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





   REAUTHORIZATION OF PDUFA: 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 1, 2012

                               __________

                           Serial No. 112-110




[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
    Prepared statement...........................................     6
Hon. Henry A. Waxman, a Representative in Congress from the State 
  of California, opening statement...............................     8
Hon. Leonard Lance, a Representative in Congress from the State 
  of New Jersey, opening statement...............................     9
    Prepared statement...........................................    11
Hon. Tim Murphy, a Representative in Congress from the 
  Commonwealth of Pennsylvania, opening statement................    12
Hon. Phil Gingrey, a Representative in Congress from the State of 
  Georgia, opening statement.....................................    12
    Prepared statement...........................................    14
Hon. Frank Pallone, Jr., a Representative in Congress from the 
  State of New Jersey, opening statement.........................    15
Hon. John D. Dingell, a Representative in Congress from the State 
  of Michigan, prepared statement................................    59
Hon. Anna G. Eshoo, a Representative in Congress from the State 
  of California, prepared statement..............................    79
Hon. Marsha Blackburn, a Representative in Congress from the 
  State of Tennessee, prepared statement.........................   202

                               Witnesses

Margaret A. Hamburg, Commissioner, Food and Drug Administration..    16
    Prepared statement...........................................    19
    Answers to submitted questions...............................   203
Geno Germano, President and General Manager, Specialty Care and 
  Oncology, Pfizer, Inc..........................................   100
    Prepared statement...........................................   103
    Answers to submitted questions...............................   237
David L. Gollaher, President and Chief Executive Officer, 
  California Healthcare Institute................................   113
    Prepared statement...........................................   115
    Answers to submitted questions...............................   240
Richard F. Pops, Chairman and Chief Executive Officer, Alkermes, 
  on Behalf of Biotechnology Industry Organization...............   123
    Prepared statement...........................................   125
    Answers to submitted questions...............................   243
David E. Wheadon, Senior Vice President, Scientific and 
  Regulatory Affairs, Pharmaceutical Research and Manufacturers 
  of America.....................................................   137
    Prepared statement...........................................   139
    Answers to submitted questions...............................   247
Allan Coukell, Director of Medical Programs, Pew Health Group, 
  The Pew Charitable Trusts......................................   154
    Prepared statement...........................................   156
    Answers to submitted questions \1\...........................
Diane Endquist Dorman, Vice President, Public Policy, National 
  Organization for Rare Disorders................................   162
    Prepared statement...........................................   164
    Answers to submitted questions...............................   251
Daniel A.C. Frattarelli, Chair of Pediatrics, Oakwood Hospital 
  and Medical Center, on Behalf of the American Academy of 
  Pediatrics' Committee on Drugs.................................   175
    Prepared statement...........................................   177
    Answers to submitted questions...............................   255

                           Submitted Material

Summary, undated, of H.R. 1483, the Drug Safety Enhancement Act 
  of 2011, submitted by Mr. Dingell..............................    62
Statement, dated February 1, 2012, of the National Community 
  Pharmacists Association, submitted by Mr. Pitts................    89
Statement, dated February 1, 2012, of the National Association of 
  Chain Drug Stores, submitted by Mr. Pitts......................    92

----------
\1\ Mr. Coukell did not answer submitted questions for the 
  record.

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

                              ----------                              


                      WEDNESDAY, FEBRUARY 1, 2012

                  House of Representatives,
                            Subcommittee on Health,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:02 a.m., in 
room 2123 of the Rayburn House Office Building, Hon. Joseph R. 
Pitts (chairman of the subcommittee) presiding.
    Members present: Representatives Pitts, Burgess, Shimkus, 
Rogers, Myrick, Murphy, Gingrey, Latta, Lance, Cassidy, 
Guthrie, Bilbray, Griffith, Pallone, Dingell, Towns, Capps, 
Schakowsky, Gonzalez, Ross, Matheson, Markey, Eshoo, 
Christensen, and Waxman (ex officio).
    Staff present: Clay Alspach, Counsel, Health; Michael 
Beckerman, Deputy Staff Director; Mike Bloomquist, General 
Counsel; Anita Bradley, Senior Policy Advisor to Chairman 
Emeritus; Andy Duberstein, Deputy Press Secretary; Paul 
Edattel, Professional Staff Member, Health; Debbee Keller, 
Press Secretary; Ryan Long, Chief Counsel, Health; Carly 
McWilliams, Legislative Clerk; John O'Shea, Professional Staff 
Member, Health; Heidi Stirrup, Health Policy Coordinator; Alli 
Corr, Democratic Policy Analyst; Eric Flamm, FDA Detailee; 
Karen Lightfoot, Democratic Communications Director and Senior 
Policy Advisor; Karen Nelson, Democratic Deputy Committee Staff 
Director for Health; and Rachel Sher, Democratic Senior 
Counsel.

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

    Mr. Pitts. The subcommittee will come to order. The chair 
recognizes himself for 5 minutes for an opening statement.
    Today, we will discuss reauthorizations of the Prescription 
Drug User Fee Act, PDUFA, the Best Pharmaceuticals for Children 
Act, BPCA, and the Pediatric Research Equity Act, PREA, all of 
which expire September 30 of this year. We will also discuss 
pharmaceutical supply chain issues.
    PDUFA was first authorized by Congress in 1992 with the 
goal of expediting human drug applications through the FDA 
approval process. Under the act and its subsequent 
reauthorizations, the drug industry pays user fees to FDA, and 
FDA commits to meet certain performance goals. I am pleased 
that the industry and FDA have reached an agreement for PDUFA 
V, and I look forward to hearing more of the details from our 
witnesses. Under the agreement, industry would pay over $700 
million in fiscal year 2013, and higher amounts in the 
remaining 4 years.
    The PDUFA V agreement is designed to speed new drugs to 
patients awaiting treatments and cures, while ensuring the 
highest safety standards. It is also designed to make the 
approval process more timely, predictable, and certain for drug 
sponsors and the venture capitalists who fund new drug 
research.
    Among the highlights, the agreement increases the 
communication between FDA and drug sponsors, specifically 
building contacts and meetings into the regulatory review 
process. To increase the efficiency and predictability of the 
review process, a new 60-day validation period will be used for 
FDA and drug sponsors to communicate, interact and plan before 
the clock officially starts.
    We are also here to discuss the Best Pharmaceuticals for 
Children Act and the Pediatric Research Equity Act. BPCA gives 
FDA the authority to extend a 6-month period of market 
exclusivity to a manufacturer in return for specific studies on 
pediatric use. Under PREA, a manufacturer of a new drug or 
biologic is required to submit studies of a drug's safety and 
effectiveness when used by children.
    Most prescription drugs have never been the subject of 
studies specifically designed to test their effects on 
children. Yet, when no pediatric-approved drugs exist for an 
illness, doctors often prescribe these medications to children, 
relying on the safety and effectiveness demonstrated with 
adults, in the absence of clinical data on how the drug may 
work in a child. As a father and grandfather, I view 
reauthorizing BPCA and PREA as a step toward obtaining that 
data and ensuring that our children and grandchildren receive 
the correct medications and correct dosages when they are ill.
    We should not forget that Americans are the most innovative 
people on earth, and the United States leads the world in new 
drug development. Some 4 million jobs in the United States are 
directly or indirectly supported by the drug industry.
    If the goals of the PDUFA V agreement are realized, we will 
continue to be the world leader in new, safe and effective 
life-saving and life-enhancing drugs; American patients will 
have timely access to treatments and cures for everyday 
maladies, chronic illnesses, and terminal diseases; and we will 
keep good, well-paying jobs here in the United States.
    [The prepared statement of Mr. Pitts follows:]


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    Mr. Pitts. I would like to thank all of our witnesses for 
coming today and now yield to the vice chairman, Dr. Burgess.

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

    Mr. Burgess. Thank you, Mr. Chairman and Madam 
Commissioner. Thank you very much for being here. Thank you for 
the hospitality you have shown to me and my staff on the two 
times we ventured out to the FDA during your tenure. I 
certainly appreciate the time you spent with us.
    We are here to talk about the User Fee Act 
reauthorizations, but we are also here to ask some questions 
about how the FDA as a whole is successfully accomplishing its 
mission. If we don't understand where we are, it is hard to 
know where we are trying to go, and this committee has already 
laid an aggressive schedule and foundation for the user fee 
reauthorizations. Certainly, today's hearing is going to be a 
big part of that because it is an issue of patient safety, and 
we are all for patient safety. That is not a partisan issue. We 
are also all for creation of American jobs. That is not a 
partisan issue, or should not be a partisan issue either.
    And the big question I have is the lack of predictability 
driving American drug manufacturers out of the country. We are 
trying to encourage job growth and innovation in this country. 
Does the FDA's slow approval process send venture capitalists 
elsewhere where they can find more stability? Is there a way to 
continue to streamline the approval process of single-molecule 
drugs where you have the most regulatory experience?
    The FDA must have the infrastructure and programs in place 
in order that innovations are dealt with in a fashion that 
assures safety for the patient and a straightforward and 
streamlined approved process.
    Mr. Chairman, I thank you for the recognition. I will yield 
back the balance of my time.
    [The prepared statement of Mr. Burgess follows:]


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    Mr. Pitts. The chair thanks the gentleman and recognizes 
the ranking member of the full committee, Mr. Waxman, for 5 
minutes.

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

    Mr. Waxman. Thank you, Mr. Chairman, and thank you, Mr. 
Pallone, for allowing me to give my statement at this point.
    Today, we begin, once again, the process of reauthorizing 
the UFAs and our pediatric drug testing laws. I have been a 
part of this process since the inception of each of these 
programs, starting first with the Prescription Drug User Fee 
Act in 1992. In every reauthorization, we have worked together 
on a bipartisan basis. Of course, that is how it should be, 
given the role these laws play in helping FDA fulfill its vital 
public health mission.
    The drug and device user fee programs ensure that FDA gets 
critical dollars to allow the agency to complete its premarket 
review in a timely manner so that patients have access to 
therapies at the earliest possible time. The Best 
Pharmaceuticals for Children Act and the Pediatric Research 
Equity Act give FDA the authority to obtain information about 
the use of drugs in children. And this year, for the first 
time, we will be establishing two new programs to help speed 
FDA's review of low-cost generics and biosimilars.
    As we begin this process, these are the primary goals we 
need to keep in mind. We must reauthorize and establish these 
essential programs in a timely way so that FDA can do its job 
protecting the health and safety of American patients. It would 
be irresponsible to allow this legislation to become a vehicle 
for the wish lists of members seeking to move their own 
controversial bills. I hope we should continue the long 
tradition of UFA bipartisanship and work together to ensure 
this does not happen.
    I am concerned, however, about some of the bills our 
counterparts across the aisle have suggested will be under 
consideration. Some of these bills would prevent FDA from 
insisting on adequate data from clinical trials and forcing it 
to approve drugs and devices on an incomplete record. These 
proposals would prove disastrous for the safety and efficacy of 
our drugs and devices. Another would enrich the pharmaceutical 
industry by gutting the time-tested system of incentives 
provided under Hatch-Waxman. The cost of this windfall would 
fall on the backs of American patients who under that proposal 
would be forced to pay monopoly drug prices for 15 years.
    Another controversial proposal the majority intends to 
consider would fundamentally reform FDA's mission by adding 
things like ``economic growth, innovation, competitiveness, and 
job creation'' to the agency's priorities. The title of this 
hearing suggested our colleagues across the aisle also believe 
that creating jobs should be one of FDA's many 
responsibilities. I hope we would all agree that FDA should not 
take jobs into consideration when it is reviewing the safety 
and effectiveness of a new medicine. We want FDA to ensure that 
our drugs and devices are safe and effective. Whether jobs will 
be created is simply not a part of that scientific public 
health equation. As a matter of fact, some of the new drugs, if 
they are higher priced and don't do any more than the older 
drugs, may be a financial burden and one could then evaluate 
that at FDA, which is also not FDA's appropriate role.
    It appears that many of these proposals are driven by 
rhetoric insisting that FDA has become too demanding of 
companies seeking to market their drugs and devices. As a 
result, innovation and jobs are being driven abroad. When we 
examine claims as serious as these, we must insist on data and 
on facts. Biased anecdotes from individual constituent 
companies do not qualify as fact. I am aware of no reliable 
data showing that these claims are true. To the contrary, I am 
aware of some studies showing, for example, that FDA actually 
approves drugs faster than our counterparts in Europe. I am 
also aware of a study showing that FDA is quite flexible in its 
requirements in reviewing orphan drug applications. NORD is 
here today and will testify on this study.
    We should all be united in the goal of ensuring that we 
have a strong, well-resourced FDA that is armed with a full 
complement of authorities to protect us from unsafe drugs and 
to assure that those drugs work. That is FDA's fundamental 
mission, and it is in no one's interest to have a weak FDA. 
American consumers depend on FDA. If Americans lose confidence 
in the FDA, they will lose confidence in the pharmaceutical and 
medical device industries as well.
    One final point. I appreciate that we are looking at the 
increasing globalization of our drug supply as a feature of our 
hearing. It is critically important issue. FDA has indicated 
that it needs an updated set of tools to deal with this 
dramatically different marketplace, and I look forward to 
hearing more on this issue from our witnesses today.
    Mr. Dingell, Mr. Pallone, Ms. DeGette and I have proposed 
legislation, the Drug Safety Enhancement Act, that will go a 
long way toward providing FDA with these much-needed resources 
and authorities.
    Thank you, Mr. Chairman. I yield back the balance of my 
time.
    Mr. Pitts. The chair thanks the gentleman and now 
recognizes the gentleman from New Jersey, Mr. Lance, for 5 
minutes.

 OPENING STATEMENT OF HON. LEONARD LANCE, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF NEW JERSEY

    Mr. Lance. Thank you, Mr. Chairman.
    Congress first authorized PDUFA in response to lagging 
approval times for prescription drugs at the FDA. Under the 
agreement, the FDA collects funds from drug sponsors to help 
expedite the human drug approval process. Not only has PDUFA 
improved the approval times of drugs, but the past 
authorizations have led to improved safety policies, better 
communication and improved regulatory processes at the FDA.
    The current reauthorization, PDUFA V, includes provisions 
to provide the FDA with tools to make safe and effective new 
medicines available to patients in a more efficient, consistent 
and timely manner while maintaining the high review standards 
for safety and efficacy. Additionally, the agreement contains 
new provisions to address problems that have arisen since PDUFA 
IV. This includes the implementation of a new benefit risk 
framework, patient-focused drug development, standardization of 
the risk evaluation and mitigation strategies, and a new 
implementation plan for the rare-disease program, something 
that is close to my heart.
    I look forward to hearing from the panels on their views on 
the agreement and working with my colleagues on both sides of 
the aisle on the committee to reauthorize this vitally 
important legislation.
    Thank you, Mr. Chairman, and I yield the balance of my time 
to Dr. Murphy.
    [The prepared statement of Mr. Lance 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 for yielding.
    As this committee begins the processing of reauthorizing 
the Prescription Drug User Fee Act, it is important to look 
back at where we were when this was first enacted.
    Prior to the first PDUFA agreement in 1992, it took almost 
2 years for the FDA to review new drug applications and roughly 
70 percent of all new drugs were entering the market overseas 
before they became available to U.S. patients. By 2007, review 
time for new drugs had been reduced to just over 1 year. The 
backlog of applications that had been built up prior to PDUFA 
had been cleared, and today, 50 percent of new drugs are now 
marketed in the United States first, making us the world leader 
in bringing new treatments to market.
    The certainty and transparency provided to drug 
manufacturers as a result of PDUFA have been key drivers of 
economic development in the biopharmaceutical sector. In 2009, 
the industry was directly supporting almost 650,000 jobs and as 
many as 4 million jobs indirectly while boasting a total 
economic impact of $918 billion annually.
    Now industry and the FDA have come together and negotiated 
an agreement that seeks to expand transparency and consistency 
in the drug approval process while continuing to ensure patient 
safety. As this committee reviews this agreement, we must have 
three priority goals: one, ensuring the safety of patients; 
two, facilitating access to new treatments for patients as soon 
and as safely as possible; and three, establishing a review 
process that continues to allow U.S. pharmaceutical jobs to 
flourish. Let us gather the facts on these three essential 
goals and work together towards a bill that saves lives and 
saves jobs.
    With that, Mr. Chairman, I will yield to Dr. Gingrey of 
Georgia.

  OPENING STATEMENT OF HON. PHIL GINGREY, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF GEORGIA

    Mr. Gingrey. Mr. Chairman, I thank the gentleman from 
Pennsylvania for yielding to me.
    The reauthorization of the FDA user fee program presents 
Congress with the opportunity to improve upon the current U.S. 
drug and device approval pathway. These hearings also present 
us with an opportunity to work together for patients and 
businesses back home in our districts who tell us that reform 
is long overdue. I look forward to working with my colleagues 
on both sides of the aisle to accomplish this worthy goal.
    To Dr. Hamburg, a special welcome. It is good to see you 
before this subcommittee again, Dr. Hamburg. You and I have 
spent time talking over the past year and a half about the 
potential that regulatory science holds as well as the need to 
spur antibiotic drug development, and I want to commend you for 
your leadership in these fields and personally thank you for 
your support of our efforts on Generating Antibiotic Incentives 
Now, the GAIN Act, H.R. 2182. My GAIN Act original cosponsors, 
Gene Green, Ed Whitfield, Diana DeGette, John Shimkus, Anna 
Eshoo, Mike Rogers, and the latest edition, and not the least, 
Ed Markey, thank you for your efforts and that of your staff on 
the GAIN Act. This is truly a bipartisan piece of legislation. 
We created it together. We have advocated for it together, and 
it is because of our combined efforts that it has a real chance 
of becoming law.
    Finally, thank you to the long list of GAIN Act supporters, 
and specifically, the Pew Charitable Trust, which I see will be 
testifying on the second panel.
    With that, Mr. Chairman, I thank you for the time and I 
yield back.
    [The prepared statement of Mr. Gingrey follows:]


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    
    Mr. Pitts. The chair thanks the gentleman and yields to the 
ranking member of the subcommittee, Mr. Pallone, for 5 minutes.

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

    Mr. Pallone. Thank you, Chairman Pitts, and I welcome 
today's hearing and I am very much looking forward to working 
together on the critical business of this subcommittee.
    This is the beginning of a multi-month process in this 
subcommittee that will involve many hearings, lengthy 
deliberations, negotiations amongst members and staff, and 
final legislation on critical FDA policy.
    The User Fee Acts, which has become known as the UFAs, will 
include reauthorizations of some successful and some not as 
successful FDA programs. This will be our subcommittee's 
opportunity of working alongside the FDA, industry and other 
stakeholders to build upon and improve these critical programs. 
It will also include some new programs such as a generic drug 
user fee program that I am optimistic will help to advance 
generic drug utilization in this country.
    But today's hearing will focus on the reauthorization of 
the Prescription Drug User Fee Act, otherwise known as PDUFA. 
Originally authorized in 1992, PDUFA has provided FDA with the 
additional resources it needs to efficiently review an 
application for a new drug or biologic to enter the 
marketplace.
    I would like to first applaud the FDA and the brand drug 
industry for coming together on this thorough and responsible 
agreement. PDUFA has been a remarkable success, giving patients 
access to safe, effective and breakthrough medical treatments 
while supporting the advancement of science and promoting a 
thriving pharmaceutical industry in the United States, and I 
know that we all agree that failure to reauthorize PDUFA in a 
timely manner would be extraordinarily disruptive and a misstep 
for all parties involved, so I look forward to hearing from our 
witnesses about the important compromises made in this 
agreement and how it will help to strengthen the PDUFA program 
overall.
    That said, I would like to note that as we set out to 
reauthorize this program for a fourth time, an important issue 
remains unresolved, and that is the growing globalization of 
the drug marketplace. I believe that Americans deserve the 
confidence that the drugs they rely on will help them get 
better and not make them more sick. That is why along with Mr. 
Dingell, Mr. Waxman and Ms. DeGette, I will be advocating for 
critical provisions of the Drug Safety Enhancement Act to be 
included in these reauthorizations. The bill would equip the 
FDA with the increased authorities and resources it needs to 
keep pace with an increasingly international marketplace of 
products. It is imperative that the FDA play a role in 
improving quality and safety standards of manufacturing 
facilities abroad. This legislation process presents a unique 
opportunity for this subcommittee to make extraordinary changes 
to enhance our drug safety laws, and it is my hope that my 
colleagues on both sides of the aisle, consumer advocates and 
the regulated industry, can all come together to ensure we 
address the safety of the Nation's drug supply in a meaningful 
way.
    Also under discussion today is the reauthorization of two 
pediatric programs, the Best Pharmaceuticals for Children Act, 
BPCA, and the Pediatric Research Equity Act, PREA, which are 
designed to provide necessary research on the appropriate use 
of prescription drugs in pediatric populations. These programs 
have been crucial in the successful cultivation of important 
research used by doctors and parents to better determine what 
kind of drug therapy is safest and most appropriate for a 
child. Above all else, we must ensure that the prescriptions 
our children use are tested appropriately and deemed safe. I 
believe that we can all agree that we have an enormous 
responsibility to our children to make certain that they have 
access to the best possible medical treatment. BPCA and PREA 
are two different but complementary approaches towards 
accomplishing that goal.
    Now, the regulatory authority granted to FDA under PREA is 
linked to the expiration of BPCA and thus will also expire at 
the end of this fiscal year. I understand there are proposals 
being offered by some members on the subcommittee that would 
sunset the expirations on both programs, and I have some 
concerns with that approach, so I am eager to hear from our 
witnesses about their views on the linkage and expiration of 
these programs.
    Now it is time for us to get to work on these critical 
issues. It is my hope that our subcommittee can work in a 
bipartisan manner and produce strong consensus legislation, and 
again, I want to thank all our witnesses for being here today, 
including Dr. Hamburg, who I have to say with regard to Dr. 
Hamburg, she has been incredibly cooperative, come to my 
district and I know other districts to talk about the FDA, and 
I do believe we have made substantial progress under your 
leadership, so I want to commend you for that. Thanks.
    I yield back, Mr. Chairman.
    Mr. Pitts. The chair thanks the gentleman.
    We have two panels today. Our first panel will have just 
one witness, Dr. Margaret Hamburg, the Commissioner of FDA, and 
we are happy to have you with us today.
    Dr. Hamburg, you are recognized for 5 minutes for your 
opening statement.

 STATEMENT OF MARGARET A. HAMBURG, COMMISSIONER, FOOD AND DRUG 
                         ADMINISTRATION

    Ms. Hamburg. Good morning, Mr. Chairman and members of the 
subcommittee. I am Dr. Margaret Hamburg, Commissioner of Food 
and Drugs, and I really do appreciate this opportunity to 
discuss the reauthorization of both the Prescription Drug User 
Fee Act and legislation to promote pediatric drug testing, laws 
that will expire if not reauthorized this year. I will also 
talk about FDA's efforts to promote science and innovation as 
well as the continuing challenges of ensuring the safety of 
medical products in a global marketplace.
    I am joined today by Dr. Theresa Mullin, who is the 
Director of the Office of Planning and Informatics in the 
Center for Drug Evaluation and Research, and Deborah Autor, 
Deputy Commissioner for Global Regulatory Operations and 
Policy. Dr. Mullin actually served as FDA's lead negotiator 
during the recent PDUFA reauthorization discussions and leads 
our long-range planning efforts within the Center for Drug 
Evaluation and Research. I have also charged Ms. Autor, Deb 
Autor, in a new role recently to really help the agency to 
adapt to the challenges of globalization and import safety as 
the Deputy Commissioner of a newly organized entity to really 
focus on these important challenges. Both are very 
distinguished and they are available to help answer some of the 
questions that you may have based on their ample experience and 
knowledge.
    I am pleased to report that we have transmitted our 
recommendations for three user fee programs to help fund our 
prescription drug, generic drug and biosimilar review programs 
to Congress ahead of schedule. I am also very placed to 
announce this morning that FDA and industry have also agreed in 
principle to a user fee program for medical devices.
    Congress first enacted the Prescription Drug User Fee Act, 
also known as PDUFA, back in 1992, as was noted. Before PDUFA, 
FDA's review process was understaffed, unpredictable and slow. 
Patients in the United States often had to wait for new 
products that were already available in foreign countries. 
PDUFA revolutionized the drug approval process by providing the 
funding necessary for us to conduct faster, more predictable 
reviews.
    In the nearly 20 years since PDUFA was first enacted, FDA 
has approved over 1,500 new drugs and biologics. In the last 
fiscal year, FDA approved 35 new groundbreaking medicines, 
actually the largest number second to only one other year in 
the last couple of decades. We were able to approve two new 
treatments for hepatitis C, groundbreaking medicines using more 
advanced science, targeting molecular targets linking 
diagnostics and therapeutics. We approved the first drug for 
Hodgkin's lymphoma in 30 years and the first drug for lupus in 
50 years, and just this week we approved innovative new drugs 
to treat cystic fibrosis and skin cancer, and we did it ahead 
of our PDUFA performance goals. The United States now in fact 
leads the world in the introduction of novel drugs.
    We look forward to working with the subcommittee on the 
fifth authorization of PDUFA. In keeping with the requirements 
Congress put into place, we negotiated this new PDUFA agreement 
with industry while regularly consulting consumer, patient and 
health care professional organizations. The agreement contains 
several enhancements that address the concerns raised by 
industry and public stakeholders as well as the agency's 
priorities. These enhancements include initiatives to improve 
communication between FDA and industry to speed up drug 
development, advance the science behind drug regulation, 
particularly around rare diseases, enhance the way FDA 
evaluates the risks and benefits of therapies, modernize FDA's 
drug safety system, and require electronic submission and 
standardize the format of the data that we receive. Together, 
these improvements, along with additional funding industry will 
be providing under the agreement, will allow us to maintain our 
Nation's leadership in drug development while preserving our 
high standards for safety and efficacy.
    On the same timetable for reauthorization as PDUFA are two 
laws designed to ensure that drugs are appropriately tested for 
their use in children, entitled the Best Pharmaceuticals for 
Children Act and the Pediatric Research Equity Act, also known 
as BPCA and PREA. These two laws have dramatically improved our 
understanding of the safety and efficacy of drugs prescribed 
for our children, and I want to thank Representatives Mike 
Rogers and Anna Eshoo, who are leading the reauthorization 
efforts on these important laws.
    Before enactment of BPCA in 1997, all too often, health 
care professionals were forced to rely on imprecise and 
ineffective methods to provide medications for children such as 
adjusting dosing based on weight or crushing pills and mixing 
them in food. But today, as a result of BPCA and PREA, 
approximately 400 drugs have been studied and labeled 
specifically for pediatric use. We welcome the opportunity to 
work with Congress to reauthorize these successful programs.
    Lastly, I will turn to the challenges posed by 
globalization and FDA's efforts to meet these challenges. 
Today, approximately 40 percent of the drugs Americans take are 
manufactured outside our borders and up to 80 percent of the 
active pharmaceutical ingredients in those drugs come from 
foreign sources. Over the next decade, FDA will transform 
itself from a domestic agency operating in a globalized world 
to a truly global agency fully prepared for a regulatory 
environment in which product safety and quality knows no 
borders.
    To achieve this transformation, the agency is developing a 
new, more international operating model that relies on 
strengthening collaboration, improved information sharing and 
gathering, data-driven risk analytics, and the smart allocation 
of resources. We are eager to work with Congress to ensure that 
our regulatory authorities keep pace with an increasingly 
globalized world.
    So I thank you for the opportunity to testify today and I 
am happy to address any questions that you may have.
    [The prepared statement of Ms. Hamburg follows:]


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    Mr. Pitts. The chair thanks the gentlelady and I will now 
begin the questioning and recognize myself for 5 minutes for 
that purpose.
    Commissioner, I believe the PDUFA agreement contains 
helpful improvements to the drug review process, and I am 
particularly interested in the process improvements for the 
review of new molecular entities. Would you explain these 
improvements and how they will add to the predictability and 
transparency of the review process?
    Ms. Hamburg. Well, there are a number of important 
elements. One is, you know, to really focus on the 
transparency, consistency and predictability issues that are so 
important to industry that you mentioned through enhanced 
communication and sitting down early in the process and midway 
through the process to really make sure that we all understand 
where we are, where we are going, what are the expectations, 
and to be able to, you know, much more rapidly surface issues 
as they emerge and address them so that we can, you know, 
really streamline the process and avoid unnecessary delays or 
confusion.
    Mr. Pitts. I understand that FDA and the industry have a 
tentative agreement on the medical device user fees. As you 
know, Chairman Upton and I have set a deadline of reauthorizing 
the user fees by the end of June. I think my colleagues on the 
other side of the aisle would agree that reauthorizing the user 
fees by the end of June is in the best interest of the FDA and 
the American people. We received the three other user fee 
proposals by January 15 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, when 
will the FDA send us the legislative language and the proposed 
agreement for the Medical Device User Fee Act so this committee 
can begin its work? Could you give us a specific date? And how 
does the Administration plan to expedite the process so the 
committee can get the device information as soon as possible?
    Ms. Hamburg. Well, we are really delighted to be able to 
come before you this morning and say that we have an agreement 
in principle, and that was actually just announced within the 
last hours. There are still some i's to dot and t's to cross. 
We will move as swiftly as we can to be able to present it to 
all of you to begin to work on it. We do want to follow the 
process that Congress laid for us of course, though, which does 
require that the recommendations be presented at a public 
meeting and also that a docket be opened with at least 30 days 
of comment. As soon as we have finalized this agreement and we 
are very nearly there, we will begin that process, and while I 
can't specify an exact date, we are very mindful of the 
timeframe that you have set forward and are very appreciative 
of that timeframe that you have set forward, and we are very 
eager to move this as swiftly and as surely as possible. This 
is an important agreement and one that we are very, very 
pleased to be able soon to finalize and move to this next 
stage.
    Mr. Pitts. Thank you. Companies that want to manufacture 
prescription drugs in the United States are at a competitive 
disadvantage because there are manufacturing plants in China 
with very little oversight. Now, there is a 2-year inspection 
requirement for domestic manufacturers but no similar 
requirement for foreign manufacturers including those located 
in China. Shouldn't we ensure that our regulatory oversight 
system does not create an uneven playing field for American 
manufacturers? Wouldn't a risk-based inspections approach make 
more sense in ensuring resources are spent inspecting higher-
risk facilities like those in China rather than setting 
arbitrary statutory requirements?
    Ms. Hamburg. Well, I think the issue of how we can really 
respond to the globalized world that we live in where there are 
manufacturing facilities around the world that are making 
products coming into the United States is one of the most 
important challenges before us and certainly one of the 
priorities that I have taken on during my tenure as 
Commissioner. We very much need to rethink many of the ways 
that we have traditionally done business. Many of our 
authorities were actually put in place in a world that looks 
very different back when President Roosevelt created the modern 
FDA in 1938. Most drugs were in fact produced in this country 
and that is certainly not the case anymore.
    So we are both trying to expand our ability to do 
inspections internationally, which are more complex and a bit 
more costly. We certainly are trying to introduce risk-based 
approaches so that we use our limited resources as widely as 
possible. We are also trying to work more closely with 
regulatory counterparts who share this challenge of having to 
do inspections in many more places and many more countries so 
that we can actually share information and begin to in many 
instances, you know, rely on the work of others to leverage 
resources towards the goal of expanding our presence 
internationally and, as you say, leveling the playing field so 
that people who have manufacturing overseas don't have to wait 
longer than those that are producing domestically. We also 
think that by more coordination with regulatory authorities, we 
can reduce the burden on industry by having more harmonization 
of standards, approaches and expectations and perhaps reducing 
the overall number of inspections that they will be subject to.
    Mr. Pitts. The chair thanks the gentlelady and yields to 
the ranking member, Mr. Pallone, for 5 minutes for questions.
    Mr. Pallone. Thank you, Mr. Chairman.
    Dr. Hamburg, in your testimony you mention the challenges 
posed by increasing the global marketplace. As you know, Mr. 
Dingell, Ms. DeGette, Mr. Waxman and I have introduced a bill, 
the Drug Safety Enhancement Act, that gives FDA some 
authorities and an infusion of resources to address these 
challenges. Could you comment on the bill and whether FDA 
supports the bill? Some have asserted that FDA already has the 
authority to do some of the things that are included in the 
bill and that FDA could just proceed with its current 
authority. Can you comment to what extent that is true and 
whether having explicit new authority would be helpful?
    Ms. Hamburg. You know, we really do feel, as I mentioned, 
that the ability to respond to the challenges of a globalized 
world is among the most important issues before us and that we 
really have increased vulnerabilities and increased demands 
that, you know, really threaten our ability to fulfill our 
critical mission to ensure the safety of products that the 
American people use and count on, so we are very eager to work 
with the members of this committee and Members of Congress more 
broadly to identify authorities that will make a difference in 
our ability to better ensure the safety of the supply chain and 
these important products that are being manufactured and 
distributed on a global basis to enable us to do better 
screening of products coming into this country, to be able to 
act when we identify products that are coming in that may pose 
a risk in terms of safety and quality, so we are very, very 
interested in the work that you are doing, appreciate your 
leadership and stand ready to provide whatever information that 
we can.
    Mr. Pallone. Thank you. A topic that has garnered a lot of 
attention over the years is the issue surrounding conflicts of 
interest on FDA's advisory panels. Obviously, if the advisory 
committee is to be credible and useful, it has to have a 
limited number of members who have conflicts. In the 2007 
legislation, we included a provision that prohibited FDA from 
seating more than a certain percentage of conflicted advisory 
committee members, but both before and since the 2007 law, FDA 
has encountered difficulty trying to fill advisory committees 
with qualified and unconflicted members, and many have asserted 
that the waiver caps are to blame, but my understanding is that 
FDA has not come close to hitting those caps. So I am concerned 
about reports of weakened advisory committees because I think 
they are very important.
    I wanted to ask you, do you agree that FDA has indeed 
encountered problems in filling advisory committees in recent 
years, and what is the impact, if so, of these vacancies on the 
ability of FDA to obtain expertise? Have there been instances 
in which the advisory committee meetings were delayed because 
FDA could not identify a sufficient number of outside experts, 
and to what extent are the waiver caps the problem or, you 
know, related to this?
    Ms. Hamburg. Well, this is a very important issue and one, 
you know, that very much goes to our ability to bring the best 
possible science to bear on our decision making. We also must 
have a process that has integrity, and so we have been, you 
know, working on this issue, talking with stakeholders and 
reviewing our policies and experience. It is one of those 
issues unfortunately in a way that the more you get into it, 
the thornier and more complex it gets, and on the one hand, 
there are people who would like to see us step away and relax 
some of our conflict-of-interest policies so that we can bring 
those individuals who are most expert to the table to serve on 
our advisory committees, and there are others on the other end 
of the spectrum who are very, very concerned that we need to 
have individuals who do not have----
    Mr. Pallone. I am just trying to--because my time--
specifically, have there been problems filling these advisory 
committees in recent years?
    Ms. Hamburg. At the present time, as you noted, we are not 
bumping up against our cap in terms of waivers, and we have 
actually been making an aggressive effort to fill empty slots 
on our advisory committees and have made progress. It is a 
challenge to get people on our advisory committees for many 
reasons, both that it is a huge time commitment and----
    Mr. Pallone. Do you have any ideas about what you could do 
to improve it----
    Ms. Hamburg. Well, I think----
    Mr. Pallone [continuing]. And whether we could help in some 
way with the legislation?
    Ms. Hamburg. You know, we have been looking at this pretty 
closely and we don't at the moment see major areas where a 
legislative fix is required but I think it is something that we 
want to continue to work on. The input and engagement with our 
various stakeholders is absolutely crucial, and, you know, the 
role of the advisory committees is, you know, very foundational 
to a lot of what we do and so we want to make sure that we have 
the right balance of expertise without conflict of interest 
that might compromise the value of the input of those 
individuals, and we do think that transparency is a very 
important aspect of moving forward on this, and that is a 
strategy that enables often individuals to be able to bring 
their expertise with fuller understanding also though of their 
engagement either with sponsors of a product or an industry or 
positions that they have taken in the past on related issues.
    Mr. Pallone. I thank you.
    Mr. Pitts. The chair thanks the gentleman and recognizes 
the gentleman from New Jersey, Mr. Lance, for 5 minutes for 
questions.
    Mr. Lance. Thank you, Mr. Chairman, and good morning to 
you, Dr. Hamburg. I have not had the privilege of meeting you 
previously, and it is my honor to do so.
    On the front of advancing personalized medicine, what steps 
might the FDA be taking to modernize the current regulatory 
structure? I have a bill in the hopper, the Modern Cures Act, 
that I believe might be able to be helpful in this area.
    Ms. Hamburg. Well, it is such an important area and we 
certainly are on the cusp of dramatic advances in terms of 
opportunities for care and treatment, and we are already seeing 
breakthroughs including a new therapy that was announced 
yesterday for cystic fibrosis where we are able to really see a 
therapy targeted to individuals with a particular genetic 
marker and really treat the underlying pathway of a disease in 
a new way.
    With respect to activities at the FDA to enable us to 
really realize the potential of personalized medicine, a major 
area of focus is the investments in advancing regulatory 
science that we have embarked on with our colleagues in 
industry and academia, and I am very happy that a focus on new 
investments in regulatory science is part of the PDUFA V 
agreement because I think that will enable us to further 
develop the tools that will matter to both drug development and 
regulatory review and enable us to really target therapies for 
the people who will respond or for the people who will have 
unacceptable adverse consequences of therapy. We can also 
stratify populations and learn who will benefit and who will 
perhaps have unacceptable risks.
    Mr. Lance. Thank you.
    Ms. Hamburg. There is one other thing. I have also 
reorganized the agency in order to try to bring new leadership 
in, and we have a Deputy Commissioner for Medical Products who 
has a background in personalized medicine, and he will be 
working across drugs, biologics and devices to coordinate 
activities, which is very important to make personalized 
medicine real.
    Mr. Lance. Thank you.
    Ms. Hamburg. I am sorry.
    Mr. Lance. I look forward to working with you on that.
    Section 9 of the goals letter, enhancing regulatory science 
and expediting drug development, includes a subsection on 
advancing development of drugs for rare diseases. Specifically, 
the proposal provides for by the end of fiscal year 2013 that 
the FDA will complete a staffing and implementation plan for 
the CDER rare disease program within the Office of New Drugs 
and a CBER rare disease liaison within the Office of Center 
Director, and the FDA will increase by five the staff of the 
CDER rare disease program and will establish and fill the CBER 
rare disease liaison position. Would you please indicate to the 
committee assurances that you can provide that these additional 
staff will lead to greater efficiency and not create an 
additional layer of delay with no or limited value?
    Ms. Hamburg. You know, I think that we are moving in a 
direction that is very positive and will help support and 
extend our efforts in the rare and neglected disease area. I 
think it is an area where we have made terrific progress in 
terms of being able to work with sponsors to identify new 
promising drug candidates and move them through the system 
where we have been able to apply new and better science and 
more flexible regulatory tools, innovative clinical trial 
designs being one important aspect of that, and I think you 
will have the opportunity to hear more about that.
    But I think the new proposal in the PDUFA agreement will 
enable us to have some individuals who are really focused on 
some of the unique needs and concerns in the rare and neglected 
disease areas and to be able to work across many components of 
the agency to ensure that we are doing all that we can, 
bringing the best possible science to bear and never forgetting 
this important aspect of drug development and getting new 
products to the people who need them.
    Mr. Lance. Thank you, Commissioner. And finally, on 
biomarkers, innovative drug development is increasingly 
dependent on the use of new biomarkers of disease to target the 
right patients. What is the FDA doing to encourage the use of 
biomarkers in drug development?
    Ms. Hamburg. It is such a key aspect of how we can bring 
new and better science to bear on drug development and drug 
review. We already have been, you know, quite involved in 
biomarker development including through the biomarker 
consortium that brings industry and academia together with 
government, both FDA and NIH, to try to identify and validate 
biomarkers for regulatory use. Biomarkers have an essential 
role to play in identifying potential toxicities so that if a 
drug is going to fail, it can fail early and we can speed the 
process. Biomarkers have a critical role to play in terms of 
serving as surrogate end points for clinical trials so that we 
can get important information about whether a drug is working 
or not without having to have extended trials and follow the 
whole course of the disease to give us early indications, and 
in other ways, you know, really gives us tools to accelerate 
the drug development process and the review process. It is an 
area that industry shares our excitement and enthusiasm about 
the opportunities in science, and I think its inclusion in the 
PDUFA V agreement reflects that we think that by focusing on 
this area, we can really make huge strides forward.
    Mr. Lance. Thank you, Mr. 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, Mr. Chairman.
    Thank you so much for your testimony, Dr. Hamburg, and for 
being with us today. You and your team have done such terrific 
work coming together on the PDUFA V agreement, and I look 
forward to working with you to move this bill forward. I also 
wanted to acknowledge that while these user fee agreements are 
a critical piece to ensuring that the FDA has the resources to 
do its job and continue to be the gold standard in this work 
around the world, at the same time we here in Congress must not 
shirk our responsibility to adequately fund the agency so that 
you can do that work, and I hope that in our bipartisan 
agreement that we will also work across the aisle during the 
appropriations process to do just that.
    I hope to get to two topics in this very fast-moving 5 
minutes that I have. In your testimony, Dr. Hamburg, you 
mentioned the Sentinel system for postmarket surveillance. This 
program holds great promise for more efficient and effective 
postmarket surveillance to protect the public's health, save 
money on research and curb potential drug recalls. Your 
testimony says that PDUFA V will allow user fees, and this is a 
quote, ``to determine the feasibility of using Sentinel to 
evaluate drug safety issues that may require regulatory 
action.'' Would you explain just a little bit more, not too 
long, about what that means? How do the goals described in 
PDUFA V differ or expand upon the pilot projects that have 
already been completed in PDUFA IV?
    Ms. Hamburg. Well, of course, FDAAA began us on the path of 
really strengthening our postmarketing surveillance 
capabilities and focusing on safety in the postmarket setting, 
and what we hope to be able to accomplish now with PDUFA V is 
to really use the data available in the postmarket setting and 
the data management and analytic tools to be able to very 
quickly ask and get answers to questions of an emerging drug 
safety concern. If we hear that a particular drug might be 
associated with an elevated risk of another kind of problem, we 
can query the database, and we are now up to 100 million 
patient lives in the database, and can answer that will help us 
to determine the level of concern associated with an emerging 
safety issue and help us decide, do we really need to ask for 
additional clinical studies to further evaluate the safety risk 
or are we comfortable with a determination that it doesn't 
appear to be a true correlation.
    Mrs. Capps. I understand. That is important. Do you have 
the authority--should you need to expand the scale of this 
program, do you have the authority on your own to evaluate and 
make decisions along the way?
    Ms. Hamburg. I believe that we have all the authorities 
that we need, and obviously PDUFA V will help to give us 
additional resources that we need, and part of what is exciting 
about what we are doing as well is that it is a real 
partnership working with the private sector and the broader 
patient community in terms of being able to access important 
data, which of course is utilized in a patient-confidential 
manner but----
    Mrs. Capps. Great.
    Ms. Hamburg [continuing]. We do now have these large 
information resources that enable us to do things that we 
couldn't do before.
    Mrs. Capps. Great. Another topic, in your testimony you 
touched on the scale-up of electronic submissions to the 
agency, and in July I asked your colleague, Janet Woodcock, 
about reports that clinical trial data submitted to the FDA do 
not routinely reporting based on sex or other important 
demographics. As you may know, this issue is one we have long 
struggled with. It is a key component of a bill that I have, my 
Heart for Women Act. In her response, she noted that while she 
couldn't confirm these reports, the use of electronic 
submissions would make it easier for the FDA to identify if 
companies are indeed submitting the disaggregated data as 
required by law. Can you tell me where the agency is at this 
moment on moving toward an electronic-only submission system 
and what are the benchmarks put forward in PDUFA V for that 
kind of adoption?
    Ms. Hamburg. Yes. Well, we are very excited about this 
component of PDUFA V. It has many benefits, both streamlining 
and modernizing our systems to help speed review and reduce 
burdens ultimately on both industry and our staff, but it has 
the additional benefit that it will enable us to deal with data 
in much more targeted ways and to be able to ask and answer 
critical questions around such important matters as gender and 
race and age and other factors that we very much need to 
understand more deeply to be able to provide the best possible 
products and the best possible care to our citizens.
    Mrs. Capps. Thank you very much. I yield back.
    Mr. Pitts. The chair thanks the gentlelady and recognizes 
the gentleman, Dr. Burgess, for 5 minutes for questions.
    Mr. Burgess. Thank you, Commissioner, again for being here.
    Commissioner, we need your help. Last year, February 2011, 
this committee sent a letter regarding documents from the Food 
and Drug Administration relating to the issue of contaminated 
heparin, and you recall that national tragedy was prior to your 
becoming Commissioner but at the same time we are having 
difficulty coming to a conclusion on that, and while I 
recognize that you talked about the issues of globalization, 
you are no longer going to be a domestic agency but a global 
agency, I mean, here is where you have to show value because 
you had a compound manufactured in communist China that was 
used to adulterate a biologically derived product, heparin, a 
blood thinner. This hypersulfated chondroitin sulfate that was 
used to contaminate the heparin was a molecule that was 
produced in a lab and patented in the People's Republic of 
China and found its way into our drug supply with loss of life 
in dialysis centers when people were administered a bolus of 
heparin.
    Last year, February 23rd, the committee sent a letter. Your 
Office of Legislative Affairs has documents from at least four 
employees but we don't have them at the committee level. In 
November, your agency committed to a timetable to complete the 
production of heparin documents by the end of January 2012. We 
are there but we don't have any documents. So what has been 
happening over at your Office of Legislative Affairs for over 6 
months? This is a poor reflection on the agency and one where 
our committee and you all need to work together and it is not 
happening.
    Ms. Hamburg. Well, as you point out, heparin was a very 
serious event that we all take very seriously in terms of the 
initial response at the time but also making sure that we have 
the systems in place to prevent that particular problem from 
occurring again or other similar problems. I am surprised by 
what you say. I am eager to work directly with you to make sure 
you are getting what you need because my sense was that our 
staff was spending literally thousands of hours culling through 
documents for you, answering questions, briefing committee 
staff on these issues, that we had sent up some 50,000 pages of 
documents. But if you----
    Mr. Burgess. If I may interrupt, that may be the case but 
we don't have them, so over the next 2 weeks can we elicit your 
help in getting this committee and the Subcommittee on 
Oversight and Investigation the information that it needs?
    Ms. Hamburg. Absolutely. I commit to working very closely 
with you to make sure that you are getting the materials that 
you are requesting and need.
    Mr. Burgess. Well, we are grateful for the more 
sophisticated testing that would reveal this problem in the 
future for new heparin but if there is someone out there who 
seeks value in contaminating our drug supply chain, it may not 
be heparin next time, it may be something else, and I don't 
have a sense that we understand what happened when this 
adulteration occurred.
    We are all concerned about drug shortages. You hear about 
it. It is in the newspapers. There is a particular 
chemotherapeutic agent named Doxil which you are probably 
familiar with that has the company apparently involved in the 
manufacture of Doxil has said they are not going to make any 
more, so now we are in a tough spot because other companies are 
willing to take up that slack but all remaining Doxil has to be 
used for treating patients. It can't be used for doing the 
clinical trials, randomized clinical trials that would be 
necessary. So what options do we have in this very rare 
situation to allow the patients who are depending upon that 
chemotherapeutic agent to continue to receive it and at the 
same time speed the approval of generic doses of Doxil?
    Ms. Hamburg. Well, I am not familiar with all the details 
of the particular case of Doxil that you raise. But it is 
speaks to a set of important issues around drug shortages in 
terms of, you know, really needing to work closely with 
companies to get early warning when decisions are made to 
discontinue manufacturing or if they believe that there is an 
emerging quality or manufacturing concern to help identify 
other sources of available product to treat the conditions that 
patients may have when there are potential shortages and to 
help work with sponsors to expedite the standing up of 
manufacturing capability.
    Mr. Burgess. Right. We appreciate this is a complex 
problem, a multifactorial problem, but in this specific 
instance what we're asking is, Can you use your flexibility on 
the issue of bioequivalents to help get these patients the 
drugs that they so desperately need?
    Ms. Hamburg. You know, as I said, I don't know enough about 
the specifics in terms of the option in that case so I would 
not want to comment in the setting. I will certainly go back 
and make sure that the people with the direct knowledge and 
expertise address that.
    Mr. Burgess. We will follow up with that. Thank you.
    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, and thank you, Dr. 
Hamburg, for being here. I have four questions and I am going 
to get right to them, but I do want to associate myself with 
Ms. Capps' complimentary remarks to you and also the need to 
make sure that we adequately fund the FDA.
    My first question is this. There was a 2010 report from the 
HHS Office of Inspector General which found that ``80 percent 
of approved marketing applications for drugs and biologics 
contain data from foreign clinical trials.'' So my question is, 
does the FDA have adequate resources to do clinical trial 
oversight in places like China and Peru?
    Ms. Hamburg. Well, this is part of the overall growing 
demands on FDA in terms of oversight of both foreign 
manufacturing facilities and research that is being done in 
other countries. It certainly is something that we are putting 
time and attention to. We are working both with the regulatory 
authorities in a wide range of countries----
    Ms. Schakowsky. Do you have the resources to----
    Ms. Hamburg. We need additional resources in order to be 
really provide the level of oversight that we think is 
necessary and appropriate, and we need some new models for 
doing business as well in terms of coordination with regulatory 
authorities sharing information and also increasing regulatory 
oversight capacity in many countries to ensure good clinical 
practice.
    Ms. Schakowsky. So it is authority and resources, right?
    Ms. Hamburg. Indeed.
    Ms. Schakowsky. I have been very interested in the issue of 
cosmetic safety, and here is my question. It relates to 
authority. If the FDA had reason to believe a cosmetic product 
was harmful, could it issue a mandatory recall of that product?
    Ms. Hamburg. I believe that we could work with the company 
to encourage a voluntary recall, but in order to pursue a 
mandatory recall, we would have to engage with the court system 
and pursue it through that venue.
    Ms. Schakowsky. There has been a lot of publicity around 
the product, the hair straightener product, Brazilian Blowout, 
and I know that the FDA wrote to the manufacturer to inform 
them they had determined their products to be both misbranded 
and adulterated, but apparently it is still being used in 
salons across the United States. So do you plan any further 
actions against the manufacturer of Brazilian Blowout?
    Ms. Hamburg. It is my understanding that we are involved in 
some continuing discussions with the manufacturers trying to 
better understand the issues involved and working with them 
around our concerns. I also believe that OSHA is engaged on 
this issue in terms of some of the workplace health concerns 
around the people that are providing the services in those 
beauty salons.
    Ms. Schakowsky. Right, the employees there, OSHA has moved 
in on their behalf.
    Now, I want to ask you about the ubiquitous advertising, 
direct-to-consumer advertising that we see on television. Some 
of them, I have to tell you, seem like if you really listen to 
all the cautionary things, it is like ``and death could 
result'' it seems like always at the end. It is almost humorous 
to me while you see people skipping through the flower fields. 
Anyway, what I am asking is that do you actually have any 
resources for direct-to-consumer advertising monitoring to 
ensure that consumers do have a balanced understanding of the 
drugs and the risks advertised to them, the accuracy of those? 
Where are you with monitoring those direct-to-consumer ads?
    Ms. Hamburg. Well, we do have a group that is charged with 
working on the oversight of direct-to-consumer advertising and 
there is a process that involves the screening of the direct-
to-consumer advertisements.
    Ms. Schakowsky. But you didn't have fees for that, right?
    Ms. Hamburg. We don't have fees associated with that. I 
gather that in the last PDUFA negotiation, this has been 
identified as possible area of focus, but actually including it 
was moved away from for a number of reasons that I think may 
have included the willingness to match or include budget 
authority. I am not sure of all the details but it was 
considered in PDUFA IV but----
    Ms. Schakowsky. Let me just say----
    Ms. Hamburg [continuing]. But it is not part of PDUFA V.
    Ms. Schakowsky. Given the prevalence of those ads on 
television, it seems to me that that would be a major focus, 
and I hope we can work together to make that happen. Thank you.
    Ms. Hamburg. Thank you.
    Mr. Pitts. The chair thanks the gentlelady and recognizes 
the gentleman from Kentucky, Mr. Guthrie, for 5 minutes for 
questions.
    Mr. Guthrie. Thanks, Dr. Hamburg. Thanks for coming. It is 
nice to have you here today. I have a related question, I want 
to get to another question, and it is related because it is 
user fee related. On the Tobacco Control Act, I have a question 
on that. The concern is, there is a user fee by tobacco 
companies to fund the Center for Tobacco Products, and my 
understanding, there is not transparency in the use of that 
money in terms of performance reporting or financial reporting 
like it is in PDUFA, you have to account for where that money 
is being used. My understanding is, there is not a report, not 
required statutorily for you to issue a report. I wonder if you 
have any comment on the transparency or use of those funds.
    Ms. Hamburg. Well, the user fees that are involved in 
supporting the tobacco program and its activities are 
scrutinized, and we have developed, you know, very strict 
oversight mechanisms and firewalls in terms of their targeted 
use for tobacco program activities, but you are correct that 
the legislation did not require the same kind of performance 
reporting as for other user fees, and, you know, I think that 
are obviously--I would certainly understand that Congress would 
like to know more about how those user fees are being utilized. 
I would say that, you know, we take, as I said, the oversight 
of those resources and their appropriate use very seriously and 
do have a stringent process that is involved with that.
    Mr. Guthrie. Yes, I don't think anybody has commented that 
you all were using it improperly, just that they don't have the 
access to the information that you do. So if I implied that, I 
apologize. But just the idea that other user fee programs, and 
maybe we should have financial reporting. Of course, Congress 
didn't ask you to do that when we passed that bill before.
    The one thing, and I have been kind of focused on a little 
bit is this use of guidance documents, so I know it is not 
right on PDUFA but while we are here talking about that, and 
just a couple of examples, and I'm not getting into the details 
of specifics, but just like draft guidance for industry and FDA 
staff commercially distributed in vitro diagnostic products. I 
know that is very detailed. But when that was issued and it 
went forward, there were citations about 2 weeks after guidance 
document. Well, first it was brought forth as nonbinding, not 
for implementation, but my understanding is that the FDA has to 
take an action citing that guidance document I guess 2 weeks 
after implementation. So the question is, and I want to leave 
you time to respond, essentially the Administrative Procedures 
Act has the rulemaking process and there is some concern that 
FDA is using the guidance documents in a way that should be 
through the whole rulemaking process and comments. A lot of 
stakeholders have brought that to our attention. Do you have 
any comment on the use of guidance documents as binding even 
though they say nonbinding?
    Ms. Hamburg. Well, you know, we have found a lot of 
interest from the industries that we regulate in the role of 
guidance. There may be some mixed views, but I will tell you 
that what I generally hear is that guidance is very useful in 
giving an indication of where the agency is, where we are going 
and thinking about a particular problem. While they are not 
binding in the same way that rulemaking is, they are much 
quicker to put forward and they are welcomed. In fact, one of 
the things that I think came up in the PDUFA negotiations was 
examining ways to actually support the guidance production 
system because there are a lot of areas, personalized medicine 
being one, where it would be helpful to sponsors of products to 
have more guidance in order to know what directions to pursue 
and get the insight into our thinking and approaches. So I 
think that it is overall my sense is very useful but I think it 
does sometimes create an uncomfortable situation where people 
don't know whether it is an enforcement document or whether it 
is simply guidance.
    Mr. Guthrie. See, I don't disagree with anything you said 
there at all. I think that you are absolutely right. People 
want some direction because the rulemaking process does take 
time so where is the direction we need to go in the interim, 
but I guess the concern is when they become treated like rules, 
that they didn't actually go through the Procedures Act, and 
that is a just a concern that we have.
    Thanks. I yield back.
    Mr. Pitts. The chair thanks the gentleman and yields to the 
ranking member emeritus from Michigan, Mr. Dingell, for 5 
minutes for questions.
    Mr. Dingell. Mr. Chairman, I thank you. I commend you for 
this hearing. It is very much needed, and significant reform of 
food and drug laws is very much needed.
    I ask unanimous consent my opening statement be inserted 
into the record at this point.
    Mr. Pitts. Without objection.
    [The prepared statement of Mr. Dingell follows:]


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    Mr. Dingell. I would like to begin by making a couple of 
observations. We have renewed PDUFA on a number of occasions 
and have expanded to a number of other activities by Food and 
Drug for a fee is now paid willingly by the industry. Each time 
this legislation has been extended, it has been extended with 
the active support of the industry. I authored PDUFA for some 
very interesting reasons. This committee conducted an extensive 
investigation of Food and Drug involving some serious 
misbehavior, accepting of gratuities and things of that kind, 
because of the fact that the agency did not have the resources 
to properly handle the issuance of permits for new 
pharmaceuticals, and the end result was, there were huge 
numbers of complaints from industry and some very unfortunate 
corruption existed in the agency.
    One of the interesting things, and I hope my colleagues 
will listen to this, about PDUFA and one of the reasons that it 
and its half sisters and brothers have been supported by the 
industry is that a good pharmaceutical brings into the 
manufacturer, or did at the time it was first put in place, 
about $250 million a year, and if each time that a company 
found that it is delayed in putting a pharmaceutical to work 
and getting approved, that company finds that it has massive 
losses, massive losses stemming from the fact that it cannot 
market while its patent, which exists for 17 years, is running. 
Food and Drug does not have the resources to do this.
    Now, Food and Drug is also moving forward to see to it that 
they have legislation which would enable them to begin to 
collect fees for certain changes in the law with regard to 
other pharmaceutical regulatory activities by that agency. 
These would impose the same burden on foreign manufacturers, 
who are now bringing in huge amounts of counterfeits and other 
unfortunate things into this country, to the great detriment 
and the hurt not only of our law but also of American 
manufacturers and Americans who are being poisoned. I would 
observe that we had a rather hideous example of this when a lot 
of Americans were killed or seriously hurt by heparin which 
came in.
    So these questions first of all to Commissioner Hamburg. 
Has the law kept up with the changing environment? Yes or no.
    Ms. Hamburg. No.
    Mr. Dingell. It is badly in need of change, is it not?
    Ms. Hamburg. Yes.
    Mr. Dingell. And you have a number of changes which you 
will suggest for the record on this matter. Is that not so?
    Ms. Hamburg. We would love to work with you on this.
    Mr. Dingell. But the answer is yes?
    Ms. Hamburg. Yes.
    Mr. Dingell. It is also so that these will enable you to 
address not only changes in domestic production and the law as 
regards to domestic production but also with regard to the 
foreigners who are now sending in huge amounts of unsafe 
pharmaceuticals that you simply do not have the resources to 
address. Is that not so?
    Ms. Hamburg. It is correct.
    Mr. Dingell. Unfortunately, yes. Now, does Food and Drug 
have the authorities, the resources to adequately oversee such 
a heavily outsourced drug industry?
    Ms. Hamburg. We don't currently have the resources----
    Mr. Dingell. You don't have the resources, do you?
    Ms. Hamburg [continuing]. To fulfill as we would like our 
mission.
    Mr. Dingell. Good. I am giving you easy questions. These 
are all yeses or nos.
    Ms. Hamburg. It is hard to answer just yes or no.
    Mr. Dingell. Unless I indicate otherwise.
    Now, will you submit for the record the key authorities 
that FDA needs to oversee the drug supply chain?
    Ms. Hamburg. With pleasure.
    Mr. Dingell. Now, one of the additional problems that you 
have is that the components are now coming in from overseas. In 
the case of heparin, it was the components which caused the 
damage to the health of the American people, was it not?
    Ms. Hamburg. We believe that the contaminant was introduced 
into the crude heparin preparation, yes.
    Mr. Dingell. Thank you.
    Now, I have, Mr. Chairman, an analysis of H.R. 1483, the 
Drug Safety Enhancement Act of 2011, and I would ask unanimous 
consent that it be inserted into the record at this point.
    Mr. Pitts. Without objection.
    [The information follows:]


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    Mr. Dingell. Madam Commissioner, one last question. You are 
familiar with the provisions of 1483. They are significantly 
similar to the additional powers and resources that Food and 
Drug received in the last couple Congresses ago to address the 
question of food safety, and you are finding that those new 
authorities are working very well there, are you not?
    Ms. Hamburg. Those new authorities are very, very 
important. We of course are struggling to fully implement the 
demands of the Food Safety Modernization Act but we are moving 
forward, and the additional authorities really are able to put 
us in a position to do things that are very, very important to 
prevent problems and address them swiftly.
    Mr. Dingell. And they particularly allow you to control 
imports and to address the question of possible seizure of 
unsafe pharmaceuticals which you had previously no capacity to 
address. Is that not so?
    Ms. Hamburg. That is correct.
    Mr. Dingell. Mr. Chairman, I have used more time than I am 
entitled to. Thank you for your courtesy.
    Mr. Pitts. The chair thanks the gentleman and recognizes 
the gentleman from Georgia, Dr. Gingrey, for 5 minutes for 
questions.
    Mr. Gingrey. Mr. Chairman, thank you.
    Dr. Hamburg, I love you just as much as the chairman 
emeritus does. He said he had some easy questions for you. In 
that spirit, I definitely have one that I think is easy but 
another one that may not be quite so easy. First, for the 
easier of the two, I am holding in my hand a news report that 
ran yesterday from U.S. News and World Report, and it reads, 
``Antibiotic-resistant bacteria found in 37 United States 
states.'' Can you tell me your thoughts on the magnitude of the 
threat that antibiotic-resistant bacteria pose to the United 
States patients?
    Ms. Hamburg. Antibiotic resistance, as you well know, is a 
huge and growing problem and one that we must take very 
seriously. We are seeing across various, you know, classes of 
antibiotics more and more resistance. That is greatly worrisome 
in terms of, you know, rendering important tools for 
controlling disease and preventing spread. We are seeing them, 
you know, rendered useless, increasing the burden of disease 
and the costs of care and potentially putting us in a position 
in some instances where we don't have the kinds of therapeutic 
interventions that we have come to expect, so it is something 
we need to address and we need to address it together, and FDA 
has a critical role to play.
    Mr. Gingrey. And I really appreciate that. I will put in 
more plug for the GAIN Act. So much for the easier of the two.
    Now, this next question is not meant to be unfriendly at 
all but I think it is very important. Ranking Member of the 
Health Subcommittee, Mr. Pallone, sort of addressed this 
earlier. I want to follow up on what he said, though.
    A number of constituencies, both patients' groups and 
industry, recognize there are great advancements in our 
understanding of the human genome and science behind biologics. 
These same constituencies, however, have shared with me their 
concerns regarding current conflict-of-interest rules governing 
the FDA. Their contention is this: If the rules are not changed 
to take into these emerging sciences nor the limited number of 
individuals who understand these emerging sciences, these 
sciences may progress beyond the FDA's ability to understand 
how to properly assess the science. And I understand that 
currently the cap on the waivers for these conflict-of-interest 
rules has not been reached but I also understand that there are 
maybe a number of obesity drugs, as an example, within the FDA 
review process that have been stalled because of a preconceived 
lack of understanding of the science behind the drugs. I will 
cut right to the chase. Simply put, I do not believe the FDA 
cap is the issue here. I just want to understand this. Is it 
the FDA's contention that changes to the current conflict-of-
interest rules governing the FDA advisory panels would not 
benefit the FDA, patient groups or businesses when considering 
whether to invest in new drug development?
    Ms. Hamburg. Well, I think your question raises a number of 
really important points and of course goes beyond simply the 
conflict-of-interest rules and the advisory committees but how 
do we bring in the best possible expertise as we pursue our 
regulatory oversight of critical products to address critical 
medical and public health needs, and advisory committees are 
one important element of that but there are other ways that we 
do it as well.
    You know, for example, you mentioned obesity drugs. Well, 
we have a working relationship now spearheaded out of George 
Washington University where we are trying to bring together 
critical partners to help us think through how we can really 
improve our regulatory pathways for obesity reduction drugs 
including, you know, health care providers, scientific experts 
and patients. So I think there are different ways to bring in 
expertise, and part of what is exciting in PDUFA V, I think, is 
the focus on investments in regulatory science, which is an 
important venue for bringing the right expertise together, 
framing the right questions and making sure that we bring the 
best minds to bear in getting the critical answers.
    Mr. Gingrey. Well, let me interrupt you because I am just 
about out of time, and I am encouraged to hear that and I thank 
you for that response, but that is why I am supportive, quite 
honestly, of my colleague from Texas, Dr. Burgess's bill in 
regard to lifting these caps on waiver so that we have that 
expertise and maybe we approach it from two aspects, but thank 
you very much, Dr. Hamburg, and Mr. Chairman, I yield back.
    Mr. Pitts. The chair thanks the gentleman and recognizes 
the gentleman from Arkansas, Mr. Ross, for 5 minutes for 
questions.
    Mr. Ross. Thank you, Mr. Chairman, and Commissioner 
Hamburg, thank you for joining us today.
    I believe that keeping a safe, affordable emergency inhaler 
available without a prescription, specifically Primatene Mist, 
is critical for asthmatics. Therefore, I am a little confused 
as to why the FDA took Primatene Mist off the market after 
December 31st of last year. Primatene has been available for 
over 40 years, and now, because of an environmental issue, not 
a health issue but an EPA environmental issue, the FDA has 
pulled Primatene from retail shelves and will not allow the 
existing supply chain to be sold. Here is why this concerns me. 
If the FDA allowed the existing supply to be sold, asthmatics 
could have access to an over-the-counter emergency inhaler for 
at least the next few months until another affordable over-the-
counter emergency inhaler without harmful environmental 
impacts, as alleged by the EPA, is approved. Not only did the 
FDA deny access to the Primatene Mist in our supply chain but 
you have now stopped the phase III studies for development of 
an over-the-counter replacement for Primatene, and now 
Americans are without an OTC emergency inhaler and probably 
will be for the rest of the year when there are at least a 
million units of this inhaler sitting in a warehouse in 
California.
    So Americans now have to go see a doctor. If they get a 
prescription, then they have got to get it filled if they can 
afford it as a substitute for this over-the-counter product, 
and here is where it really hits home for me. I represent a 
very large, a very rural, a very poor district, and Primatene 
Mist can be purchased over the counter for asthmatic patients 
for 20 bucks and prescription albuterol is costing those same 
patients 50 to 65 bucks, and the cost is not only to consumers 
but also to the government. It is estimated it is costing our 
government, the federal government, between $300 million and 
$1.1 billion due to asthmatics' increased hospitalizations, ER 
visits and an increased cost of going from the over-the-counter 
inhaler to one that requires a prescription, and of course, 
much of this cost of the $300 million to $1.1 billion obviously 
is coming from Medicare and Medicaid because there is not 
another OTC emergency inhaler.
    So these figures are taken from the FDA's final rule 
ordering the removal of Primatene Mist based on not 2012 but 
2008 cost estimates. So when we say it is costing the 
government $300 million to $1.1 billion, those are probably low 
numbers, and I believe that the denial letter from the EPA 
states it deferred to the FDA in denying the sale of the last 
remaining units. In other words, the EPA left it up to FDA. FDA 
chose not to. A lot of folks where I come from, they can't 
afford a $50 substitute for a $20 product that they have been 
taking for way too many years because of their asthmatic 
condition.
    And so I would ask or suggest that you look into resolving 
this issue by considering releasing the remaining units of 
Primatene Mist and expedite the development of an emergency 
over-the-counter inhaler for asthma that is affordable and back 
on the U.S. market as soon as possible, and I would love to get 
your comments and thoughts on that.
    Ms. Hamburg. Well, it is obviously a complicated issue, but 
I think it is important to understand the broader context and 
the medical issues here. As part of the Montreal convention, 
there was a move--there was an environmental issue, as you 
point out, to remove chlorofluorocarbons from various products 
including asthma inhalers. It has been a very long transition 
period and we have been working with the various manufacturers 
of asthma inhalers to transition towards other delivery 
vehicles that don't have the CFCs. Of course, the manufacturer 
of Primatene Mist has been part of these discussions and they 
were given an extended period, some additional time for 
transition and we had indicated that we would welcome an 
application for another product.
    But in terms of the concerns you raise about the public 
health of individuals, I want to make it clear that there 
really is--we engaged in a very broad process of consensus 
development about the medical necessity of this product, 
talking with health care providers, scientific experts, public 
health professionals and patients and patient groups, and there 
is great concern about Primatene Mist or over-the-counter 
epinephrine-based--solely epinephrine asthma inhaler being used 
without the oversight and management of a medical provider and 
is really in the best interest of patients that have asthma, 
which can be a very serious and life-threatening condition, to 
have a medical provider. There are better treatments for the 
management of asthma overall. The epinephrine inhaler is a 
transient effect that briefly improves moderate symptoms but 
doesn't address the underlying cause of the asthma, and so we 
really think that in the best interest of individuals having 
access to a medical provider, going to a community health 
center where you pay on the basis of your ability to pay, local 
free clinic or public hospital or there are also sponsored 
programs to make medicines available at cheaper rates by 
various companies is important to the overall health and 
wellbeing of individuals suffering from asthma.
    I recognize the inconvenience of not being able to get an 
over-the-counter product for immediate relief if you don't have 
your prescription inhaler with you, etc. We really tried to 
make it a smooth phase-out process with ample warning and 
information, both to enable patients to find alternative 
products and health care providers and to ensure that the 
health of individuals would be protected. But I understand the 
issues that you are raising and the concerns that you have.
    Mr. Ross. Well, it is not about convenience, it is not 
about trying to sell these million units that are in a 
warehouse in California. It is about having a product that 
people can afford. Too many of my folks can't afford to go to a 
doctor. They can't afford a $50 inhaler. They are having a 
tough time affording a $20 inhaler. I am just saying we ought 
to continue--whatever CFCs are out there, they have been out 
there and people have been on this stuff forever in order to be 
able to breathe, and we ought to find a way to be able to let 
them continue to get it until another over-the-counter product 
that is EPA approved can be developed. Otherwise they can't 
afford it. They are going without it. They are showing up in 
the emergency room and it is costing our government well over a 
billion dollars as we make this transition.
    Mr. Pitts. The gentleman's time is expired. The chairman 
thanks the gentleman and recognizes the gentleman from Ohio, 
Mr. Latta, for 5 minutes for questions.
    Mr. Latta. Well, thank you, Mr. Chairman, and Commissioner, 
thanks very much for being with us today. I really appreciate 
it, and very interesting testimony today.
    I would like to just kind of switch a little bit over on 
the pediatric side, and I see in your testimony you state, you 
know, that both these statutes, the BPCA and the PREA, continue 
to foster an environment that promotes pediatric studies and 
builds an infrastructure for pediatric trials that previously 
were nonexistence. If I could, I would just like of like to--
from experience I have had, I have talked to a lot of pediatric 
docs, researchers, hospitals and parents of children that have 
severe illnesses, and I guess I would like to ask you, first of 
all, what they see is that the adult side sometimes is getting 
more of the dollars that are going in for the research, and on 
the second question, when these drugs are coming through, are 
they getting equal treatment as the adult medicines that are 
going--when the FDA is making its determination decisions?
    Ms. Hamburg. Well, I think that the BPCA and PREA 
legislation have been enormously helpful in creating a 
framework to really focus attention on the importance of doing 
pediatric studies on drugs that had previously really been only 
studied in adult populations and providing some incentives to 
move in that direction. We still have a considerable ways to 
go. There are, I think, reasons why pediatric trials often are 
not as likely to be done as adult trials that include both the 
recruitment issues of getting kids into trials, both logistics 
and ethics issues, and----
    Mr. Latta. Can I interrupt you right there? To solve that 
then, when you are talking about getting the kids into the 
trials and also the ethics issue, how should we go about trying 
to get that changed or promote to get more children into them 
so that these drugs can be----
    Ms. Hamburg. Well, I think that this path is a good one and 
we need to continue these programs and strengthen them as it 
becomes more routine for drug sponsors to be expected to also 
examine the drugs in pediatric populations, you know, both 
creates a very different climate where there is now an 
expectation and a commitment and accountability for doing so, 
and it also, I think, helps to expand the opportunities and the 
expertise for doing pediatric clinical trials. But I think it 
is an area--obviously it is not exclusively within the realm of 
FDA but where we need to as a nation be continuing to put more 
attention and resources to create pediatric clinical trial 
networks, to train the clinical researchers to do that work, 
and to encourage both on the medical product and the medical 
device side more innovation and attention to the needs of 
pediatric populations.
    Mr. Latta. Let me ask then, in your testimony you say there 
is slow but deliberate process that is being made in setting 
the safety and the efficiency of the approved therapies for 
certain ages. Would you say that would be the same thing, it is 
trying to get these--getting the children into these tests, or 
how would you address that statement in your testimony?
    Ms. Hamburg. You know, to be honest, I am not quite sure 
the question you are asking, but----
    Mr. Latta. You state that slow but deliberate progress is 
being made in these studies and again, is that going back to 
the whole issue of trying to get the children and maybe infants 
into some of these studies and the ethics side?
    Ms. Hamburg. I see. There definitely are some additional 
barriers I think to recruiting pediatric patients into clinical 
trials, and we need to work on those, and it is--I think it is, 
as I said, a broader issue of really having the support for the 
clinical trial networks, the training of the pediatric 
researchers, the education of both families and pediatric 
community providers about the importance of pediatric clinical 
trials and the opportunities that they can represent for both 
individual patients and for extending knowledge about 
appropriate pediatric care, so I think it is something that we 
really do need to work on and we need to work on it together.
    Mr. Latta. Thank you.
    Mr. Chairman, my time is expired and I yield back.
    Mr. Pitts. The chair thanks the gentleman and recognizes 
the gentleman from New York, Mr. Towns, for 5 minutes for 
questions.
    Mr. Towns. Thank you very much, Mr. Chairman, and also the 
ranking member for holding this hearing today. Also, thank you 
very much, Commissioner, for being here.
    PDUFA has been an effective and essential tool in assuring 
that safe, effective drugs are brought to the market in a 
timely fashion. However, we must be certain that we are 
striking the proper balance between the benefits of speedy 
approval of new treatments and the risk that different patient 
populations are willing to accept in order to gain access to 
them.
    Let us also keep in mind that different patient groups may 
be willing to tolerate different degrees of risk. This is why 
it is crucial for FDA to communicate with the affected patient 
population when reviewing new treatments.
    In your written testimony, Commissioner, you indicated that 
the FDA takes into consideration the benefits and risks of new 
drugs on a case-by-case basis. Considering the degree of unmet 
medical needs and the severe or morbidity of the conditions the 
drugs intended to treat when conducting this assessment, do you 
see the input of the patient population affected by the 
condition?
    Ms. Hamburg. Well, we do, and one of the exciting things 
about the PDUFA V framework also is a real focus on developing 
better strategies to formalize and systematize how we think 
about benefit-risk and importantly the engagement of patients 
and their perspectives, and part of what we hope to accomplish 
over the next 5 years, if this PDUFA agreement is reauthorized, 
is to in a formal way through a series of public meetings, four 
a year over the 5-year period to really target different 
disease conditions and engage with the patient community about 
their perspectives of the available drugs, their experience of 
benefits and risks, what kind of risks they are willing to 
tolerate, etc., and that will be, I think, very, very useful, 
in addition, you know, really building on work that we do every 
day as we look at important products in terms of thinking about 
what are the other options available to patients and how 
serious, life-threatening, life-disrupting is the condition, 
and we do weigh risks and balance them with benefits, and in 
our approvals we are often willing to accept a considerably 
high level of risk in some cases when there is true benefit to 
the patient.
    Mr. Towns. Thank you very much, and let me say to my 
colleagues, I hope we recognize the importance of making 
certain that we fund you adequately as we make some demands as 
we move forward.
    I applaud the agency for instituting the accelerated 
approval process in 1992. Do you feel that the program has been 
successful, particularly in the rare disease space?
    Ms. Hamburg. You know, it has been a very valuable program 
and we have seen, you know, a high number of drugs move forward 
through the accelerated approval process. We also--and many of 
them, a large percentage have been in the rare and neglected 
disease space. We also often give a full approval straightaway 
to rare and neglected diseases when we have, you know, good 
science, a good product and an impact on the underlying 
condition that is meaningful. So I think we have made enormous 
progress in the last couple of decades moving forward in orphan 
drugs, rare and neglected diseases and have been able to apply 
a lot of regulatory flexibility in how we approve those drugs, 
and I think you may be able to hear more about that in the 
second panel from the NORD representative.
    Mr. Towns. Let me ask you, what challenges do you face with 
orphan drugs? What challenges do you actually face? Very 
quickly.
    Ms. Hamburg. Well, very often, the challenge is how to do 
the science that enables us to get the answers that we need. If 
you are talking about small numbers of patients, how can you 
tailor the clinical studies so that you can get robust, 
meaningful answers with only a small number of patients. I 
think historically also there were concerns about incentivizing 
industry to want to work on some of these disease areas where 
there would be limited patient numbers, and I think that the 
orphan drug program and the incentive structure there has 
helped to shift that dynamic, and I think that as we really 
begin to draw on the advances in science and technology today, 
there are very special opportunities in the rare and neglected 
disease areas to produce the kinds of product like the way we 
were able to approve yesterday for cystic fibrosis. We were 
able to really see a targeted therapy for a particular 
underlying genetic marker and really provide a breakthrough 
treatment, even though the number of patients with that 
particular condition is quite limited. In this case, we are 
estimating about 1,200 cystic fibrosis patients.
    It is a very exciting time and it is an area where I think 
there is a lot of opportunity, and PDUFA obviously has 
identified that as an area where we can make some real 
progress.
    Mr. Towns. Thank you, Mr. Chairman. I yield back.
    Mr. Pitts. The chair thanks the gentleman and recognizes 
the gentlelady from North Carolina, Ms. Myrick, for 5 minutes 
for questions.
    Mrs. Myrick. Thank you, Mr. Chairman.
    I appreciate you being here today, and that is kind of 
along the same lines of what I wanted to talk about and that, 
is, the guidelines for approval of certain drugs. While the FDA 
is tasked with protecting public health, I don't think it 
should be in a position of withholding or removing approval of 
drugs that treat fatal illnesses. When a patient is expected to 
die imminently from a disease, the FDA's decision of whether or 
not to approve that drug should be made on a different metric 
than the approval of a drug that is intended to treat a less 
serious condition.
    Your agency does claim to factor this in, and I know you 
see it as part of your mission to move treatment forward for 
patients, but it doesn't seem to me that you give enough weight 
to the fact that dying patients will tolerate a riskier drug. 
Sometimes they won't respond and will succumb to the disease 
but sometimes they respond well, and aggregate clinical data 
doesn't always reflect that properly. So can you just tell me 
why the FDA shouldn't have a separate metric for determining 
approvals for diseases like metastatic or otherwise fatal 
cancers, ALS and other deadly illnesses?
    Ms. Hamburg. Well, we do, as we were discussing earlier, 
you know, really take very seriously the importance of 
balancing risk and benefit and recognizing when you have a 
serious life-threatening illness with no or limited other 
treatment options. The proposed drug must be viewed in a very 
different context than if it is one of six potential drugs for 
a disease, you know, that has only a very minor impact on the 
tasks of daily living. So we do take that very, very seriously, 
and if you look at our approvals, it is clear that as I said, 
in some instances, there is significant risk associated with a 
drug that we will approve, but we do at the end of the day have 
to ask the question of, is there an overall benefit to the 
patient, and that can be very difficult and challenging. But 
that is, you know, an important part of what we are charged 
with.
    I think, again, you mentioned the sort of stratified 
populations, that there may be some who respond and some who 
don't, and that is why the deepening of the scientific 
understanding is so important and to continue to work as PDUFA 
V, you know, has indicated in the area of regulatory science 
and really identifying how we identify--we need to really 
define who are the subpopulations of responders so that we can 
target the benefits to the people.
    Mrs. Myrick. No, I understand. We have talked about that 
before. That is one that I refer to simply because of people 
that I know who are very successfully being treated with that 
for other than the uses that you had approved.
    Also, with the compassionate use process for terminally ill 
patients who have very few other clinical options, it doesn't 
always work very well. Companies understandably worry that 
patients who don't fit the trial guidelines who have completed 
the trial for their drug will negatively alter their clinical 
data if they are allowed to take an experimental treatment 
under a compassionate use exception. Yesterday, a 41-year-old 
ALS patient was in our office, and he saw significant symptom 
improvement while involved in a clinical trial, but his 
participation in the trial ended and then he was denied access 
to the drug under compassionate use because of these concerns.
    So in your opinion, what else can FDA or Congress, for that 
matter, do to improve the likelihood that patients with no 
other clinical option can access treatment through 
compassionate use? I mean, this is an ongoing problem. I 
understand where you come from but it is also pretty hard to 
look somebody in the face and say I am sorry, I can't help.
    Ms. Hamburg. Well, it is, you know, a huge issue and one 
that certainly without knowing the specifics of that instance, 
you know, we do try to work with patients' families and 
providers under those kinds of circumstances to see if we can 
help facilitate access to a product.
    Mrs. Myrick. Can we refer him to you?
    Ms. Hamburg. Pardon me?
    Mrs. Myrick. Can we refer him to you?
    Ms. Hamburg. You know, I think you could. You know, I can't 
make any promises but----
    Mrs. Myrick. No, I understand.
    Ms. Hamburg [continuing]. Absolutely and we can----
    Mrs. Myrick. He is so young, you know.
    Ms. Hamburg. Yes, no, and, you know, it is an area that we 
need as a society to continue to work on.
    Mrs. Myrick. Well, my time is almost up so I will yield 
back, Mr. Chairman.
    Mr. Pitts. The chair thanks the gentlelady and yields to 
the gentleman from Utah, Mr. Matheson, 5 minutes for 
questioning.
    Mr. Matheson. Thank you, Mr. Chairman, and Dr. Hamburg, 
welcome. Thank you for coming today.
    I would like to focus my questions on a national track and 
trace program or a drug pedigree issue, which I know Mr. 
Dingell talked about and some others as well. You probably 
know, I have worked with my colleague, Mr. Bilbray, and a lot 
of stakeholders on crafting legislation to implement a single 
national pedigree standard. Last year, February 2011, the FDA 
held a 2-day track and trace public workshop. One of the 
reoccurring concerns from stakeholders at the workshop was the 
need for timely guidance on a single national pedigree standard 
prior to States going off and implementing their own systems. 
Implementation of a national standard could take years to 
implement. Could you speak to the timeframe necessary for 
Congress, the FDA and industry to act on this? And in speaking 
on that also, if PDUFA passes without a national pedigree 
solution included, what are the implications for where we are 
going to be in terms of our domestic pharmaceutical supply 
chain over the next 5 or 10 years?
    Ms. Hamburg. Well, it is a very important question, and 
since I happen to be sitting next to an expert on this topic 
and you have been hearing me talk an awful lot, I think I may 
actually let my colleague, Deputy Commissioner Deb Autor, 
respond to that because she really has been working on those 
important issue for a very long time.
    Mr. Matheson. Great.
    Ms. Autor. Thank you. Congressman, as you mentioned, we did 
hold a public workshop on track and trace and we have had over 
120 participants in that workshop and a lot of comments that 
have been submitted to the docket on a track and trace system. 
We are working hard on working on those standards, and I would 
be happy to talk to you more about how we can work together 
towards a national uniform pedigree system. We are concerned 
that if a national system doesn't go into place, we run the 
risk of having a patchwork of State laws including California's 
law that is scheduled to go into effect in 2015. We believe 
track and trace provides very important assurances to the 
integrity of the drug supply by giving us and industry and 
pharmacies and consumers the information they need to know to 
be assured that their drugs are safe and effective.
    Mr. Matheson. Do you think the FDA needs further authority 
from Congress in order to implement a national standard?
    Ms. Autor. Yes. We have authority now to implement 
standards but it is not clear in the law that those standards 
will be binding on everybody in the industry, and it is not 
clear that they would effectively preempt State law, so in 
fact, I think national legislation on this would be useful.
    Mr. Matheson. That is good to know.
    Now, the safety of our pharmaceutical supply chain has an 
important overlap with the drug shortage issue that we have 
been talking about. I saw a survey by the American Hospital 
Association that showed 42 percent of those hospitals facing 
shortages purchased a more expensive product from a new 
distributor. However, in this instance, there is no meaningful 
way for that hospital to be sure the drug they are buying has 
traveled a safe and secure path. Do you think a single national 
pedigree standard would help hospitals ensure the integrity of 
products bought outside their normal source of supply?
    Ms. Hamburg. I think, you know, that the issue of supply 
chain and shortages are linked but they also have many distinct 
characteristics, and I think that as we are grappling with the 
drug shortage problem, which is, as you know, a very real 
problem and growing, you know, we are trying to look at all the 
critical factors that are involved and, you know, they range 
from issues of limited numbers of manufacturers of a given 
product to aging production facilities, to cost reimbursement 
issues, and some of the issues around consolidation of 
providers and manufacturers.
    The issue of the security of the supply chain and quality 
being built into both manufacturing and assurances of quality 
throughout the supply chain obviously play a role in shortages 
to some degree, and also understanding the supply chain is 
important in understanding what kinds of products and quality 
products people might be accessing in relation to a shortage. 
So it is a complicated issue.
    Mr. Matheson. And I know there are a lot of separate issues 
in the two. It just seems to me that in a shortage situation, 
that----
    Ms. Hamburg. In a shortage situation, it is absolutely 
critical that whatever you are using as an alternative product, 
we can know is safe and high quality.
    Mr. Matheson. Yes, shortages create stress on the system, 
and stress creates opportunity for bad things to happen.
    Mr. Chairman, my time is up. I will yield back. Thanks.
    Mr. Pitts. The chair thanks the gentleman and yields to the 
gentleman from Louisiana, Dr. Cassidy, for 5 minutes for 
questions.
    Mr. Cassidy. Dr. Hamburg, thank you for being here.
    Now, I have learned to say in this job, I know what I have 
been told, not what I know, so let me just preface this by 
this. I am told that there is a difference between calendar 
days and FDA days, so on page 4 of your testimony where you 
mention that the FDA approval phase of new drug development has 
shrunk. I heard previously people come and say you have got to 
be kidding, they kick it back to us, they don't include this, 
and actually the time has grown. I have learned to say what I 
have been told, not what I know, so I come to the font, if you 
will, to say is that true? Is calendar days actually longer 
even though FDA days are theoretically shorter?
    Ms. Hamburg. Well, in terms of the way the performance 
goals have historically been structured, you know, in fact, one 
is looking at the FDA time and the clock can be stopped for 
different kinds of activities and ultimately what matters to 
patients and, you know, truly what matters to all of us 
involved in the process is how long does it take for a product 
to actually get to the person who needs it. But I think one of 
the things that has been very, very encouraging as we have 
watched the PDUFA process really take hold in terms of the 
resources capacities and focus of our review activities is that 
we have seen the number of drugs approved in the first cycle 
increase and it is over 60 percent now, I think, which means 
that we are getting drugs to people in the first review 
process, which is really critical because----
    Mr. Cassidy. Now, your answer suggests to me that indeed 
calendar days may have increased for any given drug but it 
doesn't go through two cycles so maybe net it is less.
    Ms. Hamburg. On the drug side, I don't believe that that is 
the case. The device side, it is a little bit of a different 
scenario, and that is why I was sort of avoiding speaking to 
specific details, but on the drug side, we are seeing changes 
in the absolute time that it takes to get a product to market 
in really across-the-board way, particularly for priority 
review.
    Mr. Cassidy. Let me go to my next question. I thank you. We 
will later hear testimony from the Pew Health Group, which kind 
of relates to something which we previously spoke about, that 
if you are a domestic pharmaceutical, you are getting reviewed 
every 2 years, and if you are overseas, it may be every decade. 
And I understand here we are now creating resources but in a 
previous conversation, you mentioned that union contracts limit 
the ability of FDA to assign people to go overseas to inspect. 
Now, does this address that issue as well?
    Ms. Hamburg. You know, I think that the union issue is 
really not central to the discussion. The issue about the 
increased cost complexity demands on the system of increasing 
the numbers of international inspections is, and we are really 
embarked on a series of activities to be able to strengthen our 
capacity to have a global presence and either directly inspect 
or get inspectional information.
    Mr. Cassidy. So you imply that, if you will, as a 
workaround so even through the contract may inhibit it, you 
have a workaround in which you could third party it?
    Ms. Hamburg. You know, I think that the union issue is 
really a non-issue here. We work closely with the union around 
the activities of union employees.
    Mr. Cassidy. Now, that is a little bit different than what 
we heard last time in which we were told that people had to 
volunteer, they could not be assigned, and that sort of thing.
    Ms. Hamburg. Well, we definitely seek volunteers for our 
foreign inspectional activities. We are addressing it in a 
number of ways. We do have a dedicated foreign inspectional 
cadre that really like to travel and have specifically 
volunteered.
    Mr. Cassidy. So just a pointed question, knowing that right 
now it is every 10 years or so overseas, if you had tomorrow to 
say listen, we haven't inspected them for 5 years, you two are 
going and we expect an inspection report from you in however 
long it takes to do an inspection report, would you be able to 
do that?
    Ms. Hamburg. Well, we are dramatically ramping up our 
foreign inspections and we are doing it through both using 
domestically based inspectors who travel overseas. We are doing 
it through having foreign offices and inspectors who are based 
in country. We are doing it sharing inspectional information 
with our regulatory counterparts in other countries.
    Mr. Cassidy. Now, if I may interrupt, because I am almost 
out of time. I don't mean to be rude. But nonetheless, we are 
only doing it every 10 years. What do you project if we have 
this hearing 3 years from now that the frequency of inspection 
of an overseas plant will be by whatever mechanism we assign 
staff to do so?
    Ms. Hamburg. We are looking ultimately for parity between 
our domestic inspectional schedule and our foreign inspectional 
schedule. We want a level playing field, and it is interesting, 
we are not talking today so much about the generic user fee 
agreement but the foreign inspection are a particular issue 
around generic drugs and their manufacture and actually through 
leadership from the generic industry, you know, we have a 
first-time-ever user fee agreement that very much focuses on 
how can we strengthen the resources and programs to meet those 
demands of foreign inspections.
    Mr. Cassidy. Mr. Chairman, you have been very generous. 
Thank you. I yield back.
    Mr. Pitts. The chair thanks the gentleman. That concludes 
the questions from the members of the subcommittee. We will go 
to the rest of the members of the committee, and the chair 
recognizes Dr. Christensen from Virgin Islands for 5 minutes 
for questions.
    Mrs. Christensen. Thank you for the opportunity to sit in 
on this important hearing and to be able to ask questions.
    Most of the questions that I had around risk and benefit 
balancing and how it affects the time I think have already been 
asked several times and answered, so I am not going to ask that 
one. But I have a specific question on supply chain that 
relates to the territories, and I don't really expect you to 
answer it right this minute but maybe giving me an opportunity 
to work with your staff on it. The medicines that come to the 
U.S. Virgin Islands are sometimes held by Food and Drug through 
Customs in Puerto Rico and almost always confiscated when they 
are being sent back to their supplier. We are outside of the 
Customs zone. That is part of the problem. But we are part of 
the United States. Our pharmacists are licensed, trained and 
licensed in the United States, and we are purchasing from U.S. 
companies. So what we would like to pursue is having a waiver 
or some special procedure to avoid this problem because it is a 
great burden to my hospitals and my pharmacies and of course, 
it had a deleterious impact on patients' access to clinically 
important drugs, and I am hoping that as you look through a new 
international regulatory system that we can find a way to fix 
that within that. So again, if you want to comment on it, fine, 
but I think it is----
    Ms. Hamburg. Well, only to say thank you for bringing this 
to our attention, and I think that we would like to work with 
you to better understand the nature of what is happening and 
why and what can be done to address it.
    Mrs. Christensen. Right. And we have talked in the previous 
administration about it, so some of your staff may know about 
it, but I know it is a fresh one for you.
    Could you tell me how the FDA's new Office of Minority 
Health works, for example, with the Office of Pediatric 
Therapeutics to ensure that racial and ethnic minority children 
are appropriately, ethically and adequately included in drug 
research on children and pediatric populations?
    Ms. Hamburg. Well, we are just standing up this new Office 
of Minority Health. It was actually something--the opportunity 
to put it in place was part of the health care reform act, and 
it is intended to sort of cut across the full range of 
activities within FDA but with a special focus on a set of 
important scientific, medical and public health issues 
including how can we assure the appropriate representation of 
racial and ethnic minorities in clinical studies and I think 
there are huge opportunities both to work with our Office of 
Women's Health and our pediatric offices but to work across, 
you know, all of the medical product areas so that we can 
really address these critical concerns.
    Mrs. Christensen. On BPCA and PREA, often in children, the 
side effects of medicine or anything might not be seen for many 
years. Is there a requirement for the pharmaceutical industry 
to follow children for a certain period of time after they have 
been involved in clinical trials?
    Ms. Hamburg. You know, I am not sure that I can give you 
the complete response. We obviously have ongoing efforts to 
monitor adverse events, whether they are near term or long 
term, and our ability to do that in a meaningful way is 
enhanced by what we have been able to do in terms of 
strengthening our postmarket surveillance activities. In 
certain disease areas, there might be a particular concern 
anticipating possible longer-term risks or specific side 
effects in children and it might be part of the structuring of 
the clinical trial at the time of its initiation through PREA 
to put in place certain requirements and expectations about 
ongoing monitoring. But there may be some additional activities 
as well that I am not fully aware of.
    Mrs. Christensen. Maybe we can follow up on some 
discussions with your office around that and see if there is 
something that needs to be done in terms of children and long-
term impacts.
    Thank you, Mr. Chairman, I yield back the balance of my 
time.
    Mr. Pitts. The chair thanks the gentlelady and recognizes 
the gentleman from Virginia, Mr. Griffith, for 5 minutes for 
questions.
    Mr. Griffith. Thank you, Mr. Chairman, and I know we have 
plowed through some of this territory but I think it is 
interesting. As a member of the committee but not of this 
subcommittee, it has been very educational and I do appreciate 
you being here, Mr. Chairman, and I appreciate you letting me 
participate.
    But you have heard from both sides of the aisle what I am 
about to say, and that is, we have all been contacted by 
constituents. That is why I am here today. I was contacted by a 
constituent who feels that the strong risk aversion at the FDA 
is creating at least the perception that it is slowing down or 
stopping the approval of new, innovative treatments for cancer 
and other life-threatening terminal diseases. And I like some 
of the others who have spoken here today, and I am not going to 
make you go through all the things you have already testified, 
are very concerned that if you are facing a certain death, you 
are willing to take more risk, and you are wondering why the 
government is getting in the way. So I would ask you first, you 
have already been over a number of things that the FDA is doing 
to try to make that process better, but have you given 
consideration to creating a waiver process where a consumer who 
is facing one of these diseases can waive liability and any 
concerns about a particular drug or biologic treatment or 
whatever in order to get that treatment when they are facing 
the consequences? Obviously, there has to be a disclaimer of 
all the either known or unknown risks involved, but have you 
all given consideration to doing something like that? Because 
thank God, I have never had to face that and hope I never do, 
but there are a lot of folks out there like the 41-year-old we 
heard about, and you have heard from both sides of the aisle, 
folks are willing to take those risks, particularly when they 
are younger and particularly if they have young children, as I 
do. You know, I would take those risks in a heartbeat if it was 
going to give me extra time with my kids.
    So I am just wondering, have you thought about creating 
some kind of a waiver--ok, this hasn't been approved but I am 
willing to take that risk? And if you haven't thought of that, 
would you? And then let me follow up with, and what other 
things is the FDA is doing that you have not already testified 
to, because I don't want you to have to be like a broken record 
and go over the things that you have already mentioned.
    Ms. Hamburg. Well, you know, obviously this is such an 
important point and it is something that goes to the very heart 
of what we do because, you know, our mission really is to try 
to get the best possible treatments to people who need them, 
and, you know, as we have already talked about, we are putting 
an increasing focus on how we think about benefits and risks 
and weigh them. We already do accept, you know--have a much 
higher tolerance for risk when you are talking about a disease 
that is serious, life threatening, has no other treatment. I 
don't believe that we have really explored the exact proposal 
that you put forward, and I think it would certainly require 
broader discussions than just within the FDA. And we do have 
some other programs. Compassionate use was mentioned for trying 
to get drugs to people that are in desperate, life-threatening 
situations but perhaps, you know, in the interest of time and 
completeness, you know, we could provide you with some 
additional information about the programs that we are 
undertaking, and we certainly can continue to think about other 
strategies including the one that you mentioned.
    Mr. Griffith. Well, and if you would, and, you know, this 
is one of those things where sometimes folks just sitting 
around the table brainstorming might come up with one of those 
eureka moments and have an epiphany.
    Let me shift a little bit to another question that has come 
up in my district. I represent a rural district. There are many 
recognized off-label uses for approved drugs but--I will pick 
up Dr. Cassidy's point. But I am told that the FDA severely 
restricts communications to doctors and patients about these 
uses. Representing a rural district, I have heard about doctors 
who find it difficult to get the information about off-label 
uses that could benefit many of their patients. So what can we 
do to better, both as the FDA and what can we do as Congress to 
help you better inform doctors, especially in rural communities 
so they know about potential effective off-label uses of 
approved treatments?
    Ms. Hamburg. Well, off-label use, as you know, you know, is 
an important part of many medical practices and FDA doesn't 
regulate the practice of medicine and off-label use is 
something that we recognize is happening and frequently I have 
talked with people within FDA about how can we really collect 
better information to understand off-label use so that it could 
inform the broader issues around the approved indications for 
the use of a drug, but I think that the big concern is when 
drug companies are actively marketing an unapproved drug for an 
off-label use and that is where the controversies have been 
really focused on.
    Mr. Griffith. Yes, ma'am. Thank you for your time. I yield 
back.
    Mr. Pitts. The chair thanks the gentleman and recognizes 
the gentlelady from California, Ms. Eshoo, for 5 minutes for 
questions.
    Ms. Eshoo. Thank you, Mr. Chairman, for holding this 
hearing and also for extending both you and the ranking member 
a legislative courtesy to me to join this hearing today. It has 
always been a great source of pride to me to have served on 
this subcommittee for some 15 years, most of the years that I 
have been in the Congress, and I miss being here but I look 
forward to coming back and I am glad I am here today.
    I would like to ask unanimous consent that the lovely 
statement that I have be added to the record.
    Mr. Pitts. Without objection.
    [The prepared statement of Ms. Eshoo follows:]


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    Ms. Eshoo. Commissioner Hamburg, it is wonderful to see 
you. I think that you know that I was the original author of 
both PREA and the BPCA, so I come here today with a great sense 
of pride and I welcome the comments and the questions that 
members have asked about both pieces of legislation that the 
Congress is preparing to reauthorize.
    As you know, PREA was created to ensure that drug companies 
were doing important clinical trials in children, an area which 
had been most frankly woefully underserved before the passage 
of the legislation. And without adequate pediatric labeling, 
doctors were left to guess what the appropriate dosages for 
children would be. I think there was maybe this assumption that 
was being made that children are little adults, and they are 
not; they are children. So I think that this has--we took a 
very important step with the passage of that legislation, and I 
think it is why it is crucial for companies to develop their 
pediatric plans as early in the drug development process as 
possible.
    Now, I understand that the FDA has draft guidance asking 
companies to submit their pediatric plans at the end of phase 
II but the PREA statute requires submission at the time of the 
new drug application. I think the sooner that companies focus 
on pediatric populations, the sooner kids will receive the 
drugs that they need in some cases to survive. So can you say 
with confidence that pediatric study discussions always start 
as early as the FDA recommends?
    Ms. Hamburg. Well, first, let me say thank you for your 
leadership, and before you walked into the room, I had actually 
made note of it in my opening remarks. But BPCA and PREA have 
been very important pieces of legislation and have enabled 
enormous progress in the pediatric therapeutics area. The 
question you raise, you know, is an important one. I know it 
has been under discussion within the agency and beyond, and I 
think it is sort of an ongoing discussion in terms of what is 
the most appropriate timing, and frankly, there probably is no 
one cookie cutter approach. It probably really does depend on 
the particular product in question and the types of trials 
required. But I think in general, my sense is that early 
engagement is always helpful and the ability----
    Ms. Eshoo. I ask because of how the statute reads. Do you 
have any idea what the percentage of pediatric plans are 
actually completed at the end of phase II? I mean, if you don't 
know, maybe you can get that to us.
    Ms. Hamburg. We can get that to you.
    Ms. Eshoo. Now, if a company does not submit its pediatric 
plan by the end of phase II, as the draft guidance recommends, 
does FDA have any enforcement mechanisms to address it?
    Ms. Hamburg. Now, you know, I want to make sure that I 
answer your question properly.
    Ms. Eshoo. I ask this because I think it would be helpful 
to have legislation to ensure that companies submit their 
pediatric plans at the end of phase II. In fact, Congressman 
Markey and I are working on this, and maybe I should just turn 
the question around. Would it be helpful to you to have 
legislation that addresses what I just stated?
    Ms. Hamburg. Well, we do feel that at least as I understand 
it currently, you know, we have the tool of misbranding as a 
way of trying to respond to when the commitment is not met by 
the company with respect to completion of the pediatric 
studies, and that does seem like a bit--not quite the right 
regulatory or----
    Ms. Eshoo. I can sense it in your voice that there is----
    Ms. Hamburg. Yes, it creates a situation----
    Ms. Eshoo. So you think legislation would be helpful?
    Ms. Hamburg. I think that looking at that and if there is 
an approach that could be more targeted and flexible, that that 
would be very useful in terms of pushing companies to complete 
this important work and doing it in a constructive way that 
ultimately benefits the patients.
    Ms. Eshoo. Thank you very much, and thank you for your 
work, Mr. Chairman, and our ranking member, thank you again for 
your legislative hospitality.
    Mr. Pitts. The chair thanks the gentlelady and recognizes 
the gentleman from California, Mr. Bilbray, for 5 minutes for 
questions.
    Mr. Bilbray. Thank you very much for your courtesy, Mr. 
Chairman, and I just realized that at least on the other side 
of the aisle, there is a few that may remember the time I 
served on the committee for 6 years. A whole lot of new faces 
on this side.
    Doctor, we talk a lot about safety and regulation to 
protect it. We have an over-the-counter consumer product that 
is connected to over 500 deaths a year, and we continue to 
allow that to be sold over the counter. Do you want to explain 
to this committee why aspirin in its existing form is not more 
regulated or more restricted from consumer use even though 
there is what some people would call a very high death rate 
related to its use?
    Ms. Hamburg. Well, you know, aspirin obviously is a widely 
available product that we know has associated risks but also 
benefits. I don't think that I am prepared in this setting to 
discuss the whole context of the oversight and regulation of 
aspirin but I think it is an important reminder that even drugs 
that the average American would probably consider sort of safe 
and routine do have consequent risks and they need to be 
addressed in an ongoing way and that the FDA does in fact have 
a responsibility for the lifecycle of products, not just for 
approval but for monitoring safety, efficacy and benefit, 
overall benefit to patients over the whole course of the 
product's use.
    Mr. Bilbray. Now, would it be fair to say, or if you can 
refer to your experts around you or whatever, would it be fair 
to say on the flip side of that issue that aspirin probably can 
be documented as being one of the most lifesaving drugs that 
have been readily available to the public in the last 30, 40, 
50, 60 years?
    Ms. Hamburg. Aspirin has many benefits on different levels. 
That would be fair to say.
    Mr. Bilbray. Do you have any idea if there was any other 
drug out there that we could point to that probably has saved 
as many lives as aspirin has?
    Ms. Hamburg. You know, I am not really prepared to make 
those comparisons or have that----
    Mr. Bilbray. I would be very interested if you would take a 
look at the reality we have with aspirin, and I ask you to 
consider, and let us be very frank about it. If this product 
with its fatality problems came before the FDA today, could our 
existing system actually process it and get it out onto the 
market, or is it just one of those products that became so 
institutionalized before our regulatory oversight got where it 
is today? And my question is, do you think aspirin could get 
through the system today?
    Ms. Hamburg. Well, I wondered if that might be the ultimate 
question that you would be asking, and I guess that my answer 
in the form of a true bureaucrat is that I wouldn't be prepared 
to speculate without having really reviewed the information and 
the data, but I understand the issue that you are raising.
    Mr. Bilbray. I mean, my issue is the fact that if you only 
look at the negatives and if you focus, even if you look at the 
positives but if you focus on the negatives, in today's life, 
which usually happens, there are huge opportunities that may be 
denied, and my biggest concern is that I am looking at this and 
I don't see any way aspirin would be approved in our system, 
and how many people would die every year in this country and 
around the world if it wasn't available to the consumer? And I 
have to ask myself, do we know how many other drugs or 
treatments may be out there that have come later that cannot be 
accessible? So my big question is, has anybody ever challenged 
themselves to say do we have any idea how many deaths may be 
caused because we don't allow products like aspirin on the 
market today?
    Ms. Hamburg. Well, you know, as I was saying earlier in 
discussions, you know, we look in a very clear-eyed way at 
risks and benefits of the products that come before us, and I 
think we are striving now to deepen our strategies for 
addressing that and, you know, we do take a lot of risks. There 
is a sense that we are very risk-adverse.
    Mr. Bilbray. Doctor, I appreciate that and I am not blaming 
you. I am blaming the fact that the political side, we would 
raise holy hell, you would seeing us standing on the House 
Floor giving big speeches damning you for allowing this on the 
market, and I just want to sensitive that.
    Let me just say one thing. One of the great breakthroughs 
we did with AIDS in the 1990s when I was here was that we 
changed a lot of regulations, and multi-triaging was one of 
those things that we really moved the protocol for AIDS that 
hadn't been done for other research in other treatments. When 
it comes to cancer, it really appears that multi-triaging and a 
combination of drugs and uses may be one of those things we 
have learned from the AIDS success. Where we going now with FDA 
improving the ability for researchers and for pharmaceuticals 
to look at multiple drug use in the treatment of diseases such 
as AIDS and do we have an expedited process to try to move that 
process along?
    Ms. Hamburg. Well, I began my career in public service 
working on HIV/AIDS drug development and know exactly what you 
mean in terms of the importance of the breakthroughs, and it 
was really a combination of bringing the science together with 
the resources and commitment of industry, academia and the 
patient groups, and we were able to move very forward very 
swiftly and we were able to introduce, you know, some new 
regulatory approaches, etc. in the cancer arena and in other 
areas as well, other infectious diseases and other disease 
domains, we have a real opportunity as our science has deepened 
to do some of the kinds of things that you were just 
mentioning, and we actually just recently put out guidance to 
help industry think in some new ways about testing drugs in 
combination rather than doing one after another after another.
    Mr. Bilbray. And taking 20 years to do it.
    Ms. Hamburg. Yes.
    Mr. Bilbray. Mr. Chairman, I know my time is expired. To my 
colleagues, just to follow up on that, one of those other great 
successes that my colleagues will remember is that in the AIDS 
crisis, we could do blood tests and monitor virus levels to be 
able to see what cocktails were working rather than what we 
have now in cancer where you basically have to wait for the 
cancer to show up again. You have clinical trials in process 
right now on the East Coast for a blood test for lung and for 
breast cancer that is being looked at. Has anybody in your 
agency taken a look at the fact that this is not just a product 
that may be able to detect cancer for treatment but maybe one 
of those huge breakthroughs that cancer researchers are looking 
at to be able to more efficient in their research, much like 
they do with AIDS? Is anybody considering the connection 
between this blood test may not only be a good treatment but 
may be an essential part of research to address this issue?
    Ms. Hamburg. Yes, and let me just clarify that actually 
partly stemming from the work in HIV/AIDS, we do use surrogate 
markers including the kind of markers identified through blood 
tests in our approval process. That is really what accelerated 
approval is all about, is identifying what can serve as 
surrogate endpoints for an early approval followed by 
additional clinical studies to confirm or not confirm the 
initial promise as indicated in those studies. So we take that 
very seriously. We use it in our decision making, and certainly 
what you were describing would fit within that framework of 
regulatory----
    Mr. Bilbray. Thank you for your courtesy, Mr. Chairman.
    Mr. Pitts. I thank the gentleman and recognize the 
gentleman from Massachusetts, Mr. Markey, for 5 minutes for 
questioning.
    Mr. Markey. Thank you, Mr. Chairman.
    The Web site clinicaltrials.gov was transformed into a 
mandatory registry that I created along with Representative 
Waxman in the 2007 FDA amendments. This Web site publishes 
information about the results of clinical trials designed to 
evaluate medical treatments but several problematic loopholes 
exist. For example, a drug company finds out from a clinical 
trial that a diabetes drug is not only ineffective but also 
causes severe side effects. As a result, the company abandons 
the drug's development, never seeks approval with the FDA and 
never publishes the results because there is no incentive to do 
so. Commissioner Hamburg, will the results of this trial ever 
have to be posted on the clinical trials database?
    Ms. Hamburg. As I understand it, currently, no. That is an 
important issue that you raise. I think it could be addressed 
but it is not included in----
    Mr. Markey. So if another researcher decided to pursue 
clinical trials of this same drug, they would have no idea 
about the dangers identified from the previous trial and would 
put more people at risk of the same adverse health effects that 
had already been identified so generally do you agree that it 
would be a good public health measure to ensure that results of 
all registered trials, regardless if the drug is approved or 
not, are posted on the database?
    Ms. Hamburg. I believe that NIH through its rulemaking 
process is currently looking at this question in terms of 
whether trials for drugs that aren't actually approved could be 
posted. I think you also raise a broader issue that certainly 
we are talking about with industry and others in terms of more 
transparency and the benefits, the common good of making more 
information about, you know, not just what works but what 
doesn't as well.
    Mr. Markey. Thank you. Now, some clinical trials that occur 
entirely overseas can be used to support a drug application 
with the FDA even though they are not subject to the disclosure 
requirements of the clinical trials database. Do you agree that 
any clinical trial regardless of where it takes place should be 
subject to the same transparency requirements if the trial is 
used as part of the company's approval application to the FDA?
    Ms. Hamburg. You know, yes, you know, in general we 
certainly agree that more transparency, more information is 
beneficial and we think that this is a bit of a disconnect and, 
you know, we would be interested in working with you further.
    Mr. Markey. So this is something that Ms. Eshoo and I are 
working on, this next subject, which is that the FDA data shows 
that since 2007, 78 percent of PREA's pediatric study 
requirements were not completed by their due dates, if at all. 
These are products that could benefit children but the studies 
needed to provide that information are not always being 
completed. Pediatric studies are especially challenging and 
companies may have a perfectly acceptable reason for asking FDA 
to extend their deadlines, but if the company does not meet its 
pediatric requirements and fails to provide a reasonable 
justification, what enforcement options does the FDA have?
    Ms. Hamburg. Well, we do, as I was discussing with 
Congresswoman Eshoo earlier, have, you know, a limited arsenal 
of tools and it really is an area where it is important, number 
one, to understand the reasons for the delays, and as you note, 
there are some reasons that are understandable, but these are 
studies that are important to get done. We need to support 
companies in getting them done and there should be expectations 
and accountability on the completion of those studies.
    Mr. Markey. Yes, it is my understanding that the FDA's only 
option for enforcement is misbranding the product if there is 
an enforcement action that you can take but that is an option 
very rarely, if ever, taken by the FDA. If the FDA were to deem 
a lifesaving treatment misbranded because the company failed to 
complete its pediatric requirements, children who were being 
prescribed the drug off-label would lose access to it. Adults 
would also lose access. Is that correct?
    Ms. Hamburg. That is correct, and that is why in some 
ways--I have heard it internally referred to as the nuclear 
option.
    Mr. Markey. So either FDA triggers the nuclear option of 
misbranding, costing everyone access to that drug, or they can 
do nothing, and that is very different from the way many other 
violations of the Food, Drug, and Cosmetic Act are handled, 
which can incur civil monetary penalties. Have civil monetary 
penalties been effective in other areas to ensure compliance?
    Ms. Hamburg. I think that they have been and they do give 
more flexibility and the ability to target the action to what 
needs to be done in a more effective way.
    Mr. Markey. And I see no reason, Ms. Eshoo and I agree on 
this, that companies failing to meet their obligations to 
children should enjoy those special protections. So we would 
like to work with you in giving you the flexibility to impose 
those penalties.
    And just finally, Ms. Schakowsky and Ms. Baldwin and I 
introduced a cosmetics bill last Congress. We reintroduced the 
same cosmetics bill in this Congress, and as you know, most 
people believe that the government makes sure that personal 
care products like shampoo and cosmetics are safe before they 
are sold. Does the FDA have statutory authority to require 
safety testing of cosmetic ingredients before they go on the 
market?
    Ms. Hamburg. We do not do premarket approval for cosmetics 
except in a very limited domain of color additives.
    Mr. Markey. And can you require a recall of any product in 
cosmetics?
    Ms. Hamburg. If there were serious safety issues raised 
with public health consequences, we would work with the company 
to get them to voluntarily----
    Mr. Markey. But it is voluntary. You don't have a mandatory 
power.
    So Ms. Schakowsky and Ms. Baldwin and I are very interested 
again in pursuing that legislation and working with Mr. Pallone 
and working with the chairman towards the goal of finding a way 
of giving you the authority that you need to work on these 
issues. So if you would be willing to work with us, we are 
willing to work with you and with Mr. Pallone and others to see 
if we can do something legislatively in this area.
    Thank you, Mr. Chairman.
    Ms. Hamburg. Terrific. Thank you.
    Mr. Pitts. The chair thanks the gentleman. That concludes 
round one, and we will go to one follow-up on each side for 
round two. The chair recognizes Dr. Burgess for a follow-up 
question.
    Mr. Burgess. Dr. Hamburg, thank you for spending so much 
time with us here this morning. I just wanted to follow up on 
something that Mr. Ross from Arkansas brought up about the 
over-the-counter asthma inhalers, and while I recognize the 
problem actually originated in the EPA, not at the FDA, on the 
removal of CFCs as a propellant, you know, the fact of the 
matter remains, I spent New Year's Eve driving from pharmacy to 
pharmacy to make sure I had an adequate supply of Primatene 
because as he correctly points out, it is two vials for $32, so 
it is a fairly reasonable price compared to the expensive price 
of the albuterol, which is a prescription device.
    My understanding is that the over-the-counter iteration 
that is non-CFC is currently in process with the HFA as a 
propellant and that FDA is evaluating that. I would just 
encourage you to do so with all great dispatch. These are 
things that have been around for a long time, and most people 
with asthma, as I do, experience times when the disease is much 
worse and times when it is not so bad, and those times when it 
is not so bad, I may get quite far away from having anything 
around the house that would be available to help me, and it was 
always comforting to know at 2 o'clock in the morning I could 
drive to a 24-hour pharmacy and purchase a Primatene inhaler. 
Now the only option is--and I am a doctor, I can write my own 
prescription, but for the vast majority of people, you have to 
go to the emergency room, likely going to get a breathing 
treatment and a pulse oximeter, maybe a blood gas, and you are 
going to spend $1,500, $2,500 for what could have been fixed, 
as Mr. Ross correctly points out, for a $20 charge at an all-
night pharmacy.
    So it is important to get the over-the-counter option back 
out there. Many people use these rescue inhalers not frequently 
but from time to time, and that is the part of the population 
that really would benefit from having these back and available 
again. Can we look to you to help us get those?
    Ms. Hamburg. We have indicated that, you know, we would 
welcome an application and we will work to expedite the review.
    Mr. Burgess. Because the active ingredient is not any 
different than what it has been for the last 100 years, right? 
And the difference is the propellant, and if it used in the 
albuterol inhalers, it can't possibly be harmful. I think it is 
as good as CFC. CFC gets you a much better dispersion. The HFA 
always ends up in the oropharynx and you have to relearn how to 
use it.
    But this is important to people, and every member of this 
committee, in fact, every Member of Congress is going to be 
hearing about this at some time during the year when their 
constituents run out of their existing supply of CFC inhalers 
and find that they cannot replace them.
    Thank you, Mr. Chairman.
    Mr. Pitts. The chair thanks the gentleman, and Mr. Pallone 
is recognized for 5 minutes for one follow-up.
    Mr. Pallone. Thank you, Mr. Chairman.
    Dr. Hamburg, some have suggested that FDA is insisting on 
too much clinical trial prior to approval and that it is 
resulting in an export of innovation and jobs abroad, and to 
help address this situation, some of the members have suggested 
that FDA's mission statement should be changed to include 
things like job creation and innovation. In fact, there is a 
bill, the Food and Drug Administration Mission Reform Act, that 
would accomplish this.
    Now, even assuming there is some truth to these reports, 
and I think that there is important evidence to suggest that 
there is not, revising FDA's mission statement seems like a 
drastic measure to me, and I just wanted you to comment on the 
implication of revising FDA's mission statement to include 
things like job creation. How would FDA even begin to assess 
whether certain agency actions would create jobs?
    Ms. Hamburg. Well, I think that it is very, very important 
that FDA as a science-based regulatory agency with a public 
health mission really focus our efforts on determining the 
safety, efficacy and quality of the products that come before 
us and that we do our work in the context that clearly 
understands that we need to make sure that we are bringing 
products to people in a timely way that they need and count on 
and that we do need to do everything we can to make sure we 
have the most modern and streamlined approaches and that we 
work closely with product sponsors in a way that is 
transparent, consistent and predictable to achieve our common 
goal of making important products available to people.
    I think that our safety and efficacy standards are very 
important to the success of industry as well as to improving 
and protecting the health of the public.
    Mr. Pallone. But what I am trying to find out is whether 
you would want to revise the FDA's mission statement to include 
things like job creation.
    Ms. Hamburg. Well, I was going to get to that and I think 
it would be very hard for us to factor in to this science-based 
decision making the question of how would approving or not 
approving this product impacts jobs and how would approving or 
not approving a product impact jobs of a competitor, and it 
would get very, very complicated, and frankly, I think it would 
be quite inappropriate and would ultimately not serve the 
American people well or serve industry well, and I think it is 
something that would be extremely hard to quantify, and I think 
that, you know, what is really important is that we make sure 
that operating within the ecosystem of biomedical innovation 
and product development that we ensure that we are doing our 
job as well as we can, which is to apply science-based, data-
driven processes to our decision making, do it in as modern and 
streamlined a way as possible, and work as effectively with 
industry and other stakeholders to deliver the products that 
people need.
    Mr. Pallone. Thank you.
    Mr. Pitts. The chair thanks the gentleman. That concludes 
our questions for panel one. The chair thanks the panel, 
specifically Dr. Hamburg, for your excellent testimony. It is 
very important information you have shared with the committee.
    We will now excuse panel one and call panel two to the 
witness table, and while we change panels, we will take a 5-
minute recess and reconvene at 12:45.
    [Recess.]
    Mr. Pitts. We will ask all of guests and witnesses to 
please take their seats, and would like to ask at this time 
unanimous consent to enter into the record a statement by NCPA, 
that is community pharmacists, and NACDS, National Association 
of Chain Drug Stores, into the record. It has been shared with 
the other side, so without objection, so ordered.
    [The information follows:]


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    Mr. Pitts. I would like to now welcome panel two and thank 
all of you for agreeing to testify before the subcommittee 
today, and I would like to quickly introduce our expert panel.
    Mr. Geno Germano, President and General Manager of 
Specialty Care and Oncology at Pfizer, is our first guest. Dr. 
David Gollaher, President and CEO of California Healthcare 
Institute. Mr. Richard Pops, Chairman and CEO of Alkermes. Mr. 
Pops is testifying on behalf of the Biotechnology Industry 
Organization. Mr. Allan Coukell, Director of Medical Programs 
for the Pew Health Group; Ms. Diane Dorman, Vice President of 
Public Policy at the National Organization of Rare Disorders; 
Dr. David Wheadon, the Senior Vice President for Scientific and 
Regulatory Affairs at PhRMA; and Dr. Daniel Frattarelli, Chair 
of the American Academy of Pediatrics' Committee on Drugs.
    So we will go in that order. Again, thank you all for 
coming. We have your prepared statements, and we will ask each 
of you to summarize in 5 minutes your opening statements.
    Mr. Germano, we will begin with you. You are recognized for 
5 minutes.

  STATEMENTS OF GENO GERMANO, PRESIDENT AND GENERAL MANAGER, 
 SPECIALTY CARE AND ONCOLOGY, PFIZER, INC.; DAVID L. GOLLAHER, 
 PRESIDENT AND CHIEF EXECUTIVE OFFICER, CALIFORNIA HEALTHCARE 
   INSTITUTE; RICHARD F. POPS, CHAIRMAN AND CHIEF EXECUTIVE 
    OFFICER, ALKERMES, ON BEHALF OF BIOTECHNOLOGY INDUSTRY 
    ORGANIZATION; DAVID E. WHEADON, SENIOR VICE PRESIDENT, 
SCIENTIFIC AND REGULATORY AFFAIRS, PHARMACEUTICAL RESEARCH AND 
 MANUFACTURERS OF AMERICA; ALLAN COUKELL, DIRECTOR OF MEDICAL 
 PROGRAMS, PEW HEALTH GROUP, THE PEW CHARITABLE TRUSTS; DIANE 
    EDQUIST DORMAN, VICE PRESIDENT, PUBLIC POLICY, NATIONAL 
 ORGANIZATION FOR RARE DISORDERS; AND DANIEL A.C. FRATTARELLI, 
 CHAIR OF PEDIATRICS, OAKWOOD HOSPITAL AND MEDICAL CENTER, ON 
  BEHALF OF THE AMERICAN ACADEMY OF PEDIATRICS' COMMITTEE ON 
                             DRUGS

                   STATEMENT OF GENO GERMANO

    Mr. Germano. Thank you, Chairman Pitts and members of the 
subcommittee. My name is Geno Germano. I am President and 
General Manager of Specialty Care and Oncology at Pfizer. 
Founded in 1849 in New York City, we have grown to become the 
world's largest biopharmaceutical company, providing treatments 
for a myriad of diseases that afflict people around the world. 
I appreciate this opportunity to testify on behalf of Pfizer 
and our 40,000 U.S. colleagues to unequivocally support the 
reauthorization of the Prescription Drug User Fee Act.
    Behind the acronym PDUFA is another acronym: R&D, research 
and development. Research and development is the lifeblood of 
Pfizer. It is the lifeblood of our industry and it is the 
lifeblood of great American innovation. Today it takes on 
average more than a billion dollars and 12 to 15 years to 
research and develop a new medicine. Approximately one in 
10,000 compounds that enter the drug discovery phrase is every 
approved by the Food and Drug Administration and made available 
to patients. Our R&D is ultimately codified in our patents. 
Patents represent our license to move forward and are a 
fundamental legal basis for our existence.
    It is important to remember, we file our patents on 
compounds in the very early stages of development, often a 
decade or more before the review process begins at the FDA. 
Therefore, by the time we had submitted an application to FDA, 
the patent life is already eroded to a meaningful extent, 
making an effective and efficient process with FDA imperative 
for our firm.
    Biopharmaceutical companies like Pfizer typically have at 
most between 10 and 14 years to recoup our investment before 
generic competition enters the market. However, the public 
value, the public health value of our investment continues for 
generations to come.
    It is through this foundational work in R&D and 
manufacturing that the biopharmaceutical industry supports more 
than 3 million U.S. jobs and nearly $300 billion in total 
output to GDP. PDUFA will help keep R&D and new medicine 
introductions in the United States.
    The financial commitment and significant time and resources 
required to develop a drug reflect the uncertainties inherent 
in our business. The scientific uncertainties are ultimately 
reduced to the core question: does the benefit of the drug 
outweigh the risk? And this is a question we and FDA seek to 
answer, and it will vary depending upon the treatment and the 
intended patient population. Regulatory uncertainties can 
complicate this dynamic if the review process at FDA is 
ambiguous and inefficient. This is why a strong partnership and 
communication with the FDA are essential.
    As the head of the specialty care business, I am intimately 
engaged in the development of our medicines. My business focus 
is on developing therapies for complex and rare diseases, many 
forms of cancer, and vaccines for the prevention of life-
threatening infections.
    Prevnar 13, a vaccine for the prevention of pneumococcal 
disease, is a great example of an important medical 
advancement. In December of last year, Prevnar 13 received 
approval from FDA for adults 50 years of age and older under 
the accelerated review process, a pathway specifically intended 
to speed new medicines to market for significant unmet health 
needs. Then last Friday, FDA approved our new cancer medicine, 
Enlighta, that we developed for patients with advanced renal 
cell cancer whose disease continues to progress after first-
lien therapy fails. The development pathway for critical 
medicines and vaccines like these are not cookie cutter in 
nature, and it is essential to have a strong, functional 
regulatory agency for advancements like these to continue.
    In my full statement, I discuss the major provisions of the 
new PDUFA agreement. I would like to highlight one of these, 
the review enhancements for new molecular entities, or NMEs, 
which will have an immediate impact on Pfizer and medicines in 
our pipeline. A good example of the benefit of an effective NME 
review process is Xalkori, which was approved by FDA last 
August. Xalkori is an NME and is the first lung cancer drug 
approved by the FDA in more than 6 years. This scientific 
innovation is also one of the first personalized medicines 
targeting a genetic abnormality shared by only 3 to 5 percent 
of the 200,000 lung cancer patients diagnosed in the United 
States each year. Xalkori was a fast-track product that was 
given priority review by FDA. The goal was to review in 6 
months. FDA reviewed it in 4 months. While Xalkori's approval 
is an example of getting it right, the challenge we have is 
making sure that situations like Xalkori are the rule and not 
the exception. The NME review process enhancements will help 
achieve that goal. These enhancements embody what we consider 
to be the foundation of a successful review: communication and 
transparency.
    The improved process will encourage better issue 
identification and resolution at the fine stages of the review 
cycle. Further, these enhancements will have a direct impact on 
the dozens of NMEs at various stages of development in our 
pipeline. These are potential new treatments and therapeutic 
areas such as oncology, pain, cardiovascular disease and 
vaccines.
    The ability of Pfizer to do its job depends on the ability 
of FDA to do its job, and PDUFA provides a framework and 
resources for that to happen. PDUFA is must-pass legislation. 
It is must-pass for Pfizer and the biopharmaceutical industry. 
It is must-pass for FDA, but most importantly, it is must-pass 
for patients and society as a whole.
    Thank you for this opportunity to testify. I look forward 
to answering any questions you may have and hearing your views.
    [The prepared statement of Mr. Germano follows:]


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    Mr. Pitts. The chair thanks the gentleman and recognizes 
the gentleman, Dr. Gollaher, for 5 minutes for an opening 
statement.

                 STATEMENT OF DAVID L. GOLLAHER

    Mr. Gollaher. Thank you, Chairman Pitts and Ranking Member 
Pallone. My name is David Gollaher, and I am President and CEO 
of the California Healthcare Institute. California has by far 
the largest cluster of innovative research institutions and 
biotechnology companies in the world. Today there are about 
270,000 jobs directly connected to biomedical R&D in 
California.
    My purpose today is first to support the reauthorization of 
PDUFA, then to explain why PDUFA is critical to drug 
innovation, and then briefly to review work that CHI, our 
institute, has been conducting with the Boston Consulting 
Group, BCG, together and analyzed data that accurately reflect 
FDA performance.
    I know there has been a lot of criticism of the FDA, but 
all of us agree that a strong, efficient FDA is important to 
our industry and to patients, an agency that performs well, 
encourages medical innovation and a regulatory system that has 
clear rules, that operates transparently, builds confidence 
among investors, and confidence is key because patients need to 
be confident that their drugs meet the highest standards of 
safety and effectiveness while industry needs to be confident 
that the FDA is abreast of the latest science and is applying 
it reasonably to innovative products.
    The first point I would like to make is about the 
relationship of advanced science to regulation. We live in an 
unprecedented age of biological sciences. After the human 
genome project was completed in 2003, our ability to understand 
diseases at the level of genes and cells is racing ahead. 
Still, though, if we compare the past several years to the 
period during the 1980s and 1990s when there was so many 
pioneering biotech drugs along with breakthrough drugs for HIV/
AIDS, we can see that today drug development has lagged. It 
hasn't kept up with science.
    The reasons for this are complicated. For one thing, our 
bodies are the most complex organisms in nature, and developing 
drugs that have powerful effects on disease without harming 
healthy cells and tissue turns out to be extremely difficult. 
So difficult, in fact, that developing a new medicine now costs 
well over a billion dollars.
    In trying to become more efficient and reduce development 
costs, the drug industry is searching for the optimum model for 
R&D but the most productive model and scale for biotech 
research remains a quest in progress.
    The problem is that we continue to see high failure rates 
for drugs that enter the regulatory pipeline. Only 5 to 8 
percent of new molecular entities that start out as drug 
candidates make it all the way to the market. Commissioner 
Hamburg has pointed out that we are investing between industry 
and academia about $100 billion in research today and not 
getting our fair share of new medicines. But this isn't true 
across the board. In 2011, the FDA issued a report citing 35 
innovative treatments for hepatitis C, prostate cancer, lupus, 
pneumonia and other serious disorders. This report showed how 
the FDA used expedited approval authority, flexible clinical 
study requirements, and resources collected under PDUFA to 
improve the rate of approvals. Oncology, for instance, emerged 
as a particularly bright spot, and our recent work with BCG 
found that cancer drugs experience rapid review on the order of 
10 to 15 months. But there were other areas--cardiovascular, 
central nervous system, gastrointestinal--that stretched almost 
twice as long.
    The point is, there are major differences in timelines 
depending on a drug's therapeutic area, and in our view, this 
suggests an opportunity, namely, for the FDA to learn from its 
own best practices and then replicate those practices across 
the agency. To accomplish this, though, will require more data 
than we have had in the past but timely, accurate data would 
prove equally valuable for internal FDA benchmarking and for 
industry management.
    It is hard to overstate the importance of good data. A 
time-honored principle of management is that what gets measured 
gets done. Our work with BCG over the past 2 years, mining the 
agency phone data in order to gain a better understanding of 
how it operates, suggests a few things to us. First, that we 
meet regularly together and analyze the best possible data and 
that there is an opportunity to provide longitudinal data over 
the next PDUFA cycle so that 5 years from now FDA, industry and 
Congress can share the understanding of real trends over time. 
It is ironic that for an agency that regulates more than 20 
percent of U.S. GDP and relies increasingly on industry user 
fees that there has been so little in the way of consistent 
tracking.
    In addition, better data may help the agency, Congress and 
industry to develop a better understanding of benefits versus 
risks. Virtually all medicines carry some capacity for harm, 
and a zero-risk mentality would shut down development of 
beneficial drugs altogether. But more attention needs to be 
devoted to how the FDA's policies and operations encourage or 
discourage investment in different therapeutic areas. In other 
words, how should we measure risk if the agency's demands for 
data become so intense that investors avoid that therapeutic 
area altogether. This is happening today in areas like diabetes 
and obesity.
    I would like to conclude by observing that PDUFA has been a 
remarkable success. For this legislation to move science 
forward, it needs to remain highly focused on enabling the 
agency to promote innovation, on encouraging it to address 
areas of inefficiency, on balancing its mission to protect 
public health with the importance of attracting robust private 
sector investment into new drugs and biologics. Ultimately, 
public health and economic competitiveness are two sides of the 
same coin. Without investment, the next generation of 
breakthroughs will never materialize nor will the jobs to 
manufacture them. Commissioner Hamburg wrote an op-ed last year 
calling FDA America's innovation agency. I think this is more 
an aspiration than a historical fact, but it is an aspiration 
that we all share, and PDUFA V is an important step toward 
accomplishing it.
    Thank you, and I would be happy to answer any questions.
    [The prepared statement of Mr. Gollaher follows:]


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    Mr. Pitts. The chair thanks the gentleman and recognizes 
Mr. Pops for 5 minutes for an opening statement.

                  STATEMENT OF RICHARD F. POPS

    Mr. Pops. Thank you, Chairman Pitts and Ranking Member 
Pallone. I appreciate the opportunity to be here today. I am 
Richard Pops, Chairman and CEO of Alkermes, and I am here 
testifying on behalf of the Biotechnology Industry 
Organization, or BIO. I coordinated BIO's engagement on the 
PDUFA V discussions with FDA, and I have got more than 20 years 
of experience in managing biotechnology companies and 
successfully developing new therapies for patients. So I know 
firsthand the impact that PDUFA has had on patients and on 
medical innovation.
    BIO, in summary, supports a swift enactment of PDUFA V 
recommendations that improve this regulatory process and 
provide patients and doctors with earlier access to 
breakthrough therapies that we focus our lives on developing. 
So at Alkermes, our company, we are in a very exciting phase of 
growth with a diversified portfolio of commercial products that 
have already made it through the FDA process, so we have had 
that experience, but also new medications in development where 
we are in the midst of the regulatory process addressing 
central nervous system disorders such as addiction, 
schizophrenia and depression.
    We began as a raw startup in labs next to MIT up in 
Massachusetts, and today we employ over 1,200 individuals in 
Massachusetts, Georgia, Ohio and worldwide, and we operate 
large manufacturing facilities in both Ohio and in Georgia as 
well.
    The key to our success and I think the success of the 
industry in general is a reliable and predictable FDA, and the 
PDUFA program is an incredibly important part of that.
    The PDUFA V recommendations are based on the principles 
that a science-based transparent and well-managed review 
process that appropriately balances benefit and risk can 
enhance the public trust and increase patient access to new 
medicines. Industry and FDA agreed upon a set of enhancements 
under PDUFA V designed to reinforce FDA's review performance 
and get back to basics for patients. These proposals have also 
been informed by an unprecedented level of public input, which 
has further strengthened the technical agreement. These 
enhancement include a new molecular entity, or NME, review 
program that we hope will lead to further review cycles and 
earlier patient access to needed treatments, enhanced 
communication during drug development, regulatory science 
modernization and robust safety and postmarket surveillance 
capacities.
    While BIO, of course, supports the entirety of the 
technology agreement, today I would like to focus primarily on 
the enhanced communication in PDUFA V. This initiative is based 
on the philosophy that timely interactive communication with 
biotechnology and life science companies during drug Venezuela 
should be a core agency activity. While many biotechnology 
companies operate on the cutting edge of biomedical science and 
develop new therapies, science is a collaborative process. It 
doesn't occur in a vacuum. And it is critical to promote 
interactive scientist-to-scientist communications between FDA 
and sponsors.
    In the course of drug development, we often have simple 
clarifying questions, the responses of which could have a 
significant impact on the development program but are not 
extensive enough to warrant formal meetings with FDA. To obtain 
timely responses to such questions, we currently often have to 
engage in lengthy exchange of multiple formal letters with FDA, 
which is an inefficient and cumbersome use of both FDA's and 
sponsors' time. For small biotechnology companies reliant on 
limited venture capital funding sources, these delays can 
create significant impediments to development programs and 
therefore innovation.
    So as part of the enhanced communication program, FDA will 
establish best practices for this type of interactive dialog 
and train staff on communication. Independent reports 
commissioned by FDA have demonstrated that enhanced 
communication during drug development ultimately results in 
higher quality applications which can improve efficiency for 
FDA reviewers. This proposal was a top BIO priority and we are 
pleased that it was included in the agreement.
    In addition to the enhanced communication features, the 
PDUFA V agreement makes new resources available to modernize 
regulatory science in the areas of personalized medicine and 
rare disease drug research. Modern approaches to drug 
development and evaluation will introduce new efficiencies in 
the drug development process and provide FDA with additional 
tools to evaluate the benefits and the risks of pharmaceutical 
products. These proposals will also integrate more structured 
and systematic approaches to addressing benefits and risks and 
allow FDA to conduct outreach to patients and hold workshops to 
better understand patient perspectives on disease severity and 
unmet medical need.
    BIO looks forward to working with the committee and the FDA 
to implement PDUFA V, and I want to thank you again for having 
us here today.
    [The prepared statement of Mr. Pops follows:]


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

                 STATEMENT OF DAVID E. WHEADON

    Mr. Wheadon. Thank you. Chairman Pitts Ranking Member 
Pallone and members of the subcommittee, good afternoon. I am 
David Wheadon, Senior Vice President of Scientific and 
Regulatory Affairs at the Pharmaceutical Research and 
Manufacturers of America, better known as PhRMA. PhRMA 
appreciates this opportunity to testify today and share our 
views on the fifth reauthorization of the Prescription Drug 
User Fee Act, PDUFA, and the reauthorization of the Best 
Pharmaceuticals for Children Act, BPCA, and the Pediatric 
Research Equity Act, PREA.
    PhRMA and its member companies, the country's leading 
pharmaceutical research and biotechnology companies, strongly 
support the original goals of PDUFA, namely to provide patients 
with faster access to innovative medicines, to preserve and 
strengthen FDA's high standards for safety, efficacy and 
quality, and to advance the scientific basis for the agency's 
regulatory oversight. PDUFA has advanced public health by 
accelerating the availability of innovative medicines to 
patients while helping to ensure patient safety.
    Furthermore, PDUFA has helped to improve America's 
competitiveness around the world. Since the passage of the 
original Prescription Drug User Fee Act in 1992, the United 
States has become the world leader in bringing new medicines to 
patients first. Ensuring that the United States maintains a 
policy and regulatory environment that encourages an efficient, 
consistent and predictable drug review process is key to 
keeping America competitive in today's global economy.
    PhRMA strongly endorses the recommendation of PDUFA V 
performance goals letter, which was created with unprecedented 
transparency and input from diverse stakeholders. This 
agreement will provide FDA with the resources and the tools 
required to further enhance the timeliness, completeness and 
efficiency of the drug review process including provisions to 
advance regulatory science and modernize drug development, to 
improve benefit-risk decision making, and to further strengthen 
FDA's focus on patient safety.
    I would like to focus for a moment on one specific 
provision in the PDUFA V agreement. PDUFA V will improve the 
review process for new molecular entity, NME, drug and biologic 
applications which will be particularly significant for 
patients because NMEs are novel compounds that have the 
potential to address unmet medical needs and advance patient 
care. Specifically, it is anticipated that earlier and more 
comprehensive communication between the agency and drug 
sponsors as required in this enhanced review program will 
improve the rate of on-time first-cycle successes. The success 
of the new review program and of the agency's ability to 
achieve its drug review goals will be independently assessed 
and reported in 2015 and 2017. PDUFA V will continue to provide 
FDA with the resources and tools that are essential to support 
patient safety and promote medical innovation through enhanced 
timeliness, completeness and efficiency of the drug review 
process.
    PhRMA encourages Congress to reauthorize PDUFA in a timely 
manner based on the negotiated PDUFA V performance goals and to 
minimize the inclusion of additional provisions that may have 
the unintended consequence of distracting from the act's 
original intent.
    The Best Pharmaceuticals for Children Act and the Pediatric 
Research Equity Act have been extraordinarily successful in 
improving medical care for children by driving research to 
create innovative medicines for use in pediatric patients. 
According to the FDA, the current pediatric exclusivity program 
has done more to spur research and generate critical 
information about the use of medicines in pediatric patients 
than any other government initiative. Ensuring that the 
pediatric exclusivity incentive is preserved is key to 
continued innovation and improvement in pediatric medical care 
in the face of rising research costs. Since their initial 
enactment and subsequent reauthorizations, BPCA and PREA have 
been subject to a sunset clause under which their provisions 
expire after 5 years unless reauthorized by Congress. To build 
upon the tremendous success of BPCA and PREA in improving 
medical care for children, Congress should permanently 
reauthorize BPCA and PREA.
    In closing, I would like to use this opportunity to briefly 
discuss the issue of pharmaceutical supply chain integrity. 
PhRMA supports granting FDA discretion to set routine 
inspection intervals for foreign and domestic facilities 
according to risk. We support providing FDA with the 
flexibility to prioritize inspections of foreign establishments 
based on the risk they present and believe relying on set 
criteria such as compliance history, time since last 
inspection, and volume of type of products produced will 
enhance the FDA's ability to target its inspection resources 
efficiently and effectively. A more detailed description of 
additional recommendations on how to strengthen the integrity 
of the supply chain can be found in PhRMA's written testimony. 
We look forward to continuing to work with this committee, FDA 
and other stakeholders on these important issues.
    Chairman Pitts and members of the subcommittee, thank you 
for the opportunity to testify. I am happy to answer any 
questions.
    [The prepared statement of Mr. Wheadon follows:]


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    Mr. Pitts. The chair thanks the gentleman and recognizes 
Mr. Coukell for 5 minutes for an opening statement.

                   STATEMENT OF ALLAN COUKELL

    Mr. Coukell. Chairman Pitts, Ranking Member Pallone and 
committee members, thank you for the opportunity to be here 
today.
    My name is Allan Coukell. I am the Director of Medical 
Programs with the Pew Health Group, which seeks to improve the 
health and wellbeing of Americans by supporting policies that 
foster innovation and reduce risks to consumers. I am here 
today to talk about the safety of the U.S. drug supply. Pew has 
focused on this for the last 4 years as has this committee.
    In recent years, pharmaceutical manufacturing has been 
transformed. What was once a domestic industry is now global. 
Forty percent of our finished drugs and 80 percent of the 
active ingredients now originate outside our borders. Much of 
the supply is purchased in India and China. The number of non-
U.S. plants that supply the United States has doubled in just 
the past decade. Yet the Food, Drug, and Cosmetic Act remains 
overwhelmingly domestically focused. This puts consumers at 
risk and American manufacturers on an uneven playing field. 
While the leading companies are already doing thorough 
assessments of their supply chains, we have to make sure that 
there is no incentive for the weaker actors to gain a 
competitive advantage by cutting corners.
    Just 4 years ago, hundreds of American patients were 
sickened and some died after they received a blood-thinning 
drug, heparin, that had been adulterated during manufacture in 
China. This was a U.S. company that was reliant on an upstream 
network of suppliers that it didn't know and couldn't control. 
Since that tragedy, this committee has held nine hearings and 
heard from more than 60 witnesses. You have conducted a careful 
and thorough investigation that has identified serious gaps in 
the system. We don't know who adulterated that heparin from 
China but we certainly know how to reduce the risk that someone 
else will adulterate some other imported drug in the future.
    Congress needs to act to protect Americans. We need a 
system that reduces risks, that rewards companies that have 
proper quality systems in place, promotes an even playing 
field, and uses taxpayer dollars efficiently. Pew's ``After 
Heparin'' report identifies the risks and suggests some 
pragmatic solutions. Let me make three key points.
    First, inspections. Not that far from here is one of the 
U.S.'s largest pharmaceutical manufacturing facilities. It is a 
Mylan facility in West Virginia that employs a lot of people, 
and like any other domestic manufacturing facility, it can 
expect an FDA inspection about every 2 years. That company's 
competitors in India and China also making drugs for the U.S. 
market face nowhere near that level of scrutiny. A plant 
outside the United States knows that FDA may visit only once 
before the product is first approved and then may never return, 
and that reduces the incentive to make ongoing investments in 
quality. The FDA should inspect plants both domestic and 
overseas based on risk, and no company should go uninspected 
for more than 4 years. We support the call by Mylan and others 
in industry for a level playing field to ensure safety 
regardless of where the drugs come from.
    Inspections are one part of the solution. Let me talk for a 
moment about supplier quality. Pfizer, represented here today 
on this panel, has invested heavily in supply chain integrity 
from production and ingredient sourcing to distribution 
security. Let me quote from previous testimony by Pfizer. They 
said ``Companies in emerging markets are operating in a 
developing regulatory environment with a novice inspector. Many 
have rudimentary quality systems, or none at all. Before a U.S. 
pharmaceutical firm can considering sourcing from these 
suppliers, it is imperative that the firm work with suppliers 
to upgrade their quality systems and standards.''
    The Pew report outlines well-documented cases of suppliers 
concealing the actual sources of drug ingredients, in some 
cases bringing in chemical materials that were not intended for 
pharmaceutical use. We call for modernizing current regulations 
to ensure that every company has appropriate measures in place 
to ensure quality standards at their suppliers.
    And finally, we need to make sure that the FDA has the 
tools that are appropriate for today's global paradigm. For 
example, companies with high quality systems and an established 
track record shouldn't face delays at the border. Companies 
that don't have those things should face heightened scrutiny. 
We need to make sure that the FDA has the clear authority at 
the border to refuse products when the plant that made them has 
denied an FDA inspection.
    The proposed generic user fee agreement will provide FDA 
with new resources for increased inspections of overseas 
generic manufacturing. It is an important step, and the PDUFA 
reauthorization is the opportunity to bring the FDA into the 
21st century to give Americans a greater assurance of safety.
    Let me conclude with something that we heard often over the 
course of our research. If there are feasible practical steps 
that we don't take, it is not a question of if there is another 
tragedy, it is a question of when.
    Thank you, and I welcome any questions.
    [The prepared statement of Mr. Coukell follows:]


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

               STATEMENT OF DIANE EDQUIST DORMAN

    Ms. Dorman. Thank you, Mr. Chairman. Thank you, Ranking 
Member Pallone. Thank you for the opportunity to testify before 
you today. I am Diane Dorman, Vice President for Public Policy 
for NORD, the National Organization for Rare Disorders.
    Since 1983, NORD has served as a leading voice and advocate 
for the approximately 30 million men, women and children with 
rare diseases in the United States. NORD's mission is to foster 
a social, political and financial culture of innovation that 
supports the basic and translational research necessary to 
develop new diagnostic tests and therapies for all rare 
disorders. This requires a regulatory environment that 
encourages the development and timely approval of new, safe and 
effective treatments for rare disorders.
    Reauthorizing PDUFA presents an opportunity for Congress to 
achieve that goal. Greater clarity and predictability for the 
review of novel therapies for rare disorders can be achieved by 
allocating some of the PDUFA resources to support the 
enhancement of regulatory science. Of special significance in 
the draft agreement is the rare disease initiative that will 
enhance development of drugs and biologics for the treatment of 
rare conditions. We support these efforts and look forward to 
the opportunity to work with the agency and with Congress to 
guarantee the success of this initiative.
    The rare disease community was heartened recently when the 
drug approval summary for 2011 was announced. Of the 35 
innovative drugs approved in 2011, ten were orphan drugs. We 
hope and expect that further investment in orphan products will 
lead to continued development of therapies that address the 
unmet medical needs of patients. We are encouraged that the 
Orphan Drug Act has brought about such successful innovation in 
the market for rare disease therapies.
    The reality is that we have barely started the journey. 
There is still approximately 6,800 rare diseases that lack an 
FDA-approved therapy. The reauthorization of PDUFA offers hope 
that we may build on previous successes by strengthening the 
review process still further and by creating an environment 
that encourages innovation and investment. We believe that the 
rare disease program will enhance the regulatory science needed 
to accelerate development of new therapies. This initiative 
allocates a small fraction of user fees to support the existing 
rare disease program and CDER. The agreement completes the 
current staffing and implementation plan and establishes a rare 
disease liaison within the Center for Biologics.
    Last October, NORD released a landmark study that looked at 
all drugs for diseases other than cancer approved as orphans 
since 1983 to identify whether and when FDA exercised 
flexibility in the review process. Of the 135 drug approvals 
studied, NORD concluded that the FDA demonstrated flexibility 
in the review of effectiveness data on orphan drug therapies 
for two out of every three orphan drugs approved. FDA clearly 
has demonstrated in its actions on orphan products over the 
past three decades that it recognizes the importance of 
therapies for people with rare disorders. NORD believes it 
would be helpful for such flexibility to be recognized in a 
formal FDA policy and for officials to incorporate flexibility 
in a systematic way in their evaluations of each new therapy.
    While the statutory standard for safety and efficacy should 
be the same for all medical products, enhancement of the rare 
disease program will allow FDA to provide greater clarity in 
how it applies the standards for safety and effectiveness to 
orphan products. A formal policy setting forth the agency's 
view of flexibility in conducting orphan product review is 
likely to provide more certainty to innovators seeking to 
develop rare disease therapies. Further, we would like to see 
the proposed public meeting and staff training implementation 
dates moved forward to occur no later than 2013.
    PDUFA V will provide FDA with the resources needed to 
maintain a strong professional staff that is necessary for the 
development of clear guidelines and the expedited review of 
innovative therapies.
    In addition to the rare disease program, there are two 
other policy considerations that we feel are worthy of your 
consideration: current conflict-of-interest provisions and 
patient participation in risk assessment. First, during FDAAA 
negotiations, NORD argued that because patient populations are 
very small and the number of researchers who study a particular 
rare disease is limited, identifying experts not financially 
conflicted to sit on an advisory committee would be difficult, 
if not impossible. Those concerns were realized in 2008 when it 
took the FDA nearly 6 months to identify an expert to review a 
life-saving therapy to treat infantile spasms. While conflict-
of-interest considerations are clearly necessary, our view is 
that the existing provisions in the Federal Advisory Committee 
Act and the Ethics in Government Act of 1978 are adequate to 
safeguard against conflicts of interest. A separate standard is 
not needed.
    Second, NORD, working with like-minded patient 
organizations, has developed a proposal submitted to the FDA to 
allow the patient community to communicate on a more frequent 
and periodic basis with medical reviewers and other relevant 
FDA staff to make risk tolerance and other decisions. We 
advocate that more systematic processes be established at FDA 
to enable contributions from the patient community at the time 
that critical decisions on risk tolerance are being made. We do 
not seek to create a burdensome or time-consuming process; 
rather, we want to be sure that patients have the opportunity 
to share their views.
    In closing, I want to thank the committee again for giving 
NORD the opportunity to testify today regarding the 
reauthorization of PDUFA. The rare disease community believes 
that engaging Congress and FDA officials in the process has and 
will continue to lead to practical, detailed improvements to 
the regulatory process that will accelerate the development of 
orphan products from concept to access.
    Thank you very much.
    [The prepared statement of Ms. Dorman follows:]


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    Mr. Pitts. The chair thanks the gentlelady and recognizes 
Dr. Frattarelli for 5 minutes for an opening statement.

              STATEMENT OF DANIEL A.C. FRATTARELLI

    Mr. Frattarelli. Thank you. Mr. Chairman, members of the 
subcommittee, my name is Dr. Daniel Frattarelli. I am a 
practicing pediatrician and Chair of Pediatrics at Oakwood 
Hospital in beautiful Dearborn, Michigan. I am here today 
representing the American Academy of Pediatrics in my official 
capacity as Chair of the AAP's Committee on Drugs.
    The testimony I give you today is supported and endorsed by 
the Elizabeth Glazer Pediatric AIDS Foundation, and I am here 
today to discuss the Best Pharmaceuticals for Children Act and 
the Pediatric Research Equity Act, and I would like to begin 
just by amplifying something that Dr. Wheadon said. When we are 
looking at BPCA and PREA, we can really say unequivocally that 
these two laws have added more pediatric-specific information 
to the labels of drugs and biologics than we have been able to 
in the 70 years prior to their enactment, and it is vitally 
important for infants, children and adolescents that these laws 
be reauthorized.
    I wish to extend the academy's sincerest thanks to 
Representative Anna Eshoo for her longstanding support and for 
championing these important laws for children, and although not 
the subject of today's hearing, the academy also wishes to 
acknowledge and thank Representatives Mike Rogers and Ed 
Markey, who together authored the Pediatric Medical Device 
Safety and Improvement Act of 2007.
    Now, as a pediatrician, I see firsthand the need for all 
children to have medicines that are studied for their use, and 
thankfully, we have gone from a time back when I trained when 
about 80 percent of the drugs that we used didn't have any 
specific pediatric labeling, to today, where that number is 
down to about 50 percent, and this success is a direct result 
of BPCA and PREA. Since 1997, 426 labels have been updated with 
new pediatric information, and in many cases, studies have 
altered the dosages or formulation we give our patients, and in 
others, drugs that were previously thought to be safe or 
effective in children have proved not to be.
    The 2007 reauthorization led to several improvements in the 
function of these laws. All BPCA and PREA studies now result in 
label changes, and the number of times companies have declined 
BPCA studies has gone down tremendously while the number of 
products studied under BPCA and PREA has gone up, and the 
consistency and quality of pediatric studies has improved 
significantly, largely through the hard work of the FDA's 
internal pediatric review committee.
    Based on what we have learned about these laws since 1997, 
the academy offers five recommendations for improvements to 
BPCA and PREA in 2012. The first of these is to do pediatric 
study plans earlier. Now, PREA is a premarket requirement for 
safety and effectiveness. However, the law does not require the 
submission of a plan for pediatric studies until a company 
submits its drug application to the FDA. Submission of this 
plan so late in the process can lead to insufficient planning 
and potentially avoidable delays in getting important pediatric 
data. The AAP therefore recommends amending PREA to require the 
submission of a pediatric study plan by the end of phase II.
    The second recommendation is to improve accountability. We 
heard this already also that 78 percent of PREA studies due 
after September 27, 2007, are currently late or were completed 
late. While many of these studies might be delayed for good 
reason such as difficulty recruiting patients, FDA's publicly 
available data do not distinguish between the reasonable and 
the unreasonable delays. We feel the FDA should have the 
authority to grant extensions when there is a good cause, but 
in cases where there isn't a good cause, FDA should have added 
enforcement tools comparable to those it has for postmarketing 
commitments involving adults.
    Third recommendation is to promote studies in younger age 
groups. Now, the neonatologists, the people who take care of 
babies from birth to age one month, report that almost 90 
percent of the drugs that they use routinely have never been 
labeled for this population, and neonatal drug research faces 
some unique hurdles. The AAP believes that the FDA should be 
required to ensure that BPCA and PREA written requests includes 
neonates whenever possible, and if they are not, explain the 
rationale why. PREA should be triggered when a company decides 
to expand to a new age group so that pediatricians will have 
data for an age group that is as young as the FDA determines 
necessary. The GAO also identified a lack of neonatal expertise 
at the FDA, and we feel that a dedicated neonatologists added 
at FDA would assist in reviewing divisions in thinking through 
these neonatal drug studies.
    Fourth recommendation is to increase transparency. As we 
learned in the 2007 amendments, increased transparency benefits 
policymakers and researchers. Building on this, the AAP also 
recommends that new written requests under BPCA be made public 
at the time they are accepted or declined.
    And our fifth recommendation is to make PREA permanent. We 
call upon Congress to make PREA permanent in 2012. The FDA 
currently has permanent authority to ensure the safety and 
efficacy of drugs used in adults, and children deserve the 
same. As part of this legislation, Congress should also 
reauthorize the important program at the National Institutes of 
Health to fund the study of older drugs no longer subject to 
BPCA and PREA.
    I would like to thank the committee again for allowing me 
the opportunity to share with you the strong support of the 
American Academy of Pediatrics for the reauthorization of BPCA 
and PREA, and would be happy to answer any questions that you 
have.
    [The prepared statement of Mr. Frattarelli follows:]


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    Mr. Pitts. The chair thanks the gentleman, and I will now 
begin questioning and recognize myself for 5 minutes for that 
purpose.
    Mr. Germano, will you explain how the PDUFA agreement will 
help improve predictability and transparency of the drug review 
process, why this is important to American patients and jobs?
    Mr. Germano. I think that the measure that I spoke of in my 
testimony was a measure that is particularly important. The 
PDUFA provisions allow for a review process that has a number 
of important enhancements. Most notably, as the number of 
interactions that now would be mandatory for communication and 
transparency between the agency and the sponsor companies, I 
think very often issues that arise during the review process 
are not clearly understood or not consistently understood 
between the agency and the sponsor company, and I think that 
this enhanced level of communication and transparency is likely 
to result in a greater level of understanding and issue 
resolution and consistency in the review process leading to, 
you know, review times that likely could be shortened, and, you 
know, a clarity on expectations between the two parties. If we 
can get through the process more efficiently, we can bring new 
products to the market more quickly and benefit patients, and 
it is good all around for the FDA, for the company and for 
physicians and patients who need our medicines.
    Mr. Pitts. Thank you.
    I will just down the line. Dr. Gollaher, in your testimony 
you make a connection between differences in FDA review times 
across therapeutic areas and how that affects development 
decisions by investors and companies, and can you speak to that 
issue a little further? You also mentioned the adage that you 
can't manage what you don't measure, and PDUFA has long 
required the agency to report on numerous performance 
measurements. You suggest that performance would benefit from 
some more granular reporting at the review division level. Can 
you elaborate on that?
    Mr. Gollaher. Sure. I think those two are related. 
Investors in large companies like Pfizer but even more venture 
capitalists who are looking at funding new ventures consider 
the time to market for their inventions, for their investments, 
and as we have seen, for example, in diabetes and in 
cardiovascular, venture investment has almost completely dried 
up because the time for review and the cost of clinical studies 
is so great. So the FDA exists in an ecosystem. It exists in a 
market in which it sends signals about its standards, about 
times and so forth, and those signals are extraordinarily 
important for the amount of investment that flows into new 
inventions and innovative products.
    On the data question, you know, we just heard the 
Commissioner talking about moving to electronic submissions and 
basically taking the FDA from the analog era that it has 
inhabited to the digital age, and that is really important, but 
at bottom, FDA is really a data management agency. I mean, it 
collects data from industry, it analyzes the data and makes 
decisions. The opportunity for a better assessment of some of 
the metrics that people have been talking about, for example, 
transparency, communication and so forth, and how the agency is 
performing against those can be measured and I think should be 
part of the ongoing assessment of agency performance.
    Mr. Pitts. Thank you.
    Mr. Germano, you had mentioned in your testimony that one 
of your vaccines got approved through the accelerated approval 
pathway. Can you give us background on the importance of the 
accelerated approval pathway, why it is important to get the 
vaccine to patients as soon as possible?
    Mr. Germano. Yes. Just last December, our vaccine Prevnar 
13 was approved for prevention of pneumococcal disease in 
individuals 50 years of age and older under this accelerated 
review process, and the accelerated review process is a measure 
that the FDA can use when they deem a medicine or, in this 
case, a vaccine to be appropriate to satisfy a significant 
unmet medical need for a serious disease or a serious 
condition, and in this case, just to give you some 
understanding of the seriousness of pneumococcal disease, 
pneumococcal pneumonia accounts for over 300,000 
hospitalizations a year in the United States and over 25,000 
deaths, so it is a very significant disease state and a high 
burden of both disease and high burden of cost for society. So 
the FDA utilized the accelerated review process to review and 
approve this medicine and now really that there is only one 
other hurdle to get through to bring this vaccine to patients 
or to society really and that is a CDC recommendation for 
usage, and we are hopeful that we will get a CDC recommendation 
later this month when their advisory council on immunization 
practices meets, and then we will be able to bring the vaccine 
to the American public.
    Mr. Pitts. Thank you.
    I think we are going to have to do a second round. My time 
is up. I will recognize the ranking member, Mr. Pallone, for 5 
minutes for questions.
    Mr. Pallone. Thank you, Mr. Chairman.
    I wanted to ask this question, I guess of Mr. Germano and I 
guess Mr. Pops and Dr. Wheadon, the three of you could answer. 
We heard from Dr. Hamburg this morning that the FDA rarely, if 
ever, meets the waiver caps related to the number of persons 
with a conflict of interest that can serve on an FDA advisory 
panel. At the same time, we know there are concerns from the 
public about FDA panelists having conflicts of interest related 
to the issues they are reviewing. About 3 weeks ago, the Wall 
Street Journal published an article highlighting the conflict 
of interest three panelists had one panel had in relation to a 
product they were reviewing. You know, I know it is a concern, 
I mean, we are concerned because we want to have the best 
experts possible on the panels but we need to help the FDA get 
such experts and get them in a timely manner.
    But I am having difficulty seeing how removing the waiver 
caps will solve anything when FDA is not meeting these caps, 
and my question is, given that the waiver caps are not 
routinely reached, can you explain how removing the caps would 
improve the current situation, if you believe it would, and are 
there any other fixes you would suggest in addition to or 
instead of removing the waiver caps? Let us start with Mr. 
Germano.
    Mr. Germano. OK. I will start. And I think this is a 
particularly important area for Pfizer. As I mentioned in my 
testimony, we are focused on bringing new medicines in the rare 
disease and orphan disease area, and this is an area where 
oftentimes there are a small number of highly expert opinion 
leaders and physicians.
    Mr. Pallone. I don't have a lot of time, so what do you 
think? I mean, should we be removing them?
    Mr. Germano. Well, I think that we--you know, our view is 
that there is a need to improve the process of the advisory 
committees, particularly in areas where there is a paucity of 
experts, and I don't know if it is additional waivers or better 
utilization of the waivers that exist. I am not familiar enough 
with the issues, but there is a need for improvement.
    Mr. Pallone. Would either of the other two of you like to 
answer?
    Mr. Pops. Just being directly responsive to your question, 
I don't think removal of the waivers does a whole lot for the 
reasons you cited. I think FDA has different standards than 
other agencies of the government with respect to conflict. My 
own view is that I think they are too restrictive. And coming 
at it from the innovators' point of view, the most important 
thing for us when we convene a panel is that the people sitting 
at the panel are expert in the disease because they are the 
best suited to make the decision between risk and benefit that 
are so critical for patients.
    Mr. Pallone. OK. Dr. Wheadon?
    Mr. Wheadon. Thank you, Representative Pallone. I think in 
addition to what Mr. Pops just added----
    Mr. Pitts. Is your mic on?
    Mr. Wheadon. I think it is. Can you hear me?
    Mr. Pallone. Yes, I can hear you. Maybe talk closer to it.
    Mr. Wheadon. I think it is also important for us to 
consider broadening the question and looking at it from perhaps 
a different perspective from just waiver caps, and that might 
be recognizing that both FDA and industry have a vested 
interest in working with the best expertise. Should there be a 
penalty for FDA because industry has engaged that expertise and 
helping it develop its plan for investigation and research and 
vice versa, should industry not be allowed to engage that 
expertise because FDA may be planning to use that individual in 
an advisory committee. And in the case of rare diseases, it is 
even more of a particular issue because there could be so few 
experts for both industry and FDA to engage.
    Mr. Pallone. All right. Thanks.
    Let me get a second question in here. We talked about how 
in today's world drug manufacturing is a global affair and 
outsourcing is common, and robust supply chain management is 
best practice for industry including supplier qualification and 
assessment. So I wanted to ask Mr. Germano again, Pfizer has 
underscored in previous testimony the importance of ensuring 
the quality of suppliers, particularly those in emerging 
economies. Can you tell me what Pfizer is doing to ensure 
supplier quality? Do you believe that every company knows their 
suppliers and knows the quality system in place?
    Mr. Germano. Well, I mean, you know, product supply quality 
is the highest interest to Pfizer and I think that we have put 
a number of important measures in place to ensure the integrity 
of our supply, and you know, some of those measures include 
risk assessments of potential suppliers, you know, contractual 
measures to ensure the effectiveness and quality of those 
suppliers. We go into some of the suppliers and work with them 
to upgrade their systems. We have audits on a routine basis. So 
we employ quite an array of measures to ensure the quality and 
integrity of our suppliers.
    Mr. Pallone. I was going to ask Mr. Coukell but I guess I 
am out of time, Mr. Chairman. Thanks.
    Mr. Pitts. The chair thanks the gentleman and recognizes 
Dr. Burgess for 5 minutes for questioning.
    Mr. Burgess. Thank you, Mr. Chairman.
    Ms. Dorman, let us stay on the issue of the conflicts 
because you referenced that in your prepared testimony, and I 
do believe it is extremely important. In fact, when this 
reauthorization occurred in 2007, I was way down at the kids' 
table on the minority side and wasn't really able to make the 
point as effectively as it needed to be made, but we have got 
vacancies on the advisory panels. Now, we have got waivers that 
can be applied and there are caps on the waivers. Do you think 
the system itself creates an environment where otherwise 
qualified people say you know what, I don't need that, I'm not 
going to go through that. So have we created a hostile 
environment to the researchers and the people who might be 
knowledgeable about these products because of the restrictions 
placed on the advisory panels in the 2007 reauthorization?
    Ms. Dorman. I don't know if I would say that there is a 
hostile environment per se but some of the restrictions, 
especially related to, you know, their finances and their 
investments and things like that, could be a deterrent to some 
people to expose themselves to that type of level of scrutiny. 
I will say, there is something that really does need to be 
done. A colleague of mine is president of the Friedrich's 
Ataxia Research Association, and he was asked by the FDA to 
apply to sit on an advisory committee, and he was turned down 
because of perceived conflicts, and this is a man whose child 
died of Friedrich's ataxia, so there are real concerns that 
really need to be looked at, and we feel as if it should be--
FDA should not held to an even higher standard than all other 
federal agencies.
    Mr. Burgess. Well, as I recall, during the discussion, the 
reference to the Institute of Medicine said no more than 40 
percent of the advisory panel should be made up of people who 
potentially had a conflict, and I thought that was an OK 
number. That means you still have--as you correctly alluded to, 
the universe of people who have an understanding of the 
diseases and the treatments proposed is vanishingly small with 
some of these, and if you exclude even one individual, that may 
be a significant percentage of the population, the scientific 
population that actually understands the studies at hand.
    Ms. Dorman. That is correct. I mean, the patient 
population--the rare disease community is very, very small. 
Patient organizations work with researchers. They work with 
companies to encourage the development of these orphan 
products. So yes, in the rare disease community, basically 
everyone is pretty conflicted.
    Mr. Burgess. Well, are all conflicts equal? In the real 
world, are all conflicts equal?
    Ms. Dorman. No, I don't think so.
    Mr. Burgess. Yes, I don't either.
    Let me ask you this. Do you think we have actually--that 
the advisory conflict policy has hindered bringing new products 
to market?
    Ms. Dorman. No. It may have delayed like in the case of 
Savril but I don't think it has, in my opinion.
    Mr. Burgess. In my opinion, hindered and delayed would be 
identical, but I will accept your answer.
    Well, would you support loosening some of these 
restrictions?
    Ms. Dorman. Excuse me?
    Mr. Burgess. Would you support the loosening of some of 
these restrictions that were placed in the 2007 
reauthorization?
    Ms. Dorman. Yes, we would.
    Mr. Burgess. In the interest of full disclosure, I have a 
bill out there, 3206, which attempts to undo some of these 
restrictions. Have you had an opportunity to look at that 
legislation?
    Ms. Dorman. Yes, I have, and I have spoken with your staff.
    Mr. Burgess. And Dr. Hamburg implied that she didn't need a 
legislative fix, but in your estimation, would a legislative 
fix expedite the solution to this problem in your world?
    Ms. Dorman. That has been our position, yes.
    Mr. Burgess. And no great surprise, my position too.
    Dr. Wheadon, let me ask you a question. Dr. Hamburg 
referenced coming into the electronic age for some of the 
applications for the premarket approval process, and I guess I 
am surprised that that is not farther along. Do you have a 
sense as to what is the volume of new product applications, new 
drug applications that are sitting on paper applications in 
boxes in the basement of someone's warehouse?
    Mr. Wheadon. Well, I think we may be talking about two 
different things. Most sponsors, if not all, certainly the 
member companies that we represent now submit what is called an 
electronic document. So everything is electronic. It is no 
longer boxes in U-Haul trucks as it used to be 20 years ago.
    I think what Dr. Hamburg was referring to and what we 
reference in the PDUFA agreement is an attempt to have more of 
a common template such that that electronic data is collected 
in a common format regardless of who the sponsor may be. The 
ultimate benefit of that is, when the agency needs to look 
across products, across sponsors, the data is collected in a 
similar way. It is much easier to collate, much easier to do 
analyses and come to some robust conclusions. Right now, it is 
all over the place and it makes it much more difficult for the 
agency to do that type of analysis. So I don't think Dr. 
Hamburg was intending to imply that they are still collecting 
data on a paper format. That is not the case. It is just doing 
it more physically such that the agency can carry out its job 
much more effectively.
    Mr. Burgess. Thank you.
    Thank you, Mr. Chairman. I will yield back the time.
    Mr. Pitts. The chair thanks the gentleman and recognizes 
the ranking member emeritus, Mr. Dingell, for 5 minutes for 
questions.
    Mr. Dingell. Mr. Chairman, I thank you for your courtesy.
    First, welcome to Dr. Daniel Frattarelli. He is a 
constituent of mine from Oakwood Hospital and from Dearborn 
Medical Center in Dearborn, Michigan, my hometown. Doctor, it 
is a pleasure to welcome you. Thank you for being here.
    Mr. Frattarelli. Thank you.
    Mr. Dingell. As members of the committee well know, I have 
long believed that the FDA does not have the people, the 
funding or the authorities it needs to properly oversee an 
increasingly global drug supply chain. That has been supported 
by testimony and evidence submitted in hearings before this 
committee for a number of years. So in support of that posture, 
I would like to direct my questions to you, Mr. Germano of 
Pfizer, and please answer to the following questions yes or no. 
Do you agree that both FDA and industry have a responsibility 
to ensure the security of our drug supply chain? Yes or no.
    Mr. Germano. Yes.
    Mr. Dingell. Do you agree that the knowledge of your 
suppliers is important? Yes or no.
    Mr. Germano. I am sorry. The knowledge about suppliers?
    Mr. Dingell. Yes, your knowledge and experience with them 
as to their behavior and the quality of the goods that they are 
delivering you. Yes or no.
    Mr. Germano. Yes.
    Mr. Dingell. Thank you. There are no traps here.
    Mr. Germano. I just want to make sure I understand the 
question.
    Mr. Dingell. Just give the answers and you will be 
satisfied and so will I.
    Mr. Germano. OK.
    Mr. Dingell. Does Pfizer have systems in place so that they 
can know and understand their suppliers and monitor the 
manufacturing quality of these suppliers? Yes or no.
    Mr. Germano. Yes.
    Mr. Dingell. Should all companies making drugs in the 
United States know their suppliers and have quality systems in 
place there to assure that they are getting safe supplies from 
their suppliers? Yes or no.
    Mr. Germano. Yes.
    Mr. Dingell. Now, I must assume, however, though, that 
there would be some instances where additional help would be 
needed by American suppliers, i.e., in the heparin case where 
raw materials or components for the heparin were clearly not 
safe and the result was American manufacturers were put at 
risk. Should FDA have additional authorities to provide that 
kind of support for American manufacturers? Yes or no.
    Mr. Germano. Yes.
    Mr. Dingell. No traps here. I want you to be comfortable.
    Should the companies be using risk analysis to target 
safety risks? Yes or no.
    Mr. Germano. Yes.
    Mr. Dingell. And that is not a standalone basis. Obviously 
they would have to use other things.
    Now, these are for Dr. Wheadon of PhRMA. Doctor, I want you 
to be comfortable with these, and I am not trying to lay any 
traps for anybody here. I want to focus on inspections. Do you 
agree that requiring FDA to conduct comparable inspections of 
domestic and foreign drug facilities is important to ensuring a 
level playing field for our drug manufacturers? Yes or no.
    Mr. Wheadon. Certainly, the answer is yes based on----
    Mr. Dingell. Sorry?
    Mr. Wheadon. I am sorry. Certainly, the answer is yes based 
on the ability to assess risk.
    Mr. Dingell. Good. I have very limited time, Doctor, and I 
beg your cooperation here.
    Mr. Wheadon. I understand.
    Mr. Dingell. Do you agree that conducting comparable 
inspections of domestic and foreign facilities is important to 
public health? Yes or no.
    Mr. Wheadon. That is a yes.
    Mr. Dingell. And of course, it is important to the fairness 
with which we treat our manufacturers. Is that not so?
    Mr. Wheadon. I think it is important to be fair across the 
board.
    Mr. Dingell. Now, do you agree that FDA needs adequate 
resources to conduct comparable inspections of domestic and 
foreign drug manufacturers? Yes or no.
    Mr. Wheadon. I believe the agency should have adequate 
resources.
    Mr. Dingell. Now, if FDA does not treat manufacturers 
alike, it is very liable to be unfair to U.S. manufacturers 
because of its inability to impose equal burdens upon both 
domestic and foreign manufacturers who are outside of our 
borders and outside the capabilities of FDA to reach them. 
Isn't that so?
    Mr. Wheadon. I think FDA has ability to impact foreign 
manufacturers if they are importing drugs into the United 
States.
    Mr. Dingell. But you would advocate that FDA do have such 
authority?
    Mr. Wheadon. I think FDA has that ability to impact those 
manufacturers----
    Mr. Dingell. Please answer my question.
    Mr. Wheadon. And they should, yes, sir.
    Mr. Dingell. OK. Does the prescription drug user fee 
agreement currently provide resources for preapproval 
inspection? Yes or no.
    Mr. Wheadon. Yes, it does.
    Mr. Dingell. Does the prescription drug user fee agreement 
currently provide resources for any inspections beyond the 
preapproval inspection? Yes or no.
    Mr. Wheadon. That is a qualified yes, it does.
    Mr. Dingell. Qualified? But it should be ``yes'', shouldn't 
it? Because FDA should have that authority, should they not?
    Mr. Wheadon. FDA has the ability to inspect facilities with 
resources----
    Mr. Dingell. That is one of the questions we are going to 
be going into, Doctor.
    The generic drug user fee agreement provides additional 
resources for FDA to conduct GMP inspections of both domestic 
and foreign drug facilities. Would you support providing 
similar resources to FDA for inspections of facilities 
manufacturing innovator drugs? Yes or no.
    Mr. Wheadon. No.
    Mr. Dingell. Do you agree that a risk-based inspection 
schedule for domestic and foreign drugs facilities based, for 
example, on compliance history, time since last inspection, 
volume and type of product would allow the FDA to better target 
the use of their resources? Yes or no.
    Mr. Wheadon. Yes.
    Mr. Dingell. One obstacle to ensuring comparable 
inspections of domestic and foreign facilities is the lack of 
complete and adequate information that FDA has on drug 
manufacturing establishments. Do you support requiring domestic 
and foreign drug manufacturing facilities to register with FDA 
to provide a unique facility identifier and to list their 
products? Yes or no.
    Mr. Wheadon. I think that is one I would have to come back 
to you with further comment on. I am not prepared to give a 
specific yes or no on that one.
    Mr. Dingell. Very good. One question then. Why is it that 
PhRMA does not support additional resources for GMP 
inspections?
    Mr. Wheadon. Well, this is more than a yes or no, right?
    Mr. Dingell. It is a fairly simple question. I know you 
have a fairly easy to understand answer.
    Mr. Wheadon. Right. So as you correctly point out, 
Representative Dingell, the PDUFA fees that the innovative 
industry presently pays goes towards preapproval inspections. 
When an inspector goes into a facility, be it domestic or 
foreign, they don't only look at the product that is under 
consideration for approval, they look at the system of that 
manufacturing establishment. So a GMP inspection is carried out 
in the context of preapproval inspections.
    Mr. Dingell. Am I somewhat dense in not understanding why 
we would want to see to it that FDA has the authority that it 
needs to carry out its responsibilities in the best way 
possible?
    Mr. Wheadon. We certainly agree that FDA should have the 
resources to carry out their responsibilities very efficiently.
    Mr. Dingell. I note, Mr. Chairman, I have exceeded my time 
by 3 minutes and 5 seconds. You have my thanks and my 
apologies.
    Mr. Pitts. The chair thanks the gentleman and yields to the 
gentleman from Illinois, Mr. Shimkus, for 5 minutes for 
questions.
    Mr. Shimkus. Thank you, Mr. Chairman, and I apologize for 
missing the first part. I have a lot of questions about nuclear 
waste I could offer to you, but it is good to be here on the 
health panel.
    I would also like to go to Ms. Dorman, and can you just 
elaborate on how the FDA's risk-based, current risk-based 
analysis is affecting patients?
    Ms. Dorman. Well, it is the feeling of many patient 
organizations that the FDA has become far more risk averse than 
it should be, and so we want some way that patients can 
communicate directly with the reviewers. We have had 
conversations with the FDA leadership but the reviewers 
actually looking at the data don't normally hear from the 
patients or their families.
    Mr. Shimkus. And what would the patients and the families 
tell them if they were listening?
    Ms. Dorman. It depends on the disease, I suppose, or the 
condition, but just let them know what their quality of life 
is, to know more about the disease, what the risks of the 
disease are, what the progression of the disease is. I think 
those are some of the things that the reviewers would like to 
hear, and I would like to point out to the committee that Mr. 
Shimkus was the sponsor of the rare diseases back in 2002. 
Thank you.
    Mr. Shimkus. No, thank you, and that is not why I went to 
you but I appreciate that.
    So I think you kind of answered this. How would you improve 
that risk-based system? What would you want us to do in a 
public policy arena to try to fix that?
    Ms. Dorman. What we have proposed directly with the FDA, we 
are working internally with the officials there, what we have 
proposed, which isn't really written in stone, would allow 
patients in an unburdensome way, maybe through a portal there 
on their Web site that would communicate some of those things. 
We don't want it to be a burdensome process for the agency at 
all. But to empower patients in some way, shape or form to feel 
as if they have more control over approval of a product.
    Mr. Shimkus. And technologically, that shouldn't be real 
difficult, should it?
    Ms. Dorman. I am a real techno dweeb but I would say it is 
probably not all that difficult to do.
    Mr. Shimkus. I would also agree with you.
    Let me stay with you and ask about the FDA's vacancies on 
their advisory committees. Do you know how many there are, and 
what does that mean in this discussion that we are having?
    Ms. Dorman. I really don't know what the numbers might be.
    Mr. Shimkus. And what is the problem with vacancies?
    Ms. Dorman. Well, the problem is that it can delay 
consideration of products if they are unable to find someone 
who is expert, especially in the rare disease world where, you 
know, there are not of people expert in their conditions. 
Usually the patients know more about their conditions than 
their doctors do, so----
    Mr. Shimkus. Say that again. I mean, just reiterate that 
point.
    Ms. Dorman. I am speaking just from NORD's perspective. I 
mean, many patients have more knowledge about their condition, 
about the progression of their disease than some of the 
physicians do. So it is very important to have their input, and 
they are anxious to do so.
    Mr. Shimkus. And I would agree with you there. I mean, they 
are anxious because either they are suffering themselves or 
having the life experience. They are also very passionate to 
try to make the system better for the future, and by being 
involved in the process, helpful. That gives them a role in 
this that they would like to be involved in.
    Ms. Dorman. Yes, and it is helping our organizations 
understand the regulatory process more. So many of them are 
focused entirely on research at NIH and know very little about 
the FDA process. But on March 1, they are having a one-day 
advocacy meeting with patient organizations and over 180 
organizations have signed on, so they will give them an 
opportunity to learn about the FDA and the FDA to learn about 
their conditions.
    Mr. Shimkus. Great. Thank you.
    And just briefly, Mr. Gollaher, I have been very concerned 
about capital research fleeing the United States because of the 
FDA's slowness. We have also heard a lot of testimony about 
venture capitalism. Is that true, if we have research and 
development, venture capital moving overseas? Where are they 
going and what does this mean for U.S. jobs?
    Mr. Gollaher. To some degree, and this is less true in the 
drug industry than the medical device industry, there has been 
a shift of first in human trials and of middle-stage and late-
stage research to Europe and the device field has a faster and 
more user-friendly regulatory system. And we have certainly 
seen in California, we have seen across the country that most 
venture capitalists will not look at a business plan for a 
device company that doesn't have a European strategy. That is a 
tremendous change in the last 10 years.
    Mr. Shimkus. And that would really affect jobs and the 
economy. I mean, if they get the approval in Europe, they are 
most likely going to start there.
    Mr. Gollaher. Well, no, that is right, and there are also a 
number of sequelae. So for example, if you introduce a product 
in Germany before here, the doctors learn to use it. Some of 
the factors that are involved in early-stage manufacturing may 
go there as well. And you also teach your competition how to 
make the product. So it is a real issue.
    Mr. Shimkus. Thank you very much. I yield back my time, Mr. 
Chairman.
    Mr. Pitts. The chair thanks the gentleman and recognizes 
the gentleman from California, Mr. Waxman, for 5 minutes for 
questions.
    Mr. Waxman. Thank you, Mr. Chairman.
    Dr. Frattarelli, in your testimony you provide compelling 
evidence of the benefits to children that the Best 
Pharmaceuticals for Children Act provides. As you know, because 
of studies conducted in response to BPCA and the Pediatric 
Research Equity Act, we learned invaluable information about 
the use of drugs in children. However, despite how well it has 
worked, you point out that the AAP believes that Congress 
should not remove the BPCA 5-year sunset provision because it 
provides Congress the opportunity to assess whether the BPCA 
continues to strike the right balance between achieving 
critical pediatric information and providing an appropriate 
incentive. Can you briefly expand on your testimony regarding 
why Congress should retain that 5-year sunset provision?
    Mr. Frattarelli. Sure. One of the big issues here is that 
it is kind of a moving target that we are talking about. The 
cost that this is going to incur by varying the period of 
exclusivity these drugs obtain will change over time, and that 
cost is going to be borne by a lot of groups, private insurance 
companies and the government as well. So there is a financial 
side to this, but the other part is, every 5 years having the 
opportunity to look at these again, revise them, gives us some 
real benefits. If we go through, you know, what happened last 
time we went and reauthorized these, we had some changes made 
so that, for example, now all the information that we get from 
these studies results in a label change and the information is 
more publicly available. Those are two real meaningful and 
important things to have, and they came about because we had 
this opportunity to reevaluate.
    Mr. Waxman. That is a very good argument. The other, of 
course, is that when we have a 6-month exclusivity, that is a 
lot of money, and that cost, as you point out, is being carried 
by the people who pay for these drugs, whether it is 
government, insurance or private individuals. If you have a 6-
month exclusivity, especially if it is a drug like Lipitor 
where the annual sales are over $5 billion, that just can be a 
huge cost that is being passed on to others.
    And so we need to maintain a balance between providing 
adequate incentives for developing new indications for 
pediatric populations and not unduly burdening patients and 
payers with high drug costs for any longer than is necessary.
    During the 2007 reauthorization, we put forward a proposal 
to trim that 6 months of exclusivity for drugs with very high 
profit margins, so-called blockbuster drugs. I thought that 
made sense, but we didn't prevail in including it. I agree, it 
is critical to retain that sunset provision so we have an 
opportunity to evaluate these questions, both the balance and 
the research questions as well.
    Ms. Dorman, we have heard concerns from several parties 
about the development of drugs for rare diseases. I talked in 
my opening statement about a proposal under consideration that 
would make changes to FDA's fast-track approval system for 
orphan drug, the ULTRA Act. Specifically, it would require the 
FDA to use whatever data was available to evaluate and approve 
surrogate endpoints for review of these drugs and would prevent 
FDA from requiring additional clinical data even when FDA 
considers such additional data necessary to enable it to make 
an approval decision based on that endpoint. That is a concern 
to me. My understanding is that under current law, FDA has a 
great deal of discretion to identify and require appropriate 
scientific evidence.
    NORD recently did a study looking at whether FDA is 
flexible in its requirements for the approval of orphan drugs. 
Can you describe the conclusions of this study in more detail? 
What is NORD's view on the need for legislative changes to 
FDA's fast-track approval program for orphan drugs, 
specifically on the ULTRA Act?
    Ms. Dorman. We feel as if ULTRA would require the FDA to 
rely on surrogate endpoints based on little or no clinical 
evidence, and it could expose patients to unnecessary risk and 
in our opinion would lower the approval standards of the FDA, 
and that is our concern. That study is really a landmark study. 
Of the 130, you know, products that were reviewed by a former 
chair, many of them, 90 of the 135, were approved based on 
administrative flexibility or case-by-case flexibility, and I 
think the example that Dr. Hamburg gave this morning in her 
testimony regarding the new therapy for cystic fibrosis, it was 
approved in 3 months, so they do use that flexibility when 
something that important comes forward.
    Mr. Waxman. Well, we all want these drugs on the market as 
fast as possible but I would be concerned about any proposal to 
remove FDA's ability to require clinical data when FDA thinks 
it is essential to assure that these drugs are safe and 
effective, so I certainly agree with the position NORD has been 
taking.
    Ms. Dorman. Thank you.
    Mr. Waxman. Thank you, Mr. Chairman.
    Mr. Pitts. The chair thanks the gentleman and recognizes 
the gentleman from New Jersey, Mr. Lance, for 5 minutes for 
questions.
    Mr. Lance. Thank you, Mr. Chairman.
    To Mr. Germano, very nice to see you again. In your 
testimony, you noted that Pfizer's enhanced focus on rare 
diseases, specifically allocating the majority of your research 
and development efforts to the areas that represent the 
intersection between unmet medical needs and your strength in 
biology and chemistry, given that, could you comment on how the 
enhancements in regulatory science contained in the goals 
letter will support the development of products for rare 
diseases?
    Mr. Germano. Yes, I think that there are a number of 
elements of the proposed PDUFA V that will help in the 
advancement and review and development of medicines for rare 
diseases. I think the NME review process that I spoke of before 
will help bring, you know, clarity to the review process, which 
I think will be helpful. I think that some of the provisions in 
the, you know, enhancements in regulatory science, you know, 
specifically for rare diseases, biomarker identification and, 
you know, other measures that are in the PDUFA V I think are 
all intended to elevate the capability of the FDA and the 
potential for better transparency and problem solving and 
decision making between the company and the FDA.
    Mr. Lance. Thank you. Are there any other changes that you 
could see that would incentivize innovative biopharmaceutical 
companies into developing more products for unmet needs?
    Mr. Germano. Well, I think overall, you know, confidence in 
the development pathway is a very big part of providing an 
incentive for a company to take on a project in the development 
of a new molecular entity in particular. So some of these 
provisions relate directly to improving confidence in the 
pathway and agreements that exist between the agency and the 
sponsor company. Beyond that, I think, you know, intellectual 
property and exclusivity assurance will give greater confidence 
to the sponsor to make the investments necessary to bring these 
kinds of medicines forward.
    Mr. Lance. Thank you very much.
    To Mr. Pops, I think it is critical that we ensure a 
consistent and transparent evaluation of benefit-risk during 
FDA's review of new drugs. Unfortunately, from my perspective, 
this evaluation has on occasion kept life-improving, life-
saving drugs from patients, and in your opinion, what do we 
need to do in order to rebalance the analysis?
    Mr. Pops. The was one of the real questions that was 
brought up during the PDUFA V technical negotiations, and I 
think that what we----
    Mr. Lance. Which I know you were involved.
    Mr. Pops. Is that in PDUFA V, and I think the Commissioner 
mentioned earlier, there is this patient-centric and more 
formalized risk-benefit evaluation that we are seeking to 
implement through PDUFA V. I think we have a long way to go but 
I think the agency has an interest in bringing more rigor and 
formalization to the risk-benefit analysis.
    Mr. Lance. Thank you.
    Is there anyone else on the panel who would like to comment 
on that? Very good. Thank you very much.
    I yield back the balance of my time, Mr. Chairman.
    Mr. Pitts. The chair thanks the gentleman and recognizes 
the gentleman from New York, Mr. Towns, for 5 minutes for 
questions.
    Mr. Towns. Thank you very much, Mr. Chairman.
    Let me begin by thanking you, Ms. Dorman, for working with 
my staff and Mr. Stearns on ULTRA. This bill is still a work in 
progress, and we look forward to receiving NORD's 
recommendations for changes to the text as your group has 
promised my staff within the next few weeks. We look forward to 
continued work with you on that.
    Let me go to you, Mr. Germano. Last year, the FDA approved 
a Pfizer drug under priority review in 4 months. In your 
experience, is this common for orphan drug review, and what 
made this one so exceptional?
    Mr. Germano. This was--I think you are referring to our 
drug crizotinib, and the brand name is Xalkori. It is a drug 
for----
    Mr. Towns. That is correct.
    Mr. Germano [continuing]. A specific subset of patients 
with non-small-cell lung cancer, and in this case, there is a 
genetic marker to identify patients who are most likely to 
respond to the medication. So we were able to--once the 
identification of the genetic marker occurred, we were able to 
work with our partners at Abbott Laboratories to develop a 
companion diagnostic and complete a clinical trial that 
demonstrated, you know, fairly clearly the benefit-risk profile 
of this medicine for this particular patient population. So it 
is a great example of the benefit of personalized medicine or 
precision medicine approach to drug development. You know, the 
more we are able to do this, you know, the more efficient the 
development process is, the more efficient the review process 
is and the more quickly we can get new medicines to patients.
    So, you know, I can't say it is commonplace. I think we are 
all working harder and harder to find, you know, genetic 
markers and biomarkers of activity, whether it is efficacy or 
safety signals that we are after to help bring more clarity to 
the benefit-risk profile of our medicines and make it easier 
for us to develop them and for the agency to review them.
    Mr. Towns. Let me just say that I really appreciate 
Pfizer's strong commitment to finding treatments for rare 
diseases. To the best of your knowledge, have any of Pfizer's 
recently offered drug approvals been approved under the 
accelerated approval pathway at FDA?
    Mr. Germano. Well, this one that we are speaking of, 
crizotinib, was approved under the accelerated review process.
    Mr. Towns. Any others?
    Mr. Germano. We have another drug for a rare disease, a 
rare polyneuropathy that we have recently filed with the FDA 
and we are seeking accelerated review of that product as well.
    Mr. Towns. Do you have any ideas or suggestions as to how 
we might be able to improve the accelerated approval process? 
Do you have any ideas or suggestions that you might want to 
offer?
    Mr. Germano. Well, I think that some of the provisions of 
PDUFA V are likely to be helpful. Again, I think the greater 
amount of required interaction between the agency and the 
sponsor, the focus that the agency will put on, you know, risk-
benefit framework, biomarker understanding and, you know, rare 
and orphan disease issues that are components of the PDUFA V 
should be helpful in improving our ability to bring these kinds 
of medicines to the market.
    Mr. Towns. I want to go to a very quick yes or no question. 
I am very committed to supporting the FDA in their timely 
approval of safe, effective treatment options, particularly for 
rare diseases. For this reason, I am proud to be working with 
my colleague from Florida, Congressman Stearns, on an 
initiative that I hope will encourage the development of 
innovative, safe drugs in this space. The goal is to improve 
access to the FDA's existing accelerated approval pathway for 
drugs designed to treat patient with life-threatening rare 
diseases, and this would be a yes or no. Let me ask you, Mr. 
Germano, and of course Mr. Pops and Ms. Dorman, do you support 
this goal?
    Mr. Germano. To----
    Mr. Towns. Do you support the goal?
    Mr. Germano. I am sorry?
    Mr. Towns. Congressman Stearns and I are working on this 
initiative that I hope will encourage the development of 
innovative, safe drugs in this space. The goal is to improve 
access to FDA's existing accelerated approval pathways for 
drugs designated to treat patients with life-threatening rare 
diseases. Do you support that?
    Mr. Germano. Yes, I would support that.
    Mr. Towns. OK. Ms. Dorman?
    Ms. Dorman. Yes.
    Mr. Towns. Thank you very much, and I would note, Mr. 
Chairman, I don't have anything to yield back, but I yield 
back.
    Mr. Pitts. The chair thanks the gentleman and recognizes 
Mr. Guthrie for 5 minutes for questions.
    Mr. Guthrie. I think the previous two kind of went down the 
path I was going to go with Ms. Dorman. I think that we do need 
to make sure that we have a good accelerated program for people 
with risk, and I have a friend caught up in another situation, 
and the argument, I always say this. I have bad allergies. I 
don't want something put out to keep me from sniffling that is 
going to have adverse effects to me. But when you have a friend 
who has Lou Gehrig's disease, or ALS, and there is some 
opportunities for them to go forward, as long as the patient 
knows the risk and what could be there, I think that we should 
have a process for them to go forward. So I agree with Mr. 
Stearns and Mr. Towns and I would like to work with you on that 
because I think that is important to do.
    On the venture capital, which is more medical devices, I 
gather, a lot of times they are encouraged to go to Europe just 
because they get approved. If they get approved in the home 
country where they manufacture, they also get--I think China 
recognizes it. So the President talked about manufacturing, 
which is my background, we are in a situation where we have 
American manufacturers having to locate in Europe because of 
our regulatory process, which we are not comparing to a country 
that doesn't have substantial safety concerns. I mean, we are 
talking about the European Union that we are not competitive 
with in our approval process.
    But I want to get to Mr. Coukell. On this panel, a lot of 
people say ``as a doctor.'' I don't get to say that, but as a 
quality control engineer--that was my background before in 
manufacturing--Pew has done some research on drug pedigree, and 
just if you can talk about that and particularly I would like 
the safety of the supply chain, particularly foreign supply 
chains dealing with third parties or foreign regulators. I 
mean, if you could talk about what your research has been in 
the drug pedigree world?
    Mr. Coukell. Thank you for that question, sir. It is an 
area that I didn't touch on my testimony, but we looked at as 
drugs move from the manufacturer through distributors to the 
pharmacy and ultimately to the patients, what is the pedigree 
system or the absence of. So if I could share one short story. 
A couple of years ago, there was a tractor-trailer load of 
insulin that was stolen in North Carolina and disappeared for a 
while. Insulin is a drug that should be refrigerated. And then 
it showed up back in pharmacies of a major chain grocery store 
in a couple of different States. And between there is passed 
through a couple of different wholesalers. And so the question 
is, is there a system by which the pharmacy at the end use 
could have recognized that as stolen product, flagged it, do we 
have a system that lets you track the product through the 
system, do we have a unique serial number on the drugs, and the 
answer is we don't have that. California has law which is 
scheduled to come into effect in 2015. Our view is that a 
national standard would be much more preferable.
    Mr. Guthrie. What about your looking into ingredients, 
foreign ingredients and the integrity and dealing with foreign 
regulators or third parties? I think you looked into that in 
your report as well. And what are solutions? I mean, you said 
unique serial numbers. Are there other things like working with 
foreign regulators or third-party groups?
    Mr. Coukell. So let me make two points that I think are 
important. One is, a manufacturer absolutely has to have 
confidence that they know who is in their upstream supply chain 
and that they know what quality standards are in place and that 
there isn't a risk of sub standard product coming in through 
the backdoor and making its way into the supply chain.
    Mr. Guthrie. Did you find that manufacturers didn't know 
that or didn't have systems in place for that?
    Mr. Coukell. We absolutely found a whole spectrum, and 
there are great manufacturers in every country, but there are 
also risks. In our report, there is a photograph from a 
manufacturing facility in China with a whole wall of 50-gallon 
drums stacked up about one deep, and the inspectors went in 
there and said, you know, what is behind those drums; well, 
nothing. So they climbed over and found behind the drums a 
whole warehouse full of uncertified active pharmaceutical 
ingredient that was destined for, in that case, a European 
supply chain. So it does occur.
    On the question of foreign regulators, I think we 
acknowledged that the FDA is moving in the right direction on 
this, which is no one country can inspect the whole world, and 
so we have to deploy limited resources in a rational way. We do 
duplicate inspections and rely on other trusted regulators 
wherever possible.
    Mr. Guthrie. In automotive manufacturer, you actually hire 
people to come in and certify and audit your plant, and Ford or 
GM or Chrysler would accept that. Using third-party auditors 
that are reputable, that you can--the trick to it was or the 
issue was that you actually paid them to come to your plant to 
certify you to Ford's standard, but they had a reputation to 
uphold as well, and so----
    Mr. Coukell. Absolutely, and I think Congress did some of 
that for food in the Food Safety Modernization Act a couple of 
years ago. You know, one of the real leaders in industry on 
quality, a vice president of quality for one of the big 
companies has said every supplier and sub-supplier should be 
audited by somebody, but at the same time, if there is one 
company that is making, you know, an inactive ingredient like 
talc or something for tablets and they are supplying 30 
companies, you don't need 30 audits.
    Mr. Guthrie. Right. Common sense.
    Thanks. I yield back.
    Mr. Pitts. The chair thanks the gentleman.
    That concludes the questioning, and I would like to thank 
the witnesses and members for participating in today's hearing. 
We have had a lot of very important information come before the 
committee, and I remind members that they have 10 business days 
to submit questions for the record. I will ask the witnesses to 
please respond promptly to those questions. Members should 
submit their questions by the close of business on Wednesday, 
February 15th.
    With that, without objection, the subcommittee is 
adjourned.
    [Whereupon, at 2:25 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]


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