[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]


 
         REAUTHORIZATION OF THE PRESCRIPTION DRUG USER FEE ACT

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

                                HEARING

                               BEFORE THE

                         SUBCOMMITTEE ON HEALTH

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 17, 2007

                               __________

                           Serial No. 110-29


      Printed for the use of the Committee on Energy and Commerce

                        energycommerce.house.gov


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                    COMMITTEE ON ENERGY AND COMMERCE

    JOHN D. DINGELL, Michigan,       JOE BARTON, Texas
             Chairman                    Ranking Member
HENRY A. WAXMAN, California          RALPH M. HALL, Texas
EDWARD J. MARKEY, Massachusetts      J. DENNIS HASTERT, Illinois
RICK BOUCHER, Virginia               FRED UPTON, Michigan
EDOLPHUS TOWNS, New York             CLIFF STEARNS, Florida
FRANK PALLONE, Jr., New Jersey       NATHAN DEAL, Georgia
BART GORDON, Tennessee               ED WHITFIELD, Kentucky
BOBBY L. RUSH, Illinois              BARBARA CUBIN, Wyoming
ANNA G. ESHOO, California            JOHN SHIMKUS, Illinois
BART STUPAK, Michigan                HEATHER WILSON, New Mexico
ELIOT L. ENGEL, New York             JOHN B. SHADEGG, Arizona
ALBERT R. WYNN, Maryland             CHARLES W. ``CHIP'' PICKERING, 
GENE GREEN, Texas                        Mississippi
DIANA DeGETTE, Colorado              VITO FOSSELLA, New York
    Vice Chairman                    STEVE BUYER, Indiana
LOIS CAPPS, California               GEORGE RADANOVICH, California
MIKE DOYLE, Pennsylvania             JOSEPH R. PITTS, Pennsylvania
JANE HARMAN, California              MARY BONO, California
TOM ALLEN, Maine                     GREG WALDEN, Oregon
JAN SCHAKOWSKY, Illinois             LEE TERRY, Nebraska
HILDA L. SOLIS, California           MIKE FERGUSON, New Jersey
CHARLES A. GONZALEZ, Texas           MIKE ROGERS, Michigan
JAY INSLEE, Washington               SUE WILKINS MYRICK, North Carolina
TAMMY BALDWIN, Wisconsin             JOHN SULLIVAN, Oklahoma
MIKE ROSS, Arkansas                  TIM MURPHY, Pennsylvania
DARLENE HOOLEY, Oregon               MICHAEL C. BURGESS, Texas
ANTHONY D. WEINER, New York          MARSHA BLACKBURN, Tennessee       
JIM MATHESON, Utah                   
G.K. BUTTERFIELD, North Carolina     
CHARLIE MELANCON, Louisiana          
JOHN BARROW, Georgia                 
BARON P. HILL, Indiana               

_________________________________________________________________

                           Professional Staff

 Dennis B. Fitzgibbons, Chief of 
               Staff
Gregg A. Rothschild, Chief Counsel
   Sharon E. Davis, Chief Clerk
   Bud Albright, Minority Staff 
             Director

                                  (ii)
                         Subcommittee on Health

                FRANK PALLONE, Jr., New Jersey, Chairman
HENRY A. WAXMAN, California          NATHAN DEAL, Georgia,
EDOLPHUS TOWNS, New York                 Ranking Member
BART GORDON, Tennessee               RALPH M. HALL, Texas
ANNA G. ESHOO, California            BARBARA CUBIN, Wyoming
GENE GREEN, Texas                    HEATHER WILSON, New Mexico
    Vice Chairman                    JOHN B. SHADEGG, Arizona
DIANA DeGETTE, Colorado              STEVE BUYER, Indiana
LOIS CAPPS, California               JOSEPH R. PITTS, Pennsylvania
TOM ALLEN, Maine                     MIKE FERGUSON, New Jersey
TAMMY BALDWIN, Wisconsin             MIKE ROGERS, Michigan
ELIOT L. ENGEL, New York             SUE WILKINS MYRICK, North Carolina
JAN SCHAKOWSKY, Illinois             JOHN SULLIVAN, Oklahoma
HILDA L. SOLIS, California           TIM MURPHY, Pennsylvania
MIKE ROSS, Arkansas                  MICHAEL C. BURGESS, Texas
DARLENE HOOLEY, Oregon               MARSHA BLACKBURN, Tennessee
ANTHONY D. WEINER, New York          JOE BARTON, Texas (ex officio)
JIM MATHESON, Utah
JOHN D. DINGELL, Michigan  (ex 
    officio)
  
                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Frank Pallone, Jr., a Representative in Congress from the 
  State of New Jersey, opening statement.........................     1
Hon. Nathan Deal, a Representative in Congress from the State of 
  Georgia, opening statement.....................................     3
Hon. Henry A. Waxman, a Representative in Congress from the State 
  of California, opening statement...............................     4
Hon. Heather Wilson, a Representative in Congress from the State 
  of New Mexico, opening statement...............................     5
Hon. John D. Dingell, a Representative in Congress from the State 
  of Michigan, opening statement.................................     5
Hon. Steve Buyer, a Representative in Congress from the State of 
  Indiana, opening statement.....................................     6
Hon. Gene Green, a Representative in Congress from the State of 
  Texas, opening statement.......................................     7
Hon. Tim Murphy, a Representative in Congress from the 
  Commonwealth of Pennsylvania, opening statement................     8
Hon. Diana DeGette, a Representative in Congress from the State 
  of Colorado, opening statement.................................     9
Hon. Lois Capps, a Representative in Congress from the State of 
  California, opening statement..................................    10
Hon. Marsha Blackburn, a Representative in Congress from the 
  State of Tennessee, opening statement..........................    11
Hon. Darlene Hooley, a Representative in Congress from the State 
  of Oregon, opening statement...................................    12
Hon. John B. Shadegg, a Representative in Congress from the State 
  of Arizona, opening statement..................................    12
Hon. Anna G. Eshoo, a Representative in Congress from the State 
  of California, opening statement...............................    13
Hon. Jim Matheson, a Representative in Congress from the State of 
  Utah, opening statement........................................    14
Hon. Jan Schakowsky, a Representative in Congress from the State 
  of Illinois, opening statement.................................    15

                               Witnesses

 Theresa M. Mullin, Assistant Commissioner for Planning, U.S. 
  Food and Drug Administration...................................    16
    Prepared statement...........................................    19
    Answers to submitted questions...............................   105
Alan Goldhammer, deputy vice president, regulatory affairs, 
  Pharmaceutical Research and Manufacturers of America, 
  Washington, DC.................................................    60
    Prepared statement...........................................    62
William Hubbard, senior advisor, Coalition for a Stronger FDA, 
  Chapel Hill, NC................................................    66
    Prepared statement...........................................    67
James Thew, patient advocate, Amyotrophic Lateral Sclerosis 
  Association, Machesney Park, IL................................    69
    Prepared statement...........................................    71
Kay Holcombe, senior policy advisor, Genzyme Corporation, 
  Washington, DC.................................................    73
    Prepared statement...........................................    75
William K. Vaughan, senior policy advocate, Consumers Union, 
  Washington, DC.................................................    78
    Prepared statement...........................................    80


         REAUTHORIZATION OF THE PRESCRIPTION DRUG USER FEE ACT

                              ----------                              


                        TUESDAY, APRIL 17, 2007

                  House of Representatives,
                            Subcommittee on Health,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:00 a.m., in 
room 2123 of the Rayburn House Office Building, Hon. Frank 
Pallone, Jr. (chairman) presiding.
    Members present: Representatives Green, Waxman, Eshoo, 
DeGette, Capps, Baldwin, Schakowsky, Ross, Hooley, Matheson, 
Dingell, Deal, Shadegg, Buyer, Wilson, Pitts, Rogers, Sullivan 
Murphy, Burgess, and Blackburn.
    Also present: Representatives Markey and Stupak.
    Staff present: John Ford, Jack Maniko, Virgil Miller, Bobby 
Clark, Brin Frazier, Chad Grant, Ryan Long, Nandan Kenkermath, 
Jesse Levine.

OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE 
            IN CONGRESS FROM THE STATE OF NEW JERSEY

    Mr. Pallone. I would like to call the meeting to order. And 
today we have a hearing on Reauthorization of the Prescription 
Drug User Fee Act. I recognize myself for an opening statement.
    I would like to initially welcome everyone to today's 
hearing, which will be the first in a series of hearings over 
the next few weeks that will focus on issues involving the Food 
and Drug Administration, including the Medical Device User Fee 
and Modernization Act reauthorization, creating a pathway for 
FDA approval of follow-on biologics, as well as drug safety 
issues. But today's hearing will focus on the reauthorization 
of the Prescription Drug User Fee Act, otherwise known as 
PDUFA. Originally authorized in 1992, PDUFA has provided FDA 
with the additional resources it needs to efficiently review an 
application for a new drug or biologic to enter the market.
    Prior to the 1992 law, it would take FDA up to 29 months, 
sometimes longer, to approve a new drug application or a 
biologic licensing agreement. This backlog was cause for 
concern for both patients and drug manufacturers. Patients had 
to wait longer to receive new therapies for life threatening 
illnesses, such as HIV/AIDS or cancer. Pharmaceutical companies 
were threatened by the loss of time they would have to recoup 
their investments on research and development.
    In order to remedy these problems, Congress passed landmark 
legislation which established a user fee system in which drug 
manufacturers would provide a revenue source to the FDA to help 
expedite the review of new drug and biologic applications. 
Since its enactment, the user fee program has been viewed 
largely as a success. It has allowed FDA to increase the size 
of its work force in order to speed up review times. As a 
result, the median time between when a new drug application or 
biologic licensing agreement is submitted, and FDA approval has 
decreased dramatically.
    But shorter review time should not be the only measure of 
success for the program. As we set out to reauthorize this 
important program for a third time, we must examine a number of 
issues that remain unresolved. For example, we must pay 
attention to the trade-offs we make by expediting FDA's 
approval process. There are legitimate concerns, both in and 
outside of Congress, that in our rush to speed drugs to market, 
we could be overlooking critical safety issues and place 
patients at risk. We must strike the right balance between a 
timely pre-market review process and a robust post-market 
surveillance system to ensure patients have access to the 
safest and most effective medicines.
    Previous reauthorizations of PDUFA have focused more on the 
pre-market side of the process and I believe it is necessary 
for us to spend more time examining how we should strengthen 
our Nation's post-market surveillance system this time around. 
Now, to that end, the agreement reached between the FDA and 
industry to increase the amount of user fees that can go 
towards post-market surveillance is certainly a step in the 
right direction, but that is not to say that Congress should 
not take any steps further.
    There are a number of proposals that would improve upon the 
FDA's ability to monitor a drug over the course of its life 
cycle, as the Institute of Medicine has suggested. We need to 
ensure that FDA has the resources and the authority necessary 
to ensure the safety of a drug once it is already on the 
market. And these are important issues that are quite literally 
life and death for millions of Americans; that is why this 
subcommittee will examine drug safety, in part, today but more 
thoroughly in a separate hearing, as well. We will have a 
separate hearing on drug safety, in general.
    Furthermore, while I am pleased to see that the FDA and the 
industry have reached an agreement on direct-to-consumer 
advertising, I am not certain that what has been laid out will 
suffice. Under current law, FDA does not have prior approval 
authority for prescription drug use advertising. Rather, FDA 
relies on drug markets, drug makers, to voluntarily submit 
their ads to review. Nothing in the current proposal would 
change that and the program outlined in PDUFA still relies on 
the industry to voluntarily subject its ads to FDA review. This 
type of self-policing strikes me as something along the lines 
of the fox guarding the hen house and I realize that there are 
constitutional or first amendment concerns involved here, but 
this part of the proposal may need some work, particularly as 
it relates to the mass marketing of new drugs approved by the 
FDA.
    In the end, I will say that many of us probably wish that 
there wasn't a need for the PDUFA program and that FDA could be 
funded entirely out of general revenues, but that possibility 
does not currently exist. In the absence of that, I think that 
the PDUFA program has worked well and there is strong support 
for its reauthorization on a bipartisan basis and that we will 
obviously get more information about a number of these issues 
as we proceed today and the next few weeks.
    I would like to thank our witnesses for being here today 
and I look forward to their testimony and I would now recognize 
our ranking member, Mr. Deal, for 5 minutes for the purpose of 
delivering his opening statement. Thank you.

  OPENING STATEMENT OF HON. NATHAN DEAL, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF GEORGIA

    Mr. Deal. Thank you, Mr. Chairman. I want to thank you for 
giving the committee an opportunity to examine this important 
piece of legislation. PDUFA has helped the FDA evaluate new 
drugs in a timely fashion and has given patients faster access 
to approve medications. I am sure our witnesses today will 
testify of the many successes of PDUFA, but also to the need 
for changes during this round of reauthorization to ensure that 
program remains effective into the future.
    Since the last authorization of PDUFA, new areas of 
concerns have arisen and I am certain the committee will fairly 
evaluate ways to improve the program as we move forward. For 
instance, I have been concerned, for a very long time, about 
the types of advertisements presented to consumers during 
recent years and I am pleased to see that PDUFA IV, before us 
today, addresses this area of direct-to-consumer advertising.
    While I realize the industry has taken steps to ensure 
consumers are provided with accurate information, the 
establishment of a separate fee program for FDA review of these 
ads help solidify the FDA's advisory role. Hopefully, companies 
will take advantage of the opportunity to receive feedback on 
their television ads and that this will prevent patients from 
being misled by persuasive commercials. Today's patients are 
bombarded with information about how best to manage their 
health and they should be assured that this information is 
accurate.
    The increased emphasis on post-market drug safety is also 
well placed. As the FDA receives information about adverse 
effects, they need the tools to evaluate these reports and 
quickly detect problems with approved medications. Allowing the 
FDA to continue to monitor the safety of the drug throughout 
its life and providing increased resources to improve the FDA's 
post-market safety efforts helps ensure that the drugs 
available to consumers are safe and effective.
    The original PDUFA legislation marked a dramatic change in 
how the FDA funds its drug review activities to the point that 
today's user fees comprise a sizable portion of the FDA's 
budget. The committee should continue to monitor this dynamic 
that is created between the FDA and the industry and the 
original intent that user fees only supplement FDA's 
appropriations from Congress. Indeed, a variety of drug and FDA 
issues await action before this committee and I look forward to 
the testimony of the witnesses who will help inform us on our 
reauthorization efforts.
    Mr. Chairman, I will yield back the balance of my time.
    Mr. Pallone. Thank you and recognize Mr. Waxman for an 
opening statement.

OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Waxman. Thank you very much, Mr. Chairman. Our hearing 
today is on reauthorization of PDUFA, Prescription Drug User 
Fee bill. This reauthorization also gives us an opportunity to 
look at other ways we can enhance FDA's ability to do its job. 
For example, by giving FDA the authority to approve bio-
generics and enhancing its ongoing authority to see to it that 
drugs are tested on children. But perhaps, most importantly, 
the reauthorization of PDUFA will allow us to address the 
critical issue of drug safety.
    Today, the confidence Americans have long held in FDA has 
been seriously shaken. I don't need to repeat the list of 
recent high-profile drug safety crises that led to this decline 
in confidence. FDA's drug safety program is in serious need of 
repair. The Institute of Medicine issued a high-profile report 
on drug safety, concluding (1) that our drug safety system is 
seriously dysfunctional, and (2) FDA cannot protect Americans 
from unsafe drugs unless Congress provides more resources and 
more legal authorities.
    FDA currently lacks several critical authorities. FDA lacks 
authority to require post-market safety studies, even when 
necessary to determine a drug's risks. FDA lacks authority to 
impose necessary restrictions on the distribution of drugs 
shown to have risks. FDA doesn't have the ability to place 
controls on huge advertising campaigns at the launch of new 
drugs, which cause excessive use of drugs before their safety 
profile is clear. And finally, the agency's authority to 
require labeling changes after approval under the current 
system is so weak it guarantees the drug companies will be able 
to delay and water down needed warnings on drugs. We simply 
must address this problem.
    There are some positive aspects of the negotiated FDA PDUFA 
package; it increases the amount of user fee dollars dedicated 
to post-market drug safety activities, but the proposal does 
nothing to give FDA the vitally important authorities it needs 
to protect the American public from risky drugs. That is why I 
hope that we can incorporate the bill that I have introduced 
with Representative Markey in this legislation, just as the 
Enzi-Kennedy drug safety legislation is being added to the 
PDUFA reauthorization in the other body.
    This reauthorization will give us a rare but critical 
opportunity to take up this legislation and see it enacted. 
PDUFA has now become an entrenched feature of FDA's drug 
regulatory system, but it has not been without cost. Many 
people think that the stringent deadlines, timelines for taking 
action on new drug applications may lead to safety problems 
once they are on the market. Heavy reliance on user fees gives 
a suspicion that FDA is in the pocket of the pharmaceutical 
industry. A better balance between the amount FDA receives in 
user fees and the amount it receives in Federal dollars will 
help move us quite a way from dealing with this problem.
    Thank you, Mr. Chairman, for holding this hearing.
    Mr. Pallone. Thank you, Mr. Waxman. The gentlewoman from 
New Mexico.

 OPENING STATEMENT OF HON. HEATHER WILSON, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF NEW MEXICO

    Mrs. Wilson. Thank you, Mr. Chairman. I don't think there 
is any disagreement on this committee or in the members of the 
public that the prescription drug user fee has helped to speed 
the approval of lifesaving prescriptions. It has brought about 
$270 million of revenue into the FDA, allowing them to hire 
more people and has reduced the amount of time it takes to get 
a drug approved, from about 29 months down to 14 months. That 
is a tremendous accomplishment for this program and I think it 
needs to be reauthorized.
    As we look at these balances between safety and access, I 
hope that we don't overemphasize or don't wrongly emphasize 
what might be a false public perception that my colleague from 
California just mentioned and that we focus on the things that 
matters, as public servants, and that is safety and rapid 
access to lifesaving treatment. I am glad to see the steps the 
FDA has taken in establishing new post-marketing and 
surveillance efforts. I look forward to understanding the draft 
bill that the administration has put forward. There are some 
new provisions that might enhance the process for both pre-
market review and for post-market surveillance. And I look 
forward to working on this legislation.
    I yield the balance of my time.
    Mr. Pallone. Thank you, and recognize the chairman of the 
full committee, Mr. Dingell.

OPENING STATEMENT OF HON. JOHN D. DINGELL, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF MICHIGAN

    The Chairman. Mr. Chairman, I thank you for your courtesy. 
I thank you for holding this important hearing. We are here to 
discuss the reauthorization of a very important piece of 
legislation, the Prescription Drug User Fee Act. Originally 
passed in 1992, this program has provided valuable resources to 
the Food and Drug Administration to allow timely approval of 
safe and effective new prescription pharmaceuticals and 
biologics. Each reauthorization has strengthened the program 
and we find ourselves with the opportunity to make further 
enhancements.
    I would note that this legislation was the result of 
discussions between industry, consumers, Members of Congress, 
and others who were concerned about serious problems in terms 
of the licensing of new drugs within the FDA's purview. And as 
a result of the gross inadequacy of funds which existed with 
regard to Food and Drug and the delay that this was imposing, 
both on consumers and on industry, the Members of Congress 
decided that we would work with industry to create a program 
which would carry out the very important purpose of ensuring 
that prescription pharmaceuticals came speedily to the market 
and that there were funds and resources made available to FDA 
to carry out their responsibilities.
    The legislation has worked well. It has been expanded on a 
number of occasions and it will continue to work better if this 
committee and the Congress does what needs to be done to see to 
it that it has continuing sympathetic reauthorization processes 
which move it forward. I would note that I have seen some, what 
I regard as, unfair criticisms of the legislation in which it 
is said that the legislation does not encourage FDA 
independence in terms of its licensing of new prescription 
pharmaceuticals.
    I know of nothing to support those statements and I would 
advise anyone who has a different view on these matters to come 
forward forthwith so that the committee may go into these 
matters and we may find out whether, in fact, there is 
something wrong when nothing appears to be wrong. As we 
consider PDUFA reauthorization, we have to be mindful of two 
fundamental goals; gaining quicker access to lifesaving 
products for patients and ensuring that the products that do 
come to market are safe and effective.
    For a cancer patient, access to a lifesaving product in 6 
months as opposed to 18 months may be the difference between 
life and death. Similarly, for that same cancer patient, access 
to a drug that is neither safe or effective may very well be 
the difference between life and death. We are going to work to 
find balance between these concerns. We look to countless 
Americans who depend on the development of safe, effective and 
accessible drugs and biologics and speedily so. We recognize 
the time sensitivity of this reauthorization. The committee 
must act in a timely manner to prevent possible exit of 
scientists and other experienced officers at FDA whose 
positions are funded by user fees.
    With this in mind, Chairman Pallone and I have sent a 
letter to the commissioner of the Food and Drug Administration 
asking for a date certain by which the agency will begin 
issuing notices. Coincidentally, the due date of this answer 
happens to be today. I will expect our witness from FDA to 
address this issue in her testimony and that we will have the 
answers to the questions because the continuance of an adequate 
staff and an adequate mechanism to approve new prescription 
pharmaceuticals is an urgent matter of concern.
    I appreciate the hearing, Mr. Chairman, and the work that 
user fee stakeholders have put into this proposal. I look 
forward to the testimony of the witnesses and the input of our 
members as we discuss the PDUFA reauthorization. Thank you, Mr. 
Chairman.
    Mr. Pallone. Thank you, Chairman Dingell. I recognize now 
the gentleman from Indiana, Mr. Buyer.

  OPENING STATEMENT OF HON. STEVE BUYER, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF INDIANA

    Mr. Buyer. I would like to compliment Mr. Waxman and the 
Democratic majority, back in 1992, for this legislation. I 
think, as I look back, also Mr. Dingell and Mr. Waxman, your 
leadership has made a difference. And so as you look back over 
the history and all the reauthorizations that we have done, the 
words that come up are access and safety, but I just want to 
lay out part of my challenge is the inconsistent use of the 
language, access and safety.
    So as we focus here on PDUFA, I then take a look at other 
things that we have done. Well, let us see. This Congress just 
said let us repeal noninterference, so they want to choose 
access over the development of new drugs because if you repeal 
that, I assure you it will have a tremendous impact upon the 
ability to get new drugs to market. So here the Democratic 
majority then chooses access over the development of new drugs. 
Then when it comes to drug re-importation, the Democratic 
majority will choose access over the safety that is of our 
closed system.
    And then when it comes to the issue on advertising, I am 
not surprised the Democratic majority would then choose 
Government regulation or choose censorship over freedom of 
speech. I don't care, whether I look back, they did that on the 
V-chip or they will do that now with regard to how we are going 
to regulate on advertising. I just see inconsistencies. So as I 
focus here on PDUFA, I am very keen on the language that people 
use. They will stand up and pound their chest and say we are 
going to choose safety, we are going to be careful with regard 
to access; well, at the same time, they want to take our closed 
system and open it up and say well, it is all about getting 
drugs from China, anyway, while at the same time are we really 
protecting people? No. The answer is no, flat out no.
    And so I am challenged by, and I am going to be very 
careful to listen to language that is being used as we go 
through the reauthorization process here of PDUFA. I just ask 
that we be consistent so that we can be fair in how we treat 
people that reside in this country. We should look at this not 
only from the standpoint of the consumer, the manufacturer, but 
also, in particular, the Government, as a regulatory function. 
What information do our scientists, i.e. at FDA, need that is 
useful so that they can look at these applications? We can 
increase the quality of the application, reduce the 
bureaucracies and therefore get that product into the 
marketplace.
    And moving toward this ability to enhance electronic, 
whether it is filing or the adverse effects, all this will go a 
long way. And I want to compliment the FDA in putting together 
this legislation and with that, I will yield back.
    Mr. Pallone. Thank you. I now recognize our vice chair, Mr. 
Green.

   OPENING STATEMENT OF HON. GENE GREEN, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF TEXAS

    Mr. Green. Thank you, Mr. Chairman, for holding the hearing 
on the reauthorization of the Prescription Drug User Fee Act. 
While this hearing represents the first official step in the 
health subcommittee's efforts to reauthorize PDUFA, the 
committee has been working behind the scenes for a long time to 
take a good look at the relationship between drug manufacturers 
and the FDA and how that relationship affects the FDA's ability 
to ensure the safety of our country's drug supply. In the 
Oversight and Investigation Subcommittee we investigate cases 
like Vioxx, antidepressants and Ketek and uncovered a bias at 
the FDA towards swift approval of new drug applications with 
too little attention paid toward post-market surveillance.
    There is no question that PDUFA was initially enacted to 
ensure drug approval in a more timely manner. In 1992, when 
Congress first authorized the user fees, patient groups joined 
the industry in pushing for this regulatory framework so that 
those suffering from disease could have faster access to 
potentially lifesaving drugs. At that time, it took 27 months, 
on the average, for FDA to review a standard new drug 
application. That timeframe has shrunk to 10\1/2\ months since 
PDUFA's initial enactment. Unfortunately, the use to be 
authorized by PDUFA was accompanied by some serious unintended 
consequences.
    As we have learned, over the past few years, its bias 
toward new drug approval resulted in a culture problem at the 
FDA where scientists with objections or concerns about the 
drugs' applications were silenced. We have heard of FDA 
supervisors telling scientists that their client was the 
pharmaceutical industry, a statement which flies in the face of 
the FDA's mission of protecting the public health.
    In addition to culture problems, the PDUFA framework has 
contributed to a structural problem at FDA where the resources 
weighed heavily in favor of new drug approval. In fact, the 
Office of Drug Safety receives only one-fourth of the resources 
and one-seventh of the staff dedicated to the Office of New 
Drugs. With no independent regulatory authority, the Office of 
Drug Safety has only few options at its disposal to ensure that 
drug sponsors make good on their commitment to post-market 
studies. In fact, the pharmaceutical industry hasn't even begun 
71 percent of the post-market studies requested by the FDA, a 
sign of the industry's lack of regard for the post-market 
surveillance process in their clear understanding that FDA, 
can't do much about it.
    I think most of my colleagues agree we are going to change 
that bias during this reauthorization. While I am pleased that 
the proposal worked out between the industry and the FDA 
includes a dedicated funding source for drug safety, the $29 
million set aside for drug safety represents only 7 percent of 
the total user fee annually under the proposal. I would like to 
see more emphasis on drug safety to ensure that the FDA has a 
workforce level to assure the American people that our drug 
supply is safe and effective.
    Mr. Chairman, I look forward to working with you to 
accomplish these goals of the PDUFA reauthorization process and 
I thank our witnesses for appearing today and look forward to 
their testimony. And with that, Mr. Chairman, I will yield back 
my time.
    Mr. Pallone. Thank you. Mr. Murphy of Pennsylvania.

   OPENING STATEMENT OF HON. TIM MURPHY, A REPRESENTATIVE IN 
         CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA

    Mr. Murphy. Thank you very much, Mr. Chairman. I appreciate 
you holding this hearing today. I wanted to bring out two parts 
as we proceed with this to make sure we reviewed these as we 
look at issues involving drug safety. Not only should we all be 
concerned about reviewing medications and making sure that 
medications are brought to the market in a timely manner, but 
also safely in terms of understanding the impact of their 
chemical components on persons, as well as their ability to 
treat disease.
    But it is also important, as we review this, that we look 
at some of the aspects of how medication is prescribed. In 
particular, the area of psychiatric medications concern me. I 
previously raised questions that emphasized that anti-
depressant medication should only be prescribed by mental 
health professionals and accompanied by psychotherapy, 
particularly with those with depression or bipolar illness. I 
know, in the past, this committee and other committees have 
taken up the issue with regard to adolescents, who have 
increased risk of suicide when they are on anti-depressant 
medications.
    It is important to understand that such medications may 
change the mood of the patient but do not necessarily change 
the behavior of the patient and they certainly do not change 
the cognitive processes of the patient. It is important, I 
believe, that the FDA works with manufacturers and with 
prescribers of medication to understand that all of those 
components are essential parts of dealing with medications in a 
safe and effective way; not only what they are made of, but how 
they are used.
    I am also hopeful that the final PDUFA language will 
reauthorize the Best Pharmaceuticals for Children Act to ensure 
that approved drugs are also tested for practical applications 
for our Nation's children. We recognize that adult medications 
tend to move faster than those approved for children and yet, 
it is important that we not just use adult medications and 
prescribe them for kids, but really review, in a sound, 
scientific, reliable and valid way all the aspects of these 
medications, again, in a way that moves through safely, 
effectively and efficiently in a timely manner to help our 
Nation's children.
    I appreciate this time and I yield back the balance of it. 
Thank you.
    Mr. Pallone. Thank you. Gentlewoman from Colorado, Ms. 
DeGette.

 OPENING STATEMENT OF HON. DIANA DEGETTE, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF COLORADO

    Ms. DeGette. Thank you, Mr. Chairman. This is a complicated 
issue to address and I think it deserves careful scrutiny. The 
goal of PDUFA is to speed up the process by which drug 
treatments are brought to market in the safest form possible 
and I think we need to do everything in our power, as we look 
at reauthorization, to further improve this program to meet 
that goal. Fifteen years ago PDUFA I was enacted and the 
original design was simply to provide the FDA with additional 
funds to reduce a substantial backlog of new drug applications 
and to speed up the application process to bring drugs to 
market. Since its inception, PDUFA has evolved to address the 
ever changing nature of prescription drugs and biologics.
    In PDUFA II, Congress required greater transparency in the 
drug review process, better communication with industry and 
outside groups and expanded performance goals to activities 
associated with earlier phases of drug development. PDUFA III 
further expanded the FDA's role in drug review to include 
labeling and collecting safety information data, among other 
things. In spite of PDUFA's evolution into its current 
incarnation, problems continue to persist in the drug approval 
process.
    Mr. Green and I were just talking about our membership of 
the Oversight and Investigations subcommittee where we can 
attest to numerous hearings over the years that there remain a 
significant number of problems with the drug approval process 
that have resulted in dismaying health problems for many 
Americans. Vioxx and Ketek come to mind here. I look forward to 
listening to the witnesses' testimony today to address the 
issue of how we use PDUFA to ensure the health and wellbeing of 
those who take pharmaceuticals and biologics every day.
    As we approach the authorization of PDUFA IV, I would like 
to stress several issues that are important. Because of the 
problems that have occurred with a number of drugs over recent 
years, as we have heard, the public has lost confidence in the 
FDA to protect it from the negative effects of some 
pharmaceuticals and biologics. The FDA must regain its trust 
from the American public and show the public that it is truly 
an independent agency interested only in the public's health. 
This will mean increased transparency with the drug approval 
process and more intensive post-market drug review.
    Safe and effective drugs are what people expect from the 
drug approval process and we need to show that such a process 
exists. As with any situation in which regulators are working 
closely with entities that are regulated, there are oftentimes 
people who see that relationship as too cozy. I am interested 
in hearing from the two panels today about how we might better 
make clearer distinctions between industry and regulators to 
further restore the public's confidence.
    Mr. Chairman, as with past iterations, this process is an 
opportunity to improve on the foundation of PDUFA and I look 
forward to working with you, the committee and those here today 
to make sure that the health and wellbeing of our country is 
preserved. Thank you.
    Mr. Pallone. Thank you. The gentleman from Texas, Dr. 
Burgess.
    Mr. Burgess. Thank you, Mr. Chairman. I am going to submit 
for the record, in the interest of time. We have got many 
witnesses who have come quite a distance, far away as northwest 
Washington, so I will reserve my time for questions.
    [The prepared statement of Hon. Michael Burgess follows:]
    Mr. Pallone. Thank you. The gentlewoman from California, 
Mrs. Capps.

   OPENING STATEMENT OF HON. LOIS CAPPS, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mrs. Capps. Thank you, Chairman Pallone, and thank you to 
our witnesses for their testimony today at this important 
hearing. And as we begin our discussion about Prescription Drug 
User Fee Act and its reauthorization, we undoubtedly will be 
opening the door to a whole slew of issues related to Food and 
Drug Administration function. As we discuss each of these 
issues, we need always to be keeping uppermost in mind the most 
important issue of all and that is ensuring a safe and 
affordable drug supply to all Americans within effective 
timelines. The progress has been made; unfortunately, we have 
not yet reached this goal.
    I understand that my colleagues in other subcommittees and 
committees have already held hearings on the barriers to 
ensuring that safe and affordable drug supply that we desire. I 
hope that today we can build on some of the lessons already 
learned and the bottom line remains, I believe, two of the 
barriers are: one: the failure to provide FDA with adequate 
appropriated funds to fulfill its mission, and second, a system 
vulnerable to and indeed, plagued by conflicts of interest.
    There is something very wrong when the Institutes of 
Medicine concludes that the drug safety system is impaired. And 
the General Accounting Office concludes that ``FDA lacks a 
clear and effective process for post-market drug safety 
issues.'' Clinical trials are an important component of 
evaluating drug safety, but they cannot be the only one. We 
must be more rigorous in monitoring those drugs once they reach 
the public. Quite frankly, I fear that the failure to properly 
invest in post-market safety is a result of inappropriate 
industry influence in the process.
    I am also deeply concerned with staffing and structural 
issues at the FDA that impede optimal results for timely and 
safe approval of drugs. We simply must do more to attract and 
retain qualified scientists and then give them the tools to 
properly monitor drugs continuously through the process of pre-
market approval through post-market surveillance. I certainly 
recognize the impetus for creating PDUFA and for needing 
additional revenues to get lifesaving drugs out on the market 
as quickly as it is safely possible.
    But unfortunately, we do not have the best possible system 
in place, even though we are quite aware of what improvements 
are necessary. As we move through the PDUFA reauthorization 
process, I hope we can succeed in making the improvements 
necessary to serve our Nation's public health interests. We 
have an obligation to do so. I yield back.
    Mr. Pallone. Thank you. The gentlewoman from Tennessee, 
Mrs. Blackburn.

OPENING STATEMENT OF HON. MARSHA BLACKBURN, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF TENNESSEE

    Mrs. Blackburn. Thank you, Mr. Chairman, and I want to 
welcome our witnesses who are here. We look forward to hearing 
from you. Four quick points from me on the issue before us. As 
we look at the reauthorization, I will say it is nice to see a 
program that has shown some success and we look forward to 
hearing about the successes and then also some of the stumbling 
blocks that may be there.
    Second, it is nice to see a program that has a revenue 
string and then applies it back into its mission. Number 3, 
that mission of expedited review and safety monitoring, safety 
of product to the marketplace, Dr. Mullin, I will say it is 
nice that that is still on the radar, the agency hasn't lost 
sight of that. And No. 4, I think it is imperative that we 
realize money does not solve every problem and just giving more 
money in a budget is not going to take care of any of the 
obstacles or burdens that are there.
    I hope that we will keep our focus on looking at 
regulation, at duplication, at paperwork, at the burden of 
bureaucracy that may be a hindrance--that may be continuing to 
slow the process and keeping drugs that need to be in the 
pipeline and to consumers who need to get them. And with that, 
Mr. Chairman, I thank you and I yield back.
    Mr. Pallone. Thank you. I recognize the gentlewoman from 
Oregon, Ms. Hooley.

 OPENING STATEMENT OF HON. DARLENE HOOLEY, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF OREGON

    Ms. Hooley. Thank you, Mr. Chairman. The Prescription Drug 
User Fee Act has played an important role over the last 15 
years in getting drugs and biologics to patients more quickly. 
Patient access to potential lifesaving drugs was unreasonably 
delayed before this act was passed. On average, it took over 30 
months for a drug to get approved in 1992, before PDUFA. 
Fortunately, the median time between submission of an 
application and approval has decreased to less than 14 months 
as a result of funding provided by PDUFA. However, it is not 
perfect.
    The high proportion of FDA drug review funding provided by 
user fee is not ideal. Given current budget constraints, user 
fees are an important and necessary source of funds to get 
lifesaving drugs to market as quickly and safely as possible. 
Along with ensuring adequate funding for review of new drugs, 
it is critical that reauthorization of PDUFA improve post-
market safety reviews.
    As Dr. Mullin notes in her written testimony, reports of 
serious and unexpected side effects increased by more than 65 
percent in the 3 years between 2002 and 2005. That is an 
alarming increase and we must ensure that FDA has sufficient 
resources to analyze adverse events and take action when a 
pattern of adverse events is recognized.
    The FDA recommendation to eliminate the restriction of 
post-market surveillance to only 3 years after approval is a 
positive step. There is no good reason why FDA should not 
review drugs for adverse side effects as long as they are on 
the market. Larry Kirkwood, a constituent of mine from Molalla, 
came in to my office last month to share his story about the 
debilitating stroke he suffered. He believes his injuries were 
caused by a prescription drug that FDA failed to learn had 
unexpected side effects until after it was too late for him.
    I want to make sure that FDA has sufficient funds to ensure 
that no one has to wonder, like Larry, whether an adverse 
health event could have been avoided if they had knowledge of 
potential side effects learned through more rigorous post-
market surveillance. I look forward to discussing the direct-
to-consumer advertising provisions recommended by FDA. The FDA 
is correctly taking an increased oversight role with DTC 
advertising. However, I want to make sure that the voluntary 
system envisioned by FDA is sufficient to protect the public 
health.
    Finally, I think it is important to pass PDUFA in a timely 
manner so that FDA does not lose its best scientists because 
Congress fails to act before their employees received reduction 
in force notices. Thank you, Mr. Chairman. I look forward to 
the hearing.
    Mr. Pallone. Thank you. I recognize the gentleman from 
Arizona, Mr. Shadegg.

OPENING STATEMENT OF HON. JOHN B. SHADEGG, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF ARIZONA

    Mr. Shadegg. Thank you, Mr. Chairman. I thank you for 
holding this hearing. The Prescription Drug User Fee Act was 
originally enacted in 1992 in order to expedite the approval 
process for drug and biologic applications and drug safety 
monitoring and I believe we should work together in a 
bipartisan fashion to reauthorize it. To accomplish its goal, 
PDUFA requires pharmaceutical companies to pay application fees 
for each new product, annual manufacturing fees and annual 
product fees. These user fees have contributed to a 42.5 
percent of the FDA's human drug program budget in 2006, roughly 
$517.5 million.
    Prior to the enactment of PDUFA, FDA review for a new drug 
or biologic averaged 29 months. By 2003, that approval time had 
dropped to less than 14 months, meaning it had been cut more 
than in half. The benefit to consumers of speeding up this 
process is immense in terms of lives saved and health improved. 
The latest reauthorization, commonly referred to as PDUFA IV, 
aims to enhance pre-market review of human drug applications, 
ensure the financial footing of the human drug program and 
modernize the post-market safety system.
    To accomplish these goals, the proposal would increase the 
overall user fee by $87.4 million above the current levels. I 
believe these are worthy goals and that it is important for us 
to steward this legislation through bipartisan passage as 
quickly as possible.
    Mr. Chairman, I look forward to working with you and to 
hearing from the experts before this committee and to approving 
reauthorization of a straightforward legislation as quickly as 
possible and I yield back the balance of my time.
    Mr. Pallone. Thank you. The gentlewoman from California, 
Ms. Eshoo.

 OPENING STATEMENT OF HON. ANNA G. ESHOO, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Ms. Eshoo. Thank you, Mr. Chairman, for holding this 
important hearing on reauthorizing PDUFA. I am proud to have 
worked with former Congressman Jim Greenwood to enact the most 
recent reauthorization of this legislation and I can't believe 
how time flies, that we are here again. This is always an 
important opportunity to not only review what Congress put into 
place, but the time to review how well it is working. And I 
think it is one of the most important pieces of legislation 
that our committee is going to undertake this year.
    Prescription drugs and biologics have really changed 
healthcare as we know it and they continue to improve patient 
care and to extend lives. Prior to the initial passage of 
PDUFA, it often took years; not months, but it took years for 
drugs and biologics to be reviewed by the FDA. They were then 
strapped for financial and human resources and they were unable 
to devote enough time and energy to the review process. PDUFA, 
I think, has come a long way, so that the FDA has the staffing 
and the expertise to ensure that drugs are safe and reach the 
patients that really need them.
    But there are always tensions in the two undertakings, that 
it is a timely process so that the most important and the best 
products move into the marketplace, obviously, to patients, but 
also that there is the efficacy that the American people have 
come to not only appreciate, but demand of the FDA. So I think 
that PDUFA has worked and that it has worked well, but it is 
not without its problems and the program is not perfect. In 
fact, I think anything human beings devise is a reflection of 
our humanity. It is less than perfect.
    What I would like to say in this is that I hope, Mr. 
Chairman, that we will have a clean bill. The whole issue of 
follow-on biologics or biosimilars is one that is being 
examined in the Senate and I know that Mr. Waxman is planning 
to raise here. I do not think that it should be part of PDUFA. 
There are many complexities to what is being talked about and 
offered. I think that the committee needs to review that kind 
of legislation on a stand-alone basis.
    I am not so sure what you plan to do with the pediatric 
legislation. I was Democratic lead on that. I think that that 
has worked well. I also think that that should be discussed, 
maybe, in its own hearing, whether you plan to make that part 
of the reauthorization of PDUFA. I would like to talk to you 
about it so, I am glad that we are having this hearing. I look 
forward to hearing from the witnesses. I want to reiterate my 
support for PDUFA and the user fee program. I think it is a 
good combination both what the industry does and the funding 
for FDA and if we need to do more, we need to examine it and 
make that decision.
    Certainly, the American people should have full confidence 
in FDA and there have been some products that have had to be 
removed from the market. We need to examine that, why that has 
happened and I hope that when we come through the other side of 
this process, that the American people will have even more 
confidence in the FDA. So thank you for holding this hearing. I 
look forward to the testimony of those that are going to be 
here. We have individuals that were a part of our team. Thank 
you for holding the hearing.
    Mr. Pallone. Thank you. I recognize the gentleman from 
Oklahoma, Mr. Sullivan.
    Mr. Sullivan. I waive, Mr. Chairman.
    Mr. Pallone. And the gentleman from Utah, Mr. Matheson.

  OPENING STATEMENT OF HON. JIM MATHESON, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF UTAH

    Mr. Matheson. Thank you, Mr. Chairman. Thank you for 
holding this hearing. As we will learn today from our panel of 
experts, new drugs are now available in this country faster 
than anywhere else in the world. In fact, since its inception 
in 1992, PDUFA has helped enable FDA to improve more than 1200 
new medicines and reduce review times for innovative drugs and 
biologics, providing patients and doctors with access to 
breakthrough treatments. And this is an important achievement. 
It shows that the PDUFA program is meeting its primary goal. I 
do think we should make every effort to ensure that people have 
access to effective new medicines as quickly as possible, but 
with thorough and compliant safety guidelines.
    In light of recent adverse drug examples brought before 
Congress, I look forward to hearing recommendations from our 
witnesses on how best to achieve the balance between innovation 
and public safety. As a new member of this committee, I am 
looking forward to the discussion and recommendations for the 
reauthorization of this program. And with that, Mr. Chairman, I 
yield back.
    Mr. Pallone. I recognize Mr. Pitts of Pennsylvania.
    Mr. Pitts. I will waive.
    Mr. Pallone. And next is the gentlewoman from Wisconsin, 
Ms. Baldwin.
    Ms. Baldwin. Thank you, Mr. Chairman. Thank you for holding 
this hearing and I, too, will waive my opening statement this 
morning.
    Mr. Pallone. And then we go to Ms. Schakowsky, gentlewoman 
from Illinois.

 OPENING STATEMENT OF HON. JAN SCHAKOWSKY, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF ILLINOIS

    Ms. Schakowsky. Thank you. Since its enactment 15 years 
ago, PDUFA has made a significant difference in the time it 
takes to get lifesaving prescription drugs into the hands of 
patients who need them. For many years this has, for many, 
literally meant the difference between life and death, as the 
FDA's new drug approval process has been streamlined from 29 
months in the 1980s to just 12 months for standard application 
and 6 months for priority application. This made possible by 
funding collected by the user fee, which has enabled the FDA to 
literally double its staff and make major improvements towards 
technology.
    But as I am sure most of us know by now, this user fee is 
the farthest thing from free money. Coming in at just under 43 
percent of the FDA's funding for human drug programs, there is 
no pretending that the source of this funding plays a small 
impartial role in policy and procedure at the FDA, far from it. 
In fact, it is no secret at all that the pharmaceutical 
industry has been granted a statutory role in directing where 
the collected user fees will be allocated within the FDA.
    Behind closed door with no public input, the industry 
decides how the FDA will spend this money, speeding up the 
approval process at the cost, sometimes, of important safety 
measures. With a fourth PDUFA authorization proposal, including 
an additional $87.4 million in user fees over the current base, 
it is well past time for us to start examining what needs to be 
in place to protect consumers. We need better transparency, 
better oversight of direct-to-consumer marketing and additional 
resources allocated to post-market surveillance.
    Without these measures, we may only see additional 
tragedies, like the unacceptable cases of Vioxx and Ketek. The 
drug industry cannot continue to be given a carte blanche at 
the FDA. They must be held accountable and we must enable the 
FDA to increase their authority and transparency throughout 
their drug approval process. I look forward to what should be a 
very productive hearing today and I am eager to hear from our 
witnesses. I yield back. Thank you.
    Mr. Pallone. Thank you. And that concludes the opening 
statements by members of the subcommittee, so we will now turn 
to our witness.
    I want to welcome Dr. Theresa Mullin. Dr. Mullin is the 
Assistant Commissioner for Planning with the Food and Drug 
Administration, and we will now have a 5-minute opening 
statement from Dr. Mullin. I just want to mention that, in the 
discretion of the committee, you can submit additional brief 
and pertinent statements in writing for inclusion in the 
record. And I will now recognize you for an opening statement. 
Thank you for being with us today.

    STATEMENT OF THERESA MULLIN, ASSISTANT COMMISSIONER FOR 
             PLANNING, FOOD AND DRUG ADMINISTRATION

    Ms. Mullin. Good morning, Mr. Chairman and members of the 
committee. I am Theresa Mullin, the Assistant Commissioner for 
Planning at the Food and Drug Administration and I am pleased 
to be here today to talk about the Prescription Drug User Fee 
Act, known as PDUFA. As a Director of Planning, I played a lead 
role in the coordination of implementation of PDUFA III and the 
ongoing analysis of PDUFA performance and resource 
requirements. And most recently, I served as the lead FDA 
negotiator in the discussions with industry related to the 
reauthorization of PDUFA.
    I would like to begin by discussing the successes of PDUFA 
and FDA's implementation of PDUFA, and also describe some of 
the challenges that we have tried to address in our 
recommendations for reauthorization. I will also summarize the 
highlights of our proposals for PDUFA IV. I would also like to 
emphasize the importance of a timely reauthorization before the 
expiration of this program in September of this year.
    Let me start by saying that FDA considers the review of 
safety and effectiveness of new drugs to be a central part of 
its mission of protecting and promoting public health. As you 
know, Congress enacted PDUFA in 1992 and its been reauthorized 
twice since then. The law provided added funds that made it 
possible for us to hire additional reviewers and update our IT 
systems to support drug review. At the same time, we committed 
to providing a complete review in a faster and more predictable 
timeframe. But prior to that, our drug review process was 
understaffed and slow and it delayed access to new medicines 
for patients in the United States.
    PDUFA enabled us to increase the speed of the application 
review without changing our standards for safety and 
effectiveness. And this has also led to a shorter time to 
marketing approval for those drug applications that have met 
the standards. The median time for approval for priority drugs 
and biologics has been reduced from a median of 15 months in 
1993 to a median of 6 months in 2006. And a priority 
designation means that it is a new drug that offers a 
significant advance over existing treatments. Earlier access to 
new drugs has provided important benefits for patients.
    Since the enactment of PDUFA, FDA has approved over 1,200 
new drugs and among those approvals, 76 new drugs for cancer, 
178 new anti-infective drugs, 111 new drugs for metabolic and 
endocrine disorders, 115 new drugs for neurological and 
psychiatric disorders, 80 new drugs for cardiovascular and 
renal disease, among many other new medicines.
    PDUFA has been successful in speeding access to new drugs, 
but the program has also faced challenges and I would like to 
talk briefly about the challenges. First, program costs, 
including payroll and rent related cost, have really outpaced 
the funding. And second, the review workload has grown 
significantly, particularly review activities that are not 
accounted for in the current workload adjustor. There has been 
an increasingly dramatic growth in the number of consultation 
meetings requested by companies during the drug development 
phase.
    For example, in the year 2000 meetings scheduled at the 
request of drug sponsors grew by 72 percent and now we are up 
to, last year, 2,288 meetings requested by companies for 
consultations. That translates into more than nine industry 
meetings per business day. And the same people who are doing 
those meetings are doing drug reviews and all the other work. 
These meetings are very useful. They basically help to improve 
the drug development program and it is a benefit to the 
patients who are then going to be participating in the clinical 
trials in that program. But they are also very labor intensive.
    The third challenge is the growth in the volume of post-
market safety work and our system hasn't kept up. For example, 
the number of serious and unexpected adverse events grew by 
over 65 percent between 2002 and 2005. We need the capacity to 
review and respond in a timely manner. PDUFA currently allows 
for fee supported post-market activities, but it is only for up 
to the first 3 years after approval and only for those products 
approved after October 1 2002. Our analysis of the timing of 
safety related labeling changes has found that the majority of 
those changes occur after the first 3 years that a product is 
on the market.
    In our most recent reauthorization, PDUFA III, Congress 
directed FDA to consult key stakeholders in developing our 
reauthorization recommendations. We began with the public 
process in November 2005. We had a public meeting on PDUFA and 
asked stakeholders to tell us what they thought should be 
changed and what should be retained in the program the 
following year. In 2006, we had meetings with the patient 
groups, consumer groups and health professionals to, again, 
follow up and find out what they thought we ought to be doing 
to improve the program.
    Now, in these meetings, some stakeholders felt concern that 
we rely on user fees at all, but most felt that we really 
needed to have strong support to keep the review program strong 
and adequately staffed. Nearly all expressed the view that we 
ought to be spending more on post-market safety in PDUFA and 
many thought we should be expanding our capacity for the review 
of direct-to-consumer advertising. In our discussions with 
industry and in development of recommendations, we have tried 
to address those concerns, as well as our own.
    I would now like to highlight the four key recommendations 
that we have for PDUFA IV. The first is to put the new drug 
review program on a sound financial footing. User fees have 
provided substantial resources to FDA, but they haven't kept up 
with the increasing cost of the program due to inflation and 
this expanding review work load. And so we are proposing 
changes to the financial provisions of PDUFA that would correct 
for these shortcomings.
    Second, we are recommending enhancements in two areas of 
pre-market review; first, to expand our work in the good review 
management principles for efficient and effective pre-market 
review and second, to conduct some initiatives so that we can 
enhance the science base and upgrade the science base of our 
review process and also develop guidance to improve and 
expedite critical drug development.
    And third, we are recommending changes to modernize the 
post-market safety system. We are recommending increased funds 
and the removal of the date limitations on the use of those 
funds for post-market safety and we are recommending increased 
funds to first conduct studies to be sure we are applying the 
most effective tools for collection of adverse events. We also 
want to expand our access to better patient population 
databases for epidemiology.
     Training for the post-market safety area, our standards 
for epidemiology studies, evaluating what really works in risk 
management post-market. And finally, direct-to-consumer 
advertising. We are proposing a separate user fee for direct-
to-consumer advertising because stakeholders expressed concerns 
about this and we are proposing a separate program for that and 
so that we can conduct a more timely review of the ads 
submitted to us for comment, for advisory review so we can 
weigh in on whether those ads are accurate and adequately 
balanced and adequately supported. My final point is just, and 
I have heard it many times, about the need for reauthorization 
and that we want to work with you in whatever way we can to 
support that. Thank you. I will be happy to answer any 
questions.
    [The prepared statement of Ms. Mullin follows:]

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    Mr. Pallone. Thank you. Thank you very much and now we will 
take some questions and I will recognize myself for 5 minutes 
for that purpose.
    My first question relates to what Chairman Dingell said and 
you mentioned, the need for timely reauthorization. A few weeks 
ago, Chairman Dingell and I wrote to Dr. von Eschenbach asking 
for a day certain as to when he would be forced to send a 
reduction in force or RIF notice to FDA employees should the 
user fee program fail to be authorized before September 30. 
Under part 351 of title 5, Code of Federal Regulations, the 
commissioner would have at least 60 days to issue a RIF notice 
and that would put us at the end of July that we would have 
PDUFA reauthorized or on its way to the White House.
    We are asking this so as to understand the timeframe, we 
can ensure that there is no personnel disruptions with the 
program, so my questions really are first, do you have that 
date for us with regard to the RIFs and second, would there be 
any reason to move the date up to the end of June or sooner? 
This is all for the purpose of getting this done in a timely 
fashion, obviously.
    Ms. Mullin. Well, as you said, the regulations require that 
we give individual employees 60 days notice. Substantial 
planning has to go into identifying the employees and putting 
that RIF into effect. The union would also need to be notified 
of it and it is a fairly complex process. We would like to 
submit the longer description of what has to be done in order 
to carry out that process, but I guess the larger point for us, 
as you say, is that when employees become aware that a process 
is underway, we are concerned that they may begin to look for 
something else to do.
    Mr. Pallone. But are you going to give me a date because 
Mr. Dingell insists on regular order around here and we want to 
be orderly.
    Ms. Mullin. I wish I could give you a specific date. I do 
have one and I would like to go back and have the longer 
description of what has to be done provided to you. I do know 
that reauthorization in June or at least mid-July would be most 
preferred, I would say.
    Mr. Pallone. OK. Well, that is helpful. Thank you. Second 
question. The PDUFA IV proposal is a result of a compromise 
between FDA and stakeholder groups. What are some of the items 
that were included in the initial discussions that were left 
out of the final proposal?
    Ms. Mullin. Well, in terms of the safety package that we 
have, we essentially have gone into the package, it is all of 
our priorities FDA identified for drug safety and the entire 
package was supported. FDA, in its own, looking at other 
programs, for example, in the DTC area, has focused on TV 
advertisement as a place where we can really sort of have a 
great impact, we think, and we actually have the data to 
actually structure and go in there and start a program data on 
the workload that is there today so we can estimate what it 
would take. I would have to say that in terms of resourcing for 
what we wanted to get that we really did come out of it with 
the things that we went in and wanted to have.
    Mr. Pallone. So you don't think there are any items that 
were in the initial discussions that were left out, for the 
most part?
    Ms. Mullin. No, I don't think we really got the things that 
we were hoping to get.
    Mr. Pallone. OK. Now, you mentioned, in your written 
testimony, that the number of reports of serious and unexpected 
adverse events has jumped by more than 65 percent in 3 years. 
In your opinion, is there a correlation between those reports 
and the fact that user fees are becoming a larger and larger 
portion of the FDA budget?
    Ms. Mullin. In my opinion, there is no relationship between 
those two things.
    Mr. Pallone. OK. And then I wanted to ask you, finally, 
according to the data analyzed by Harvard professor, Daniel 
Carpenter, drugs approved just before PDUFA deadlines are far 
more likely than those approved at other points in the review 
cycle to cause safety problems after they are in widespread 
use. Do you agree with that assessment?
    Ms. Mullin. I had heard about that finding. I haven't read 
his paper and I really don't feel I can comment on it. I just 
really don't think I can make a comment on it.
    Mr. Pallone. What I am trying to get out is whether there 
is any indication that PDUFA timeliness and PDUFA timelines 
compromise the safety of new drugs and biologics. If you don't 
think that is true, do you have----
    Ms. Mullin. Well, we don't believe that there is a problem. 
We don't think that the timelines have any effect on the safety 
or the issues that he points out by, like I said, I don't 
really know what is in his paper, but that has not been our 
experience. We don't think there is a relationship there.
    Mr. Pallone. Do you have any evidence you could submit to 
us in writing that would contradict what the professor is 
saying?
    Ms. Mullin. I think we would be happy to provide a more 
thoughtful and to go back and look at that paper response to 
that for the record.
    Mr. Pallone. I would appreciate it. Thank you. Mr. Deal.
    Mr. Deal. Thank you. I would like to ask you if you could 
elaborate on the whole issue of health information technology. 
Let me couch it in two particulars. Last year, as we were 
trying to pass an expanded health information technology bill, 
one of the things we were trying to promote was non-
identifiable health information that could assist in a variety 
of areas; further development in research, et cetera. And I 
guess my concern is what is the current situation with regard 
to your ability for data mining through health information 
technology to determine adverse events and to what extent could 
that be expanded and to what extent would the funding that is 
in this proposed legislation assist in that regard?
    Ms. Mullin. Our current post-market safety system relies 
primarily on a passive reporting approach and we receive 
information through passive surveillance. I believe what you 
are describing is moving more toward what is called an active 
surveillance system and the proposals that we have for post-
market safety in PDUFA IV would move us and position us to be 
ready to begin, but be ready to be a part of that kind of 
system which is often described and I think, envisioned as a 
consortium or partnership with many, many parties participating 
is how I think the department has conceived it, as well.
    We have talked about a sentinel system, for example. But to 
do that, we need to have the infrastructure that can allow us 
to link, have access to linked databases, these kinds of 
population databases that we are talking about and so we need 
to have that. We would need to have better tools, analytic 
tools, for mining appropriately using those kinds of data and 
as I mentioned, in our packages, best epidemiology practices so 
the people's methods for looking at these very complex data 
sets are consistent to well-understood, so people aren't 
arguing about the findings because they don't agree on the 
methods. So we want a process where we involve academics and 
industry and other members of the public in trying to identify 
and discuss that so we can identify best practices for using 
those kinds of data sets, as well. And we have put in some 
resources for moving toward that kind of approach in PDUFA IV.
    Mr. Deal. I think one of the things that we all have 
concerns about is that we have some overall and overarching 
policy considerations as we deal with a variety of issues, and 
I think the information technology gathering process is very 
important, especially as we deal with things like follow-on 
biologics and the pharmaceuticals associated with all of that 
entire area.
    I know this is not exactly within the scope of what you are 
here to testify about today, but I would hope that FDA would 
provide this committee with your points of view as it would 
regard how we would structure this non-identifiable information 
that would be most beneficial to you. For example, I know that 
in the projects that are ongoing now with reporting of 
information by physicians and others and moving toward perhaps 
they pay for performance arrangement. I would hope that we 
would have the information that is being gathered there in a 
format that would be compatible with FDA utilizing that 
information.
    Sometimes I think we do things in little categories of 
their own and do not have concern for how they could interact 
with and impact on other areas of what the Government is doing 
in different agencies. So I don't think it necessarily requires 
a response from you here, but I would hope that as we move 
forward looking at these areas such as health IT, that FDA 
could give us some insight as to what, if anything, we could do 
that would facilitate your activities, particularly as it 
relates to the post-approval adverse event categories. Thank 
you, Mr. Chairman.
    Mr. Pallone. Did you want to respond?
    Ms. Mullin. My comment there would be that the department 
is undertaking an effort to look at, certainly under the AHIC, 
as it is called, under Secretary Leavitt and the Office of 
National Coordinator, are focusing on interoperability 
standards to be sure that we do have the kind of capabilities 
you are describing and FDA is fully participating in that 
process.
    Mr. Pallone. Thank you. Mr. Waxman.
    Mr. Waxman. Thank you, Mr. Chairman. Dr. Mullin, thank you 
for your testimony. The industry/FDA proposal would expand the 
use of the user fees to some important post-market safety 
activities and this is a positive development. I want to ask 
you more about this. The proposal specifies that FDA may apply 
user fees to things like (1) collecting and reviewing post-
market safety information; (2) developing improved adverse 
event data collection systems; and (3) expanding FDA's 
analytical tools to assess potential safety problems, including 
access to external databases.
    And yet, under the proposal, only $29 million would be 
devoted to these activities; the remaining $360 million would 
continue to be spent on review activities. In its report, the 
IOM set forth some rough estimates for how much funding it 
would take to conduct enhanced drug safety activities, 
including many activities described in the industry/FDA 
proposal, they came up with something more in the range of a 
$100 million to $200 million. So I am deeply concerned that $29 
million is just not going to be enough. At the outset of the 
FDA and negotiation with industry, how much did FDA request for 
drug safety activities?
    Ms. Mullin. At the outset of our discussions, we, as I 
mentioned a minute ago, wanted the set of items that we 
proposed and we have a base amount of spending already in the 
post-market area, although it has the time restrictions on it, 
and it is on the order of about $15 million a year that we 
currently have from user fees that we spend on post-market 
safety, as opposed to the broader drug safety, of course, which 
a great deal of which happens in pre-market. But $15 million, 
30, 29.3 is added to that and this is again focused on these 
post-market activities. But we focused on the set of things 
that are post-market safety.
    Mr. Waxman. You thought this amount of money is sufficient? 
You didn't ask for more.
    Ms. Mullin. We thought it was sufficient to cover the 
things that we thought were our highest priority. It would 
certainly not cover everything that is recommended in the IOM 
report.
    Mr. Waxman. Let me ask you this. If all you asked for was 
an additional $29 million, would this create an optimal drug 
safety system? If not, what else is needed?
    Ms. Mullin. I think it doesn't create the system mentioned 
in the IOM report, which is a much more expansive effort, but 
it gives us a very strong safety system that we think is a 
significant improvement and will provide a very strong 
capability for us.
    Mr. Waxman. One of the recommendations that the IOM made 
was to do something about FDA's lack of authority to require 
drug manufacturers to take certain critical actions with 
respect to drug safety. For example, FDA is unable to require 
manufacturers to conduct post-market studies. Under the current 
law, FDA could ask a manufacturer to conduct the studies and 
then hope that they are actually done when the manufacturer has 
agreed to FDA's request, but if later they don't do the 
studies--and most of them appear not to--FDA's only option is 
to remove the drug from the market, something that FDA has 
never done and isn't likely to do, given the significant 
patient populations that come to rely on these drugs.
    I know that one of the performance goals contained in the 
industry/FDA PDUFA proposal is develop standard operating 
procedures that would clarify FDA's policies and procedures 
with respect to requesting voluntary study commitments, but 
this obviously does nothing to address the very critical fact 
that FDA is entirely unable to require that these studies be 
done in the first place or that they be completed. This is not, 
of course, just a theoretical problem.
    According to FDA's own data in 2006, there were 1200 open 
or ongoing commitments to conduct post-marketing studies, but 
manufacturers ended up completing only 11 percent of these 
studies that year; 71 percent of these studies hadn't even 
started. Do you think this is acceptable? Do you agree the 
PDUFA package does nothing to change the fact that FDA lacks 
the authority to require post-market studies because FDA would 
need Congress to act to address that problem?
    Ms. Mullin. Well, I will go back and begin with the IOM 
report and I know those recommendations were in there. The IOM 
report had recommendations----
    Mr. Waxman. Well, I am not talking about the report. I am 
asking specifically on this issue, on this recommendation that 
you be able to require these studies to be done.
    Ms. Mullin. I will begin, if I may, just saying that the 
recommendations that they made were for FDA, some 
recommendations for the department and some for Congress and 
regulatory authority recommendations were directed at Congress 
and my role in doing these PDUFA discussions has been to focus 
on getting better resourcing for the current authority and so 
we can do a better job----
    Mr. Waxman. Well, don't you think in addition you ought to 
have that authority to require the manufacturers do the study?
    Ms. Mullin. I can't really speak to that, but I can say 
that what we have in the PDUFA that we are recommending is 
additional resources so that----
    Mr. Waxman. Well, I know you are satisfied with what you 
have, but don't you think you ought to have more, given your 
experiences at FDA in this area?
    Ms. Mullin. I am really not an expert on that and I can't 
really speak to that.
    Mr. Waxman. Thank you. Thank you, Mr. Chairman.
    Mr. Pallone. Thank you, Mr. Waxman. Mr. Buyer from Indiana.
    Mr. Buyer. I would like to follow up where, on Mr. 
Waxman's, but take a different course on the post-market 
review. I noticed, over the years, the FDA has been very 
concerned with regard to the number of counterfeit drugs that 
are coming into our country. So here we can focus on the 
perfection of a closed system, while at the same time we have 
cracks in that closed system. So the Internet has exploited 
this and so we have many of our citizens think that they are 
getting drugs from Canadian pharmacies when, in fact, the FDA, 
in cooperation with United States Customs and Border 
Protection, you have been conducting surveillance.
    So whether it has been in 2001, 2003, 2004, 2005, you have 
been going to different ports of entry, examining parcels that 
come in to the hubs and you have been determining that many, 
each one, there are different percentages; 60, 70, 80, now it 
is 90 percent of the drugs that they examine are non-FDA 
approved drugs. So if we are going to look at this post-market 
review and how you are able to come up or perfect a particular 
system, I look at this and say my gosh, if we have got so many 
unapproved FDA drugs, obviously, there would be then a lack of 
assurance with regard to safety, effectiveness, quality and 
purity.
    And if the FDA cannot assure the safety and efficacy of a 
drug product line that is coming through these types of 
sources, because you have not been able to review or you didn't 
review or approve, nor have you had accessibility to monitor 
the manufacturing and quality control of a particular facility 
from a particular country. And if they are coming from 27 
different countries through these types of sources, I don't 
know how you can sit here before us and say well, we are going 
to have a wonderful monitoring system here.
    We go to page 8 of your testimony. On page 8 of your 
written testimony in discussing the post-market review of 
drugs, it says the FDA intends to use additional resources ``to 
improve our tools for detection of adverse events.'' My 
question, now, is knowing that we have this exploitation that 
is occurring from other countries to gain access to our system 
and there are people even sitting here in this panel before you 
that think that will this get access to people? To heck with 
safety. Let us go with a populist issue. So to what extent has 
the FDA factored in counterfeit drugs and what effects will FDA 
pursue to combat counterfeit drugs in this post-market review?
    Ms. Mullin. The post-market compliance issues that you 
refer to are currently outside the scope of what is defined as 
human drug review in the statute and our recommendations for 
PDUFA IV would still not include post-market compliance issues 
in the area that you are talking about.
    Mr. Buyer. Time out for just a second. We are going to 
reauthorize this. If I had a particular drug that is on the 
market and if, oh, take a step back. A manufacturer puts a drug 
on the market and the doctor has prescribed this particular 
drug to the patient. The patient begins to take that drug and 
then thinks that well, I can get that drug cheaper, so I will 
get it through a Canadian source and what we have happening is, 
is that there are adverse effects that don't even end up being 
reported. So my question to you is how can we have an effective 
system if we have this prevalency occurring with regard to the 
number of unapproved FDA drugs and many, many drugs that are 
coming onto the marketplace? How can we improve this detection 
system?
    Ms. Mullin. Well, some of the adverse event reports we may 
be getting now may be the result of the use of counterfeit 
medications and we are going to continue to monitor adverse 
events and try to understand the context of the care in which 
they occurred so we can identify what the source of harm was.
    Mr. Buyer. Do we know that of the 60 percent increase of 
adverse effects over the last 3 years, do we know the impact of 
the counterfeit drugs are having upon that number?
    Ms. Mullin. I don't think we do, but I have to say we are 
really outside of the scope of my expertise and if you would 
like, we can certainly go back and talk to the experts who 
focus on the counterfeit drug issues at FDA and provide you an 
answer for the record.
    Mr. Buyer. I just don't know how we can have, how we can 
best protect the American people and give them the assurances 
of a drug's safety if we are going to permit this exploitation 
and damage to our drug supply and then in turn, beat up the 
manufacturer. I would like to work with you on figuring out how 
we can expand the scope and go after these counterfeiters. I 
yield back.
    Mr. Pallone. Thank you. The gentleman from Texas, Mr. 
Green, our vice chair.
    Mr. Green. Thank you, Mr. Chairman. Again, welcome, Dr. 
Mullin. Former FDA Commissioner Mark McClellan has advocated 
for a more robust system to monitor post-market risk. In 
testimony delivered to the Senate Health Committee and in a 
recent New England Journal of Medicine article, he writes the 
problems in the current adverse events reporting system are 
spontaneous and by design, can only capture a small fraction of 
the problem. To improve surveillance, Dr. McClellan proposes 
that risk information be gathered through an electronic and 
active surveillance system network.
    We know that data exists already through private health 
insurers and within the Medicare and Medicaid programs. In 
fact, I know at least one pharmacy benefit manager that thanks 
to its electronic data, knew about the Vioxx problem and pulled 
Vioxx before even the FDA took action. Can you comment on Dr. 
McClellan's proposal to what additional funds would be needed 
to implement it and how it could complement existing 
surveillance systems at the FDA to catch these problems sooner?
    Ms. Mullin. Well, we think that the active surveillance 
approach that Dr. McClellan is describing is really the way of 
the future. We think that is the way we want to go in the 
future. I think that what we have in our package of proposals 
for PDUFA IV, as I am saying, it really helps us to move and be 
positioned to be able to work effectively with that kind of 
pooled population data. The scope of such a system that is 
envisioned is not there yet today. Those electronic health 
records are definitely beginning to become available, so we are 
moving in that direction.
    What we are doing, to be ready for that kind of system 
which I have often heard described as perhaps something where 
there will be multiple parties involved, shared resources and 
so forth, in the future where we want to be ready for that, to 
be participating in it and so the tools and moving the 
infrastructure, our IT infrastructure, that way is critical for 
our being ready to be participants in that, as well.
    Mr. Green. So whatever we reauthorize under PDUFA, we need 
to make sure the resources are there so the FDA can do their 
job with that----
    Ms. Mullin. I think FDA would want to participate and want 
to be involved in that.
    Mr. Green. OK. I would like to explore the new user fee for 
the direct-to-consumer advertising. As you mentioned in your 
statement, companies currently have the option of submitting 
ads before public hearing. To your knowledge, what percentage 
of drug advertisements are submitted to FDA for pre-screening?
    Ms. Mullin. Our data suggests that about a third of those 
direct-to-consumer advertisements that are broadcast on TV are 
currently submitted for pre-review.
    Mr. Green. OK. I understand that the new user fee would be 
sufficient to hire 27 additional staff to review the ads. Is it 
true that the review would still be voluntary for industry in 
the proposal?
    Ms. Mullin. Yes. Under our proposal, which is the current 
authority, it would be a voluntary review.
    Mr. Green. What element of the proposal, if any, would 
provide additional incentives to submit their ads?
    Ms. Mullin. We think that companies would--well, first of 
all, we arrived at this proposal and I think it received the 
support and endorsement of the industry, including, I would 
assume, the companies that would be participating in such a 
program. But we think the incentives would be that if you are 
going to put out a new ad and spend a great deal of money on 
broadcast, TV broadcast ads, that it would be certainly 
advantageous to participate in this and get FDA's views before 
you run the ad about whether or not we consider it to be 
compliant rather than having to say have it pulled later. And 
so that is a reason and also the extra people would allow us to 
have these reviews in a much more timely way than we can do 
today and we think that the timely review plus just the value 
of having that FDA advisory review would encourage 
participation.
    Mr. Green. In your opinion, is there a public health 
benefit or safety, drug safety, benefit on direct-to-consumer 
advertising for newly approved drugs?
    Ms. Mullin. Well, I am not an expert on that. I am 
certainly not a lawyer. But it is my understanding there are 
first amendment concerns related to that.
    Mr. Green. Well, I guess I have some concerns in using 
Vioxx and I know when it was first developed, I actually had 
relatives wanting me to get them some because they thought it 
was getting prescription, because their illnesses and so the 
market was created for it. And I guess, maybe, if we are going 
to create this market, which is what advertising is for, we 
ought to make sure that that pharmaceutical does not have these 
side effects that we now know and of course, the civil justice 
system took care of some of that because we had this untold 
number of lawsuits on Vioxx. I would much prefer the FDA to do 
that and the pharmaceutical industry before people have to go 
to the courthouse. Mr. Chairman, thank you for the time.
    Mr. Pallone. Thank you. Mr. Murphy.
    Mr. Murphy. Thank you, Mr. Chairman. Just a couple of quick 
questions. One relates to the issue of dealing with the 
statutory time limit that restricts user fee funding for drug 
safety, I believe it is 3 years. How long do you think this 
should be extended? What would the cost of that be if it went 
beyond 3 years?
    Ms. Mullin. We are basically recommending that the time 
limit be altogether removed because I think, we believe when a 
safety issue comes up, you don't want to have an artificial 
restriction on what products can be included in the study, for 
example, that you might want to use user fee funds to support 
the work that is going into that analysis and you wouldn't want 
to leave products out of the analysis because of a date 
restriction. We have accounted for the removal altogether in 
the proposed amount of additional fees that we are talking 
about here.
    Mr. Murphy. Would this, then, allow you, for example, if a 
drug, drug X is used and it has begun to be prescribed for 
different purposes, say, 3, 4, 5 years after it was first 
approved, this would allow you to go into other trials and 
other reviews of those medications once new discoveries would 
come up for those drugs?
    Ms. Mullin. Absolutely. We would continue to follow the 
product through the whole life cycle, as we say.
    Mr. Murphy. Thank you. And another area, this agreement, it 
establishes a new user fee for reviewing direct-to-consumer 
advertising. Now, some members would like to require review of 
all advertising, including print, Internet, television, et 
cetera. How would this work? Would the fees be sufficient to 
cover all levels for the FDA to review all advertisements and 
on all media?
    Ms. Mullin. No, the amount of money we are talking about 
here, the $6.25 million, was specifically to address the 
staffing that we thought would be needed to deal with just the 
more timely review of direct-to-consumer TV ads and we assumed 
that we would get more than today. We assumed that there would 
be about 150 submissions of such ads per year, that was a 
ballpark number we used to come up with the resources. It was 
not and did not include anything, any scope of work beyond 
that.
    Mr. Murphy. But we have to know that there are many levels 
of ads that, through print and magazines, there are multiple 
pages of ads; there are things, pop-ups on the Internet that 
also cover those. How will we review those direct-to-consumer 
ads and determine if they are appropriate?
    Ms. Mullin. We have a staff that review ads more generally 
will still be there. I mean, we will still be reviewing those 
ads as well as we can, all of the other materials.
    Mr. Murphy. I hope so, because it is an area that certainly 
many constituents are concerned about, with regard to the 
amount of funding that is spent on direct-to-consumer ads. If 
they influence a patient's decision when they come to 
physicians' offices and demand to be prescribed certain drugs, 
it is important that those ads do depict, in an accurate and 
truthful way, all those claims and I mean, I certainly 
understand the value of letting people know that there are 
medications available and they do have some benefits in terms 
of helping people understand that they may even have an illness 
that they are not aware of and that it is treatable.
    However, we also want to make sure that they are not 
increasing unnecessarily prescription drug and healthcare costs 
in doing that, so I don't know if this is enough money to cover 
that. I am very concerned about all the other areas that are 
going on. I mean, if this is just television, it doesn't even 
cover radio, which there are several levels here. So I am very 
concerned and I hope that your efforts can be expanded to look 
carefully at all those areas.
    Ms. Mullin. Well, we will continue to look at those other 
areas, but this program, you are right, only focuses on, that 
we are proposing, only focuses on the direct-to-consumer TV ads 
for pre-review.
    Mr. Murphy. Thank you very much. Mr. Chairman, I yield back 
the balance of my time.
    Mr. Pallone. Thank you. The gentlewoman from Colorado, Ms. 
DeGette.
    Ms. DeGette. Thank you, Mr. Chairman. Dr. Mullin, I have a 
concern that, as I said in my opening statement, that the 
public has lost some of its faith in the FDA's ability to 
regulate the drug industry because of some of these high-
profile problems that we have had and they believe, as a result 
of these problems, that the FDA has too cozy a relationship 
with the pharmaceutical and biotech companies. So to that end, 
I am concerned about these recent PDUFA negotiations that the 
FDA and drug industry have been having and the fact whether 
they were made available to the public. Can you talk to me 
about the negotiating process and what kind of public 
disclosure there was?
    Ms. Mullin. Our process, certainly. Our process began with 
a public meeting in November 2005 and we had a panel of 
consumers, a panel of patients' advocacy groups, a panel of 
healthcare provider professionals and academic researchers and 
also a panel from industry to begin with and to hear, sort of, 
the opening sort of view of the program and what needed to be 
addressed. We also undertook a lot of analysis within FDA to 
understand and sort of document what are the real issues to 
separate impressions that we may have from what the actual data 
suggest by way of the issues.
    We followed it up with meetings with, a separate meeting 
with patient advocacy groups, a meeting in May with patient 
advocacy groups and a meeting in May with consumer advocacy 
groups and in June with healthcare professionals to further 
understand what their concerns were and hear about it. And they 
provided us with very helpful, I would say, kind of a big 
picture guidance about the areas of their concern. At the same 
time, we were having more detailed discussions with industry 
about things like rent and----
    Ms. DeGette. And if you will excuse me, we only have 5 
minutes. But those meetings were held privately, correct? With 
the meetings with industry. I mean, I know you had a couple 
public, opportunities for public input, but the meetings with 
industry were held privately, as I understand it.
    Ms. Mullin. Well, they were private in the sense of just 
industry people were involved in those discussions.
    Ms. DeGette. Right. And so the question is in theory, those 
meetings could be held in public, similar to FDA advisory 
committee meetings? I am wondering, if you did that, is there 
confidential or trade secret material of individual companies 
that has been discussed in those private meetings with the 
companies? Is there some reason not to have more, to have the 
availability of the public, at least, sitting in on those 
meetings?
    Ms. Mullin. There is nothing confidential, commercial or 
trade secret, anything of that type discussed in such meetings.
    Ms. DeGette. So what would be, given some of these issues 
and all of our concern that we restore the public's confidence, 
to the extent that it has been diminished, in the FDA, what 
would be the legal or policy decision to not have those 
meetings open to the public?
    Ms. Mullin. I don't know. I don't know how well that would 
work, but it is certainly worth looking at. I guess I feel that 
the most important thing we can do to restore public confidence 
is to get the program strengthened and so that is really, 
again, the sort of getting the resources needed. I mean, the 
workload I mentioned is a very difficulty reality and I think 
it----
    Ms. DeGette. Right. Yes. And that is my next question, is 
the strengthening of the program that the FDA announced on 
January 30, I have got the press release here, talked about 41 
separate activities, eight of which the FDA proposed to be 
funded out of PDUFA IV, and 18 as it described is recently 
initiation and 15 to be started. I am wondering how the FDA is 
going to find the resources necessary. I think it is a really 
ambitious and good strategy, I am just wondering how you are 
going to find the resources to fund it?
    Ms. Mullin. Some of these efforts involve better 
collaboration between pre- and post-market safety and that is 
one of the things that the program, overall, will be able to 
fund and in addition to the resources that we are talking about 
for PDUFA, we requested additional appropriated dollars and the 
president's budget includes $11.2 million in additional 
appropriated dollars.
    Ms. DeGette. So the president's budget, the $11.2 million, 
would, if Congress appropriated that, would it be adequate to 
fund all of these improvements?
    Ms. Mullin. The ones that we described in our January 
response to the IOM report.
    Ms. DeGette. Thank you very much.
    Mr. Pallone. Thank you. Dr. Burgess.
    Mr. Burgess. Thank you, Mr. Chairman. Dr. Mullin, thank you 
for being here and providing us with your testimony. The Food 
and Drug Administration is probably, when I think of Federal 
agencies, it is the Federal agency that I was very first aware 
of back in either the late 1950's or early 1960's, as a small 
child, reading the stories in Life magazine about the tragedy 
of phylitimite in Europe and whether it was because of 
bureaucratic inefficiency or scientific curiosity, phylitimite 
was prevented from being sold on the American market and we 
were spared that tragedy, so I am not sure that I can say that 
I was aware that it was the FDA that did that, but I was aware 
that there was a regulatory agency in the Federal Government 
that was looking out for the citizens in this country, but then 
that kind of morphed.
    As a physician in the 1980's, I became very resentful of 
the FDA because it seemed like there were all these great 
things that were happening around the world and we could not 
get them for our patients. I didn't know that it was PDUFA that 
came along and allowed that process to be speeded up and 
allowed that backlog to suddenly begin to move forward, but is 
now the United States, where do we rank in terms of being a 
country that is able to get breakthrough pharmaceuticals to our 
patients in a timely fashion? Are we near the top, are we still 
in the middle or near the bottom?
    Ms. Mullin. We are definitely near the top. I think we are 
considered to be still the gold standard in terms of getting 
products to market and including safe, effective products to 
market. I think there is a recently considerable interest in 
Europe in trying to improve their support for new product 
development, to sort of work, you have probably heard the term 
we have used, critical path, but they have become very 
interested in that because of wanting to be more competitive, 
but we are still considered to be a world leader.
    Mr. Burgess. So have we, in a sense, traded places, then, 
with Europe since the 1980's where it seemed to take us so long 
in the 1980's to get new drugs to market and Europe could have 
them, essentially, as soon as they were off the laboratory 
branch, Europeans physicians had access to medications where we 
would have to wait, it seemed like, years. Have we now switched 
positions with Europe?
    Ms. Mullin. I believe we have. I haven't seen the most 
recent data, but it is my understanding that we are definitely 
a country that is often the first place in the world where a 
new product may be introduced and patients in the U.S. may have 
first access.
    Mr. Burgess. So largely because of the efforts that 
Congress made many years ago, 15 years ago, with the first 
PDUFA, with PDUFA I, that was able to alleviate some of that 
backlog and begin to break that log jam, was that?
    Ms. Mullin. We think that is a factor. We think that is an 
important factor.
    Mr. Burgess. Well, I agree with you and I think it would be 
a mistake to see it go away. Now, let me, you were asked a 
question about Dr. McClellan's comments on the use of 
information technology to speed the process or to essentially 
speed the learning process for drugs after they have gone on to 
market. Do you, at the FDA, now currently have the 
architecture, the infrastructure in place to allow you that 
sort of rapid learning environment from an information 
technology standpoint?
    Ms. Mullin. We don't have that infrastructure today and 
part of our proposal here includes some funding to improve the 
infrastructure for adverse event collection and also to link, 
to access linked databases, which are the type that are being 
referred to in that active surveillance concept.
    Mr. Burgess. And is that through PDUFA or is that through 
part of the general appropriations process?
    Ms. Mullin. Well, certainly in PDUFA we have tried to 
include that. Overall, we are trying to improve our IT 
infrastructure at FDA and generally trying to do that for all 
medical products and other products, as well, so I have to say 
that it is part of our larger budget effort, as well.
    Mr. Burgess. Am I correct in the assumption that that part 
of information technology infrastructure that is purchases 
through any funding available through PDUFA will not have any 
strings attached to it so that it has a particular drug's name 
on it as a product goes through?
    Ms. Mullin. There are no strings attached to it in that way 
and I also think it is an understanding, in terms of getting 
resources for drug and biologics infrastructure that with the 
same infrastructure is one we will want to build on for medical 
devices and other medical products. It doesn't make sense to 
have many separate systems.
    Mr. Burgess. I would agree with that philosophy 
wholeheartedly. Now, just for my own edification, what is the 
process for review? A new drug comes to market, is approved by 
the advisory panel and approved by the whole FDA, it becomes 
generally available to clinicians and patients throughout the 
country. Is there a defined period for look-back as to problems 
that might be surfacing? What are the procedures that are in 
place now for a new drug that comes to market?
    Ms. Mullin. Well, the new drug review process actually 
begins much sooner than when we get that marketing application; 
that actually marks sort of the end of the development phase. 
The first time FDA sees a drug is actually when an 
investigational new drug application is submitted, really is 
drug begins clinical trials in humans and we continue to get 
information about that product over the years of development. 
We have meetings with companies.
    Mr. Burgess. That database is then built upon by data that 
trickles back in after it becomes generally available to the 
local medical doctor and the patients in the community?
    Ms. Mullin. Right. Yes.
    Mr. Burgess. Did we used to just get a form to fill out, to 
say that if you have had a problem with a drug in the past 
year, fill in this form and do the best you can to recollect 
all the particulars and send it back to the FDA postage paid? I 
don't recall ever receiving any information or maybe it was 
just because I was inattentive and curious, but I don't ever 
recall receiving any information that said now we have got this 
up on the Internet and you can simply go to a secure Web site 
and record the same information. Somewhere along the line I 
stopped getting the prepaid envelopes, so again, maybe I just 
wasn't paying attention. Has that process been in place?
    Ms. Mullin. We are right now working on really simplifying 
and streamlining our med watch reporting process so that it is 
one entry point straightforward.
    Mr. Burgess. So can I still get those envelopes in the mail 
once or twice a year?
    Ms. Mullin. I actually don't know if you still get those in 
the mail, but we are trying to make the Internet based 
reporting much more straightforward.
    Mr. Burgess. I am about to run out of time. I will say I 
have never been a fan of direct consumer advertising. As a 
physician, I was always insulted when a patient would come, 
carrying a 3-year-old magazine and an ad and say I want this, 
Doctor, and I realize I shouldn't have left them in the waiting 
room so long that they had a chance to do that, but I am 
grateful that you are spending some time and effort to monitor 
that. I am grateful that there is going to be a pre-approval 
process. Of that one-third that now does not voluntarily pre-
approve, I think you mentioned a number of one-third that 
doesn't go through the process, to what extent are you finding 
problems in that one-third that is self-unregulated?
    Ms. Mullin. Actually, it is one-third that do submit today 
for pre-review and advisory review.
    Mr. Burgess. Oh, OK.
    Ms. Mullin. And I actually don't know the percentage where 
we would recommend to them that they make some changes because 
we feel that the ad is not a fair and balanced representation 
of the benefits and risks. I do know, I have been told the top 
five reasons why ads are considered to be violative and they 
sort of are the overstatement, the understatement or the 
minimization or omission of risk information.
    Mr. Burgess. With the disclaimers they have to put on the 
television, I don't know why they even do it in the first 
place, but it is America and they are allowed free speech 
rights and I don't think we, at least right now, if there was a 
way, finally, on the off-label use of medications, are you 
going to look at compiling a database for the off-label use of 
compounds, some of which is extremely valuable to clinical 
practice, some of which borders on quackery, but are you going 
to be watching and is that going to be something that is 
generally accessible to clinicians and providers?
    Ms. Mullin. I think, as we move toward this approach of 
active surveillance, which is what we intend to do through 
PDUFA IV, we are going to have the ability to look at the 
population database and how the drug is used and of course, 
that is going to include its use off-label, so it is going to 
give us a much more complete picture of how drugs are going to 
be used and we will be able to do a much better job of 
analyzing the ways in which they are off-label used.
    Mr. Burgess. Even if the manufacturer has no interest in 
pursuing the off-label----
    Mr. Pallone. We have got to move on here.
    Mr. Burgess. Let me give you that one in writing, because 
that is important. Some drugs do actually have a black box 
warning and for all the good they do, we go around that in 
clinical practice, but thank you.
    Mr. Pallone. Thank you. Mrs. Capps.
    Mrs. Capps. I want to congratulate you, Dr. Mullin, for 
your recommendations to modernize your post-market review 
capabilities and shore up your work force for post-market 
safety work, but I notice that you only discuss how user fees 
would be used to achieve this. Now, I, along with several of my 
colleagues, are going to be urging for greater congressional 
appropriations for the FDA and for lessening the percentage of 
revenue that is relied upon from the industry.
    I do take seriously the recommendations of the four former 
FDA commissioners who agreed that we would be better served 
through a greater direct appropriations which would give the 
FDA more independent authority and would lessen the reliance on 
constraining agreements with the industry. So I want to get on 
the record and ask you if you agree, and it can be a yes or a 
no, that if a greater percentage of FDA funding came from 
appropriations, from us, from the taxpayers, if you will, the 
agency could better provide for an independent drug review 
system?
    Ms. Mullin. Well, I have to say that I don't think that the 
share of resources that come from fees versus appropriations 
really has any effect on the regulatory decision process. There 
is no evidence of that. I wouldn't want to imply that we don't 
welcome more appropriations, but I don't see any impact on the 
regulatory decision process.
    Mrs. Capps. Excuse me. No matter what the percentage is 
from the private sector?
    Ms. Mullin. I don't think that it affects the review 
process. I don't think that our reviewers, while the people who 
work in my kind of job, who are aware of budget and where the 
money is going and the financial analyst types may pay 
attention to that. We work in planning and budget offices. The 
people who actually do the reviews are in another part of the 
organization; they are focused on the review. And so I don't 
see that it matters to that process.
    Mrs. Capps. I guess you can tell I am aligned with the four 
former FDA commissioners. But I will move on because I believe 
that the public understand that we need to be taking an effort 
to ensure that FDA retains independence when we have heard 
about so many instances of undue influence by industry, so 
whatever the percentage, surely there are concerns about undue 
influence and I want to ask you what steps you will be and 
perhaps already are taking to ensure independence?
    Ms. Mullin. Well, as I said, the appropriations side, the 
user fee side of the program has been adjusted over the years 
for inflation and workload and the same mechanisms haven't been 
there for the appropriations side, so that is why I think we 
have seen this continuing growth of difference between them. 
The people who do the reviews are in different parts of the 
organization. They are in the drug centers, they are in review 
divisions and they really are not aware of whether the money 
that is supporting them comes from user fees, appropriations. 
That is something that is actually determined after the fact. 
We figure that out at the end of the fiscal year what 
percentage we have had from user fees or appropriations.
    Mrs. Capps. So the understanding that I have had, that 
there is a plan to exclude individuals from an advisory panel 
if they hold $50,000 or more in financial ties to the company 
or its competitor, that is only determined after the year?
    Ms. Mullin. The advisory committee issue that you are 
mentioning is not one in my area of expertise and it is really 
a separate issue, but I would be happy to get any questions you 
have about advisory committees answered by the people at FDA 
who are experts.
    Mrs. Capps. I would like to have that. I understand that 
that is a plan and I am kind of disheartened to have read just 
last week about an advisory for Arcoxia, which did, even those 
this proposal is under say, that particular panel included 
scientists with financial ties.
    Ms. Mullin. Well those are not FDA reviewers. Advisory 
committee members are not FDA staff reviewers.
    Mrs. Capps. No, but advisory panels are very influential, 
is that not true?
    Ms. Mullin. They give FDA advice and I think they are 
important and I would really want to take your question back 
and have it properly addressed in writing for the record.
    Mrs. Capps. I was assuming that it was under your 
jurisdiction, but so I would really appreciate a response to 
this. I think there is some concern that I have held about the 
importance, and maybe that could be part of my question that 
you will get back to me or somebody will, about the role that 
the advisory panel plays, then, in determining the approval. Is 
it just advice and to what degree is it advice. Thank you. I 
appreciate that. And with that, I will yield back and wait for 
an answer.
    Mr. Pallone. Thank you. Recognize Ms. Blackburn.
    Mrs. Blackburn. Thank you so much. Let us see where I want 
to start. Let us go back to Dr. Burgess' question where we were 
talking about the drugs that are approved in the country and 
how often in the U.S. we are first approved with new drugs that 
are coming to market and we look at other areas around the 
globe and how often those drugs are first to market and 
available to our consumers here. I would like for you to expand 
on that just a bit and give us, if you can, percentages where 
we are first to market with new drugs or maybe even raw numbers 
and you can do this in writing.
    You don't have to do it right now, but I think that that 
would be helpful for us and knowing how often that was the case 
prior to PDUFA so that we can look at some apples to apples 
comparisons, if you will. And then another thing I would like 
to know and maybe you can expand on this just a little bit. If 
PDUFA were not reauthorized, then the amount of time, the 
length of time that you would expect that review process to 
increase and delaying the patients' access to new therapies and 
new drugs. What kind of delay would we expect to see? And you 
may be able to answer that or you may want to submit that in 
writing.
    Ms. Mullin. I think we need to submit it in writing. The 
program currently is supported by actually, get the right 
number here, of more like 58 percent of the funding of PDUFA 
today comes from user fees; 58 percent from fees, 42 percent 
from appropriations. So as you can imagine, that would have, 
probably, a fairly devastating effect on the program. Fifty-
five percent of the FTE support, slightly different, comes from 
user fees. So more than half of the people in the program, 
almost 60 percent of the funding of the program, which covers 
other things related to costs of the programs, so if that were 
to go away and rather abruptly, it would cause a lot of 
dislocation.
    Mrs. Blackburn. Another thing I think would be helpful to 
us is to know specifically what policy changes, and you have 
talked a little bit about this in your testimony, but specific 
policy changes that would impede your success or your continued 
success and as you all talk about different things, throw that 
in as you write your response, just the specific actions in 
those policy changes.
    One thing I do want to highlight. In reading your testimony 
and then listening to your answers, as we look at the 
reauthorization, I think it is important to all of us that, and 
it certainly is important to me, that any funding that you 
have, and we need to know if FDA is going to ensure that the 
funding reaches its intended targets and is not just used to 
increase the bureaucracy. PDUFA came about because of an 
unresponsive bureaucracy and I think that it is an imperative 
to constituents that we deal with that are dealing with your 
agency, that the funding reach those intended targets and I 
hope that that is not lost.
    Ms. Mullin. Speaking as someone in the office of the 
commissioner, who might be viewed as part of the bureaucracy 
part of that, we have actually tried to reduce the 
administrative overhead of the program to make sure we are 
hiring more reviewers with the money and really putting it 
where it is needed most in the pre-market and post-market 
safety reviews.
    Mrs. Blackburn. My time is going to run out and I have got 
two more questions for you. One, on your IT improvements, the 
infrastructure that you are building, are you doing that in-
house or are you outsourcing that work?
    Ms. Mullin. Most of our IT work is done through contract 
work.
    Mrs. Blackburn. Through contract, so it is outsourced. Do 
you consider it on-schedule or is it lagging behind?
    Ms. Mullin. I think it is on schedule and I think that we 
are paying a great deal of attention, because resources are 
tight, to making sure that those contracts are very well 
managed.
    Mrs. Blackburn. And then I will just highlight your DTC 
program and the advertising review. I think we are all going to 
be watching very closely on the type expansion that you are 
looking for, the direct-to-consumer advertising is something 
that a lot of complaints come in about and as you move forward 
with a framework with basically your expectations, a clear 
definition of that, I think it is going to be something that we 
are going to be watching closely to see and I yield back.
    Mr. Pallone. Thank you. Ms. Hooley.
    Ms. Hooley. First of all, thank you so much for testifying 
and taking all of our questions and sometimes I think we forget 
what an awesome responsibility you have, how important it is to 
get new drugs on the market, what it does for people's lives, 
how important it is to make sure when they come on the market 
they are safe and that you do that follow up. So I have some 
questions in regard to some of the follow-up. And thankfully, 
you are removing the 3-year time limit for post-market review. 
That means that you will obviously have a lot more work to do 
in your surveillance office.
    In your written testimony you stated that the 
recommendations for PDUFA would permit the hiring of 82 
additional staff for post-market safety activities. How many 
employees do you currently have working on that post-market 
safety? And what I am trying to do is get a better sense of how 
much this additional funding for post-market surveillance will 
get you; how many of the new hires in the post-market safety 
division would you estimate will be used in maintaining the 
existing level of post-market surveillance out past that 
current 3-year window versus engaging in new and more 
comprehensive surveillance activities. So that is sort of my 
first question. Let me ask the second and you can answer both 
of them.
    It is my understanding that the Office of Surveillance and 
Epidemiology has little or no enforcement authority of its own. 
The Office of New Drugs has that authority. Do you think the 
Office of Surveillance and Epidemiology should be given more 
authority to act when it uncovers post-market safety concerns? 
If the expertise on post-market safety is within their office, 
doesn't it make sense for that office to have enforcement 
authority?
    Ms. Mullin. I think that, in FDA's view, it is FDA that has 
the authority and that we really work as a team and if we are 
talking about benefit and risk and you can't separate benefit 
and risk; instead of pre-market/post-market, we think you have 
got to combine the information you obtained about the drug pre-
market with the further experience post-market and look at, 
again, benefit versus risk of a product and see whether the 
balance of benefit versus risk is adequately served by the 
current labeling and whether the drug should be on the market, 
but really, we like to think of it as we are trying to create a 
team here.
     Talking about a culture of safety, we think the way, the 
best way to address this is to create a strong team across pre-
market and post-market and not further look at divisions there. 
So I think that we view it as benefit versus risk, life cycle 
of the product and let us keep focusing on learning and 
bringing the new information that we get into our overall 
assessment of the product. So that is kind of, I think, the 
approach we are trying to take and use the best science, also, 
in trying to update the information that we have.
    You asked about numbers and I have--at least, I don't have 
the whole office here, but I do have some information about, at 
least, the fee supported part of post-market safety staff today 
and the fiscal year 2005, I have the actuals in front of me. We 
don't have the actuals yet available for 2006. That year just 
closed out last September.
    Ms. Hooley. All right.
    Ms. Mullin. And the total FTE for post-market risk 
management funded by fees was 62 staff.
    Ms. Hooley. So you would get an additional 82 over the 62?
    Ms. Mullin. That is correct.
    Ms. Hooley. OK.
    Ms. Mullin. And that 62 is spread across the----
    Ms. Hooley. And then how are you going to use that 
additional funding? You are going to hire 82 additional, so----
    Ms. Mullin. Well, first of all, you were saying a minute 
ago that taking the time limit away would create more work. And 
actually, the work, we think, will be the same. I mean, the 
workload is one thing; having the resources that we can apply 
to the workload is what we are going to be able to do now that 
we got the elimination of the what we can support with the 
fees, so we are going to be able to use those fee dollars to 
support the work that is there already. And we are going to 
spend about $5 million a year of contract epidemiology studies 
and we are going to be using about a few million dollars to do 
the IT upgrades that I have been talking about and the balance 
of the resources would be used for training our staff that are 
on board today, conducting a few public processes that we 
described in the testimony that I provided in writing and 
basically hiring more epidemiologists and safety experts so we 
can beef up our capacity. We need more people to do that work, 
as well as giving them better tools. So that is how we would 
use the resources.
    Ms. Hooley. Thank you and I yield back my time.
    Mr. Pallone. Thank you. Mr. Pitts.
    Mr. Pitts. Thank you, Mr. Chairman. Thank you, Dr. Mullin, 
for your testimony. A couple of things. As I understood your 
testimony, is the United States now the country where most new 
drugs are first approved?
    Ms. Mullin. The data that I have is not the most recent and 
the last thing I saw on this, and I think it is a couple of 
years old, so I would rather go back and get the latest 
analysis from our economists and provide that for the record.
    Mr. Pitts. But we are certainly near the top?
    Ms. Mullin. We are certainly near the top.
    Mr. Pitts. Now, was this the case prior to PDUFA?
    Ms. Mullin. No, it wasn't. Actually, there has been 
something of a reversal, if you look at the data going back.
    Mr. Pitts. If PDUFA is not reauthorized, could we expect to 
see review times increase and thus delay patients' access to 
new therapies?
    Ms. Mullin. Yes, I think it would be safe to say that you 
would see that.
    Mr. Pitts. Now, a goal of PDUFA IV is to accelerate the 
move towards automated drug review and improve health IT 
infrastructure at the FDA. How will that help reviewers analyze 
applications?
    Ms. Mullin. I think having better access to population 
databases will be extremely helpful, certainly as you get into 
post-market review it will help. But also, as we get 
information when an efficacy supplement comes in, that is a 
product that has been on the market for a while, so you have 
post-market experience with that as well as the new information 
that you will receive in an efficacy supplement. And so I think 
it would help both the pre-market reviewers and even more, the 
post-market reviewers in trying to get a more complete and 
accurate picture of the use of the product out there in the 
delivery system and trying to understand the adverse event 
reports and signals that we are getting so we can appropriately 
respond.
    Mr. Pitts. Now, as I understand your response to 
Congressman Buyer, I think you said much of the 60 percent 
increase in adverse effects over the last 3 years can be 
attributed to counterfeit drugs on the market, is that correct?
    Ms. Mullin. No, I don't.
    Mr. Pitts. No.
    Ms. Mullin. I think I said I don't know how much of that 
can be attributed. I really don't know how much of that could 
be attributed to the use of counterfeit drugs. The data on 
counterfeit drug use is pretty imperfect, but I don't know the 
amount. We can go back and get the best information we have on 
that for the record.
    Mr. Pitts. What about foreign versions of FDA approved 
drugs?
    Ms. Mullin. A foreign version of an FDA approved drug, I am 
not expert in this area, but it is not an FDA approved drug if 
it is not the version that is used and labeled by FDA.
    Mr. Pitts. What could Congress do to help you deal with 
counterfeit drugs or foreign versions of FDA approved drugs?
    Ms. Mullin. I don't think I can give you an adequate answer 
and we have experts at FDA who can, so I would rather take your 
question back to them and provide the answer for the record.
    Mr. Pitts. Is there something that doctors need to do, that 
we need to ask of doctors to ensure that they are getting the 
drug from a supply chain which they can control?
    Ms. Mullin. Again, I would like to include that in the 
answer that we provide for the record.
    Mr. Pitts. All right. Thank you, Mr. Chairman.
    Mr. Pallone. Ms. Eshoo.
    Ms. Eshoo. Thank you, Mr. Chairman, and thank you, Dr. 
Mullin, for your testimony so far. An all-electronic drug 
review system at FDA, we know, is going to cut application time 
and decrease or entirely eliminate paper filing. And I think 
that those are two very important goals and I think that they 
need to be achieved. It is also very importantly, I think, a 
way to eliminate medical errors and in time, it could help 
track safety information through a product's life cycle and it 
would be useful for data mining activates to identify adverse 
events and compile clinical trial data. So it clearly is a very 
important investment and it would produce a lot of outcomes 
that we need and that we are looking for.
    Now, I understand that the administration's PDUFA proposal 
includes $4 million to move the FDA toward an all-electronic 
drug review system. Now, when you compare the $4 million with 
something else, $6.25 million that would be generated to 
support the new user fee for direct-to-consumer television ad 
reviews, it is a curiosity to me. So I want to ask you, in your 
view, is the $4 million adequate for the adoption of an agency-
wide program for an all-electronic drug review system?
    Ms. Mullin. The $4 million is not adequate, but 
fortunately, and we should have made this clearer in my 
testimony, that that is in addition to what we are already 
spending from user fees on IT systems and so----
    Ms. Eshoo. What is the total amount?
    Ms. Mullin. The total amount that we are currently for 
PDUFA, which we would continue to spend in going into the 
future and----
    Ms. Eshoo. But I am asking you, what is the total amount 
for the all-electronic drug review system?
    Ms. Mullin. The total amount that we are spending from 
PDUFA fees would be more on the order of $34 million because we 
are spending about $30 million per year now from user fee 
dollars.
    Ms. Eshoo. So the $4 million----
    Ms. Mullin. Is added on to about $30 million.
    Ms. Eshoo. And will that complete, is that complete funding 
to achieve the system that I just outlined?
    Ms. Mullin. No, it is not and there are also, we are trying 
to build systems that are not just siloed for human drugs and 
biologics, but make it a system that can also be accommodating 
medical devices and other medical processes.
    Ms. Eshoo. So $34 million is what? For this year?
    Ms. Mullin. The $34 million would be the amount that would 
start in 2008 if we had the $30 million going forward from 
PDUFA III added to $4 million from PDUFA IV. In addition to 
that, the $4 million that you are referring to is the pre-
market component, but as you were saying, post-market----
    Ms. Eshoo. Is it going to require an additional 
appropriation for Congress or are the user fees going to cover 
this?
    Ms. Mullin. For PDUFA and for human drug review, we are 
seeking these resources for user fee support and there is, in 
addition, the $33.7 million for post-market proposals IT 
support. So for in PDUFA, the new money we are talking about in 
PDUFA IV would be $4 million for pre-market, $3.7 for post, so 
that is $7.7 million new IT money in PDUFA IV on top of about 
$30 million a year we are spending currently for PDUFA user 
fees on IT.
    Ms. Eshoo. I see. Now, can you briefly explain the steps 
that FDA is going to take under PDUFA IV to modernize and 
improve the ways that the post-market safety will be monitored 
and analyzed?
    Ms. Mullin. Certainly. We would begin by trying to improve 
our IT informatics support, as you were just saying. The 
collection of adverse event reports that are accessed to link 
databases----
    Ms. Eshoo. So you are looking to have this system beef it 
up, essentially? It is relying upon this?
    Ms. Mullin. The infrastructure is an important piece, but 
in addition to the infrastructure, we are going to look at the 
best way to collect adverse event information so that we get 
the most information out of it, best epidemiology practices. We 
haven't got a standardized set of practices for those studies 
today and we want to have access to these databases. We want to 
make sure we use good methods to analyze the data once we have 
it, so increasing our access to population databases to be able 
to conduct studies of post-market----
    Ms. Eshoo. Let me just very quickly ask, because I have 11 
seconds left, what has FDA done to identify drug safety 
problems and remove products from market earlier in the post-
market cycle? It is a problem for the FDA and this why the 
confidence, I think, of the American people has gone down.
    Ms. Mullin. Well, what I am able to talk about today is 
what we are trying to do going forward and beefing up the 
program and providing more resources to do a better job under 
the current authority and I think as Chairman Pallone just 
said, we will have the experts here for a separate hearing on 
drug safety and they can help with that.
    Ms. Eshoo. That is fair enough. Thank you. Thank you, Mr. 
Chairman.
    Mr. Pallone. Thank you. And I recognize the gentlewoman 
from New Mexico.
    Mrs. Wilson. Thank you, Mr. Chairman. So a financial 
report, I think it is the most recent one on PDUFA and there 
was a section in it talking about people and the challenge that 
the FDA faces in hiring, training and retaining qualified 
reviewers. According to the report, it said that the agency's 
ability to attract and retain the best and the brightest in 
medicine and science is critical to maintaining FDA's 
recognized gold standard in new product safety. It also notes 
that a large number of FDA's reviewers are nearing or entering 
retirement eligibility and they are also, many of them have 
excellent employment opportunities outside of Federal service.
    Can you talk about that a little bit and the challenges 
that you face and whether the legislation that you recommended 
addresses this in any way?
    Ms. Mullin. Certainly. I think that it is a continuing 
challenge for FDA to attract and then retain people who, by 
virtue of their growing experience at FDA, become even more 
attractive to other employers and so it is a challenge to us. 
One of the things we provided for, I haven't said a great deal 
about, but in that sound financial footing piece, to try to 
increase the amount of inflation adjustment in which we include 
our payroll and payroll benefits.
    And that includes that retention allowances for a lot of 
our very specialized scientific and medical experts so that we 
can attract people like that to come a little closer to the 
kinds of compensation they might receive elsewhere and cover 
the healthcare costs of the people in the program and 
retirement costs. So we are addressing it by really catching up 
to and putting in a provision that will keep us able to cover 
those costs going into the future so that we can attract and 
retain those people.
    Mrs. Wilson. What kind of retention bonuses are available 
for these kind of folks and what kind of base salary levels do 
they, on average, get?
    Ms. Mullin. I am not able to actually give you accurate 
details on that, but I would be happy to go back to the people 
who keep those numbers and provide an answer for the record.
    Mrs. Wilson. Is there anything in the draft legislation 
that would address this issue of recruitment and retention of 
qualified personnel?
    Ms. Mullin. We address it through the change to the 
inflation adjustor where we say we would like to have a 
provision that includes the most recent 5-year payroll costs 
for the agency as another possible adjustor for inflation. That 
number has been running at 5.8 percent on average for us as 
opposed to 4.2 percent, which is the 5-year average for just 
the Federal pay raise. So this will help us to keep resources 
so that we can get to the numbers of these qualified people 
that we want to have and retain.
    Mrs. Wilson. And are you having any difficulty at this 
point in keeping those positions filled or any difficulty in 
recruiting new qualified reviewers when you have folks retire 
and move on?
    Ms. Mullin. Not if we have the resources and not if, people 
have a sense that the program is going to continue, I think we 
will be fine.
    Mrs. Wilson. But currently, do you have a large vacancy 
rate or a large mobility in your reviewer pool?
    Ms. Mullin. Well, now that we are going forward with our 
2007 budget and able to move forward, I think we are going to 
be able to staff up and with the increasing resources we are 
proposing in fiscal year 2008 with PDUFA, we will really be 
able to aggressively try to fill the positions that we need to 
fill to get the program adequately staffed. We have actually 
experienced a loss of FTE because of other costs going up. We 
haven't been able to afford as many people in the most recent 
years of the program, so we are trying to address that so we 
don't lose people because we are having to take the money to 
pay rent or rent related costs and that kind of thing, so we 
think we will be in good shape going forward.
    Mrs. Wilson. Thank you, Mr. Chairman.
    Mr. Pallone. Thank you. I recognize the gentlewoman from 
Wisconsin.
    Ms. Baldwin. Thank you, Mr. Chairman. Thank you, Dr. 
Mullin, for your testimony. There has been a fair amount of 
discussion in the questions about public confidence in the FDA 
and various ways in which it may have been eroded and how we 
can bolster that. And Congresswoman Capps asked some questions 
about the advisory panels and financial conflicts of interest 
that might exist and you are going to refer those questions to 
colleagues of yours. I would like to take a closer look at the 
question of political interference rather than financial 
conflicts of interest that might be experienced by the 
scientists who are employed by the FDA.
    In response to a previous question, I think you were 
indicating that the balance of private sector versus taxpayer 
dollars doesn't influence the research because they are 
employed in a separate division, et cetera. But you are 
probably aware of last year's Union of Concerned Scientists' 
survey of FDA scientists and concerns that were raised in their 
report about political interference with science and as I 
reviewed just an executive summary of this, it appears that the 
survey was provided to or the opportunity to fill out the 
survey was provided to nearly 6,000 scientists.
    About a thousand, just a little fewer than a thousand 
participated in this survey and there were some pretty 
disturbing findings. There were some open ended questions and 
also limited answer questions. One in five responded that, the 
scientists responded that they had been asked for non-
scientific reasons to inappropriately exclude or alter 
technical information about their conclusions in an FDA 
scientific document. More than three in five, 61 percent, knew 
of cases in which the Department of Health and Human Services 
or FDA political appointees had inappropriately injected 
themselves into FDA determinations or actions.
    Three in five said they knew of cases where commercial 
interests have inappropriately induced or attempted to induce 
the reversal, withdrawal or modification of FDA determinations 
or actions. And 50 percent also felt that non-governmental 
interests had induced or attempted to induce such changes. In 
another area it says nearly 70 percent of the respondents to 
the survey do not believe the FDA has sufficient resources to 
effectively perform its mission of protecting public health and 
helping the public get accurate science-based information they 
need to use medicines and foods to improve their health.
    On the open ended question that was posed, a couple of 
quotes that I found particularly distressing. One was, and this 
if from a scientist from the Center for Drug Evaluation and 
Research. ``Scientific discourse is strongly discouraged when 
it may jeopardize an approval. Whenever safety or efficacy 
concerns are raised on scientific grounds, these concerns are 
not taken seriously.'' Another one, this one is from the Center 
for Devices and Radiological Health. This is a good quote. ``In 
my experience, it is never the low level reviewers in the FDA 
who breach the integrity of our work. It is usually at much 
higher levels, such as center directors and above. Those higher 
levels are so far removed from the scientific work that we do, 
that politics has even more sway over their decisions. The 
people I work with are truly dedicated to serving the American 
public and doing whatever is in their power to ensure their 
safety.''
    And I have just several follow-up questions to what I have 
just iterated. One is, do you take exception to these results 
or if you don't, how is this reflected in your planning and 
budgeting, your response to this reflected in your planning and 
budgeting? And then back to the answer you provided earlier on 
the separation of the scientists from the budgeting decision 
making, how does that work at the upper levels where that 
separation, perhaps, isn't as strong and a number of the people 
who responded to this survey are indicating that the 
interference, the political interference is higher up?
    Ms. Mullin. OK. Well, let me begin by saying that I think 
that that separation goes all the way up. I don't think that 
anybody at FDA, any scientist at FDA makes decisions based on 
the percentage of fee versus appropriated dollars. That is my 
belief. I think that first of all, one of the findings that you 
mentioned was resources and certainly with PDUFA, we have 
endeavored to address that as well as we can because we think 
that our review staff really does, they are overworked. I mean, 
they have a huge amount of work to accomplish and it is 
extremely important complex work and so what we have endeavored 
to do with PDUFA IV is really boost the resources to give them 
enough people to be able to do their job and because we fully 
support them and they are very dedicated people. Everybody at 
FDA, I think, is very dedicated.
    The other point I would make is I think Dr. von Eschenbach 
is very concerned that, to the extent that people feel the way 
described in that survey, that that be addressed. And so I know 
that on his short list of his agenda and leadership priorities 
is to strengthen the environment of trust and transparency and 
integrity, to have everybody feel that the agency invites and 
we engage in vigorous debate on issues, but that we make 
science-based decisions within our regulatory authority and I 
know that that is one of his key elements of his agenda at FDA, 
so I think that our new leadership plans to address this very 
aggressively.
    Ms. Baldwin. I wouldn't ask you to speak for Dr. von 
Eschenbach, who isn't here today, but what you just indicated 
was almost, it sounds like you take issue with some of the 
things that I read, that there is a disbelief that the politics 
is actually getting involved in the decision making and that it 
is all science-based and yet your scientists don't believe 
that. I guess I am asking you has the agency decided to take 
issue with this study and its findings or are you acting 
purposefully to root out the politicization of the process as 
it may exist?
    Ms. Mullin. Well, I think we are trying to listen to what 
people's concerns are. I can't speak for the commissioner, but 
I would say that from what I can tell, we are trying to listen 
to the concerns and be sure that we are employing the best 
science in our decision making, that we have enough people to 
do the job and that we provide an environment that encourages 
debate.
    Mr. Pallone. Thank you. The gentleman from Michigan, Mr. 
Rogers.
    Mr. Rogers. Thank you, Mr. Chairman. I appreciate it. We 
have a very difficult job, Doctor. We had one of the most 
emotional cases I had in my office was a constituent whose wife 
was dying of cancer and firmly believe that there was a drug 
that was going through the final stages of approval, if they 
could only get that drug it might, in fact, save his wife's 
life and we worked as hard as we could to find some legal 
remedy that they could go around the system to be able to use 
those drugs, even knowing what the risks were and we couldn't, 
unfortunately, do it in the course of time.
     And on the other side, I have a constituent who is no 
longer able to take a drug that has been removed from the 
market that brought her extensive relief and she didn't have 
the adverse effects that allowed that drug to be removed from 
the market and wants to find a way to be able to continue to 
access that drug for her health and care and this is a 
difficult, difficult thing for all of you to do and we 
appreciate how complex this issue is.
    Your position is, in the FDA, for planning, is for the 
safety and efficacy, right? You come up with the system and the 
standard which allows us to go through the process so that you 
can, with some sense of surety, say that this drug is safe and 
it will do what we say it is going to do. Is that correct?
    Ms. Mullin. No, that is actually not quite right. I work at 
a much more, sort of, less close to the science level. I am in 
the office of the commissioner. We deal with issues across the 
whole agency in terms of budget and performance and provide 
that analysis that PDUFA involves; centers for drugs, 
biologics. Some work in the part of the field staff and the 
office of the commissioner.
    Mr. Rogers. So you are not a policy person to that degree?
    Ms. Mullin. I am a planning and analysis person and I am 
not a scientist and so the kind of----
    Mr. Rogers. But am I incorrect in saying that you are, at 
least, responsible for coming up with the template for how Drug 
A hits the FDA and at the end of the day ends up on a 
pharmacist's shelf, the process of that, not necessarily the 
science of that?
    Ms. Mullin. No, I am not responsible for that. The 
scientific staff within the centers of drugs and biologics 
really would determine what that process needs to look like. 
And it would be based on the scientific information that you 
need the evidence of safety and effectiveness. My job has been 
to try to help them figure out what resources would be needed 
to have an effective process, what kind of performance they 
want to specify to make the process run as efficiently as 
possible.
    Mr. Rogers. So they would come to you and say we need 
resources for X or Y or Z in order to accomplish what we 
believe is the right----
    Ms. Mullin. And they would have to detail what it is that 
needs to be done.
    Mr. Rogers. OK. So you at least, you have some visual into 
that process?
    Ms. Mullin. Yes, but it is, I would have to say, at a 
pretty high level.
    Mr. Rogers. OK. Because what concerns me is the World 
Health Organization estimated by 2003 that there were $32 
billion of counterfeit drugs in the world market, which is 
about 10 percent. And in the U.S. value of counterfeit drugs 
seized in 2003 was $200 million, which was a sevenfold increase 
in the year before. So when we look at a 60 percent increase in 
adverse effects between 1999 and 2003, in a sevenfold increase 
in counterfeit drugs between 2002 and 2003, I used to be an FBI 
agent and scratched my head a little bit, but that is a clue.
    There is a problem growing here and I don't get a sense, at 
all, that the FDA--and how do you go through an efficacy plan 
when a doctor is writing in that gee, that drug didn't have any 
affect at all on my patient? Matter of fact, just down from my 
office in Lansing, Michigan, they did a raid in the Detroit 
area and found that insulin was not refrigerated correctly, 
wrong instructions were on the drug. This is one of those 
Canadian pharmacies that we found out was not a Canadian 
pharmacy. And non-active ingredients. So none of that, 
according to the testimony I have heard today, gets factored in 
at all.
    How can we honestly say we are coming up with a system for 
safety and efficacy even with post-approval, when we have no 
clue where the logistics chain of those drugs are?
    Ms. Mullin. Well, counterfeit drugs are an important 
concern. I think there are a lot of factors that could be cited 
that may be contributing to the increase in the number of 
serious and unexpected adverse events and that may very well be 
one of them. There are others, as well. For example, people are 
using a lot more drugs and people are using a lot more 
combinations.
    More people are using more drugs at the same time, as well 
as perhaps dietary supplements and other things, so it is a 
complex picture, but I think what will help here is getting to 
the ability to go to these bigger population databases because 
we are going to be able to take a better look at the adverse 
events. I mean, as you say, some of those events could be 
caused by counterfeit products, but if we try to take a better 
look at when those events occur, we will get a better sense of 
what is driving it and the many factors that may be driving it.
    Mr. Rogers. But that is the only thing that concerned me, 
and I know my time is up, Mr. Chairman, is that that hasn't 
been already ruled in and how you would make that 
determination. Just in one port, they found that 85 percent of 
the packages they inspected, 85 percent that were labeled as 
Canadian drugs were, in fact, not Canadian drugs. That is a 
huge problem. And if you don't have a plan to roll that in to 
make that determination, maybe it is a 1 percent problem, maybe 
it is a 90 percent problem. The thing that scares me most is 
that you don't know.
    Ms. Mullin. Well, we do have a whole separate plan, if you 
will, related to imported products and it is not just in the 
drugs area, but across the whole range and we need a solution 
and informatics is part of that solution, as well, but I hear 
and we will be coming back with the answers for the record on 
counterfeit drugs. We will try to address the issues that you 
have raised. As I said, today a lot of the compliance work that 
would be involved in FDA's enforcement of counterfeit products 
is outside the scope of the PDUFA program.
    Mr. Rogers. Thank you and I yield back your time, Mr. 
Chairman.
    Mr. Pallone. Thank you. Mr. Stupak.
    Mr. Stupak. Thank you, Mr. Chairman, and thank you for 
allowing me to sit in and ask a few questions. As chair of OI, 
we have had two hearings on PDUFA reauthorization. 
Unfortunately, we look at the problems that continue to plague 
the FDA and unfortunately, I haven't heard anything that would 
assure me that the FDA's going to do anything different to 
improve the drug safety. If you take what Mr. Rogers was just 
asking you about, 10 years ago, Mr. Dingell and I did a bill on 
Internet sales, pharmacies, where we didn't have a big problem 
like we have now. I have been to those mail houses, as he has 
indicated, and for 10 years now we have been trying to get the 
FDA to even comment on our legislation and they refused and 
have not. Are you prepared to comment on it today, the 
legislation we have had on Internet pharmacy sales?
    Ms. Mullin. No, I am afraid not. I am not able to do that.
    Mr. Stupak. OK. You mentioned the 288 meetings you have had 
with drug manufacturers that your folks at FDA do. How many of 
those--were nine meetings a day, I think you said. How many of 
them dealt with post-marketing issues?
    Ms. Mullin. Most of those meetings that were talked about 
are dealing with issues during drug development, so they 
would----
    Mr. Stupak. But post-market----
    Ms. Mullin. No, they would not be post-market meetings.
    Mr. Stupak. So it sounds like you are more concerned about 
drug development, but not post-marketing safety surveillance.
    Ms. Mullin. In the program to date, the funding for post-
market mismanagement work has been limited and so one of the 
things we are proposing for PDUFA IV is to get rid of that 
limitation on how long and how the funds can be used.
    Mr. Stupak. Well, I heard you say that and in response to 
Mr. Waxman, because I have been watching this hearing up in my 
office, if the FDA's primary mission is to ensure safety and 
efficacy of products proposed for marketing, is it to help 
speed it to market or to make sure drugs are safe and you said 
well, it is a dual or equal concern of the FDA, I believe you 
said, right?
    Ms. Mullin. Yes. I mean, we like to prevent problems before 
the products go on the market, too.
    Mr. Stupak. Then why isn't post-market surveillance, then, 
receiving equal amount of resources to do the post-market 
surveillance? Because if you have $29.3 million, that is about 
7 percent of the user fees paid for post-market surveillance.
    Ms. Mullin. Well, the post-market surveillance piece is a 
little bit larger than that because we have money we are 
spending today on the order of about $15 million in the fee 
program today, so it would be added on top of that.
    Mr. Stupak. PDUFA IV reauthorization proposal is $29.3 
million.
    Ms. Mullin. Right.
    Mr. Stupak. And that was what you developed this in 
consultation with industry.
    Ms. Mullin. Right.
    Mr. Stupak. So if my figures are right, that is near 7 
percent of the user fees.
    Ms. Mullin. But those are added on to the base program that 
we have today and the base program we have today has about $15 
million a year that goes to that purpose. The other thing I 
would say----
    Mr. Stupak. Fifteen million dollars, maybe another 3 
percent; now we are up to 10 percent. Do you think 10 percent 
is equal to 90 percent?
    Ms. Mullin. Post-market surveillance is one component of 
post-market safety and----
    Mr. Stupak. Well, let us go to another component. Let us go 
to the 1,200 post-marketing studies that are pending before the 
FDA. Of those, 11 percent are done. 71 percent of the post-
market surveillance that are supposed to be done have never 
been done, 71 percent. Why isn't the FDA demanding that the 
manufacturers do the post-marketing studies that they promised 
to do with the approval of these drugs? That is using your 
authority to get them to do the post-marketing things, so we 
can leave money out of this equation.
    Ms. Mullin. Well, we don't have the authority to require, 
under current authority we cannot require the completion of 
those studies.
    Mr. Stupak. So what recommendations do you have to get the 
authority to require the marketing be done?
    Ms. Mullin. We are not recommending changes.
    Mr. Stupak. You are not making any recommendations, right.
    Ms. Mullin. We are not making changes in our authority. We 
are recommending that the increase----
    Mr. Stupak. So if you are not going to recommend any 
changes, how is this ever going to be resolved? You don't want 
the authority, you are not asking for the authority, so how are 
these 71 percent of 1,200 post-marketing studies that should 
have been done that are not done, how are they going to get 
done if you don't ask for the authority and you have no 
intention to ask for the authority?
    Ms. Mullin. Well, we include in our proposal for PDUFA IV 
is increased resources so that we can have the discussions of 
labeling and post-market commitments weeks before the action 
date and not what sometimes happens, days before. And we think 
the result of that is going to be much better designed trial 
that we expect actually would be completed at a higher rate.
    Mr. Stupak. How about the 1-800 number we talked about, 
post-market surveillance, and you rely upon the public, when 
the drug is finally being used, the public to help you with to 
flag problems with it? In the last PDUFA reauthorization, the 
FDA was supposed to put a 1-800, I believe it is FDA 1088 
number on all bottle of medicine being prescribed. It has been 
almost 5 years. You still haven't done it. I have asked 
everyone from the FDA. They keep telling me it is going to come 
soon. Are you going to do this before the reauthorization, 
before September, or is this something I will have to once 
again stick in PDUFA so the American people know how to report 
an adverse event to the FDA?
    Ms. Mullin. I am not able to address that, Mr. Stupak. I 
don't know. We are working on a better Med Watch Plus, as we 
are calling it, online system.
    Mr. Stupak. I don't care about that. I want to know about 
the 800 number. I mean, when something happens, people don't 
know who to turn to, how to report an adverse event. You rely 
upon those adverse events to see if there is a signal out 
there, whether there is a problem with the drug.
    Mr. Pallone. If you could answer that and then we are going 
to move on.
    Mr. Stupak. I am sorry.
    Ms. Mullin. I would be happy to go back and to talk to the 
folks who know more about that and to provide you an answer for 
the record.
    Mr. Stupak. Same answer for 5 years, Mr. Chairman.
    Mr. Pallone. I understand. Thank you. And that concludes 
our questions, but thank you very much. We really appreciate 
your being here this morning. Thanks.
    Ms. Mullin. Thank you.
    Mr. Pallone. I would like to have the next panel come 
forward, if you would. Well, thank you for being with us, I was 
going to say this morning, but it is this afternoon. Let me 
introduce each of the five panel members from my left to right. 
Dr. Alan Goldhammer is deputy vice president for Regulatory 
Affairs for PhRMA. Next is Mr. Hubbard, William Hubbard, who is 
a senior advisor of the Coalition for a Stronger FDA. And then 
we have Mr. James Thew, who is a patient advocate with the ALS 
Association. And then we have Kay Holcombe, who is senior 
policy advisor for the Genzyme Corporation, former staff member 
for our committee. And next to her is Bill Vaughn, who is a 
senior policy advocate for the Consumers Union, a former staff 
member with Mr. Stark. So thank you all for being here and I 
guess we will start with an opening statement by Dr. 
Goldhammer.

STATEMENT OF ALAN GOLDHAMMER, DEPUTY VICE PRESIDENT, REGULATORY 
 AFFAIRS, PHARMACEUTICAL RESEARCH AND MANUFACTURERS OF AMERICA

    Mr. Goldhammer. Thank you very much, Mr. Chairman and 
members of the Subcommittee on Health. I am Alan Goldhammer, 
deputy vice president for Regulatory Affairs at PhRMA. Having 
participated in each of the four previous user fee 
negotiations, I bring to the subcommittee today an historical 
perspective of PDUFA and the need for expeditious 
reauthorization. Last year FDA and industry representatives 
spent 9 months integrating comments from public stakeholders in 
discussing how the PDUFA program could be improved to continue 
to meet FDA's central mission of protecting and promoting the 
public health.
    The passage of PDUFA in 1992 brought about tangible results 
in a very short period of time. Drug reviews that were 
averaging over 30 months were shortened and the backlog of 
pending applications eliminated. This added predictability to 
the drug review process and provided widespread public access 
to important new therapies. The 5-year sunset provision of 
PDUFA has been a good thing. It provides necessary time to 
gauge the effectiveness of the program, allowing all 
stakeholders to reflect on what can be further done within the 
confines of user fees to improve the review process.
    The past two PDUFA reauthorizations have increased FDA 
resources, improving interactions during drug development, the 
information technology infrastructure and also and perhaps most 
importantly, FDA's drug safety operations. Throughout the past 
15 years of PDUFA, the exacting standards by which FDA 
evaluates new drug applications has not been compromised. 
Increased resources have allowed FDA to complete its rigorous 
reviews more efficiently. The outcome of an individual review 
is not affected by PDUFA funding and whether a drug is to be 
approved is a decision for FDA alone to make based on 
information in the license application.
    The PDUFA IV proposal being considered here today contains 
important new provisions and resources to enhance and modernize 
the FDA drug safety program, add a new user fee program for 
reviews and advisory opinions on direct-to-consumer television 
advertisements, improve drug development and provide a more 
stable financing for the program. We believe that the 
substantial new funding provided to enhance and modernize FDA's 
drug safety system, nearly $150 million over the next 5 years, 
will continue to assure FDA's pre- and post-market safety 
assessment as the world's gold standard.
    Furthermore, this PDUFA agreement substantively addresses 
all relevant recommendations in the IOM drug safety report that 
could be addressed through additional resources. These 
additional resources will be used to reduce FDA's reliance on 
the spontaneous reporting of adverse events and increase the 
use of modernized techniques and resources, such as 
epidemiology studies on large medical databases to identify 
risks more quickly and more importantly, accurately. FDA and 
industry also need a process to identify risk management, risk 
communication tools that are effective and work. This PDUFA 
agreement provides resources to accomplish this.
    A key patient safety initiative is the allocation of a 
portion of the funding to improving the trade name review 
process. FDA will now have resources to review trade names 
during drug development, reducing the likelihood of medication 
errors because of confusing trade names. The proposal also 
includes a new user fee for reviewing the issuance of an 
advisory opinion on direct-to-consumer advertisements. In 2005 
PhRMA issued a set of voluntary guiding principles regarding 
DTC advertising. Our member companies committed to submit all 
new DTC television ads to FDA prior to public dissemination to 
ensure FDA's suggestions could be addressed before the ad was 
aired.
    This proposed user fee will ensure that FDA has the 
resources to review TV advertisements in accordance with our 
guiding principles. The proposal also suggests additional 
improvements to the drug review process. By implementing the 
good review management principles formulated during PDUFA III, 
FDA will communicate to sponsors the timelines for discussing 
labeling and post-market commitments in advance of the action 
date. This will lead to more meaningful post-market studies 
that are appropriate for the new drug.
    Funding is also allocated for the purpose of expediting 
drug development. This will permit FDA staff to participate in 
external activities, such as partnerships and consortiums that 
are generating data and information that will create new 
paradigms for drug development. In return, FDA commits to 
developing draft guidance in areas related to safety 
assessment, clinical trial design and the use of biomarkers. 
This important work will lead to earlier patient access of 
important new therapies.
    Finally, there are a number of proposed technical 
adjustments to the financing of the PDUFA program over the next 
5 years. It is PhRMA's hope that collectively these will 
provide the sound financial footing needed to continue to keep 
FDA's drug and biological review program strong. And thank you.
    [The prepared statement of Mr. Goldhammer follows:]

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    Mr. Pallone. Thank you, Doctor. And next we have Mr. 
Hubbard.

 STATEMENT OF WILLIAM HUBBARD, SENIOR ADVISOR, COALITION FOR A 
                          STRONGER FDA

    Mr. Hubbard. Thank you, Mr. Chairman. I have a written 
statement, but I will just make a few remarks, if I may. I am 
here representing a remarkable coalition of patient, consumer 
and industry groups that is trying to point out to the Congress 
that dire shortfalls at FDA resource problems are emerging. I 
was at FDA for 27 years, the last 14 in which I was an 
associate commissioner, very much involved in the origination 
of PDUFA and its most recent reauthorization.
    When I came to the FDA in the 1970's, it was clearly the 
biggest problem that FDA had. Successive FDA commissioners and 
agency secretaries made it their highest priority. The patient 
groups were crying out for access to new drugs. Many patients 
were going overseas for therapy. We all remember the case of 
Rock Hudson going to Paris for AL721. Industry was very 
frustrated and feeling the standards might have to be lowered 
to get their products through the system. Research and 
development for new drugs was moving overseas to Europe and 
with lost jobs and lost ownership in pharmaceutical 
development. And then FDA was a much beleaguered agency in 
terms of drug review at that time.
    Many things were tried during that period by commissioners 
and secretaries and others, administrative and regulatory 
reform through the 1960's and 1970's and 1980's and nothing 
seemed to work until this committee grabbed the reins and 
developed the PDUFA paradigm that exists now. So thanks to 
PDUFA, American patients now get drugs. First, the review 
process gets them products as fast or faster than anywhere in 
the world. Pharmaceutical research and development moved back 
to the United States and it stayed here in the years since 
PDUFA was enacted. And FDA has now had the resources to 
maintain the safety standards that you told them to maintain 
when you gave them the additional resources.
    So I believe PDUFA is arguably the most important thing 
this committee has done, in the FDA context, since the 1938 
Food, Drug and Cosmetic Act was enacted. But there is a 
downside, Mr. Chairman, to PDUFA. While the new resources have 
flowed into the program, appropriated funds have not kept up. 
That has caused two negative outcomes. First of all, industry 
fees are now an ever-increasing percentage, raising fears of 
undue industry influence, and funds have been shifted because 
of PDUFA, from pulling FDA programs elsewhere in the agency to 
the Drug Review Program, thus weakening public protection 
elsewhere.
    I have one slide that I will ask to be put up very quickly 
to give you an example, a data example. If we could put up a 
slide called FDA Staffing. As you know, FDA does all of its 
work via its people and so I think this slide will demonstrate 
to you that while the overall FDA workforce is growing, the 
workforce for the programs other than users fees have declined. 
Have we got that slide or should I proceed?
     The point of the data, Mr. Chairman, is that the increase 
in PDUFA has caused a concomitant reduction base programs at 
FDA, so that the agency's drug safety, food safety and other 
programs have lost a thousand people in the last 10 years, and 
we could explain that more at another time if you like. And so 
if I may, at the close, there are two big things I would hope 
that the committee would turn to next. One is on the drug 
safety side. The ledgers become imbalanced. All of these 
resources have flowed into the drug review side but at the 
expense of the drug safety side. And I have another piece of 
data that we can give you later that shows the tremendous 
increase in adverse drug reaction reports that the agency 
simply cannot look at, and I don't believe the current new 
PDUFA deal will substantially affect that, because the people 
that review that are not being beefed up substantially, so 
there needs to be more resources overall into the drug safety 
side to catch up with that huge increase on the drug review 
side.
    And then the other thing that is going on is that while 
drug reviews have dropped substantially since the early 1990's, 
total drug development time still takes 10 to 12 years and 
there is great frustration on the patient and industry part, 
that these drugs are not getting through the system. FDA has a 
proposal to shorten drug development time so that from the 
initial synthesis in the lab to actual availability to doctors 
in writing their scrip, that can be shortened substantially. It 
is called a critical path. FDA has not been able to get the 
funding for that program and so I believe that there needs to 
be some way found to find additional funding for drug safety 
and for drug development that would compliment the progress 
made by the PDUFA program. So with those comments, I will end 
my comments. Thank you, Mr. Chairman.
    [The prepared statement of Mr. Hubbard follows:]

                    Statement of William K. Hubbard

    Mr. Chairman and members of the Committee, I am William K. 
Hubbard. Before my retirement after 33 years of Federal 
service, I served for many years with the U.S. Food and Drug 
Administration, and for my last 14 years was an FDA Associate 
Commissioner responsible for, among other things, FDA's 
regulations and policy development. Although I have remained 
retired since my departure from FDA in 2005, I have agreed to 
provide advice to a remarkable group of patient, public 
interest, and industry groups that have recently formed 
themselves into a Coalition for a Stronger FDA (whose mission 
is to urge that FDA's appropriations be increased). Throughout 
my career at FDA, I was deeply involved in improving one of 
FDA's most important functions--the review and marketing 
approval of new pharmaceuticals. Accordingly, I wish to thank 
the Committee for inviting me to testify on the Prescription 
Drug User Fee Act that the Committee is considering for 
reauthorization.

                               Background

    As you know, the process for assessing new drugs for 
approval is a complex and challenging undertaking. In any one 
year, FDA must oversee thousands of drugs undergoing testing, 
and review hundreds of applications to market the drugs that 
emerge successfully from the testing process. FDA's scientists 
have very little margin for error, as the approval of a new 
drug makes it available to millions of Americans, and often 
also triggers approval in many other countries, thus exposing 
any given drug to a potential patient population in the 
billions around the globe.
    When I began my career at the FDA, the review of new drugs 
was the most troubled program in the agency, and remained so 
for many years. The signs of distress were rampant:

     Applications to market new drugs often lingered 
three or more years in the FDA review process;
     Patients pleaded with FDA for more rapid access to 
new therapies, particularly for serious and life-threatening 
illnesses, and sometimes felt compelled to travel overseas for 
therapy they could not get in the United States;
     Drug sponsors were increasingly frustrated that 
years of effort to develop new products were put on hold while 
FDA reviewers labored to process a flow of drug applications 
that greatly outpaced their capacity to manage a growing 
workload;
     Investments in pharmaceuticals and medical product 
research and development were moving to Europe and industry 
leaders decried the lost jobs and other economic detriments 
caused by the ``drug lag'' with Europe,
     And FDA officials proposed and developed a series 
of initiatives to speed the review of new drugs, none of which 
managed to significantly reduce drug review times.
    Then, in 1992, this committee took the lead in drafting 
legislation to create a new program for addressing the ``drug 
lag,'' and it has been, in my opinion, one of the most 
successful statutes ever enacted for improving public health.

                   The Prescription Drug User Fee Act

    The drug user fee act, known by its acronym, PDUFA, has 
been a remarkable success story. In rapid succession after 
PDUFA's creation, FDA's time to review new drugs dropped 
steadily; new, life-saving drugs flowed to patients more 
rapidly than ever before; investment in medical R&D climbed 
steadily, resulting in yet more new drug discoveries; and the 
United States seized and maintained its lead in global 
pharmaceutical development. Today, thanks to PDUFA, drugs are 
reviewed in the United States as fast as or faster than 
anywhere else in the world, with no diminution in FDA's 
historically high standards for drug safety.
    In essence, Congress instructed FDA that review speed 
mattered, but not at the expense of safety; and mandated that 
FDA be given new resources to apply to drug reviews, but would 
be expected to manage those resources in a documented, 
business-like method--with program activities closely tracked 
and progress carefully assessed. Drug sponsors, in turn, were 
given more access to FDA scientists, so that they could better 
understand FDA's requirements and design better clinical 
trials, resulting in better applications that could be reviewed 
more easily by FDA scientists. Thanks to this remarkable 
program, well over a thousand new treatments have flowed 
expeditiously to patients since its enactment, saving countless 
lives and reducing untold suffering. For this reason, I join 
the many others who have urged you to act quickly to 
reauthorize the PDUFA program as negotiated between FDA and the 
pharmaceutical industry.

                         The Downside to PDUFA

    Despite its overwhelming success in improving the process 
for reviewing new drugs, I must take note of some effects 
flowing from the PDUFA program that are problematic. First and 
foremost, budget managers have allowed the infusion of new user 
fee funds to offset appropriations, despite efforts by 
Congressional drafters to utilize ``triggers'' to prevent that 
outcome. As a result, while total FDA resources and staffing 
have increased since PDUFA's inception, the agency's non-user 
fee resources have actually declined. This is best illustrated 
by the attached graph, which shows total FDA staffing growing, 
while staff paid by appropriated dollars have declined by a 
thousand over the past decade--an enormous decline for an 
agency as small as the FDA. The practical effect of this has 
been the loss of staff for such critical FDA programs as drug 
safety and protection of the food supply.
    A second concern raised by PDUFA is the extent to which 
user fees are paying for drug review expenses. When the program 
was first developed fifteen years ago, it was conceived as a 
relatively limited supplement to the existing drug review 
staff, to enable FDA to deal with a large and growing drug 
application workload. By the end of PDUFA II, in the early 
years of this decade, fears arose that the percentage of the 
drug review program that would be paid by user fees was 
approaching 50 percent. FDA leaders, joined by industry, 
consumer, and patient groups, expressed concern that the 
program not pass the 50 percent point, out of fear that over-
reliance on industry fees could slowly but inexorably lead to 
greater industry influence in FDA's decisions whether to 
approve or disapprove a given drug. Unfortunately, that 50 
percent level was passed in PDUFA III. This has been caused by 
decisions to hold down or reduce FDA's annual appropriations. 
So, for example, in a given year the PDUFA fees are adjusted to 
stay even with FDA's increased costs--usually about 6 percent 
per year. But FDA's appropriations in recent years have been 
well below its inflationary costs, meaning that the portion of 
the drug review program funded by fees has risen steadily. If 
this continues unabated, it is quite possible that the 
percentage of the program paid by user fees could exceed 70 
percent, a level that raises both fairness questions for drug 
sponsors and concerns about industry influence in FDA decision-
making. Therefore, I urge the committee to consider ways of 
``rebalancing the ledger'' so that the original intent of PDUFA 
is restored.

                 The Next Challenge in Drug Development

    I will close with a final observation about FDA's drug 
program. PDUFA has been momentous for its success in improving 
the speed to market of new drugs. But there are two other 
critical legs to what one might call the drug development 
``tripod.'' The first is one the committee will likely be 
wrestling with this year as well--the safety of drugs once they 
are on the market. As new funds have flowed to FDA for the drug 
review program, the drug safety staff that monitors drugs on 
the market has not been increased, despite an ever-increasing 
workload. I have attached a graph that demonstrates the 
enormous increase in adverse event reports being submitted to 
FDA reports that are intended to give FDA early clues as to 
whether a marketed drug should be relabeled, restricted, or 
even withdrawn. This increase in workload has overwhelmed FDA's 
drug safety function, and as a result, problems with drugs such 
as Vioxx are likely to continue. FDA officials have ideas for 
substantially improving the drug safety system focused on using 
new technologies to capture drug safety ``signals'' sooner and 
more thoroughly. I urge you to hear their views and to assist 
them in gaining the appropriations to fund their solution to 
this vexing problem.
    My last point relates to drug development time--the years, 
often a decade or more, from the time a new drug is synthesized 
in a laboratory to the time it actually starts treating 
patients as an approved drug. While drug review times within 
the FDA dropped rapidly and substantially thanks to the PDUFA 
program, drug development times have remained too high. 
Further, drug manufacturer continue to pursue ``dry holes'' 
that are expensive and shift focus away from successful 
therapies (the vast majority of drugs making it to the human 
testing phase ultimately fail). Also, the number of submissions 
of new drugs for approval by the FDA has flattened out, 
suggesting that the next wave of new drug discoveries will be 
harder to find and develop. Indeed, there is substantial 
evidence that the current ``path'' to new drug development is 
increasingly challenging, inefficient, and costly. FDA has made 
a proposal to decision makers that it calls ``The Critical 
Path.'' It is offering to bring to bear its considerable 
experience in drug assessment to the development of powerful 
new scientific and technical methods (such as computer-based 
predictive models, biomarkers for safety and effectiveness, and 
new clinical evaluation techniques), to help drug manufacturers 
become more efficient and more successful in their decisions 
about which therapies to pursue and bring to market--with the 
expectation, of course, that the public will ultimately benefit 
by having more and better drugs made available for their 
treatment as rapidly as possible. But FDA has been unable to 
secure funding for this initiative, despite widespread 
expressions of support for the concept. I urge you to consider 
the Critical Path program an important part of your mission to 
improve the FDA's drug program and to impress upon your 
Appropriations colleagues the importance of funding that 
initiative.
    Indeed, Mr. Chairman, an increase of just $40 million a 
year for five years, for a total increase in appropriations of 
$200 million annually by the fifth year, would, in my opinion, 
both ``fix'' drug safety and provide the necessary funding for 
the Critical Path initiative. I believe that such relatively 
modest sums would be repaid many, many times over in the 
development of new therapies and the successful treatment of 
our citizens and, as such, would be an investment of tremendous 
value to our society.
    I again applaud the Committee for its groundbreaking work 
in enacting PDFUA and thereby successfully addressing a major 
national problem. And I thank you for letting me express my 
views today on its reauthorization.
                              ----------                              

    Mr. Pallone. Thank you. Sorry about the slide. I don't 
know, maybe we can get it passed out later. Mr. Thew.

 STATEMENT OF JIM THEW, PATIENT ADVOCATE, AMYOTROPHIC LATERAL 
                     SCLEROSIS ASSOCIATION

    Mr. Thew. Good afternoon, Mr. Chairman and Congressman Deal 
and the members of the subcommittee. My name is Jim Thew and I 
am from Machesney Park, IL. I appreciate the opportunity to 
speak with you this afternoon on behalf of the ALS Association 
and the people living with ALS across the country. I was 
diagnosed with ALS in July 2004. At the time, I had no idea 
what ALS was. But when doctors say I am sorry, you don't have 
cancer, you know that is not good news.
    ALS is better known as Lou Gehrig's disease. It is a 
neurological disease that destroys a person's ability to 
control their muscles. You can see what the disease has done to 
me. I can no longer stand or walk without assistance. I spend 
most of my time in this wheelchair. You can hear the disease in 
my voice. It has taken away my ability to speak. At night, I am 
in need of assistance of a machine called a bipap to help me 
breathe. That is what this disease has done to me so far, but 
it will continue to progress as it gets worse.
    I call ALS the monster. That is because it is the scariest 
thing I have ever faced. I met a young man by the name of Eric 
Oberman from Alabama when I was in DC last year for the ALS 
Association's advocacy days. He was 24 years old, his whole 
life ahead of him, but the only thing he could move was his 
toes. He could not speak. He could not breathe without a 
ventilator. He could not even nod his head or wink his eyes. 
But he was alive; you could see the life within his eyes; that 
he knew exactly what was happening and that is why I call ALS 
the monster. I know that this is what ALS will do. It can 
strike anyone regardless of their age, gender or race. It is 
not discriminative. And it is fatal. Usually the average 
lifespan is 2 to 5 years.
    What bothers me is that we don't know enough about this 
disease. We know it strikes military veterans like myself at 
about twice the rate as the general population, but we don't 
know why. That is why we need to have more funding for ALS 
research at the Department of Veterans and the VA. We know ALS 
is a rare disease, but we don't know how many may strike. That 
is why we need a national ALS registry and why I hope Congress 
will pass the Registry Act, which is expected to be introduced 
soon by Congressman Engel. Mr. Chairman, I also want to thank 
you for cosponsoring the bill last year and I hope you will do 
so again.
     We also don't have an effective treatment for ALS and that 
is why PDUFA is so important, because we need encouragement and 
a speedy access to new drugs that will benefit people like 
myself. There is currently only one drug approved to treat ALS. 
However, Rilutek, which was approved in late 1995, prolongs 
life by just a few months and only in a few patients.
    PDUFA includes a number of important provisions and goals 
that the ALS Association strongly supports. First, PDUFA 
provides needed resources to the FDA; second, PDUFA will help 
speed drug development and drug reviews; third, PDUFA would 
improve the use of technology to fight ALS; and PDUFA includes 
important provisions that will promote the collaboration 
between industry and the agency.
    I hope that I have given you a better understanding of why 
PDUFA is so important to people like me. I also hope that you 
will view this from our perspective; that you recognize the 
urgent need to act; that you not delay passing PDUFA by adding 
provisions; and that issues like drug safety must not hinder 
access to new treatment. It may be a matter of policy for you, 
but it is a matter of life and death for me. Earlier, I told 
you about what ALS is doing to me physically. What you don't 
see is the real impact of the disease. I want to watch my son 
graduate high school, who is only 10 years old. I want to be 
able to walk my daughter down the aisle on her wedding day. I 
want to grow old with my wife. I want to see my grandkids. To 
do all of that, I need a treatment for ALS. I hope that you 
will act quickly and reauthorize PDUFA and help me fight 
against this monster. Thank you for inviting me here today.
    [The prepared statement of Mr. Thew follows:]

                         Testimony of Jim Thew

    Good morning Chairman Pallone, Congressman Deal and members 
of the subcommittee. My name is Jim Thew and I am from 
Machesney Park, Illinois. I appreciate the opportunity to speak 
with you this morning on behalf of The ALS Association and 
people living with ALS across the country. I hope that by 
hearing my experience living with this disease, you will gain a 
better understanding of the needs of people with chronic and 
life-threatening conditions and why it is so important that 
Congress act swiftly to reauthorize the Prescription Drug User 
Fee Act.
    I was diagnosed with ALS in 2004. At the time, I had no 
idea what ALS was. Amyotrophic lateral sclerosis meant nothing 
to me, as I'm sure it means nothing to thousands of others when 
they are first diagnosed. But when doctors say ``I'm sorry, you 
don't have cancer,'' you know it's not good.
    ALS is better known as Lou Gehrig's disease. It is a 
neurological disease that destroys a person's ability to 
control their muscles. You can see what the disease has done to 
me. I can no longer stand or walk without assistance. I spend 
most of my time in this wheelchair. You can hear the disease in 
my voice. It's taking away my ability to speak. At night, I 
need the assistance of a bipap machine to help me breathe. 
That's what the disease has done to me so far. But, it will 
continue to progress. It gets worse.
    I call ALS ``the monster.'' That's because it's the 
scariest thing I've ever faced. I met a young man from Alabama 
when I was in Washington last year for The ALS Association's 
Advocacy Day. He's 24 years-old. His whole life ahead of him. 
But the only thing he could move was his toes. He could not 
speak. He could not breathe without a ventilator. He couldn't 
even nod his head or wink an eyelid. But he was alive--you 
could see the life in his eyes. That he knew exactly what was 
happening. And that's why I call ALS the monster.
    I know this is what ALS will do. It can strike anyone, 
regardless of their age, gender, or race. It does not 
discriminate. And it's fatal; usually in an average of two to 
five years.
    What bothers me and why I am here today is that doctors and 
researchers don't know enough about this disease. We know it 
strikes military veterans like me at about twice the rate as 
the general population. But we don't know why. That's why we 
need more funding for ALS research at the Department of Defense 
and the VA. We know ALS is a rare disease. But we don't know 
how many it strikes. That's why we need a national ALS registry 
and why I hope Congress will pass the ALS Registry Act, which 
is expected to be introduced soon by a Member of this 
subcommittee, Congressman Engel. Mr. Chairman, I also want to 
thank you for cosponsoring the bill last year and hope you will 
do so again.
    We also don't have an effective treatment for ALS. And 
that's why the Prescription Drug User Fee Act is so important 
because we need to encourage innovation and speed access to new 
drugs that will benefit people like me. There currently is only 
one drug on the market specifically approved to treat ALS. 
However, Rilutek, which was approved by the FDA in late 1995, 
has demonstrated only modest effects, prolonging life by just a 
few months and only in some patients. Unfortunately, I'm not 
one of them.
    PDUFA includes a number of important provisions and goals 
that The ALS Association strongly supports.

                             FDA Resources

    First, PDUFA provides needed resources to FDA. When I 
learned that the FDA receives less funding than what some 
school districts get, I didn't believe it. As someone whose 
life depends on the FDA's ability to quickly review new drugs 
and promote drug development, I strongly believe the FDA needs 
additional resources to do its job and help people like me. The 
ALS Association believes that the PDUFA plan put forth by the 
FDA will provide a much-needed increase in staff and resources 
and will help the Agency ensure that people have timely access 
to safe and effective medicines.

                      Drug Development and Review

    Second, PDUFA will help speed drug development and drug 
reviews. As I mentioned, people with ALS currently have only 
one treatment option. And it's not a great one. However, we 
hold onto the hope that our Nation's scientists and researchers 
will develop new treatments for the disease that can slow its 
progression, improve quality of life and, ultimately cure and 
even prevent the disease from arising. That's why it is so 
critical that PDUFA promote drug development and expedite drug 
reviews and approvals, including for products not specific to 
ALS. After all, people with ALS can benefit from advances in 
the treatment of other neurological conditions such as MS, 
Parkinson's and Alzheimer's.
    The Association supports the timelines and goals outlined 
in PDUFA concerning the prompt review of drugs. Delays in drug 
reviews mean denied access to potential life-saving therapies 
for people like me--to withhold a drug in order to obtain an 
unreasonable amount of data could cause patients to suffer or 
die due to the lack of access to new treatments.

                          Enhanced Technology

    Third, PDUFA would improve the use of technology at FDA. I 
spend a great deal of time on e-mail and on the internet. For 
people with ALS, information technology is our window to the 
world. It helps us to easily communicate and interact with 
others especially as the disease robs us of the ability to move 
and to speak. It's also how we learn about new ways to fight 
this disease. It's clear to me that the FDA also can use 
information technology to fight ALS by streamlining the drug 
development and drug review process. It allows the agency to 
rapidly collect, analyze and understand the enormous amount of 
information gathered throughout the lifecycle of a drug, during 
development and after it is approved. The ALS Association is 
pleased that the PDUFA plan submitted to Congress is an 
important step forward in using technology to find treatments 
and cures for diseases like ALS.

                             Collaboration

    Fourth, PDUFA includes important provisions that will 
promote collaboration between industry and the Agency, helping 
to expedite drug development. This collaboration builds on 
efforts underway with the Critical Path Initiative. I first 
heard about the Critical Path Initiative when The ALS 
Association invited the FDA to speak at our Public Policy 
Conference last May. I am encouraged that the Agency is making 
additional efforts to help improve clinical trial design and 
provide other guidance that enable us to speed the development 
of new drugs and decrease their cost to develop. I am also 
encouraged that for the first time FDA has recommended that 
fees be used to hire additional staff that will make it easier 
for the agency to collaborate in the scientific research 
leading to new treatments and to streamline the regulatory 
process. What is really important to me about this plan is that 
it is not just focused on the drug review process. It also is 
designed to speed drug development. The ALS Association is 
pleased that PDUFA would provide full-time permanent staff and 
funding for this much needed collaboration that surely will 
benefit people with ALS and other life-threatening diseases.
    I hope that I have given you a better understanding of why 
PDUFA is so important to people like me. I also hope that you 
will view this from our perspective--it may be a matter of 
policy for you, but it's a matter of life and death for me.
    Earlier I told you about what ALS is doing to me physically 
- what you can see and hear in my voice. What you don't see is 
the real impact of the disease. I want to be able to watch my 
son graduate from high school. I want to be able to walk my 
daughter down the aisle on her wedding day. I want to grow old 
with my wife Kumi and play with our grandkids. To do all of 
that, I need a treatment for ALS. I hope you will act quickly 
to reauthorize PDUFA and help me in the fight against this 
monster. I don't have time to wait.
    Thank you again for inviting me to be here today.Summary of 
Key Points
    PDUFA includes a number of important provisions and goals:

    FDA Resources. PDUFA provides needed resources to FDA. As 
someone whose life depends on the FDA's ability to quickly 
review new drugs and promote drug development, I strongly 
believe the FDA needs additional resources to do its job and 
help people like me. The ALS Association believes that the 
PDUFA plan put forth by the FDA will provide a much-needed 
increase in staff and resources and will help the Agency ensure 
that people have timely access to safe and effective medicines.
    Drug Development and Review. PDUFA will help speed drug 
development and drug reviews. People with ALS currently have 
only one treatment option, which prolongs life by a few months 
only in some patients. It is critical that PDUFA promote drug 
development and expedite drug reviews and approvals, including 
for products not specific to ALS. After all, people with ALS 
can benefit from advances in the treatment of other 
neurological conditions such as MS, Parkinson's and 
Alzheimer's.
    The Association supports the timelines and goals outlined 
in PDUFA concerning the prompt review of drugs. Delays in drug 
reviews mean denied access to potential life-saving therapies 
for people like me--to withhold a drug in order to obtain an 
unreasonable amount of data could cause patients to suffer or 
die due to the lack of access to new treatments.
    Enhanced Technology. PDUFA would improve the use of 
technology at FDA. FDA can use information technology to fight 
ALS by streamlining the drug development and drug review 
process. It allows the agency to rapidly collect, analyze and 
understand the enormous amount of information gathered 
throughout the lifecycle of a drug, during development and 
after it is approved. The ALS Association is pleased that the 
PDUFA plan submitted to Congress is an important step forward 
in using technology to find treatments and cures for diseases 
like ALS.
    Collaboration. PDUFA includes important provisions that 
will promote collaboration between industry and the Agency, 
helping to expedite drug development. This collaboration builds 
on efforts underway with the Critical Path Initiative. The 
Association is encouraged that the Agency is making additional 
efforts to help improve clinical trial design and provide other 
guidance that enable us to speed the development of new drugs 
and decrease their cost to develop. The Association also is 
pleased that for the first time FDA has recommended that fees 
be used to hire additional staff that will make it easier for 
the agency to collaborate in the scientific research leading to 
new treatments and to streamline the regulatory process. This 
collaboration surely will benefit people with ALS and other 
life-threatening diseases.
    The ALS Association encourages Congress to promptly 
reauthorize PDUFA this year.
                              ----------                              

    Mr. Pallone. Thank you so much, Mr. Thew, for being here 
today and you remind us about the need for timeliness and why 
we have to act quickly and I appreciate that. Thank you. Ms. 
Holcombe.

   STATEMENT OF KAY HOLCOMBE, SENIOR POLICY ADVISOR, GENZYME 
                          CORPORATION

    Ms. Holcombe. Chairman Pallone, Ranking Member Deal and 
members of the subcommittee, thank you for the opportunity to 
testify today about the reauthorization of the Prescription 
Drug User Fee Act.
    Genzyme Corporation, my company, chairs the PDUFA committee 
for the biotechnology industry organization and today I am 
speaking on behalf of BIO. Like Genzyme 25 years ago, most 
biotechnology healthcare companies currently are working to 
bring their first product to market. A strong, effective and 
efficient FDA is critical to these BIO members. Mr. Chairman 
and members of the subcommittee, my most important message to 
you is thank you. This subcommittee and this committee have 
been instrumental from day one in enacting and overseeing the 
PDUFA program and in ensuring its reauthorizations. PDUFA is 
credited with helping enhance FDA's capacity to evaluate the 
effectiveness and safety of new drugs and biologics, without 
reducing the agency's high standards or commitment to 
empirically-based and thorough product evaluation. But a 
successful program is not a perfect program and additional 
improvements can help address FDA's increasing workload and 
provide 21st century tools to evaluate prescription drug 
products pre and post-market. You have received a full 
description of the recommended PDUFA IV modifications from FDA 
and I will not repeat them. BIO supports these recommendations.
    I want to focus specifically on a few things associated 
with the increased user fees dedicated to modernization and 
enhancement of FDA's post-market safety activities. The PDUFA 
IV recommendations, if enacted, will provide an increase of 
nearly $150 million over 5 years, for a variety of activities, 
many of which were those kinds of activities recommended in the 
recent report of the Institute of Medicine. For example, the 
new funds will allow FDA to improve its IT infrastructure for 
more efficient and sophisticated post-market monitoring and 
analysis, and to enhance the analytical skills necessary for an 
up-to-date post-market surveillance system based on health 
information technology.
    FDA also will be able to utilize large medical databases to 
mine for potential safety signals and to evaluate them. FDA 
will be better equipped to identify and characterize adverse 
events that may not have been seen in clinical trials, to 
continue to assess product benefit risk profiles, in light of 
new data, and to provide physicians and patients with useful 
updated information. The additional funds also will allow the 
agency, with its own and outside safety experts, to evaluate 
post-market risk management plans to identify the most 
successful strategies and disseminate them.
    Mr. Chairman, BIO joins FDA and others in supporting the 
PDUFA IV recommendations, including funding for FDA's critical 
path activities to help expedite drug development, continued 
improvements in pre-market review, including improved processes 
to achieve the best drug labeling, and to develop post-market 
studies mostly likely to provide useful information for doctors 
and patients, and as I mentioned briefly, to make significant 
post-market safety improvements.
    The PDUFA IV proposals include substantial new resources 
for FDA. However, Mr. Chairman, FDA also needs adequate 
appropriations for its human drug review activities. PDUFA fees 
are intended to be additive to, not a substitute for a sound 
base of appropriations. But user fees now account for more than 
50 percent of the cost of human drug review and that percentage 
is rising. Unless appropriations increase substantially more 
than they have over the last 10 years, user fees will account 
for more than two-thirds of the cost of human drug review 
activities at the FDA by the end of PDUFA IV. This imbalance of 
fees versus appropriations creates an unseemly misperception 
that FDA must be or will become beholden to the industry it 
regulates. This perception is not in the best interest of the 
FDA, it is not in the best interest of the regulated industry, 
and it is not in the best interest of consumers. BIO is working 
with the Administration and Congress to seek needed 
appropriations increases for FDA. We strongly urge this 
subcommittee to continue your activities, as well, in this 
regard.
    In conclusion, Mr. Chairman, BIO urges timely 
reauthorization of this successful program. We also 
respectfully request and urge that the PDUFA IV reauthorization 
be passed unencumbered by unrelated, complex and contentious 
issues that could slow or jeopardize its passage and enactment. 
I want to thank you again, Mr. Chairman and Ranking Member 
Deal, on behalf of BIO and myself, for inviting us to 
participate in today's hearing. It is a great honor for me, 
personally, to appear before you. Thank you.
    [The prepared statement of Ms. Holcombe follows:]

                       Testimony of Kay Holcombe

    Chairman Pallone, Ranking Member Deal, and members of the 
Health Subcommittee, thank you for the opportunity to testify 
before you today on the success of the Prescription Drug User 
Fee Act (PDUFA) and the proposed enhancements for PDUFA IV.
    My name is Kay Holcombe and I am Senior Policy Advisor for 
Genzyme Corporation. As one of the world's foremost 
biotechnology companies, Genzyme is dedicated to making a major 
positive impact on the lives of people with serious diseases. 
Founded in Boston in 1981, Genzyme has grown from a small 
start-up to a diversified enterprise with more than 9,000 
employees in locations across the United States and spanning 
the globe. Genzyme is a leader in the effort to develop and 
apply the most advanced technologies in the life sciences to 
address a range of unmet medical needs. Over the past two 
decades Genzyme has introduced a number of breakthrough 
treatments and diagnostics in the areas of inherited disorders, 
kidney disease, orthopaedics, transplant and immune disease, 
and cancer, which have provided hope to patients who previously 
had no viable treatment options.
    Today I represent the Biotechnology Industry Organization. 
BIO represents more than 1,100 biotechnology companies, 
academic institutions, state biotechnology centers and related 
organizations across the United States. BIO members are 
involved in the research and development of healthcare, 
agricultural, industrial and environmental biotechnology 
products. Like Genzyme at its start, most biotechnology 
companies are currently working to bring their first innovative 
product to market. A strong, credible, and efficient Food and 
Drug Administration (FDA) plays a critical role in enabling BIO 
member companies' success in creating the next generation of 
biotechnology medicines.

                        PDUFA Has Been a Success

    The PDUFA program has been widely credited as an innovative 
program that has strengthened the Food and Drug 
Administration's (FDA's) capacity to evaluate the safety and 
effectiveness of new drugs and biologics, thereby expediting 
the availability of needed new therapies for patients. Congress 
enacted PDUFA to provide FDA with additive, consistent, multi-
year resources to increase its review capacity, including new 
medical and scientific expertise, so the agency could become 
more efficient without reducing its commitment to the highest 
standards of empirically based product evaluation. In fact, 
since its inception in 1992, PDUFA has helped enable FDA to 
approve more than 1,200 new medicines and reduced review times 
for innovative drugs and biologics, providing patients and 
doctors with earlier access to breakthrough treatments.
    While the program is successful, additional improvements 
can help address FDA's increasing workload and provide the 
agency with 21st century tools to evaluate prescription drug 
products. The recommended PDUFA IV improvements will enhance 
both FDA's post-market safety capacity and review 
infrastructure. BIO played a role in the consideration of these 
proposals and fully supports these recommendations. We urge 
Congress to adopt this framework in reauthorizing PDUFA in a 
timely manner prior to its expiration.

             A Lifecycle Approach to Drug Safety Evaluation

    BIO endorses the PDUFA IV proposals because they underscore 
our commitment to patient well-being and safety by 
supplementing the Agency's resources to enhance and modernize 
the drug safety system in the United States. Safety is an 
integral and paramount part of companies; considerations during 
research and development, FDA's deliberations during 
application review, and as part of post-market monitoring by 
the agency and by companies. When considering improvements to 
the Food and Drug Administration's safety evaluation system, 
the following principles should be taken into account.

  BIO Principles for Changes to Drug Safety Evaluation and Monitoring

     FDA Should Continue to Lead in Evaluating Safety 
and Efficacy. In the United States, the FDA is, and should 
remain, the government reviewer of benefits and risks of 
regulated products. FDA's scientific knowledge and expertise is 
essential for evaluation of safety and efficacy of medicinal 
products and FDA must have sufficient resources to complete its 
mission. Also, the Agency should be provided with the 
flexibility to distribute its resources to maximize efficiency 
and value. FDA's current organizational structure, which deals 
with drug and biologic safety pre- and post-approval in an 
integrated way, is appropriate for the comprehensive and 
systematic evaluation of safety throughout the lifecycle of 
medicines.
     Benefits and Risks Must be Considered Together: 
All drugs and biologics carry both benefits and risks that 
should be carefully weighed by patients and their doctors.-- 
The balance between the benefits of treatment and the risks of 
potential side-effects will differ based on many factors, 
including the nature of the treatment and the condition, and 
each patient's unique medical profile. Efforts to improve safe 
use of medicines should support and inform medical decisions 
made by patients and their physicians, rather than limit the 
ability of physicians to prescribe a particular medicine to a 
particular patient. This will help to ensure that patients 
continue to have access to medications they and their 
physicians believe they need.
      Patients and Practitioners Benefit from Timely, 
Accurate, and Relevant Information: Patients and physicians 
need timely, accurate, and relevant information about the 
benefits and risks of a drug or biologic so they can make well-
informed choices about therapy. FDA's assessment and 
communication of emerging information regarding a treatment's 
benefits and risks, both before and after approval, provides a 
needed integrated system of medical product evaluation. Safety 
information collection, communication, and regulatory action 
should be informed by the best available scientific data and 
expert advice.
     Safety Systems Should Support and Reflect 
Innovation: The most beneficial policies and actions with 
respect to drug safety are those that continue to enhance 
patient health and that promote innovation and the development 
of novel medicines. Biotechnology companies are on the leading 
edge of scientific advances in biomedical science and 
bioinformatics. The public and private sector should work 
collaboratively to harness and use these advancements to 
enhance, optimize, and modernize the system of drug and 
biologic safety evaluation.

    BIO believes the negotiated PDUFA IV reauthorization 
proposals are fully consistent with these principles and should 
be implemented. Additionally, these principles would support 
the establishment of a private-public partnership to conduct 
routine, active surveillance through the use of population-
based medical databases. Such a system could identify safety 
signals and analyze the findings, so meaningful information can 
be communicated to the public to support individual medical 
decisions. In addition, based on the information gleaned from 
such a 21st Century active surveillance program, FDA can 
determine what, if any, additional risk mitigation steps might 
be appropriate. Certain other drug safety proposals, such as a 
separate office of drug safety, conditional product licensure, 
one-size-fits-all risk management strategies for all drugs, or 
restrictions on a physician's ability to prescribe an 
appropriate treatment to a patient, would not be in accordance 
with these principles.

           Modernized Approaches to Post-Market Surveillance

    PDUFA III provided FDA with $71 million to ensure efficient 
risk management after a product was approved, and the PDUFA IV 
recommendations would build on that commitment. The PDUFA IV 
post-market safety enhancements would provide FDA with nearly 
$150 million over five years to establish a foundation of 
epidemiological expertise, IT infrastructure, and programmatic 
skill sets necessary for an up-to-date post-market surveillance 
system based on 21st century advances in science and health 
information technology. With this funding, FDA would be able to 
further its public health mission while continuing to enable 
access to safe and effective medical products. Along with 
modernizations to current adverse event collection systems, FDA 
would have the capacity to utilize large medical datasets to 
mine for potential safety signals actively and to subsequently 
facilitate the testing of those signals. With this capacity, 
FDA would be better equipped to identify adverse events that 
might not be evident in clinical trials.
    Based on these recommendations, FDA would establish its 
vision for a 21st century drug safety system based on a five-
year plan developed with the input of the public, academia, and 
industry experts. FDA would establish best scientific practices 
for conducting analyses of medical data sets, validate post-
market risk management and minimization plans to identify the 
most successful strategies and disseminate information about 
such strategies, and study how to maximize the value of adverse 
event reporting and analysis during a product's marketed life.

                      Expediting Drug Development

    Additionally, these PDUFA proposals would provide FDA with 
the resources necessary to draw on recent advances in genomics 
and biomedical science to develop information to help improve 
drug development through earlier ability to predict risks and 
develop appropriate ways to manage them. For example, FDA would 
release several guidances to expedite drug development. These 
guidances would outline the agency's latest thinking on how to 
predict certain toxicities more accurately and how to enhance 
the quality of the information developed through clinical 
trials. FDA and stakeholders would work together to develop 
tools necessary to further work in personalized medicine, such 
as new validated safety and efficacy biomarkers and new ways to 
measure variation in patient response.

  Improved Procedures to Ensure Timely and Valuable Pre-Market Reviews

    FDA also would improve the processes for developing clear 
and concise product labels and scientifically appropriate post-
market commitments. Often, discussions of product labeling and 
phase IV trials occur near the end of the review period with 
limited time for meaningful dialogue and few standardized 
procedures. The PDUFA IV recommendations include that FDA would 
plan for adequate time in the review process for these critical 
discussions, usually 30 days before the user fee date. 
Allotting this time for meaningful discussion will lead to 
enhanced safety information emerging from post-market trials 
and clearer label information for patients and physicians.
    Reducing Medication Errors. In addition, the PDUFA IV 
recommendations include a program under which FDA would improve 
the process for review of prescription drug product names, to 
minimize the potential for medication errors caused by name 
confusion. According to the Institute of Medicine (July 2006), 
1.5 million preventable medication errors occur each year in 
the United States and some of these mistakes are caused by 
confusion over the drug's name. The PDUFA IV recommendations 
improve the process for evaluating proprietary drug names so 
that concerns can be identified earlier, before a product goes 
on the market.
    Information Technology Enhancements: PDUFA IV provides FDA 
with additional resources to establish an automated standards-
based information technology environment for the exchange, 
review, and management of information supporting the process 
for the review of human drug applications throughout the 
product life cycle. These IT enhancements will lead to more 
efficient, higher quality evaluation of new and marketed drugs.
    The PDUFA IV recommendations, in conjunction with the new 
safety initiatives FDA announced in response to the Institute 
of Medicine report (Sept. 2006), allow FDA to establish a 
modern, comprehensive, life-cycle approach to drug safety based 
on 21st century information technologies, biomedical advances, 
and efficient risk management strategies.

             Significantly Enhanced Funding Base for PDUFA

    From its inception, the PDUFA program has been about 
efficient review of applications for new prescription drug 
products. The PDUFA IV recommendations include significant new 
resources--more than $50 million--to reinforce the program's 
financial base and ensure that the program can continue to meet 
its goals. These new funds allow FDA to respond to inflationary 
pressures, unanticipated work volume and intensity, facilities-
related costs, and increased need to meet with sponsors and to 
review special protocol assessments (SPAs).
    PDUFA Cannot Succeed Without Strong Appropriations for 
Human Drug Review
    While we applaud the new recommendations in PDUFA IV, BIO 
notes that PDUFA fees are intended to be additive to a sound 
base of appropriations for FDA's core activities. However, BIO 
is concerned that FDA has become over-reliant on these user 
fees to meet the core mission of the human drug program. For 
instance, appropriations funded 150 fewer reviewers in 2005 
compared to the start of the program in 1992. In 2005, fees 
funded more than half of the cost of human drug review, 
compared to 7% at the start of the program. Unless 
appropriations increase substantially more than they have over 
the last 10 years, user fees could account for more than two-
thirds of the cost of human drug review by the end of PDUFA IV. 
BIO is concerned that FDA's over-reliance on industry fees 
creates an unseemly misperception that FDA is beholden to the 
industry it regulates. In the long-term, this perception is not 
in the best interest of patients, biopharmaceutical innovators 
or FDA. The fee increases proposed under PDUFA IV are necessary 
for FDA to implement the new proposals which will enable them 
to continue to make needed new medicines available to patients, 
but BIO believes that FDA also needs increased appropriations 
to continue its mission of protecting patients as it faces a 
revolutionary new era of scientific innovation and advancement.
    BIO is a founding member of the Coalition for a Stronger 
FDA, a group of trade associations, patient groups, consumer 
advocates, and individual companies whose goal is to ensure a 
strong, consistent public commitment to resources for the FDA. 
In addition to user fees, it is important that FDA receive a 
reasonable balance of appropriations for human drug review. BIO 
and the Coalition for a Stronger FDA will continue to work with 
the Administration and Congress to seek needed increases in 
appropriations for human drug review activities at FDA over the 
next five years.

            PDUFA Should be Reauthorized in a Timely Manner

    It is important that Congress complete this reauthorization 
in a timely manner to avoid program interruptions, the 
initiation of a reduction in the FDA workforce, and slow-down 
in regulatory reviews that will reduce patient access to new 
therapies. PDUFA should not be slowed or unencumbered by 
unrelated or scientifically contentious issues. BIO looks 
forward to working with members of the committee to ensure that 
this PDUFA package is reauthorized expeditiously and well in 
advance of the statutory expiration of PDUFA III on September 
30th 2007.
    In conclusion, BIO believes that the PDUFA program has been 
highly successful and is a direct contributor to increased 
patient access to life-saving, breakthrough therapies. The 
proposed enhancements for PDUFA IV would provide FDA with tools 
and resources to modernize the post-market surveillance system, 
evaluate more efficiently each product's unique benefits and 
risks, and continue to support the timely development and 
availability of new medicines to patients.
    Thank you and I would be happy to answer any question from 
the committee.
                              ----------                              

    Mr. Pallone. Thanks so much. Mr. Vaughan.

STATEMENT OF WILLIAM VAUGHAN, SENIOR POLICY ADVOCATE, CONSUMERS 
                             UNION

    Mr. Vaughan. Thank you all for inviting Consumers Union, 
the publishers of Consumer Reports, to testify today, and I 
guess I will have a little bit different tone but similar 
outcome on all of this. We think there is a lot of wisdom in 
the old saying, who pays the piper calls the tune, and that is 
why we oppose funding a vital consumer protection agency out of 
industry user fees that are essentially really a tax on people 
who take medicines. It would be far, far better if the entire 
FDA budget were funded by the progressive tax system. The user 
fee system is damaging to the image of the FDA, as Kay just 
indicated, and morale of the staff and to the public because it 
compromises drug safety.
    On the image issue, Consumers Union has just conducted a 
national poll. It found the public overwhelmingly wants 
stronger drug safety protections, but 84 percent feel the 
industry has too much influence over the regulators, with two-
thirds concerned about the user fee system. And on morale, 
Representative Baldwin cited the Union of Concerned Scientists 
survey. I put some of those quotes in my written testimony, 
which I ask permission to be put in the record, please, and I 
hope you could look at them because they are truly frightening. 
And recently, as Representative Capps noted, four former FDA 
commissioners spoke in favor of appropriations over user fees. 
So our dream is to see the FDA totally funded out of 
appropriations. Well, as you said, Mr. Chairman, it isn't going 
to happen, not in this budget climate and these tough budget 
days. But we hope that you might work for this in the long run, 
because it really would be helpful. Or achieve the same 
purposes of improved image and morale and drug safety by 
keeping the user fees but breaking the strings that the 
industry has put on the agency. Those strings were the main 
concern about users fees in the Institute of Medicine's report. 
We urge you to consider Representatives Hinchey and Stupak's 
bill of the 109th that would keep user fees but break the 
strings. Whatever happens, whatever happens, it is vital that 
Congress give the agency more resources, as Mr. Hubbard has 
said, and greater authority to conduct post-market approval 
safety activities. We do not want to take resources away from 
or in any way slow down the approval of possibly lifesaving 
drugs. We so strongly agree with the ALS witness on that. As we 
see it, nothing in the FDA reform bills, Grassley-Dodd, Enzi-
Kennedy, or Waxman-Markey slows down the approval of new 
lifesaving drugs. But the agency desperately needs more 
resources and authority to match the high speed of approvals 
with a high speed, post-approval system that makes sure the 
drugs on the market really are safe and effective.
    PDUFA calls for a safety increase of $29 million. That is a 
start but woefully inadequate. Therefore we congratulate 
Senators Kennedy and Enzi, who are marking up a bill tomorrow 
that increases PDUFA safety fees by $50 million per year above 
the $29 million that has been talked about, dedicating the 
money to their new safety initiatives and particularly to an 
exciting new proposal to use huge medical databases, such as 
Medicare's, to do epidemiological studies to detect safety 
programs. Congressman Deal, I think that Senate bill really 
takes a big step forward towards the IT problems you were 
talking about.
    And the other issues. We urge you to look hard at the 
proposed voluntary advertisement user fee proposal. I am not 
sure it works. You should legislate that the companies get more 
than a slap on the wrist for bad ads so they will want to pay a 
user fee for pre-clearance. And then another issue. Since PDUFA 
triggers general Treasury appropriations and now involves 
safety, when you consider PDUFA V in 2012, and I hope you are 
all here, patients should get to participate in the real 
negotiations. Today, consumers are consulted while the others, 
several others at the table here, get to do the actual 
negotiating and I feel we are sort of at the kid's table. I 
would trade 10 hours of consulting for 1 hour of negotiating 
any day and I think you would get some better public policy out 
of it.
    And finally, it is absolutely essential that safety 
legislation, like Waxman-Markey's H.R. 1561, which we strongly 
endorse and we hope you will all cosponsor, be included in 
whatever PDUFA legislation you enact. If FDA reforms that could 
save us from future Vioxxes are not included in that must-pass 
PDUFA package, we will miss the best chance in 5 years to 
protect the American public. Thank you very much.
    [The prepared statement of Mr. Vaughan follows:]

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    Mr. Pallone. Thank you all for your opening statements and 
now we will start with questions and I will yield myself 5 
minutes. I wanted to start with Mr. Vaughan. A number of the 
committee members talked about Vioxx and you, in your written 
statement, use Vioxx as sort of the poster child, I guess, if 
you will. I wanted to use that by reference and ask you this 
question. You heard the testimony today. We are concerned about 
the timeliness of passing PDUFA reauthorization. But on the 
other hand, the issue is out there about whether to add drug 
safety or even throw in biologics or whatever. And of course 
the concern is, how far can we go with this and not jeopardize 
the timeliness of the reauthorization? You were using Vioxx as 
sort of an example about--I think you used it in two respects. 
One, you said that if you have better data collection or larger 
data collection, that was certainly an answer. You mentioned 
Mr. Waxman's bill, as well, in this context. So just give me a 
comment on what you think led to the Vioxx situation and what, 
if any, were the failings of the FDA by reference to this? I 
know we could talk all day, but if you could kind of summarize.
    Mr. Vaughan. Basically not having enough information out 
there on the clinical trials that were done on that drug, so 
that it was hard for the world's researchers to really say 
there is a problem here, but a lot of people saw some warning 
signs. The VA didn't use Vioxx much. Kaiser didn't. Several 
State Medicaid programs avoided it. Then when there were some 
studies that caused the FDA to say, ``hey, let us redo the 
label'' they had to negotiate with the company for 14 months. 
They couldn't say, ``excuse us, it is very clear to us, we want 
a label change tomorrow morning and by the way, you ought to 
cool the advertising.'' They couldn't do that. The legal 
authorities weren't there. Dr. McClellan has testified on the 
idea of monitoring large epidemiological databases, that the 
Vioxx problem probably could have been picked up in about 3 
months instead of the 3 to 4 years that it took for a general 
consensus that, hey, this drug is trouble. To add that to 
PDUFA, like Kennedy-Enzi is doing could save, in a future case, 
thousands of lives, millions of dollars, free up research for 
other stuff instead of law cases. So we hope that you will 
expand on PDUFA and include some of these safety ideas.
    Mr. Pallone. I appreciate that. And then my second 
question, which I guess can be for Ms. Holcombe or Dr. 
Goldhammer. With regard to the direct-to-consumer advertising 
and we heard the testimony from the FDA representative about--
that this would continue to be a voluntary system. There have 
been proposals for moratoriums. Of course, I worry about the 
constitutionality of a moratorium because of commercial speech. 
Are there ways of having a system that has some kind of better 
controls without having a moratorium? In other words, not just 
relying on a voluntary system because of the concern that the 
bad actors may not participate? But without going to 2- or 3-
year moratorium which I guess I would be concerned might be 
thrown out by the courts on the free speech grounds, is there 
something in between that could be done?
    Mr. Goldhammer. Well, unfortunately, I am not a lawyer and 
can't opine on the constitutionality.
    Mr. Pallone. Yes. I am not asking you to do that. I am just 
asking practically.
    Mr. Goldhammer. There is a ``but''. But I will say that, 
since the principles were adopted by the PhRMA board a couple 
of years ago, we have seen a marked difference in enforcement. 
I think our statistics from 2006 pointed out, at least in the 
first 9 months, there were zero enforcement actions taken by 
FDA against broadcast advertisements, whereas the previous year 
there were 17. So we have seen a marked shift in the way the 
ads are submitted to FDA. They are taking that very seriously. 
So it may very well be that the voluntary action of industry 
has largely solved the problem out there.
    Mr. Pallone. I am questioning that and I am asking if there 
is any kind of limits on advertising other than a moratorium, 
that could be put in place. And I am not trying to stop you, 
but I am going beyond the voluntary. Maybe Ms. Holcombe or Mr. 
Vaughan would respond to that.
    Mr. Vaughan. I would strongly, strongly urge pre-clearance. 
This is an example of talk of the pharmaceuticals. Last fall, 
in a back-to-school campaign, pushing sleeping pills on little 
kids last September. They ran the ad for a few days in 
September. The FDA sends them a letter in March saying, gee, 
please don't run that ad anymore, because this drug has no 
proof that it works in kids and it is probably harmful to 
little kids. And in March, they send the letter, nothing else. 
No penalty, no requirement to run ads to correct the impression 
that parents should pump their kids full of sleeping pills. We 
have got to have a better system. This voluntary system doesn't 
work. I assume they are not members of your PhRMA.
    Mr. Pallone. When you talk about pre-clearance, how do you 
do that and move away from the voluntary system?
    Mr. Vaughan. You submit all ads and they are pre-cleared by 
FDA staff who reviews them for accuracy and honesty, that we 
are not pumping poison, if you will, into our Nation's 
children. Or, if you don't want to do that, how about this? 
Civil monetary penalties are in Waxman-Markey. Make it very 
clear that if you are out there with a misleading ad that 
doesn't list side effects, doesn't give warnings, then you pay 
a CMP and if you do it twice, you pay a fortune. Clariton got 
cited 11 times. How can people who are so smart to make a pill 
like that, not get the ads right?
    Mr. Pallone. OK.
    Mr. Vaughan. I mean, this is crazy.
    Mr. Pallone. I thank you. I know my time has run out. I 
yield to Mr. Deal.
    Mr. Deal. Thank you, Mr. Chairman, and I want to thank all 
of you for being here today and Mr. Thew, especially for your 
efforts to be here and to testify. You certainly underscore the 
importance of getting drugs on the market and research that is 
necessary and hopefully speeding the process up for lifesaving 
drugs that would be important to you and to many other people.
     While we are talking about the advertising, I have had a 
problem for a long time, understanding the reason why we would 
advertise something that requires a prescription to obtain. But 
that, nevertheless, I have been told does pay dividends, 
apparently, for those who choose to go that route. Mr. 
Goldhammer, I believe you said in your testimony that, in 2005, 
your association issued voluntary standards that would say that 
every member of PhRMA would submit their ads for pre-approval. 
Can you tell us to what degree that guideline has been 
successful?
    Mr. Goldhammer. We will have to get back to you in writing. 
I believe that most, if not all, of the members of PhRMA have 
signed on to those principles, but I am not the one who is in 
charge of that program, but we will be happy to go back and get 
the exact percentage to you.
    Mr. Deal. One of the concerns that I have heard expressed, 
and I think the reason for the add-on to provide funding for 
reviewing the ads, is the delay time in getting approval under 
the current system and this would generate revenue that 
hopefully would provide personnel to be able to give a quicker 
approval for ads. Is that everybody's general understanding as 
the motivation?
    Mr. Goldhammer. Yes, that is correct. While we were 
negotiating, we got extensive statistics from the FDA about how 
long it was taking them to review the ads and render an 
advisory opinion and we have seen just, I think, over the last 
3 years it has gone from about 35 days to over 80 days. And 
that represents a real disincentive, I believe, for companies 
to submit an ad for getting this advisory opinion back, if they 
are going to be sitting in a queue waiting and waiting and 
waiting for that opinion. On the other hand, companies want to 
get these opinions. To run a broadcast ad is not an 
insignificant amount of money to go through and do that and I 
think companies want to get it right before the ads actually 
air on television.
    Mr. Deal. I think all of us are concerned about this 
ongoing balance or mix, if you will, between industry-funded 
testing and certification versus Federal general taxpayer 
revenue, and several of you touched on that from a variety of 
points of view. Mr. Vaughan, I am a little interested in your 
survey that showed that 67 percent of Americans are concerned 
that funding comes from the industry. My first reaction to that 
is that I am surprised that 67 percent of the public even knows 
that fact. I presume that is because you have informed them in 
a previous question, is that right?
    Mr. Vaughan. No. Of course the question asks, if drugs are 
approved and if partly paid by--yes, of course, sir.
    Mr. Deal. Yes. OK.
    Mr. Vaughan. But it was a good poll. About thousand folks.
    Mr. Deal. One of the concerns that you expressed, Mr. 
Vaughan, was that you felt that PDUFA has compromised the 
safety component and you quote in your written testimony. I 
presume these are researchers or people employed within FDA, 
expressing their concerns and you have categorized them in a 
variety of ways. I presume that the safety issue relates to the 
feeling of being under a time limitation to get the work done. 
Is that generally it?
    Mr. Vaughan. Yes, sir, that seems to be it. I have not 
worked at the FDA, but also in the testimony, there is this 
Harvard Professor Carpenter, who, I believe, the chairman 
referred to earlier, that actually tried a very sophisticated 
mathematical analysis and I couldn't attest to his math, but 
basically, things approved just before the PDUFA due date have 
a lot of trouble afterwards, like four or five times as many 
adverse events and label changes. Whereas, when the FDA takes a 
little bit longer and it slips a bit past the PDUFA due date, 
the drugs seem to be safer or don't have as many troubles on 
the market. Now, we wouldn't want to slow up lifesaving drugs. 
If we have the cure for ALS or we think we do. For gosh sakes, 
bring it to market. But for the 20th kind of statin or the 40th 
kind of antihistamine, what is the rush that it has to be on 
the 10th month?
    Mr. Deal. Well, my comment to that is that FDA is a 
bureaucracy like many. Deadlines and time limits have good 
effects many times, because they don't just let you bury 
something within the system, but I think we all acknowledge 
that it is a very delicate balancing act that we have try to 
achieve. And my time has expired. Thank you, Mr. Chairman.
    Mr. Pallone. Mr. Waxman.
    Mr. Waxman. Thank you very much, Mr. Chairman. Balancing is 
something we have to do in this legislation. In one area, of 
balancing, is the amount of revenues that goes into drug 
approval that is paid for by the user fees as opposed to 
appropriations. One of the things we insisted on when we 
adopted PDUFA is that the user fees not replace the 
appropriations. Rather than improving our system, we would end 
up in worse shape and I am just alarmed to learn about the 
prediction that the percentage of user fees could exceed 70 
percent if we don't act to stop this ever-increasing reliance 
on user fees. Mr. Hubbard, what is your view of the optimal 
balance? What percentage of FDA's drug review funding should 
come from user fees as opposed to Federal dollars? And what 
impact has this perception had, that FDA is in the pocket of 
the pharmaceutical industry had on the agency and its culture?
    Mr. Hubbard. I recall that, in the late 1990's, when the 
percentage approached 50, then Commissioner Jane Haney and the 
industry folks and the consumer patient groups all felt it 
should not pass 50 percent. And Dr. Haney put in a large budget 
for appropriations that year to prevent that and to increase 
the appropriated dollars. However, it never came and subsequent 
commissioners have done that as well. So it has clearly been an 
effort at the FDA to try to say let us hold it down, but that 
has not been done. The perception certainly is that as those 
percentages go up to 60, 70, perhaps even 80 percent someday, 
that industry could be into FDA saying to the scientists, we 
are paying your salaries and we need our approval, and that 
would not be a good thing to happen. So I would urge you to do 
whatever you can do to increase FDA appropriations so that the 
percentage will stay where it is or even go down.
    Mr. Waxman. Another imbalance, as I see, is that the amount 
of the PDUFA funds that will go for FDA's review of the drug 
compared to its drug safety program. So while PDUFA dollars are 
flowing freely to the drug review program, and that is 
increasing the speed with which new drugs enter the market, 
which is something we all find desirable, FDA's post-market 
drug safety system appears to be starving. Can you talk more 
about how this has occurred and the impact it has had?
    Mr. Hubbard. Absolutely, Mr. Waxman. That has undeniably 
happened. The post-market system at FDA has not been 
strengthened in the way the pre-market system has, so the 
imbalance has grown and grown and grown. And this gets 
somewhat, I think, to Mr. Stupak's point. I will show you this 
chart we tried to show earlier.
    [Chart shown.]
    This is the increase in adverse drug reports that come to 
the agency. As you can see, they have increased exponentially. 
There were 30 people to review them in 1990 when there were 
200,000, or 20,000. There are 30 people now to review them and 
they are 200,000.
    Mr. Waxman. Do you think that the proposal that the FDA has 
presented to us that they negotiated with the industry is a 
good balance in this regard?
    Mr. Hubbard. Well, certainly, I very much support the 
negotiation that occurred, but the catch-up needs to be, in my 
view, on the appropriations side. I think the fact that the 
industry is paying more now for post-market surveillance is a 
good thing, but in the end, you need to have the appropriations 
catch up, I believe.
    Mr. Waxman. Dr. Goldhammer, I noted that you support the 
limited funding for FDA to conduct certain post-market drug 
safety activities, as set forth in the industry/FDA proposal. I 
am sure you are aware of the Institute of Medicine in its very 
well-regarded report says that far more is needed to give 
Americans confidence that marketed drugs are safe. They 
recommend a number of significant reforms that would give FDA 
several new authorities, including, for example, the ability to 
require that post-market studies, safety studies, be conducted, 
to require labeling changes and to place moratoriums on DTC ads 
for new drugs if it is going to increase sales at a time they 
are not sure about the safety of it. Many of these 
recommendations are in the Kennedy-Enzi bill and the Waxman-
Markey bill. What is your position or your view on these 
recommendations?
    Mr. Goldhammer. We were empowered during the PDUFA 
discussions to only focus on what could be done through PDUFA 
and the recognition was, when the IOM report came out in mid 
September, we needed to take a hard look and see, did we 
address what we could have addressed through the PDUFA process? 
And I think what FDA said and what we have said in our 
statement is the answer to that is yes. In terms of what could 
be done through more resources, we have done that. The rest of 
the IOM report and I think the major things, as you have noted, 
are, I think, issues that IOM has thrown back to Congress for--
--
    Mr. Waxman. Well, what is the position of PhRMA, let us 
say, on the issue of whether FDA should be able to require a 
post-market review by the company rather than simply 
requesting?
    Mr. Goldhammer. Well, we don't have a position on any of--
--
    Mr. Waxman. Well, what is your best professional judgment 
on that point?
    Mr. Goldhammer. On?
    Mr. Waxman. On requiring the studies to be conducted post-
market rather than simply requesting it and then finding it is 
not done.
    Mr. Goldhammer. Well, as we have looked at the statistics 
that FDA publishes on a yearly basis, only 3 percent are 
delayed. The vast majority of them are proceeding according to 
schedule. Now, I think there is a misperception in that regard, 
because people look at this large number of pending studies and 
believe the pending studies are not on schedule, but that is 
not, in fact, what the FDA regulation says. If a study is 
pending, it means it is not delayed.
    Mr. Waxman. There is no end date set for them. Don't you 
think the FDA ought to have the authority to require it?
    Mr. Goldhammer. Well, I think, certainly for subpart H, 
drugs approved under subpart H, they do have that authority 
today. There are end dates in almost all of the post-market----
    Mr. Waxman. So your answer is no or your answer is yes?
    Mr. Goldhammer. Well, I am saying I don't have an answer, 
as PhRMA right now.
    Mr. Waxman. And I don't have anymore time.
    Mr. Pallone. Thank you. Thanks a lot. OK, next is Mr. 
Buyer.
    Mr. Buyer. Thank you, Mr. Chairman. Mr. Thew, I want to 
thank you for being here, but when you leave today, I would 
like for you to bring a point up with the leadership of ALS and 
other patient advocacy groups, that these groups were pretty 
silent during the Democratic majority's effort to repeal the 
noninterference language that would have had a detrimental 
impact upon many narrow-targeted drugs that help many different 
narrow-disease groups. So I just want you to take that back 
with you. I appreciate you being here to testify on this issue, 
but their silence on this other issue was painful to me. And so 
I appreciate you being here today and take that up with them 
and tell them don't play politics when it comes to your friends 
who are similarly situated.
    With regard to PhRMA and BIO, let me ask this question. The 
witness on behalf of FDA did not do a very good job, I don't 
think, answering questions that I had or Mr. Pitts or Mr. 
Rogers, relative to this question of the prevalence that we 
have right now on the drugs that are coming into our ports of 
entry through these imported parcels. And so when the FDA and 
Customs do these blitzes and do the inspections, the prevalence 
of FDA unapproved drugs and biologics is shocking. And so from 
a curious standpoint here, as we talk about PDUFA IV and 
modernizing with regard to post-market review and we have got 
this escalation of adverse reports, how do we nail this one 
down? I mean, if I'm a manufacturer out there, I have got some 
pretty strong concerns with regard to these adverse reports and 
whether or not it is my drug or not. I mean, you could have Dr. 
Burgess here prescribe something for me, but then if I go, 
well, I am just going to get from a Canadian source and I come 
back and see him and say I don't feel any better, he may or may 
not report. Mr. Pitts asked a really great question. What more 
should we require of doctors to ask of the patients, where did 
you get that prescribed drug from? Did it even have proper 
labeling? Did it come from an approved source? I am curious 
about your impression of all of our questions. What do we need 
to add in this legislation, if anything, to nail this down?
    Ms. Holcombe. Well, I don't know if there is something that 
you specifically can add into this legislation. But 
alliteratively, I would like to share your shock. We have been 
strong opponents, for years, of efforts to reduce FDA's ability 
to track imported products that are not approved by the agency, 
to go after these products, prevent them from reaching 
consumers in the United States, prevent counterfeit drugs from 
coming in. And most of the products that BIO member companies 
produce are products that are injected and so they come in 
vials. Mostly they are clear liquids. So if you get a clear 
liquid in a vial and you take a syringe full of it out and 
inject into a patient, there is no way for you to know, is it 
the thing? Is it not the thing? Is it clean, dirty? And we have 
had very well-publicized incidences exactly as you have 
described, where patients have taken the drug over and over and 
they are not getting better. We believe the wrong message has 
been sent to FDA by attempts to legalize the importation of 
prescription drugs and that this is something that we find 
shocking and appalling, that this should go on. This is 
dangerous, it is absurdly dangerous and yes, from the 
innovative company's perspective, we do wonder how many when we 
see these escalations of adverse reports. Is this our product? 
Or is this something that someone else is shaking up in a 
garage somewhere and sticking into our bottles? So I am 
shocked.
    Mr. Buyer. Thank you.
    Mr. Goldhammer. Yes. And I think our other major 
disappointment, in addition to what Ms. Holcombe said, is with 
FDA's inability to finalize the pedigree regulations that is 
called for under the Prescription Drug Marketing Act that was 
introduced by Congressman Dingell some years ago, because this 
would then provide the assurance of completely keeping the 
supply chain within the United States closed. We have tried 
doing as much as we can, through a variety of media 
opportunities, to make sure that patients purchase drugs 
through established pharmacies or Internet pharmacies that are 
verified by the National Association of Boards of Pharmacy, to 
make sure that they are not getting something through some kind 
of phony Canadian Web site.
    Mr. Buyer. Thank you, Mr. Chairman.
    Mr. Pallone. Thank you. Chairman Dingell is recognized for 
5 minutes.
    Mr. Dingell. First, thank you. I would like to welcome our 
distinguished panel here and tell them that we very much 
appreciate their assistance. I want to express my particular 
affection and respect for Ms. Holcombe, who did such valuable 
work when she was a very fine member of the staff of this 
committee, particularly on matters like PDUFA. Welcome back, 
Ms. Holcombe. We are honored that you are with us. Thank you, 
Mr. Chairman.
    Mr. Pallone. Mr. Stupak.
    Mr. Stupak. Well, thank you and again, thank you for 
allowing me to ask questions. Mr. Goldhammer, in your 
testimony, you stated you believe that ``PDUFA agreements 
substantially addresses all relevant recommendations made by 
the IOM.'' However, a very quick glance at the IOM report, I am 
unable to see where the proposal, where in the proposed 
recommendation by IOM, that there should be specific safety-
related performance goals in PDUFA. That is not in there. Also, 
I cannot find where IOM's recommendation that CDER review 
teams, regularly and systematically, analyze all post-market 
results and make the public aware of their assessments or the 
significance of the results with regard to risk and benefit 
information. Don't you believe those two goals should be part 
of PDUFA IV?
    Mr. Goldhammer. I think you asked some very good questions 
that probably are better directed towards the FDA, in terms of 
what kind of internal management changes they are going----
    Mr. Stupak. Well, I can tell you that they don't know and 
you are at the table, so that is why I was asking you guys.
    Mr. Goldhammer. OK. Well, again, I am not an FDA employee 
and I would be loathe to comment on what are essentially FDA 
management issues.
    Mr. Stupak. No. But you were there. Weren't you guys there? 
PhRMA was at the table negotiating PDUFA IV with FDA. Don't you 
think these two goals should be in there, specific to safety-
related performance goals?
     And also post-marketing results that would be made 
available to the public so they can assess the risk benefit 
analysis of a drug they are taking.
    Mr. Goldhammer. Well, with respect to post-market study 
results, we already took the initiative on that several years 
ago when we set up a database for clinical study results and we 
have got data on over 350 drugs in that database.
    Mr. Stupak. Those are only the studies you want to put on. 
They are not all the studies. It is the only one that PhRMA and 
the manufacturer puts on. It is not the ones that may find an 
adverse event. You control the information that is going on 
there. What we are asking for is all the reports be made 
available so the American public can decide. Don't you think 
that is a good idea?
    Mr. Goldhammer. Well, again, I think those are questions 
that Congress should deliberate and there should be a thorough 
consideration of those as you move forward.
    Mr. Stupak. Mr. Vaughan, do you care to comment on that?
    Mr. Vaughan. We desperately need those, sir, and we find it 
is strange that we complain about the high cost of developing 
drugs and bringing drugs to market and yet people don't want to 
provide information on what trials were done and what the 
results were so that as a result, people keep repeating dead-
end efforts of other companies. Not only that, but it hides 
safety features, so we desperately need a reform of the 
clinical trial registry and results database, sir.
    Mr. Stupak. Mr. Vaughan, I had asked Dr. Mullin, the last 
panel, about the $29 million, and Mr. Waxman mentioned a little 
bit about it, too, which I see represents a mere 7 percent of 
the user fees paid by industry to FDA to be put in post-
marketing surveillance. Do you feel this is enough?
    Mr. Vaughan. Not at all. There is good news in this 
Kennedy-Enzi bill being marked up tomorrow. As introduced last 
week, it was $70 million more. The version they put out tonight 
is $50 million more, but that is a good deal. That is better 
than the $29 million. We think even more is needed, sir. In 
fact, in the written testimony, we have a list of a bunch of 
projects that if you all would care to consider and legislate 
and help fund, we would have not only the fastest approval 
system in the world, we would have the safest drugs in the 
world.
    Mr. Stupak. Now, Mr. Vaughan, you also mentioned Rozerem 
and that was a sleeping pill ad that ran in September 2006, 
where Rozerem would remind you that it is time to go back to 
school. This ad was complete with visuals of chalkboards, 
school books, school bus, laptop computers, school-age children 
with their backpacks. It is my understanding that it took the 
FDA more than 6 months to ask this drug maker to cease these 
ads that suggest sleeping pills are indicated for children. I 
find that simply outrageous and indicative of the problems that 
plague the FDA. Yet, in the Administration's newly released 
PDUFA reauthorization proposal, FDA recommends creating a 
separate user fee program to collect fees from companies that 
seek FDA advisory reviews of their direct-to-consumer 
television prescription drug advertisements. Do you expect a 
voluntary program that allows drug makers to decide if they 
want their advertisement clear will have any major effect?
    Mr. Vaughan. That is what baffles me and I hope you all can 
dig into that a bit, because if you don't get anything more 
than a letter 6 months later saying please stop or tell us when 
you are going to stop--and of course they had stopped in early 
September--why would you bother with this volunteer program. 
And Consumers Union and Consumer Reports magazine, we have 
documented a major decline in penalty letters. So they are 
telling companies that they are not doing as good a job 
monitoring these ads. There is no penalty when there is a 
violation. Why would you pay a user fee? I am just not sure 
that idea works, and I hope you all can kind of dig into what 
brings you to the table to use this service to get an honest ad 
out there.
    Mr. Stupak. So would you support IOM's 2-year moratorium, 
then, on direct-to-consumer advertising until we can try to 
straighten this out?
    Mr. Vaughan. On drugs where there is some background 
chatter or it is a new drug, wherethere might be a problem? 
Absolutely. I keep this pinned to my wall. It was an ad that 
was done in a newsletter, not you and I, but to executives of 
drug companies and it says, ``how many prescriptions...how many 
weeks in market...until you are confident that your drug is 
safe'' Why do we want people out mass advertising when this is 
what the businessmen themselves are saying. ``I don't know, but 
maybe once 10 million people use it we will know.'' If they are 
going to advertise, there ought to be a little sign up there 
that says, and you are participating as a human guinea pig. 
Call 1-800-FDA if there is an adverse effect.
    Mr. Pallone. Thank you.
    Mr. Stupak. Thank you.
    Mr. Pallone. And I apologize for missing you, Dr. Burgess. 
I recognize you for 5 minutes.
    Mr. Burgess. That is OK, Mr. Chairman. It has been a long 
day. I appreciate everyone staying with us through all of this. 
Dr. Goldhammer and Mr. Hubbard, I was so glad that you are here 
to give the perspective of what life was like before PDUFA, 
because some days I wonder if I really remembered it 
accurately. But as a clinician during the 1980's, it just 
seemed like we were constantly running behind trying to get new 
therapeutics to our patients. In fact, we had a whole course of 
medical school called developmental therapeutics for cancer 
drugs, which was designed to how do you get around the FDA? I 
guess I shouldn't go into that too much now. But let us talk 
about the direct consumer advertising. Again, I am not a fan of 
it. We heard testimony in the previous panel that two-thirds of 
the direct consumer advertising, there were two-thirds that did 
not go through the voluntary. Dr. Goldhammer, do you have a 
sense of that two-thirds, in retrospect, how much of that 
advertising would seem to be a problem, that is if a company 
did not self-refer of the two-thirds that did not self-refer, 
what segment of that two-thirds of the population ended up 
doing something that perhaps shouldn't have gotten on the 
airwaves?
    Mr. Goldhammer. Well, a number of those may not have been 
self-referred. It may have been just minor changes to an 
existing ad campaign, and the PhRMA principles don't call for 
those to be submitted for pre-clearance if they are minor 
changes, because it is up to the company to make that decision. 
Again, I think the most telling is the FDA statistics that 
point out that there have been very few enforcement actions 
against television ads and we like to think that is because of 
the PhRMA principles being put into place. The other thing that 
the PhRMA principles call for is in the case of a new drug that 
has just been approved, is that no direct consumer advertising 
take place until the company has had a chance to go out and do 
an educational campaign with physicians, so physicians don't 
end up getting blindsided by drugs out on the market and 
patients are coming in holding the ad.
    Mr. Burgess. Yes, you assume we are paying attention and of 
course the practice of medicine has changed in the 21st century 
and patients aren't the same patients that were there in the 
1990's and the 1980's, and as much as I don't like direct-to-
consumer advertising, there were times where patients brought 
me information of which I was not aware and after further 
research decided that this would indeed be an appropriate 
therapy for them. And again, it may not have crossed my mind or 
I may not have been as up on it as I should have been.
    Let us talk just a little bit about the user fee/
appropriation ratio, and this is really for everyone on the 
panel. We have Mr. Thew, whose primary goal in being here today 
is that we do not obscure a therapy or delay a therapy that 
could come his way and for people who are similarly afflicted, 
and I share his prayer in that regard. But I don't recall 
anything, Mr. Chairman, and maybe I am wrong, but we passed a 
big budget here a few weeks ago and I don't recall anything in 
there that had a big increase in the amount of money we were 
going to give the FDA. Now maybe I missed it. Maybe it was in 
one those vaunted reserve funds, but to the best of my 
knowledge, those reserve funds were not funded with actual 
dollars. They were more like, well, let us send a get well card 
to SCHIP and maybe we sent a get well card to the FDA.
    But if we are really serious about it and if that is going 
to be the point of the discussion today, then, clearly, people 
on this committee need to pay attention when we go through our 
Labor, HHS appropriation bill, and if the Appropriations 
Committee has not done its work that we offer, the appropriate 
amendments under an open rule, and I know that means we stay up 
here all night, but that is OK, to see that you get the funding 
in the appropriations process to balance the money that you are 
going to get in the PDUFA process. And I have heard various 
figures, but the proportion that I am going to take away from 
here is a 50/50 mix. Is that about the right number or do other 
people feel differently about that? Mr. Vaughan doesn't want 
any, but again, I remember the 1980's. I am not going back 
there. I know Mr. Thew doesn't want us to go back there, and 
you are about 15 years too late for that and I would 
respectfully suggest that it was a Democratic Congress that was 
here 15 years ago. So when you lost that battle, actually, your 
friends were in charge here. But am I correct on that, that it 
should be a 50/50 mix on the appropriation PDUFA funding?
    Mr. Hubbard. Well, may I comment, Dr. Burgess?
    Mr. Burgess. Please.
    Mr. Hubbard. When the 2007 budget was passed a few weeks 
ago, FDA needed $90 million just to keep even from where it was 
in 2006. They got $88 million. So they basically stay flat and 
that was the best budget they have had in recent years. So the 
environment is such that a flat budget that says you can do no 
more is good, because they have been actually losing money 
every year for the last decade.
    Mr. Burgess. Well, we have level-funded our doctors for the 
last 5 years, so I know it seems appropriate that we do the 
same to the FDA. Well, I appreciate everyone being here. I know 
my time has expired, Mr. Chairman, and I appreciate your 
indulgence. Just one last thought. Mr. Hubbard, the comments 
that Mr. Buyer was making, do you have any sense as to what 
this--if you recall, he called it an exponential rise. Do you 
have any sense as to whether or not any of those adverse drug 
reactions are because of corruption of the supply chain from 
foreign interference?
    Mr. Hubbard. No. As you know, Dr. Burgess, the 
counterfeiting is endemic around the world. The United States 
has been relatively free but it is increasing in the United 
States, both by people wanting to sell large volumes of 
counterfeit drugs, as well as these imported drugs supposedly 
from Canada and elsewhere. But because these drugs are not 
supposed to be here and they are not legal drugs, the 
healthcare system doesn't have a way to track them, because 
there is no way of knowing that they are even here and how to 
track them. And of course, FDA has no resources to go to 
doctors and medical centers and develop a tracking system for 
these drugs that shouldn't even be here to begin with.
    Mr. Burgess. So these adverse drug reports could include--
--
    Mr. Pallone. We are over our minutes, so wrap it up.
    Mr. Burgess. Yes, but you ignored me, so I am taking it out 
on you now.
    Mr. Pallone. That is true. That is why I am being good.
    Mr. Burgess. This graph could include counterfeit but it 
may not, so we have really no way of evaluating that.
    Mr. Hubbard. It could. It probably doesn't. These are so-
called manufacturer reports where a doctor reports to the drug 
sponsor and then they report to the FDA.
    Mr. Burgess. So we should accept this at face value?
    Mr. Hubbard. Well, most of them, I think.
    Mr. Burgess. All right, thank you.
    Mr. Pallone. Thank you and that is the end of our 
questions, but I really thank you all for being here. I thought 
it was--oh, I am sorry, Mr. Dingell. I apologize. Go ahead.
    Mr. Dingell. I have just one other question I would like to 
ask of the panel here. And if you would bear with me, Mr. 
Chairman, I would be very appreciative. Mr. Hubbard, your 
statement, I thought, was a very helpful one and I thought your 
comments on the success of PDUFA were very beneficial. Just to 
give us a little history several years ago, we found that there 
were severe problems related to the FDA prescription drug 
program. This committee had to run an investigation, which led 
to the indcitment of a fair number of individuals at the Food 
and Drug Administration. One of the things we found was that 
the Agency didn't have the money that it took to process 
prescription pharmaceutical applications by the pharmaceutical 
manufacturers. We found that people were coming to the judgment 
that they were going to favor this applicant over that 
applicant and sort of play god. Gratuities were passed and all 
kinds of bad things happened.
    So we had two problems here. We had a terrible climate 
inside FDA. As I mentioned, it resulted in a few good 
individuals going to jail. We also had the problem that there 
was not enough money to process new drug applications in a 
timely manner. So there were several things that flowed from 
that. The first was that the applications were not approved and 
as a result, drugs that could have helped people were kept off 
the market. The other thing was that manufacturers could not 
get decent service. So we began a process of negotiating with 
the manufacturers and we said, look, we are going to get you a 
system whereby you pay for the service, and they found that 
this was a very good buy, because of what they received in 
return. They made a huge amount of money by shortening the time 
of waiting for approval by the Food and Drug Administration. It 
worked so well that we were able to engage over-the-counter 
drug manufacturers. Because they found that this was important 
to them. And then, after a long period of negotiations, we 
engaged medical device manufacturers and we found that all of 
this worked. We gave a commitment to the manufacturers that we 
would protect their user fee money so it would not be diverted.
    Now every time this committee writes legislation to put in 
the trust fund, and I don't care if it is us or the Public 
Works Committee or any of the other committees around here, we 
find that the appropriators in the Office of Management and 
Budget and the budgeters try to divert those user fee monies. 
Your comments indicated that PDUFA has been a tremendous 
success, but you also indicated that because more than 50 
percent of the FDA drug approval budget comes from 
manufacturers for the licensing process, that there is some 
kind of corruption, at least that is the impression I come away 
with. I want to know, is there some dishonest practice? Is 
there corruption at FDA? Is there something going on down there 
that this committee needs to look into? Now, tell me.
    Mr. Hubbard. Well, you will recall, Mr. Chairman, you are 
referring to a generic drug scandal that occurred in the late 
1980's, in which you and your committee uncovered that. There 
have been examinations of the new drug approval process, to 
look for that. It has never been found. And one of the 
advantages of the new drug approval process is there are so 
many physicians and pharmacists and others involved at FDA, 
that one person can't have much influence. So fortunately, that 
program has been free of taint, at least that is widespread 
perception.
    Mr. Dingell. Well, if there is wrongdoing down there and if 
this is tainting the system, we will change it. And I am asking 
you, is this creating a problem in terms of the integrity of 
the system, in terms of the protection of the consumers, in 
terms of the integrity of the Food and Drug Administration?
    Mr. Hubbard. It has clearly been a concern on the part of 
FDA leaders and staff that the fees should not continue to go 
up because it could potentially lead to a problem.
    Mr. Dingell. Is that a statement supported by evidence of 
misbehavior and wrongdoing? Or is that statement based on a 
theory of how good government should really work?
    Mr. Hubbard. I think the latter. There is no evidence of 
wrongdoing, but certainly the perception, as Mr. Vaughan and 
others have pointed out, when the industry starts paying 70, 80 
percent of the fees----
    Mr. Dingell. Well, let me express one of my concerns. We 
investigate and analyze and check out the safety of less than 1 
percent of the foods coming into this country. We import about 
50 percent of our foods. Customs charges for the review by 
Customs agents at the point of entry. They have numerous 
agents, so the process is expedited. The Food and Drug 
Administration currently does not provide the same reviews for 
food at the points of entry. FDA fails to inspect the foods we 
import. Now what is coming in? Fruits and vegetables 
contaminated; dog food or cat food with melamine in it; a 
significant problem in terms of bacterial and viral 
contamination of food stuffs coming in; tremendous amounts of 
counterfeit and illegal pharmaceuticals are being imported into 
the country. No way of stopping it; no way of dealing with it. 
The good hearted people at the Office of Management and Budget 
believe food inspections are not needed. We have a leaner, 
meaner Food and Drug and they do a splendid job on this. And 
then I go back and talk to Food and Drug and they say, well, 
how many of these things are you connecting, and how many cats 
and dogs got killed just recently by bad stuff coming in from 
China? And so they have to admit, well, we aren't doing so 
good.
    Now what are we going to do about this? You live in a 
system where money is like this or diverted and we have had--
time preserving and protecting the monies that have to go to 
see to it that PDUFA is properly implemented. Now, if PDUFA is 
not being properly implemented, if there is dishonesty, 
misbehavior, bribes, or special preference being afforded, I 
want to know about it. If there is not, then I have to say, if 
we are going to continue this system and we are going to try 
and do the best we can about making it work, in the broad 
interest of the public and the broad interest to the industry 
and the broad interest to the consumers and in the broad 
interest of good government. Now is there rascality and if so, 
who is doing it and what is doing it? What is happening? What 
do we have to do about it?
    Mr. Hubbard. Mr. Chairman, I remember that you were sitting 
in that chair 21 years ago, 1986, and I was on this side and 
you said imports are a scandal and FDA was inspecting 10 
percent at the time. Today, they are inspecting less than 1 
percent. The oversight of imported foods is a catastrophe and I 
will agree with you all day long on that. In terms of PDUFA, I 
don't see the kind of scandal you are raising in that program. 
They are very hardworking, dedicated people, but they do need 
more resources.
    Mr. Dingell. And this committee spends a huge amount of 
time trying to get it for them and I must say, only with modest 
success. Now, I want to thank you, Mr. Hubbard. I have asked 
you some hard questions. If you come upon any wrongdoing, I 
want to be the first to hear about it, and the committee wants 
to hear about it. We will have the appropriate individuals 
before the committee to answer questions about what they are 
doing that isn't right.
    Mr. Pallone. Thank you.
    Mr. Dingell. Mr. Chairman, I thank you.
    Mr. Pallone. Thank you, Mr. Chairman. Mr. Markey is 
recognized.
    Mr. Markey. I thank you, Mr. Chairman, very much and I 
thank you for your courtesy. Could we just go down yes and no 
on this? The question is, should the FDA have the authority to 
require post-market studies, as recommend by the Institute of 
Medicine and by the Government Accountability Office? Just go 
down. Should the FDA have the authority to require post-market 
studies? Mr. Goldhammer?
    Mr. Goldhammer. Yes, I think, again, I will have to give 
the same answer.
    Mr. Markey. Could you just answer yes or no?
    Mr. Goldhammer. We are not prepared to answer that question 
yes or no.
    Mr. Markey. You are not prepared to answer it. Yes, Mr. 
Hubbard?
    Mr. Hubbard. Speaking for myself and not for the group I am 
representing, yes.
    Mr. Markey. Yes. Thank you. Mr. Thew?
    Mr. Thew. I would say yes.
    Mr. Markey. Yes. Thank you. Ms. Holcombe?
    Ms. Holcombe. Speaking only for myself, yes.
    Mr. Markey. Yes. Thank you.
    Mr. Vaughan. Absolutely, yes. And for Consumers Union, 
absolutely, yes.
    Mr. Markey. Thank you. And I thank each of you for that. 
Mr. Vaughan, would anything in this Bush administration 
proposal prevent selective disclosure of clinical trial results 
and ensure that the public has access to all clinical trial 
information by creating a mandatory registry of a clinical 
trials and results database?
    Mr. Vaughan. No, sir.
    Mr. Markey. What is the problem with that?
    Mr. Vaughan. We are absolutely for it and it is in your 
bill with Mr. Waxman, and Kennedy-Enzi, but correct me if I am 
wrong, but the PDUFA draft bill up from the Administration 
doesn't do anything in that area.
    Mr. Markey. Why is it important that it do something in 
that area?
    Mr. Vaughan. Well, we would know what people have found 
about the safety of a drug and even more, I think, sometimes 
what they like to hide is whether it is any better than a 
placebo.
    Mr. Markey. OK. Again, Mr. Goldhammer, would you support 
having mandatory language that all clinical trials have to be 
on a list?
    Mr. Goldhammer. Again, that was not the province of what we 
were permitted to discuss during PDUFA. I understand there 
would be a subsequent hearing in this subcommittee on drug 
safety and that would be part of it and I am sure we would be 
happy to come back to you with an answer. But my answer right 
now is we have stepped up to the plate and created such a 
database, which is already being utilized.
    Mr. Markey. But your database, Dr. Goldhammer, is a 
voluntary registration.
    Mr. Goldhammer. That is correct.
    Mr. Markey. Yes. Now, if a company doesn't want to 
voluntarily provide all clinical tests, what is the penalty 
which you impose upon them?
    Mr. Goldhammer. Well, you hit it right on the head, it is 
voluntary and we, as a trade association don't have an 
enforcement mechanism.
    Mr. Markey. So there is no penalty?
    Mr. Goldhammer. Correct.
    Mr. Markey. Right. So the effect of that is that they can, 
like I would have liked to have done when I was a boy, bring 
home the good marks I got and not have to bring home the bad 
marks to my mother and father. But the world really doesn't 
work that way or the world doesn't work well that way. We can 
hide the tests that you fail. The only way in which there is 
any accountability is if all of it is disclosed. So let me go 
over to you, then, Mr. Vaughan. Could you comment upon that, 
that PhRMA, this whole idea that PhRMA has that you kind of 
grade yourself? You pick the stuff that you want to make to 
public.
    Mr. Vaughan. Oh, we think it is an absolutely terrible 
problem, in that most of the trials that do get published in 
the big journals are favorable to the person who paid for the 
trial. It is a pretty rare day that you get a trial published 
that isn't favorable to the person who is, again, paying the 
bill. And to get real honesty, we need to know what was to be 
studied, what the end points were, and then what the results 
were, because it can get written up in ways that puts lipstick 
on a pig.
    Mr. Markey. Well, let me ask you, Mr. Hubbard. Do you think 
that they should be able to selectively pick the trials they 
release or should they have to release them all?
    Mr. Hubbard. Certainly full disclosure would be the best 
thing.
    Mr. Markey. Full disclosure would be the best thing. Mr. 
Thew?
    Mr. Thew. I would have to say I am not really too sure on 
that, sir.
    Mr. Markey. You are not too sure on that? OK. Ms. Holcombe? 
So good to see you, by the way.
    Ms. Holcombe. I am not going to give you a yes or no on 
this globally, but I do want you to know that it is the policy 
of Genzyme Corporation, a Massachusetts company, to register 
all of our clinical trials in accordance with the rules and to 
publish the results of all of our studies, generally, in 
accordance with the principles that were laid out in your 
previous legislation.
    Mr. Markey. OK, I thank you for that. So that then, Mr. 
Chairman, it puts us in a situation where, again, you have 
PhRMA down here sitting isolated and I understand that 
position. It is a position, however, that leads to serious 
risks that the public and, in fact, physicians could be misled 
by the selective information which is provided to them, that 
they don't have access to all of the clinical trials. And there 
is no penalty. The risk is run by the patients, by the 
physicians, but there is no penalty for the companies. And I 
think that Ms. Holcombe, in talking about Genzyme, is talking 
about a company who has accepted that and knows that there is a 
responsibility. And I don't think, honestly, that we shouldn't 
finish this process without ensuring that the public gets the 
information they need. If PhRMA opposes this legislation based 
upon that, then there is something fundamentally wrong with 
PhRMA. This voluntary system just can't continue because of the 
danger to patients. And we go back through Paxil, but we can't 
go back through so many other instances where information was 
withheld that would have been of very critical importance to 
families. It just can't be selective. You have to know it all, 
because the decisions which people make have to be informed 
decisions. And I look forward to working with my colleagues to 
return the FDA to its role as a watchdog for the health of our 
country, and I hope, through this process, we are able to 
accomplish that goal and to put those safeguards in place. And 
I thank each of you for testifying and I yield back the balance 
of my time. Thank you.
    Mr. Pallone. Thank you very much, Mr. Markey. I am going to 
look around again and make sure we have no additional people 
coming. But that concludes our questions and thank you all for 
being here. I thought it was very useful to hear your testimony 
and the back and forth. I just wanted to remind members that 
they may submit additional questions, for the record, to be 
answer by the witnesses and the questions should be submitted 
to the committee clerk within the next 10 days, so you may get 
additional questions to answer. And without objection, this 
meeting of the subcommittee is adjourned.
    [Whereupon, at 2:05 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]

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