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




DISCUSSION DRAFT OF THE FOOD AND DRUG ADMINISTRATION GLOBALIZATION ACT 
           LEGISLATION: DEVICE AND COSMETIC SAFETY PROVISIONS

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

                                HEARING

                               BEFORE THE

                         SUBCOMMITTEE ON HEALTH

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                              MAY 14, 2008

                               __________

                           Serial No. 110-117


      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, Chairman
HENRY A. WAXMAN, California          JOE BARTON, Texas
EDWARD J. MARKEY, Massachusetts         Ranking Member
RICK BOUCHER, Virginia               RALPH M. HALL, Texas
EDOLPHUS TOWNS, New York             FRED UPTON, Michigan
FRANK PALLONE, Jr., New Jersey       CLIFF STEARNS, Florida
BART GORDON, Tennessee               NATHAN DEAL, Georgia
BOBBY L. RUSH, Illinois              ED WHITFIELD, Kentucky
ANNA G. ESHOO, California            BARBARA CUBIN, Wyoming
BART STUPAK, Michigan                JOHN SHIMKUS, Illinois
ELIOT L. ENGEL, New York             HEATHER WILSON, New Mexico
ALBERT R. WYNN, Maryland             JOHN B. SHADEGG, Arizona
GENE GREEN, Texas                    CHARLES W. ``CHIP'' PICKERING, 
DIANA DeGETTE, Colorado              Mississippi
    Vice Chairman                    VITO FOSSELLA, New York
LOIS CAPPS, California               STEVE BUYER, Indiana
MIKE DOYLE, Pennsylvania             GEORGE RADANOVICH, California
JANE HARMAN, California              JOSEPH R. PITTS, Pennsylvania
TOM ALLEN, Maine                     MARY BONO MACK, California
JAN SCHAKOWSKY, Illinois             GREG WALDEN, Oregon
HILDA L. SOLIS, California           LEE TERRY, Nebraska
CHARLES A. GONZALEZ, Texas           MIKE FERGUSON, New Jersey
JAY INSLEE, Washington               MIKE ROGERS, Michigan
TAMMY BALDWIN, Wisconsin             SUE WILKINS MYRICK, North Carolina
MIKE ROSS, Arkansas                  JOHN SULLIVAN, Oklahoma
DARLENE HOOLEY, Oregon               TIM MURPHY, Pennsylvania
ANTHONY D. WEINER, New York          MICHAEL C. BURGESS, Texas
JIM MATHESON, Utah                   MARSHA BLACKBURN, Tennessee
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
              David Cavicke, 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. Anna G. Eshoo, a Representative in Congress from the State 
  of California, opening statement...............................     4
    Prepared statement...........................................     5
Hon. Gene Green, a Representative in Congress from the State of 
  Texas, opening statement.......................................     5
Hon. Joe Barton, a Representative in Congress from the State of 
  Texas, opening statement.......................................     6
Hon. John D. Dingell, a Representative in Congress from the State 
  of Michigan, opening statement.................................     7
Hon. Michael C. Burgess, a Representative in Congress from the 
  State of Texas, opening statement..............................    10
Hon. Jan Schakowsky, a Representative in Congress from the State 
  of Illinois, opening statement.................................    11
Hon. Marsha Blackburn, a Representative in Congress from the 
  State of Tennessee, opening statement..........................    12
Hon. Lois Capps, a Representative in Congress from the State of 
  California, opening statement..................................    13
Hon. Joseph R. Pitts, a Representative in Congress from the 
  Commonwealth of Pennsylvania, opening statement................    14
Hon. Tim Murphy, a Representative in Congress from the 
  Commonwealth of Pennsylvania, opening statement................    15
Hon. Edolphus Towns, a Representative in Congress from the State 
  of New York, prepared statement................................   165
                               WITNESSES
Stephen Sundlof, D.V.M., Ph.D., Director, Center for Food Safety 
  and Applied Nutrition, Food and Drug Administration............    16
    Prepared statement...........................................    19
Marcia Crosse, Director of Healthcare, General Accounting Office.    35
    Prepared statement...........................................    37
Stephen J. Ubl, president and chief executive officer, Advanced 
  Medical Technology Association.................................    75
    Prepared statement...........................................    76
Kelvyn Cullimore, Jr., president and chief executive officer, 
  Dynatronics Corporation; secretary, Medical Devices 
  Manufacturing Association......................................    80
    Prepared statement...........................................    83
Ami Gadhia, policy counsel, Consumers Union......................    90
    Prepared statement...........................................    92
Elizabeth George, vice president, Quality and Regulatory Affairs, 
  Philips Healthcare.............................................   102
    Prepared statement...........................................   104
Pamela Bailey, president and chief executive officer, Personal 
  Care Products Council..........................................   116
    Prepared statement...........................................   118
Jane Houlihan, vice president for research, Environmental Working 
  Group..........................................................   134
    Prepared statement...........................................   135
                           SUBMITTED MATERIAL
Discussion draft.................................................    16
.................................................................

 
DISCUSSION DRAFT OF THE FOOD AND DRUG ADMINISTRATION GLOBALIZATION ACT 
           LEGISLATION: DEVICE AND COSMETIC SAFETY PROVISIONS

                              ----------                              


                        WEDNESDAY, MAY 14, 2008

                  House of Representatives,
                            Subcommittee on Health,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:09 a.m., in 
room 2123 of the Rayburn House Office Building, Hon. Frank 
Pallone, Jr. (chairman) presiding.
    Members present: Representatives Pallone, Eshoo, Green, 
Capps, Baldwin, Schakowsky, Dingell (ex officio), Deal, Buyer, 
Pitts, Murphy, Burgess, Blackburn, and Barton (ex officio).
    Staff present: Jeanne Ireland, Virgil Miller, Jack Maniko, 
Melissa Sidman, Chad Grant, Ryan Long, Lauren Bloomberg, and 
Brin Frazier.

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

    Mr. Pallone. The hearing of the subcommittee is called to 
order.
    Today we are having a hearing, actually the third, on the 
Food and Drug Administration Globalization Act, the draft bill 
that Mr. Dingell, myself, Mr. Stupak, and others have proposed, 
and today this hearing is specifically on medical devices and 
the cosmetic provisions as well. So I will recognize myself for 
an opening statement.
    Over the last few weeks, as you know, we have discussed the 
various food and drug-related provisions in this draft, and the 
focus today or the idea of having a separate hearing, if you 
will, on medical devices and cosmetics was because we do 
believe that these do not need to be basically singled out and 
some emphasis put on those specific provisions as they apply to 
those industries. In 2006, for example, 183,000 packages of 
contact lens solution, which is classified as a medical device, 
were called as a result of bacterial contamination, and this 
was a product that is classified as low risk, and that simply 
shouldn't be happening.
    While Congress set out to address initial safety concerns 
with these and similar types of products under MDUFMA, or the 
Medical Device User Fee and Modernization Act, it is clear to 
me that more must be done. The FDA is simply incapable of 
meeting the requirements of that legislation to inspect 
domestic and foreign device manufacturing establishments. In 
MDUFMA, we added a 2-year inspection requirement for device 
manufacturing companies. However, according to GAO findings, 
the FDA inspects these establishments on average only every 3 
years for high-risk devices and every 5 years for medium-risk 
devices, and I would be curious to know what the inspection 
frequency is for low-risk devices.
    Perhaps even more disturbing are the inspection rates for 
international manufacturers of medical devices, which are 
estimated to be on average every 6 years for high-risk devices 
and an incredible 27 years for medium-risk devices, and while 
the market for these products becomes increasingly global, the 
FDA has no requirement to inspect foreign establishments 
manufacturing medical devices, again a clear gap in authority, 
and it is up to us in Congress to act to allow the FDA to do 
its job and protect the American people.
    Of further concern is the FDA's use of a risk-based 
classification system. While I understand that there are 
inherently more risks with Class III medically implanted 
devices as with the class I contact solution, this 
classification is based only on the nature of the product and 
does not take into account information related to the actual 
manufacturers, and this is especially concerning when the FDA 
appears unable to accurately report information on the number 
of medical device facilities both in the United States and 
internationally. Two databases exist at FDA to monitor and 
track inspections and yet these systems cannot exchange 
information and are fraught with inaccuracies. One system 
reports that there are nearly 5,000 foreign establishments 
registered with the FDA for Class II and III products while the 
other system reports that there were over 25,000 such 
establishments internationally. This difference is significant 
and again illustrates the FDA's inability to meet current and 
emerging regulatory responsibilities.
    These concerns were echoed in a 2007 report issued by the 
FDA's Science Board that found disparities between the FDA's 
responsibilities and available resources including inadequate 
inspection of manufacturers, an obsolete technology 
infrastructure, an insufficient basis to access, integrate and 
analyze data, and frequent system failures. These weaknesses 
jeopardize the FDA's ability to fulfill its mission of 
protecting the American people and must be addressed.
    Now, turning to cosmetics and personal care products, it 
seems to be basic logic for Congress to include this industry 
in our discussion today as this industry is largely governed by 
legislation established way back in 1938. Cosmetics and 
personal care products are used by Americans each and every day 
and yet these billion dollar industries have gone largely 
unregulated. Under current Federal law, the FDA cannot require 
companies to test cosmetic products for safety before 
marketing. They cannot review or approve cosmetic products 
before they are sold to the public. They can't regulate 
cosmetic products until after they have reached the 
marketplace, and they cannot require product recalls and they 
can't require manufacturers to register their cosmetic 
manufacturers, ingredient information or report cosmetic-
related injuries. Instead, the FDA has to rely on a voluntary 
reporting system that clearly lacks the means for a systematic 
examination of the safety of the cosmetic industry.
    Further, this voluntary system has been used as rationale 
against calls for reform in the industry. FDA estimates that 
over the 3 decades during which the voluntary Cosmetic Industry 
Review, or CIR, process has been in existence, only 11 percent 
of the ingredients used in cosmetic products have been 
reviewed. In addition, countries in the European Union have 
actually banned the use of certain ingredients in cosmetic 
products yet there are no restrictions in place in the United 
States, and some studies suggest that there are a vast number 
of products on the market that contain prohibited chemicals 
that have been deemed unsafe for use by the industry's own CIR 
review process. This is to me overwhelming evidence that the 
FDA must be empowered with the authority to regulate this 
industry to protect the public.
    I just want to thank all the witnesses for appearing today. 
I know we are going to have a good discussion.
    Mr. Pallone. I now recognize, Mr. Deal, the ranking member, 
for 5 minutes for an opening statement.

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

    Mr. Deal. Thank you, Mr. Chairman.
    We are each reminded every day on a regular basis of 
potential holes in FDA's current inspection and safety system. 
As we hear of new threats presented by certain imported 
products. Just yesterday, I had an interview to discuss the 
possible lead contamination of dental crowns imported from 
facilities in China. Some fear these crowns may have 
contributed to adverse health events in patients who 
unknowingly were receiving a product made in China.
    Events like this one highlight the dwindling confidence the 
American public has in the FDA's ability to ensure the safety 
of the products it regulates. As we discuss these issues at 
today's hearing, I hope we can evaluate whether it is the case 
that the FDA has adequate authorities but insufficient 
resources or if the Agency does not even have the authorities 
necessary to protect the American consumer. My sense from some 
of our past hearings is, this problem ultimately comes down to 
insufficient resources at the Agency.
    While user fees may seem like the only option to some 
members of this committee, these fees only further raise 
questions about an inappropriate relationship between the 
regulated industry and the Agency. Just last year, this 
committee significantly increased the fees paid by the device 
industry for product reviews and it added a facility 
registration fee. Now it seems we are contemplating even 
further fee increases well above those negotiated less than a 
year ago. One aspect in particular of a facility fee structure 
which has concerned me is the possibility the fees paid by a 
domestic facility would help pay for the inspection of a 
foreign facility. If there must be a fee, it seems fair to me 
that the fee structure would account for the differences in the 
cost to do the inspections at different facilities. It is also 
my understanding some device manufacturers have expressed 
concern about the requirement for a facility inspection prior 
to marketing approval of certain devices. I would hope our 
witnesses could elaborate further on this particular subject.
    We certainly should be examining these safety issues but I 
am also afraid our ability to evaluate the effectiveness of the 
current authorities for the FDA is undermined by their lack of 
resources to carry out these authorities. While user fees may 
be the only method to provide this funding available to this 
committee, we really must question whether or not our 
dependence on fees from the industry is supplanting money which 
more rightfully should be provided by appropriations.
    With that, Mr. Chairman, I yield back my time.
    Mr. Pallone. Thank you, Mr. Deal.
    I recognize the gentlewoman from California, Ms. Eshoo, for 
an opening statement.

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

    Ms. Eshoo. Thank you, Mr. Chairman. I am very glad that we 
are having this hearing today. I think it is an important one 
to address FDA's oversight of medical devices and cosmetics, 
and I want to thank the witnesses that are here today for being 
with us to testify.
    Medical devices, and I have done a lot of legislative work 
in this whole area on medical devices to reform our practices 
at the FDA relative to them. It was complicated work but I 
think that we did important work on it, established user fees 
for people that are a part of this. Why? Because it really 
plays a very important role in healthcare in our country, and I 
think it is critical that we ensure the safety of the devices 
as we struggle to do that. I don't think we have accomplished 
everything on it relative to food and drugs.
    It is also important for us not to overlook the unique 
nature of these devices, which makes them different from drugs, 
and I think the Congress has come some distance on that, and 
that a singular regulatory scheme might not be suitable for all 
types of products. We are all painfully aware of what has made 
its way into the country and how it harms Americans. The 
newspapers are full of those stories, so we have a ways to go 
on this, and I want to be part of getting there.
    This legislation, Mr. Chairman, groups drugs and devices 
and holds them to the same standard of inspection, but I think 
that we have to look at the components of a device, and I think 
that this is where we need to hone in, because even a low-risk 
device has, I think, some other characteristics to it. A low-
risk Class II device such as X-ray equipment or an ultrasound 
machine, there may be hundreds or even thousands of parts that 
comprise that machine and go into making that into a device. 
The devices are currently inspected and approved by the FDA as 
finished products and every component has to work correctly, of 
course. Otherwise the total of the device is not going to be 
effective for the patient. Now, under the Globalization Act, 
each facility which products every nut, each bolt and the 
circuit boards that go into a device would require an FDA 
inspection. I think we have to look closer at this. I don't 
know if that is where we want to go. I don't have the perfect 
answer but I think that in the draft of this that we have 
overlooked it. So the number of facilities that would have to 
come under inspection on that could be insurmountable, and I 
don't know whether inspecting every nut and bolt in different 
facilities is what we intend to do.
    So I think that this is an important journey that we are 
on. I want the highest standards for the American people and I 
think that that is what we have to keep our eye on, but if we 
go into semiconductor chips, circuit boards, software, flat 
panel displays of these sophisticated devices across many 
facilities, I don't know if that is how we want to spend our 
time.
    So I look forward to working with you. I have some 
questions obviously for our witnesses. Thank you again for 
holding this very important hearing.
    [The prepared statement of Ms. Eshoo follows:]

                    Statement of Hon. Anna G. Eshoo

    Thank you Mr. Chairman for holding this important hearing 
on legislation to address the FDA's oversight of medical 
devices and cosmetics and my thanks to the witnesses for 
testifying today.
    Medical devices play an increasingly significant role in 
healthcare and it is critical to ensure the safety of these 
devices as we do with food and drugs. It's also important for 
us not to overlook the unique nature of these devices which 
makes them different from drugs, and that a singular regulatory 
scheme might not be suitable for all types of products.
    I support periodic and consistent inspections of facilities 
that manufacture active pharmaceutical ingredients as well as 
fully constituted drugs. We know all too well the dangers of 
unsafe drugs that have made their way onto pharmacy shelves and 
the identification of potential hazards from the component 
ingredients of a drug can be critical. This legislation groups 
drugs and devices and holds them to the same standard of 
inspection, requiring that all components of a device, even a 
low-risk device, have their facilities inspected.
    For a low-risk Class II device, such as X-ray equipment or 
an ultrasound machine, there may be hundreds or even thousands 
of parts that go into making that device. These devices are 
currently inspected and approved by the FDA as finished 
products and every component must work correctly. Under the FDA 
Globalization Act, each facility which produces every nut, each 
bolt, and the circuit boards that go into a device would 
require an FDA inspection. The number of facilities subject to 
an inspection under such a regime could be insurmountable and 
cripple the FDA's regulatory process. The unintended 
consequences of requiring component part inspections will be 
long and debilitating delays for medical imaging devices to 
come to market. It's also not clear to me that the FDA has the 
appropriate expertise to inspect the high-tech equipment such 
as semi-conductor chips, circuit boards, software, and flat 
panel displays that go into many of these sophisticated 
devices.
    I look forward to hearing from our witnesses today and the 
discussion we will have on ensuring the safety of medical 
devices.
                              ----------                              

    Mr. Pallone. Thank you, Ms. Eshoo.
    The vice chair of the subcommittee, Mr. Green from Texas.

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

    Mr. Green. Thank you, Mr. Chairman, for holding the third 
and final hearing today on the Food and Drug Administration's 
Globalization Act discussion draft. This week we will be 
discussing the device and cosmetic provisions in this draft.
    As we found in previous hearings, it is clear the FDA does 
not have the resources or the authority to effectively protect 
the American people from potential health risks. The FDA is 
responsible for medical device safety in the United States and 
for foreign devices entering the country, but as noted in our 
previous hearing on drug safety, FDA does not have ability to 
require foreign facilities to allow inspectors even in the 
facilities. The GAO estimates the FDA has inspected foreign 
Class II manufacturers once every 27 years and foreign Class 
III manufacturers once every 6 years. Clearly the FDA does not 
have as many inspectors as it needs to conduct these 
inspections and has not effectively adopted a third-party 
inspection program.
    The GAO has also noted the FDA has two separate databases 
that are not compatible, which are used to provide the FDA with 
information on foreign medical device establishments. This has 
severely limited the FDA's ability to track medical device 
establishments.
    While the FDA has some authority for regulating devices, 
they have very limited authority when it comes to regulating 
cosmetics. In fact, the FDA does not have the ability to recall 
cosmetics. It can monitor companies that issue recalls for a 
product, but if a company is unwilling to recall an unsafe 
product, the FDA only has the ability to issue a written 
request for a recall. The FDA does have the ability to inspect 
cosmetic manufacturing facilities but does not have a 
comprehensive or compatible database of manufacturers of 
product. Currently, registration for the database is voluntary. 
This means the FDA does not know what products are on the 
market and what ingredients are even in these products.
    It is astounding that the FDA has relied on manufacturers 
and industry to self-regulate medical devices and cosmetics for 
this many years. The risk-based approach that FDA has resorted 
to during this time of limited resources and restrictions seems 
like a disaster waiting to happen. We need to allocate 
resources and increase the FDA's authority so they can protect 
Americans from potential health risks.
    Thank you, Mr. Chairman. I yield back my time.
    Mr. Pallone. Thank you, Mr. Green.
    Our ranking member of the full committee is here. The 
gentleman from Texas, Mr. Barton.

   OPENING STATEMENT OF HON. JOE BARTON, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF TEXAS

    Mr. Barton. Thank you, Mr. Chairman.
    Last evening on the House Floor, I had a very cordial 
conversation with Full Committee Chairman Dingell in which he 
strongly encouraged myself and other Republicans to work with 
you and the other Democrats on the subcommittee to craft a 
bipartisan food and drug safety bill, or I believe we talked 
about a food and drug import bill, and I told him that I had 
some concerns but that I would definitely encourage all 
Republicans to engage in a good-faith effort to see if we 
couldn't find a bipartisan bill, and I have instructed my 
committee staff to do that.
    So in the spirit of that, I want to start off today by 
saying while it is a fact that in the draft that has been out 
for several months, medical devices were a part of that draft, 
so it is not that there is a surprise there, but the focus has 
been in our hearings and the focus has been in our discussions, 
at least my discussions with Chairman Dingell, that we were 
going to focus first on food safety, then drug safety, and we 
really hadn't discussed medical devices. The draft on medical 
devices, in my opinion, doesn't even deserve to be a part of 
the discussion. It doesn't mean we shouldn't look at medical 
devices but I think there are such differences that we should 
discuss the medical devices as a stand-alone issue.
    I would also say that what is in the draft on medical 
devices, in my opinion, seems to be overkill and probably non-
implementable in the real world. There are between 35 and 50 
Class III medical devices that are approved each year. These 
are complex devices and it might make some sense to require 
pre-approval inspection. However, there are another 3,500 of 
less complex Class II medical devices that are approved each 
year. To require each of those facilities to have a pre-
approval inspection is a waste of resources. It will only 
increase costs to patients and, as far as I can tell, no 
demonstrable safety benefit, and would needlessly delay these 
therapies getting to the patients.
    The bill would also call for a pre-inspection of all device 
parts. This is another example of the draft failing to 
recognize the difference between drugs and devices. A medical 
device part could be a circuit board. It could be a battery. It 
could be even a screw. A battery is not the same thing as 
heparin.
    Finally, I want to reiterate a point that I made at the 
hearing several weeks ago. During the debate on medical device 
user fee reauthorization last year, I expressed and other 
members of the Committee expressed serious concern over the 
level of user fees being paid by the industry. Last year the 
medical device industry doubled its funding commitment to the 
FDA from $150 million to $300 million. We should pay some close 
attention to the clear warnings before we made the FDA even 
more reliant on the industry that it is supposed to oversee. 
This bill would create, in addition to that, a new set of user 
fees for medical devices. I would like to point out to the 
members of the Committee that the Congress already has, as I 
just said, a user fee for medical devices.
    So I am not trying to be too critical, Mr. Chairman. I 
just--if we are going to do a food safety bill, let us do a 
food safety bill. If we want to do drug safety, let us do a 
drug safety bill. I think you can combine those. I do not think 
medical devices should be a part of the bill. If we are going 
to really look at medical devices, I think you should split it 
up and do that as a stand-alone bill.
    And with that, Mr. Chairman, I yield back.
    Mr. Pallone. Thank you.
    Next I next 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

    Mr. Dingell. Mr. Chairman, I thank you for your courtesy 
and I commend you for your diligence in holding this series of 
legislative hearings to focus on what resources and authorities 
the Food and Drug Administration needs to adequately protect 
the public health.
    The third and final hearing today will discuss and focus on 
the device and cosmetic industry safety provisions in the 
discussion draft. I want to indicate that the discussion draft 
has been produced to afford us the opportunity to receive the 
comments and understand the concerns and feelings of everyone 
who would be affected by this legislation, from consumers to 
manufacturers to importers. And I am very anxious, as I have 
indicated to my good friend, the ranking Minority member, my 
friend, Mr. Barton, that we are anxious to work together with 
him to address this problem, which is a very real one and one 
which offers real threat and peril to the American people.
    The same issues that challenge FDA's ability to properly 
oversee Food and Drugs in an increasingly global marketplace 
also plague the Agency's ability to regulate medical devices 
and cosmetics, and I want to point out that it is not the 
intention of the authors of the draft to create undue burdens 
on American industry but rather to see to it that foreigners 
meet the same standards in terms of safety and efficacy to 
American consumers as do domestic producers, and I would point 
out that Food and Drug's total inability to investigate the 
behavior of foreigners manufacturing goods elsewhere is a 
matter which hurts American manufacturers by assuring that 
American manufacturers face unfair, dangerous competition and 
they face the importation of substances and devices which offer 
real threat, not just to consumers but, quite frankly, to the 
goodwill that our manufacturers have been trying to build for 
so long. I would point out that were it not for the simple fact 
that our commitments under GAT and WTO force us to treat all 
marketed commodities in this country whether they are domestic 
or otherwise alike, we might perhaps be able to address this a 
little more focused on foreign misbehavior.
    It should be noted that the FDA Science Board in 2007 
reported that FDA's ability to carry out its mission in the 
case of medical devices is grossly inadequate and that due to 
constrained resources, lack of adequate staff, FDA is engaged 
in reactive regulatory priority setting or a firefighting 
regulatory posture instead of pursuing a culture of productive 
regulatory science. In other words, people should be concerned 
about the inadequacies of Food and Drug to carry out its 
mission and to protect the American consumers, and 
parenthetically, to protect American industry from unfair 
competition by people who are not being regulated by FDA, which 
unfortunately oftentimes doesn't even know where the people 
abroad that they are supposed to be looking at might happen to 
be located or, indeed, who they are.
    This unfortunate news has been confirmed in recent 
testimony of the Government Accountability Office, the GAO, 
before the Subcommittee on Oversight and Investigations, which 
found that the FDA was not able to make the required inspection 
every 2 years of domestic facilities where the highest-risk 
medical devices are manufactured, and I would point out that in 
the hearings of this committee in time past, we found that 
things like heart valves were not being properly and safely 
manufactured and the result with failure of that kind of device 
was an instant heart attack with total fatality being the 
result to the person who happened to have that particular 
device implanted.
    So we need to address this. We need to understand that 
currently FDA is only able to inspect medium-risk medical 
device facilities once every 5 years and high-risk device 
facilities only once every 3 years. American consumers, beware. 
And the number of inspections for foreign producers is much 
worse. The GAO estimated that FDA inspects foreign 
manufacturers of Class II devices only once every 27 years, and 
foreign Class III manufacturers only every 6 years. Despite the 
fact that there are more registered device manufacturers in 
China than in any foreign country, Chinese firms can expect FDA 
to visit them only once every 50 years. And while cosmetics 
currently represent 9 percent of FDA-regulated products 
imported into the United States, the number of these imports is 
growing, and in spite of small budget increases last year, 
FDA's Office of Cosmetics and Colors has been unable to keep 
pace with the increasing numbers of foreign cosmetic products, 
and I would remind all that we are not talking just about 
finished products but we are talking about raw materials and 
components, which can offer us greater risk as can the finished 
products to American consumers. Witness heparin.
    We will hear from two FDA officials today, who I hope will 
be forthright in their testimony about the needs of the Agency. 
We want to help the Agency, and we look forward to the Agency 
helping us to help them. We in Congress can do a better job for 
American consumers if we receive frank, truthful testimony from 
the people vested with regulatory responsibility.
    I want to commend those in the device and in the cosmetic 
industry who have stepped forward and voiced their willingness 
to work with us to strengthen FDA, and I want to make it plain 
that we understand their problems and we are desirous of coming 
up with something with which they can live and which will 
enable them to compete fairly in a difficult market.
    And as we start this effort, we must all keep in mind that 
the dire straits which FDA is in and how they impact upon 
American consumers, and we need to understand that the Federal 
budget along cannot support the growing demands of the Agency, 
and we can find time after time where the heads of the Agency 
has come in to tell us what a good job they were going to do 
and how we could hope in some distant future that they would 
have a new and wonderful device and methodology for addressing 
these problems. We have been disappointed not only in their 
failures but also in them. Industries that benefit from global 
marketplace also must share the responsibility of the safety of 
products that they sell to American consumers, and they must 
face the same situation and the same regulatory impact that 
American manufacturers confront.
    Lastly, I want to thank the consumer groups and other 
stakeholders who recognize the crisis at FDA and who are 
committed to working with us on this effort. Following the 
conclusion of today's hearing, I intend to begin to work 
immediately with my good friend, Mr. Barton, and other members 
of the Committee to try and build a strong, bipartisan piece of 
legislation using the discussion draft that we are considering 
at this particular time.
    Mr. Chairman, I commend you for this. I thank you for your 
courtesy. I yield back the balance of my time.
    Mr. Pallone. Thank you, Chairman Dingell.
    Next is the gentleman from Texas, Mr. Burgess.

OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A REPRESENTATIVE 
              IN CONGRESS FROM THE STATE OF TEXAS

    Mr. Burgess. Thank you, Mr. Chairman, and I want to thank 
the chairman of the full committee, Mr. Dingell, for his draft 
of the FDA globalization legislation, and I do wish that there 
could have been more input from the Minority side. I understand 
I am relatively new, but it seems like if we could be present 
while you are drafting the draft, it would be easier to get to 
a true bipartisan compromise. But nevertheless, in a year where 
process and regular order seem to be jettisoned so easily, I am 
grateful for this comment and review period. We have got a lot 
of work to do, but I believe that this committee sincerely 
wants this to be bipartisan legislation, and I stand ready to 
offer my assistance to make this a reality. Obviously, while I 
can't agree with all of the provisions within the chairman's 
FDA Globalization Act, I do welcome the honest and open 
discussion about the legislation that will transform the 
system.
    This year, the subcommittees of Energy and Commerce have 
had hearing after hearing after hearing regarding the resources 
or lack thereof of the Food and Drug Administration. We have 
also had many important investigations such as the heparin 
issue, the melamine issue, the ongoing investigation of lead in 
dental devices, but while I sit on the Health Subcommittee, 
Oversight and Investigation Subcommittee, Commerce, Trade, and 
Consumer Protection, I cannot recall any discussion or any 
investigation regarding the cosmetic industry. So I am sure 
that there are some reforms that need to be made within the 
Office of Cosmetics and Colors and the Center for Food Safety 
and Applied Nutrition, but I would urge this committee, this 
subcommittee to move methodically and deliberately. We 
shouldn't just be passing legislation because we happen to be 
here.
    I would like to address the issue of resources. I respect 
the fact that this bill attempts to garner more resources for 
the Agency but I do question some of the attempts. We all know 
that the Food and Drug Administration, which should be the 
premiere Federal agency, has been underfunded for decades. It 
is many administrations, both Republican and Democratic, it is 
many Congresses, both Republican and Democratic, that bear 
responsibility for this problem, but this bill seeks to solve 
that by imposing a pass-through tax to consumers disguised in 
the form of user fees. So, Mr. Chairman, I call on the 
leadership of this committee, the leadership of the 
Appropriations Committee and the Speaker of the House to come 
together and develop a plan to get the critical resources to 
this important agency. This is an authorization bill. Under the 
best of circumstances, when do we expect to see one dime 
delivered to the Food and Drug Administration? Yet we can do 
that through the appropriations process this year if we will 
simply pay attention to the process. This committee doesn't 
appropriate money but every single member of this committee 
knows that this year we will be lucky to pass one 
appropriations bill. Chances are, most appropriations will be 
passed through on a continuing resolution and so the Agency 
will receive level funding yet for another year. Consequently, 
unless we take immediate steps to work within the 
appropriations process, the Food and Drug Administration will 
continue to be underfunded regardless of the number of hearings 
that we hold at the subcommittee level.
    So we must act and we must act methodically and 
deliberately, and Mr. Chairman, you have been generous. I will 
yield back the balance of my time.
    Mr. Pallone. Thank you.
    The gentlewoman from Illinois, Ms. Schakowsky.

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

    Ms. Schakowsky. Thank you, Mr. Chairman. I appreciate the 
opportunity to have this hearing today on such an important 
issue, keeping our devices and cosmetics safe for American 
consumers. I applaud your leadership on these issues as well as 
other issues and concerns addressed in your draft Food and Drug 
Administration Globalization Act.
    Today I would like to address some of my concerns about the 
regulation of cosmetic products at FDA, or rather the lack of 
regulation. It is under the Food, Drug and Cosmetic Act that 
FDA receives its authority to regulate drugs, devices, 
cosmetics, and other products. But what many Americans don't 
know and in fact, it came as a surprise to me, is that FDA has 
little to no authority to actually regulate the personal care 
products we use every single day. Furthermore, the original 
statute under the FDCA has remained essentially unchanged since 
1938. Even the measures that FDA does have the authority to 
require such as safety substantiations, labeling requirements 
and facility inspections but without the resources to do so, 
cosmetics remain widely untested and unregulated. For example, 
tests for safety are done by the manufacturers themselves and 
are not overseen by the FDA. Additionally, without an actual 
standard for what is considered safe, it is hard to imagine 
what exactly is passing for safe and arriving on shelves across 
America.
    Unfortunately, even when FDA does find a deficiency or 
violation, it doesn't possess the authority to issue a 
mandatory recall and often does not pursue legal action because 
the burden of proof rests on the FDA, which has no resources to 
carry out investigations or studies of its own. So think about 
it. How many personal care products does each of us use every 
day? Ten, 25? My concern is that more and more studies are 
coming out on the hazards of these products and we simply don't 
know enough about them and their long-term effects. We are just 
told that they are safe, trust that the industry's voluntary 
reporting program works and assume that the FDA has sufficient 
authority to act if necessary. Yet according to a letter send 
by the Environmental Working Group to FDA Commissioner von 
Eschenbach last September, well over 22,000 products--that is 
98 percent of all products--contain one or more ingredients 
that has never been publicly assessed for safety, not by the 
FDA, not by the Cosmetic Industry Review, which is the industry 
self-regulation panel, and not by any other publicly 
accountable U.S. institution.
    By contrast, the European Union has required cosmetic 
companies to remove reproductive toxins, mutagens and 
carcinogens from personal care products and it now bans more 
than 1,100 chemicals from personal care products due to risks 
associated with cancer, birth defects or reproductive problems. 
In stark contrast, just nine chemicals are banned from 
cosmetics in the United States.
    That to me is unacceptable and I am so very grateful for 
the chairman's efforts to rein in this unregulated industry by 
requiring manufacturers to register their facilities, their 
products, and their ingredients with the FDA and to submit 
serious adverse events relating to the use of its cosmetics to 
a registry. This draft legislation would also establish good 
manufacturing practices, a big step in the right direction.
    So I look forward to working with you, Mr. Chairman, as 
well as the rest of my colleagues on the Committee to 
strengthen these provisions further. I think that the improving 
oversight authority of cosmetics is long overdue, and I look 
forward to hearing from our witnesses today.
    Thank you. I yield back.
    Mr. Pallone. Thank you.
    Next is the gentlewoman from Tennessee, Ms. Blackburn.

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

    Ms. Blackburn. Thank you, Mr. Chairman, for having this 
hearing to discuss the device and cosmetic provisions contained 
in the draft Food and Drug Administration Globalization Act. I 
do appreciate the goal of the legislation, which is to increase 
consumer safety in the U.S. import system, and I continue to 
support increased transparency and enhanced public safety to 
reduce future incidences of tainted products that are entering 
the country.
    Of course, we have heard, debated, listened to quite a bit 
of evidence on that issue in this committee this year, and as 
this committee has learned through those numerous hearings, 
what we have is the FDA is a broken agency. What we have 
learned is, there seems to be very little interagency 
communication, that there are too few inspectors, that there 
are insufficient resources to complete its core mission, that 
there are inadequate IT systems, and as far as we know, since 
we have not heard differently, there seems to be a lack of best 
practices within the Agency. It seems somewhat out of order for 
this committee to legislate new requirements for FDA without 
fixing what appears to be their fundamental and structural 
underpinning, which is causing problems within the Agency. My 
hope is that by the time we get around to the final bill, that 
what we will do is prioritize consumer safety with a balanced 
approach for consumers and for manufacturers. When legislating 
in the name of increased consumer safety, it is critical that 
this legislation achieve its desired effect and not severely 
restrict the entry of life-saving medical technology into the 
U.S. healthcare system. This legislation should not limit 
patients' access to important preventative screenings and 
diagnostic procedures.
    It is well known that the FDA is in need of resources. We 
have heard they need hundreds of millions of dollars in 
additional funding to increase inspections on both domestic and 
foreign manufacturing facilities and to do those in a timely 
and orderly manner. Last year, user fees, which are taxes and 
they all get passed to the consumer, user fees were increased 
under the Medical Device User Fee and Modernization Act, which 
was authorized to help defray FDA review costs. Concurrently, 
some on this committee complained that increased user fees, 
there again taxes, created FDA dependence on drug and device 
companies. Well, it concerns me that what we have got is kind 
of a here-you-go-again with this bill with these user fees and, 
again, read that as taxes, are further increased and appear to 
unfairly burden domestic medical imaging manufacturers.
    I look forward to discussing the rationale for increased 
user fees without creating further dependence on the FDA. I 
know we are going to have quite a discussion on this and I have 
got more to say, but, Mr. Chairman, I am going to yield back 
the balance of my time and look forward to the continuing 
conversation on the legislation.
    Mr. Pallone. Thank you, Ms. Blackburn.
    Next recognized for an opening statement, the gentlewoman 
from California, Ms. Capps.

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

    Ms. Capps. Thank you, Chairman Pallone. I appreciate your 
holding this hearing today and I want to commend our Chairman 
Dingell for his continued leadership on this very important 
issue. As a public health nurse, I believe there is no greater 
goal than protecting the public's health and well-being, and of 
course, as part of its mission, the FDA is responsible for 
regulating all medical devices that are marketed in the United 
States, including those manufactured on foreign soil.
    Inspections are probably the most powerful tool that the 
FDA has to ensure that these devices are safe and effective, 
yet growing demands on the Food and Drug Administration have 
limited the resources it has available to adequately fulfill 
its mission. As a result, inspections are far too infrequent 
and unsafe devices have the potential of entering the market 
undetected.
    But device manufacturers also need to be part of this 
process. We need to form a working partnership in order to 
guarantee a safe supply. I am pleased that we will have an 
opportunity to hear today from both FDA and the medical device 
industry about how to make such a partnership work. It is 
abundantly clear that the Food and Drug Administration is in 
desperate need of additional resources. This fact has been 
acknowledged by colleagues on both sides of the aisle, and it 
was confirmed by FDA officials testifying before this committee 
just this month.
    Medical devices are not the only products that may be 
compromised by such limitations. The FDA's authority to 
regulate the cosmetic industry has been historically limited. 
The cosmetic products and ingredients are not currently subject 
to rigorous pre-market FDA inspection and approval. It is left 
to the cosmetic industry to verify the safety of their 
products. This limited oversight, combined with a lack of 
product recall authority, greatly constrains the FDA's ability 
to protect consumers from potential toxins hidden in cosmetic 
products. Without sufficient resources, adequate staff and 
robust regulatory authority, the FDA has been relegated to a 
reactionary role instead of taking preventive and proactive 
measures. This is no way to protect the public's health and 
safety. Changes do need to be made, and in order to do this, we 
must make a strong commitment to invest in the Food and Drug 
Administration, something I have supported throughout my tenure 
in Congress.
    So I thank the witnesses for taking the time to join us 
today, and I look forward to a productive discussion.
    Thank you, and I yield back.
    Mr. Pallone. Thank you.
    I recognize the gentleman from Pennsylvania, Mr. Pitts.

OPENING STATEMENT OF HON. JOSEPH R. PITTS, A REPRESENTATIVE IN 
         CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA

    Mr. Pitts. Thank you, Mr. Chairman, and thank you for 
convening this hearing today on the device and cosmetic 
provisions of the food and drug safety FDA.
    I have to admit, however, I am a bit confused as to why 
drugs and devices have been included in the same title of the 
discussion draft. The FDA Amendments Act of 2007 recognized the 
distinct differences between drugs and devices and addressed 
the two separately, yet several provisions in the draft before 
us apply the same requirements to both sectors.
    I would like to welcome all of the witnesses, particularly 
those from Avamed and Mita and MDMA. I look forward to all of 
your comments on this draft legislation.
    I think it is important to point out that foreign medical 
device manufacturing facilities are already subject to 
international quality and safety inspections at least annually 
as part of the International Standards Organization, the ISO 
13485 standard, a standard virtually identical to the FDA 
Quality System regulations. Meeting this ISO standard is a 
requirement for medical device manufacturers in 47 countries 
worldwide. The FDA should make use of the valuable information 
gained from these already required inspections.
    Also, the discussion draft requires an inspection every 
time a change is made to a medical device and requires 
inspections of all component parts. Medical imaging devices, 
for example, are updated or improved on average once every 18 
months. This could be updated software, the device may have an 
added functionality, or it may be able to image another part of 
the body. I do not believe that these updates to already 
approved products warrant an entirely new facility inspection. 
We have all heard about FDA's lack of resources and lack of 
inspectors. We can't wait until an FDA inspector comes to a 
facility to complete a new assessment to give the go-ahead to a 
product that has effectively an 18-month shelf life. Patients 
here in the United States need those technologies.
    It is also important to note that the FDA classifies 
medical imaging devices as Class II, which are considered low 
risk. The FDA inspects and approves medical imaging devices as 
finished products. I fail to see how inspecting every single 
component down to the screws used to hold a device together is 
an efficient use of FDA's time or resources. Every screw, 
circuit board, and screen must work correctly for the completed 
device to function properly and pass its rigorous inspections. 
Examining component parts individually would be duplicative and 
not be a prudent use of funds. These new inspection 
requirements could ultimately end up slowing down the delivery 
of improved and updated technology to the U.S. market and 
ultimately to patients.
    Finally, medical device manufacturers currently pay a 
facility registration fee of $1,700 per facility per year to 
the FDA. They also pay fees for ISO inspections. However, this 
discussion draft includes additional annual facility 
registration fees as well as an annual $10,000 importer 
registration fee. Let us remember that device manufacturers 
voluntarily agreed to almost double the amount of fees they pay 
to FDA last year. These new fees are duplicative and do not 
provide a direct benefit to the manufacturer. I believe we need 
to be careful not to cross from valid user fees into new taxes 
on these manufacturers.
    I would like to thank all of our witnesses for testifying 
today. I look forward to your statements, and I yield back the 
balance of my time.
    Mr. Pallone. Thank you.
    The other gentleman from Pennsylvania, Mr. Murphy.

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

    Mr. Murphy. Thank you, Mr. Chairman. It seems as though 
much of what can be said has been said, and some of my friends 
say one thing and some another, and I agree with my friends on 
this, but nonetheless, I want to emphasize here too, and thank 
you for this hearing, and hope that part of what we get out of 
this in shaping a bill is one that recognizes we do need to 
have a more effective system of inspections, not just for its 
own sake, but on devices and on these other products. I want to 
make sure we are simply not adding more to the cost burden of 
these products without yielding results.
    In particular, some of the areas I hope our witnesses will 
talk about is in the areas of finding those who may manufacture 
or bypass or violate some of these rules, and when we are 
dealing with foreign companies, it is not hard for them to 
simply close that company and show up as another name and 
therefore stay under the radar screen with this. One of the 
great things about America is, we are able to still be seen as 
a leader in inspection and having product safety. However, we 
want to make sure that we maintain that position and not give 
it up to other countries who are able to bring other products 
in here that don't have that.
    So I look forward to the hearing here and finding how we 
can carefully balance this issue of making sure that we are 
able to maintain product safety and not simply overburden the 
system with regulations that are not leading to that end, and I 
yield back.
    Mr. Pallone. Thank you. I believe that concludes our 
opening statements, so we will now turn to our first panel. I 
would ask our witnesses from the FDA and the GAO to come 
forward at this time.
    Thank you. Let me introduce each of you. On my left is Dr. 
Sundlof, who is Director of the Center for Food Safety and 
Applied Nutrition at U.S. FDA. Next to Dr. Sundlof is Lillian 
Gill, who is Senior Associate Director of the Center for 
Devices and Radiological Health with FDA. I understand she is 
not going to be testifying but will answer questions and help 
us in that respect. And then next is Dr. Marcia Crosse, who is 
Director of Healthcare for the General Accounting Office.
    You know the drill, that we hear 5-minute opening 
statements they become part of the hearing record, but each 
witness may in the discretion of the committee submit 
additional statements in writing for inclusion in the record, 
and I will start with Dr. Sundlof for 5 minutes. Thank you for 
being here.

 STATEMENT OF STEPHEN SUNDLOF, D.V.M., PH.D., DIRECTOR, CENTER 
     FOR FOOD SAFETY AND APPLIED NUTRITION, FOOD AND DRUG 
                         ADMINISTRATION

    Dr. Sundlof. Thank you, Mr. Chairman and members of the 
subcommittee. I am Dr. Stephen Sundlof, director of the Center 
for Food Safety and Applied Nutrition of the Food and Drug 
Administration, and as you indicated, with me today is Dr. 
Lillian Gill, Senior Associate Director, Center for Devices and 
Radiological Health at FDA.
    Thank you for the opportunity to discuss challenges posed 
by imported medical products and components of cosmetics. We 
commend the members of this subcommittee and their staffs for 
developing the discussion draft entitled, the Food and Drug 
Administration Globalization Act of 2008. We recognize and 
appreciate the Committee's efforts to include new authorities 
requested by the Administration in support of the Action Plan 
for Import Safety.
    Foreign-manufactured medical devices must meet FDA 
regulatory requirements in order to be imported into the United 
States or its territories. These requirements include 
establishing registration device listing, manufacturing in 
accordance with quality systems regulation, reporting of 
adverse events and pre-market notification or pre-market 
approval. Initial importers must register with the FDA. Foreign 
manufacturers must designate a U.S. agent to, among other 
things, facilitate interactions between the FDA and the foreign 
manufacturer. FDA inspects foreign manufacturing sites to 
assess compliance with FDA requirements and help inform 
decisions regarding admissibility into U.S. commerce. FDA 
cooperatively works with Customs and Border Protection in 
regarding imported products. Products that do not meet FDA's 
regulatory requirements may be detained at the border.
    Cosmetic firms are responsible for substantiating the 
safety of their products and ingredients before marketing. In 
general, except for color additives and ingredients 
specifically prohibited or restricted by regulation, a 
manufacturer may use any ingredient in the formulation of a 
cosmetic, provided that the ingredient does not adulterate the 
finished cosmetic and the finished cosmetic is properly 
labeled.
    Cosmetic manufacturers are encouraged to register their 
establishments and file a cosmetic product ingredient statement 
with FDA's voluntary cosmetic registration program. This 
program provides FDA with the best information available about 
the locations, business trade names and types of activities of 
the establishments that participate in this program. If 
manufacturers do not remove dangerous products from the market, 
the Agency can pursue enforcement actions against violative 
products or against firms or individuals who violate the law. 
FDA works closely with all its partners including the 
international regulatory authorities on a wide variety of 
issues important to cosmetic safety including ingredient usage 
and labeling, marketing surveillance, and areas of emerging 
science.
    The Administration's Action Plan for Import Safety presents 
broad recommendations and specific action steps to promote the 
safety of imported products under the organizing principles of 
prevention, intervention and response. One of the plan's 
premises is that the United States must transition from an 
outdated snapshot approach to import safety in which decisions 
are made at the border into a cost-effective preventive focus 
model that identifies and targets critical points in the 
import's life cycle where the risk of the product is greatest 
and verifies the safety of products at those important phases.
    Under the auspices of the Administration's Action Plan for 
Import Safety, FDA has many initiatives underway to further 
protect and promote the public health. For example, FDA's 
Beyond Our Borders initiative is a multi-pronged approach to 
promote and verify compliance of imported foods, cosmetics and 
medical devices with the FDA requirements prior to importation. 
This initiative includes increased FDA presence overseas, 
increased FDA inspections, greater sharing and use of foreign 
authority inspection reports and other information, use of 
third-party certification and increased capacity building with 
countries that have less-developed regulatory systems to ensure 
product safety.
    In order to target our intervention efforts related to 
foreign firms, FDA has several plans to enhance its IT systems 
in ways that will improve databases, enhance interoperability 
of systems within the Agency and among other regulatory 
agencies, and provide better analytical function to assess and 
control risk.
    Finally, when a health threat emerges with a regulated 
product, FDA must have the tools to facilitate the timely 
recovery of the violative produce, reduce the opportunity for 
harm, and secure the integrity of the supply. FDA is working to 
facilitate the adoption by industry of track-and-trace 
technologies to identify and track the product along the 
product's life cycle back to the point of origin. Under the 
Food and Drug Administration Amendments Act of 2007, FDA is 
working to develop unique identifiers which may support product 
identification technologies.
    Under new authorities, the Action Plan for Import Safety 
called for providing a number of new authorities in order to 
enhance the safety of imported products. It requests authority 
to establish import certification programs using accredited 
third parties to verify compliance of foreign products with 
U.S. standards. The plan recommends authorizing FDA to refuse 
admission of a foreign manufacturer's product when access to 
the foreign manufacturing site is hampered. The plan also 
requests authority to expedite destruction of refused medical 
products, which will prevent unsafe medical products for 
personal use from entering the U.S. market. Finally, asset 
forfeiture remedies for certain criminal offenses involving 
fraudulent or counterfeit products would allow the forfeiture 
of all vessels, vehicles, aircraft, and other equipment used to 
aid in the importing, exporting, transporting, selling, 
receiving, acquiring, and purchasing of violated products.
    We are in the process of reviewing the FDA Globalization 
Act discussion draft in detail, and we look forward to working 
with you on this legislation. Let me reiterate some general 
principles that guided the development of the Action Plan for 
Import Safety.
    Mr. Pallone. Dr. Sundlof, I hate to stop the FDA witness, 
in your case, but you are about a minute and a half over. But 
summarize. We don't want to stop you completely.
    Dr. Sundlof. Thank you. I think I can stop at this point, 
Mr. Chairman.
    [The prepared statement of Dr. Sundlof follows:]


    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Pallone. Well, now I did stop you. That wasn't my 
intention.
    Dr. Crosse.

  STATEMENT OF MARCIA CROSSE, DIRECTOR OF HEALTHCARE, GENERAL 
                       ACCOUNTING OFFICE

    Dr. Crosse. Thank you, Mr. Chairman and members of the 
subcommittee. I am pleased to be here today as you examine 
FDA's oversight of medical devices.
    At the request of the full committee, we have been 
reviewing a number of issues related to FDA's foreign 
inspection programs. A variety of medical devices are 
manufactured in other countries, including high-risk devices 
designed to be implanted or used in invasive procedures. Our 
work points to one conclusion: FDA's programs have not kept up 
with the globalization of manufacturing and the products that 
FDA regulates. FDA's inspections of foreign establishments are 
infrequent. The agency's data systems have been rife with 
errors and lack fundamental capabilities needed to manage the 
programs, and the Agency has faced several challenges unique to 
conducting foreign inspections.
    Since I first testified about these problems, FDA has 
announced a number of initiatives to address these concerns, as 
we have heard today from Dr. Sundlof. FDA's initiatives have 
the potential to strength FDA's foreign device inspection 
program but they do not fully address the weaknesses.
    FDA is required to inspect every 2 years all domestic 
establishments manufacturing medical devices classified as 
being of high risk, or Class III, such as pacemakers and 
defibrillators, or medium risk, or Class II, such as syringes 
and hearing aids. There is no comparable time requirement for 
inspecting foreign establishments, but FDA is responsible for 
ensuring that they meet the same standards required of domestic 
establishments. We found that FDA has not met the statutory 
requirement for domestic inspections of medical device 
establishments and foreign medical device establishments are 
inspected less frequently, about every 6 years for Class III 
devices or 27 years for Class II devices. As of September 2007, 
there were about 5,000 Class II and III foreign device 
establishments registered with FDA, of which fewer than 300 
were inspected last year.
    FDA has faced particular challenges in managing its foreign 
inspection program. FDA's databases contain inaccurate 
information about foreign medical device establishments and the 
products they manufacture. A recent change to FDA's medical 
device registration process could improve the accuracy of the 
registration data. The new process includes electronic 
registration with an annual registration fee currently set at 
about $1,700.
    Another initiative aimed at reducing duplication in its 
import database is a proposal that FDA has supported to change 
the data it receives from Customs and Border Protection on 
products entering the United States. However, the 
implementation of this proposal is not certain and would 
require action from multiple Federal agencies. In addition, 
inspections of foreign medical device establishments pose 
challenges to FDA in human resources and logistics. FDA depends 
upon volunteer inspectors, lacks independent translators and 
has difficulty altering the travel itinerary if problems are 
uncovered that might warrant further review. FDA has proposed 
establishing a dedicated cadre of staff to conduct foreign 
inspections but the overall time frame associated with this 
initiative is unclear.
    FDA has also announced plans to establish offices overseas 
with an initial eight FDA staff to be based in China and five 
Chinese nationals to provide translation and other support. 
However, the impact that these offices will have on the foreign 
device inspection program is unknown because these staff would 
be responsible for all FDA-regulated products.
    Finally, over the years there has been interest in using 
third parties to supplement FDA's inspection resources. We 
found, however, that few inspections have been conducted 
through FDA's two accredited third-party inspection programs. 
In the 4 years since FDA first cleared an accredited 
organization to conduct independent medical device inspections, 
a total of 11 inspections have been conducted, 6 of foreign 
establishments and 5 of domestic establishments.
    In conclusion, given the growth in foreign device 
manufacturing for the U.S. market and the relatively few 
foreign inspections conducted by FDA, the Agency will need to 
devote considerable resources to this area if it to increase 
the rate of inspections. The agency has recently taken some 
positive steps to improve its foreign inspection program 
including announcing plans to increase its presence overseas. 
However, it is too early to tell whether these steps will 
ultimately enhance the Agency's ability to ensure the safety 
and effectiveness of medical devices marketed in the United 
States.
    Mr. Chairman, this concludes my prepared remarks. I would 
be happy to answer any questions that you or other members of 
the subcommittee may have.
    [The prepared statement of Dr. Crosse follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    
    Mr. Pallone. Thank you, Dr. Crosse, and I am going to start 
the questioning by recognizing myself for 5 minutes. I was 
going to start with Dr. Gill because you are the device person 
but I guess I am directing it to Dr. Sundlof--to Dr. Gill 
through Dr. Sundlof. There has been industry interest in the 
international harmonization of standards for device inspection. 
Specifically, we have heard that industry would like FDA to 
adopt International Standards Organization--well, the standards 
of--they would like them to adopt the International Standards 
Organization standards. That sounds a little weird but that is 
what it is. Are there any substantive differences between the 
FDA's standards and those of the International Standards 
Organization? And what is your opinion on asking the FDA to 
move to those standards?
    Dr. Gill. Thank you, Mr. Chairman. We have worked for quite 
a while, the Center for Devices, with the Global Harmonization 
Task Force. In fact, we chaired that task force this year. We 
have been working to harmonize our quality system regulation 
with many of the standards under the GHTF task force. We find 
that their quality system or their ISO inspection 13485 is 
pretty close, very similar to ours. In fact, the most recent 
FDA Modernization Act allowed us to evaluate foreign inspection 
reports, 13485 ISO inspection reports. So we find them to be 
very similar. We certainly are developing the criteria under 
which we could get the reports in, look at them, determine 
whether or not they have met the foreign standard requirements 
and to see if they are similar to ours, and we look forward in 
the future to figuring out how we can use these in lieu of an 
inspection.
    Mr. Pallone. OK. Thank you.
    And then I wanted to ask Dr. Crosse, in your testimony you 
mentioned the third-party inspection programs that are 
currently in place and the fact that very few companies have 
taken advantage of those programs, even after improvements were 
made. Can you explain why this is and make any recommendations 
as to how to put in place more incentives for companies to 
actually partake in those programs? And then does the FDA need 
additional authorities or basically are there ways to make this 
work, and how would you go about it?
    Dr. Crosse. Thank you. Yes, we did take a look at the 
accredited inspection programs and one of the issues that we 
hear from industry is that it is not clear at this point that a 
single inspection can meet the requirements of both the FDA and 
other foreign governments. Is it really that feasible? A few of 
the companies that had explored using this program had 
determined from the accredited inspectors that they would 
actually conduct separate inspections to meet the U.S. 
requirement from what they would conduct for, for example, the 
European Union, and so at this point I think there are still 
some issues to be ironed out. There also is a concern, I think, 
on the part of some industry organizations that if you are 
hiring an accredited inspector, you are ensuring then that 
someone is coming to your door and exposing you to possible 
regulatory action. Right now, FDA doesn't come that often and 
so if you just sit back and wait for FDA to show up, it could 
be many years. So that has worked also as a disincentive for 
organizations to hire an accredited inspector, to pay for that 
inspection. Right now an FDA inspection does not cost them any 
money, and then to face possible penalties that might be 
incurred. I think it is too soon to know whether the changes 
that were made in the bill last year are going to modify that 
but at this point under that accredited inspection program, 
only one additional inspection has been conducted since we 
testified in January on this. FDA itself has undertaken a 
separate pilot program with Canada to try to determine if they 
can iron out some of these problems.
    Mr. Pallone. Thank you.
    Let me ask one cosmetic question. Dr. Sundlof, you 
mentioned several areas of concern with the rapidly growing 
nature of the cosmetics industry, including increasingly 
sophisticated technology and more complex ingredients. Will the 
provisions included in the discussion draft, and I am 
referencing the mandatory registration, mandatory adverse event 
reporting, GMP regulations, will they assist FDA in fulfilling 
its regulatory mission concerning cosmetics?
    Dr. Sundlof. In terms of requiring that the firms register 
and report all of the ingredients, it would at least alert us 
to the fact that there may be new ingredients that we may not 
otherwise have been aware of were in these cosmetics so in that 
respect, yes. The other ones I don't think would particularly 
address that issue of the widely emerging new products that are 
coming out in terms of new chemicals, new ingredients, et 
cetera.
    Mr. Pallone. Thank you.
    Mr. Deal.
    Mr. Deal. Thank you.
    I want to follow up on the ISO issue. First of all, how 
many countries recognize the ISO 13485 inspections?
    Dr. Gill. I don't have that number with me. I would be 
happy to provide that. But we do know that those that are in 
European Union recognize that.
    Mr. Deal. Does China recognize those or do they 
participate?
    Dr. Gill. China has attended the last Global Harmonization 
Task Force meeting. They are scheduled, according to 
discussions we have had, to attend the next set of GHTF 
meetings.
    Mr. Deal. But I would assume it takes action on the part of 
a country to incorporate the ISO inspection standards into 
their way of doing business in their own country? They have to 
formally adopt it. Is that correct?
    Dr. Gill. That is my understanding.
    Mr. Deal. How long do you anticipate it is going to take to 
determine whether or not FDA standards can be harmonized with 
ISO standards?
    Dr. Gill. We are currently working through looking at the 
standards now, looking at the differences and preparing to have 
a public announcement of our adoption of some of the standards.
    Mr. Deal. I would encourage you to do that as quickly as 
possible.
    The next question is, in the event that you determine that 
ISO standards are sufficient to cover FDA responsibilities, 
would it require legislation to allow you to use the ISO 
inspections as a part of your mandatory, if we go to a 
mandatory, time frames or numbers of inspections? Will it 
require that we legislatively build in language that allows you 
to accept the ISO inspections?
    Dr. Gill. I think if they are harmonized inspections and we 
find that they are very equivalent to ours, I am not sure the 
legislative changes are absolutely necessary.
    Mr. Deal. I would ask you all if you would look at that 
because I personally think that is the direction we need to go 
in.
    Second question is, do other countries require on-site 
inspections of American manufacturing facilities? In other 
words, the reverse of what we do in overseas inspections.
    Dr. Gill. Yes.
    Mr. Deal. How do their fees compare with what we charge?
    Dr. Gill. I believe many countries may use the ISO 
inspectorate. I can certainly find out an answer to that. But 
that would be an agreement between the third-party inspector 
and the manufacturers.
    Mr. Deal. In order for that to be accomplished, the reverse 
of what we normally think of here, would it require formal 
action on the part of the United States or of FDA to adopt ISO 
standards as our standard in order for them to accept our 
inspections under ISO privileges and grant reciprocity, in 
effect?
    Dr. Gill. I would be happy to provide a written response to 
that.
    Mr. Deal. All right. Thank you.
    One of the issues that was mentioned was the Beyond Our 
Borders initiative that FDA has undertaken. I think it is going 
to be increasingly important for us to try as best we can to 
harmonize with other countries that are trying to do the right 
thing and be able to work cooperatively in that effort, and I 
think it is also going to require that we continue to apply 
pressure for those countries that do not move in that 
direction, and in that regard, reference was made in Mr. 
Dingell's opening statement that we could not--we have to be 
careful, I guess under WTO, that we do not differentiate 
between domestic and foreign inspection costs, et cetera. But 
isn't it true that it is significantly more expensive to do 
overseas inspections under our current system than it is to do 
domestic inspections?
    Dr. Gill. I do believe there are costs associated with 
travel in foreign inspections that we don't have to pay for 
domestic inspections but we do try to cover at least three 
inspections while we are there to minimize that travel cost.
    Mr. Deal. One of the things that the Administration asks us 
under their safety plan, has asked Congress to grant FDA the 
authority to refuse to admit for import products that were 
manufactured in facilities that denied FDA inspectors or 
hampered their ability to do inspections. Is it true that there 
is no authority to discriminate against those countries and 
products where you have been, in effect, denied or hampered in 
your inspections that we don't have any authority to 
discriminate against them currently?
    Dr. Gill. Allowing an FDA investigator into a foreign 
facility is voluntary, so we--
    Mr. Deal. No, I am talking about on our end. What I read is 
that apparently you are asking Congress to give you the 
authority to discriminate against those products from those 
countries or from those plants that have interfered with your 
ability to inspect their product. Is that something that needs 
statutory changes?
    Dr. Sundlof. Yes, I believe it is, and right now we can 
detain product if we have reason to believe that it is 
adulterated but we have to establish at the port of entry that 
it is adulterated. Then we can issue an import alert, and that 
prevents it. But we don't have that authority just on the 
basis--we can't initiate an import alert on the basis that the 
country of origin refused our inspection.
    Mr. Deal. Thank you.
    Mr. Pallone. Chairman Dingell for questions.
    Mr. Dingell. Thank you.
    Does FDA currently have an accurate, verified count of how 
many foreign device facilities are selling products to the 
American people, yes or no?
    Dr. Gill. Our new database will help us determine how many 
foreign facilities--
    Mr. Dingell. So the answer is, you do not have such 
information?
    Dr. Gill. At this time, I don't believe we have an exact 
number.
    Mr. Dingell. All right. Now, you have got two--is it two or 
three databases?
    Dr. Gill. We have about three or four databases.
    Mr. Dingell. OK. How many of them talk to each other and 
how many of them are integrated?
    Dr. Gill. Currently, we are working to make sure that they 
talk to each other, but as of--
    Mr. Dingell. So at this time you have none of them are 
integrated and none of them can talk to each other?
    Dr. Gill. Well, we are integrating the electronic 
registration database.
    Mr. Dingell. So the answer to the question is yes?
    Dr. Gill. We do have one or two.
    Mr. Dingell. All right. Now, how much is it going to cost 
and when will this be done? First of all, how much is it going 
to cost, and second, when will it be done?
    Dr. Gill. I can certainly provide you an answer with the 
cost.
    Mr. Dingell. Please submit that for the record. I have a 
grand total of 5 minutes here.
    Now, does FDA currently have an accurate and verified 
accounting of what products these companies are making? The 
answer to that question is no, is it not?
    Dr. Gill. Until our new system is in and they can list 
their products--
    Mr. Dingell. I have a limited amount of time. Yes or no?
    Dr. Gill. I believe we don't have the accurate account.
    Mr. Dingell. Does FDA currently know how many foreign 
facilities are actually subject to inspection, yes or no?
    Dr. Gill. We are finding that out daily, Mr. Chairman.
    Mr. Dingell. Now, Dr. Gill, as we move forward producing 
bipartisan legislation to this concern, it would be very 
helpful to have the Committee have the Agency's plan of action 
for improving its device information system, both its funding 
needs and timelines. Does such a plan exist, yes or no?
    Dr. Gill. We are developing that plan.
    Mr. Dingell. You are developing it, but you do not have it. 
When will you have it and when can you submit it to the 
committee?
    Dr. Gill. I can certainly submit to you the dates when we 
will have the plan completed.
    Mr. Dingell. You will submit that to us for the record.
    Now, Dr. Woodcock said that meeting the Agency's 
obligations when she was here before the committee would cost 
an additional $100 million. Can you tell us how much you need 
to meet the required frequency for domestic device inspections?
    Dr. Gill. That also could be provided for you.
    Mr. Dingell. Please submit that for the record.
    I am told here, according to Dr. Crosse, FDA inspects 
relatively few foreign medical device establishments despite 
the fact that over 4,200 foreign facilities have been 
registered to sell medium- and high-risk devices to American 
consumers. Is that accurate?
    Dr. Gill. Could you repeat that question?
    Mr. Dingell. FDA inspects relatively few foreign device 
establishments, according to Dr. Crosse, despite the fact that 
over 4,200 foreign facilities have been registered to sell 
medium- and high-risk devices to American consumers. Is that 
accurate?
    Dr. Gill. Yes, that is what we have reported.
    Mr. Dingell. Dr. Woodcock testified at the previous hearing 
that FDA would need another $225 million to inspect foreign 
drug facilities at the same rate that is required currently to 
investigate domestic facilities. Can you tell us what the 
figure would be for foreign device facilities?
    Dr. Gill. We will certainly make that part of the answer we 
supply to you.
    Mr. Dingell. Now, have you seen the GAO study?
    Dr. Gill. Yes, we have.
    Mr. Dingell. I want you to submit any criticisms to this 
committee you have with regard to the factual and other 
questions associated with this study, and I will ask that the 
record be kept open so that that may be done.
    Now, they said this: ``In summary, we found that FDA faces 
challenges in its program to inspect foreign establishments 
manufacturing medical devices. In January 2008, we testified 
that the two databases that provide FDA with information about 
foreign medical device establishments and the products they 
manufacture for U.S. market contain inaccurate information 
about establishments subject to FDA inspection and could not 
exchange information.'' Is that true?
    Dr. Gill. According to the report, yes.
    Mr. Dingell. All right. They went on to say this: ``Few 
inspections of foreign device manufacturing establishments have 
been conducted through FDA's two programs for inspections by 
accredited third parties.'' Is that statement true?
    Dr. Gill. According to the report, yes, we responded.
    Mr. Dingell. All right. Now, in this, they further say 
this: ``FDA faces challenges conducting inspections of foreign 
establishments that manufacture medical devices,'' and they go 
on to say, ``FDA lacks accurate data on the number of foreign 
establishments subject to inspection.'' Are those statements 
true?
    Dr. Gill. I think our data is becoming more accurate with 
the electronic registration and listing, and we are finding--
    Mr. Dingell. Are these statements true?
    Dr. Gill. As of the time of the report, yes.
    Mr. Dingell. They are true?
    Dr. Gill. Yes.
    Mr. Dingell. All right. I have so many questions, Mr. 
Chairman, I am sort of floundering in a morass.
    They go on to say this: ``FDA inspects relatively few 
foreign medical device establishments.'' Is that statement 
true?
    Dr. Gill. It is correct.
    Mr. Dingell. Then they go on and say, ``FDA officials told 
us it has been difficult to recruit investigators to 
voluntarily travel to foreign countries. However, they added 
that if the Agency could not find an individual to volunteer 
for a foreign inspection trip, it would mandate the travel. 
Logistically, foreign medical device establishment inspections 
are difficult to extend even if problems are identified because 
the trips are scheduled in advance.'' Is that true?
    Dr. Gill. Yes, they are pre-announced inspections.
    Mr. Dingell. Now, what are you doing about that?
    Dr. Gill. Well, we are certainly cleaning up the database 
and finding out the inspections that are warranted, the Class 
II and Class III who actually registered with us who are 
actually exporting product to the United States that we should 
go inspect.
    Mr. Dingell. Mr. Chairman, I am going to ask that I be 
permitted to submit additional questions in writing. I thank 
you for your courtesy to me, witnesses. I thank you, and I am 
sorry I can't ask more friendly questions of you. Yours is a 
great agency, and regrettably, you are crippled by your 
inability to carry out your responsibilities.
    Thank you, Mr. Chairman.
    Mr. Pallone. Thank you, and without objection, so ordered 
to submit those questions.
    We do have a vote, 11 minutes left. I was going to ask the 
ranking member, Mr. Barton, to ask his questions and then we 
will recess and come back. There is just the one vote. Mr. 
Barton.
    Mr. Barton. I just have two or three questions, Mr. 
Chairman.
    As I said in my opening statement, I am a little confused 
about medical devices being included in this particular bill. 
We have had major problems with food imports from China, we had 
major problems with drug imports from China, but I am not aware 
that we have had major problems from medical device imports 
from China. Dr. Gill, are you aware of any major medical device 
issues in terms of medical devices that are manufactured in 
China and sent to the United States?
    Dr. Gill. Well, the most recent with the heparin issues 
but--
    Mr. Barton. Well, heparin is not a medical device.
    Dr. Gill. Well, it is used on medical devices but we did 
not have any serious issues with those devices.
    Mr. Barton. I would ask our witness from the GAO, are you 
aware of that?
    Dr. Crosse. No, sir, not specifically of devices 
manufactured in China, although, as Dr. Gill indicated--
    Mr. Barton. Are you aware of any major medical device 
issues in terms of medical devices that are manufactured in 
China and sent to the United States?
    Dr. Gill. Well, the most recent with the heparin issues but 
we did not--
    Mr. Barton. But heparin, though, is not a medical device.
    Dr. Gill. Well, it is used on medical devices, but we did 
not have any serious issues with those devices.
    Mr. Barton. I would ask our witness from the GAO, are you 
aware of that?
    Dr. Crosse. No, sir, not specifically of devices 
manufactured in China, although as Dr. Gill indicated, the 
heparin has affected a number of devices that are now being 
recalled.
    Mr. Barton. But heparin is a drug.
    Dr. Crosse. Yes, but it is used to coat certain things like 
catheters that are sometimes used in invasive procedures to 
keep clots from forming. And so there is some heparin that is 
used in some of the medical--
    Mr. Barton. And you are saying the heparin is coated on the 
medical device in China?
    Dr. Crosse. On certain medical devices. The heparin 
manufactured in China has been used to coat certain medical 
devices.
    Mr. Barton. But if we solve the heparin problem, the device 
itself is not--
    Dr. Crosse. With those devices, that is correct.
    Mr. Barton. OK. Now, on the issue of the number of 
inspections that are done on these facilities, I think each of 
you testified FDA doesn't conduct its own inspections as 
frequently overseas as it does in the United States, and we 
have a law that allows the company to ask for a third-party 
inspection, but many companies don't do that because they say, 
well, if the FDA is not inspecting me, why should I ask for a 
third-party inspection that then may result in an FDA 
inspection. What if we reversed that and allowed the FDA to 
direct a third-party inspection as a substitute for an FDA 
inspection? How would that work?
    Dr. Gill. Well, certainly in the Import Safety Action Plan 
we looked at what would help us to get more information about 
foreign facilities, and certainly asking for those foreign 
inspections reports would give us that information.
    Mr. Barton. But currently the FDA can't direct a third-
party inspection. It has to be done at the request of the 
facility, isn't that correct?
    Dr. Gill. It is all voluntary.
    Mr. Barton. So if we changed it, you could still ask for 
the voluntary but if you gave the FDA the authority because of 
whatever reason, limited resources, limited time, probable 
cause, you name it, to direct a third-party inspector, would 
that help address this issue of lack of frequency of FDA 
inspections? That is my question.
    Dr. Gill. I think we would want to make sure that the third 
parties are trained to conduct them so we get the same quality 
in the inspection that we get with our own FDA inspections. It 
might help.
    Dr. Crosse. I would just add that at the current time, 
there aren't enough to fill the gap. There are not enough 
trained, accredited inspectors to be able to fill the gap to 
get inspections up to the level that is required, and also you 
would be asking the company then to bear the cost of that 
inspection. An accredited inspection program requires the 
company to pay.
    Mr. Barton. But the concept on the face of it doesn't seem 
unworkable?
    Dr. Crosse. The accredited inspection program is set up 
with the goal that that inspection is equivalent to an 
inspection by FDA.
    Mr. Barton. And we wouldn't change that. That is all my 
questions, Mr. Chairman.
    Mr. Pallone. Thank you, Mr. Barton. We will take a recess. 
There is only one vote, so we should be back fairly quickly, 
and then we can take the rest of the questions for this panel. 
The Subcommittee stands in recess.
    [Recess.]
    Mr. Pallone. The Subcommittee will reconvene, and we left 
off with Mr. Barton, so I recognize the gentlewoman from 
California, Ms. Eshoo, for questions.
    Ms. Eshoo. Thank you, Mr. Chairman. Let me ask the 
following questions. In the legislation, I believe there is a 
pathway for inspections, and how we operate today and where we 
want to go obviously, the legislation puts forth the way. What 
I would like to examine with the FDA is, what are the ISO 
standards today? How high are they? Do they meet with FDA 
standards? And what you bring to inspections of devices sent 
into our country, is it better to inspect in the facilities 
abroad? How effective is your inspection here? And so I would 
like to examine that area because most frankly I am not so sure 
how it works, how well it works, and what you think of it.
    What I want to say, and this is just a general observation, 
and we don't have very many members here so I am going to be 
speaking to three other people. Most frankly, I think if I were 
the FDA Commissioner, I would bring forward a list to the 
Congress and this Committee and say, these are all of the 
responsibilities that you have charged us with in order to 
protect the American people. We have the resources to do the 
following. You know, we may have given the FDA 79 things to do, 
all very, very, important, and the Agency not having the 
resources to carry the rest out. I have said consistently here, 
we cannot remain content with user fees. They are important. I 
helped to establish them. But having said that, I don't believe 
the Congress is funding the Agency the way it needs to be 
funded in order to carry out these all-important mandates 
including the ones that we are looking at in this legislation.
    So can you take us through the inspections? How robust are 
they and compare and contrast the two standards for us. I think 
Dr. Gill is going to address this.
    Dr. Gill. Yes.
    Ms. Eshoo. Thank you.
    Dr. Gill. First of all, we have our quality system 
inspection that we use to conduct our G&P inspection. There is 
an ISO standard that is very similar, and that is the 13485 
that looks at many of the same components that our quality 
system inspection looks at. Where I think the major differences 
lie and it is what is covered in the FDA inspections. We 
include not only G&P--
    Ms. Eshoo. Is it a higher standard? That is what I want to 
know.
    Dr. Gill. It includes many more element--
    Ms. Eshoo. It does?
    Dr. Gill [continuing]. And some of the difference is also 
in the depth of our inspection. We inspect to the regulation. 
We of course look at whether or not they have--
    Ms. Eshoo. And how often do you do that?
    Dr. Gill. We do the FDA inspection every time we go, and we 
have two levels of inspection. We have an abbreviated quality 
system inspection and we have a full inspection.
    Ms. Eshoo. This is when products are coming into the United 
States?
    Dr. Gill. This is the inspection technique process that we 
use regardless. We use it in foreign manufacturers, we use that 
in domestic manufacturers. We don't inspect product at the 
border as it is coming in, we inspect the manufacturing 
facility.
    Ms. Eshoo. How often do you do that?
    Dr. Gill. As the report says, we are conducting domestic 
inspections for Class III devices about once every three years 
and Class II--
    Ms. Eshoo. Are you satisfied with that statement?
    Dr. Gill [continuing]. Every five. According to our risk-
based scenario, it is covering our most critical high-risk 
issues.
    Ms. Eshoo. OK. Let me just get another question in. I still 
think this still needs some more exploration. I raised in my 
opening statement the whole issue of the component parts for 
medical devices, circuit boards, software, et cetera. Do you 
want to comment on that? I don't think FDA knows how to inspect 
those things?
    Dr. Gill. Our current law requires the manufacturers to be 
responsible. Devices, as you stated, are made up of multiple 
components, and we have, in our law, said the manufacturer is 
responsible for making sure that the components that they 
purchased to include in the finished product--
    Ms. Eshoo. So if the device fails--
    Dr. Gill [continuing]. Still qualify for--
    Ms. Eshoo. If the device fails, then the responsibility is 
on the company?
    Dr. Gill. It is on the company. We do go in and inspect 
whether or not they have looked at all components to their 
product to make sure that they were acceptable according to the 
standard.
    Ms. Eshoo. Thank you. And my time is up. Thank you, Mr. 
Chairman.
    Mr. Pallone. Thank you. The gentleman from Indiana.
    Mr. Buyer. Thank you. I would like to do some follow-up on 
the question that Mr. Deal had asked earlier just for clarity 
purposes to the FDA. During these inspections and you have a 
foreign government that will not cooperate or you have a 
company in a foreign country that doesn't cooperate with an 
inspection, are you asking us for specific statutory authority 
so that you could prevent those products from entering into the 
United States market?
    Dr. Sundlof. Yes, sir. The Import Safety Action Plan 
specifically asks for authority to deny importation of products 
if we are denied access to those foreign firms.
    Mr. Buyer. And if this Committee were to take affirmative 
action to include that in this bill, that provision, of course, 
you would support that?
    Dr. Sundlof. Could you repeat the question, please?
    Mr. Buyer. If we took that and put this in the bill, 
obviously that is something that you would support?
    Dr. Sundlof. The administration has support--now obviously, 
we would have to see exactly what the language said but--
    Mr. Buyer. All right. You don't have to dance. I just want 
you to know, we are trying to help you, right? OK.
    Dr. Sundlof. Thank you, sir.
    Mr. Buyer. You don't have to do that kind of answer. Are 
you aware of any trade agreement issues that might arise from 
the bill's $10,000 import registration fee on how that could be 
interpreted?
    Dr. Sundlof. I don't have the answer to that. We can get 
you an answer in writing. I think the kind of trade agreement 
concerns that we had specifically looked at having higher 
standards for imported products than we do for our domestic 
products. We need to make sure that any legislative language 
would not interfere with our trade agreement.
    Mr. Buyer. Well, that would be my hope also. To be helpful 
to us and to the GAO, if you, in cooperation with other 
departments or agencies, recognize that if we were to actually 
put a $10,000 import registration fee and it is against any of 
our trade agreements, we need to know about that. So please let 
the Committee know in writing.
    I have some concerns that there are approximately 3,800 
pre-market notifications a year and the majority are Class II 
devices, given your testimony on the drug side of this bill and 
how much effort it is going to take for you to do staffing and 
resources necessary to inspect on the drug provisions of this 
bill, what are your concerns regarding the provisions in the 
bill with regard to--how are you going to be able to do the 
staffing and how are you going to be able to do all of what is 
required in this bill given your present level of 
appropriations?
    Dr. Sundlof. I believe with all the new authorities that 
this bill would offer, we would need additional resources to be 
able to accomplish all of the new authorities that we would 
have. And exactly what that is, the dollar amount, I can't say. 
One of the things that we say in our Import Safety Action Plan 
and that has been addressed in this bill as well, the use of 
third parties. Depending upon how extensively we took advantage 
of those third parties would have a major impact on what we 
need to staff. In other words, FDA inspectors versus what we 
would be relying on third parties to accomplish without us 
having to fund them.
    Mr. Buyer. Section 210 of the bill provides for civil 
penalties, and civil penalties were placed in the Food, Drug 
and Cosmetic Act of 1990. Are you aware of how many civil cases 
the FDA has brought against the device industry since 1990?
    Dr. Gill. I don't have that number offhand, but I know we 
have taken some civil money penalty cases.
    Mr. Buyer. Would you please provide in writing the number 
of civil penalty cases since 1990 and at what amounts and why 
they were--
    Dr. Gill. We certainly will.
    Mr. Buyer. --by industry? You don't have to do it by 
industry, I only want it for the device industry.
    At this moment, I am going to yield to Mr. Deal if he has 
any further questions he may have with regard to those foreign 
inspections so we can get the right and appropriate language 
given the questions he had asked earlier. I yield to the 
gentleman.
    Mr. Deal. I thank the gentleman for yielding. I understand 
that there was a letter written to the Committee by the 
European Union. Do you have that here? I am trying to get a 
staff to get it for us. Apparently they are claiming that any 
import fee would be in violation of WTO rules. Are any of you 
aware of that issue being raised by the European Union?
    Dr. Gill. I am not aware of that issue.
    Mr. Deal. I think it is a concern that we need to be 
looking at. Dr Crosse?
    Dr. Crosse. No, I am not aware of that issue, either. There 
currently is a registration fee that is being charged to all 
medical device firms.
    Mr. Deal. And I had earlier asked if foreign countries were 
also coming in and charging fees of our manufacturers, and I 
have had several people during the break assure me that they 
are and that the fees that they are charging to American 
manufacturers are significantly more than they are charging to 
their own domestic manufacturers. Hopefully I will have that 
copy of the letter and we will put it in the record perhaps 
before the end of the hearing. I would ask you all if you would 
take a look at that issue. We don't need to do something that 
is going to provoke a WTO fight or retaliation and all the 
things that we know go along with those kind of disputes. If 
there is a way we can achieve our purposes short of that, then 
I would think we would all hopefully work toward that; and I 
would follow up, too, with Mr. Buyer on that line of 
questioning as to your action plan as it relates to the 
statutory language. I have not personally seen any suggested 
language on that. This would be the appropriate place in my 
opinion for us to try to get that statutory authorization that 
you think is appropriate, and I would urge you to make that 
available to us as soon as possible because I assume we are 
going to be marking this bill up some time in the very near 
future in this committee.
    I appreciate the gentleman yielding. Thank you. I will 
yield back.
    Mr. Pallone. The gentlewoman from Illinois, Ms. Schakowsky, 
for questions.
    Ms. Schakowsky. Thank you, Mr. Chairman. Do any of you know 
whether or not balloon catheters are imported ever?
    Dr. Gill. I will check on that and get back to you.
    Dr. Crosse. According to the registration date, certain 
types of balloon catheters used in angioplasty are among the 
top devices imported from foreign countries.
    Ms. Schakowsky. There was a Supreme Court case, Regal v. 
Medtronic, where the Regals sued the medical device company for 
injuries that Mr. Regal sustained when the balloon catheter 
that was used by this physician burst in angioplasty. And the 
Supreme Court ruled in favor of Medtronic and found that FDA 
regulations preempted state civil matters. And my concern is 
this. If we are doing an inadequate job of inspecting, of 
assuring the safety of the devices, and yet any other actions, 
either state actions or court actions, are precluded because 
the FDA is the final authority, then it seems to me that we are 
leaving people without options and at risk, and important 
ability for states and individuals through a private right of 
action that might be an incentive for these products to be 
safer is precluded. So I just wondered if anybody had a comment 
on whether or not the ultimate authority--if consumers can 
really depend now on the FDA to be the ultimate authority on 
the safety of these products.
    Dr. Gill. I don't have any current comment on that. I think 
many of our products of our safe. We do have a reporting system 
that lets us know from all users as well as consumers when 
there are problems with products, and for the most part, we are 
finding devices are safe and we are actively investigating 
those that are not.
    Ms. Schakowsky. Would you argue, Dr. Crosse, that the GAO 
report would endorse that assessment?
    Dr. Crosse. I think we have concerns about the current 
level of oversight that FDA is able to employ, both for medical 
devices and for drugs.
    Ms. Schakowsky. Let me ask about cosmetics. It is my 
understanding, Dr. Sundlof, that in response to an 
Environmental Working Group Petition in 2005 that the FDA 
responded, ``The Food, Drug and Cosmetics Act contains no 
provision that requires demonstration to FDA of the safety of 
ingredients of cosmetic products prior to the marketing of the 
product.'' Is that correct?
    Dr. Sundlof. That is correct. There is no pre-market review 
of cosmetics.
    Ms. Schakowsky. But you do have a requirement that 
manufacturers adequately substantiate their products for 
safety, is that not correct?
    Dr. Sundlof. Yes, that is correct.
    Ms. Schakowsky. Are you able to provide our Subcommittee 
with FDA's definition of safe?
    Dr. Sundlof. I can provide that to you in writing.
    Ms. Schakowsky. My understanding is that there is no FDA 
definition of safe.
    Dr. Sundlof. In the area of cosmetics, I will have to go 
back and look into that. There certainly are definitions of 
safe for foods and medical products.
    Ms. Schakowsky. Check that. I would be interested because I 
have been told that there is no definition for safe for these 
cosmetics. Does the Agency develop guidelines for industry and 
what should be done on their part to substantiate safety?
    Dr. Sundlof. I am sorry, could you repeat that?
    Ms. Schakowsky. Are there guidelines developed by the FDA 
to substantiate safety that manufacturers have to follow?
    Dr. Sundlof. The FDA participates in the international 
community with programs that establish what the criteria are, 
what kind of testing criteria are used to demonstrate certain 
kinds of safety, and those have been in effect for a number of 
years.
    Ms. Schakowsky. And when the companies substantiate their 
products before they are sold, who do they submit the data to, 
the FDA?
    Dr. Sundlof. They are not required to submit data to the 
FDA. If it turns out that there is a safety issue associated 
with a particular cosmetic, the FDA has the authority to 
inspect that facility and determine whether or not the company 
has done an adequate job of demonstrating the safety before 
they entered the product in the market.
    Ms. Schakowsky. Thank you. Mr. Chairman, may I ask one more 
question? It is my understanding that the industry-funded 
safety panel, the Cosmetic Ingredient Review Panel, has only 
reviewed 11 percent of the over 12,000 ingredients in personal 
care products over its 30-year history. So I am concerned that 
this panel might not be up to the job. And in your testimony 
you state that FDA estimates that within their voluntary 
registration system, there is product information from just a 
third of all domestic manufacturers. So what do you think it 
would take to review all ingredients used in personal care 
products, what kind of data does FDA currently have on chemical 
ingredients most commonly used in personal care products, and I 
guess finally, do you think that the work that is being done to 
guarantee safety currently is sufficient?
    Dr. Sundlof. Certainly, the law as it currently is written 
allows virtually anything to be incorporated into cosmetics 
with certain exceptions that are specifically prohibited under 
the Act. The reminder of your questions I think we would need 
to go back and we can provide you with an answer in writing.
    Ms. Schakowsky. I just wondered, Dr. Crosse, if I haven't 
read the whole report, if you deal with that in your report?
    Dr. Crosse. No, I am sorry, we do not look at cosmetics at 
all.
    Ms. Schakowsky. Thank you. Thank you, Mr. Chairman.
    Mr. Pallone. Thank you. And that concludes our questions of 
the first panel. I want to thank you very much for answering 
the questions and for your testimony. As you know, we do intend 
to move toward the marking of this bill at some time in the 
near future. So we will continue to get back to you. Thank you.
    And if the next panel could come forward at this time? 
Well, welcome again. I am going to introduce each of you. 
Starting on my left, some of you, maybe all of you but 
certainly a lot of you have been here before. You are no 
strangers to the Committee. First is Stephen Ubl. Did I 
pronounce it right?
    Mr. Ubl. Ubl.
    Mr. Pallone. Ubl. OK. Stephen Ubl. I have met you many 
times. Stephen Ubl is president and CEO of the Advanced Medical 
Technology Association. And then is Kelvyn Cullimore. He is 
President and CEO of MDMA Secretary. Is that the organization?
    Mr. Cullimore. I am Secretary of the MDMA--
    Mr. Pallone. Oh, I see. You are President and CEO and also 
Secretary of the MDMA of the Dynatronics Corporation.
    Mr. Cullimore. Dynatronics is the company. We are a member 
of MDMA, and I am on the--
    Mr. Pallone. Oh, I see. You are doing both. OK. And then we 
have Ms. Ami Gadhia with the Consumers Union. She is the Policy 
Counsel. She was here recently. And then we have Elisabeth 
George who is Vice-President for Quality and Regulatory Affairs 
at Philips Healthcare, and Pamela Bailey who is President and 
CEO of Personal Care Products Council, and Jane Houlihan who is 
Vice-President for Research of the Environmental Working Group 
here in D.C.
    Thank you all for being here. You know the rules: 5 minutes 
opening statement. They become part of the record, and we may 
submit additional questions in writing that we would ask you to 
get back to us about. And I will start out with Mr. Ubl.
    Mr. Ubl. Thank you.
    Mr. Pallone. Is that on?
    Mr. Ubl. It is on now.
    Mr. Pallone. OK.

   STATEMENT OF STEPHEN J. UBL, PRESIDENT AND CEO, ADVANCED 
                 MEDICAL TECHNOLOGY ASSOCIATION

    Mr. Ubl. Thank you, Mr. Chairman, Ranking Member Deal. I 
appreciate the opportunity to share our views on the discussion 
draft of the FDA Globalization Act of 2008.
    Medical technology is one of the few manufacturing 
industries where there remains a strong, vibrant balance of 
trade. Every day our member companies export more medical 
devices that are imported to the United States. In fact, more 
than three-and-a-half times more exports than imports. In 2007, 
medical device exports were approximately $4.7 billion and 
imports were barely a third of that at $1.5 billion.
    Before I address our specific comments on the discussion 
draft, I would like to first emphasize the broad range of 
medical devices and the risk-based approach currently used by 
the FDA to effectively regulate devices. As you know, FDA 
classifies devices into three risk categories ranging from low-
risk products in Class I to high-risk devices in Class III. 
Since its inception in 1976, the legislative framework, the 
Medical Device Law, has been to regulate based on risk. FDA's 
regulatory regime, whether it is the approval process or 
setting of inspectional priorities, are based on a level of 
risk associated with the device. We believe FDA's risk-based 
approach effectively focuses the Agency and its resources on 
the right areas to ensure public health and safety.
    I would like to now address three primary issues with 
regard to the discussion draft. First, we have concerns with 
the proposed new broad-based industry fee, but we are open to 
exploring a more targeted approach to inspections. Our view is 
that inspections are a core function of the FDA, and funding 
should come from the appropriations process, not industry fees. 
As has been mentioned earlier, last year's FDA Amendments Act 
resulted in a 91 percent increase in industry user fees, 
including the establishment of the first-ever facility 
registration fee. A new, broad-based user fee would impose a 
potentially significant financial burden on top of the 
increased user fees enacted into law last year. We also believe 
there could be unintended consequences with a broad-based user 
fee. Many of our members, particularly small companies, do not 
even have foreign facilities. Yet, through their fees, they 
would effectively subsidize inspections of foreign companies 
exporting their products to the United States. Consider that 
high-risk medical device imports overwhelmingly come from 
countries with established regulatory systems. According to our 
analysis of U.S. Customs data from 2007, 93.7 percent of 
imported medical device implants come from the highly developed 
countries of the European Union, Canada, Australia, and Japan. 
In this category of devices, 0.01 percent come from China. I 
want to emphasize that we are willing to explore a targeted 
funding mechanism for inspections of foreign facilities that 
are located in countries with less developed regulatory systems 
and actually export products to the United States.
    Our second issue is with the proposed pre-approval 
inspection for Class II and Class III devices. As you know, FDA 
already conducts pre-approval inspections of all new Class III 
medical devices. There has been mention with regard to Class II 
devices, there are more than 3,600 approved each year. Simply 
put, the FDA approval process would come to a screeching halt 
if this proposal were implemented. Requiring a pre-approval 
inspection for this number of products before they are 
permitted to be marketed could inhibit the availability of 
lifesaving and life-enhancing devices.
    The third issue is with the catch-up inspections for all 
Class II and Class III facilities. According to the GAO, there 
are 10,600 facilities manufacturing Class II and Class III 
devices. Having FDA inspect all of these facilities within the 
next 2 years is an unrealistic expectation. We support FDA's 
risk-based approach in determining its inspectional priorities. 
Moreover, for the purpose of setting those priorities, the 
recently enacted FDA Amendments Act permits FDA to accept 
submissions from companies of certifications through 
internationally accepted quality system standards set by the 
International Organization for Standardization, or ISO. To 
explain, ISO is an international standard-setting independent 
organization consisting of technical experts including FDA. FDA 
personnel are active participants in the ISO technical 
committees developing these important standards. We support a 
change in law that would go one step further by allowing FDA to 
accept ISO quality system standard as equivalent to FDA's 
current quality systems regulation. Doing so would allow FDA to 
use a company's compliance with the ISO standards in place of 
an FDA inspection. This also would bring FDA into harmonization 
with the internationally recognized and accepted quality 
systems regulations.
    In closing, we support a strong FDA and appreciate the 
Committee's leadership in offering the discussion draft under 
consideration. Our members are committed to providing safe and 
effective products, and we look forward to working with you.
    [The prepared statement of Mr. Ubl follows:]

                      Statement of Stephen J. Ubl

    Good Morning. My name is Stephen J. Ubl. I am President and 
Chief Executive Office of the Advanced Medical Technology 
Association, known as AdvaMed. I am pleased to be here today to 
comment from a medical device perspective on the Committee's 
discussion draft of the FDA Globalization Act of 2008. Thank 
you, Chairman Dingell, Congressman Barton, and other members of 
the Committee for giving us the opportunity to share our views 
on this important topic.
    AdvaMed represents manufacturers of medical devices, 
diagnostic products, and health information systems that are 
transforming health care through earlier disease detection, 
less invasive procedures, and more effective treatments. 
AdvaMed's members produce nearly 90 percent of the health care 
technology purchased annually in the United States and more 
than 50 percent of the health care technology purchased 
annually around the world. AdvaMed members range from the 
smallest to the largest medical technology innovators and 
companies. Nearly 70 percent of our members have fewer than $30 
million in sales annually.

                                Overview

    AdvaMed very much appreciates the Committee's process of 
providing the public with an opportunity to comment on the 
Committee's preliminary thoughts as the Congress considers how 
to address major challenges in our increasingly global economy. 
I would like to begin by making several general points. First, 
our members are committed to assuring that the medical devices 
we manufacture are safe and effective, perform as intended, and 
meet all the rigorous quality system requirements established 
by the FDA.
    Second, we share the Committee's view that a robust and 
effective FDA inspection program is an essential element of 
FDA's regulatory system. We believe that such a program can be 
achieved with a multi-faceted approach by leveraging FDA's 
resources and expanding FDA's existing risk-based analysis 
model that currently guides device facility inspections. We are 
willing to explore ways in which FDA's resources can be 
leveraged with use of third party inspection information and 
mechanisms for financing foreign facilities inspections.
    Third, we share the Committee's goal of increasing funding 
for FDA activities. This is why AdvaMed partnered with you last 
year during the FDA Amendments Act, and why it is a member of 
the Alliance for a Stronger FDA. We look forward to working 
with the Committee on finding innovative ways to assure the 
effectiveness of FDA's inspection regime. However, while we 
understand the goals expressed in the Committee draft, we do 
have a number of concerns about specific provisions and we 
appreciate your interest in our suggestions. Our greatest 
concerns relate to requirements for pre-marketing inspection of 
plants making class II products, use of the two year statutory 
standard rather than a risk-based approach as the guide for 
frequency of FDA inspections of Class II product plants, and 
imposition of a broad-based facility user fee to pay for 
expanded foreign and domestic inspections.
    Fourth, as additional regulatory or cost requirements are 
considered by the Congress, it is important to keep the unique 
story of the industry in mind. Medical devices represent one of 
the few manufacturing industries where there remains a strong 
and vibrant balance of trade. According to 2007 data from the 
International Trade Commission, medical device exports 
approximated $4.7 billion. In contrast, imports were barely 
one-third of that amount, or approximately $1.5 billion. 
According to a 2007 analysis by the Lewin Group, these exports 
supported 357,000 domestic jobs, with average annual wages of 
$45,600, based on 2002 data, versus $40,300 for the average U. 
S. manufacturing job. At the same time, medical device imports 
overwhelmingly come from developed countries with established 
inspection systems. For example, roughly 93.7% of imported 
medical device implants and 97.6% of imported medical device 
instruments and appliances came from the highly developed 
countries of Canada, Australia, the European Union, and Japan. 
In these categories of imported medical devices, only .01% are 
imported from China. This does not mean that inspections of 
foreign facilities should not be increased, but it does mean 
that there is no immediate cause for alarm. Clearly, in a 
global marketplace, significant changes to the cost structure 
of our companies could impact this very positive story for an 
industry in which the United States leads the world.

                          Summary of Concerns

    In order to properly consider changes to the FDA inspection 
process for medical devices, it is important to first 
understand the broad range of medical device products. This 
understanding is important as it logically leads to a view that 
different types of devices warrant various levels of 
regulation. The law currently anticipates these differences 
with respect to, for example, market access.
    The FDA currently classifies devices into three risk based 
categories: I, II, and III. Class I are the lowest risk devices 
such as tongue depressors, bedpans, and bandages. Class II 
devices are moderate risk devices such as contact lenses, 
tracheal tubes, and glucose test meters. Class III are high 
risk devices such as pacemakers, heart valves, and implantable 
cardiodefibrillators.
    There has been no demonstrated public health need for pre-
marketing inspection of facilities making Class II products. 
Implementation of such a system would actually harm the public 
health, by drastically slowing the introduction and 
availability of improved medical devices. FDA currently 
conducts pre-approval inspection of approximately 50 class III 
devices a year, and pre-approval inspection is appropriate for 
these high risk devices. Requiring FDA to conduct pre-approval 
inspections of the 3,600 plus class II devices that are 
approved every year would bring the approval process to a 
grinding halt. Appropriately, FDA inspects facilities that make 
class II products on a risk-based schedule.
    While we understand that the goals outlined in the draft 
will require a significant increase in FDA's ability to gather 
inspections data, imposition of a broad-based user fee to pay 
for inspections would represent a serious departure from the 
principles that have governed device user fees. User fees were 
assessed under MDUFMA and FDAAA, based on negotiations between 
FDA and industry and approved by the Congress. These fees are 
used to finance improvements in the device approval process 
that benefit both industry and the public. Establishing a user 
fee to finance domestic inspections would transfer financial 
responsibility from the appropriations process to industry for 
what has rightfully been a public function. The industry just 
negotiated a new user fee agreement with the FDA and the 
Congress last year that have raised total fees by 91% and 
established a facility registration fee for the first time. An 
important premise of that negotiation was that user fees would 
remain stable for the 5-year life of the reauthorization. Under 
these circumstances, the industry would find it difficult to 
bear the increased burden of a new broad-based user fee 
program--particularly one that shifts the financing of public 
functions to its shoulders.
    In addition, a proposal to assess a broad-based user fee to 
fund an inspection program would raise a number of questions 
for our member companies:
    1. The costs of inspection would certainly vary 
significantly for a domestic facility versus a foreign facility 
in a developed country versus the cost of inspection in a less 
developed country. Is it fair to charge one price for these 
different facilities and potentially have domestic companies 
subsidizing the costs of inspections for foreign facilities?
    2. What guarantees would there be that the fees be additive 
to FDA's current or future level of appropriated funds, rather 
than financing, in part or in whole, the current level of 
effort supported by general treasury funds? And what assurance 
is there that this change in the philosophy of user fees to 
support the device center would not, in tight budget times, be 
used to shift more and more of the burden of financing the 
center to industry?
    3. How would fees for FDA inspections interact with the 
existing third party inspection program for medical devices?

                          Additional Comments

    The proposed pre-inspection requirement for all class II 
devices. Section 202 of the discussion draft calls for a new 
FDA inspection requirement for all class II medical devices. 
FDA already conducts such inspections for class III products. 
Under this proposal, an FDA inspection would be required prior 
to the distribution of all new products, and FDA would have 
just 2 years to inspect all facilities marketing such products 
today. This new requirement is not justified on public health 
and safety grounds, would be impractical to implement, and is 
premature, given the potential benefits of the third-party 
inspection program just streamlined through the FDAAA.
    Since its inception in 1976, the legislative framework of 
the medical device law has always been to regulate based on 
risk. This risk-based philosophy is embedded within the three 
classes of medical devices and particularly in the very 
different risk profiles of class II and class III medical 
devices. FDA already routinely conducts pre-approval 
inspections of new class III medical devices, but rightfully 
inspects facilities that make class II products on a risk-based 
schedule. If the current provisions of the draft bill were to 
be implemented, it would inevitably delay the availability to 
patients of thousands of new safe and effective therapeutic and 
diagnostic medical device products. To appreciate the order of 
magnitude involved, FDA currently conducts pre-approval 
inspections for about 50 class III devices approved annually, 
but more than three thousand six hundred class II devices are 
approved each year.
    Moreover, the ``catch-up'' requirement for FDA to go back 
and inspect the thousands of current class II facilities is 
also simply not feasible. The mere process of hiring, training, 
and deploying new inspectors could not realistically be 
accomplished during that time.
    Should more inspections of domestic medical device 
facilities be needed, one approach would be for FDA to fully 
implement the third-party inspection provisions of the FDAAA. 
Although Congress first authorized FDA accredited third parties 
to conduct inspections of medical device establishments in the 
original MDUFMA legislation in 2002, legislative changes were 
needed and instituted in 2007 to make that process more 
attractive and feasible from both an agency and industry 
standpoint. We are hopeful that this program will free up 
significant FDA resources.
    Finally, we do not believe that the case has been made for 
an exponential increase in FDA inspections of domestic medical 
device facilities, such as the discussion draft envisions. 
There should be a well-documented public health and safety 
benefit from this expenditure of resources. It would be a more 
prudent course of action, as described further below, for 
Congress to allow the opportunity for the third-party 
inspection process that was streamlined in the FDAAA to work. 
As with many other times when Congress considers new 
legislation, we ask that any legislation addressing medical 
devices be geared specifically and uniquely to the existing 
legal and factual circumstances surrounding medical devices and 
that medical devices not be swept in with pharmaceutical and 
other products regulated by FDA.

                             Importer fees

    We believe the annual fee of $10,000 per importer may 
violate World Trade Organization (WTO) rules and respectfully 
suggest that the Committee examine this issue carefully before 
moving forward.

            ``Country-of-Manufacture'' labeling requirement

    We believe additional legislation is unnecessary and 
potentially counterproductive due to existing rules under U.S. 
Customs law. Under existing Customs law, any company that 
imports products, including medical devices, is already 
required to disclose the country of origin on shipping cartons, 
individual packaging, and, in some cases, the product itself. 
There are already sanctions in place for violating the Customs 
law, including both civil and criminal sanctions. See, e.g. 19 
U.S.C. Section 1304(h) and (k), Section 1592(a) and Section 
1595a.
    The Customs ``Country of Origin'' marking requirement 
focuses on the individual unit so that the ultimate purchaser 
or user of the device can be informed of the country of origin. 
In addition, the entry documents for imported products state 
the country of origin. Therefore, an amendment to the Federal 
Food, Drug, and Cosmetic Act (FD&C Act) that requires device 
products to identify ``country of manufacture,'' as proposed by 
section 206 of the discussion draft, would be duplicative, 
costly, and potentially confusing if the regulations 
promulgated by FDA under a new FD&C Act mandate differ in any 
way from the standards used under Customs rules.

                       Unique facility identifier

    We do not believe there is a need for additional 
legislation on this subject. FDA already assigns a unique 
identification number as part of its mandatory registration 
process for all establishments involved in the production and 
distribution of medical devices intended for commercial 
distribution in the United States when those facilities 
register with the FDA. This process provides FDA with the 
location of medical device manufacturing facilities and 
importers. To the extent that Congress wishes to authorize FDA 
to use the facility registration numbers for ``purposes other 
than for registration,'' as provided in the discussion draft, 
FDA also does that currently. For example, FDA already requires 
a medical device company to include its unique facility 
registration number on the Premarket Review Submission Cover 
Sheet, when being submitted to FDA's Center for Devices and 
Radiological Health (CDRH), to identify where the product will 
be manufactured.

                               Conclusion

    AdvaMed appreciates the opportunity to share its views with 
the Committee on the discussion draft of the FDA Globalization 
Act of 2008. We share your goal of an effective, risk-based 
inspection system that applies to both foreign and domestic 
manufacturers and is adequately funded. As I have outlined in 
my testimony, we have a number of concerns about specific 
provisions of the bill, and serious questions about the concept 
of a broad-based user fee to fund inspection activities. 
However, we share the overarching goals of the Committee as it 
pertains to safety in the global supply chain, and look forward 
to working with the Committee to achieve them.
                              ----------                              

    Mr. Pallone. Thank you, Mr. Ubl. Mr. Cullimore?
    Mr. Cullimore. Thank you.
    Mr. Pallone. Mr. Cullimore, let me just say, I just wanted 
to make it clear for the record that you are the President and 
CEO of Dynatronics Corporation, but you are the Secretary of 
MDMA, which is the Medical and Devices Manufacturing 
Association.
    Mr. Cullimore. Thank you.
    Mr. Pallone. Did I get that right?
    Mr. Cullimore. Thank you for that verification. Our 
President got very nervous when you made that announcement.
    Mr. Pallone. OK.

    STATEMENT OF KELVYN CULLIMORE, JR., PRESIDENT AND CEO, 
    DYNATRONICS CORPORATION; SECRETARY, MEDICAL AND DEVICES 
                   MANUFACTURING ASSOCIATION

    Mr. Cullimore. Chairman Pallone and Ranking Member Deal, 
thank you for having me here today to testify. Many of my 
comments echo those of Mr. Ubl. We appreciate the opportunity 
to comment on this draft legislation. We recognize and 
acknowledge the sincerity of concerns that motivate this 
legislation, and we really do support additional appropriations 
for FDA to accomplish their assigned mission. But I would like 
to spend my 5 minutes focusing on a few concerns about the 
draft legislation. As was mentioned, my name is Kelvyn 
Cullimore, and I am the President and Chief Executive Officer 
of Dynatronics Corporation which is a small publicly traded 
medical device company headquartered in Cottonwood Heights, 
Utah. We also have manufacturing facilities in Tennessee.
    Today I am here to testify on behalf of the MDMA, Medical 
and Devices Manufacturing Association, which is a national 
organization of more than 180 member companies representing the 
innovative, entrepreneurial sector of the medical technology 
industry. MDMA's mission is to ensure that patients have access 
to the latest advancements in medical technology, most of which 
are developed by small research-driven medical device 
companies. MDMA was actually founded in 1992 to oppose attempts 
by Congress and large manufacturers to institute a device user 
fee program. While MDMA recognizes the appropriate role of 
government in regulating the industry, the Association believed 
that the government should fund such regulation through 
appropriations, not user fees. However, in 2002, as we know, 
MDUFMA I was passed and it established user fees. While MDUFMA 
I did include important provisions to ensure that smaller 
companies received fee relief, it did start the slippery slope 
of government reliance on industry fees.
    In 2007, this Committee led efforts to reauthorize the user 
fee program for an additional 5 years. The result was fees paid 
by industry almost doubled from $150 million under MDUFMA I to 
$300 million under MDUFMA II. The reauthorization also expanded 
fees beyond just device applications to include annual 
registration fees of $1,700 applicable to every registered 
manufacturer and fees for filing of annual reports. If we 
continue to add more and more fees, it will create a 
significant financial burden for the majority of small medical 
device companies that could literally mean the difference 
between success and failure to those companies.
    In light of the doubling of the medical device user fees 
under MDUFMA reauthorization last year, the current draft 
legislation's proposal to seek even more fees from industry is 
very alarming. While these fees may not be viewed as a hardship 
for multi-billion dollar drug and device companies, I can say 
for certain that it will be a hardship for the thousands of 
small medical device companies in this country which are 
responsible for much of the medical device innovation. Levying 
additional fees will further erode R&D budgets and have a 
serious detrimental effect on the operation and sustainability 
of these small companies.
    Enhancing FDA's stewardship and oversight of importation of 
regulated products is a worthy pursuit, but such efforts that 
benefit the public at large should be funded from congressional 
appropriations, not additional user fees, particularly given 
that proposed paradigm that requires domestic and non-importing 
manufacturers to subsidize such efforts. When I testified 
before this committee last year, concerns were raised about FDA 
becoming too reliant on industry user fees for funding. I 
shared these concerns and strongly advocate for additional 
congressional appropriations to fund this proposed legislation.
    I would like to take a moment to discuss the bill's 
provisions dealing with inspections. Congress and FDA have 
recognized the importance of establishing risk-based 
classifications for medical devices based upon the level of FDA 
control necessary to establish and assure the safety and 
effectiveness of the medical device. However, Section 202 of 
the draft legislation ignores the important distinction between 
Class II and III medical devices and proposes to subject all of 
these medical devices to equal, pre-approval, and pre-clearance 
inspection regardless of risk. The proposed Section 202 appears 
to require FDA to conduct pre-clearance inspections of all 
510(k) pre-market notifications. Such a requirement would 
create a logistical nightmare for FDA and would effectively 
impose additional indeterminate delays on the applicant while 
awaiting for an FDA inspection, regardless of whether FDA 
determines that such a pre-clearance inspection was necessary. 
It could also result in manufacturers being inspected multiple 
times per year. Adding an additional waiting period for an FDA 
pre-clearance inspection would result in unacceptable and 
unnecessary delays for both patients and manufacturers, not to 
mention the untold pressure on FDA resources to conduct 
thousands of additional inspections each year.
    Finally, let me briefly address the issue of the proposed 
civil monetary penalties outlined in the draft bill. In 
particular, as currently drafted, Section 210 could be read as 
mandating the imposition of penalties for any violation. This 
section would appear to impose penalties on situations where 
FDA and manufacturers have historically worked cooperatively to 
remedy minor and technical violations. The legislation should 
permit FDA the flexibility and discretion to determine when 
civil penalties should be imposed and should specifically 
clarify that penalties would not be imposed for violations that 
can be addressed by the cooperative efforts of FDA and the 
industry.
    Thank you for providing me with the opportunity to testify 
today before the Committee. We look forward to working with you 
and your staff to improve the current FDA inspection process in 
an efficient and effective manner.
    [The prepared statement of Mr. Cullimore, Jr., follows:]

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    Mr. Pallone. Thank you, Mr. Cullimore. Ms. Gadhia?

    STATEMENT OF AMI GADHIA, POLICY COUNSEL, CONSUMERS UNION

    Ms. Gadhia. Good afternoon, Subcommittee Chairman Pallone, 
Ranking Member Deal, and members of the Subcommittee. My name 
is Ami Gadhia and I am Policy Counsel with Consumers Union, the 
non-profit publisher of Consumer Reports Magazine.
    I am here today to testify about the medical device and 
cosmetic safety provisions of the discussion draft of the FDA 
Globalization Act. Consumers Union applauds Chairman Dingell 
for his leadership on the proposed legislation and commends 
members of the Energy and Commerce Committee for holding 
today's hearing on this critical consumer safety issue.
    Some of the more high-profile failures of our medical 
device and cosmetics regulatory system are well-known at this 
point. The 2006 recall of 183,000 packages of contact lens 
solution manufactured in China because of bacterial 
contamination and the June 2007 import alert about toothpaste 
made in China that contains the very dangerous chemical, 
diethylene glycol, which is used in antifreeze and as a 
solvent. Other frightening stories of recalls of medical 
devices include balloon catheters that failed to deflate and 
cause a heart attack and heparin lock flush syringes that were 
contaminated with bacteria.
    FDA is charged with overseeing these products, but due to a 
lack of resources and political will, the Agency has dropped 
the ball. There have not been enough inspections, enough 
authority, or enough enforcement of existing regulations, and 
consumers are paying the price.
    Consumers Union believes that the discussion draft of the 
FDA Globalization bill contains a number of strong provisions 
that will help make consumers safer. With regards to medical 
devices, CU supports the provisions of the bill that would 
require mandatory inspection of both domestic and foreign 
medical device facilities every 2 years. This inspection 
provision, if implemented with protections against conflicts of 
interest, should help improve compliance with existing FDA 
safety regulations. We would respectfully recommend that this 
inspection occur annually and more often if there are problems, 
given the host of serious public health risks that have emerged 
from foreign facilities in particular.
    With regards to cosmetics, CU is in support of the 
provisions addressed in the FDA's Cosmetic Adverse Event 
Reporting System, CAERS. In addition to mandatory reporting of 
adverse events by manufacturers, it is important that FDA's 
processing and publicizing of these events occurs in a timely 
manner.
    With regards to both device and cosmetic safety, we are 
pleased that under the draft legislation FDA would track all 
registered establishments and, at least with regards to medical 
devices, have a firm number of establishments subject to 
inspection. Currently, the number of establishments the FDA 
should be inspecting is a ballpark figure with many 
establishments completely off FDA's radar.
    The discussion draft would require destruction of 
adulterated, misbranded, or counterfeit drugs that a company 
attempts to import into the United States. However, a similar 
safeguard does not exist for unsafe medical devices, and we 
would recommend that it be added. We also support the 
provisions in the bill creating a fee requirement for importers 
of cosmetics. It is not sufficient for FDA's inspection 
resources to stay at their current extremely inadequate level 
with regard to imported cosmetics. This importer fee 
requirement is one step toward addressing this problem.
    There are, however, some provisions in the discussion draft 
affecting both medical devices and cosmetics that Consumers 
Union would encourage the Committee to consider strengthening. 
We would recommend shortening the timeframes for 
implementation. It appears that the effective dates of a number 
of the bill's provisions are too far out into the future, 
sometimes 2 or 3 years out. These should be shortened.
    We support the provision creating a user fee schedule for 
various new FDA functions. However, we urge the Committee to 
ensure that the user fees do not turn into a pay-for-play 
scenario. We would not want to see regulated entities have the 
ability to exert undue influence over the FDA in its decision-
making or other functions.
    In addition, like the user fees for food safety 
importation, the fees pertaining to device and cosmetic safety 
should be indexed for inflation.
    Consumers Union also believes that the monetary civil 
penalties for violations of the medical device protections in 
the bill are set too low. For a large manufacturer, producer, 
or other multi-national, a penalty of $100,000 is simply a cost 
of doing business or a few hours' worth of profit. For the 
penalties to serve as a true deterrent against illegal actions, 
they should be set higher.
    FDA must also have the ability to perform unannounced 
inspections of foreign facilities. Because of advanced warning, 
these foreign manufacturers, unlike domestic companies, are 
able to clean up to ensure that they pass inspection, even if 
they are out of compliance every other day of the year. In 
addition, any provisions in the final bill that permit FDA to 
outsource any agency task to a third party should include 
protections against such tasks being performed by entities with 
a conflict of interest.
    We have a number of other concerns and recommendations 
about the draft bill that we would also like to bring to the 
Committee's attention. These particular concerns are presented 
in detail in my written testimony.
    We wholeheartedly support providing FDA with new authority 
and resources. We are pleased that this discussion draft gives 
FDA a number of new and very necessary powers to better ensure 
the safety of our medical devices and cosmetics. We also urge 
that manufacturers and others who profit from the sale of 
medical devices and cosmetics to American consumers fairly 
shoulder their full responsibility for improving the safety and 
quality of the products that they sell.
    I thank the Committee for the opportunity to testify today, 
and we at Consumers Union look forward to looking with the 
Committee to help move forward on the strongest FDA reform bill 
possible.
    [The prepared statement of Ms. Gadhia follows:]

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    Mr. Pallone. Thank you again. Ms. George?

  STATEMENT OF ELISABETH GEORGE, VICE PRESIDENT, QUALITY AND 
             REGULATORY AFFAIRS, PHILIPS HEALTHCARE

    Ms. George. Mr. Chairman, Ranking Member Deal, and members 
of the Committee, thank you for the opportunity to testify 
today. My name is Elisabeth George, Vice President of Quality, 
Regulatory, Sustainability, and Product Security at Philips 
Healthcare. I am testifying today on behalf of Medical Imaging 
and Technology Alliance, MITA, where I serve as a member of the 
board of directors.
    MITA understands and has a record of supporting the 
Committee's desire to ensure that FDA is well-funded and that 
medical devices imported into the United States are safe for 
U.S. patients.
    MITA is the collective voice of medical imaging equipment 
manufacturers, innovators, and product developers whose sales 
comprise more than 95 percent of the global market. Medical 
imaging encompasses X-ray, CT scans, radiation therapy, 
ultrasound, PET, and MRI. Our members make the products that 
detect and treat serious illnesses such as heart disease, 
cancer, stroke, and osteoporosis. The equipment our member 
companies manufacture empowers doctors and medical 
professionals to view the human body with stunning and ever-
increasing clarity and accuracy. This enables better diagnosis 
and more effective medical care for patients, often reducing 
the need for costly medical services and evasive surgical 
procedures. In fact, it is not an exaggeration at all to say 
the term exploratory surgery will become obsolete in medicine 
due to the power of medical imaging.
    The medical imaging industry is a net exporter economic 
engine and employs tens of thousands of skilled workers here in 
the United States. The research and development that led to the 
innovative technologies were invented right here in communities 
across America.
    As we continue working together to reduce healthcare 
spending, improve patient care and outcomes, MITA appreciates 
the support from leadership and members of this committee to 
protect medical imaging from further Medicare reimbursement 
cuts. We understand that there are significant concerns about 
drug ingredients and food that have been imported from foreign 
countries. However, we believe the device industry, a highly 
regulated industry globally, is vastly different. Medical 
devices are classified into Class I, II, and III based on the 
level of risk. Medical imaging devices are Class II. Our 
members' foreign and domestic facilities are subject to 
international quality and safety inspections at least annually 
as a part of the International Standards Organization, ISO 
13485 standard. This inspection is virtually identical to the 
FDA quality system regulation system inspections. Meeting the 
ISO 13485 standard is a requirement for medical imaging 
manufacturers in 47 countries. MITA believes that the FDA 
should avail itself of valuable information gained from these 
inspections that are required by every other industrialized 
nation.
    I would like to turn to the discussion draft before us 
today. We believe the discussion draft places new unnecessary 
regulatory burdens on our products without taking into account 
the unique nature of how our devices are manufactured and 
extensively regulated. For example, the draft would require an 
FDA inspection for nearly every modification of the device. 
MITA believes this inspection requirement unduly stalls 
delivery of improved technology that benefits patients. On 
average, each medical imaging device is updated with improved 
technology once every 18 months. For example, a manufacturer 
may submit a device change to the FDA based on the fact that we 
can image another part of the body, we have updated the 
software, or added new functionality. These updates do not 
warrant a new facility inspection which will halt production of 
already-approved products until an FDA inspector completes the 
new assessment.
    Secondly, we are concerned that requiring registration and 
inspection of component parts may be duplicative and imprudent. 
Medical imaging devices are inspected and approved by the FDA 
as finished products. Components, including screws, circuit 
boards, monitors, and so forth, must work correctly for the 
device to function properly.
    Finally, we believe significant new fees are duplicative 
and are unnecessary. Last year, FDAA Act, the industry agreed 
to a 90 percent increase in user fees in order to provide 
stability to the Agency and ensure the life-saving medical 
devices would proceed to market. Medical device manufacturers 
currently pay fees for ISO inspections as well as for FDA-
mandated facility registration fees. However, the draft 
includes additional annual facility registration and importer 
fees. These new fees unfairly burden domestic medical imaging 
manufacturers. MITA understands the need to fund the FDA, but 
any fees should be targeted at funding the actual inspection of 
the foreign facilities.
    In conclusion, medical imaging has become integral to best 
practices across so many disease states and plays a critical 
role in providing high-quality patient care. It is critical 
that patients have access to innovative medical imaging 
technology to help fight serious illnesses.
    Again, thank you for the opportunity to testify at today's 
hearing, and I welcome your questions later.
    [The prepared statement of Ms. George follows:]

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    Mr. Pallone. Thank you. Ms. Bailey?

 STATEMENT OF PAMELA BAILEY, PRESIDENT AND CEO, PERSONAL CARE 
                        PRODUCTS COUNCIL

    Ms. Bailey. Thank you, Chairman Pallone, Ranking Member 
Deal. I am pleased to be able to testify today on behalf of the 
Personal Care Products Council and to discuss the longstanding 
safety record of our personal care products companies.
    The Council is the leading national trade association 
representing the global cosmetic and personal care products 
industry, and our 600-member companies are the manufacturers, 
suppliers, and distributors of the vast majority of finished 
personal care products marketed in the United States.
    We would like to state up front that we appreciate and 
support the goal of this Committee in the cosmetic section in 
the pending legislation to ensure the FDA has the authority to 
provide strong oversight so that American consumers can be 
assured that imported products are safe. I also appreciate the 
opportunity today to provide additional information to the 
Committee on the existing nature of the regulatory framework 
governing personal care products.
    Consumer safety has always been the number one priority of 
our companies. Under the Federal Food, Drug, and Cosmetic Act, 
it is a crime to market an unsafe cosmetic product in the 
United States. Cosmetic products imported into the United 
States are subject to the same substantive standards as those 
produced in the United States and face an even higher 
regulatory threshold upon entry in that an appearance of 
adulteration or misbranding may subject them to detention at 
the border. They must be safe and contain no prohibitive 
ingredients, and all labeling and packaging must be in 
compliance with U.S. regulations.
    In addition, all colors must be listed and are pre-approved 
by FDA, and a number of color additives in addition must be 
pre-approved, batch tested, before they can be added to a 
personal care product either within the United States or 
outside.
    In addition, if a product contains an active ingredient 
that qualifies it for regulation under our OTC drug rules, then 
they are subjected to the stricter drug review standards that 
govern drugs in the U.S. What this means, Mr. Chairman, is that 
if a product is a sunscreen, an antiperspirant, and a dandruff 
shampoo, toothpaste, mouthwash, it must go through the pre-
approval standards of the OTC program. In addition, any colors 
added to products must be pre-approved. So a product as simple 
as a lipstick that has SPF in it will be subject to pre-
approval standards both for the colors and for the SPF.
    Product safety in a global marketplace is not only a matter 
of law for our members, it is the primary commitment for each 
of them and for our Association. For 40 years our companies 
have invested millions of dollars through our trade association 
in safety programs to enhance the regulatory responsibilities 
at FDA including our consumer commitment code, the Cosmetic 
Ingredient Review Panel, our FDA Company Registration Program, 
the International Cosmetic Ingredient Dictionary, our consumer 
information Web site, and our Import Safety Committee. The 
result of these safety practices and initiatives, cosmetics and 
personal care products are the safest category of products 
regulated by FDA. This means, for example, that of the 11 
billion individual personal care products sold in the United 
State each year, less than 200 instances of product adverse 
events are reported to FDA. It means that between the years of 
2000 and 2005 of the warning letters issued by CFSAN, some 
1,400 of them related to food and only three related to 
cosmetics.
    We recognize that ours is now a global industry and that 
our products and our ingredients are manufactured and sourced 
throughout the world. We agree with the Committee that FDA 
needs basic information about the safety of products and where 
and how they are manufactured. That is why three years ago, 
when we wrote our Consumer Commitment Code, we required member 
companies signing the code to register their cosmetic 
facilities with FDA and to report serious and unexpected 
adverse events to FDA.
    We are proud that in the first 16 months of its 
implementation, 80 percent of all U.S. annual sales are covered 
by our board member companies who have certified to the code 
and are registered with FDA and have agreed to report their 
adverse events to FDA. We are proud that our industry helped 
craft global manufacturing standards and have worked with 
international regulatory agencies to encourage each nation to 
adopt those G&P standards, and we have encouraged FDA to issue 
guidance incorporating ISO G&P standards into current practice 
in the United States.
    The Committee and the draft bill challenge us to take the 
next step. Exactly how that is done is important. We have been 
working with the bipartisan staff to provide technical details 
on the draft's regulatory provisions, and we appreciate the 
opportunity to continue those discussions.
    We believe the most effective way to enhance cosmetic 
safety is to provide additional resources to FDA. The budget 
for FDA for cosmetics in 1974 was $2.7 million. In real dollar 
terms, that would be $14.5 million today. In reality, it was 
$3.5 million last year before we successfully lobbied for an 
additional $1 million in appropriations. We are going to 
continue those efforts and urge the Committee to support 
additional appropriations.
    Mr. Chairman, I want to close with a note on the 
registration and import fees. Our industry has never been 
subject to fees. This is a topic of significant discussion. We 
are continuing to discuss that. We are going to continue to 
discuss it with the Committee, but we are going to need more 
time on that and other issues.
    In conclusion, we want to thank the Committee for the 
opportunity to work on this legislation. Our industry has 
always put safety first. We have always been aware of the 
necessity to take additional steps whenever that may be, and we 
look forward to discussing with the Committee the most 
effective way to take the next steps so that we can continue to 
ensure the American consumer that our products are safe. Thank 
you.
    [The prepared statement of Ms. Bailey follows:]

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    Mr. Pallone. Thank you very much. Ms. Houlihan?

   STATEMENT OF JANE HOULIHAN, VICE PRESIDENT FOR RESEARCH, 
                  ENVIRONMENTAL WORKING GROUP

    Ms. Houlihan. Chairman Pallone and Ranking Member Deal, 
thank you for the opportunity to testify. My name is Jane 
Houlihan. I am Vice-President for Research at the Environmental 
Working Group. We are a non-profit research and advocacy 
organization based in Washington, D.C. We appreciate the 
interest of the Committee in addressing the regulation of 
cosmetics for the first time in a long time.
    Cosmetics, or personal care products, are essentially 
unregulated under the Federal Food, Drug, and Cosmetics Act. 
FDA can't require companies to test products and can't review 
or approve products or ingredients before they are sold. FDA 
can't require product recalls. They must go to court to remove 
misbranded and adulterated products from the market. FDA can't 
require manufacturers to register cosmetic establishments, file 
data on ingredients, or report cosmetic-related injuries. 
Instead, they rely on voluntary reporting for this data. And in 
the absence of government authority, the safety of personal 
care product ingredients is evaluated through a voluntary 
industry program, the Cosmetic Ingredient Review.
    This absence of accountability to a responsible government 
agency has created a culture of ignorance. Far too little is 
known about ingredient safety, and the FDA and industry 
maintain that everything is safe, even without full knowledge.
    In the committee discussion draft, you are taking vital 
steps that we support to close some of these gaps requiring 
that companies register and report their facilities, products, 
ingredients, and cosmetic-related injuries to the FDA and 
follow good manufacturing practices.
    We look forward to working with you on additional efforts 
as well. I want to tell you about seven major gaps in cosmetics 
safety that show why it is important to act.
    First of all, the vast majority of ingredients have not 
been assessed for safety by any publicly accountable body. 
Through three decades, the CIR has reviewed only 11 percent of 
ingredients in products, and at this pace, it will require 
another two-and-a-half centuries to complete reviews for all 
ingredients.
    Second, companies are free to use almost any ingredient 
they choose in personal care products. FDA has prohibited or 
restricted only nine ingredients in personal care products. In 
contrast, 244 ingredients are restricted and prohibited in 
Japan, more than 600 in Canada, more than 1,100 in the E.U.
    The third major gap in cosmetic safety, these ingredients 
can penetrate the skin, they can pose health risks, 
particularly for children. Americans use an average of nine 
products every day with 126 unique ingredients. Cosmetic 
ingredients are found in blood, urine, breast milk, even in 
breast tumor tissue. These ingredients are linked to birth 
defects, allergies, thyroid problems and more. And children are 
particularly at risk. Their skin is thinner than an adult's, 
their exposures are higher, their bodies are more vulnerable.
    The fourth gap in cosmetic safety, despite these potential 
health risks, the FDA doesn't even know how many ingredients 
are used in cosmetics. They have records of 4,100 product 
ingredients. We found an additional 5,000 ingredients not on 
record at FDA at all in our survey of products on the market.
    The fifth major gap in cosmetic safety, FDA doesn't know 
where and how many companies make and distribute personal care 
products. Facility inspections are FDA's primary enforcement 
tool for overseeing this industry according to GAO, and yet, 
FDA doesn't even know where all these facilities are and they 
can't mandate registration.
    The sixth major gap in cosmetic safety is that FDA doesn't 
know the extent of health impacts from harmful ingredients in 
cosmetics. Companies aren't required to report adverse events, 
and companies that have experienced major problems may be least 
likely to report them voluntarily.
    The seventh gap in cosmetic safety, consumers' right to 
know, is hampered by lack of standards and labeling loopholes. 
Not all ingredients appear on labels, like ingredients in 
fragrance; and companies can use terms like natural and 
hypoallergenic to mean anything or nothing at all. More than a 
third of all children's products marked as natural in fact 
contain artificial preservatives linked to allergic reactions 
and nervous system problems.
    We support the Committee's discussion draft with mandatory 
reporting and manufacturing standards, but we also support 
safety standards for cosmetics and enforcement authority for 
FDA. These should be brought up to par with FDA's authority 
over pesticides and food and color additives which meet a 
safety standard under the Act. Cosmetic ingredients are found 
in cord blood, they pollute the bodies of almost everyone in 
the population, and they should be as safe as pesticides, food, 
and color additives. FDA needs the mandate to ensure that 
ingredients are safe and the authority to demand the study it 
needs to make this finding.
    Thank you very much.
    [The prepared statement of Ms. Houlihan follows:]

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    Mr. Pallone. Thank you, Ms. Houlihan. OK. We will have some 
questions from the members, and I will start out with myself.
    I wanted to first ask some questions relative to cosmetics, 
and I will start with Ms. Bailey. You mentioned the Cosmetic 
Industry Review, CIR. Actually, several of you mentioned it, 
but you mentioned it in your testimony. Can you elaborate a bit 
on this CIR? For example, how is the panel determined? How are 
the conflict-of-interest considerations made? How are decisions 
disseminated?
    Ms. Bailey. Sure. Thank you, Mr. Chairman. The panel was 
set up in 1976, and at that time it was designed to mirror the 
same standards supplied for OTC drug reviews at FDA. In fact, 
my understanding is it was set up by the industry because the 
FDA did not then have the resources to do it itself. The 
conflict of interest standards are indeed as strict if not 
stricter. Nobody on the expert panel can have any tie 
whatsoever to the industry. The panelists are all chosen by 
existing panelists. The Chair, Dr. Wilma Bergfeld, is 
considered first lady, if you will, of dermatology and chairs 
the Department of Dermatology at the Cleveland Clinic.
    Mr. Pallone. OK. I am still with you, Ms. Bailey. Now, Ms. 
Houlihan mentioned the CIR as well and also noted that they 
have identified 9 unsafe ingredients that are actually 
different from the 9 or 10 unsafe ingredients that the FDA has 
identified. What has been the response from the cosmetic 
industry in reaction to those restriction recommendations, both 
from the CIR as well as the FDA, and are those ingredients 
found in products on the market today?
    Ms. Bailey. I am sorry, are those ingredients found--
    Mr. Pallone. Found on the market today in products that are 
on the market today?
    Ms. Bailey. An ingredient that is unsafe, Mr. Chairman, 
should not be in any cosmetic product because the company 
cannot substantiate the safety of it. So the ingredients FDA 
has found to be unsafe should not be in any product, nor should 
the ones CIR has deemed unsafe.
    Mr. Pallone. OK. Did Ms. Gadhia or Ms. Houlihan, do you 
want to add anything to what Ms. Bailey said or comment 
further? Go ahead.
    Ms. Houlihan. I would say that one shortcoming of the CIR 
process is that it is dominated by dermatologists who are 
primarily interested in allergic reactions and irritations with 
ingredients, and that means that a huge wealth of health 
impacts doesn't get proper consideration by that panel. And it 
is one reason, in addition to many others, that we feel like 
the authority for assessing ingredient safety needs to be 
mandatory, needs to belong with FDA so we have a consistent, 
national standard, an FDA authority over cosmetic safety.
    Mr. Pallone. Did you want to add anything, Ms. Gadhia?
    Ms. Gadhia. I would concur with what Ms. Houlihan said. The 
only thing I would add is that there is only one dedicated 
consumer representative on CIR representing that standpoint.
    Mr. Pallone. All right. Let me ask Ms. Houlihan, do you 
think the provisions included in our discussion draft will 
assist the FDA in regulating the cosmetic industry which is 
growing rapidly?
    Ms. Houlihan. I do and we support the provisions in the 
discussion draft that would make mandatory the registration of 
facilities, ingredients, products, and adverse effects. I think 
it is a great first step to get FDA that very basic data that 
it needs to determine the range of unsafe products that might 
be on the market and take action.
    Mr. Pallone. With regard to ingredients, how many 
ingredients do you estimate are currently being used in 
cosmetic products, currently being used by American consumers? 
In other words, of those ingredients, how many would you say 
have been tested by FDA or other independent bodies for their 
safety?
    Ms. Houlihan. There is no mandatory reporting of 
ingredients to FDA, so it is not known the full range of 
ingredients that are on the market. FDA has estimated 12,500, 
but cosmetic industry officials have estimated it is only 
between 2,000 and 4,000. When we surveyed products on the 
market, we found 8,800 unique ingredients. It is an open 
question, and it is one reason that mandatory ingredient 
reporting needs to happen so that FDA has an understanding of 
what is on the market. We do know that of the estimated 12,500 
ingredients that FDA thinks are on the market, the industry has 
reviewed only about 1,400 or 11 percent.
    Mr. Pallone. OK. I wanted to get one more thing in but--
that is all right. Go ahead, and then I will ask the other.
    Ms. Bailey. Thank you, Mr. Chairman. The number 12,500 
indeed refers to the number that the discreet ingredient names 
that are listed in the cosmetic dictionary that we in fact 
publish. Not all of those ingredients are used in cosmetic 
products. By our count, 5,500 ingredients are commonly used in 
U.S. products. Of them, some 3,000 are ingredients such as 
botanicals. They would not reach the threshold of risk for the 
full peer-reviewed study. That leaves 2,500. By the end of this 
year, 2008, CIR will have reviewed 2,000. They are chosen by 
level of risk and complexity and by use on the common use. So 
that would leave some 500 that would be of lower risk, and CIR 
as I understand it is now reviewing how the best way would be 
to review those ingredients. But they are now reviewing them at 
the rate of 200 a year. If I could add, the issue of how many 
ingredients and what is commonly in use is also a reflection of 
the database problem that FDA has because until 2005, all of 
these files were made by paper and they have yet been able to 
complete the transfer of the paper filings into their new 
electronic system.
    Mr. Pallone. I had a medical device question, but let us 
hear from the other two members, and then we will see if we 
have time. Mr. Deal?
    Mr. Deal. I will try to go quickly. You all do the same. 
Going down the list of all of you there, do any of you disagree 
with the proposition that FDA needs greater resources in order 
to carry out the responsibilities they currently have and would 
particularly need more resources if they were given the 
responsibilities under this proposed legislation? Anybody 
disagree with the concept that they need more money? Apparently 
not. Let me go down the list, though. What should be the source 
of that revenue? Should it be further appropriations by 
Congress or should it be user fees or some combination thereof? 
Mr. Ubl, I will start with you.
    Mr. Ubl. We believe inspections are a core function of the 
Agency and as a result should be funded by appropriated 
dollars. In addition, I think FDA's risk-based approach, 
together with greater reliance or leveraging of the ISO 
standard that has been discussed is our preferred approach for 
addressing the legitimate gap that has been raised as a result.
    Mr. Deal. So primarily appropriations then?
    Mr. Ubl. Yes.
    Mr. Deal. Mr. Cullimore?
    Mr. Cullimore. We agree, appropriations are the way to do 
it. We feel that user fees have the risk of undermining a very 
essential element in regulatory prioritization and that is 
fiscal restraint. When there is no fiscal restraint, the 
regulatory prioritization is much more difficult to do.
    Mr. Deal. Ms. Gadhia?
    Ms. Gadhia. Some combination of appropriations and user 
fees with the conflict of interest protections would be best in 
our judgment.
    Ms. George. I think one of the first ways better would be 
to leverage all of the ISO certificate reports that we are 
already paying for as an industry and get annually, and that 
would be a significant amount of information and data to the 
FDA to help them make that risk determination and determine 
whether they need to do further inspections of us.
    Ms. Bailey. As I pointed out, we have a long way to go on 
the federal side of funding of cosmetics. The fee issue is one 
that is new to the industry, and we are under discussion about 
that right now. But it is a very difficult issue, and certainly 
the federal funding side needs to be significantly increased.
    Mr. Deal. Ms. Houlihan?
    Ms. Houlihan. We would agree with Consumers Union on this 
point that a combination of appropriations and user fees would 
be appropriate with conflict of interest protections.
    Mr. Deal. Most of you have sort of I think agreed that 
appropriations needs to be one of the primary, if not the 
primary source. I'm going to get Mr. Pallone to agree to sign a 
letter with me I am sure to our appropriators asking that they 
consider that proposition.
    Before I go further on questions, I do now have the 
European Union letter that I mentioned earlier. I would ask 
unanimous consent that it be admitted for the record.
    Mr. Pallone. Without objection so ordered.
    [This information was unavailable at time of printing.]
    Mr. Deal. Let me go back to the proposition that several of 
you have alluded to and I asked questions about and that is 
ISO. First of all, understand there are 47 countries and China 
is not one of them as I understand, those 47 countries that 
already require each of you to comply with ISO standards, I 
assume that they, in many instances, if you are exporting, they 
send inspectors to your facilities here in the United States 
and charge fees associated with that. Is that true? Yes, yes, 
yes. All right. Now, it would seem to me that we do need 
harmonization of these efforts, and I think if you could all 
help us in later responses or written documentation as to how 
do we harmonize what FDA is trying to do with what ISO 
regulations are already doing? That would be very helpful. That 
seems to me to be a great way of saving a lot of money on both 
sides of the ocean, so to speak, in terms of what it costs to 
get products to the consumer.
    Now, Ms. George, your company has a lot of experience 
dealing with this, and you indicated that you participated in 
the ISO standard-making process, is that correct?
    Ms. George. Yes, we do. We have members that are on the 
committees that actually help define those as well as our 
members are on the Global Harmonization Task Force along with 
the FDA as well as other country members.
    Mr. Deal. So FDA is also participating in that process 
already?
    Ms. George. Yes, they are.
    Mr. Deal. I would just hope that all of us would work 
toward trying to achieve this purpose. I think it would safe a 
lot of money.
    The last thing I want to make mention of is I understand 
that since we did electronic registration that there have been 
like 11,000 facilities that have electronically registered with 
FDA. Ms. Gadhia, am I pronouncing that correctly?
    Ms. Gadhia. Yes.
    Mr. Deal. You indicated that you felt that everybody ought 
to be inspected at least once every 2 years. If there are 
11,000 of those, and I don't think that even includes what this 
bill would contemplate on component manufacturers that would be 
added to that list, is that a realistic thing that we can 
achieve or is it just pie in the sky to think we can inspect 
them all within a 2-year period?
    Ms. Gadhia. Something that is in my written testimony but 
for time purposes I could not fit in my oral testimony, we 
recognize that there are a lot of differing devices out there, 
a lot of things are classified as devices. We would support an 
approach that differentiates between say tongue depressors and 
how often those facilities are inspected versus, say, cardiac 
pacemakers. We recognize that there is a difference in--
    Mr. Deal. A risk level?
    Ms. Gadhia. I don't know if I would go as far as saying a 
risk assessment basis, but we recognize the differences of 
different types of devices.
    Mr. Deal. OK. My time is up. Thank you.
    Mr. Pallone. The gentlewoman from Illinois.
    Ms. Schakowsky. Thank you, Mr. Chairman. Ms. Bailey, you 
were talking about the large number of personal care products 
that are used. I was told you said something like billions? I 
mean, there are a lot. I use a lot of them myself. And you said 
that of that number, only 200 adverse events were reported. 
First of all, where would they be reported?
    Ms. Bailey. I am talking about to FDA, and this is a number 
that has remained fairly consistent over any number of years.
    Ms. Schakowsky. OK. Do you really think that that is the 
extent of adverse effects? Do you think it is representative of 
a true number?
    Ms. Bailey. We do because in fact, adverse events are very 
rare with these products because they are inherently safe. And 
let me also point out that OTC cosmetics, for example, 
sunscreens, antiperspirants, anti-dandruff shampoos that have 
an active ingredient are regulated. It is over the counter, 
drugs are, and those adverse reactions would be reported to the 
drug side of FDA on a mandatory basis.
    Ms. Schakowsky. Well, none of the research--does anybody 
else want to comment on that, that the 200 represents in fact a 
reasonable assessment of adverse reactions? Ms. Houlihan?
    Ms. Houlihan. Thank you, Representative. It is an absolute 
underestimate because adverse event reporting is not mandatory, 
and the GAO found that companies that experience the most 
serious effects from their products may be disinclined to 
report voluntarily, and until we have mandatory reporting, we 
won't see the full scope. I will just give you one example is 
that fragrance in personal care products is considered one of 
the top allergens in the world, and we are certainly not seeing 
all allergic reactions to fragranced personal care products 
reported to FDA's database.
    Ms. Schakowsky. Yeah, I would really caution against using 
that number. I mean, even when there are adverse effects, so 
few people actually end up reporting at all. But are you aware, 
Ms. Bailey, of any studies that have been done on the lifetime 
effects of your company's products? Do we know how safe it is 
to use any one personal care product over the course of a 
person's life, every single day?
    Ms. Bailey. In fact, companies are obligated to 
substantiate the safety of individual ingredients and the 
safety of the product before it is marketed, and those 
assessments taken into account the knowledge that these 
products were used in combination with other products and may 
be used over the lifetime.
    Ms. Schakowsky. OK. I have other questions that I wanted to 
ask. Ms. Houlihan, in your testimony you state the cosmetics 
industry review only 11 percent of the ingredients or 1,400 out 
of the 12,500. And you go on to say that at this pace, it will 
require two-and-a-half centuries to review all the products, 
assuming nothing new is introduced. So what can we do to reduce 
this timeframe of two-and-a-half centuries for reviewing the 
safety of these ingredients?
    Ms. Houlihan. Well, clearly, one thing we need is a 
consistent safety standard and a law that would mandate pre-
market safety testing of cosmetic ingredients and products 
before they go on the market, and that testing could be done by 
manufacturers. It should be public, it should be reviewed by 
FDA, and with so many ingredients on the market, one thing that 
can be considered is a prioritization system that would target 
first ingredients that might pose the highest risk, that would 
cross the placenta would be a risk to developing children that 
are known or suspected hazardous chemicals. But we certainly 
need to see the pace picked up to have an assurance that 
products on the market are safe.
    Ms. Schakowsky. And I wonder if anybody wants to comment on 
this. The European Union has required cosmetics companies to 
remove reproductive toxins, mutagens and carcinogens from 
personal care products and now bans 1,100 chemicals from the 
personal care products due to serious adverse effects, cancer, 
birth defects, reproductive problems, and just 9 chemicals, not 
900 or 90, but 9 chemicals are banned from cosmetics in the 
United States. How do we account for this difference and does 
that mean that personal care product consumers are at risk in 
the United States? Why has the E.U. banned 1,100 and we only 
nine? How do we explain that?
    Ms. Bailey. Well, in fact, the list of chemicals that you 
are referring to includes many ingredients that aren't even 
used in cosmetics either in Europe or in the United States. The 
reality is in the United States and Europe, there is the same 
principle that a company must substantiate the safety of its 
product before it is put on the--
    Ms. Schakowsky. How do we get the--OK. So what do we 
subtract?
    Ms. Bailey. Yes, and so if there is an ingredient that has 
been proven under a peer-reviewed science-based basis to cause 
cancer or be a toxin and cannot be substantiated for safety, it 
cannot be included in a finished product. And FDA has the 
authority to ban certain ingredients any time it wants to. It 
has a list. The CIR findings are peer reviewed, published in 
peer-reviewed journals, and there is a substantial body of 
science in the United States behind every ingredient that is 
included in a finished product.
    Ms. Schakowsky. How do we get that big difference? Does 
anybody want to speak to that? It would seem like even if we 
don't use all those, that it is not explained sufficiently.
    Ms. Houlihan. What has happened in the United States is 
that for the past three decades we have had a voluntary 
industry system for evaluating ingredient safety, and FDA has 
stepped back and let that be the de facto safety standard in 
the United States. And one of the major problems is yes, there 
is a requirement in the law that ingredients and products be 
substantiated for safety, but there is no definition or 
guidance that FDA has provided to industry for what that means. 
And so when we look at ingredients that are on the market here 
in the United States, we see one in five products contain 
ingredients of chemicals linked to cancer. We see 60 percent of 
all products contain estrogenic chemicals that can cause 
hormone problems, we find lead contamination in lipstick and 
cancer-causing impurities in baby products and in natural 
products. So companies are making very different decisions 
about what is safe enough to sell because they don't have FDA 
guidance on the issue.
    Ms. Schakowsky. Thank you. My time is more than expired. 
Thank you.
    Mr. Pallone. Thank you, and the bells have run for our 
votes, so I guess we just finished up in time to go to the 
floor. And I just wanted to thank all of you again. As you know 
and I said before, you have the discussion draft and it is 
still a work in progress, and so we may very well get back to 
you with additional questions or comments as we move forward to 
a markup. If we get additional questions submitted in writing, 
they will be submitted within the next 10 days and then we will 
get back to you so that you can hopefully answer them.
    Thank you again. This is a very important issue, and this 
concludes our third and final hearing on the discussion draft. 
And without objection, this meeting of the Subcommittee is 
adjourned.
    [Whereupon, at 1:15 p.m., the Subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]

                    Statement of Hon. Edolphus Towns

    I thank Chairman Pallone and Ranking Member Deal for 
today's hearing and applaud Chairman Dingell, Ranking Member 
Barton, and my colleagues for these much needed efforts to 
protect the American public from unsafe products manufactured 
outside of the United States.
    I find it interesting that in 2006, FDA-regulated 
manufacturers of medical devices sold $110 billion dollars 
worth of medical device products. Medical device imports to the 
United States have steadily increased since 2005. In 2007, the 
U.S. imported roughly $1.5 billion dollars worth of medical 
devices. The domestic cosmetic industry is also doing well and 
increasing use of foreign ingredients. The cosmetic industry 
has annual U.S. sales which are now exceeding $62 billion, 
according to current FDA figures. World imports have lifted the 
U.S. economy and supports U.S. jobs. But it hasn't lifted all 
boats and may be responsible for sinking a few, since lives 
were lost because of bad products. We should proceed with 
caution. It's also unfortunate that the FDA can't keep pace 
with globalization and is not having success with two databases 
that supply inconsistent information about foreign 
manufacturers. FDA inspections of class 2 foreign manufactured 
medical devices, or mid-level risks devices, happen once in 27 
years, but for class 3 medical devices that pose the greatest 
risks, the FDA inspects about every 6 years. Clearly, these 
inspection times are inadequate and do not come near what the 
U.S. has set as the bar for domestic standards.
    Today, I hope to hear more about user fees, third party 
certification and use of international standards organizations 
for product certification and inspections. I hope we are taking 
small business considerations into account, as well. I remain 
open to solutions and am committed to working with this 
committee, the administration, the industry, our foreign trade 
partners, consumers, and the public to get the FDA fully 
functional and actively protecting the safety of the American 
public. I thank the chairman and yield back.
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