[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]







   REAUTHORIZATION OF MDUFA: WHAT IT MEANS FOR JOBS, INNOVATION, AND 
                                PATIENTS

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

                                HEARING

                               BEFORE THE

                         SUBCOMMITTEE ON HEALTH

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                           FEBRUARY 15, 2012

                               __________

                           Serial No. 112-116



[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]





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                    COMMITTEE ON ENERGY AND COMMERCE

                          FRED UPTON, Michigan
                                 Chairman

JOE BARTON, Texas                    HENRY A. WAXMAN, California
  Chairman Emeritus                    Ranking Member
CLIFF STEARNS, Florida               JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky                 Chairman Emeritus
JOHN SHIMKUS, Illinois               EDWARD J. MARKEY, Massachusetts
JOSEPH R. PITTS, Pennsylvania        EDOLPHUS TOWNS, New York
MARY BONO MACK, California           FRANK PALLONE, Jr., New Jersey
GREG WALDEN, Oregon                  BOBBY L. RUSH, Illinois
LEE TERRY, Nebraska                  ANNA G. ESHOO, California
MIKE ROGERS, Michigan                ELIOT L. ENGEL, New York
SUE WILKINS MYRICK, North Carolina   GENE GREEN, Texas
  Vice Chairman                      DIANA DeGETTE, Colorado
JOHN SULLIVAN, Oklahoma              LOIS CAPPS, California
TIM MURPHY, Pennsylvania             MICHAEL F. DOYLE, Pennsylvania
MICHAEL C. BURGESS, Texas            JANICE D. SCHAKOWSKY, Illinois
MARSHA BLACKBURN, Tennessee          CHARLES A. GONZALEZ, Texas
BRIAN P. BILBRAY, California         JAY INSLEE, Washington
CHARLES F. BASS, New Hampshire       TAMMY BALDWIN, Wisconsin
PHIL GINGREY, Georgia                MIKE ROSS, Arkansas
STEVE SCALISE, Louisiana             JIM MATHESON, Utah
ROBERT E. LATTA, Ohio                G.K. BUTTERFIELD, North Carolina
CATHY McMORRIS RODGERS, Washington   JOHN BARROW, Georgia
GREGG HARPER, Mississippi            DORIS O. MATSUI, California
LEONARD LANCE, New Jersey            DONNA M. CHRISTENSEN, Virgin 
BILL CASSIDY, Louisiana              Islands
BRETT GUTHRIE, Kentucky              KATHY CASTOR, Florida
PETE OLSON, Texas
DAVID B. McKINLEY, West Virginia
CORY GARDNER, Colorado
MIKE POMPEO, Kansas
ADAM KINZINGER, Illinois
H. MORGAN GRIFFITH, Virginia

                                 _____

                         Subcommittee on Health

                     JOSEPH R. PITTS, Pennsylvania
                                 Chairman
MICHAEL C. BURGESS, Texas            FRANK PALLONE, Jr., New Jersey
  Vice Chairman                        Ranking Member
ED WHITFIELD, Kentucky               JOHN D. DINGELL, Michigan
JOHN SHIMKUS, Illinois               EDOLPHUS TOWNS, New York
MIKE ROGERS, Michigan                ELIOT L. ENGEL, New York
SUE WILKINS MYRICK, North Carolina   LOIS CAPPS, California
TIM MURPHY, Pennsylvania             JANICE D. SCHAKOWSKY, Illinois
MARSHA BLACKBURN, Tennessee          CHARLES A. GONZALEZ, Texas
PHIL GINGREY, Georgia                TAMMY BALDWIN, Wisconsin
ROBERT E. LATTA, Ohio                MIKE ROSS, Arkansas
CATHY McMORRIS RODGERS, Washington   JIM MATHESON, Utah
LEONARD LANCE, New Jersey            HENRY A. WAXMAN, California (ex 
BILL CASSIDY, Louisiana                  officio)
BRETT GUTHRIE, Kentucky
JOE BARTON, Texas
FRED UPTON, Michigan (ex officio)

                                  (ii)













                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Joseph R. Pitts, a Representative in Congress from the 
  Commonwealth of Pennsylvania, opening statement................     1
    Prepared statement...........................................     3
Hon. Michael C. Burgess, a Representative in Congress from the 
  State of Texas, opening statement..............................     5
Hon. Frank Pallone, Jr., a Representative in Congress from the 
  State of New Jersey, opening statement.........................     5
Hon. Joe Barton, a Representative in Congress from the State of 
  Texas, opening statement.......................................     7
    Prepared statement...........................................     8
Hon. Tim Murphy, a Representative in Congress from the 
  Commonwealth of Pennsylvania, opening statement................     9
Hon. Henry A. Waxman, a Representative in Congress from the State 
  of California, opening statement...............................     9
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, opening statement....................................   223

                               Witnesses

Jeffrey E. Shuren, Director, Center for Devices and Radiological 
  Health, Food and Drug Administration...........................    11
    Prepared statement...........................................    13
    Answers to submitted questions...............................   224
David Perez, President and Chief Executive Officer, Terumo BCT...    79
    Prepared statement...........................................    82
Elisabeth M. George, Vice President, Global Government Affairs, 
  Regulations, and Standards, Philips Healthcare.................    88
    Prepared statement...........................................    90
Ralph F. Hall, Professor of Practice, University of Minnesota Law 
  School.........................................................   100
    Prepared statement...........................................   102
Ross Jaffe, Managing Director, Versant Ventures..................   129
    Prepared statement...........................................   131
Aaron S. Kesselheim, Assistant Professor of Medicine, Harvard 
  Medical School, Division of Pharmacoepidemiology and 
  Pharmacoeconomics, Brigham and Women's Hospital................   155
    Prepared statement...........................................   157
Art Sedrakyan, Associate Professor and Director, Patient-Centered 
  Comparative Effectiveness Program, Weill Cornell Medical 
  College and New York Presbyterian Hospital.....................   164
    Prepared statement...........................................   166
Lisa Swirsky, Senior Health Policy Analyst, Consumer Union.......   174
    Prepared statement...........................................   176
James Shull, Browns Mills, New Jersey............................   182
    Prepared statement...........................................   184

                           Submitted Material

Letter, dated October 14, 2011, from Alan Mertz, President, 
  American Clinical Laboratory Association, to Mr. Burgess, 
  submitted by Mr. Burgess.......................................    72
Letter, dated October 14, 2011, from Michael A. Peat, Managing 
  Director, Texas Gulf Coast Business Unit, Quest Diagnostics 
  Inc., to Mr. Burgess, submitted by Mr. Burgess.................    73
Letter, dated October 14, 2011, from Donald E. Horton, Jr., Vice 
  President, Public Policy & Advocacy, Laboratory Corporation of 
  America, to Mr. Burgess, submitted by Mr. Burgess..............    74
Letter, dated October 18, 2011, from Edward R. Ashwood, President 
  and CEO, ARUP Laboratories, Inc., to Mr. Burgess, submitted by 
  Mr. Burgess....................................................    75
Letter, dated October 25, 2011, from Eric Rieders, President and 
  CEO, NMS Labs, to Mr. Burgess, submitted by Mr. Burgess........    76
Letter, dated November 3, 2011, from Sherri J. Bale, Managing 
  Director, GeneDx, to Mr. Burgess, submitted by Mr. Burgess.....    77
Letter, dated January 25, 2012, from Mark S. Birenbaum, 
  Administrator, American Association of Bioanalysts and the 
  National Independent Laboratory Association, submitted by Mr. 
  Burgess........................................................    78
Statement, dated February 15, 2012, of Michael A. Carome, Deputy 
  Director, and Sidney M. Wolfe, Director, Health Research Group, 
  Public Citizen, submitted by Mr. Pallone.......................   197
Statement, dated February 15, 2012, on behalf of the American 
  Urogynecologic Society and the American Congress of 
  Obstetricians and Gynecologists, submitted by Mr. Pallone......   207
Article, ``Postmarketing Surveillance of Medical Devices--Filling 
  in the Gaps,'' undated, in The New England Journal of Medicine, 
  submitted by Mr. Pallone.......................................   211
Article, ``Regulation of Medical Devices in the United States and 
  European Union,'' undated, in The New England Journal of 
  Medicine, submitted by Mr. Pallone.............................   214

 
   REAUTHORIZATION OF MDUFA: WHAT IT MEANS FOR JOBS, INNOVATION, AND 
                                PATIENTS

                              ----------                              


                      WEDNESDAY, FEBRUARY 15, 2012

                  House of Representatives,
                            Subcommittee on Health,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:17 a.m., in 
room 2322 of the Rayburn House Office Building, Hon. Joe Pitts 
(chairman of the subcommittee) presiding.
    Members present: Representatives Pitts, Burgess, Shimkus, 
Rogers, Murphy, Blackburn, Gingrey, Latta, McMorris Rodgers, 
Lance, Cassidy, Guthrie, Barton, Bilbray, Bass, Pallone, 
Dingell, Towns, Engel, Capps, Schakowsky, Matheson, 
Christensen, and Waxman (ex officio).
    Staff present: Clay Alspach, Counsel, Health; Nancy Dunlap, 
Health Fellow; Paul Edattel, Professional Staff Member, Health; 
Debbee Keller, Press Secretary; Ryan Long, Chief Counsel, 
Health; Carly McWilliams, Legislative Clerk; Chris Sarley, 
Policy Coordinator, Environment and Economy; Heidi Stirrup, 
Health Policy Coordinator; Alli Corr, Democratic Policy 
Analyst; Eric Flamm, FDA Detailee; Karen Nelson, Democratic 
Deputy Committee Staff Director for Health; and Rachel Sher, 
Democratic Senior Counsel.
    Mr. Pitts. This subcommittee will come to order.
    The Chair recognizes himself for 5 minutes for an opening 
statement.

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

    Congress first authorized a medical device user fee program 
in 2002, in the Medical Device User Fee and Modernization Act, 
MDUFMA. We last reauthorized the program in the Medical Device 
User Fee Amendments of 2007, MDUFA, which expires September 30, 
2012.
    While I am glad that FDA and industry have reached recently 
a proposed medical device user fee agreement, the committee did 
not receive it by the January 15, 2012, deadline, as set in 
statute. As it is already late, I would encourage FDA and the 
administration to expedite their review of the agreement so 
that the committee receives it at the earliest possible date.
    The proposed agreement will provide $595 million in user 
fees for fiscal year 2013 through fiscal year 2017, a sum that 
is more than double the current user fee level of $287 million.
    A key goal of the agreement is to increase predictability 
and transparency. Under the agreement, together with regular 
Congressional appropriations, FDA should be able to hire 240 
full-time review process employees, including 140 reviewers 
specifically for devices, over 5 years. The increased user fees 
will pay for additional training for device reviewers and 
information technology upgrades to improve the review process. 
With these new resources, FDA has agreed to measure review time 
in calendar days, not FDA days, which is an important step to 
providing increased predictability.
    Under the proposed agreement, FDA and industry will 
communicate more often, and earlier in the review process, 
where FDA will provide the feedback that manufacturers need to 
go forward.
    The United States is the world leader in medical device 
innovation. This not only benefits patients who need new, 
innovative treatments, it benefits our economy. In 2008, 
according to the Lewin Group, the medical device industry 
employed 422,778 workers nationwide, paid $24.6 billion in 
earnings, and shipped $135.9 billion worth of products.
    In 2008, in my home State of Pennsylvania, the medical 
device industry employed 22,233 people and paid Pennsylvania 
workers over $1.1 billion in earnings.
    These are good jobs. Nationally, jobs in medical technology 
pay almost 40 percent higher compared to the national earnings 
average.
    What is best for patients and what is best for jobs is to 
have a device review process that is clear, transparent, 
predictable and accountable, and I hope that that is what the 
proposed agreement accomplishes.
    I would like to thank all of our witnesses on today's 
panels.
    [The prepared statement of Mr. Pitts follows:]


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    Mr. Pitts. I would like to yield the remaining time to Dr. 
Burgess, the vice chairman of the committee.

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

    Mr. Burgess. Thank you, Mr. Chairman, and Dr. Shuren, 
again, thank you for being here. You are going to hear today 
some concerns from people on the dais and from our subsequent 
panel, from patients and innovators.
    As the chairman points out, funding was increased in fiscal 
year 2008 and fiscal year 2010 by nearly 35 percent, and during 
that time the average review time for lower-risk devices 
increased by 43 percent, higher-risk devices by 75 percent, so 
we have got an official Washington conundrum. Resources are 
increasing, performance is decreasing, and you need to be the 
very best you can but it doesn't look like we are there yet. 
Delays in reviews through inconsistencies certainly harm public 
health but they also stifle innovation and cost jobs.
    We don't want the FDA to approve anything that harms 
patients, and that is your mission, but a little predictability 
could go a long way. The industry should not have to double 
user fees in order to get the very basics of customer service. 
So the question is, have you become more interactive, 
predictable and innovative? Those should be the goals of the 
basic agreement but they also are tenets of a well-run 
organization. We worry about the jurisdictional creep that has 
been going on where you seek to grab as much regulatory 
territory as possible, oftentimes through draft guidance, 
absent legislative direction. Things like mobile apps and 
laboratory-developed tests are things that you want to do but 
we are not sure you are doing what you are supposed to do. We 
shouldn't enable your efforts to duplicate efforts of other 
Federal agencies.
    Mission creep may be a cry for help, and Doctor, this 
morning we are here to try to provide that help for you. But 
some days we wonder if you don't need a bigger check but you 
need a check on what is exactly happening at the level of your 
agency. We want to help. I think we all admit that there are 
problems in our device approval regimen that hurt patients and 
it is just critical that we get it right for them.
    I yield back the balance of my time, Mr. Chairman.
    Mr. Pitts. The Chair thanks the gentleman and now 
recognizes the ranking member of the subcommittee, Mr. Pallone, 
for 5 minutes for opening statement.

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

    Mr. Pallone. Thank you, Chairman Pitts. I welcome every 
here for our third installment of the UFA hearings.
    Today we will be discussing the reauthorization of the 
Medical Device User Fee Agreement, known as MDUFA, and let me 
say at the outset that we are all very relieved and encouraged 
by the current circumstances. There was grave concern that the 
parties would be unable to reach a compromise, and I am happy 
that things are moving forward.
    While there is still no legislative language, there is an 
agreement in principle that we will be discussing at length. It 
includes $595 million in fees over 5 years, specific goals for 
total review times, additional meetings with sponsors, third-
party analysis of the FDA's review process as well as other 
program improvements. In addition, I understand that the 
additional funding would allow FDA to hire over 200 new full-
time workers by the end of the 5-year program.
    Now, we have consistently heard for a long time about the 
need for FDA to improve the predictability, consistency and 
transparency of its premarket review program. This agreement 
will not solve all of those issues overnight but it certainly 
sets FDA on a good path moving forward with important tools and 
more resources at their disposal. It also provides the industry 
with some much-needed insight into the review process and 
better metrics to measure the FDA's performance, and these are 
quality enhancements that should allay those concerns.
    I know that Congress and the FDA greatly appreciate the 
industry's investment in this program. This proposal represents 
a strong compromise, and I commend the hard work of both 
parties in getting to this place I am confident will help the 
agencies continue to improve efficiencies.
    Let me also say that I have been encouraged by FDA's 
commitment both over the past year and as part of this user fee 
agreement to recognize the need for some internal 
transformations. Change doesn't happen overnight, and 
regardless, Dr. Shuren, your center has been more than willing 
to listen and learn from member stakeholders and industry on 
how to shift and adapt in ways to make these processes better 
for companies and consumers. You have recognized some of the 
inadequacies of the agency and maintained an open mind on 
fixing what is broken. At the same time, you have also 
maintained the policies are important to patient safety and 
device effectiveness. You and the Commissioner were kind enough 
to visit my district and talk one on one with me and New Jersey 
companies about these processes, so I appreciate that and I 
look forward to working with you to continue to improve the 
center.
    Today's hearing will also touch upon a number of FDA policy 
proposals from my Republican colleagues. In general, I have 
concerns with some of these bills and I look forward to 
discussing them further. Specifically, I wonder whether these 
proposals could make it difficult for the agency to meet its 
negotiated commitments. I also think it is critical we 
understand at length the intended impact, justification and 
potential unintended consequences of these proposals before 
moving forward.
    I will just close by stating what I have said a number of 
times. I agree that MDUFA is of the utmost importance. I agree 
that FDA should facilitate an environment that doesn't create 
added unnecessary burdens upon innovating companies, but we 
must not make FDA policy changes at the expense of patient 
safety. The public health must be our number one goal above all 
else. We need to take a long, hard look at any potential policy 
that could make it more difficult for FDA to protect patient 
safety, and I know there are a number of witnesses joining us 
today that will talk about that important aspect. I look 
forward to that.
    But I wanted to especially welcome Jim Shull--I hope I am 
pronouncing it right--from Browns Mills, New Jersey, who is 
here to share his personal story.
    Thank you, Mr. Chairman. I yield back.
    Mr. Pitts. The Chair thanks the gentleman and now 
recognizes the chair emeritus of the full committee, Mr. 
Barton, for 5 minutes for opening statement.

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

    Mr. Barton. Thank you, Mr. Chairman. I am not going to take 
5 minutes. I believe I am supposed to yield to Dr. Murphy.
    I have an opening statement that I will put in the record. 
I hate to be the skunk at the garden party, but every now and 
then I am. These user fees are not something that have been on 
the books for a hundred years. We first put them in place in 
2002 and we have reauthorized them once. Currently, it is about 
$287 million, I believe. I think it is a lot to ask this 
committee to swallow a doubling of the user fee budget to 
almost $600 million. I checked yesterday, and I understand that 
it may be the tradition but I couldn't find that any member or 
any staff member of the majority or the minority had been 
involved in these negotiations with the FDA and the industry. 
If we came in and asked to double the income tax receipts, we 
would be laughed out of Congress, and to have a proposal put 
forward that doubles the user fee with the performance or lack 
thereof that has accompanied the last 3 or 4 years is something 
that I am not going to condone.
    Now, I haven't talked with Chairman Upton or Chairman 
Pitts, and I am sure that there is another side to the story. 
But put me down as extremely skeptical that this is a good deal 
for the consumer or for the small medical device industry.
    I had a company in my office just this week, or late last 
week actually, that has been making a device and marketing it 
for 30 years, and all of a sudden now they have been asked to 
have to go through the entire premarket approval process for 
something. I just don't accept that.
    So Mr. Chairman, I am extremely glad that you are holding 
this hearing but don't ask this member to rubberstamp a 
doubling of a user fee when we have the program performance or 
lack thereof at this FDA.
    And with that, I would yield the balance of the time to Dr. 
Murphy of Pennsylvania.
    [The prepared statement of Mr. Barton follows:]


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

    Mr. Murphy. I thank the gentleman.
    A few weeks ago, several of my colleagues and I met with 
Professor Ralph Hall, who will be testifying a little bit later 
today on a panel. At that meeting, Professor Hall explained how 
the review process at the FDA is driving investment in medical 
technologies overseas as well as sending jobs overseas. Now, 
according to Professor Hall, 40 percent of venture capitalists 
have already reduced investment in medical technology in the 
United States and many more are planning this. About 61 percent 
of venture capitalists cite regulatory challenges with the FDA 
as having the greatest impact on their investment decisions.
    Now, this may seem like financial jargon but in reality, it 
points to a tragic bottom line: no money, no research, no 
treatments, no cures. This is about saving lives of people with 
untreatable diseases who are waiting in line for Washington's 
rules and bureaucracy to get out of the way and for the 
treatment and cures to move forward. It is cruelty, not 
comfort, when a doctor must tell a patient that bureaucratic 
barriers prevent patients in the United States from getting the 
treatment that they need.
    We need to and we must help American patients have better 
access to the latest, safest medical advancements while also 
improving FDA's review process to allow more investment in U.S. 
medical technology. It is something we ought to be doing out of 
compassion for people who are sick.
    And with that, I yield back to Mr. Barton.
    Mr. Barton. I have no further comments. If there are other 
members, I will be happy to yield, Mr. Rogers or Mr. Latta, 
anybody? I yield back to the chairman.
    Mr. Pitts. The Chair thanks the gentleman. The Chair now 
recognizes the ranking member of the full committee, Mr. 
Waxman, for 5 minutes for an opening statement.

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

    Mr. Waxman. Thank you very much, Mr. Chairman, for holding 
this important hearing.
    Our goal today is to start the process of reauthorizing the 
Medical Device User Fee Act, and I commend FDA and the industry 
for finally coming together to agree on a user fee proposal. I 
know it was a hard-fought compromise and I look forward to 
seeing the details. But I am pleased that there has been an 
agreement because I have very little faith that Congress is 
going to provide the appropriations for the FDA to do the job 
without a user fee. I would prefer we do it that way, and those 
who don't like the user fee will have to acknowledge that FDA 
will be short-funded and we won't get these devices approved as 
quickly as possible.
    The funds collected under this act will provide FDA's 
device program with critical dollars that enable the agency to 
fulfill its public health mission: to ensure that only safe and 
effective medical devices are marketed in the United States. 
That is our essential goal here. We should work together on a 
bipartisan basis to get it done.
    The real compassion in this country is to make sure that we 
can get drugs and devices that work and that are safe to 
consumers, not just to get them out on the marketplace because 
it is no one's benefit to have drugs that are not safe or 
medical devices that are not safe or effective. The FDA, the 
device industry and American patients are counting on us to do 
our job.
    I am concerned that some may try to hijack the 
reauthorization to advance proposals that would put the health 
of patients at risk. Last year, Republican members of the 
committee introduced a slate of 10 bills that would make 
significant and harmful changes, in my view, in FDA's device 
program. Unless we can reach consensus on these proposals, they 
should not be inserted into this must-pass reauthorization.
    The newspapers are full of articles about the dangers of 
improperly designed medical devices. The prestigious Institute 
of Medicine concluded that our medical device laws need to be 
significantly strengthened. But many of these bills ignore the 
need for reforms that would protect patients. Instead, they 
read like a wish list assembled by lobbyists for the device 
industry.
    The device industry claims that FDA regulation is killing 
jobs, stifling innovation, and depriving American patients of 
new medical devices. But there is no evidence to back these up 
except anecdotes. Anecdotes from some individual companies are 
not enough. And I think the industry knows that they need an 
FDA that is going to do its job if they are going to have 
credibility in the marketplace.
    I have been appalled by the quality of the so-called 
``studies'' that industry is using to advance these bills. Last 
July, I asked the editors of our Nation's top medical journals 
to examine the methodology used in the leading industry papers 
asserting that FDA is too slow, burdensome, and unpredictable. 
The editors said there were serious methodological flaws in 
both studies--biased samples, small sample size and botched 
statistical analysis, just to name a few--rendering them 
essentially useless as part of any discussion of FDA's 
regulatory system. None of the editors felt that the 
methodology of these studies was worthy of publication in a 
peer-reviewed journal, and yet they are put forward as a reason 
why we ought to change the law here in Congress.
    Many in the device industry argue that Europe should be our 
model and they say new technologies are available years before 
they are on the market in the United States. But just 
yesterday, the New England Journal of Medicine published a 
study by Dr. Aaron Kesselheim finding numerous examples of 
high-risk devices that were first approved in the E.U. but 
either showed no benefit, or, worse, had substantial safety 
risks. I am glad that Dr. Kesselheim is here today to testify 
about this study.
    FDA's job is to protect the public health. Part of 
advancing public health is helping manufacturers win approval 
for innovative new devices. But FDA's core responsibility is 
ensuring that only safe and effective devices are permitted on 
the market.
    When FDA falls short and allows dangerous devices like 
surgical mesh and metal-on-metal hip implants to be implanted 
in patients, the suffering of victims can be incalculable. That 
is why I joined with Mr. Pallone, Mr. Dingell and Ms. DeGette 
in requesting that the committee hear from witnesses about the 
risks from dangerous devices, and I want to thank Subcommittee 
Chairman Pitts and full Committee Chairman Upton for working 
with us to allow these witnesses to testify today on the second 
panel.
    The reauthorization of MDUFA should be bipartisan, so I 
urge all members of the committee to work together on this 
critically important program.
    Thank you, Mr. Chairman.
    Mr. Pitts. The Chair thanks the gentleman.
    Our first panel will have just one witness, Dr. Jeffrey 
Shuren, Director of the Center for Devices and Radiological 
Health at the FDA. Dr. Shuren is accompanied today by Mr. 
Malcolm Bertoni, Assistant Commissioner for Planning for the 
Office of the Commissioner. We are happy to have you with us 
today, Dr. Shuren. You are recognized for 5 minutes to 
summarize your testimony. Your written statement will be 
entered into the record.

 STATEMENT OF JEFFREY E. SHUREN, DIRECTOR, CENTER FOR DEVICES 
     AND RADIOLOGICAL HEALTH, FOOD AND DRUG ADMINISTRATION

    Mr. Shuren. Mr. Chairman and members of the subcommittee, I 
am Dr. Jeff Shuren, Director for the Center for Devices and 
Radiological Health, or CDRH, at the FDA. Thank you for the 
opportunity to testify today.
    I am pleased to tell you that on February 1, FDA and 
representatives from the medical device industry reached an 
agreement in principle on proposed recommendations for the 
reauthorization of the Medical Device User Fee Act, or MDUFA. 
These recommendations would authorize FDA to collect $595 
million over 5 years to help fund a portion of the agency's 
medical device review program with FDA agreeing to certain 
overall performance goals. The final details of the agreement 
will be resolved very soon, and as required by law, we will 
hold a public meeting and seek public comment on the proposed 
package before sending a final package to Congress.
    When I came to CDRH in 2009, in response to concerns 
expressed by industry and others, we initiated a review of our 
device premarket review programs. The following year, we 
released two reports that concluded, as I have testified 
before, that we had not done as good a job managing the review 
programs as we should have. The number one problem we found was 
insufficient predictability, which was leading to 
inefficiencies, higher cost to industry and FDA, and sometimes 
delays in bringing safe and effective products to market.
    In January 2011, we announced a plan with 25 specific 
actions that we would take that year to improve the 
predictability, consistency and transparency of our premarket 
programs. As of February 2012, 75 percent of these actions plus 
eight additional actions are already completed or well 
underway. They are intended to create a culture change toward 
greater transparency, interaction and the appropriate balancing 
of benefits and risk. They focus on assuring predictable and 
consistent decision-making and application of the least-
burdensome principle and implementing more efficient regulatory 
processes.
    We believe these actions have had and will have a visible, 
positive impact by providing greater predictability about data 
requirements through guidance, reducing unnecessary or 
inconsistent data requests through training and policy and 
process changes, implementing policies that lead to 
appropriately balanced benefit-risk determinations, using 
external experts more extensively and effectively, creating 
incentives to conduct clinical studies first in the United 
States, speeding up clinical trial approval decisions and 
implementing the innovation pathway.
    Preliminary data indicates that the actions we have taken 
have started to bear fruit. For example, the backlog of 510(k) 
submissions that had been steadily increasing from 2005 to 2010 
decreased for the first time last year. However, we still have 
much work to do.
    Reauthorization of MDUFA will provide the resources that 
CDRH needs to continue improving the device review programs and 
help reduce the high staff turnover that has adversely affected 
review predictability and consistency. The proposed MDUFA 
recommendations we have agreed upon with industry will also 
include several important process improvements. For example, if 
a performance goal on a device application is missed, the MDUFA 
proposal would require FDA and applicants to work out a plan to 
complete work on the submission, ensuring that no submission is 
left behind, and requiring new substantive interaction between 
FDA and an applicant halfway through the targeted time for 
reviewing the application would help to assure sufficient time 
for the applicant to properly respond to appropriate questions. 
Clear criteria for when FDA will refuse to accept a complete 
application means more efficient use of resources to the 
benefit of both FDA and industry. These and other proposed 
enhancements are intended to achieve a shared outcome goal of 
reduced average total time to decision, which we and industry 
believe is an important indicator of a successful premarket 
review program.
    The agreement in principle we have reached with industry 
strikes a careful balance between what industry agreed to pay 
and what FDA can accomplish with the amount of funding 
proposed. However, we are concerned that even if device user 
fee resources are increased under MDUFA III, additional new 
legislative mandates imposed on CDRH could divert resources and 
undermine FDA's ability to achieve the new performance goals. 
When PDUFA was last reauthorized in 2007, the addition of new 
policy-related requirements ultimately resulted in FDA's drug 
review program having to temporarily suspend meeting its PDUFA 
review goals in order to meet the statutory mandates. We want 
to avoid such a situation so that CDRH can focus on meeting the 
ambitious new proposed PDUFA program goals and achieving timely 
patient access to safe and effective devices, which is an 
objective that we share with industry, health care 
practitioners, patients and consumers, and I know you as well.
    Mr. Chairman, I commend the subcommittee's efforts and am 
pleased to answer any questions the subcommittee may have.
    [The prepared statement of Mr. Shuren follows:]


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Mr. Pitts. The Chair thanks the gentleman, and I will now 
begin the questioning and recognize myself for 5 minutes for 
that purpose.
    Dr. Shuren, Chairman Upton and I have set a deadline of 
reauthorizing the user fees by the end of June. We received the 
three other user fee proposals by January 15th but we did not 
receive the medical device user fee proposal as required under 
statute. Given the need to reauthorize the user fees as soon as 
possible, let me ask you a two-part question. Number one, when 
will FDA send us the legislative language and proposed 
agreement for the medical device user fee so that the committee 
can begin its work, and two, what specific steps does the 
administration plan to take to expedite the process so the 
committee can get the device information as soon as possible?
    Mr. Shuren. So the plan we have put in place and what we 
have asked of the administration is for expedited review of a 
proposal so that we can get the proposal out to you and out to 
the public as we move into March, and so you will be able to 
see what we are proposing, we will get the public comments, we 
will wrap up on that. We have to follow that process. And then 
we will have the final package. But you will be able to see 
that proposed package, and our goal is to try to do that in the 
next few weeks.
    Mr. Pitts. By mid-March?
    Mr. Shuren. That is approximately the time, and that is 
what we have been asking the administration to support us in 
doing.
    Mr. Pitts. All right. The medical device legislation 
introduced by our committee members and Mr. Paulson of 
Minnesota contains critical improvements aimed at making FDA's 
regulation of medical devices both premarket and postmarket 
more predictable. This predictability is critical to getting 
life-saving devices to our Nation's patients and their 
families, as we have heard from Marty Conger, Carol Murphy and 
Pam Sagan at our O&I hearing in July. It is also critical in 
keeping medical device jobs in the United States, as we have 
heard from numerous innovators throughout the past year.
    We have heard some argue that these device bills aren't 
necessary because FDA is fixing the problem. That is a little 
hard to believe. For example, that is what FDA has told us 
about the pre-amendment class III devices for the past 20 
years, and the problem still isn't fixed. Class III devices are 
still going through the 510(k) process. Frankly, we don't have 
20 years or even 6 months to wait for FDA to fix the problems. 
Our Nation's patients and innovators need help now. So my 
question is, will you commit to working with us on this 
legislation so we can help our Nation's patients and help keep 
American device jobs here in the United States?
    Mr. Shuren. Mr. Chairman, we would welcome the opportunity 
to work with you on legislation.
    Mr. Pitts. We will follow up with that. Thank you.
    What is the status of the unique device identifier rule?
    Mr. Shuren. So we have completed the rule. It is now 
currently under review at the administration and we are waiting 
for their approval to move forward with it.
    Mr. Pitts. Five years ago, the committee passed the 
reauthorization of the medical device user fee, and when we 
voted for that bill, we did so expecting that FDA would meet 
its end of the deal. It appears that that hasn't happened. FDA 
has failed to meet many of the MDUFA goals, and during the past 
5 years, we have seen the total time it takes from submission 
to FDA decision rise dramatically. Given that track record, why 
should we believe that you are going to meet the goals you 
agreed to in the proposed user fee package?
    Mr. Shuren. Well, I won't belabor the point that there are 
some things that but for the user fee act, we would not have 
been able to enhance, but we agree, we are not happy with where 
the program is; industry is not happy with where it is. There 
are fundamental problems right now. Some of that is on our 
part, and that is why I made a public commitment to make those 
changes and started last year, regardless of whether we saw 
user fee dollars or not, and we are moving forward on those.
    But by the same token, there are problems with the program 
that we cannot solve without funding. I have high staff 
turnover rates, just like the drug program had 10 years ago, 
because of too much work on their plate. We don't have enough 
managers to provide good oversight. The ratios are running from 
1:14 up to 1:25 under a front-line manager. That is untenable 
in any business, and I can't solve that with changes in 
policies and processes. I can only change that with having the 
people to do the work, enough managers and enough staff to do 
the work. That is what comes out of the user fee dollars. And 
together, making those program improvements that we have 
underway, having the dollars from industry and having smart 
performance goals in place can help us achieve a successful 
program and the outcome we all want to see from device review.
    Mr. Pitts. I have just 20 seconds left. What metrics are 
included in the agreement to make sure you can meet your goal?
    Mr. Shuren. In the MDUFA agreement?
    Mr. Pitts. Yes.
    Mr. Shuren. So there are performance goals that pertain to 
FDA time but also to the average total time to the decision. So 
these are the things that happen that are not quite under our 
control but by putting in certain process improvements of 
greater engagement and interaction with industry, with the 
companies as we move forward during the review, our hope is 
that with that and with the more staff on board, we can 
actually bring down the total time for making a decision, which 
we think is an important indicator, through those improvements. 
We also have goals that go towards--it is predominantly to the 
performance on different kinds of applications.
    Mr. Pitts. The Chair thanks the gentleman and recognizes 
the ranking member, Mr. Pallone, for 5 minutes for questions.
    Mr. Pallone. Dr. Shuren, I wanted to ask about the 510(k) 
process, and first commend you for the focus you have given to 
improving it. I have been interested in how to fix it for a 
long time. In fact, when I was the chairman of the 
subcommittee, we held a hearing in 2009. Quite frankly, both 
before and after that hearing, I was of the opinion that the 
510(k) process was broken, so I am glad that FDA has focused 
its attention on resources and how to improve it.
    I have seen your 510(k) action plan and the amount of work 
that CDRH did on this topic is pretty impressive. What is your 
sense of the 510(k) program now? Is it operating better? Is 
there more predictability and consistency? And what steps on 
your action plan would you categorize as game changers?
    Mr. Shuren. So the program is not where we would like it to 
be. We are not seeing the performance from it that we would 
like to have, but we are starting to see some early indicators, 
if you will, the canaries in the coalmine, suggesting instead 
of them dying from gas, that actually they are doing better. So 
starting almost 10 years ago, we saw the requests for 
additional information on 510(k)'s go up and up and up 
steadily. We saw total review times going up and up and up. We 
saw the backlog of 510(k)'s going up and we saw the percent of 
510(k)'s being cleared going down. In 2011, for the very first 
time we are seeing the percent of additional requests on 
510(k)'s starting to dip for the first time the other 
direction. We are seeing that the percent of 510(k)'s being 
cleared has been going up. I put all this information, by the 
way, in my written testimony. In 2012, that number, that 
percent of clearance actually went up beyond 2011. We are 
seeing the backlog go down. So all of these are early signs but 
I don't think you are going to see the real benefit from it 
until many of our policies go into effect.
    Game changers right now--simple smart business process 
improvements to assure that critical decisions like asking for 
additional information are not made in the lowest parts of our 
center but they are made at the right level of management, 
which is why I need enough managers to provide that oversight. 
In fact, we created a Center Science Council of our most senior 
people to oversee the most important decisions. We are putting 
in new policies to incentivize starting clinical trials in the 
United States earlier. You get the clinical studies started 
here first, you keep the technology here because the companies 
come back to the same doctors over and over again, and also 
having benefit-risk framework that is much more focused on 
taking into account what patients are willing to tolerate for 
risk because they are the ones who get the devices, not my 
reviewers.
    Mr. Pallone. Thank you. Let me ask you about the conflict 
of interest in these scientific experts for the advisory 
panels. We have heard from a number of parties that the 
conflict of interest provisions are not working and are 
excluding legitimate experts. When the Commissioner was here 2 
weeks ago, she indicated that there have been challenges at FDA 
in filling the advisory panels. Would you agree that CDRH is 
having similar challenges?
    Mr. Shuren. We do face challenges in moving forward, which 
is why we agree with you. You consider this an important issue; 
we consider this an important issue. And although we have not 
found a legislative fix yet that has a significant difference, 
we think this is something worth exploring. One of the reasons 
I would like to take the chairman up on his offer to work on 
legislation focused on this area is one of those areas. We are 
looking at internal process changes, are there other things we 
can be doing to sort of reduce those challenges we face.
    Mr. Pallone. I know when you testified before the Senate 
Health Committee in November, you indicated willingness to 
engage with the Senators, so I guess I am getting the same 
assurance from you today on this.
    Mr. Shuren. Yes.
    Mr. Pallone. All right. Chairman Pitts talked about the 
UDI, and I think it is unfortunate that after 5 years, I think 
we should be closer on implementation on what I consider a very 
critical component. But what I wanted to ask you is, could you 
explain how UDI will interact with other postmarket authorities 
that FDA has in the device space and other initiatives that you 
have underway?
    Mr. Shuren. So unique device identifier will allow us to 
link the use of a device with a patient's experience with the 
device. So data is collected every day as a part of routine 
clinical practice, and we can't tap into that without a UDI. 
That is why that unique device identifier is a game changer, 
and it will allow us to move forward to have more robust 
postmarket surveillance systems that then industry and we can 
take advantage of and health practitioners and others in the 
following ways. If we have more robust postmarket surveillance, 
when there are problems, if we can identify them more quickly 
and get on top of them, it doesn't mean the device comes off 
the market. It means that we address it, and you don't get the 
front-page stories in the newspapers because you don't have so 
many people exposed. You have a better infrastructure that 
allows companies to conduct postmarket studies at lower cost 
because the infrastructure is there, and it will allow us to 
make better use of postmarket data to reduce the burden for 
premarket data requirements for some devices. In fact, if we 
are properly authorized, we may be able to even shift some of 
the premarket data requirements to the postmarket setting. But 
these are all things we could do in the future and a unique 
device identifier is critical to making that happen.
    Mr. Pallone. Thank you.
    Mr. Pitts. The Chair thanks the gentleman and recognizes 
the vice chairman of the committee, Dr. Burgess, for 5 minutes 
for questions.
    Mr. Burgess. Thank you, Mr. Chairman.
    Dr. Shuren, in this committee we worked on this a lot over 
the years, and it seems like there is a repetitive stream of 
people in my office talking about difficulties they are having 
in this arena. So I don't think there is any question that we 
have a problem. The problem generally seems to be with 
predictability and consistency at your agency, and whether we 
all agree with where the problems are and whether we all agree 
with how much activity is leaving our shores, I don't think 
there is any question that some is, and the President's own 
Jobs Council has raised this issue, and specifically they 
commented, quoting from them, ``Our medical innovation system 
is in jeopardy. Investment in life science area is declining at 
an alarming rate because of the escalating cost, time and risk 
of developing new drugs and devices. While many factors 
contribute to the decline, an important factor is the 
uncertainty surrounding the FDA regulatory environment.''
    So this is not House Republicans, this is the President's 
Jobs Council. This is the administration that is voicing 
concern with the predictability and consistency within the FDA. 
How do you respond to what the Jobs Council is telling us?
    Mr. Shuren. I think you can add me and my own staff, who 
have our own concerns about the program as well, and I will say 
in terms of the Jobs Council, when they then came out and said 
what things you might want to look at for the medical device 
program, one of their recommendations was to have a benefit-
risk determination framework that is much more focused on 
looking at patient tolerance for risk. We appreciate that, 
because when they came out with that recommendation, we had 
actually already proposed such a framework over the summer. In 
fact, we are finalizing it right now and we have committed and 
are already set to put out the final document and implement it 
come the end of March.
    Mr. Burgess. But again, you know, I just can't stress this 
enough. There is a steady stream of people that come in to see 
me and I suspect other Members of Congress have similar stories 
where there is a problem, and the problem seems to be centered 
at the Center for Devices and Radiological Health. It is 
clearly something that needs your highest attention and I look 
forward not just to your framework but we actually look forward 
to some performance on this, and as I reference in the opening 
statement, we can't just be upping in the dollars and 
decreasing the performance, and unfortunately, that seems to be 
the direction we are going.
    Let me ask you a couple of specifics on some of the things 
I referenced. Some of the draft guidance that is coming out of 
your area where it appears that you are increasing your 
jurisdiction and you territory, and I am not sure that is in 
everyone's best interest and specifically in your best 
interest, but what about the draft guidance for industry and 
staff on the in vitro diagnostic products that are labeled for 
research use only and investigational use only? This is 
something that came out of your office, and depending upon the 
stage of development, such components are officially labeled 
research use only, investigational use only. That means they 
are neither sold nor marketed as clinical devices nor offered 
as services such as laboratory-developed tests, but they may be 
useful in developing new devices. So now it looks like your 
agency is wanting to regulate even the devices that are used to 
help develop the devices. Have I read that correctly?
    Mr. Shuren. Well, components that are being used as a part 
of the device are part of the device, and we regulate that. You 
know, the policy----
    Mr. Burgess. Well, let me ask you this then. Specifically, 
what are some of the deficiencies that you saw that required 
you to issue this draft guidance?
    Mr. Shuren. That there were companies who were actually 
saying that this particular device or analyte was for research 
purposes. They were actually marketing it for commercial use. 
So this policy is to clarify in terms of what you need to do to 
be very clear on, is this truly for research and how you handle 
that, or is this actually being used in patient care, and that 
is what it is trying to clarify.
    Mr. Burgess. And again, give us an idea of the scope of the 
problem of this. Is this something that you are bumping up 
against all the time or is this something that has happened and 
you are trying to get in front of it?
    Mr. Shuren. No, it is something we have been running into 
and we continue to see, and that is why we have a policy to 
clarify it.
    Mr. Burgess. And can you provide us on the committee with 
some examples of that so we can better understand why this 
mission creep is going on at your center?
    Mr. Shuren. We would be happy to come back and give you 
some very specifics, give you a list of examples.
    Mr. Burgess. And once again, this doesn't seem to be the 
flexibility built into this. It is kind of an all-or-nothing 
phenomenon, and one of the complaints we get is, there is no 
flexibility within the Center for Devices and Radiological 
Health. Is that something that you can help us with?
    Mr. Shuren. First of all, I would say actually we are more 
flexible than people give us credit for.
    Mr. Burgess. Fair statement, because you are not getting 
any credit at all right now.
    Mr. Shuren. I know. I mean, I will give you an example. We 
just recently approved a device for tears in the large artery 
in the chest, and in terms of flexibility, we actually approved 
that device based upon just 51 patients followed for just 30 
days, very small, not randomized, no controls, and we did it in 
less than 180 days. So the opportunities are there. The changes 
we are trying to make in the program are also to ensure we have 
flexibility where we need to do it but we are also consistent 
in how we apply it, and like I said, we made some process 
improvements that just went in the end of last year. There are 
a lot of policy changes, good policy changes, but as you know, 
as a Federal Government agency, we have to get public comment. 
That is a good thing. We get lots of perspectives. The downside 
is, it takes more time. So most of the things we are trying to 
improve actually don't start getting finalized and kicking in 
until this year.
    Mr. Burgess. We want you to be consistent. That is part of 
our goal as well, but I would appreciate you providing us some 
data on this because some of the stuff we are hearing does not 
comport with what you are telling us.
    Thank you, Mr. Chairman. I will yield back. Maybe we will 
have time for a second round.
    Mr. Pitts. The Chair recognizes the ranking member of the 
full committee, Mr. Waxman, for 5 minutes for questions.
    Mr. Waxman. Thank you, Mr. Chairman.
    Dr. Shuren, one of the bills included in the Republican 
package would make significant changes to the device center's 
so-called third-party review program. Currently, that program 
permits third parties to review certain 510(k) applications and 
provide recommendations to FDA on whether the agency should 
clear a particular device, then FDA has 30 days to make a final 
decision. That is what the law is now. The Republican bill 
would alter this scheme to make the third party's 
recommendation binding on FDA if FDA fails to respond in 30 
days. The bill also would expand the types of devices that 
these third parties are permitted to review to include 
permanently implantable or life-sustaining or -supporting 
devices. These outside reviewers are not currently allowed to 
review these devices. I think these changes are very worrisome. 
Would FDA be concerned about these kinds of changes to the 
program?
    Mr. Shuren. We are deeply concerned about these changes. I 
mean, the hard stop, the default about their decision going 
into effect if we don't make a decision actually can have the 
perverse impact also of our being in a position to actually not 
approve that product. That actually can spell the death knell 
for the third-party review program, and I don't think that was 
really the intent behind the bill but that is probably the 
outcome that will likely happen.
    Expanding the scope of the devices, I will tell you, there 
are over a thousand devices that are already eligible for 
third-party review. I mean, for 510(k), most of the 510(k)'s 
would be eligible. We have gone through the different 
categories and we have said almost 75 percent--the number may 
in fact be higher--could then be eligible of that set for 
third-party review. The problem is, that program hasn't worked 
all too well, and one of the big challenges we face is that 
those third parties don't have access to the confidential 
information that we do. So as a result, they end up coming back 
sometimes with decisions that are not fully informed.
    For example, we may have already spoken to a company about 
what they need to do, they came to us, and then they go 
separately to a third party. They have no idea what that 
conversation was, and as a result, they can't take advantage of 
it. That is the challenge we really face in getting that 
program----
    Mr. Waxman. Well, I was concerned about this program when 
we implemented it in 1997. I was never comfortable with the 
concept of having external third parties who have the potential 
for conflict of interests on their own reviewing these 
important devices. So when I read this bill, I was very worried 
about the changes that they put in place. After hearing your 
further description of the impact it would have, it makes me 
even more concerned and I feel very uncomfortable with these 
further changes. It is like the XL pipeline resolution. When 
you force a decision, you get a bad decision.
    Another of the Republican slate of bills, the Premarket 
Predictability Act of 2011, would make certain changes to three 
key areas of FDA's device regulation: one, to FDA's oversight 
over the investigational device exemption, two, to the so-
called least-burdensome provisions, and three, to the 
procedures for appealing decisions through the Center for 
Devices. I want to start with the changes to the least-
burdensome provision because those are the most troubling to 
me.
    This language was added to FDA's statute as part of the 
1997 Food and Drug Administration Modernization Act at a time 
when the industry was asserting that FDA was requiring too much 
of device manufacturers and stifling innovation, strikingly 
similar to what we hear still today, and in essence, these 
provisions say that FDA must consider the least-burdensome 
means of demonstrating that a device is effective when the 
agency makes its approval or clearance decisions. So in other 
words, FDA should consider whether clinical data are necessary 
if there are other less-burdensome means for demonstrating that 
a device can be marketed.
    The Premarket Predictability Act would change this 
provision by adding more-specific language like requiring FDA 
to consider alternative approaches to clinical data in 
evaluating device effectiveness ``in order to reduce the time, 
effort and cost'' and directs FDA to consider ``alternatives to 
randomized controlled clinical trials and the use of surrogate 
endpoints'' when clinical data are necessary. This seems to me 
overly prescriptive. Why would Congress be dictating to our 
premier scientific regulatory body what type of clinical data 
it should consider? It is also concerning because it seems that 
it can make it harder for FDA to require clinical data even 
when the agency believes it is necessary. I know that some of 
the language in this bill was lifted from FDA's 2002 guidance 
implementing the least-burdensome provision but it looks like 
there were some changes to that language that could be 
significant. Can you comment on this?
    Mr. Shuren. Yes. First, let me say, I support the least-
burdensome principle. I think as a general matter, it is good 
government and I support the policy we put back in our guidance 
in 2002. That is why I reemphasized it to my staff last year in 
email. It is why we are actually tailoring our guidance so we 
apply it specifically to specific devices.
    I do have concerns regarding this legislation because as it 
is drafted, we are reading it as lowering the standards in the 
United States for devices coming on the market, and that 
concerns us, and also to the extent there is a difference in 
that language in the bill versus our guidance, we have to 
reconcile those differences, which means we have to change the 
current policy. If folks think we have the right policy but we 
are not applying it consistently, that is a different issue. 
Now, we do have concerns about not applying it consistently and 
that is why we put in process improvements to assure that we 
are getting the right level of sign-off on any decisions for 
actually trying to ask for more information or doing something 
different than we did before, and oversight on decisions to 
make sure we are applying the least-burdensome principle. That 
is the problem we think needs to be fixed and that is the one 
we are already working on.
    Mr. Waxman. Thank you.
    Thank you, Mr. Chairman.
    Mr. Pitts. The Chair thanks the gentleman and recognizes 
the chair emeritus of the committee, Mr. Barton, for 5 minutes 
for questions.
    Mr. Barton. Thank you, Mr. Chairman.
    I think it is better to have a third-party review than to 
have it sit on a bureaucrat's desk at the FDA and not get 
reviewed at all, but that is just me.
    Mr. Chairman, I want to put into the record a study of 
October 2011 by the National Venture Capital Association and 
the Medical Innovation and Competitive Coalition. I am going to 
put the entire study in the record, but I want to just give 
some of the bullet points.
    This study was done in October of last year, and its 
conclusion and summary is that venture capital companies in the 
United States are decreasing their investment in biotechnology 
and medical device startups in the United States. They are 
reducing their concentration in critical therapeutic areas and 
they are shifting their focus away from the United States 
towards Europe and Asia. The primary reason is because of FDA 
regulatory challenges. In the last 3 years, they have decreased 
by 40 percent their investments in medical devices. In the next 
3 years, they expect to decrease it again by 42 percent, and 61 
percent of the respondents cited as their primary reason 
regulatory challenges at the FDA. I am sure that you have seen 
this study or at least the summaries of it, Doctor?
    Mr. Shuren. Yes, I have seen it.
    Mr. Barton. Now, the proposal that the industry and your 
department have agreed to doubles the user fees per year for 
the next, I think, 4 or 5 years. The current PMA fee right now 
I believe is $220,000. Is that correct?
    Mr. Shuren. That is correct, for full fee. If you are a 
small business, it is $55,000.
    Mr. Barton. What does it go to in this proposal that we 
have yet to see?
    Mr. Shuren. So we are finalizing those details but we are 
thinking at the end of 5 years it would be about $267,000, 
$268,000, so it will go up by about $48,000, and it was 
actually a little bit higher last year. We reduced it, because 
by law, if we collected a little bit more money, we had to 
reduce the fees so we reduced the fees this year.
    Mr. Barton. And what does the small company fee go up to?
    Mr. Shuren. I think it is about $67,000.
    Mr. Barton. And what is the level at which you are eligible 
for the small company fee?
    Mr. Shuren. If your annual sales or receipts are $100 
million or less.
    Mr. Barton. And is that what it is in the current? So is 
that changed or unchanged?
    Mr. Shuren. No, that has remained the same, and you can 
compare this on the drug side. NDA is the complement on the 
drug side. That fee is $1.8 million.
    Mr. Barton. And I am sure, Doctor, that you are aware that 
in the new health care law that passed several years ago, there 
is a 2.3 percent tax on medical device companies, and it is 
expected to raise $20 billion over the next 10 years.
    Mr. Shuren. I am aware of the tax.
    Mr. Barton. Why could we not use some of that money and 
have no fee increase at all?
    Mr. Shuren. The tax isn't under our purview. That is a 
question for the administration. But I will say the concern 
about dollars, and I recognize, you know, for industry, to ask 
them to pay more, you know, they are figuring out how to do 
that. But I will you, $595 million over 5 years, compared to 
what you heard the other week on the Generic Drug User Fee Act, 
over 5 years, they are going to collect about $1.5 billion, and 
the Prescription Drug User Fee Act over 5 years is going to 
collect almost $3.5 billion. So I appreciate the industry 
paying more and they made compromises, we made compromises to 
get to where we are, but to look at us and say that we are 
asking for way too much, the drug program is going to get six 
times the amount in user fees over 5 years than us. Even 
generic drugs, a smaller program, is going to get 3 times the 
amount.
    Mr. Barton. I appreciate that, but your current medical fee 
is $287 million, and under this proposal, it doubles.
    Mr. Shuren. Well, not the individual fees to companies, the 
collections. You know, things like--most of the small companies 
make the 510(k) devices, and the fee right now is about $2,000, 
and under the changes being made over 5 years it would go up to 
about $2,600. They also pay a registration fee, and many of 
them have one facility. That right now is about $2,300, and it 
might go up to $3,800. If you look at the drug side, a 
registration fee for a facility is a little over a half a 
million dollars.
    Mr. Barton. My time is expired, Mr. Chairman, but put me 
down as very skeptical. I will look at this with an open mind, 
but if I had to vote today, I would vote no and I would really 
ask the committee staff on both sides that once we get the 
proposal to really scrub it and let us make sure that we 
protect our device user companies and the consumers who are 
going to have ultimately pay the increase in these fees. With 
that, I yield back.
    Mr. Pitts. The Chair thanks the gentleman, and if you will 
provide a copy of that study for the minority, they would like 
to see it before we enter it into the record.
    Mr. Barton. Sure.
    Mr. Pitts. The Chair recognizes the ranking member 
emeritus, Mr. Dingell, for 5 minutes for questions.
    Mr. Dingell. Thank you, Mr. Chairman.
    Dr. Shuren, nowhere in the legislation is any money being 
diverted from the clearance of devices or pharmaceuticals. Is 
there any diversion of the fees to be collected under this 
legislation from the actual clearance in any of the programs at 
FDA?
    Mr. Shuren. No.
    Mr. Dingell. Now, do the agreed-upon user fees give FDA 
resources necessary to ensure safety and efficacy of medical 
devices? Yes or no.
    Mr. Shuren. Yes.
    Mr. Dingell. Insufficient staffing at FDA and high employee 
turnover rates were mentioned by you, and they are a matter of 
concern. Will the agreed-upon user fees allow FDA to hire staff 
to carry out functions necessary to protect patient safety and 
improve new innovative devices? Yes or no.
    Mr. Shuren. Yes.
    Mr. Dingell. Will the agreement allow FDA to improve 
training and staff to ensure consistency in the review process? 
Yes or no.
    Mr. Shuren. Yes.
    Mr. Dingell. Do you believe the additional staff and 
professional development will help lead to reduced employee 
turnover? Yes or no.
    Mr. Shuren. Yes.
    Mr. Dingell. This authorization of medical device user fees 
includes several accountability provisions. The independent 
assessment of the review process is one of these provisions. Do 
you believe that this independent evaluation of the device 
review process and the recommendations from this evaluation 
will help FDA to identify needed areas of improvement? Yes or 
no.
    Mr. Shuren. Yes.
    Mr. Dingell. And will you put effort into seeing to it that 
that transpires?
    Mr. Shuren. Yes.
    Mr. Dingell. Now, will the independent assessment help 
industry and FDA to evaluate how FDA is using these resources 
from the user fee program? Yes or no.
    Mr. Shuren. Yes.
    Mr. Dingell. Dr. Shuren, would you agree that user fees are 
necessary to supplement the rather miserable level of 
appropriations provided by Congress to FDA for the purposes in 
the legislation?
    Mr. Shuren. Yes.
    Mr. Dingell. Now, Doctor, I have a concern here. If a high-
risk device was put on the market with no trials for efficacy 
whatsoever, let us say a pacemaker or a heart valve, do you 
believe that a provider would reasonably know when or under 
what conditions to prescribe the particular pacemaker to an 
individual?
    Mr. Shuren. No.
    Mr. Dingell. So we have a real problem. If we don't assure 
that these things are safe, we might be putting in a hip or a 
knee or a heart valve or a pacemaker that wouldn't work and 
then we would have a fine mess on our hands, would we not?
    Mr. Shuren. Yes.
    Mr. Dingell. All right. Now, again, if a high-risk device 
was put on the market with no trials for efficacy, do you 
believe a patient would be sure of the efficacy of the 
particular or specific pacemaker for their particular heart 
condition? Yes or no.
    Mr. Shuren. No.
    Mr. Dingell. If a high-risk device was put on the market 
with no trials for efficacy, can a patient or provider know 
that the device is efficacious for the heart conditions you are 
trying to treat? Yes or no.
    Mr. Shuren. No.
    Mr. Dingell. In my opinion, demonstrating efficiency and 
efficacy in postmarket trials as opposed to premarket approval 
would weaken the high standard that patients have come to 
expect. Do you agree, yes or no?
    Mr. Shuren. Yes.
    Mr. Dingell. Now, even industry associations have made it 
clear that they support the regulatory framework currently in 
effect at FDA. Do you agree that maintaining this framework 
will preserve America's leadership in medical device 
innovation? Yes or no.
    Mr. Shuren. Yes.
    Mr. Dingell. We are not going to be benefited by approving 
devices that are not efficacious and that don't help the 
patient, are we?
    Mr. Shuren. No.
    Mr. Dingell. That is going to have a bad effect on our 
sales of devices, is it not?
    Mr. Shuren. Yes.
    Mr. Dingell. Now, I want to go back to a little bit of 
history on this. This whole business started when I was 
chairman of the committee and chairman of Oversight. We found 
that there was a massive amount of abuse at FDA, that there 
were gratuities taken and all matter of difficulties. We found 
that a lot of this was judgments that were being abused by FDA 
because it didn't have the money to do the job, and we found 
that industry had this awful problem of not being able to get 
clearance. So we found in the case of pharmaceuticals that 
pharmaceuticals were laying around and not getting approved and 
sometimes on a 17-year patent that was taking 7 to 10 years to 
get that done. A major U.S. pharmaceutical company would lose 
during that time $250 million a year. The consequences of that 
were very serious. So the Congress was always plagued with 
legitimate demands by industry to give them an extension of 
patent, and I supported many of these things, simply because it 
was basic fairness. But we figured out that the only way to do 
this was to see to it that they got their clearance quickly. So 
with agreement of industry, the first thing we did was to move 
this into the pharmaceuticals, and then the over-the-counters 
came in and said it would be a good idea if you did this for us 
because it would help us, and then we found that others would 
agree to it, although I have to say the device manufacturers 
had some difficulty in swallowing it, but they ultimately did, 
and they found it worked and they found that they all made more 
money because they were getting their patents cleared in a 
faster and better fashion.
    I hope my colleagues will learn a little bit about that 
history. This gives cleaner and better service to the people. 
It saves money. It helps innovation and it helps our 
manufacturers to make decent money out of their patents without 
the delay that was occurring previous to these events.
    Thank you, Mr. Chairman.
    Mr. Pitts. The Chair thanks the gentleman and now 
recognizes the gentleman from Illinois, Mr. Shimkus, for 5 
minutes for questions.
    Mr. Shimkus. Thank you, Mr. Chairman.
    Thank you, Dr. Shuren, for being here. Do you agree that 
the Institute of Medicine study on the 510(k) process was 
widely rejected? Yes or no.
    Mr. Shuren. One of their recommendations was widely 
rejected.
    Mr. Shimkus. So that would be a yes?
    Mr. Shuren. Partial yes.
    Mr. Shimkus. I will take partial. I am under Mr. Dingell's 
standards here.
    How much did you pay for that study?
    Mr. Shuren. About $1.3 million.
    Mr. Shimkus. Did you ask for your money back? I am glad we 
got some giggling. The reality is, I was at a breakfast this 
morning and someone was asking for additional Federal money, 
only $21 million. The reality is, you are sitting here saying 
we don't have enough money, but then we fund a study through 
the Institute of Medicine that costs $1.3 million that is 
widely rejected, and we don't get our money back. So these 
dollars all add up, and we are in a Congress now that says, you 
know, this whole saying, if you worry about the pennies, the 
dollars take care of themselves. So as we are talking about Mr. 
Barton, why is he doubling a user fee? Well, if we take care of 
the pennies, the dollars will take care of themselves, and in 
this case, I don't think we got our money's worth out of the 
Institute of Medicine's report.
    Mr. Shuren. And I will say, I appreciate those concerns. 
They actually had a number of other recommendations that we are 
following up on, and if it is of interest to the committee--and 
I don't want to eat up your time--I would be happy whenever it 
is convenient, now or set a separate time, to walk through what 
we will be doing with the Institute of Medicine's 
recommendations in their report and the ones that we deferred a 
decision on to give them an opportunity to weigh in.
    Mr. Shimkus. And I appreciate that, and obviously we are 
not pleased with the response so far.
    Tell me again, we will go to the yes or format, is it 
important that we require reviewers to prove scientific or 
regulatory rationale for major decision-making?
    Mr. Shuren. There needs to be a scientific rationale.
    Mr. Shimkus. Is that a yes? Come on. You can do it for Mr. 
Dingell. I mean, why can't you say yes or no? Maybe because he 
is on the other side of the aisle.
    Mr. Dingell. I would suggest if the gentleman does need 
help, I will be glad to assist him.
    Mr. Shimkus. Do you want to read these for me?
    Mr. Shuren. Let me say with a caveat within those 
constructs of the question but some of the wording I might have 
put differently so the real meaning isn't conveyed to the 
committee.
    Mr. Shimkus. Maybe I should share my questions with you 
prior to the hearing as other folks do to get a clarification 
of that in the question and answering.
    Do you think it is important that we establish an expedited 
appeals process for any challenges to those decisions?
    Mr. Shuren. Yes.
    Mr. Shimkus. Thank you. Do you think it is important to 
have qualified, trained reviewers handling applications for 
submissions?
    Mr. Shuren. Yes.
    Mr. Shimkus. Do you think it is important that we have FDA 
publish detailed review summaries of 510(k) clearance of 
premarket approval and HDE and de novo?
    Mr. Shuren. Yes, with a caveat. I mean, all of the----
    Mr. Shimkus. We are getting there.
    Mr. Shuren. Some of these go to legislation that----
    Mr. Shimkus. Amen, brother. That is what we are talking 
about.
    Mr. Shuren Would actually----
    Mr. Shimkus. You know, and legislation that was lampooned 
by the ranking member of the full committee here. I mean, he 
specifically took crosshairs on legislation putting it in its 
worst light where based upon some of your answers, maybe some 
of those have some merit, and that is what we do. I mean, that 
is what our hearing is about.
    Mr. Shuren. I know, and we would like to work through 
those, but some of these things in the bills and even things 
like detailed decision summaries if you are talking about the 
summaries that we are doing as opposed to what we are doing 
now, those have costs to them. They will divert and----
    Mr. Shimkus. Well, we have got Obamacare, million dollars 
of tax increases now and fee increases, so we are not sure it 
is all about money. We see that the medical device folks are 
really ponying up a lot money now. They are doing it in the 
Obamacare tax and they are doing it with this agreement.
    Let me go to a final point. FDA leadership--you kind of 
mentioned this earlier but I wanted to follow up. FDA 
leadership explicitly directed staff in a memo dated November 
23, 2008, to remove the ``least burdensome language'' from 
guidance documents, and of course, we have pieces of the 
legislation here that says the importance of the least-
burdensome provision. What are you doing to make sure reviewers 
actually apply to the least-burdensome standard in practice?
    Mr. Shuren. So what we did is, we took out--there was 
boilerplate that was inconsistently being used. It was creating 
more confusion and actually wasn't helping our staff apply 
least burdensome, so we are doing the following. First of all, 
you should also have--I communicated with my staff about how 
important is it to follow the least-burdensome principle. That 
went out also as a subsequent email. Secondly, what we are 
doing is trying to apply the least-burdensome principles to 
specific devices so manufacturers don't just hear, ``Well, you 
apply least burdensome,'' to show them in fact how it can be 
applied to their device. That is significantly more meaningful. 
We put processes in place to try to assure we have got 
management input so that we are applying the least-burdensome 
principle consistently in our decision-making. And I think 
those changes are starting to kick in in the program. Those are 
meaningful, important changes to make.
    Mr. Shimkus. Thank you, Dr. Shuren. Thank you, Chairman.
    Mr. Pitts. The Chair thanks the gentleman and recognizes 
the gentlelady from California, Ms. Capps, for 5 minutes for 
questions.
    Mrs. Capps. Thank you so much for your testimony, Dr. 
Shuren. I appreciate the work that has been done to reach the 
MDUFA deal, and I think this is a very important moment to 
balance the needs of the companies for increased predictability 
at the agency but also to increase patient safety. Congress 
needs to uphold our part of the deal.
    As I have mentioned in previous hearings, these user fee 
agreements do not supplant Congress's role in ensuring that FDA 
has the necessary resources to do its job. I hope we can work 
together to ensure adequate appropriations for the agency.
    Before I begin with my questions, I want to quickly raise 
the issue of the unique identifier policy for medical devices 
that is currently stuck in OMB. No matter what one's position 
on the policy itself, everyone is stuck in a holding pattern 
until this is released. Getting this policy out of OMB is 
important for industry and consumers alike, and I wanted to put 
on the record that Representative Schakowsky and I have sent a 
letter to OMB urging them to move forward on releasing the 
policy on the unique device identifier system. I appreciate, 
Dr. Shuren, FDA's work on the policy and I look forward to its 
release.
    Now, shifting gears with my question, Dr. Shuren, reports 
by the Institute of Medicine and the GAO have expressed that 
women have been historically underrepresented in medical 
research, particularly so for cardiovascular and other device 
trials. But due to proprietary data issues, it is hard to know 
for sure what is and what is not getting reported to FDA, and 
that is why my bill, the Heart for Women Act, which has passed 
the House twice with near-unanimous support, would require the 
GAO to examine whether clinical trial and drug and medical 
device safety and efficacy data are being reported by sex, by 
race, and by age. Perhaps we can make some headway here.
    I understand that as part of MDUFA's agreement, the FDA and 
industry members will conduct an initial meeting to set goals, 
timelines and expectations. Is that correct?
    Mr. Shuren. Yes.
    Mrs. Capps. Can you discuss to what extent the FDA will 
inquire about the devices use in the diverse population of 
patients? And, if the device is intended to be used in a 
diverse patient population, could the FDA use this time to 
encourage enrollment of a representative group on clinical 
trials so that the trials fully represent and reflect the usage 
of the product and prevalence of the disease?
    Mr. Shuren. So we have been stepping up our efforts to have 
better representation in medical device clinical trials, and 
that has been through guidance, that has been through workshops 
and that has been through one-on-one engagement with companies. 
So we believe it is important and it is something we are 
pursuing.
    Mrs. Capps. And it is something you can give measurable 
results on?
    Mr. Shuren. To look at what may be changing in terms of 
representation in clinical trials, yes, that kind of data we 
could be able to provide.
    Mrs. Capps. Would it be transparent enough for us to be 
able to see the data, or at least to get the assurances that 
you are giving us that there is a level of understanding and 
that it is a fully representative sample?
    Mr. Shuren. Yes. We will go back, because we have been 
trying to be more transparent about information that we are 
using in our decisions, and we actually have a tool starting to 
put up information on the clinical trials that are used in 
support of device approvals, and I think that is one of the 
components in there, but we can double-check and get back to 
you.
    Mrs. Capps. I would appreciate that we have some follow-up 
on this particular question and look forward to working with 
you on it.
    I want to bring up another topic in my remaining time. 
Several weeks ago, I asked your colleague, Dr. Hamburg, about 
the Sentinel system for postmarket surveillance. The PDUFA 
agreement will allow user fees to go towards using Sentinel for 
postmarket surveillance of prescription drugs, thereby 
protecting the public health, saving money on research and 
staying ahead of the curve on drug recalls, and from reports, 
most of the work Sentinel has done to date has been in the drug 
space. Now, let me ask you, can Sentinel be used in the medical 
device space?
    Mr. Shuren. It can be used. We have been a part of the 
discussions. The holdbacks right now is, one, we need unique 
device identifiers. Until we have that, we can't do it. The 
second is, I will say when Congress put the mandate to have a 
program for drugs, that got a lot of people to step up to the 
plate to participate, and it is a very non-regulatory program. 
But because it is not mentioned specifically for devices, it 
has not had that same level of enthusiasm.
    Mrs. Capps. I wanted to ask you to expand upon the barriers 
that might exist to expanding it to the device side, and you 
kind of hinted. Would you go further in the remaining few 
seconds to talk about some ways that you see as barriers that 
perhaps then we could--somehow there could be a pathway through 
to making it be effective there?
    Mr. Shuren. Well, the unique device identifiers, we need to 
have that system in place, and I think the fact that the 
legislation that passed just mentioned drugs put a lot of 
attention and for the folks who have data, the focus went to 
drugs because devices wasn't----
    Mrs. Capps. Are you saying the legislation needs to be 
revisited that includes devices?
    Mr. Shuren. I think if the legislation mentioned devices, 
we would get more interest in having such a program for medical 
devices.
    Mrs. Capps. I yield back. Thank you.
    Mr. Pitts. The Chair thanks the gentlelady and recognizes 
the gentleman, Mr. Rogers, for 5 minutes for questions.
    Mr. Rogers. Thank you, Mr. Chairman.
    Thank you, Dr. Shuren, for being here. I can see how it 
gets confusing. This committee asked the FDA just a very short 
number of years ago to regulate tobacco, and they are going to 
generate some $2 billion over 5 years on a product that if you 
use as directed will kill you. That is a fairly confusing 
message to the FDA, so for that, I am going to apologize for 
what Congress did to you, and I certainly could find lots of 
places for that $2 billion when it comes to medical research to 
do something pretty spectacular that is not going to find its 
way there.
    But I guess what confuses me, and I too have been looking 
at the National Venture Capital Association, mainly because 
they are the canary in the coalmine. If they are the first ones 
to give an indication if in fact they are going to change their 
investment habits to companies who are innovating when it comes 
to medical devices and the survey results are a bit 
frightening. So you believe that medical devices that are 
approved by the FDA, they advance American public health. Would 
you agree with that?
    Mr. Shuren. Yes.
    Mr. Rogers. And would you agree with Commissioner Hamburg 
that the FDA has a role to play in ensuring that medical device 
companies stay in the United States and want to bring their 
products to the market here first? There is some advantage to 
that, is there not?
    Mr. Shuren. Yes.
    Mr. Rogers. And I know we are saying to some degree nothing 
to say here, we are moving on, we are trying to get through 
this, and I hope that you do, but would you find it concerning 
that according to this survey, that 44 percent of American 
venture capital firms are now going to invest in life science 
companies in Europe and Asia? I mean, it is clearly a shift. Is 
that concerning to you?
    Mr. Shuren. Well, it does concern me to see investments not 
going into development of products here for the United States, 
and I have to tell you, I have been on the record with that 
beforehand, and one of the drivers for some of the policies we 
have in place, we have been out meeting with the venture 
capital community. Ross Jaffe is going to be up here 
testifying. Ross and I have spoken on many occasions, and Ross 
can tell me if I am not telling the truth, but, you know, some 
of the top things of their concerns was I mentioned that 
benefit-risk determination, taking into account patient 
tolerance for risk, recognizing that when you have truly novel 
first-time technology that you can't expect it to be a home 
run, you have to view that a little bit differently. All of 
that is baked into this framework, a common framework between 
us and industry that is explicit, that will be a part of the 
record.
    A second is incentivizing getting the early clinical 
studies to start here in the United States, and those policies 
were developed in part directly out of those concerns, the 
innovation pathway. Features of that were things that the 
venture capital community had raised as could be helpful to 
them to help some of these breakthrough products get to market. 
We have taken that----
    Mr. Rogers. Reclaiming my time. I appreciate those efforts, 
but what they are also saying is that the reason that 
investment shift is because ``the unpredictability at the 
FDA.'' So I understand you tried to make some changes. Did you 
hear that from those venture capital firms about the 
unpredictability of the FDA?
    Mr. Shuren. Yes, and that is why a number of the actions we 
are taking are meant to address predictability in terms of 
better guidance, better decision-making in terms of better 
oversight on the decision-making that we put in place.
    For folks who may be interested, we did put out an overview 
that covers all the actions that we are taking and it puts a 
list of everything we are doing and if we achieved it, a link 
to all that information. I will make sure that our Office of 
Legislation--I think that has been passed out. We will make 
sure that is sent to everyone, and that is updated every time 
we take----
    Mr. Rogers. The one thing that worried me is a little bit 
is, you said you sent out an email to your staff on the less-
burdensome approach. Sorry, but that doesn't sound like a great 
plan to me.
    Mr. Shuren. Well, that is why we follow that up in terms of 
specifically addressing----
    Mr. Rogers. OK, but my point being here, Dr. Shuren, I 
appreciate it. I hope you understand the gravity of it. And 
just putting out a report certainly hasn't deterred the long 
list of folks who come into Congress every day and saying they 
are having these huge problems. Investment is shifting 
overseas. The smaller folks are losing investment as we speak. 
And so we need a little fire in the belly here. If you are 
truly trying to change that equation, it has to happen now. We 
don't have time for reports and lighthearted emails about how 
we ought to change for the future. I appreciate you having to 
defend this, but at the same time, if we don't change it, we 
jeopardize having to have our devices manufactured and 
innovated in Asia and Europe. I don't think that is good for 
U.S. consumers. Oh, and by the way, we made it more difficult 
because we also applied a tax to the companies who were 
successful enough to get through what is a very unpredictable 
FDA process, which means they are also hiring less and 
innovating less. I mean, the policies here don't work together, 
and that is why I think people like me are very, very 
frustrated with the FDA, knowing that we have asked you to do 
really dumb things in the past, but this stuff is so crucially 
important for our consumers and the folks who need these 
medical devices. We have to have a little urgency in our 
approach here, and I just don't see it.
    Mr. Shuren. Well, I would say actually we have had the 
urgency. You know, in 2010, we went out and we went across the 
country to get input from industry, from others. We pushed very 
quickly to get out reports and recommendations. I will tell 
you, I got letters from some of your colleagues telling me to 
slow down. I heard from industry folks, slow down, more time 
for conversation, and our feeling was, we can't wait. We know 
there are these issues and that is why we moved forward, we put 
in our plan in the beginning of 2010 and we have been marching 
relentlessly forward. I keep hearing from people, industry has 
even said, can you slow down, you are putting too much stuff, 
and it is sort of, there is a lot of things that if we don't 
work them together and fix, rather than just a few little 
things, we won't have the impact we want to have. And that 
email I sent out is not fluff. Quite frankly, leadership starts 
at the top, and to do that and communicate with my staff, I 
have to be out there, I have to be out in front. I have to put 
my name on it, and that is what that email did.
    Mr. Pitts. The Chair thanks the gentleman and recognizes 
the gentleman, Mr. Engel, for 5 minutes for questions.
    Mr. Engel. Thank you, Mr. Chairman.
    Thank you, Doctor. Talking about medical devices, the 2011 
Institute of Medicine's report on the FDA's 510(k) processes 
raised significant concerns about the current premarket 
approval and postmarket monitoring processes for these medical 
devices. We would all agree, I don't think there would be any 
disagreement on this, that there is a necessary balance between 
premarket and postmarket FDA processes. No matter how stringent 
the premarket requirements, it is obviously not possible to 
know everything about the safety and effectiveness of new 
products until they have been in use for some significant 
period of time, and as we improve the processes for getting 
products to patients more quickly, I believe we need to improve 
FDA's ability to detect problems that occur once products are 
on the market.
    So let me ask you this. Can you please describe the role 
that postmarket data collection and surveillance play in the 
current FDA device approval framework, and secondly, what 
additional authorities or resources does FDA need to address 
the problems highlighted in the IOM report?
    Mr. Shuren. Well, we do use information from the postmarket 
setting to help inform on the premarket side. Many of the 
devices that are made, they constantly come back in the door 
through incremental innovation. So having real-world experience 
on those devices is critically important. Our systems in the 
United States are pretty good. It is not really the system the 
Nation deserves. We have adverse-event reporting that gives us 
some information, but we don't have a truly robust data 
collection that we really need. The Institute of Medicine 
highlighted that point, and we agree with them. We need to 
pursue that at a national level, and that is why as a strategic 
priority we put out last month, we said we will go forward and 
put out a draft national strategy for postmarket surveillance 
in the spring. We will have a public meeting. We will have a 
public dialog how to do this because ultimately this will help 
companies, can help companies keep products on the market, can 
help companies get products on the market, can also help 
protect patients. It is a win-win, we need to work together, 
and I think things like Sentinel, unique device identifier are 
all critical aspects, having more registries. We have been 
stepping up our efforts on registries.
    I will tell you, Europe has a lot of issues with the 
postmarket side. One thing they sometimes will do a little bit 
better than us is having a national registry for certain 
devices. I will give you an example. Just very recently we 
worked with the American College of Cardiology, the Society of 
Thoracic Surgeons and with a company, Edwards Life Sciences, on 
a registry for heart valves that are being inserted through 
blood vessels, revolutionary technology, and this now will be a 
national registry, not only getting information on that device 
but subsequent devices that come forward and you can actually 
do postmarket studies buried within that registry, can reduce 
future costs for doing those kinds of examinations.
    Mr. Engel. Thank you, Doctor. Let me ask you a question 
about the regulation of laboratory-developed tests. The FDA's 
oversight of medical tests, the LDTs, have become controversial 
of late. As I understand it, there are several issues in play 
here. First, there are a wide variety of tests, everything from 
blood tests to genetic tests that can predict whether a patient 
would benefit from a particular therapy. Secondly, the FDA 
regulates the actual tests themselves while CMS oversees the 
administration of these tests called CLIA, the Clinical 
Laboratory Improvement Amendments. It is clear that the FDA has 
jurisdiction over these tests but the agency has historically 
exercised enforcement discretion with respect to so many of 
them but there are recent signs that the agency is going to 
begin regulating a subset of these tests again.
    The reason I ask that is because one of the Republican 
medical device bills, the Modernizing Laboratory Test Standards 
for Patients Act, which is H.R. 3207, I believe would make 
radical changes in its regulatory scheme. The bill would remove 
FDA from the picture entirely and give complete control of 
these tests to CMS. My understanding is that CMS does not 
believe this is a good approach.
    So let me say this. I am very concerned about the direction 
of this bill, and by all accounts, these tests are at the 
cutting edge of new medical therapies, and to take the 
responsibility of ensuring that these tests are clinically 
effective away from the FDA, our premier scientific regulatory 
body, and give it to one that lacks entirely the scientific 
expertise to me makes absolutely no sense. Do you have concerns 
about the approach to laboratory-developed tests laid out in 
H.R. 3207?
    Mr. Shuren. We do have concerns about it, and we appreciate 
the fact that the bill recognizes the fact that finally 
laboratory-developed tests need to be regulated. The days of 
the Wild West need to stop, that CLIA is not adequate for the 
oversight of that. The law as it currently stands is not good 
enough, and the standard of analytical validity and clinical 
validity, the standard that FDA uses, that it is the right 
standard. The problem is, it creates a duplicative Federal 
bureaucracy at a much higher cost, grows government 
unnecessarily and it maintains an unlevel playing field between 
traditional manufacturers and labs who make the exact same kind 
of test, and as a result, just continues to stifle innovation 
and can actually kill jobs on the flip side, and then it allows 
those tests to come out on the market and then for CMS to make 
a decision after it goes on the market. So you can have a bad 
test that is out there, and we have seen plenty of laboratory-
developed tests, ones for diagnosing ovarian cancer that have 
been inaccurate, so women are having their ovaries out and 
didn't need to, making decisions about treatment for breast 
cancer, treatment on chronic Lyme disease, I mean tests for 
autism that are just wrong and they need to be regulated but 
they need to be regulated right, and CMS did say they are not 
the right place for it, they don't have the expertise, and the 
cost would be at least $50 million to $100 million a year plus 
$20 million startup. For our framework in the first few years, 
we are talking about a cost that is probably less than $3 
million in fees to industry, so I don't know why we want a more 
costly, less effective kind of approach and this duplicative 
oversight that actually would not help.
    Mr. Engel. Thank you. I agree.
    Thank you, Mr. Chairman.
    Mr. Pitts. The Chair thanks the gentleman and recognizes 
the gentleman from Kentucky, Mr. Guthrie, for 5 minutes for 
questions.
    Mr. Guthrie. Thanks, Dr. Shuren. We had a meeting in your 
office about this important issue. I am from a manufacturing 
background and a big believer in making in the USA and remaking 
it in the USA and have been concerned about some companies 
making them in the Europe because of the regulatory 
environment. We talked about that.
    I actually have a bill on guidance documents, and a lot of 
companies like guidance documents because it gives them 
regulatory predictability, but some of the problems--your 
process for reviewing internal guidance documents because some 
companies have said that they have submitted a guidance 
document--that guidance document no longer reflects FDA 
thinking, and so what process do you review those and because 
how they can submit to you or to a dated guidance document? 
Just kind of talk about what you are doing with the guidance 
process to improve it.
    Mr. Shuren. Yes. So with guidance documents, you can 
actually continue to submit comments about it after the comment 
period has closed. It is different from rulemaking. So that 
docket remains open and we will look to see if new comments 
come in. We made a concerted effort to improve our guidance 
development process. In fact, in 2011, our production of 
guidance documents improved by about 22 percent over 2010, and 
2010 was better than 2009, but we sort of squeezed, you know, 
the fruit and gotten maybe about as much juice as we can from 
the internal processes improvements, and it is one of the 
reasons as a part of the MDUFA III reauthorization agreement we 
are getting a little bit of extra dollars, about five 
additional people to help us for the oversight of guidances. 
What is critical is, we need people who are more technical 
writers on guidances so our experts who are doing reviews can 
provide their expertise but not write the documents themselves. 
That is what is going on now. And so they get diverted away 
from doing premarket reviews. The little bit extra help will 
help us take some of that tension off. It will also help us do 
a better job at looking at guidances that have already been put 
out to see if changes need to be made and also to try to make 
sure that we are finalizing draft guidances more quickly.
    Mr. Guthrie. And one other point I wanted to bring up. On 
page 7 in your testimony, there is a chart that says about from 
2000 to 2011 has been increasing additional request additional 
information from 510(k) requests whereas now it says in 2011 
three-fourths of all 510(k)'s had additional information 
requests coming back. And I think the implication is that 
companies aren't submitting the information that you need, 
therefore, you haven't asked for more, and I am a manufacturing 
person, quality engineer, so I used to be responsible for 
submitting our tool and dies once they came in and we got paid 
based on them being approved, and let me tell you, they were 
only wrong if I didn't have the right information because I had 
to answer to somebody because literally once our customers 
signed off on that, they were by contract supposed to cut a 
check. So sometimes I felt delayed because the other parts of 
the project weren't ready.
    So the question is, you see the trend. Are three-fourths of 
the applications really inadequate or are you not letting them 
know what you need? I mean, that is the question that I have. 
Because it does seem like a disturbing trend to go from a third 
to three-fourths.
    Mr. Shuren. Yes, and actually because it was a disturbing 
trend, we did an analysis of 510(k) decisions, the first 130 we 
had done, or 110 in 2010. We put that analysis on our Web site, 
and it is a mixed bag. I mean, there are times----
    Mr. Guthrie. You have been willing to show that. I 
appreciate these charts because it does show the issues, and I 
appreciate that.
    Mr. Shuren. Yes, but it also shows the problems have been 
longstanding, like a decade, and this was a canary in the 
coalmine that then led to increased total times for review. The 
data just marches up starting around 2002. But when we looked 
at it, so a number of different reasons behind it. There are 
companies who we have put out very clear guidance on what to do 
and they opted not to follow it, and they could do something 
different but they didn't even justify doing something 
different. I mean, even where for years you provide a little 
bit of clinical data. If you want to measure oxygen through the 
skin, you take a blood sample and compare it. A company comes 
in and never even did the blood samples. We go back, do the 
blood samples.
    Mr. Guthrie. That is legitimate. That is absolutely 
legitimate. It is hard to believe companies whose products are 
based on that.
    Mr. Shuren. Believe it or not, it happens, but then we have 
companies where if we had better clarity on what to do, that 
would help, and the last is, there are times where we ask for 
things that we shouldn't be asking for, and that was one of the 
drivers behind our changing our decision-making within the 
center, making sure we have that level of oversight that the 
staff can't suddenly decide to ask for something extra until 
you have the proper level of sign-off. In fact, if you want to 
ask for a new kind of clinical study across a type of device, 
that is made at the highest levels in the center by the Center 
Science Council where those kinds of decisions in fact should 
be made. I just need enough managers to provide that oversight.
    Mr. Guthrie. I have a chart here from the venture 
capitalists, like 38 percent of their decisions, FDA 
regulations are about 38 percent of their decision whether to 
invest, and about two flights down there is a meeting now, and 
I am going to run back to it, on manufacturing and so we have 
talked about that. That is a concern. That is why we are here 
and why we are real concerned about it because we want it made 
in America and made safety and securely and efficiently. I 
appreciate your efforts. Thanks.
    Mr. Pitts. The Chair thanks the gentleman and recognizes 
the gentlelady from Illinois, Ms. Schakowsky, for 5 minutes for 
questions.
    Ms. Schakowsky. Thank you, Mr. Chairman.
    You have heard a lot today from many that the FDA has 
become too risk-averse in terms of what the agency requires 
device manufacturers to do in order to obtain FDA clearance or 
approval, and we have heard that the FDA is insisting on too 
much clinical data prior to approval and that this has resulted 
in a decrease in venture capital investment as well as an 
export in innovation and jobs abroad, and to help address the 
situation, some have suggested that the FDA's mission statement 
should be changed to include things like job creation and 
innovation, and a bill has been introduced that would 
accomplish this. But even if we assume there is some truth to 
these reports, and I think there is a lot of evidence to 
suggest that in fact there is not, revising FDA's mission 
statement seems drastic to me. So I wanted you to comment on 
the implications of revising the FDA's mission statement to 
include things like job creation.
    Mr. Shuren. Well, we are concerned about a change to 
mission statement that would include job creation, economic 
growth, competitiveness because we read that, so are we looking 
at job growth in the context of product approvals? Are we now 
going to--I mean, to do that, then we are asking for financial 
data on the companies, we are looking at reimbursement 
opportunities, market analyses become part of approval 
decisions, and then whose jobs? Jobs in the United States or 
jobs overseas? What about jobs of the competitors? I mean, the 
devices most at risk will actually be the most disruptive 
technologies because they are more likely to adversely affect 
the competitors in the short term and could hurt job growth in 
that direction.
    So those are the kinds of, I really think, unintended 
consequences happen with those changes, and there are a number 
of other things in this bill as you march down the list that 
would lead to, we think, very troublesome changes in what we 
do. It can change the standard for evidence for our product 
approval decisions. I mean, one of them is on public 
participation. So we then say OK, so we are talking now about 
public participation in product approval decisions. That means, 
so should we revisit what information we have considered 
confidential and start making more of that information public 
and some people may think it is a good thing. We hear from 
industry, please don't do that, but that is where this bill is 
actually directing us. It talks about using the most, you know, 
innovative tools. Well, innovative doesn't mean it is the best 
tool. So we start using bad tools and we talk about, well, make 
sure you are using modern tools. Well, sometimes the newest 
tools aren't the best ones. Old ones are just as good but why 
we should change the goalpost on industry every time there is 
some modern tool? It may not be necessary to do that.
    Ms. Schakowsky. So you think that this could slow down, 
complicate and actually make less efficient the process?
    Mr. Shuren. Oh, yes. I think it could lead to some fairly 
dramatic changes in how we make product approval decisions and 
I think it would adversely affect industry and adversely affect 
patients.
    Ms. Schakowsky. If you look at the language of the bill, 
and that is called the Food and Drug Administration Mission 
Reform Act, there is some language that may on its face seem 
less controversial like changing the mission to require FDA to 
take into account the risks that certain patients are willing 
to take. Am I correct in saying that these are things the FDA 
is already doing, and if so, proponents of the bill would argue 
that there should be no harm in revising the mission statement 
to encompass things that the FDA is already doing, and I 
wondered if you could comment on that.
    Mr. Shuren. Yes, this is something we already are doing as 
part of the benefit-risk determination framework we put out. 
That is already out there publicly, and it will go final and 
begin implementation at the end of March. That is going to 
happen.
    But this is an activity. It is not really a mission. And so 
this isn't exactly the right way of sending a message about 
having a benefit-risk determination framework because it is 
really an activity. It is an action.
    Ms. Schakowsky. Well, I am concerned about revising FDA's 
mission statement. I think it is a pretty drastic step and it 
doesn't seem that there is a record for why such a dramatic 
change would in fact be necessary.
    So I thank you for your comments, and I yield back. Thank 
you.
    Mr. Pitts. The Chair thanks the gentlelady and recognizes 
the gentleman from Louisiana, Dr. Cassidy, for 5 minutes for 
questions.
    Mr. Cassidy. Dr. Shuren, a friend of mine, an orthopedist, 
went to--I am a doctor--went to a conference in San Francisco 
and said he was struck that there was, relative to previous 
years, a paucity of new equipment being displayed. So what I am 
speaking of is somewhat influenced by the conversation I had 
with him. I assume there must be some difference in terms of 
how you regard the bigger manufacturer or the bigger innovative 
company versus the smaller. Fair statement?
    Mr. Shuren. Yes. Actually, we try to do a lot more hand-
holding with the smaller companies.
    Mr. Cassidy. What in this bill--I mean, if I were to go and 
say to those smaller companies, first, how do you define a 
small company, and secondly, if I were to go to those 
innovators and say these are the specific provisions that 
pertain to you, what would be your summary?
    Mr. Shuren. So small businesses for purposes of the user 
fee act is $100 million or less in annual sales or receipts.
    Mr. Cassidy. I want to have such a small business, by the 
way, but continue.
    Mr. Shuren. And what we will do is actually work with them 
in terms of what they may need to do to bring a product to 
market. We are very used to dealing with small companies 
because they make up the largest segment of the device 
industry, although most of the devices on the market are made 
by big companies. But I will tell you, one of the challenges we 
are seeing is some of the data suggesting we are seeing an 
uptick of some of the first-time sponsor companies coming to 
us, and because they are small companies, they oftentimes don't 
have a good understanding of what they need to do to come to 
market. I quite frankly think----
    Mr. Cassidy. But that suggests a regulatory complexity as 
much as anything, correct?
    Mr. Shuren. No. You come to it with what you know, and for 
people who understand that system, can work a lot better. I 
think you don't suddenly--you need to have efficient systems, 
you need to have clear systems. They need to be predictable and 
consistent. But you don't just suddenly lower the bar simply 
because someone says----
    Mr. Cassidy. That is a fair statement. Are your fees the 
same for larger and smaller companies?
    Mr. Shuren. No, they are smaller for smaller companies.
    Mr. Cassidy. And do they remain constant relative to the 
previous authorization or do they increase or decrease for 
smaller companies in this regard?
    Mr. Shuren. So in MDUFA III, they will go up, and what we 
are talking about now is for PMA going from about $55,000 now 
to $67,000 by 2017, and the first PMA for a small business is 
free. It is on the house.
    Mr. Cassidy. Now, I presume that if you have a small 
company, you would still be required for the double blind 
control trial insofar as that is practical to test your 
invasive device. I assume that is the case?
    Mr. Shuren. The evidence you have to provide wouldn't 
change. I mean, the device is the device. It shouldn't change 
based upon who made it. That has been one of the issues with 
laboratory-developed tests.
    Mr. Cassidy. That is a fair statement.
    Mr. Shuren. But by the same token, we are trying to apply 
least burdensome, so actually most of our clinical trials are 
not placebo-controlled double blind clinical trials. They are 
either not practical or they may not be necessary.
    Mr. Cassidy. Now, let me ask you as regards the increased 
revenue you all are requesting, I have again seen stuff and I 
have learned to say what I have been told, not what I know. Let 
me first say that. But you in your testimony can see that there 
is an increased time for approval over the last several years. 
You are working to address that.
    Mr. Shuren. Yes.
    Mr. Cassidy. But I have also seen that your revenue 
increased under the last MDUFA authorization. Your revenue 
significantly increased, and I think I know that your number of 
employees similarly increased. And so it seems like the lack of 
resources was not there. I mean, you have the resources. You 
had more money, you had more people, and yet the time to 
approval increased. So since we are being asked to give you 
more resources, why did more resources not work last time but 
they are going to work this time?
    Mr. Shuren. So two parts to that. One, there are program 
issues that need to get fixed, and those are things we have 
identified and we are fixing, and that is separate from 
resources if you are going to make it work.
    But the second is the resources we got weren't sufficient 
for the work we had to do, and one of the things in MDUFA II 
was we didn't take into account the increase in workload that 
would occur. So we got more people to try to meet the goals but 
then the workload was also going up and sort of outpaced the 
resources we got, and we never addressed the fundamental issue 
of having enough people to do the work and enough managers to 
provide oversight, and so we constantly have this high turnover 
rate, which industry has complained about because it disrupts 
the review of the device.
    Mr. Cassidy. I see you have a high turnover rate, but you 
did increase your number of employees. So what you are saying 
is, you just needed to increase them even more?
    Mr. Shuren. That is correct, and we have the same problem, 
by the way, in the drug program. About a decade ago, they had 
the same high turnover rate, same issues. The drug industry 
said--and they were not concerned about--they were very 
concerned about performance. And so what happened was, there 
were process improvements in the drug program and they got more 
money. They were able to get over that hump and they were able 
to put the drug program on the right track.
    Mr. Cassidy. So you feel like your process improvements are 
not enough, just to use your existing employees with existing 
revenue more efficiently, but rather you need both efficiency 
and much more money?
    Mr. Shuren. That is correct.
    Mr. Cassidy. I yield back.
    Mr. Pitts. The Chair thanks the gentleman and recognizes 
the gentleman, Mr. Matheson, for 5 minutes for questions.
    Mr. Matheson. Thank you, Mr. Chairman.
    Thank you, Dr. Shuren, for being here today. I am glad that 
Mr. Barton and Mr. Rogers both made reference to the Venture 
Capital Association study. I was going to note that, but I 
think they covered what the substance is, is the troubling 
trend of investment going offshore. I have grave concern for a 
couple of reasons. One is, of course, I want folks in the 
United States to have access to the best devices possible to 
maintain their health and safety, number one, and secondly, the 
medical device industry is the great U.S. success story over 
time and it has tremendous presence throughout the country 
including in my home State of Utah, and I am worried about 
investment shifting offshore.
    I do applaud your goal that you stated of bringing greater 
consistency and efficiency and transparency at the device 
center, and I want to ask you about your proposed guidance 
document on when device modification requires a 510(k). Last 
year, as you know, FDA released its draft guidance to industry 
detailing when a manufacturer needs to submit a new 510(k) for 
a change to an existing device. Obviously, FDA has had a policy 
on the books for many years that industry understood and was 
well accepted, but the new policy could, from what I have been 
told, dramatically increase FDA's workload, by estimates of 200 
to 500 percent, I mean, that many more applications coming to 
the FDA for 510(k). Is it your interpretation of the guidance 
document that it would require manufacturers to file 510(k)'s 
in that much of an increased magnitude in terms of workload 
within the FDA?
    Mr. Shuren. It is not, and we had put out the guidance 
actually to clarify when to submit a modification, 
predominantly in areas that were gray where we didn't provide 
clarity in the past, and we were not intending to raise the bar 
but to clarify to make it easier. We recognized, though, the 
concerns that had been raised by industry. We take them 
seriously. And I will tell you, we have got companies in, we 
have had trade associations in, and we are actually working 
very closely with them, sort of marching through to see what 
would be the real impact, did we get some things wrong, did we 
not clarify properly and we are going through that. We are 
doing that very methodically.
    You know, one of the downsides is, one of the bills on 
guidance document development would actually limit the time 
frame to get a final guidance out, and if that was in effect 
and we had just the one year to do it, I would be in a position 
to take that guidance and rush to finish it whereas I would 
rather take the time and work with industry to get it right. I 
think that is ultimately the right thing to do and that is what 
we are trying to do now.
    Mr. Matheson. Let me ask you a specific component of the 
guidance. Is it your interpretation that the new guidance would 
require manufacturers to file a 510(k) when a manufacturer 
would need to change suppliers due to a supplier goes bankrupt 
or there is a fire or some other emergency? Would they need to 
file a new 510(k) with the agency?
    Mr. Shuren. Just to change suppliers, no. They would have 
to document it as part of their design controls. That is just 
internal records. But they don't have to submit a 510(k).
    Mr. Matheson. It is my understanding that the guidance 
proposed last year would require manufacturers to file 510(k)'s 
for likely uses. Can you comment as to how or why the FDA would 
require manufacturers to anticipate likely off-label uses of 
their devices and file a 510(k)?
    Mr. Shuren. They would not have to file a 510(k) for off-
label uses. They don't have to go and say well, it could be 
used this way so I have to file a 510(k) then. That is the 
guidance.
    Mr. Matheson. But there is something in the guidance about 
likely uses. Is that correct?
    Mr. Shuren. There is something in there about if the 
manufacturer on their own puts a contraindication in their 
labeling about a particular likely use, then there is something 
called a changes being affected manifestation that they would 
submit to us. So it just that one circumstance where they are 
actually making this change in the labeling and it is just a 
certain kind of update to 510(k).
    Mr. Matheson. So absent the manufacturer listing on their 
labels another likely use, you are suggesting that if there 
some off-label use, the manufacturer is not going to be 
compelled to file a 510(k)?
    Mr. Shuren. That is correct.
    Mr. Matheson. OK. Thank you, Mr. Chairman. I yield back.
    Mr. Pitts. The Chair thanks the gentleman and recognizes 
Ms. McMorris-Rodgers for 5 minutes for questions.
    Mrs. McMorris Rodgers. Thank you, Mr. Chairman, and thank 
you, Dr. Shuren, for being here. This is a very important 
discussion, and when it comes to new cutting-edge medical 
research, exciting new medical devices, the FDA can either help 
make it happen or the FDA can close the doors to an entire 
industry, and as Mr. Matheson just said, the medical device 
industry in America is a great success story over the last 50 
years, and we have been the world leader. Americans have 
benefited and lives have been saved. And yet today we hear 
because of the FDA, we hear about delays, we hear about 
increased cost, increased user fees. We hear about regulatory 
unpredictability. And it is not just--it is not the regulations 
themselves, it is the fact that the goalpost changes so often. 
And then along with that, we know that this industry is also 
facing huge tax increases because of the President's health 
care bill. We also know that it takes on average now 4 years 
longer in America to bring a new device to market than in 
Europe, and I don't believe that Europe is using bad tools and 
I don't believe it means that we have to lower the bar, but we 
do need to address what is happening.
    And so my first question is, do you believe that the 
current regulatory environment at FDA is negatively impacting 
the development of new medical devices here in America and 
sending jobs overseas?
    Mr. Shuren. I think the program that we have here needs to 
be improved so that we are actually having devices, more 
devices developed over here and that we are keeping and 
actually creating more jobs over here in the United States, and 
I take it seriously very much from a public health standpoint. 
I am a physician myself. I would like to see more treatments 
and diagnostics for patients. I am a neurologist. That space, 
if there is ever a space that could use more help, that is the 
one. But I don't think Europe is the answer. Europe actually 
does have a lower standard. You don't show effectiveness over 
there. You don't show that there is any benefit to patients, 
and as a result, you do have products--we are finding more 
products that have been approved over there later shown through 
subsequent studies, often through the United States, that it is 
unsafe or it is ineffective, but they don't have a centralized 
database of their approvals so it is very hard to follow much 
of this.
    And there has been a growing chorus in Europe for change, 
particularly for high-risk devices. Like the European Society 
of Cardiology, the British Medical Journal are all coming out 
to say high-risk devices should be treated more like the United 
States: demonstrate effectiveness, more robust clinical trials 
over there, putting out guidance to clarify what to do. Believe 
it or not, for the need for more guidance, we put more guidance 
than Europe does. So I don't think the answer is that the 
United States should become Europe. I think we should keep the 
American standard but the program behind it needs to be 
predictable, consistent, transparent and timely. I don't know 
what----
    Mrs. McMorris Rodgers. Do you believe that that program 
currently is predictable?
    Mr. Shuren. Well, I don't think it is sufficiently 
predictable, consistent, transparent, and we have said that, 
and I wouldn't be making these changes, I wouldn't have my 
staff spending the time to make those changes if we didn't 
believe it, and I will tell you, in spite of their working hard 
to try to get products out and the added effort to make these 
changes in the program, we are actually now starting to see 
early signs of improvement in performance. It is going to take 
a little time to really show bigger impact but it goes to show 
you, making those investments on our part can pay off 
dividends, but what we really need is, we need the support to 
go ahead and do it and then ultimately between our changes and 
the extra dollars with the user fee program, we can get 
ourselves back on track and we can keep the American standard.
    Mrs. McMorris Rodgers. Well, at the current rate, we are 
going to run out of time, and I have introduced legislation 
regarding harmonization, and I wanted to ask you what role you 
believe harmonization with other countries could play in terms 
of getting devices to market more quickly.
    Mr. Shuren. I actually consider harmonization critically 
important. We had what is called a global harmonization task 
force, which was us, European Union, Canada, Australia, Japan 
working on harmonization. I will tell that most of the members 
of that group had felt that that group had kind of run its 
course. We put out----
    Mrs. McMorris Rodgers. Now, when was this?
    Mr. Shuren. This is the global harmonization task force, 
and it put out many high-level documents that were more helpful 
to developing countries who didn't have a regulatory program in 
place or just developing but didn't lead to a lot of true 
harmonization. We, the United States, I will tell you I 
personally felt we needed to do better and so we put a new 
proposal on the table for an international medical device 
regulators forum to broaden the participation. It can't just be 
those few countries because the rest of the world was at risk 
of moving in different directions. We had to broaden our scope 
and we had to focus on real implementation on harmonization, 
and that group, I will tell you, to the credit of the members 
of GHTF, they agreed to do it and the very first meeting of 
that new forum is at the end of this month.
    Mrs. McMorris Rodgers. So are you seeing products being 
brought to market any quicker because of these efforts?
    Mr. Shuren. No, this effort is going underway. That was the 
problem with GHTF. We actually weren't focusing on critical 
questions about could we actually be relying on data submitted 
or in some cases decisions being made by other regulatory 
bodies in support of bringing the product here to the United 
States.
    Mrs. McMorris Rodgers. Thank you. I have run out of time. 
Bottom line, we are running out of time and we have to start 
making it happen. Thank you.
    Mr. Pitts. The Chair thanks the gentlelady and recognizes 
Ms. Blackburn for 5 minutes for questions.
    Mrs. Blackburn. Thank you, Mr. Chairman, and I thank you 
all for being here.
    And Dr. Shuren, I hope that you realize and appreciate that 
we would like to see a sense of urgency coming from you to do 
more than just talk about issues but actually have some 
demonstrable actions, and when you talk about a global task 
force, when you talk about, you know, time, as Ms. McMorris-
Rodgers said, we are running out of time with a lot of our 
constituents and their companies who complain about the way 
they are dealt with by the FDA, and in their mind, time is 
money.
    Now, you all in government have an additional, a continuing 
appropriation but I think it is important that you realize what 
we see from you is that you may not get additional money. The 
Federal Government doesn't have additional money to give. 
Taxpayers are saying we want to see them show some successes 
and some changes in behavior, and right now, perception is 
reality, and the reality is, the FDA is a very difficult agency 
with which to deal. You can look at the Jobs Council. You can 
look at the ODE annual report, the GAO, the Venture Capital 
Alliance. You can look at all of these, and there are problems 
dealing with you and the regulatory burden that you impose and 
the method in which you impose that.
    Now, let me ask you a question. You may have seen this 
article about mobile devices. This is something that is 
important to my constituents in Tennessee. And this is from 
February 7th Washington Times. So I want to ask you about 
mobile devices, and how do you plan to move forward with 
regulation of mobile devices? Do you think you have got enough 
on your plate with that? And if you do move forward with mobile 
devices, do you intend to subject them to the device tax? If 
somebody goes out and buys their iPad and places a mobile 
device on that, some monitoring device on this, are they going 
to be subject to the device tax? So please speak specifically 
to the mobile device.
    Mr. Shuren. So specifically for mobile devices, we actually 
took a very unique approach for FDA. Normally if something is a 
device, you regulate it like a device, and we said, ``Wait a 
minute, why do we need to do that?'' Quite frankly, if there is 
not sufficient value added to do that, and keeping in mind the 
value of having certain technologies out there and recognizing 
the more rapid innovation cycles we see, then we shouldn't do 
it. So the policy we put out--and that article is dead wrong. 
They got it wrong, and you should see the commentary in other 
publications on that article saying what was this person 
thinking. No, what we actually said is, while the world of 
mobile apps is maybe this big for devices, we are only 
interested in this, and in reality, what we are interested in 
is, it is the same thing as devices we already regulate. It 
shouldn't matter if the device is on a desktop versus on a 
mobile application. It is still a device. It is something we 
already regulate. That doesn't change it. And that is really 
the very narrow universe that we focused our attention on. That 
is essentially it. That makes a lot of sense.
    What we got back from comments is, can you provide more 
clarity on the boundaries, give us more examples about it, but 
for the most part, the read we have been getting from people is 
that very narrow look makes a lot of sense, and for the rest we 
have said even if you are a device----
    Mrs. Blackburn. What about expediency? Because right now it 
is taking about 3 years and about $75 million to get something 
through your process, and I have to tell you, some of the 
innovators that I am talking with, they don't think this was 
completely wrong. They saw a lot of commonalities in the 
article, and so I would just highlight with you, when you look 
at the speed of innovation that is taking place in the medical 
mobile applications that you can't spend 3 years trying to get 
through all of your filings and reviews and the repetitiveness 
and switching reviewers. Sir, there is a tremendous amount of 
frustration with the FDA by our innovative community. So talk 
with me about expediency.
    Mr. Shuren. Sure, and again, when we are talking about the 
mobile apps that we are looking at, it is things like you have 
technology that is pulling down X-rays and reading the X-rays, 
I mean, the stuff we normally regulate, or EKG machines to 
measure heart rhythm. We have been regulating those for years. 
But when we deal with just software, we recognize too that the 
paradigm we have, the framework we have in place for devices 
does not work well. Actually, that was one of the 
recommendations from the Institute of Medicine to look at 
software because it was so challenging. So maybe we don't have 
to get the $1.3 million fully backed. We can let them keep a 
few dollars. But we are actually underway to sort of revisit 
our entire framework as regard software, recognizing exactly 
the point that you make, that you have these rapid changes, and 
you need to allow for that kind of business model and constant 
updates. By the same token, there may be other ways to assure 
you have a good product that we might be able to avoid even 
looking at it premarket, and the other is, there is a whole 
bunch of things for clinical decision support, things to help 
you make decisions that while they could be medical devices, we 
are going through it and saying leave it alone, just leave it 
alone completely, and that is what we are working on by way of 
policy. Because we agree, we have to have a rationale approach.
    Mrs. Blackburn. When do you think that your policy will--
when are you going to have some guidance? And my time has 
expired. I will ask you to answer, and yield back.
    Mr. Shuren. OK. Our goal is on mobile medical apps to close 
out that one this year and also to put out the draft policy on 
the clinical decision support software this year as well.
    Mr. Pitts. The Chair thanks the gentlelady. That concludes 
the questions by the members of the subcommittee. Without 
objection, we will go to members of the committee for 
questions. Dr. Christensen, you have been very patient, you 
were here the whole hearing. We will recognize you first for 5 
minutes for questions.
    Mrs. Christensen. Thank you, Mr. Chairman and Ranking 
Member. It has been very informative to sit here and listen to 
the questions and the answers.
    I wanted to follow up on Mr. Waxman's questions about the 
Premarket Predictability Act of 2011. The bill would make 
changes in two areas in addition to the least-burdensome 
provisions, one, to the investigational device exemption, and 
then second, to the procedures for appealing decisions through 
CDRH.
    On the first, the bill would change the investigational 
device exemption process in ways that appear designed to permit 
companies to conduct studies that are not necessarily geared 
towards an approval or clearance decision. That seems to run 
counter to the company's interest, so can you explain where 
this is coming from, if you know, and whether you believe a 
change like this is necessary?
    Mr. Shuren. Well, we actually find problematic the change 
that is put in there because that change in standard for 
approving a clinical trial will mean that we will approve a 
clinical trial that is supposed to be the pivotal trial to show 
it is safe and effective and we will approve a trial that isn't 
going to be good enough so it will go forward, and then when 
the product comes back in the door with the results, we want to 
approve the product. And we suffered in that circumstance 
previously and so we were watching our approval of products 
going bad. It wasn't working well.
    Now, on the flip side, we sort of changed that but didn't 
change it well enough so that we said look, let us stop doing 
it, but what we didn't allow is, there may be extra questions 
we don't need an answer to right now, and they are nice to know 
but we shouldn't worry about them, and so we put out new policy 
in November of 2011 to actually set that balance right on 
approving clinical trials, and we think that is the smart 
approach. That will get us to actually approving clinical 
trials more quickly but appropriately. This change in the 
standard will actually adversely affect products coming on the 
market.
    Mrs. Christensen. That was my impression as well.
    And the Premarket Predictability Act would also make 
changes to CDRH's appeals process to make it easier to have you 
as the center director be directly involved in appeals. In 
fact, it appears that under that bill, you would not be doing 
much else other than just dealing with appeals. So can you 
comment on that section of the bill and what impact those 
changes to the appeal process would have on the center?
    Mr. Shuren. Well, if folks would prefer that I just work on 
appeals and not improving the premarket program and making the 
changes necessary to do, this is a good way to do it. I would 
actually prefer just being sent on vacation, but that is a 
problem with this bill. And I will tell you, most appeals 
actually get resolved at the office level. In fact, of the 
appeals filed in the past 2 years, 26 to 28 percent wind up 
getting changed in whole or in part. So it goes to show you, 
the appeal process can actually work.
    Mrs. Christensen. Thank you. I just wanted to get that on 
the record.
    And on the guidance issue that was raised, H.R. 3204, the 
Guidance Accountability and Transparency Act of 2011, appears 
aimed at making FDA guidance development a more public process 
and ensuring that they remain up to date. I think we all agree 
that government procedures should be as transparent as possible 
and that the ability of government to make informed and 
sensible decisions is dependent on receiving and making use of 
information stakeholders, and we certainly agree that guidance 
should be finalized in a timely manner and kept up to date.
    At the same time, though, I think we all understand that 
the principal purpose of FDA guidance is to enable the agency 
to provide advice in a more timely and flexible manner than it 
can through regulations. For instance, when FDA learns of new 
information relevant to certain product approvals, the agency 
needs to be able to communicate this information to the 
regulated industry as quickly as possible. Otherwise the 
industry could waste valuable time and money doing clinical 
trials on other work that won't necessarily help with approval 
of clearance of their product. So we need a workable process 
that balances the need.
    But I am concerned that the processes that would be 
required would actually make the guidance more onerous and more 
time consuming. So as my time is getting short, I know that the 
legislation would apply to all FDA guidances but could you tell 
me how it would affect CDRH and are there any aspects of that 
legislation that you agree with that might be helpful?
    Mr. Shuren. The bottom line is, we will issue fewer 
guidance and there will be less predictability in our programs. 
I mean, there are all these additional hoops and hurdles. You 
have to announce that you are going to do this particular 
guidance 3 months in advance. We already put out a list. Then 
we have to meet both before and after putting out the draft so 
the cost just dramatically increases, and where we have been 
trying to improve our productivity, productivity is going to go 
into the toilet and we know that is not good for industry.
    Mrs. Christensen. And if you have to issue your final 
guidance in 12 months, that just makes you say no, I can't do 
it, so----
    Mr. Shuren. Well, that is one of the problems, and industry 
sometimes asks for longer comment periods because they want 
more time to look at it. I can't grant the longer comment 
period. Modifications guidance, we couldn't be working through 
those issues. And if I have HHS or OMB who are reviewing it, 
that just adds on a lot of additional time. We understand the 
need to kind of try to move quickly and rapidly but this 
actually would have unintended consequences. And the other part 
about expanding what is under a guidance document actually can 
have adverse consequences for patient safety because it 
includes notices that involve a complex scientific issue. Those 
are public health notices that we have to get out quickly to 
tell the public about a big public health concern would not be 
subject to this good-guidance practice more onerous. So we 
would have to say there is something coming up on this device, 
we will announce it in 3 months, stay tuned. That doesn't help 
patients.
    Mrs. Christensen. Thank you for clarifying those issues for 
us. Thank you.
    Mr. Pitts. The Chair thanks the gentlelady and recognizes 
Mr. Bass for 5 minutes for questions.
    Mr. Bass. Thank you very much, Mr. Chairman, and I 
appreciate your accommodation. I am also not a member of this 
subcommittee.
    Dr. Shuren, I represent a State, New Hampshire, with a 
number of important medical device manufacturers as well as 
laboratories that are at the forefront of developing new 
medical devices, some of which are very common now and in use 
not only in America and around the world, and to say that some 
of them at least are very frustrated with the length of time 
and the quality of the decisions that are coming out of the FDA 
on the medical device side would be an understatement and 
perhaps in some cases we can work together on some of these 
issues.
    But I am here to ask you a question about a bill that I 
have introduced as part of, I think there are 10 altogether, on 
MDUFA having to do with humanitarian-device reform. As you 
know, we haven't had nearly as much success since the 1990s in 
developing humanitarian devices for rare diseases as we have 
had with the orphan drug program, just 55 devices compared to 
350 orphan drugs. But that isn't FDA's fault or the industry's 
fault. There are flaws in the law that chill investigator and 
sponsor interest and demand targeted reforms. The bill that I 
have agreed to introduce, H.R. 3211, the Humanitarian-Device 
Reform Act of 2011, would lift the profit restriction on 
current law but maintain FDA's current oversight of 
humanitarian devices. The Act would simply do it for adult HDEs 
what the 2007 pediatric device law has already done for 
pediatric HDEs. Today, there is evidence that this has already 
led to more interest in pediatric HDEs.
    My question to you is, do you agree that lifting the no-
profit restriction on adult HDEs while maintaining FDA 
oversight is a win-win reform that would encourage more 
innovation, ensure safety and result in more treatment for 
rare-disease patients?
    Mr. Shuren. So the honest answer is, I don't know what the 
ultimate impact would be on the flip side for pediatric 
devices. We happen to agree with you that there is a need for 
more incentives to develop devices for these rare conditions. I 
know the National Organization for Rare Disorders has said 
look, lift the cap on adult products. That makes a lot of 
sense. The American Academy of Pediatrics has a concern that if 
you broaden it, then manufacturers won't make devices for the 
pediatric population, and we have seen a fivefold increase in 
companies coming forward to actually get a fivefold increase in 
designations for humanitarian-device exemption for pediatric 
indications.
    So this is exactly the kind of topic, quite frankly, that 
we agree Congress should be tackling. We would like to be a 
part of that conversation. We suggest get all the players in 
there, because I don't think we have enough information to make 
a firm decision but we fully support this is an area that it is 
critical that we take a closer look at.
    Mr. Bass. I appreciate that, and I appreciate the fact that 
you are willing to work with me and other members of the 
subcommittee. I would point out that there are other patient 
groups that disagree with AAP, and the reality is that we could 
really benefit significantly if we had an honest debate and 
could work out some sort of a legislative remedy for this.
    And with that, Mr. Chairman, I will yield back. Thank you, 
Doctor.
    Mr. Pitts. The Chair thanks the gentleman. That concludes 
the first round of questioning. We will now take one follow-up 
per side. I recognize Dr. Burgess for 5 minutes.
    Mr. Burgess. Thank you, Mr. Chairman.
    I vowed to be good today, but someone on the other side 
took the first shot, so let us talk about laboratory-developed 
tests for just a moment and the reason why H.R. 3207 was in 
fact necessary because of draft guidance coming out of your 
shop, the Center for Devices and Radiological Health, appeared 
to be overstepping the boundaries. In fact, there appeared to 
be a basic change in the standard regulatory paradigm that had 
been established, and if one even wanted to draw it to its 
further conclusion, there appeared to be violations of the 
Administrative Procedures Act coming out of your office by 
issuing this draft guidance. You are going to require people to 
do things that had never previously been required, and this was 
all happening without any legislative authority. It was simply 
happening upon the will and the whim of the Center for Devices 
and Radiological Health.
    So I have got several letters from laboratories across the 
country that are in support of keeping this jurisdiction within 
CMS, within the purview of CLIA. Laboratory tests must be 
accurate, they must have clinical utility, and that is the 
correct place. To ask these companies to literally be sucked 
into the maelstrom of the regulations of the devices, you can't 
do what you are already supposed to be doing and you are asking 
for more jurisdiction. How is this helpful? How does this move 
anything in the proper direction?
    So Mr. Chairman, I did want to submit these letters on the 
laboratory-developed tests for the record, because again, I 
think this is an important part of the discussion. Maybe this 
legislation is not the correct final product but this 
discussion needs to be part of the reauthorization of the user 
fee agreements. I will certainly allow you time to respond.
    Mr. Pallone. Mr. Chairman, I would have to review those 
before I could agree to unanimous consent to put them in the 
record.
    Mr. Pitts. OK. We will provide copies to you.
    Mr. Shuren. So laboratory-developed tests, we have been 
clear for years, they are medical devices. I mean, it is the 
test. It doesn't matter who makes the test and that is how the 
law is, but we have exercised enforcement discretion but the 
world changed, and we have more-complex tests that are actually 
putting patients at significant risk. I would be very 
interested to see the framework you are talking about because 
we actually never issued draft guidance, so maybe it is another 
group that put it out there, but we have yet to put anything 
out there for people to react to. But it makes absolutely no 
sense to have the same kind of test that is regulated by two 
different government agencies, depending upon who makes it.
    And CMS has been clear when they looked at the legislation, 
this is not the right place for doing it. In fact, one of the 
changes under CLIA was about where you make determinations in 
terms of the risk on the test, and it moved from CDC to FDA, 
specifically to reduce duplication and try to have more of one-
stop shopping, and this actually goes the opposite direction 
of----
    Mr. Burgess. No, sir. The indications of the draft guidance 
you were going to put out, that would be the duplication that 
this legislation is seeking to avoid. And CLIA, remember, in 
its inception in the late 1980s, I was never a big fan of CLIA 
as a practicing physician but their whole purpose, the purpose 
that Senator Kennedy and others worked on this was so that 
laboratory tests could be certified as accurate and have 
clinical utility. That is their job. Don't tell me they don't 
want to do their job. If a Federal agency doesn't want to do 
its job, then perhaps we will have that discussion, but this is 
their job. This is what they were required to do under the 
amendments in 1988.
    Mr. Shuren. No, the amendments actually don't address these 
issues on analytical and clinical validity. In fact, your bill 
now changes that so you have to provide the data to actually 
show that. The problem is, it is not set up in a good way to 
get there and it creates duplicative government.
    This is actually a problem for personalized medicine. We 
have heard this from companies who are making drugs and then 
devices to actually have the devices diagnose who is the right 
population to get the drug, and you now have companies, they 
make the device, they make the drug, they do the data. 
Everything works out and moves forward. In fact, one of them, 
two of them that just came out, we and our Center for Drugs, we 
approved it, both the drugs and the diagnostic, in less than 5 
months. But then the day that they go out with their test and 
with their drugs, labs come out and say oh, I have got the 
exact same thing and in fact we are better. Really? And so now 
people can go use those other tests. Who knows if they are 
actually any good. Because none of the studies was even done 
with the drug. It is not even out there. And so what do you 
have now? Now you have tests that actually may be directing 
patients to get treatment they shouldn't get or not get a 
treatment they should get, and that is a disaster.
    Mr. Burgess. Well, I would submit that the duplication 
actually exists within your center, and albeit there is work to 
be done here but to simply ignore that there is a problem is to 
do no service to anyone at all.
    Thank you, Mr. Chairman, for your indulgence and I will 
yield back.
    Mr. Pitts. The Chair thanks the gentleman and recognizes 
the ranking member for 5 minutes for follow-up.
    Mr. Pallone. Thank you, Mr. Chairman.
    Dr. Shuren, H.R. 3202, the Novel Device Regulatory Relief 
Act, appears to be intended to streamline the de novo process 
for FDA approval of medical devices. Although it is important 
to ensure that FDA review processes are efficient, I am sure we 
would all agree that the fundamental goal of the FDA is to 
ensure the safety of the public and to protect Americans from 
unsafe and ineffective medications and devices.
    The proposed new language in this bill would allow device 
companies to require that their new device be evaluated under 
the de novo process without first submitting a 510(k) 
application demonstrating a substantial equivalence to another 
device already on the market, which is what is currently 
required under the de novo procedures, and it changes the 
timelines under which a de novo application must be submitted.
    So my question is, do you think this change under this 
proposed legislation would add to the efficiency of your 
clearance process? Does it give you enough time to do the 
reviews for products that presumably will be more novel than 
most 510(k) submissions?
    Mr. Shuren. We do think that the change of not having to be 
required to submit a 510(k) before going down the de novo 
pathway makes sense. So taking that requirement out of the law 
makes sense. Giving us only 60 days to do it, however, isn't 
enough time. I mean, even a 510(k), which is less complicated, 
is 90 days by law, and even that, we all know that that is not 
enough time for many of these as well. So not enough time but 
it is the right thing to do to take out the 510(k) if they 
don't want to submit it. Some companies, you actually don't 
know and they don't know, and they submit a 510(k) and then we 
will look at it. They actually never the requirements for a 
510(k).
    Mr. Pallone. All right. Then I wanted to ask you a second 
question. As you know, the Safe Medical Devices Act of 1990 
mandated that FDA evaluate pre-amendment class III devices and 
on a case-by-case basis either reclassify them to class I or II 
or require them to go through premarket approval as most post-
amendment class III devices. What I would like to know is why 
FDA hasn't completed its mandated task of reclassifying pre-
amendment class III devices or requiring them to go through 
premarket approval. Can you tell us how far you have gotten in 
this activity and how many devices remain, and are there 
unnecessary procedural hurdles in the law that keep you from 
finishing this activity?
    Mr. Shuren. So when I came on board, we put a new refocused 
energy into trying to get these done, and we have on our Web 
site each of the devices that we have to go through and where 
they are in the process. There are five steps. Four of them, we 
have wrapped up on. Another six we have proposals out and we 
will be issuing some actually final rule coming up and another 
proposed rule. So we are marching down the list. The challenge 
for us are the statutory requirements to go through this 
process, advisory committee meetings and doing rulemaking. In 
fact, this challenge--I mean, you all in legislation are 
telling us do this faster. This is a challenge when we have to 
change classification on a product. It is by rulemaking, and it 
cuts both ways. On the one hand, it is a weakness with 510(k). 
If you have a device that is in the 510(k) pathway and we have 
new data to say there are concerns, it should not be under 
510(k), it should have been under PMA, a higher classification. 
It will take us several years to go there and puts a terrible 
quandary on doctors and patients who are out there and have the 
technology and they don't have the data behind it, or we take 
it completely off the market and that doesn't make sense in a 
lot of cases. We want to leave it there. That process is too 
burdensome.
    On the flip side--and that is a safety issue. On the flip 
side, though, when we want to down-classify so we have 
something at a high risk or moderate risk and we want to make 
it lower risk and reduce regulatory burdens, we have so many 
statutory burdens on us, it is hard to do that. So it is hard 
for us to be deregulatory and it is hard for us to set the bar 
in the right place. And if that were fixed, that would solve a 
big challenge. It would actually buttress things like the 
510(k) program where the attention goes on these few devices 
where there are a lot of issues but it will also allow us to 
free up resources by down-classifying devices that should be 
subject to a lower standard.
    Mr. Pallone. You know, just an editorial comment. I don't 
envy you your job because it is a constant problem which is on 
the one hand, we want innovation, we want approvals to move 
more quickly, but we also have to balance that with public 
safety, and we get it at both ends. I mean, I as a politician 
get that from both ends, you know, ``Why aren't you moving 
quickly?'' On the other hand, everything has to be safe. You 
know, it is tough. I mean, I know a lot of my colleagues, 
particularly on the other side of the aisle, have been saying 
there are too many hurdles, but you can't sacrifice public 
safety, either, so it is a difficult quandary. Thank you.
    Mr. Shuren. I appreciate that. Actually, not even my dog is 
talking to me these days.
    Mr. Pitts. The Chair thanks the gentleman.
    The Chair has two unanimous consent requests. One, the 
report by the National Venture Capital Association entitled 
``Vital Signs.'' You have seen that?
    Mr. Pallone. That is fine.
    Mr. Pitts. Without objection.
    [The information appears with Mr. Jaffe's prepared 
statement.]
    Mr. Pallone. And the other being from----
    Mr. Pitts. Mr. Burgess's letter?
    Mr. Pallone My colleague is fine too, yes.
    Mr. Pitts. Without objection, those will be entered in the 
record.
    [The information follows:]


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Mr. Pitts. That completes panel one. Thank you very much, 
Dr. Shuren. We look forward to sitting down with you and 
working with you as the process goes forward.
    At this point we will take a 5-minute recess while panel 
two sets up on the table, and we will reconvene in 5 minutes.
    [Recess.]
    Mr. Pitts. I will ask all of our guests and witnesses to 
please take their seats, and I will introduce the second panel. 
First of all, thank you all for agreeing to testify before the 
subcommittee today. Let me quickly introduce each one of you, 
and you can present your testimony, summarize your statements 
in this order. Mr. David Perez, the President and CEO of Terumo 
BCT; Ms. Elisabeth George, Vice President of Global Government 
Affairs, Regulations and Standards for Philips Healthcare; Mr. 
Ralph Hall, Professor at the University of Minnesota Law 
School; Dr. Ross Jaffe, Managing Director of Versant Ventures; 
Dr. Aaron Kesselheim, an Internal Medicine Physician at Brigham 
and Women's Hospital; Dr. Art Sedrakyan, an Associate Professor 
at Weill Cornell Medical College; Ms. Lisa Swirsky, Senior 
Health Policy Analyst at Consumers Union; and Mr. Jim Shull 
from the State of New Jersey.
    Again, thank you all for coming. We have your prepared 
statements, which will be entered into the record. Mr. Perez, 
we will begin with you. You are recognized for 5 minutes to 
summarize your testimony.

   STATEMENTS OF DAVID PEREZ, PRESIDENT AND CHIEF EXECUTIVE 
   OFFICER, TERUMO BCT; ELISABETH M. GEORGE, VICE PRESIDENT, 
GLOBAL GOVERNMENT AFFAIRS, REGULATIONS, AND STANDARDS, PHILIPS 
HEALTHCARE; RALPH F. HALL, PROFESSOR OF PRACTICE, UNIVERSITY OF 
 MINNESOTA LAW SCHOOL; ROSS JAFFE, MANAGING DIRECTOR, VERSANT 
VENTURES; AARON S. KESSELHEIM, ASSISTANT PROFESSOR OF MEDICINE, 
 HARVARD MEDICAL SCHOOL, DIVISION OF PHARMACOEPIDEMIOLOGY AND 
PHARMACOECONOMICS, BRIGHAM AND WOMEN'S HOSPITAL; ART SEDRAKYAN, 
ASSOCIATE PROFESSOR AND DIRECTOR, PATIENT-CENTERED COMPARATIVE 
 EFFECTIVENESS PROGRAM, WEILL CORNELL MEDICAL COLLEGE AND NEW 
YORK PRESBYTERIAN HOSPITAL; LISA SWIRSKY, SENIOR HEALTH POLICY 
 ANALYST, CONSUMERS UNION; AND JAMES SHULL, BROWNS MILLS, NEW 
                             JERSEY

                    STATEMENT OF DAVID PEREZ

    Mr. Perez. Thank you, Chairman Pitts, Ranking Member 
Pallone and members of the committee for this opportunity to 
testify today.
    My name is David Perez and I am the President and Chief 
Executive Officer of Terumo BCT and Chairman of Terumo 
Corporation's Blood Management Business board, and I am 
responsible for leading the strategic direction, the growth and 
the execution of this global organization.
    At Terumo BCT, we believe in the potential of blood to do 
even more for the world than it does today. This belief unites 
our organization, inspires our innovation and strengthens our 
collaboration with customers, which ultimately benefits the 
patients that we all serve. Working with the American Red 
Cross, community blood centers throughout the United States as 
well as hospitals, we unlock the potential of blood as we 
strive to make even safer high-quality transfusions available 
to people. We help our customers bring even more treatment 
options to patients with advanced blood therapies, and we 
support researchers in developing cell therapies that may 
fundamentally improve health care.
    I want to thank you for convening today's hearing and for 
your interest in improving medical device regulation for 
patients in our industry.
    Over the course of the last year, members of this committee 
have demonstrated their focus on improving the efficiency and 
effectiveness of FDA regulation in your outreach to the agency 
and to the policy proposals that show your commitment to this 
important issue.
    The medical technology industry is an American success 
story. Our industry directly employs more than 400,000 workers 
nationwide including 22,000 in the State of Pennsylvania, 
20,000 in New Jersey and over 11,000 in my home State of 
Colorado, making these among the States with the largest med 
tech employment. In 2011, our company alone added 297 jobs, 224 
of which were in manufacturing.
    Whether the firm is large or small, success in our industry 
comes only from innovation, the creation of diagnostics, 
treatments and cures that extend and enhance lives. While we 
are very proud of our contribution to the U.S. economy, we are 
even more proud of our contributions to improving patient care.
    Even though we are making progress in improving patient 
care and see immense future opportunities, we are also very 
worried. Today, America is the world leader in medical 
technology but there are warning signs that our lead is 
slipping, and a key factor in our loss of competitiveness has 
been the decline in the FDA's performance. Put simply, FDA is a 
crucial partner to our company's efforts to bring safe and 
effective medical devices to patients. Without a strong, 
effective and efficient FDA, we cannot have a strong and 
competitive industry.
    While the FDA has consistently maintained an excellent 
record of assuring the safety and effectiveness of the products 
it reviews, delays in product approval, inconsistency in the 
review process and the resulting downstream effects on 
investment and innovation have undermined the competitiveness 
of our industry and harm patient access to new treatments, 
diagnostics and cures.
    I am pleased to be able to report that after extensive 
negotiations, industry and FDA recently reached an agreement in 
principle for a new user fee package, which we believe has the 
potential to help achieve meaningful change in FDA performance 
through groundbreaking accountability and transparency 
measures.
    The FDA leadership and Dr. Shuren in particular have 
recognized the need to vigorously address the issues affecting 
the device center, and I want to applaud them for this 
commitment. The user fee agreement is a huge step in the right 
direction. It is good for industry, it is good for the FDA, and 
most of all, it is good for patients.
    The user fee agreement builds the conditions for success in 
a number of major ways. For the first time ever, this user 
agreement establishes average total time goals for FDA product 
review. All previous agreements have set goals in terms of time 
on the FDA clock. What matters to companies like my own and 
patients is the time it actually takes to get the product to 
patients. By setting in place this new goal, we will helping 
the FDA focus on the metric that is truly the most important to 
all concerned.
    The agreement also includes process standards that we 
anticipate will improve the consistency and timeliness of the 
review process independent of the specific time goals, and the 
agreement provides for meaningful pre-submissions interactions 
where agreements reached will not change so that companies know 
what the FDA expects and the FDA is bound by its commitments. 
And a new procedure, what we call No Submission Left Behind, 
will be instituted so that if the FDA time target is missed, 
the company and the FDA will meet to work out a schedule to 
resolve the remaining issues so that the submission doesn't go 
to the bottom of the pile.
    The agreement also provides for greater accountability so 
that FDA's success will be transparent to FDA management, to 
industry, to patients and to Congress so that any problems that 
arise can be corrected promptly. There will be quarterly and 
annual reporting on key metrics both the FDA and the industry 
have agreed are very important. In addition, this agreement 
requires analysis of FDA's management of the review process by 
an independent consulting organization coupled with an FDA 
corrective action plan to address opportunities for change and 
improvement.
    Finally, to give FDA additional tools to meet these goals, 
the agreement provides $595 million in user fees, additional 
reviewers, lower management-to-reviewer ratios, enhanced 
training, and other resources provided by the agreement will 
give FDA what it needs to improve performance.
    I appreciate the committee's work and its focus on 
enactment of this reauthorization package as soon as possible, 
and once again, I thank you for the opportunity to testify.
    [The prepared statement of Mr. Perez follows:]


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    Mr. Pitts. The Chair thanks the gentleman and now 
recognizes Ms. George for 5 minutes for an opening statement.

                STATEMENT OF ELISABETH M. GEORGE

    Ms. George. My name is Elisabeth George and I represent 
Philips Healthcare as their Vice President of Global Government 
Affairs, Regulations and Standards. I want to start by thanking 
Chairman Pitts and Ranking Member Pallone for holding today's 
hearing. I also want to thank you for your particular interest 
in medical innovation and for leading a policy discussion on 
how we can work together to collectively improve the medical 
device user fee program.
    It is clear to me that we all share the goal of getting 
safe and innovative products to U.S. patients in a timely and 
predictable manner. Philips Healthcare employs over 15,000 
hardworking Americans in cities and towns across the country. 
We are just one in a global industry. Philips Healthcare's 
current activities are organized across four businesses: 
imaging systems, patient care and clinical informatics, home 
health care solutions, and customer services. We have 
appreciated your steadfast support in ensuring the access to 
medical technology and particularly imaging and its important 
appropriate use for patients.
    I have worked for Philips Healthcare for more than 15 
years. I have managed strategic planning and technical aspects 
for global affairs, regulations and standards. I have also 
served on multiple FDA advisory panels through the years and 
have most recently represented the medical imaging industry 
during the MDUFA negotiations with the FDA. As an industry 
negotiator, I am pleased to talk with Congress today about the 
agreement in principle between the medical device industry and 
FDA. We believe that this agreement will facilitate improved 
transparency and consistency leading to better predictability 
and more timely access for patients.
    After negotiating for more than a year, we believe that 
this agreement is balanced and is fair to all stakeholders. We 
hope this package will lead to a timely reauthorization of the 
medical device user fee program. The goal of this agreement is 
to ensure timely patient access to safe, effective treatments 
and diagnostics. Although it is not formerly proposed to 
Congress until it receives full administrative approval and the 
FDA completes its public commenting period, the package as 
negotiated includes commitments from the agency that will 
improve the device review program through additional 
predictability, transparency and accountability. In a time of 
tremendous advances in medical technology, the agreement 
enables the industry to bring innovative, lifesaving 
technologies to market faster so that patients receive the 
highest quality care.
    The explicit goal of the device user fee program has been 
to achieve more timely clearance of safe and effective devices 
by providing the FDA with supplemental funds to independently 
evaluate applications. However, despite clear Congressional 
intent, FDA performance has declined steadily over the past 
several years. For example, fiscal year 2006, it took an 
average of 105 calendar days to make a final decision on a 
submission. The number increased to 154 days in 2009 despite 
the fact that the user fees had increased by over 50 percent 
over the same period. The decline in timeliness has been an 
overarching concern for industry. Our goal in this agreement 
was to reverse this downward trend and to ensure value for our 
user fee investment for both patients and innovators. The 
increase in resources to the agency under this agreement 
corresponds to a more timely approval process, which will 
benefit patients and the manufacturers who develop these 
innovative technologies.
    The agreement includes several new quantitative goals to 
hold the FDA accountable. These goals include total time for 
decisions as well as improved annual targets for 510(k) 
applications. The agreement also works to ensure an improved 
review process that is more predictable and transparent for 
manufacturers, patients and other stakeholders such as through 
enhanced clarity in the pre-submission process, enhanced 
guidance development and an independent assessment of the FDA's 
performance. These improvements are important for patients, 
innovation and jobs in America.
    I believe it is important that Congress do everything 
possible to encourage high-tech 21st century industries like 
the medical device manufacturing that will continue to create 
jobs and necessary to grow the U.S. economy. We are very 
appreciative of members of this committee who have held a 
series of hearings and introduced a number of bills in an 
effort to respond to these concerns and improve the FDA review 
process for medical devices. I believe that our collective 
efforts will lead to constructive improvements.
    Thank you for your consideration of these important issues. 
As the legislative process moves forward, we look forward to 
continuing to work with Congress and the administration to 
ensure patients are guaranteed timely access to medical 
technologies.
    I again thank you for this invitation.
    [The prepared statement of Ms. George follows:]


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    Mr. Pitts. The Chair thanks the gentlelady and recognizes 
Mr. Hall for 5 minutes for an opening statement.

                   STATEMENT OF RALPH F. HALL

    Mr. Hall. Chairman Pitts, Ranking Member Pallone, members 
of the committee, I appreciate the opportunity to address you 
on these important issues of medical device regulation. I serve 
on the faculty of the University of Minnesota Law School. I am 
also part-time counsel with Faegre Baker Daniels and am CEO of 
a four-person startup company.
    I am here to focus on two matters: the agency's authority 
in the area of medical device regulation and the safety 
performance of FDA in its actual review. I believe it is 
important to differentiate between questions of authority from 
questions of implementation. Authority is whether the agency 
can act or has the power to compel action, while implementation 
goes to issues such as resources, skill sets, timing, 
processes, etc. The user fees that are under discussion 
specifically today primarily address implementation challenges 
and are intended to address those.
    On the authority front, the agency has extensive authority 
for the entire lifecycle or, as we call it, total product 
lifecycle, of a device from initial design to final 
obsolescence. There are of course improvements, some of them 
which have been discussed in the de novo process or HDEs, for 
example, but fundamentally, the agency has the current 
authority to require products to meet the statutory standard of 
a reasonable assurance of safeness and effectiveness. This is 
true under both the 510(k) system and the PMA system. There are 
differences in how we achieve that objective or that test but 
that same statutory standard applies to all products.
    Along the same lines, the agency has extensive postmarket 
authority. Examples include the MDR system, the 522 orders, 
MedSun, registries, and there have been discussions about 
registries. It is important to note again on the authority 
front that the agency currently has the authority under the 
510(k) system to mandate patient registries for products for 
which it believes such registries are appropriate and valuable. 
The agency likewise has extensive authority in the areas of 
recalls and dealing with product issues including the authority 
to ban products where that is necessary and the authority to 
mandate recalls.
    The major question then is, how is the agency performing on 
the safety aspects. I leave to others the issues of impact on 
innovation, timeliness, predictability, etc. We have performed 
a study looking at medical device recalls. We have analyzed 5 
years of data. We are actually in the process right now of 
analyzing another year's worth of data. That is not yet 
completed. The conclusion of this study is that the agency is 
doing a very good job on the safety aspect. The vast majority 
of products that get through their system do not have 
significant safety issues. It is obvious and critical to 
remember that all medical devices have risks and the statutory 
standard is a balance between the benefit and the risk of the 
product. So one of the key aspects and requirements of the 
system is to identify the risks so that a knowing balance can 
be made between the risks and the benefits, and when you look 
at the data, you can see that greater than 99.5 percent of all 
product approvals do not result in a class I recall, that the 
majority of recall safety issues that do occur are postmarket 
issues: manufacturing mistakes, labeling errors, etc. And 
changes to a premarket system obviously can impact events that 
take place after product approval.
    Quality systems are the key to improving product safety. Of 
all recalls, as we have looked at the data, approximately 90 
percent of all of those have some relationship to quality 
systems and improvements in quality systems therefore provide 
the greatest leverage. Very preliminarily, we have looked at 
2010 data, as I mentioned. That data seems consistent with what 
we have seen to date with the other data, with a slight 
increase in manufacturing issues. We are not clear if that is 
statistical or not. We have also taken a look at class II 
recalls, and preliminarily, the reasons for recall appear to be 
consistent between class I and class II recalls.
    So in conclusion, the agency has multiple control points to 
ensure product safety and effectiveness, not just one: quality 
systems, premarket approval, postmarket approval. The agency 
has authority, extensive authority both pre- and postmarket, 
and the agency's safety record has been very good over the past 
years.
    Thank you very much.
    [The prepared statement of Mr. Hall follows:]


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    Mr. Pitts. The Chair thanks the gentleman and recognizes 
Dr. Jaffe for 5 minutes for an opening statement.

                    STATEMENT OF ROSS JAFFE

    Mr. Jaffe. Chairman Pitts, Ranking Member Pallone, members 
of the subcommittee, thank you for the opportunity to testify 
today. My name is Ross Jaffe. I am a physician trained in 
internal medicine who for the last 21 years has had the 
privilege of working to help develop innovative medical 
technologies.
    In my role as a physician and venture capitalist, over the 
last few years I more and more frequently face a frustrating 
paradox. On the one hand, we live in a time of incredible 
innovation in science and medicine that I see embodied in 
fascinating technologies every day. On the other hand, more and 
more often I am forced to turn down many of these important 
medical innovations because our unpredictable regulatory system 
here in the United States has stretched development time frames 
and increased capital requirements needed to fund these 
technologies, precluding adequate investment return for my 
investors.
    It is important to note that our investors are primarily 
university endowments, foundations and pension funds, which 
rely on us to generate a positive return on their capital. If 
we do our jobs well, not only do patients benefit and 
physicians have access to more innovative medical technologies, 
high-quality jobs are created, universities can educate more 
students, foundations can do more good works, and people can 
retire in greater comfort, a real win-win-win system that 
supports medical innovation and the U.S. economy.
    Colleagues of mine who have testified during previous 
hearings have described how most medical innovation comes from 
small venture-backed companies. However, the growing 
uncertainty with the FDA has dramatically reduced the amount of 
investment available to fund innovative medical companies. 
According to data from PriceWaterhouseCoopers, in 2007, 116 
early-stage companies raised approximately $720 million in 
initial financing. In just 4 short years, that investment 
amount has dropped by more than 70 percent to just 55 companies 
raising only $200 million. To put this in perspective, 2011 saw 
the lowest level of venture capital investment in medical 
startups in the last 16 years.
    In a recent survey by the National Venture Capital 
Association, which has been referenced this morning, 42 percent 
of health care venture firms expect to decrease investment in 
medical device companies over the next 3 years. In addition, 31 
percent of firms expect to shift health care investment and 
operational focus away from the United States towards Europe 
and Asia. In both cases, regulatory challenges here in the 
United States were cited as the primary factor for declining 
investment and driving investment overseas. Indeed, it is now 
common for many innovative lifesaving technologies, for 
example, percutaneous heart valves, to be available for 
patients in Europe years before they are available to patients 
here in the United States.
    Fortunately, within the last year or so, the FDA leadership 
including Dr. Shuren has acknowledged how regulation is slowing 
innovation and driving product development overseas. They have 
begun internal efforts to improve FDA processes as illustrated 
by a series of draft guidance documents released over the past 
few months.
    One notable efforts seeks to make explicit FDA 
considerations and risk-benefit determinations for premarket 
approval. Under the law, FDA is supposed to assess medical 
technologies to assure that the probable benefits are greater 
than the probable risks. Unfortunately, over the past few 
years, many FDA reviewers appear to be applying a different 
standard, weighing the probable benefit against any possible 
risk, which is not the standard in the law. If implemented 
appropriately, this guidance should make risk-benefit 
determinations more patient-centric and evidence-based and 
therefore improve the transparency, consistency and 
accountability of FDA decision-making, and I was pleased to 
hear today that that should be moving forward very quickly in 
the next few months.
    Beyond administrative changes under consideration by the 
FDA, the MDUFA reauthorization being discussed at this hearing 
will include additional process enhancements as well as needed 
resources to increase the predictability of the process. 
However, resources alone are not enough. We also need 
meaningful operational improvements, not only through MDUFA but 
also through additional legislation that leads to better 
application of the least-burdensome principle, streamlining the 
de novo process and revision of conflict of interest policies 
to allow more leading experts to sit on FDA advisory panels.
    In closing, let me be clear about one thing. We are not 
asking for increased regulatory predictability, consistency or 
efficiency at the expense of public safety. Innovation and 
safety are not a tradeoff. It is not an either-or. We 
absolutely need both. As investors, my colleagues and I pursue 
medical innovations precisely because they are safer and more 
effective for patients, preferably when they also can reduce 
health care costs. We need to work together to assure a 
regulatory system that supports the timely development of 
innovative products and therefore enables safer and more 
effective patient care.
    Thank you.
    [The prepared statement of Mr. Jaffe follows:]


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    Mr. Pitts. The Chair thanks the gentleman, and Dr. 
Kesselheim, you are recognized for 5 minutes for an opening 
statement.

                STATEMENT OF AARON S. KESSELHEIM

    Mr. Kesselheim. Chairman Pitts, Ranking Member Pallone and 
members of the Subcommittee on Health, thank you very much for 
the chance to share my thoughts with you today about the 
regulation of medical devices. I am Assistant Professor of 
Medicine at Brigham and Women's Hospital and Harvard Medical 
School in the Division of Pharmacoepidemiology and 
Pharmacoeconomics.
    One essential question being addressed in today's hearing 
is whether requiring the FDA to loosen its standards for 
medical device regulation would encourage innovation and help 
patients. Some offer the European Union as a model because 
high-risk devices generally make it to market sooner and more 
easily there. The main reason is that E.U. device approval 
usually only requires studies in small numbers of patients 
showing the device appears to be safe and performs as expected. 
Such evidence could include demonstrating that a new stent 
expands appropriately in the coronary artery. There are no 
requirements in the E.U. that companies demonstrate that their 
devices benefit patients. By contrast, the FDA requires more 
robust evidence of safety and effectiveness for many of these 
implantable or high-risk devices. Thus, approval for the same 
coronary stent might require showing fewer cardiac events or 
the need for another invasive procedure.
    The current E.U. system for approving medical devices 
recalls the U.S. prescription drug market before 1962 when the 
FDA only required limited studies of purity or safety before a 
drug could be marketed, but after the thalidomide public health 
crisis, legislation gave the FDA authority to compel reasonable 
safety and efficacy data before a new drug could be sold. This 
reform was almost derailed by accusations that it would 
threaten the viability of the pharmaceutical industry, but what 
happened instead was that the U.S. pharmaceutical industry grew 
into one of the most profitable in the world. Why? FDA 
validation meant that physicians could prescribe drugs 
confident that a neutral expert body had certified their 
efficacy and safety. Requiring companies to demonstrate that 
their products were effective also created incentives for 
manufacturers to impose a higher standard on their product 
evaluation, leading to their developing some of the most 
important medications we have, and today, nobody seriously 
advocates returning to a time when we essentially let any drug 
on the market and then figure out afterwards which ones were 
useful or dangerous based on haphazard patient experience.
    But this is indeed what is happening in the E.U. for 
approval of even the highest-risk medical devices. For example, 
the French company PIP is now under criminal investigation for 
using non-medical-grade silicone in breast implants. PIP's 
silicone implants were never submitted for marketing in the 
United States. Or take the case of the PleuraSeal lung sealant 
system, which was approved in the E.U. in 2007 to treat air 
leaks after pulmonary resection surgery. A clinical study 
conducted as part of an FDA premarket approval application 
showed in 2011 that it had triple the rate of adverse events 
compared to standard techniques. As a result, the device was 
rejected by the FDA and a worldwide recall was initiated. Or 
the CorCap cardiac support device, a harness for patients with 
heart failure to improve their cardiac output. The device was 
granted E.U. approval in 2000 but a pivotal U.S. premarket 
trial conducted by 2004 showed no change in mortality, had 
numerous irregularities including missing data for about 40 
percent of patients, and it was not approved by the FDA. Thus, 
the FDA requirement for premarket testing helped identify 
unsafe or ineffective devices or prevented companies from 
introducing substandard products, sparing U.S. patients from 
being exposed to them.
    But the FDA approval process is not perfect. Rigorous 
premarket testing cannot identify all safety concerns, and the 
FDA must use a least-burdensome approach in working with 
manufacturers to decide what clinical data will be required. In 
addition, experts have identified the clearance of high-risk 
devices through pathways designed for low-risk devices as an 
important inconsistency between the FDA's mandate and practice. 
Thus, patient safety also requires enhanced postmarket testing 
of new devices.
    In the drug world, one of the lessons from the Vioxx 
episode was that safety surveillance cannot be dependent on the 
recent of adverse-event reports alone. More active postmarket 
device surveillance would include development of national 
registries with mandatory reporting of all implanted devices 
along with automatic review of clinical experiences for certain 
devices after a period of years to ensure that they are 
producing the expected benefits. With today's advances in 
informatics and epidemiological surveillance techniques, this 
would not be problematic in terms of either cost or regulatory 
burden.
    In summary, patients and physicians do not want access to 
any latest drug or device. Rather, they want access to products 
that have meaningful clinical benefits with reasonable 
assurance of safety. The Medical Device User Fee Act should 
bolster this essential role of the FDA by increasing funding 
for inspections of manufacturers, hiring of more reviewers or 
safety experts, and by providing for more rigorous postmarket 
surveillance so that devices proven to be effective and safe 
can be used confidently by physicians for the benefit of their 
patients.
    Thank you very much.
    [The prepared statement of Mr. Kesselheim follows:]


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    Mr. Pitts. The Chair thanks the gentleman, and Dr. 
Sedrakyan, you are recognized for 5 minutes for an opening 
statement.

                   STATEMENT OF ART SEDRAKYAN

    Mr. Sedrakyan. Thank you very much, Chairman Pitts and 
Ranking Member Pallone and members of the subcommittee. It is a 
pleasure to talk today. I am Art Sedrakyan. I am an Associate 
Professor at Weill Cornell Medical College, and I am directing 
the Patient-Centered Comparative Effectiveness Research Program 
that is focusing on safety and effectiveness of devices. In my 
career, I have been exposed to regulatory, academic and 
manufacturing perspectives.
    In the past decade, we have seen a lot of groundbreaking 
devices that will change the practice of medicine. However, at 
the same time, we have seen a number of high-profile failures 
of approved medical devices. Many of these failures occurred 
through these pathways which was called substantial equivalency 
pathway, which was 510(k) pathway.
    The mere presence of this pathway creates an environment 
that is making people prone to committing errors. The absence 
of funding for robust postmarket surveillance is an even more 
important issue that we need to consider. The Centers for 
Devices and Radiological Health recognized the limitations of 
postmarket surveillance infrastructure today and they set up a 
program called Medical Device Epidemiology Network, and it also 
created a new entity that will look for a specific example, an 
orthopedic device. It is called International Consortium of 
Orthopedic Registries that is planning to bring together 15-
plus nations and registries from around the world to create an 
infrastructure that will enhance postmarket surveillance in the 
area of orthopedic devices. However, there is limited funding 
to sustain and replicate this effort in many other areas.
    The absence of robust postmarket infrastructure system, in 
the absence of that, we need to make only gradual adjustment to 
the balance of pre- and postmarket evaluation. It is important 
for us to build these large comprehensive registries and 
registry consortia and also advance the registry science. The 
process will be through evidence-based innovation and will 
protect manufacturers as well. Only after we build this strong 
postmarket surveillance infrastructure will we accumulate 
evidence of device performance in a variety of device 
performance in a real-world setting. We can make those 
adjustments at the premarket threshold.
    Let me discuss the issue that shows the limitations for 
both premarket and postmarket infrastructure and the investment 
we have to make to ensure that we don't get disasters in the 
future. There are over 270,000 hip replacement devices used in 
the country, and this is a very safe operation. There are some 
devices that are very successful and have 95 percent success 
rate over a 10-year period. Even in this environment where 
there are very successful devices on the market, through the 
510(k) pathway new devices were introduced, so-called metal-on-
metal devices, and a specific example is the ASR device. The 
device has been approved through the path of substantial 
equivalency and used a predicate device of the same company 
that if you look closely does not really resemble the original 
predicate device. It has undergone substantial transformation. 
Over the iterative cycle, I was able to--these products entered 
the market because you could--that if you use one predicate as 
a predicate for another device and then so forth encourages 
vicious cycle for bringing device that might be dissimilar to 
the previous device that has been approved.
    Without any evidence, these metal-on-metal devices were 
quickly adopted by surgeons and registries around the world 
reported really disastrous outcomes with this particular 
implant. DePuy recalled 93,000 of these devices out of the 
market, and the evidence has been summarized in our paper and 
also well covered by Barry Meyer at New York Times. 
Interestingly, there would be more than 50,000 patients that 
will undergo this serious revision surgery in the next 10 
years, and this is going to cost American taxpayers billions of 
dollars of additional costs, and this has--I am not aware of 
any discussion between CMS and manufacturers to cover side 
effects related to faulty medical products.
    So I have some graphic pictures in my testimony that show 
that these revision surgeries that are happening are not really 
trivial problems. People have substantial suffering related to 
these procedures.
    I have to also note that even though European registries 
were the first and Australian registries were the first to see 
these problems, they are not necessarily the best registries 
that we have today in the world and we should build much more 
robust infrastructure system in this country and sometimes 
multinational infrastructure to be able to prevent this 
happening in the future, and one of the most important ways 
that we can do that is through public-private partnership, and 
a public-private partnership that can be led by FDA and involve 
stakeholders in partnership with manufacturers and insurers.
    Thank you very much.
    [The prepared statement of Mr. Sedrakyan follows:]


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    Mr. Pitts. The Chair thanks the gentleman and recognizes 
Ms. Swirsky for 5 minutes for an opening statement.

                   STATEMENT OF LISA SWIRSKY

    Ms. Swirsky. Good afternoon. My name is Lisa Swirsky and I 
am a Senior Health Policy Analyst at Consumers Union. Consumers 
Union is the publisher of Consumer Reports magazine and Best 
Buy Drugs. We also have a Safe Patient Project, which is a 
campaign to improve the safety and efficacy of devices. We are 
also member of the Patient Consumer and Public Health 
Coalition, which is a broad coalition of public interest groups 
interested in the safety and efficacy of drugs and devices, and 
some of our comments today reflect the broader interest of that 
community.
    Consumers Union urges Congress to take a balanced approach 
to reauthorizing MDUFA, focusing both on the real need to keep 
deficient devices off the market while also providing timely 
access to safe and effective devices. Safety failures such as 
those that occurred with metal-on-metal hips and surgical mesh 
resulted from failures in the device regulatory system, 
particularly the problem 510(k) process. But we would also urge 
Congress to understand that behind those failures, there are 
real people. Lana Keaton is one such consumer. She was a 
previously healthy woman who was treated for what was a pretty 
routine condition for a middle-aged woman, incontinence. She 
went on for surgery for insertion of a synthetic mesh bladder 
sling, which is a product that was cleared through the 510(k) 
system. She awoke from surgery in extreme pain due to 
complications from the mesh, and she has had to undergo 17 
surgeries, and she has another one upcoming.
    CU urges Congress to remember the experiences of hundreds 
of thousands of people like Lana who have been injured by 
defect devices as it considers reauthorization of the medical 
device user fee program. Our priority is that these devices 
work and that they don't hurt people, and we believe that with 
proper resources, we can have a streamlined timely system 
without sacrificing safety.
    To this end, we would ask Congress to strengthen the 
premarket approval process for devices. In particular, Congress 
should pass legislation ensuring that recalled devices cannot 
be used as a predicate for subsequent devices. Congress should 
also shore up the system for monitoring devices once they are 
already on the market by providing FDA with the authority to 
require postmarket studies when it deems necessary to ensure 
the safety of devices and also to improve postmarket 
surveillance tools such as Sentinel and the adverse event 
reporting system.
    CU has reviewed provisions of the agreement as described in 
the minutes from the FDA's January 31st meeting with industry, 
and we offer the following comments and concerns on the 
outlines of the agreement in principle.
    Overall, we feel that the user fee amount in inadequate. 
During the course of negotiations with industry, the FDA 
indicated it would need somewhere between $770 million to up to 
$1 billion to implement the program enhancements that it was 
asking for. Now, while we understand that FDA has since scaled 
back those proposals in light of the lower-than-expected user 
fee, nonetheless, a lot of those program enhancements still 
remain in the agreement and we are concerned that as long as 
they remain in the agreement without dedicated funding, they 
will become an unfunded mandate on an agency that is already 
struggling to meet current requirements. And we would ask that 
if Congress thinks that these enhancements are beneficial, that 
they appropriate adequate funding.
    We also are concerned that the agreement overemphasizes the 
achievement of performance goals when device applications are 
reviewed and processed within a reasonable time frame because 
the application is sound and the device is safe and effective. 
This is obviously a win-win for consumers and industry. 
However, there is no mention in the agreement that these goals 
are conditioned on the overall quality of the products, the 
complexity of the products, the benefit of the products to 
consumers or really any factors that may be relevant to 
protecting the public health. Notably, the word ``safety'' does 
not appear once in the minutes from the meeting where industry 
and FDA came to agreement. We consider this a striking 
omission, given recent notable safety lapses by the device 
industry.
    Even more worrisome, the agreement in principle references 
total time to decision, goals based on calendar years in 
addition to the goals based on FDA days. Current performance 
goals stop the clock when the FDA sends an application back to 
a device manufacturer when the agency needs additional 
information. Under the agreement, the FDA is kept on the clock 
even when it needs to get further information. CU opposes any 
kind of binding of the FDA to get the information that it needs 
to ensure the safety and adequacy of devices.
    We have further concerns about provisions in the agreement 
that call for incorporating the patient perspective and risk-
benefit considerations. The industry has requested that groups 
that represent patients with a specific disease represent the 
patient perspective. However, in our experience, many of these 
patient groups are heavily funded by industry. Patient 
representatives used for these purposes should be held to 
conflict of interest standards and should be required to 
disclose any financial ties with industry.
    Finally, as Congress considers MDUFA, we urge it to provide 
a direct seat at the table for consumers in future 
reauthorization negotiations. While the stakeholder meetings 
that FDA conducted with consumer groups was an advancement over 
prior authorization processes, they still kept consumers at 
arm's length from negotiations that have significant 
implications for the public health.
    Thank you.
    [The prepared statement of Ms. Swirsky follows:]


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    Mr. Pitts. The Chair thanks the gentlelady and now 
recognizes Mr. Shull for 5 minutes for an opening statement.

                    STATEMENT OF JAMES SHULL

    Mr. Shull. My name is Jim Shull. I am from Browns Mills, 
New Jersey. I would like to thank the committee for allowing me 
to speak here today.
    My story goes back to 2005 when I was told I had a hernia. 
I woke in the recovery room from the surgery in excruciating 
pain. Two days later, I was in such pain that I couldn't stand 
up straight or barely walk. I called my surgeon's office and he 
told me to meet him at the emergency room. He took me into an 
examination room, looked at the surgical site and told me that 
it was very infected. He prescribed an antibiotic, and morphine 
for the pain, but nothing seemed to help. The infection was so 
bad that I had streaks running down my groin.
    I continued to call the surgeon over the next 2 weeks only 
for him to tell me that I am a slow healer. At my 6-week 
follow-up I explained again to my surgeon that I was in 
unbearable pain, so, he decided to inject my groin with 
Novocain right through the incision and sent me back to work.
    The pain I was feeling was as if there was a sharp object 
left inside of me. After continuously going back to the surgeon 
he decided to send me to pain management, where over the course 
of 6 weeks the pain doctor injected my groin upwards of 70 
times.
    Nothing would help the pain so I decided to investigate 
myself. I went back to the surgeon and explained to him what I 
had found. Only then did he tell me that he had put a synthetic 
mesh inside of me and told me that it was not the mesh, because 
the mesh is inert and my problem has to do with the nerves in 
my groin. I tried to go back to work because I couldn't afford 
not getting a paycheck, but the pain was so unbearable that I 
ended up in the ER. The doctor in the ER did a CT scan only to 
find nothing. That is because the mesh is transparent and 
cannot be seen on X-rays. The doctor in the ER told me that I 
probably had diverticulitis and that I needed to follow up with 
a GI specialist. Those tests came back negative also.
    I decided to get a second opinion from another surgeon and 
asked if he could remove the mesh from inside of me. He told me 
that he couldn't remove the mesh but could do an exploratory 
surgery to see if the nerves were stitched up. This surgeon did 
cut and tie off one of the nerves in my groin and thought that 
it would ease my suffering. After returning to him for 6 weeks 
in unbearable pain, he told me that there was nothing else he 
could do for me. So I was on my own.
    I finally did find a surgeon in another State and he agreed 
to see me. When he examined me he told me that he knew exactly 
what was wrong with me but to be sure he sent me to have an 
MRI. I went back to this surgeon and he showed me the problem. 
There it was: a hardened piece of synthetic mesh inside of me. 
So finally after almost 2 years of unbearable pain, I found 
someone who could give me some answers. The surgery to remove 
the mesh took 3-1/2 hours. When I awoke in the recovery room, 
the surgeon was at my bedside. He told me that he was sorry and 
that I would be in pain for the rest of my life. The surgeon 
explained to me that he had removed a balled-up piece of 
concrete from my groin, that the mesh had hardened and balled 
up, and had encapsulated the other two main nerves in my groin. 
In order to get the mesh out, the nerves had to be severed. He 
explained to me that the mesh was so hard, that when I moved it 
was acting like a saw and cutting into the surrounding tissue. 
I had a 3-inch gash in my pelvic floor along with hundreds of 
smaller cuts and tears.
    In 2008 I was diagnosed with a degenerative nerve 
condition. The pain that I suffer through on a daily basis 
consists of constant burning and sharp pains in my groin and 
upper thigh. My groin and upper thigh are purple and brown 
color because of the nerve condition I now have. I must take 
three strong medications--OxyContin, Percocet and Tramadol--
just for the pain alone. Every 6 months I have to have radio 
frequency ablation done at the spinal level where the nerve 
roots are located. It is very uncomfortable for me to sleep at 
night without the help of medication. Because of this product I 
am no longer able to work as a printer.
    When I was a teenager, I had a hernia. That hernia was not 
repaired with mesh, but was stitched back together. Thirty-four 
years later and I still have no problems with that repair. The 
mesh that was put inside of me caused so much damage that none 
of the nerves will ever be able to be repaired and will never 
grow back. I live a life of pain because of a product that 
never had any kind of clinical testing and slipped through the 
back door of what you know as the 510(k) process based on the 
use of predicate devices. I am left disabled because the FDA 
considered surgical mesh equivalent to that of sutures and 
allowed it to be implanted in patients like me.
    After years of people reporting problems and investigations 
into synthetic mesh, the FDA published a public health warning. 
Unfortunately, the warning was only for synthetic transvaginal 
meshes that are used in woman. There was no public health 
notification for hernia meshes, which are just as tragic and 
cause horrible complications for men and women alike. Failing 
to address the hernia mesh issue puts too many people in 
danger. I think synthetic mesh should not be on the market 
because it is unsafe and I have proudly taken the challenge to 
work to prevent this from continuing to happen to others.
    In closing, I would like to say that I am only one face in 
thousands of people that this has happened to, and the sad part 
of it all is that I feel that I may be one of the lucky ones. 
This committee can change the laws to improve the safety of 
medical devices and put patients first. Surgical mesh and other 
medical devices should be tested for safety before they are 
allowed to be implanted into people like myself. We also need a 
national system to track what happens to patients like me after 
devices are implanted, to catch these problems as soon as 
possible.
    Thank you.
    [The prepared statement of Mr. Shull follows:]


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    
    Mr. Pitts. The Chair thanks the gentleman and thanks to all 
the panel for your testimony, and we will now begin 
questioning, and I will recognize myself for 5 minutes for that 
purpose.
    Dr. Jaffe, you presented some very compelling data in your 
testimony, and it reiterates what we have been hearing from 
medical device innovators who have testified before this 
committee and those we speak with back in our home districts. 
PWC reports show that in 2007, 116 medical device startups had 
$720 million in funding, and that last year, 55 companies 
received under $200 million. This reflects more than a half-
billion-drop in funding of medical device startups. Can you 
explain the impact of this alarming drop in funding, the impact 
on patients and jobs?
    Mr. Jaffe. Thank you, Chairman Pitts. Let me start with the 
jobs issues first. Clearly, each of these companies may only 
have five to ten employees who start up funding, but if they 
are successful, they will grow, and many successful medical 
device companies we are involved with have hundreds of 
employees. We also know from data that for every one job we 
create in a company, there are three or four created in the 
community to support to those jobs, so clearly there is an 
economic impact.
    The more important issue, though, is really the impact on 
patients and potential technologies for those patients. I have 
an unusual job in the sense that I invest in things I hope I 
never have to use personally and I hope none of you or your 
loved ones ever need any one of the products we develop. But if 
you are someone with the issue that our technologies address, 
you will be very grateful they were developed. And the sad part 
of all this is that there are many technologies that I 
mentioned earlier that I see every day that deserve development 
but I can't pursue because the time and capital requirements 
would be too great to allow me to make returns I need to 
satisfy my investors' requirements, and it is the challenge of 
the system we all need to work on.
    Mr. Pitts. Thank you.
    Mr. Perez, can you give us an example of difficulties your 
company has had with the FDA? Have you experienced an increase 
in how long it takes to get through the FDA process, and why do 
you believe that doubling the amount you pay in user fees is 
going to solve what is partly a management issue?
    Mr. Perez. Well, I think the performance metrics that are 
specifically addressed in the MDUFA agreement go back to some 
of the issues that we have had with the FDA. I will give you an 
example. We had a pre-submission hearing with the FDA on a 
technology, and then we went almost 14 months before we heard 
back from the FDA, and a lot of that had to do with the fact 
that there was not agreement within the FDA on how to go 
forward with the approval process of a product like this, and 
this specific MDUFA agreement addresses that where we have a 
pre-submission meeting, there has to be agreements and those 
agreements can't be changed. We had another example where we 
had an agreement with the FDA on a clinical trial. We moved 
forward on the clinical trial. We got about halfway through the 
clinical trial and the requirements of that trial were changed.
    So once again, I think some of the things that we are 
trying to address regarding predictability and accountability 
are specifically addressed in this MDUFA agreement, and I think 
some of the challenges that we have, I am not saying they are 
all going to go away but I think some of the specific 
challenges that we have had will be addressed with this new 
agreement.
    Mr. Pitts. Ms. George, how does the proposed user fee 
agreement improve predictability and consistency with respect 
to FDA's review of medical devices, if you can be specific?
    Ms. George. I believe that there are a couple of areas that 
it does that. First off, that through the pre-submissions 
process, as was stated by Mr. Perez, there would be agreement 
as to what the requirements are ahead of time, early, prior to 
submission, so that the manufacturer when they submit their 
510(k) it includes the requirements up front so that it can 
flow through the process more quickly. I also think that the 
interaction requirement that we have put into the agreement of 
having earlier interaction with the FDA so that we know what 
the questions might be if they are going to have them, that 
will support it, and then the added management as through the 
resources that are going to be added, that will ensure 
consistency in how they make those determinations so that a 
reviewer by themselves doesn't have to make that decision.
    Mr. Pitts. Professor Hall, from what I understand, FDA has 
extensive postmarket authority for medical devices. Would you 
walk us through that authority, please?
    Mr. Hall. There are a number of authorities the agency 
currently has. They include obtaining information through 
medical device reports, so-called MDRs, the MedSun process, 
which is an active postmarket surveillance system linking about 
350 hospitals. There is a 522 order process. You have special 
controls that specifically include the statutory authority for 
postmarket surveillance obligations, patient registries and 
other tools. In the PMA world, you have conditions of approval. 
The QSR systems include postmarket surveillance. We call them 
CAPA, corrective and preventive action, processes that, for 
example, require product trending, root-cause analysis, etc. So 
those are just a number of the statutory systems that are 
currently in place.
    Mr. Pitts. Thank you. My time is expired. The Chair 
recognizes the ranking member, Mr. Pallone, for 5 minutes for 
questions.
    Mr. Pallone. Thank you, Mr. Chairman.
    I wanted to ask Ms. Swirsky and Ms. George, only because of 
time limitations, because of these advisory committees and 
conflict of interest. As you know, industry and some patient 
groups have focused on removing limits on how many experts with 
financial conflicts of interest may serve on the committees. 
Many consumer groups are concerned that for FDA and the public 
to be confident in the objectivity of the advice FDA receives, 
every effort must be made to minimize the number of conflicted 
experts that serve on these committees. I would like to ask Ms. 
Swirsky, if you could suggest ways that FDA could broaden its 
pool of experts. Let me start with that and then I will go to 
Ms. George. How would you suggest the FDA could broaden its 
pool of experts?
    Ms. Swirsky. I want to say first off, I think the FDA has 
already suggested that those caps on the waivers, which I think 
are the subject of many of the bills in the House and some in 
the Senate, haven't really been at issue. They are not using 
the existing caps.
    Mr. Pallone. Right. She mentioned that when we had the 
Commissioner here last week.
    Ms. Swirsky. So that suggests to us that there is some 
broader problems.
    Mr. Pallone. Right. Just give me your suggestions, because 
I don't have a lot of time.
    Ms. Swirsky. I am sorry. So some of our suggestions, we 
would hope that the FDA would be ripe for a task force to bring 
in stakeholders, various stakeholders, consumer groups and 
industry to sort of come together to look at some of the 
barriers and identify some solutions. But some of the solutions 
I think we and other consumer groups have thought about is 
first of all, creating better awareness of advisory panels. I 
think right now there isn't great awareness of it, and so what 
you have now are self-selected folks who sign up for these 
advisory panels, and some ideas include trying to work with 
medical schools to make this a part of their curriculum so we 
can create more prestige around the advisory panels. Obviously 
we can pay them more, which is probably not in the cards for 
the short term. But also I think there is a lot of evidence 
that about 50 percent of academic researchers aren't conflicted 
at all so we need to tap into that pool, and research suggests 
that academic medical centers have fewer conflicted members, 
and so bringing them into the process and getting their input 
in how we can make it more attractive to them.
    Mr. Pallone. Thank you.
    Ms. George, first I wanted to thank you for coming to that 
FDA roundtable we had at Rutgers with the Commissioner, but 
would explain why elimination of the caps on waivers would be 
helpful, given as Ms. Swirsky said, that the FDA hasn't come 
anywhere near reaching its cap to date? Do you think it would 
be helpful? And if you want to comment on broadening the pools 
also but----
    Ms. George. One of the challenges----
    Mr. Pallone Quickly because I have one more question.
    Ms. George. One of the challenges I think that does occur 
with the panels is, anything that goes to panels is innovative. 
It is new technology. It is new clinical science and there are 
not a lot of available people out there to actually come in to 
be those experts, to come in and answer the questions, to be 
able to ask industry the questions. So one of the challenges 
that we have as a manufacturer if we bring something to panel 
is, we have probably already tapped a lot of those people to 
help us in the development and in the creation of the 
technology or science and so the FDA has limited people 
available that they could use, so that does cause some aspect 
of conflict.
    Mr. Pallone. Let me ask Mr. Perez, I have one more 
question. I have about a minute left. You know, I understand 
the negotiation over the medical device agreement wasn't easy, 
but we have heard from the drugs and biologics trade 
associations that they are committed to a clean PDUFA, and 
while they may have some additional legislation they would be 
happy to see enacted as part of the UFA legislation package, 
they don't want anything that would slow down or jeopardize the 
passage of that package. So I just wanted to ask you, are you 
committed to seeing that nothing slows down or stands in the 
way of passage of MDUFA as part of the package of FDA 
legislation? I am asking you to take the same pledge.
    Mr. Perez. I think we share a common goal here, that we 
want to get this done in a very timely manner. We know many 
members have already introduced some legislation all in an 
effort to improve and help the FDA be more successful but I 
think right now we need to make sure that we balance those 
efforts with trying to get the MDUFA passed in a very timely 
manner. So we would like to work with the members of the 
committee, to listen to them, and I think it is very, very 
important to get this done. Dr. Shuren outlined a timetable and 
I hope we can stick to it.
    Mr. Pallone. All right. Thank you so much.
    Mr. Pitts. The Chair thanks the gentleman and recognizes 
the vice chairman of the committee, Dr. Burgess, for 5 minutes 
for questioning.
    Mr. Burgess. Thank you, Mr. Chairman.
    Mr. Perez, a valid point, what a lot of people don't 
realize about the user fee agreements is when they expire on 
September 30, this is not like the typical Congressional action 
where we can say the dog ate my homework so I am going to give 
myself an IOU for the next couple of months. These are 
voluntary funds that are provided by the industry, and without 
the user fee agreement and in force, those monies simply stop 
on October 1st. Is that correct?
    Mr. Perez. That is correct.
    Mr. Burgess. So this timeline that we are looking at now is 
one with a great deal more severity than the usual 
Congressional timelines. I mean, I forget, we had, what, 35 
different temporary patches to the FAA reauthorization in the 
last 10 years. We can't do this.
    Mr. Perez. I agree. We have to get it done.
    Mr. Burgess. We have to get it done, and so I appreciate 
all of you being here and Dr. Shuren being here because I think 
this is--you know, we may disagree about some parts of this but 
we all understand how important it is to get this done.
    Dr. Jaffe and Dr. Kesselheim, let me just take advantage of 
the fact that you two are sitting next to each other and you 
seem to have vastly different views of the world. You both 
heard each other's testimony. Is there any common ground 
between you or are we left with this rather stark definition on 
either side of what an ideal user fee agreement would look 
like?
    Mr. Jaffe. Well, I don't know where the differences are 
between us on the user fee agreement. I certainly didn't hear 
any concerns about the need for more resources for the FDA and 
for process improvements.
    Mr. Kesselheim. I would agree with that. I mean, I think 
that the need for greater funding for a lot of the essential 
work that the FDA does is essential and it would be my 
preference to see that money come directly from Congress, but 
since that is not going to happen, I think that the user fee 
agreement is essential and a lot of the issues we will deal 
with by improving the----
    Mr. Burgess. Let me interrupt you in the interest of time 
because they just called a vote. Dr. Jaffe, you describe a 
world in which the risk-averse nature of the agency charged 
with protecting the public interest, the risk-averse nature has 
damaged your business model. Is that correct? Did I 
misinterpret that?
    Mr. Jaffe. Yes, Dr. Burgess.
    Mr. Burgess. And Dr. Kesselheim, your view seemed to be 
that it doesn't matter about the damage because these companies 
are out there trying to push products out on the American 
public, the unsuspecting American public that are bad products 
and the FDA has to stand as the last bastion of defense against 
the industry and these bad products. Did I miss something in 
the testimony of two individuals?
    Mr. Kesselheim. Well, so I would first say that for many 
products in the 510(k) clearance process, for 95 percent of 
products the time to market in the United States and the 
European Union is not different, that what we are talking about 
are the highest risk products that arrive at the E.U. market 
sooner, and I think as I said before, the essential reason for 
that is that they are just not being tested for efficacy and 
for----
    Mr. Burgess. Dr. Jaffe, do you agree with that?
    Mr. Jaffe. I don't fully agree with that, I must say. You 
know, we do go to Europe early because there is a more 
straightforward path but we do test products in Europe. They do 
have to have data to get approved. We have a company selling in 
Europe a leadless cardiac defibrillator which could be a major 
improvement over the problems we have had with leads here in 
the United States. That product has been on the market for 3 
years in Europe and it will probably be several more years 
before it is approved here.
    Mr. Burgess. Now, let me ask you something. Do they have a 
postmarket surveillance program in Europe?
    Mr. Jaffe. The company has continued to do studies but I am 
not sure--I am not directly involved in it. I don't know if 
they are required to but the company has continued to do 
studies of that product both in Europe and it has completed a 
clinical trial here in the United States which is submitted.
    Mr. Burgess. Now, will that company be able to use any of 
that data when it goes to the FDA to present its case?
    Mr. Jaffe. I do not know the answer to that question. I am 
not directly involved.
    Mr. Burgess. Mr. Hall, do you know?
    Mr. Hall. It is possible, assuming that it meets the U.S. 
criteria for informed consent, data, validity, etc., but there 
are many situations where data can be used.
    Mr. Burgess. Now, I have got a list of a number of things 
where the postmarketing authority exists in the device world 
and is missing from the drug world. Now, there are some things 
where drugs and devices share some postmarketing authority, 
things like adulteration, misbranding, manufacturer changes 
both drugs and devices are required to report but you look at 
things like classification based on risk, devices have it, 
drugs don't; user reporting, devices have it, drugs don't; 
reports of removals or corrections, devices have it, drugs 
don't; tracking, devices have it, drugs don't. I mean, it looks 
like the Food and Drug Administration is already applying many 
of these standards in the device world maybe even a little bit 
more stringently than the drug world. Do you agree with that, 
Mr. Hall?
    Mr. Hall. There are obviously a number of differences 
between drugs and devices. The agency has a plethora of 
postmarket authorities in the device world. Some of them do not 
exist in the drug world. In part, that is because of the 
differences between drugs and devices. You don't have an 
implantable drug, you know, as a general rule.
    Mr. Burgess. You do for some hormonal agents.
    Mr. Hall. As a general rule, is what I am trying to say.
    Mr. Pitts. The Chair thanks the gentleman and recognizes 
the ranking member emeritus--I mean ranking member of the full 
committee, Mr. Waxman, for 5 minutes.
    Mr. Waxman. Thank you. I will be emeritus when we get the 
control back and then I will be chairman, but thank you very 
much for calling on me and I thank this panel for their 
testimony. I had a chance to review some of the testimony, and 
I have had my staff here throughout your presentation.
    Dr. Kesselheim, I must express alarm over your article 
describing the harms caused by the devices approved in Europe 
first and then later found to be ineffective or, worse, harmful 
to patients. This is important information for us to have given 
that so many in the device industry have complained that FDA is 
depriving Americans of the innovative devices patients in the 
E.U. get so early. Obviously as you have shown, this is not 
always such a good thing. Your New England Journal article also 
describes what are some critical fundamental differences 
between the E.U. and the U.S. systems. You say that ``the E.U. 
system is a part of a framework for commerce which originated 
as a means of streamlining trade and coordinating 
manufacturing, safety, and environmental standards'' in the 
E.U. Your article also states that so-called notified bodies, 
which are for-profit independent companies that specialize in 
evaluating many products, not just medical devices, are not 
``designed to work as public health agencies,'' and the 
approval standards in the E.U. are quite different from ours. 
Device manufacturers have only to prove that the device works 
as intended, not that it is effective at treating or curing the 
particular indicated condition.
    So yet in recent months, many have argued that we should 
reformulate our device regulatory system so that it more 
closely resembles the E.U. Let me ask you, based on what you 
have learned from your study, do you agree that we should look 
to the European system as a model for how we regulate devices 
in the United States?
    Mr. Kesselheim. Absolutely not. You know, there is no 
evidence that I have found in all the places that I have looked 
that suggests that the model for device approval in the E.U. in 
any way benefits patients overall as compared to the U.S. 
system, and indeed these notified bodies have major problems 
with conflicts of interest and their independence, and in fact, 
they only evaluate devices for approval whereas the competent 
authorities in the E.U. are the ones charged with safety 
evaluations. So the safety and the approval evaluations in the 
E.U. are separate and that is just not the way to effectively 
protect the public health.
    Mr. Waxman. Some of the bills that are being proposed 
change FDA device regulation to make our system look a lot more 
like the E.U. system. Let me ask you about one of them that 
would expand the device center's so-called third-party review 
program. Currently, that program permits third parties to 
review certain 510(k) applications and provide recommendations 
to FDA on whether the agency should clear a particular device. 
FDA has 30 days in which to make a final decision, but it is 
FDA that has the final say. That is existing law. One bill has 
an alteration of the scheme to make the third party's 
recommendation binding on FDA if FDA fails to respond in 30 
days. The bill would also expand the types of devices that 
these third parties are permitted to review to include 
``permanently implantable or life-sustaining or supporting 
devices.'' These outside reviewers are not currently allowed to 
review these devices.
    Dr. Kesselheim, as an expert on the U.S. and E.U. systems 
of medical device oversight, do you believe this legislation is 
a move in the right direction? Would you be concerned about 
these kinds of changes to the program?
    Mr. Kesselheim. Yes, I believe this is definitely a move in 
the wrong direction, and I would be concerned about these types 
of changes. First of all, there is plenty of peer-reviewed 
evidence showing in the drug realm that decisions made at the 
end of a fixed regulatory period end up more likely leading to 
drugs that have safety problems later on down the road, so 
imposing this 30-day fixed time limit on the FDA in terms of 
devices is bad policy, and I also think that increasing the 
role of these independent agents into the evaluation of the 
most highest-risk devices would again move us more towards the 
E.U. equivalent, notified bodies, and it would be bad policy, 
and there is very little individual oversight of what these 
notified bodies are able to do. Manufacturers are able to game 
the system in a way and select which notified bodies they want 
to based on which are known to provide a faster path to 
approval, and I just think it would be a bad idea.
    Mr. Waxman. It is ironic that Governor Romney is attacking 
President Obama saying he wants us to be more like the 
Europeans. That may or may not be right, but in this case, we 
don't want to be more like the Europeans. The FDA gives a seal 
of approval that is respected all around the world for our 
drugs and devices and we are better able to protect the public 
health with our present system.
    Mr. Kesselheim. Indeed, I do, and in fact, a lot of the 
European authorities rely on the studies done for FDA approval 
in order to make decisions about payments and use of the 
devices there. So indeed, you know, authorities around the 
world rely on the FDA system.
    Mr. Waxman. Thank you, Mr. Chairman.
    Mr. Pitts. The Chair thanks the gentleman. We are going to 
try to wrap this up. We are in the middle of a vote. Dr. 
Cassidy, 5 minutes for questions.
    Mr. Cassidy. So Mr. Hall and Dr. Jaffe, just to be on 
record, are you all in favor of this bill, the number three, if 
you will?
    Mr. Jaffe. The MDUFA reauthorization? Yes.
    Mr. Cassidy. And Mr. Hall, are you?
    Mr. Hall. The agency needs adequate resources. I am Don 
Quixote on this. I prefer the funding to be from public 
sources. I recognize the practical aspects and problems with 
that right now.
    Mr. Cassidy. OK. That sounds good.
    Now, Dr. Kesselheim, I think William Moser said let us use 
our drugs while they still work, and that was obviously way 
back when, when there was poor regulation. You suggest it still 
may be true in Europe of medical devices. And Dr. Jaffe, 
obviously there is tension there that was earlier alluded to. I 
am way out of field. I am a gastroenterologist. But don't I 
recall something--I was looking at but I couldn't find it--that 
there was an artificial disc that was being used by maybe 
orthopods or spine surgeons that had been implanted in lots of 
folks and turned out not to be efficacious?
    Mr. Kesselheim. As far as I am concerned, yes, there have 
been examples of those sorts of orthopedic spine devices that 
turn out later to have been unsafe or not work, yes.
    Mr. Cassidy. Now, Dr. Jaffe, how would you--understanding 
there has to be a kind of movement towards innovation but 
understanding that there are these instances where things are 
not efficacious, that they are approved and they are put in a 
lot of people and they cost a lot of money. How would you 
balance that tension?
    Mr. Jaffe. Congressman, I just wanted to say clearly that 
we have not advocated for any type of European system here in 
the United States, and we still believe in the importance of 
good clinical safety and efficacy studies. The challenges we 
have with the FDA are less around those standards than they are 
about the unpredictability and the delays and the difficulty in 
getting decisions made that cost our companies millions that 
stretch time frames in a great distance.
    Mr. Cassidy. So you are not so concerned with the paradigm 
that they use, rather how they implement it, if you will?
    Mr. Jaffe. Exactly. It is more their internal management. 
That is why these guidance documents that Dr. Shuren referred 
to are so important, making the clinical risk-benefit 
determination much more transparent and clear and accountable 
so we can review over time, make sure that we are in agreement 
to start and we are in agreement at the end of the process 
using the same standards because we have seen standards change 
as reviewers change. We have seen delays in getting to 
decisions. We see----
    Mr. Cassidy. I have limited time, so Dr. Kesselheim, again, 
I am just kind of curious about this, and again, I am trying to 
dig from the recesses of my memory, so if I say something 
stupid, it won't be the first time. Somebody has pointed out to 
me that some of the things that are approved, maybe certain 
types of stents for cardiac disease, turn out not to be 
efficacious but there is no vested interest in terms of 
learning efficacy in terms of your outcome data is--if your 
outcome data is mortality, it is a long study, very expensive, 
etc. Surrogates may not be adequate markers for the ultimate 
outcome. And Dr. Sedrakyan, I think I saw you nodding your 
head. Would you all comment on that? Because again, I am trying 
to understand this issue. I am not challenging anybody. I am 
just trying to understand.
    Mr. Sedrakyan. I can answer that. In many situations, it is 
possible that a device will take time until side effects will 
develop, and a large number of products will be already on the 
market with consequences for public health. Now, the best 
answer to that kind of problem is to have a worldwide network 
that will help us determine the side effects early.
    Mr. Cassidy. But side effects is lack of clinical efficacy. 
It may decrease angina, for example, but it may not prolong 
life. Do we need 10,000 people and 5,000 get a stent and 5,000 
don't? Do you see what I am saying? Can we use surrogate 
markers?
    Mr. Kesselheim. I mean, I think that there are surrogate 
markers that have been validated as relatively well predicting 
final outcomes, and in those cases, surrogate markers are 
useful. There are also, you know, new techniques for doing 
randomized trials in detecting efficacy so that they can be 
done in a more expedited way, and I am also more in favor of 
promoting an efficient and predictable FDA regulatory process 
as well, but I think that at the end of the day----
    Mr. Cassidy. Let me cut you off because I told my colleague 
I would give him the remainder of my time, because I think I 
got your point.
    Mr. Burgess. I thank the gentleman for yielding.
    Dr. Kesselheim, if I could just ask you very quickly, are 
you currently involved either with the plaintiff or defense in 
any of the product liability lawsuits involving, say, the 
artificial hip?
    Mr. Kesselheim. No.
    Mr. Burgess. And the same question to you, Dr. Sedrakyan?
    Mr. Sedrakyan. No.
    Mr. Burgess. Mr. Shull, let me just ask you, your story is 
very compelling. Certainly at some point there has been a 
lawsuit involved, I would assume.
    Mr. Shull. Yes.
    Mr. Burgess. And currently your lawsuit is against whom?
    Mr. Shull. It has settled.
    Mr. Burgess. With whom did you settle?
    Mr. Shull. That would be the doctor.
    Mr. Burgess. Was the product you referenced in your case, 
was that product ultimately recalled from the market?
    Mr. Shull. No, it was never recalled.
    Mr. Burgess. Did you file suit against the company?
    Mr. Shull. I did, but the product was deemed used off label 
and----
    Mr. Burgess. So it was the physician involved, not the 
company?
    Mr. Shull. The company exchanged testimony for me to drop 
the suit against them.
    Mr. Burgess. All right. I thank you for that.
    I will yield back, Mr. Chairman.
    Mr. Pitts. The Chair thanks the gentleman. We have a 
unanimous consent request.
    Mr. Pallone. Mr. Chairman, I would ask unanimous consent to 
enter into the record first the testimony from Public Citizen; 
second, testimony from American Congress of Obstetricians and 
Gynecologists; and third, two New England Journal of Medicine 
articles, one, ``Postmarketing Surveillance of Medical 
Devices--Filling in the Gaps,'' and second, ``Regulation of 
Medical Devices in the United States and European Union.''
    Mr. Pitts. Have you shared that with us?
    Mr. Pallone. Yes.
    Mr. Pitts. Without objection, so ordered.
    [The information follows:]


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    Mr. Pitts. That concludes the second panel. I would like to 
thank the witnesses and members for participating in today's 
hearing. I remind the members that they have 10 business days 
to submit questions for the record, and I ask the witnesses to 
respond promptly to the questions. Members should submit their 
questions by the close of business on Thursday, March 1. 
Without objection, the subcommittee is adjourned.
    [Whereupon, at 1:57 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]


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