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



 
       FDA USER FEES 2012: HOW INNOVATION HELPS PATIENTS AND JOBS

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

                                HEARING

                               BEFORE THE

                         SUBCOMMITTEE ON HEALTH

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                             APRIL 18, 2012

                               __________

                           Serial No. 112-136


      Printed for the use of the Committee on Energy and Commerce

                        energycommerce.house.gov



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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         TAMMY BALDWIN, Wisconsin
CHARLES F. BASS, New Hampshire       MIKE ROSS, Arkansas
PHIL GINGREY, Georgia                JIM MATHESON, Utah
STEVE SCALISE, Louisiana             G.K. BUTTERFIELD, North Carolina
ROBERT E. LATTA, Ohio                JOHN BARROW, Georgia
CATHY McMORRIS RODGERS, Washington   DORIS O. MATSUI, California
GREGG HARPER, Mississippi            DONNA M. CHRISTENSEN, Virgin 
LEONARD LANCE, New Jersey                Islands
BILL CASSIDY, Louisiana              KATHY CASTOR, Florida
BRETT GUTHRIE, Kentucky              JOHN P. SARBANES, Maryland
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)
  


                             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...........................................     2
Hon. Joe Barton, a Representative in Congress from the State of 
  Texas, opening statement.......................................     2
Hon. Frank Pallone, Jr., a Representative in Congress from the 
  State of New Jersey, prepared statement........................     3
Hon. John D. Dingell, a Representative in Congress from the State 
  of Michigan, prepared statement................................     4
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, opening statement....................................     5
    Prepared statement...........................................     5
Hon. Michael C. Burgess, a Representative in Congress from the 
  State of Texas, opening statement..............................     6
Hon. Henry A. Waxman, a Representative in Congress from the State 
  of California, opening statement...............................     7

                               Witnesses

Janet Woodcock, M.D., Director, Center for Drug Evaluation and 
  Research, U.S. Food and Drug Administration....................     8
    Prepared statement...........................................    10
    Answers to submitted questions...............................   200
Jeffrey E. Shuren, M.D., J.D., Director, Center for Devices and 
  Radiological Health............................................    44
    Prepared statement...........................................    46
    Answers to submitted questions...............................   200
David E. Wheadon, M.D., Senior Vice President, Scientific and 
  Regulatory Affairs, Pharmaceutical Research and Manufacturers 
  of America.....................................................   113
    Prepared statement...........................................   115
Sara Radcliffe, Executive Vice President of Health, Biotechnology 
  Industry Organization..........................................   122
    Prepared statement...........................................   124
David Gaugh, R.Ph., Vice President, Regulatory Sciences, Generic 
  Pharmaceutical Association.....................................   135
    Prepared statement...........................................   137
Joseph A. Levitt, J.D., Partner, Hogan Lovells US LLP, on behalf 
  of the Advanced Medical Technology Association.................   157
    Prepared statement...........................................   159
Allan Coukell, Director of Medical Programs, Pew Health Group, 
  The Pew Charitable Trusts......................................   172
    Prepared statement...........................................   174

                           Submitted Material

Statement of the National Alliance on Mental Illness, submitted 
  by Mr. Pitts...................................................   194
Statement of the California Healthcare Institute, submitted by 
  Mr. Bilbray....................................................   198


       FDA USER FEES 2012: HOW INNOVATION HELPS PATIENTS AND JOBS

                              ----------                              


                       WEDNESDAY, APRIL 18, 2012

                  House of Representatives,
                            Subcommittee on Health,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The Subcommittee met, pursuant to call, at 10:15 a.m., in 
room 2123 of the Rayburn House Office Building, Hon. Joe Pitts 
(chairman of the subcommittee) presiding.
    Members present: Representatives Pitts, Burgess, Shimkus, 
Rogers, Myrick, Murphy, Blackburn, Gingrey, Latta, Lance, 
Cassidy, Guthrie, Barton, Bilbray, Upton (ex officio), Pallone, 
Dingell, Engel, Capps, Schakowsky, Matheson, Eshoo, Markey, and 
Waxman (ex officio).
    Staff present: Clay Alspach, Counsel, Health; Gary Andres, 
Staff Director; Nancy Dunlap, Health Fellow; Paul Edattel, 
Professional Staff Member, Health; Debbee Keller, Press 
Secretary; Ryan Long, Chief Counsel, Health; Carly McWilliams, 
Legislative Clerk; Monica Popp, Professional Staff Member, 
Health; Chris Sarley, Policy Coordinator, Environment and 
Economy; 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, and the 
chair recognizes himself for 5 minutes for an opening 
statement.
    Today's hearing addresses the FDA user fee package 
discussion draft. This draft is the product of over a year of 
hard work by various parties. While the individual industries--
prescription drugs, medical devices, generic drugs and 
biosimilar drugs--represented in this draft were negotiating 
with FDA on their user fee agreements, this subcommittee was 
holding at least 10 hearings on subjects related to the draft. 
After intense negotiation between both sides of the aisle, we 
have arrived at a discussion draft that I hope all members of 
the subcommittee will be able to support.
    There are still some outstanding issues that staff 
continues to work on, and I hope that they can be resolved 
before next week's subcommittee markup.
    This package is critical to patients. It will ensure that 
FDA has the resources and reforms needed to speed new drugs, 
devices and treatments to those who are ill. These user fee 
agreements will make the approval process more transparent, 
more consistent and more predictable, benefiting patients, but 
also keeping the United States the preeminent leader in drug 
and device development and manufacturing.
    Good-paying jobs in the drug and device industries, like 
those in my home State of Pennsylvania, will be critical to our 
economic recovery, and we cannot afford to outsource them.
    I look forward to hearing from our witnesses today, to get 
their thoughts and reactions on the discussion draft. \*\
---------------------------------------------------------------------------
    \*\ The discussion draft is available at http://
energycommerce.house.gov/sites/republicans.energycommerce.house.gov/
files/Hearings/Health/20120418/BILLS-112HR-PIH-UFAreauthorization.pdf.
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    [The prepared statement of Mr. Pitts follows:]

               Prepared statement of Hon. Joseph R. Pitts

    Today's hearing addresses the FDA user fee package 
discussion draft. This draft is the product of over a year of 
hard work by various parties. While the individual industries--
prescription drugs, medical devices, generic drugs, and 
biosimilars drugs--represented in this draft were negotiating 
with FDA on their user fee agreements, this Subcommittee was 
holding at least ten hearings on subjects related to the draft.
    After intense negotiation between both sides of the aisle, 
we have arrived at a discussion draft that I hope all members 
of the Subcommittee will be able to support.There are still 
some outstanding issues that staff continues to work on, and I 
hope that they can be resolved before next week's Subcommittee 
markup.
    This package is critical to patients. It will ensure that 
FDA has the resources and reforms needed to speed new drugs, 
devices, and treatments to those who are ill. These user fee 
agreements will make the approval process more transparent, 
more consistent, and more predictable, benefitting patients, 
but also keeping the United States the preeminent leader in 
drug and device development and manufacturing.Good-paying jobs 
in the drug and device industries, like those in my home state 
of Pennsylvania, will be critical to our economic recovery, and 
we can't afford to outsource them.
    I look forward to hearing from our witnesses today, to get 
their thoughts and reactions on the discussion draft.

    Mr. Pitts. I yield the remaining time to the chairman 
emeritus of the committee, Mr. Barton.

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

    Mr. Barton. Thank you, Mr. Chairman, and thank you for 
holding this hearing today.
    Put me down, as I said at the last hearing you had on this, 
as undecided on this particular bill. I know that you have 
worked very hard and your staff has worked very hard and the 
minority staff and members have worked very hard on the bill. 
My basic problem is that I am not sure the FDA deserves a large 
increase in user fees given the amount of money that they have 
been receiving in general fund increases.
    As you know, under the Patient Protection and Affordable 
Care Act, there is a new 2.3 percent gross sales tax on the 
sale of all medical devices in the United States beginning in 
the year 2013. This tax is supposed to raise $20 billion to 
help offset the cost of President Obama's $1 trillion new 
health bill. A 2.3 percent tax is imposed on revenues, as you 
know, and not profits, so that the tax applies to devise 
regardless of they are sold at a loss. This is on top of the 
current federal tax rate of 35 percent on corporate profits and 
all State and local taxes in addition. It is obvious that 
companies have less incentive to stay in the United States than 
they did before these bills became law.
    This Administration has indicated that the increased tax 
will have little to no negative effect on medical innovation in 
the United States. That just begs credulity, Mr. Chairman. When 
you increase taxes across the board and then throw these user 
fee increases on top of it, that has to have a negative effect. 
It is simply a law of physics, so to speak.
    In any event, I do want to commend you and others for 
trying to come together on a bipartisan bill. I think it is 
obvious by my comments that I may be a no vote but I do want to 
be a positive part of the process if at all possible.
    I want to thank our witnesses for being here today, and 
with that, Mr. Chairman, I can yield the remaining 1 minute to 
someone else or yield it back to you.
    Mr. Pitts. All right. The gentleman yields back. The chair 
recognizes the ranking member of the Subcommittee on Health, 
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.
    Today, the subcommittee is meeting to hear testimony about 
the released discussion draft concerning the prescription drug, 
medical device, generic drug and biosimilar drug user fee 
agreements as well as several other FDA-related proposals 
including programs to foster the development of prescription 
drugs for children, administrative and regulatory reforms at 
the FDA, and drug shortages.
    I will note as a matter of process that each of these 
issues has had its own hearing in the subcommittee over the 
course of the 3 months, and I want to commend Chairmen Pitts 
and Upton and the staffs on both sides. We have worked very 
hard to cover a lot of ground, and I would also like to thank 
all the subcommittee members for their participation in these 
hearings and I welcome their comments and suggestions on the 
discussion draft as we continue to move forward.
    Let me state that we have not yet reached full agreement on 
the discussion draft in time for today's hearing. As we will be 
seeing, the bill contains language largely identical to the 
March draft released by the Republicans except for the brackets 
surrounding a majority of the text. These brackets indicate 
that the bill is a work in process and we continue to make 
headway.
    There are many issues that have been worked out. 
Specifically, we have been able to make substantive changes to 
the FDA reforms in this draft would have led to many unintended 
and unacceptable consequences to FDA's regulatory scheme. We 
have also been working hard to include language that would 
equip the FDA with the authority and the resources it needs to 
address a growing global drug supply. That language has come a 
long way, and I am optimistic that we can strengthen it 
further.
    It is important to note that there are still key concerns 
remaining but the process has been a good one to date and I am 
hopeful that we can come together to address those outstanding 
issues and generate a consensus, a bipartisan product that both 
sides can support.
    I just wanted to quickly comment on the four user fee 
proposals that are the impetus behind this legislation. The 
discussion draft is largely based on the agreements between the 
FDA and the industry. These programs represent a critical 
opportunity to work alongside FDA, industry and other 
stakeholders to build upon and improve these critical programs. 
Together we can help give patients access to safe, effective 
and breakthrough medical treatments while supporting the 
advancement of science and promoting a thriving life science 
industry in the United States.
    A particular note of course is the new generic drug user 
fee agreement, which will dramatically improve the median 
approval times for generic applications. This program will 
cause an influx of generic drug products onto the market and 
into the hands of consumers, thereby significantly lowering 
health care costs.
    I just want to welcome back our witnesses here today. You 
have been a great resource to our subcommittee throughout this 
process. We are eager to hear your opinions and your 
suggestions, and I look forward to working with you, Chairman 
Pitts, leading up to next week's scheduled markup to improve 
the discussion draft further. And again, thanks for the 
continued bipartisanship.
    I would like to yield my 2 minutes left to the chairman 
emeritus, Mr. Dingell.

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

    Mr. Dingell. Mr. Chairman, I thank you for holding today's 
hearing and I thank my good friend, Mr. Pallone, for yielding 
to me.
    I am delighted that we are having this hearing and I am 
happy to work together with my colleagues in a bipartisan 
consensus effort to achieve a good piece of legislation on food 
and appliance and other performance by the FDA.
    FDA's authorities are not sufficient to protect our drug 
supply chain. Investigations by this committee found the FDA 
not only lacks knowledge of how many drug manufacturing 
facilities are operating overseas, what entities are importing 
drugs or when incidents like adulteration, theft, 
counterfeiting, contamination or repeated manufacturing 
failures are posing health risks. FDA has lacked the authority 
to detain or destruct harmful drugs, to prevent medical product 
from entering the country if the manufacturer prohibits 
inspection or to require importers to provide compliance 
information at the border.
    Current law has unintentionally created an unlevel playing 
field which hurts our domestic manufacturers. While FDA 
inspects domestic manufacturers every 2 years, it may or may 
not inspect foreign manufacturing facilities, although it 
occasionally gets around to it about every 9 years. This 
committee must address these critical gaps in FDA's authority 
and the knowledge of our entire food chain from active 
ingredients to the patient's medicine cabinet. FDA ought to 
know the parties who are manufacturing, distributing or 
importing drugs and should be able to take action against those 
who are allowing harmful drugs into the United States market.
    We have before us today an opportunity to deal with the 
shortage of money and personnel and see to it that we stop 
making Americans sick or killing Americans by having a failure 
to have Food and Drug have the ability to carry out its 
responsibilities. I thank you, Mr. Chairman.
    Mr. Pitts. The gentleman yields back, and I now recognize 
the chairman of the full committee, Mr. Upton, for 5 minutes.

   OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF MICHIGAN

    Mr. Upton. Thank you, Chairman Pitts, for today's hearing 
on the reauthorization of the FDA user fees and the impact of 
innovation on American patients and jobs.
    Since the beginning of February, this subcommittee has held 
six hearings on the FDA, and during these hearings, we have 
heard from witnesses from around the country on how Congress 
can help FDA become more predictable, consistent and 
transparent and how that will foster innovation here in the 
United States. I have heard this back home from my constituents 
as well. I think we all agree that fostering innovation does 
help American patients and aids in creating American jobs. As 
part of our efforts to foster that innovation, we need to fix 
the recent problems with the investigational device exemption 
approval process and the medical device modifications guidance 
document. Recent FDA policy changes have created some problems, 
and we intend to use the user fee legislative process to 
rectify them.
    I really want to thank Mr. Waxman and Mr. Pallone and Mr. 
Dingell and other members of this committee for their 
constructive and bipartisan work to reauthorize these user 
fees. During the past couple of months, we have had a number of 
productive conversations on ways to improve the regulatory 
process at FDA. As I said at the start of this process, we need 
to reauthorize the user fees by the end of June to assure 
continuity at the FDA and increase predictability for America's 
medical innovators and job creators. We still have work to do 
but because of the bipartisan commitment from members on both 
sides of the aisle, I am convinced that we are on track to do 
that, and I appreciate all the hard work, particularly from the 
staff as they have spent countless numbers of hours working to 
make sure that we can have a productive bill, and I yield the 
balance of my time to the vice chairman of the subcommittee, 
Dr. Burgess.
    [The prepared statement of Mr. Upton follows:]

                 Prepared Statement of Hon. Fred Upton

    I'd like to thank Chairman Pitts for holding today's 
hearing on the reauthorization of the Food and Drug 
Administration user fees and the impact of innovation on 
American patients and jobs.
    Since the beginning of February, this subcommittee has held 
six hearings on the FDA. During these hearings, we've heard 
from witnesses from around the country on how Congress can help 
FDA become more predictable, consistent and transparent and how 
that will foster innovation here in the United States. I have 
heard this back home from my constituents too.
    I think we all agree that fostering innovation helps 
American patients and aids in creating American jobs. As part 
of our efforts to foster innovation, we need to fix the recent 
problems with the investigational device exemption approval 
process and the medical device modifications guidance document. 
Recent FDA policy changes have created major problems, and we 
intend to use the user fee legislative process to rectify them.
    I'd like to thank Ranking Member Waxman, Ranking Member 
Pallone, Mr. Dingell and the other Democratic members of the 
Energy and Commerce Committee for their bipartisan work on 
reauthorizing the user fees. During the past few months, we've 
had productive conversations on ways to improve the regulatory 
process at FDA.
    As I said at the start of this process, we need to 
reauthorize the user fees by the end of June to assure 
continuity at the FDA and increase predictability for America's 
medical innovators and job creators. We still have work to do 
but because of the bipartisan commitment from members on both 
sides of the aisle, we are on track to do that.

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

    Mr. Burgess. I thank the chairman for yielding. I want to 
thank the chairmen of the full committee and subcommittee as 
well as the ranking members of the full committee and 
subcommittee for moving this legislation forward. I think the 
manner that this has been approached is one that has been 
constructive and certainly been respectful of individual member 
concerns. We have been sensitive to patient concerns and we are 
focused on finding an end product that is workable for the 
agency and for the patients that it serves.
    The impact of these areas, the medical device, the 
pharmaceutical, the biologic and generic industries of the 
United States certain reaches farther than the patients that 
benefit from them, and we will hear a lot about job creation 
and help to the economy, but the patient concerns must remain 
our primary focus. And these industries do affect commerce. 
They affect technology. They do affect the economy and they 
provide quality jobs to Americans, which range from the 
scientific to the highly skilled and technical and those 
involved in their manufacturing.
    The Food and Drug Administration has one of the most 
important missions of any federal agency to ensure that medical 
products are safe and effective. They are also the gateway to 
providing patients with products that help them maintain their 
health, perhaps help them live with a chronic condition. We 
have to be certain that that gateway does not become a 
bottleneck. I think there are constructive updates that can be 
made and I appreciate so much the discussion draft now being 
out there for all of us to reflect and offer our thoughts.
    Again, I want to thank the chairman for his approach to the 
process, thank our witnesses for their willingness to come 
before this committee multiple times, for the transparency that 
they have exhibited and the fact that this has come through 
under regular order and that the chairman has worked to a 
product which I think both sides of the dais can justifiably be 
proud, and I----
    Mr. Shimkus. Will the gentleman yield?
    Mr. Burgess. Yes, I will be happy to yield.
    Mr. Shimkus. Thank you. I want to just take a minute and 
talk about this process and some of the reforms that are 
proposed and just make the point, especially in two areas that 
I have been interested in, the investigative device exemption 
and the 510(k) modifications.
    The attempt is really to remedy through public policy 
changes in the operation that the FDA has done in the last 
couple years. So it is an attempt to return back to a day when 
these two areas were working and we weren't losing innovation 
and jobs and folks moving overseas to get these approvals. And 
so I hope that you all will when we get into that part of the 
discussion receive it in the attempt that we are trying to 
portray it. We really want to get back to where we don't have 
this backlog and we are the innovators, we are the producers 
and we lead the world again.
    I yield back my time.
    Mr. Pitts. The chair thanks the gentleman and now 
recognizes the ranking member of the full committee, Mr. 
Waxman, for 5 minutes for an opening statement.

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

    Mr. Waxman. Chairman Pitts, thank you for holding this 
hearing today.
    Although we were not able to come to full agreement in time 
for the discussion draft released yesterday, I am pleased with 
the progress that we have made on this user fee package thus 
far. I am optimistic that we will get to full agreement soon. 
We all know how important it is to reauthorize the underlying 
user fee programs in a timely way. No one is served by adding 
controversial proposals to the bill. That would only serve to 
slow the process.
    So far, we have worked together to avoid weighing down this 
critical legislation with extraneous policies about which we 
cannot agree. This will ensure that we get the work on these 
critically important bills done in time.
    I am particularly hopeful about the progress we have made 
in the area of drug safety as it relates to the increasingly 
globalized supply chain. Mr. Dingell has a strong bill that has 
served as a template in this area, and I appreciate all the 
work that Mr. Upton and Mr. Pitts have done to incorporate 
provisions modeled on that bill.
    I want to note however that I continue to have strong 
concerns with respect to devices. We have all heard the 
increasing rhetoric that FDA is slowing innovation and forcing 
jobs abroad, but that does not justify the troubling provisions 
that could compromise patient safety that are under 
consideration. There are numerous examples of unsafe medical 
devices that have been permitted on the market and have caused 
incalculable suffering for victims. And that occurs under the 
current system with the powers FDA has today. Now is not the 
time to go backwards and take away important authorities from 
the FDA that it needs to help ensure the safety and 
effectiveness of devices. I will continue to oppose any 
addition of any provisions that would prevent FDA from doing 
what it feels necessary to protect patients from unsafe and 
ineffective devices.
    Let me turn now to the area of antibiotics. The discussion 
draft includes the GAIN Act, which is a good first step toward 
creating incentives for the development of new antibiotics, 
which we all agree we desperately need. I remain concerned that 
the bill does not narrowly target antibiotics that treat 
dangerous infections for which we don't have adequate 
treatments. The bill should also include provisions to ensure 
that the efficacy of these newly developed antibiotics is 
preserved once they are on the market. These are goals we 
should all share and I am optimistic that we will fix the bill 
to achieve them.
    I also look forward to learning more today about the 
proposal put forward by the Infectious Disease Society of 
America, the Limited Population Antibacterial Drug, or LPAD--it 
sounds like a new technical device sold by Apple--approval 
mechanism. This proposal would establish a more rapid 
regulatory pathway for new antibiotics targeted at the most 
serious infections.
    The concept appears to have great promise at speeding 
important new antibiotics to the market, but I think we need to 
be assured that these drugs will not be inappropriately used. 
If we cannot get that assurance, we should all be concerned 
about moving forward with this kind of proposal.
    Strengthening and improving FDA is in the interest of all 
Americans. I look forward to continuing to work with all of my 
colleagues on this committee to reach bipartisan agreement on 
this critically important legislation, and I yield back the 
balance of my time.
    Mr. Pitts. The chair thanks the gentleman.
    We will now to go to panel one. We have two panels today. 
Our first panel will have two witnesses: Dr. Janet Woodcock, 
Director of the Center for Drug Evaluation and Research at the 
FDA; and Dr. Jeffrey Shuren, Director, Center for Devices and 
Radiological Health. We are happy to have both of you here 
today.
    Dr. Woodcock, you are now recognized for 5 minutes for your 
opening statement.

 STATEMENTS OF JANET WOODCOCK, M.D., DIRECTOR, CENTER FOR DRUG 
EVALUATION AND RESEARCH, U.S. FOOD AND DRUG ADMINISTRATION; AND 
JEFFREY E. SHUREN, M.D., J.D., DIRECTOR, CENTER FOR DEVICES AND 
                      RADIOLOGICAL HEALTH

                  STATEMENT OF JANET WOODCOCK

    Dr. Woodcock. Thank you. Mr. Chairman, members of the 
subcommittee, thank you for the opportunity to testify about 
the three important drug user fee proposals that are laid out 
in the discussion draft. Each of three drug user fee programs 
is important for the public, and will, if enacted, impact 
positively on patients, industry and on biomedical innovation.
    The fifth iteration of the prescription drug user fee 
program contains important advances for regulatory science and 
patient-centered drug development as well as maintaining 
consistent and predictable review process for the innovator 
industry. The biosimilars user fee program will support the 
growth of a new industry and will help provide more affordable 
biological drugs to the public. Both I think are very important 
public goals.
    The generic drug user fee program as proposed would 
represent a historic agreement to maintain a high and uniform 
level of drug quality no matter where the drug is sourced in 
the world. It also will ensure a robust and predictable path to 
market for generic drugs that should invigorate the industry.
    That said, implementation of these three new programs if 
enacted will create a significant body of work for the agency. 
We are eager to undertake this but we are wary of additional 
provisions, unfunded provisions. The experience after the FDA 
Amendments Act I think is illustrative. While FDA implemented 
the many needed safety programs that were stipulated in the 
Amendments Act, we had to miss a number of user fee goals under 
the prescription drug user fee program and slow down our review 
process, and while that was a worthy tradeoff, we have to 
recognize that any additional provisions will have tradeoffs on 
workload.
    I understand that there are other policy issues and 
development challenges that are unaddressed by the user fee 
proposals, which are really about process and procedures, and I 
am happy to answer questions about these issues and I really 
look forward to the discussion. Thank you.
    [The prepared statement of Dr. Woodcock follows:]

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    Mr. Pitts. The chair thanks the gentlelady.
    Dr. Shuren, you are recognized for 5 minutes for your 
opening statement.

                  STATEMENT OF JEFFREY SHUREN

    Dr. Shuren. Mr. Chairman and members of the committee, 
thank you for the opportunity to testify today.
    As you know, on February 15th, FDA and representatives from 
the medical device industry reached an agreement on proposed 
recommendations for the reauthorization of the Medical Device 
User Fee Act, or MDUFA, the details of which we provided to you 
on March 16th. As required by law, we held a public meeting on 
March 28th and sought public comment on the proposal package. 
We plan to send the final package to you by the end of this 
week.
    When I came to CDRH in 2009, in response to concerns 
expressed by industry and others, we initiated a review of our 
device premarket review programs. The following year, we 
released two reports that concluded as I have testified before 
that we had not done as good a job managing the review programs 
as we should have. The number one problem we found was 
insufficient predictability, which was leading to 
inefficiencies, higher costs for industry and FDA, sometimes 
delays in bringing safe and effective products to market.
    In January 2011, we announced a plan with 25 specific 
actions that we would take that year to improve the 
predictability, consistency and transparency of our premarket 
programs. We announced additional steps since then. As of 
today, 30 actions have been completed or well underway. They 
are intended to create a culture change toward greater 
collaboration, interaction, transparency and the appropriate 
balancing of benefits and risk. They focused on assuring 
predictable and consistent decision making and application of 
the least-burdensome principle and implementing more efficient 
regulatory processes.
    Preliminary data indicate that the actions we have taken 
have started to bear fruit. For example, the backlog of 510(k) 
submissions that had been steadily increasing from 2005 to 2010 
decreased for the first time last year and are continuing to 
decline in 2012. The backlog of PMA submissions that had been 
steadily increasing from 2007 to 2011 has decreased this year 
for the first time, and average total time for review appears 
to be decreasing for the first time as well.
    However, we still have much work to do. Reauthorization of 
MDUFA will provide the resources that CDRH needs to continue 
improving the device review programs and help reduce the high 
staff turnover that has adversely affected review 
predictability and consistency. The proposed MDUFA 
recommendations we have agreed upon with industry includes 
several important process improvements. For example, if a 
performance goal on a device application is missed, the MDUFA 
proposal would require FDA and applicants to work out a plan to 
complete the work on the submission, ensuring that no 
submission would be left behind, and requiring a new 
substantive interaction between FDA and an applicant would help 
assure sufficient time for the applicant to properly respond to 
appropriate questions. These and other proposed enhancements 
are intended to achieve a shared outcome goal of reduced 
average total time to decision, which both we and industry 
believe is an important indicator of a successful premarket 
review program.
    The agreement we have reached with industry strikes a 
careful balance between what industry agreed to pay and what 
FDA can accomplish with the amount of funding proposed. 
However, we have concern that even if device user fee resources 
are increased under MDUFA III, additional new legislative 
mandates imposed on CDRH could divert resources and undermine 
FDA's ability to achieve the new performance goals. We are very 
willing to work with Congress on initiatives that complement 
the user fee agreement. However, just as FDA and industry 
mutually agreed that some initiatives would be part of the 
formal agreement, we also agree that some initiatives would not 
be part of the agreement. Additional legislation to codify 
initiatives the agency and industry chose not to devote 
resources to risks diverting resources from achieving MDUFA 
goals and could undermine the user fee agreement entirely.
    When PDUFA was last reauthorized in 2007, as you heard, the 
addition of new policy-related requirements ultimately resulted 
in FDA's drug review program having to temporarily suspend 
meeting its PDUFA review goals in order to meet the statutory 
mandates. We want to avoid such a situation so that CDRH can 
focus on meeting the ambitious new proposed MDUFA program goals 
and achieving timely patient access to safe and effective 
devices, which is an objective that we share with industry, 
health care practitioners, patients, consumers and you.
    Mr. Chairman, we share your goal of timely reauthorization 
of MDUFA. We look forward to working with you toward enactment 
of this critical legislation. I commend the subcommittee's 
efforts and am pleased to answer any questions the subcommittee 
may have. Thank you.
    [The prepared statement of Dr. Shuren follows:]

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    Mr. Pitts. The chair thanks the gentleman.
    I will begin the question period and recognize myself for 5 
minutes for that purpose. Dr. Woodcock, we will begin with you. 
In your testimony, you say that FDA is expediting manufacturing 
change submissions to help with drug shortages. In the 
discussion draft, we include a section on expediting 
manufacturing changes that will alleviate a drug shortage. In 
talking with patients and manufacturers and providers, they 
tell me it is one of the best parts of the discussion draft and 
it will really help with shortages. Do you agree with those 
patients, providers and manufacturers that expediting 
manufacturing changes that will alleviate drug shortages is a 
good idea? I would like your comments on that section.
    Dr. Woodcock. We are currently able to expedite 
manufacturing changes and we do to alleviate shortages or to 
prevent them if we hear about them in advance. So we do not 
need authority authorities to expedite a review of 
manufacturing changes or implementation by manufacturers.
    Mr. Pitts. All right. What is the latest on medical gases? 
We had a hearing on this issue. Will you have a proposal to 
share with the committee by the end of the week on this?
    Dr. Woodcock. Well, both parties will have to. We are in 
active discussions with the association. I have had personal 
meeting with the association and my staff and there have been 
multiple additional discussions. I think we are in substantial 
agreement but we are continuing to go back and forth and make 
sure we have all the details nailed down, so I can't guarantee, 
because it is only my side of it, that it will done by the end 
of the week but we certainly are working very hard on bringing 
this to a conclusion.
    Mr. Pitts. The user fee discussion draft includes language 
to enhance FDA performance reporting in the drug space by 
including division-level data. I believe there is great value 
in regularly gathering and analyzing the best possible data in 
order to understand where there are working and where they need 
improving. Collecting more granular information at the review 
division level will allow FDA management, patients, industry 
and Congress to better identify where things are working and 
where improvements are needed. As an example, in November of 
2011, the agency issued a report citing the approval of 35 
innovative drugs that represented advances in treatment for 
many serious disorders. If we had division-level data, we could 
better understand what practices led to such an accomplishment 
and how we could apply those lessons in other areas. Do you 
agree that collecting, reporting this information is a good 
idea given that it will help us understand how we can apply 
these best practices in other parts of the drug center and 
agency? Would you comment on that, please?
    Dr. Woodcock. Certainly. We have calculated the 
requirements for personnel and investment in generating 
additional formal reports. We really do believe in transparency 
of all our processes, and I believe I as a manager am 
accountable to you and to the public to make sure that we 
review particularly lifesaving or life-altering drugs as 
rapidly as possible. It is one of my highest priorities. 
However, setting up additional reporting systems, we calculate 
would cost us $4.7 million based on what is laid out in the 
draft and would require 15 FTEs, or full-time equivalents, of 
people to work on that. Those people would be diverted from 
working on reviewing the applications.
    Now, the division-by-division variability in how many 
applications come out and how many of those are approved and so 
forth is primarily a function of the input. So right now, if 
you looked at it sort of naively, you would say our cancer 
group is like the most productive group and they do the best 
job. But they get--right now there is a renaissance of cancer 
therapies based on the molecular knowledge of cancer that has 
been generated and so they are able to approve--we are seeing a 
lot of very good applications and we are able to approve those 
rapidly.
    So I don't think you can make a cause-and-effect link 
between what comes out in a given disease area and their 
particular productivity. For example, I think our neurology 
division is wonderful and does a fantastic job but we haven't 
been able to approve a lot of new drugs for Alzheimer's because 
those drugs have failed in development.
    Mr. Pitts. The chair thanks the gentlelady. My time is 
expired.
    I yield to the ranking member, Mr. Pallone, for 5 minutes 
for questions.
    Mr. Pallone. Thank you, Mr. Chairman.
    I am going to start with Dr. Woodcock and may able to get 
to Dr. Shuren if there is time. Well, first, welcome back, and 
I appreciate your being with us again today. I wanted to focus 
on review times for Abbreviated New Drug Applications, or 
ANDAs. Under current law, what is the length of time in which 
the FDA is required to review generic drug applications?
    Dr. Woodcock. This is like a quiz. I think it might be----
    Mr. Pallone. At least it is not yes or no.
    Dr. Woodcock. I think it is 180 days.
    Mr. Pallone. OK. And what is the median review time for 
ANDAs today?
    Dr. Woodcock. Currently, the average or median or 
approximately average review time is 30 months.
    Mr. Pallone. And how long do you think it will take to 
significantly reduce the review times for generic drug 
applications?
    Dr. Woodcock. I believe if the proposed user fee program 
that is put within the discussion draft is enacted, within 
several years we will be seeing a greatly improved performance.
    Mr. Pallone. And then can we expect to see any meaningful 
reduction in review times in year one or year two of the 
generic user fee program?
    Dr. Woodcock. We will certainly try. However, we have a 
backlog that comprises almost--there are 2,600 applications in 
the queue that we have to clear out, and that would be our 
first priority.
    Mr. Pallone. Chairman Pitts just asked and referred to the 
discussion draft on PDUFA, and I guess on pages 18 and 19 there 
is some bracketed language that will require FDA to report to 
Congress on various statistics about the agency's drug reviews, 
and I wanted to ask you about this language. Was this part of 
the negotiated user fee agreement?
    Dr. Woodcock. Could you repeat the question?
    Mr. Pallone. Sure. I'm talking about PDUFA, and the 
chairman asked and referred to the discussion draft. On pages 
18 and 19, there is some bracketed language that would require 
the FDA to report to Congress on various statistics about the 
agency's drug reviews. I don't think that was part of the 
negotiated user fee agreement, correct?
    Dr. Woodcock. Yes, that was not part of what we negotiated 
with the public and with industry, and it was not accounted for 
in the resource calculations for the user fee.
    Mr. Pallone. So that was my question. I am concerned about 
putting a burden on the agency that is not funded by user fees 
and could result in an unwarranted reshuffling of resources 
that Congress intended to be dedicated to other activities, and 
I think we need to be careful when we start opening up the 
PDUFA agreement. I don't know if you wanted to comment on that 
a little more.
    Dr. Woodcock. Yes. I believe, as I said, very highly 
believe in transparency and accountability of the new drug 
review program to the public, to Congress and to any of our 
stakeholders. However, we feel these additional tracking 
requirements when unfunded will divert us from actually 
accomplishing the objectives that are laid out by Congress in 
the user fee agreement.
    Mr. Pallone. Now, let me go to Dr. Shuren for a question. I 
have a couple minutes or less. I wanted to ask you about one of 
the provisions in the discussion draft related to devices, 
specifically Section 706 would change the standard for when 
device manufacturers are required to submit a new 510(k) 
application for changes to their already cleared devices. It 
might seem like an arcane issue, but I know it is an extremely 
important one. Permitting companies to make changes to their 
devices without first obtaining FDA clearance could result in 
devices on the market over which the FDA had had very little 
oversight and knows very little about. Industry of course would 
say that if they are just making small changes to the device, 
there is no need to go through the 510(k) process again. But I 
wanted to get a better sense from you about what is going on 
here. Is there a need for any change here? Can you speculate on 
why the language of 706 is being included in the draft, and 
basically does the FDA have concerns about the language in 
Section 706?
    Dr. Shuren. We believe the existing standard that we have 
for modifications is a good one. Most modifications made to a 
device do not come to the FDA for review. The only ones that 
come are those that could significantly affect safety or 
effectiveness. The issue right now is about a guidance we put 
out on modifications that we did not put out with the intention 
of increasing in any significant way the number of 510(k)s 
coming in but provide greater clarity in places that have been 
gray zones and emerging technologies. We recognize there are 
many concerns with the guidance. That is why we have had lots 
of meetings with industry. We have even had two all-day 
meetings with a group of companies, trade associations coming 
in the door and raising their issues and working it through. 
Our intent is to get that guidance right, and we know because 
of the concerns, our plan is, we would actually put out a new 
draft guidance and make sure we work it out.
    Our concern with what has been proposed in the legislation 
is it would change the existing approach that we had that had 
been working for many years, and instead changes it to only 
submit if it does significantly affect safety and 
effectiveness. If it does affect safety and effectiveness, you 
don't submit a 510(k). The product wouldn't come on the market. 
So essentially companies will be making changes to their 
devices and none of those changes will be coming to the FDA for 
review. That causes significant concern. You have devices like 
linear accelerators that blast radiation at patients to treat 
cancers. You can now make modifications that can impact that 
technology, and we won't see it, and we have plenty of cases 
where companies made changes, they did some testing, and there 
were big problems that but for the FDA review, those unsafe 
technologies would have gotten to patients, and that is what we 
worry would happen with this change in the law.
    Mr. Pallone. All right. Thank you, Doctor.
    Mr. Pitts. The chair thanks the gentleman and now yields to 
the vice chairman of the committee, Dr. Burgess, 5 minutes for 
questions.
    Mr. Burgess. Thank you, Mr. Chairman.
    Dr. Shuren, we might come back to the issue of 
modifications if I have time, but let us talk for a minute 
about the 510(k) process. It is my understanding that when the 
Food and Drug Administration clears a device through the 510(k) 
process, it tells the company that they have received a 
substantial-equivalence determination and then the FDA sends a 
letter to the company that expressly states, please be advised 
that the FDA's issuance of a substantial-equivalence 
determination does not mean that the FDA has made a 
determination that your device complies with other requirements 
of the act, that being the Food, Drug and Cosmetic Act. Is that 
a correct statement?
    Dr. Shuren. As a paraphrase, and then the company is 
responsible for assuring they have met what we have called 
general controls, things that pertain to reporting requirements 
or labeling or meeting our quality systems or Good 
Manufacturing Practices.
    Mr. Burgess. If there is a device that is found to be 
defective that has been approved under a 510(k) authority and 
another device is found to be substantially equivalent, because 
of the defect that you discovered in the predicate device, you 
would do something to prevent that follow-on device from going 
to the market. Is that not correct?
    Dr. Shuren. What we do in those cases, and there are 
limited cases, we try to--within our authority we might put 
explanations in the labeling, try to address it as best we can. 
The challenge is that those may be ineffective. Right now, 
there is not a responsibility on the part of the manufacturer 
to show that if they replicate a design flaw, for example, that 
they have put in appropriate mitigations to make sure that does 
not affect patient safety or effectiveness. It has been 
proposed by some in industry what we would do is, well, you 
would clear it. They could go to market and then you would 
build a legal case to say it is misbranded and then take an 
enforcement action against the company, which kind of puts the 
cart before the horse. In reality, what we do is clear a 
device, then maybe take an enforcement action, and what they 
would have to do is actually come back in the door with another 
510(k). So we do what we can with the authorities that we have 
but it is not a perfect solution. There is a way of solving it 
that focuses very narrowly----
    Mr. Burgess. Please let me ask a question so I am sure that 
I understand it. Right now you are compelled to approve an 
unsafe device under the 510(k) program?
    Dr. Shuren. Well, compelled to determine that there is 
substantial equivalence between the predicate and the new 
product.
    Mr. Burgess. Right. So substantial equivalence, but then 
that does not necessarily infer that there is approval to 
market the device under the Food, Drug and Cosmetic Act. Is 
that correct?
    Dr. Shuren. The terminology, just so we have it right, is 
clearance. The manufacturer is then responsible for meeting the 
other requirements of the law to then put it on the market but 
they do not wait for any other affirmative determination by the 
agency to go to market.
    Mr. Burgess. This is important, and I am not trying to be 
argumentative, but has the FDA allowed products that they know 
to be harmful to reach the market?
    Dr. Shuren. We believe that we have tried to take the best 
actions we can to assure that the devices that come to market 
are safe.
    Mr. Burgess. Well, why didn't you just immediately say 
these are misbranded and must not be marketed?
    Dr. Shuren. So in the few cases where this has happened, we 
have tried to either address it with labeling and it is our 
hope that that will be an adequate mitigation. What we don't 
have in a normal case in premarket review is the data to 
support that it would be an adequate mitigation.
    Mr. Burgess. Can you provide this committee--you keep 
saying there are a limited number of examples. We actually need 
to see those cases. I have to tell you, that concerns me 
greatly that the Food and Drug Administration for all of the 
heft that you have has allowed devices to come to the market 
that may be inherently unsafe that you knew were unsafe before 
they were marketed. So can you please--how many cases do we 
have like that? You say there are a few but is it like three or 
five or nine?
    Dr. Shuren. There are a handful. We will get you some of 
them. We would be happy to do so.
    Mr. Burgess. All of them, Dr. Shuren. We need all of them 
because we have to make a determination about where the process 
is not working because clearly this is--I don't believe you 
want it and I certainly don't want it where the FDA is 
approving, because of a finding of substantial equivalence, 
allows a device to come to market that is inherently unsafe. I 
don't understand, why would you not issue a mandatory recall 
immediately?
    Dr. Shuren. Well, first of all, a mandatory recall, if 
there is a problem, first of all, that we find the problem 
thereafter. We tend to work with the company for a voluntary 
recall. A mandatory recall winds up taking--can actually take 
several years because it involves a formal hearing, and 
oftentimes we work with the company----
    Mr. Burgess. All I know is, in a medical staff situation, 
if you know you have a provider, a doctor, who presents a clear 
danger to patients, I mean, there is an immediate revocation of 
that person's privileges. I don't see why the same should not 
apply within your agency in the device world.
    Dr. Shuren. No, I appreciate that, and if folks think that 
we actually have the authority to do that right now and 
immediately stop it from going to market, it would be helpful 
to us then to provide that clarity in legislation.
    Mr. Burgess. Well, and part of the clarity is providing us 
the cases because that is--Mr. Chairman, I think we may need to 
involve the Subcommittee on Oversight and Investigations to 
look into this because this is a fundamental issue of patient 
safety, and if the primary federal agency charged with 
providing that drugs and devices are safe and effective is not 
meeting that first goal, that is a serious, serious problem, 
and I will yield back my time.
    Mr. Pitts. The chair thanks the gentleman and now recognize 
the ranking member of the full committee, Mr. Waxman, 5 minutes 
for questions.
    Mr. Waxman. Thank you very much, Mr. Chairman. The point 
Mr. Burgess raised is an important one, and if you feel you 
need stronger or clearer legislation in that area, let us know 
because we are concerned about whatever, even a handful of 
devices that may be harmful.
    Dr. Woodcock, I would like to ask you about two proposals 
designed to help get new important antibiotics to market. One 
is GAIN and the other is LPAD. First of all, on GAIN, we know 
the pipeline for new antibiotics is essentially dry. It is a 
serious public health threat and it is clear that we need to 
look at ways to incentivize the development of these lifesaving 
drugs. One way to do that, of course, is to provide additional 
exclusivity. I think whenever we talk about adding new 
exclusivity, we need to ensure that it is truly necessary, and 
in this case, I think a good case can be made that it is, but 
then it should be narrowly targeted so that only the drugs we 
need to have developed are rewarded with this generous prize, 
and exclusivity is often very generous and you never get it 
back even when it is no longer valid or useful.
    I am concerned that the language in the discussion draft 
does not adequately target, and I want to get your views on 
that subject. As I read it, the legislation would provide 5 
years additional exclusivity to an antibiotic that received FDA 
approval based only its ability to treat or prevent essentially 
any antibiotic-resistant bacterial pathogen. I think this 
legislation should be narrowly targeted and only apply to 
antibiotics approved for serious or life-threatening diseases 
for which there is an unmet medical need. I would like to know 
whether you agree. If so, how would that work in practice? Is 
that a standard FDA could easily apply?
    Dr. Woodcock. We do apply a standard on approval on review 
called the Priority Review, and we determine whether or not a 
product would be an advance in its class or is simply yet 
another option amongst multiple options, so we do have some 
experience in applying some standard like that. I think of 
course it is up to Congress how you weigh these different 
tradeoffs as far as the affordability of drugs versus their 
availability. You don't want to set up an incentive program, in 
my opinion, that drives developers toward the broadest market 
and thus to neglect potentially those challenging areas of, 
say, drug-resistant organisms, which is where we have the 
greatest need for new antibiotics. But because that is a narrow 
market, if you do an incentive program, often the desire is to 
apply that to the broadest market possible to gain the most 
obviously profit from doing that. So I think Congress needs to 
think about what incentive you are offering and how is that 
incentive going to operate, and will it operate to solve the 
problem that has been identified. There are several problems. 
One problem is, we don't have antibiotics----
    Mr. Waxman. Let me--it is very helpful but then I think 
about all the things I still want to ask. So you agree that we 
ought to be sure to narrowly focus this incentive because 
otherwise an incentive becomes just very beneficial to those 
who get it but not really solving the main problem that we 
have. Is that correct?
    Dr. Woodcock. I believe that Congress ought to define the 
problem that you are trying to address and make sure you design 
an incentive that incentivizes drug development to solve that 
problem.
    Mr. Waxman. I want to ask you about the LPAD approach. This 
has been discussed by the Infectious Disease Society of 
America, and as I understand it, this approach is intended to 
establish a more rapid regulatory pathway for new antibiotics 
targeted at the most serious infections. The risk-benefit ratio 
for such antibiotics will often support more narrowly tailored 
clinical trials that are needed for other antibiotics. A 
fundamental aspect of this proposal is that it would require 
that any antibiotic approved under this pathway bear a strong 
label statement describing the limited population of patients 
with serious or life-threatening infections for which the drug 
had been approved and noting that its safety and effectiveness 
had not been established beyond this limited population. 
Companies would have to provide their promotional materials to 
FDA before distributing them. It seems this kind of approach 
could really get help critically important antibiotics on the 
market more rapidly than otherwise possible. However, for it to 
work as intended and for it not to lead to lowering of the 
approval standard, it has to have effective mechanisms for 
ensuring that antibiotics approved for small populations are 
indeed used by those small populations. I would like to hear 
your views on whether you think LPAD maintains that balance. 
Specifically, do you think that it will facilitate the more 
rapid approval of important new antibiotics for limited 
populations, and do you think that there are adequate controls 
to prevent widespread off-label use in a much broader 
population than for which it was tested and approved?
    Dr. Woodcock. Yes, and yes. I believe that probably a 
narrow development program, and we could offer, we believe, a 
radically smaller development program than for an antibiotic 
intended for broad uses is a stronger incentive than 
financial--than exclusivity, number one. And number two, we 
believe that particularly if Congress were to make a statement 
about the antibiotic stewardship of this class of products, 
good stewardship in the market, that that would have the effect 
of limiting the use.
    Mr. Waxman. Thank you.
    Thank you, Mr. Chairman.
    Mr. Pitts. The chair thanks the gentleman and recognizes 
the gentleman from Illinois, Mr. Shimkus, for 5 minutes for 
questions.
    Mr. Shimkus. Thank you, Mr. Chairman. Thank you all for 
coming.
    Dr. Woodcock, I agree that Congress needs to define a 
problem we want to address, and that is part of this process of 
the hearing and also some of the bills that have been 
introduced. So I couldn't agree more, and of course, I will 
focus mine on the IDE and the 510(k) issue.
    First of all, Dr. Shuren, you said that the number of 
applicants is down. Is that what you said in your opening 
statement?
    Dr. Shuren. No, the backlog, so the number of 510(k)s that 
are still under review at the end of the year has gone down. It 
had been going up for 510(k)s since 2005 every single year.
    Mr. Shimkus. OK. Let me follow up then. According to 
companies who I have talked to, your draft guidance could 
increase 510(k) submissions by 300 to 500 percent. Do you agree 
with that? And do you have the capability to respond to that if 
that is the case?
    Dr. Shuren. So first of all, we don't know if that number 
is correct.
    Mr. Shimkus. Have you heard that number before?
    Dr. Shuren. We have heard that number before. But putting 
aside whether data support that or not, we agree there are 
concerns with the policy we put out, which is why we are 
working with industry to make adjustments and try to get it 
right. Our intent is not to see----
    Mr. Shimkus. And that is what we are trying to do 
legislatively also in response to what Dr. Woodcock said that 
we should define a problem we want to address and we are trying 
to legislatively address that problem.
    Let me go to the IDE real quick, and you have also--a 
couple concerns. First of all, one is that we do have an issue 
that we think disregards the Administrative Procedures Act in 
that it acts as--the guidance contradicts regulation so concern 
one on that. It also--we do think it also could be not in 
compliance with the Federal Food, Drug and Cosmetic Act and a 
former IDE administrator says, and I quote, ``It does not look 
like the authority is there to disapprove an IDE based upon the 
fact that FDA doesn't anticipate that it would support a 
marketing approval or clearance.'' So the question is, how have 
innovators reacted to your policy change?
    Dr. Shuren. There have been concerns raised of what we 
would not consider truly a policy change. Our IDEs, we will not 
approve if it doesn't provide sound science or if the 
investigational plan is inadequate. Now, what we said in the 
guidance is, if it is a pivotal clinical trial and a pivotal 
clinical trial is intended to demonstrate safety and 
effectiveness----
    Mr. Shimkus. The question is, how have the innovators 
reacted? What have the innovators told you? I can tell you what 
they have told me.
    Dr. Shuren. So their concern is whether or not this will 
actually lead to our not approving more clinical studies than 
before. We think the language may not have articulated clearly 
what we are talking about. That is namely that if you submit a 
study that is producing sound science for its intended purpose, 
what it is intended to do. In case of a pivotal trial----
    Mr. Shimkus. Let me--I only have a minute and 40 left. One 
innovator told me that in 2012, he will only have been in the 
United States for 5 weeks prior to the first 5 months of the 
year because he had to do clinical trials overseas. That is 
what we are hearing from innovators based upon this policy, and 
I think if the policy is questionable that it is against the 
Administrative Procedures Act and legally may be against the 
Federal Food, Drug and Cosmetic Act, I think that would raise 
some concerns as to the policy which is new and implemented 
under the last couple of years.
    Let me go to funding. In the last hearing, you did talk 
about funding and the like. Is it true that even under the 
agreement which doubles the user fees that FDA gets from 
industry, you will still get about 70 percent of your CDRH 
budget from appropriations?
    Dr. Shuren. About 65 to 70 percent of funding will come 
from----
    Mr. Shimkus. So you will have other non-user fee funds that 
are appropriated by Congress?
    Dr. Shuren. That is correct.
    Mr. Shimkus. Shouldn't Congress be able to give direction 
on how these funds are spent?
    Dr. Shuren. Congress has broad authority to weigh in on how 
we should actually use our funds.
    Mr. Shimkus. Thank you. Isn't it true that the FDA 
undertook activities during the life of MDUFA II that were 
significant resource investments and outside the agreement? And 
you probably know what I am talking about, the Institute of 
Medicine report that was unfinished and not totally accurate?
    Dr. Shuren. First of all, the IOM report, we didn't pay out 
of any user fee dollars.
    Mr. Shimkus. Right, and $1.3 million of taxpayer funds went 
to the IOM report.
    Dr. Shuren. Well, there were concerns raised on the 510(k) 
program, how well it was operating to meet the----
    Mr. Shimkus. But there was obviously concern about the 
accuracy of the IOM report also.
    Dr. Shuren. Well, we did disagree with one of their 
recommendations regarding the 510(k) program. We actually 
agreed with most of their other recommendations.
    Mr. Shimkus. Thank you, Dr. Shuren. I appreciate your time.
    Dr. Shuren. But I do want to make the point on clinical 
trials, because it is an important one, and we don't want 
innovators going overseas, but quite frankly, if we are 
approving a clinical trial and we are putting our name on it 
saying that this study is good enough to show safety and 
effectiveness but it doesn't and it is not going to then 
support that product coming to market, then we have put 
patients at risk because they are----
    Mr. Shimkus. But they are going overseas.
    Dr. Shuren. And then the companies come in the door, and 
this is exactly what was happening, with studies that then they 
weren't getting their products approved, and that is the worst 
thing for the company and it is the worst thing for patients. 
So the policies we have put out have actually tried to address 
the real problem, which is reviewers who are coming back to ask 
for a study that quite frankly they believe is the better study 
but that is not the point. It is the least-burdensome 
principle. They need to put out the study that is least 
burdensome and approve it. And the second is that they were 
holding up approvals trying to address questions that were not 
relevant at that time for making a decision and so draft policy 
we put out in the fall was meant to readjust that so that we 
were freeing up and making decisions and approving products. In 
fact, we are now seeing that first cycle approvals for clinical 
trials are going up.
    Mr. Shimkus. And I would just end by saying what I think we 
have done is moved our innovators overseas, and I yield back my 
time.
    Mr. Pitts. The chair thanks the gentleman and now 
recognizes the ranking member emeritus, Mr. Dingell, for 5 
minutes for questions.
    Mr. Dingell. Mr. Chairman, thank you. I commend you for 
this meeting of the committee and for your fine cooperation in 
framing this legislation and working with the minority. I also 
want to express the same commendations to our distinguished 
chairman.
    These questions go to Dr. Woodcock. Please respond yes or 
no. The heparin incident made it clear that there needs to be 
robust communications between drug manufacturers and FDA 
regarding unsafe or compromised drugs. Currently, does the 
Food, Drug and Cosmetic Act require manufacturers to notify FDA 
if they have reason to believe that their products have been 
adulterated, contaminated or misbranded prior to distribution? 
Yes or no.
    Dr. Woodcock. No.
    Mr. Dingell. Are drug manufacturers currently required to 
notify FDA if their drug has been stolen, counterfeited, lost 
or there have been repeated manufacturing quality incidents? 
Yes or no.
    Dr. Woodcock. My understanding is that they do have to 
notify us for quality problems under field alert reports. The 
rest is no.
    Mr. Dingell. OK. Now, would requiring drug manufacturers to 
report such information to FDA confer benefit on the public 
health?
    Dr. Woodcock. Yes.
    Mr. Dingell. As FDA continues to regulate an increasingly 
globalized market, the ability of FDA to work and share 
information with trusted foreign regulatory counterparts is 
critical. Do you believe that, and is that a correct statement?
    Dr. Woodcock. Yes.
    Mr. Dingell. Doctor, is it true that FDA only shares 
commercial confidential information with State, local or 
trusted foreign regulators when FDA has written assurance that 
the agency will not disclose? Yes or no.
    Dr. Woodcock. Yes.
    Mr. Dingell. Doctor, can FDA currently share trade secret 
information with State, local or trusted foreign regulators? 
Yes or no.
    Dr. Woodcock. No.
    Mr. Dingell. Now, would authority to share this information 
with other regulators help monitor FDA's efforts to protect the 
American public with regard to today's globalized drug supply? 
Yes or no.
    Dr. Woodcock. Yes.
    Mr. Dingell. Now, would this authority help FDA to have 
better information to assess risk and target oversight? Yes or 
no.
    Dr. Woodcock. Yes.
    Mr. Dingell. Doctor, if given this authority, FDA would 
commit to only sharing such information with trusted foreign 
regulators when they have proper and satisfactory assurances 
that the foreign agency will not disclose. Is that correct?
    Dr. Woodcock. Absolutely yes.
    Mr. Dingell. Is that necessary for us to do?
    Dr. Woodcock. Yes.
    Mr. Dingell. I happen to think so. Now, Doctor, so then the 
agency would not share proprietary commercial information like 
the formulation of Coca-Cola with China or any foreign country. 
Am I correct on that?
    Dr. Woodcock. Yes.
    Mr. Dingell. And FDA would protect that concern and that 
policy. Is that right?
    Dr. Woodcock. That is correct.
    Mr. Dingell. Now, Doctor, I have a concern. We have the 
ability to regulate to some degree the shipment into this 
country of food, drug, cosmetics and devices. How about the raw 
materials or the components of this? What is FDA's ability to 
regulate? Do you have a statutory ability to regulate or not?
    Dr. Woodcock. We have very limited ability to regulate the 
supply chain of components.
    Mr. Dingell. Now, I must assume that being able to regulate 
that kind of activity and that kind of product would be 
extremely important to assure the safety of American consumers. 
Is that right?
    Dr. Woodcock. Yes.
    Mr. Dingell. We found that out in the heparin case, did we 
not?
    Dr. Woodcock. We did.
    Mr. Dingell. Now, this committee looked at this problem 
over the years of safety and that sort of thing, and one of the 
things that we found is that nobody seems to be able to keep 
out the admission of illegal substances, unsafe, counterfeits 
and things of that kind including some controlled substances, 
and I sense that a part of that, although not all, is the 
inability of Food and Drug to have the money, the personnel and 
the necessary cooperative agreements with other regulatory 
bodies that deal with entry of commodities and people into this 
country. Am I correct in that?
    Dr. Woodcock. Yes.
    Mr. Dingell. Do you need additional authority there?
    Dr. Woodcock. Yes.
    Mr. Dingell. Mr. Chairman, I notice I have used all my 
time. I thank you for your courtesy.
    Mr. Pitts. The chair thanks the gentleman and now 
recognizes the gentleman from Michigan, Mr. Rogers, for 5 
minutes for questions.
    Mr. Rogers. Thank you, Mr. Chairman.
    Dr. Woodcock, I want to thank you and your staff for 
working with us on the permanent reauthorization of BPCA and 
PREA. Thank you very much for doing that. I think it has been 
productive. I introduced that legislation with my friend, Ms. 
Eshoo from California, and Mr. Markey, and I think it is 
representative of good bipartisan work, which is included in 
the committee's draft today, so I am hoping that other members 
will join us in supporting that effort. I think they will, and 
I am proud to say the bill has support of numerous 
stakeholders, as you know, including the American Academy of 
Pediatrics, BIO and PhRMA. So I think we are in a good place. 
We will do good things. And again, I want to thank you and your 
staff for that. While making these laws permanent, the bill 
also includes important reforms to encourage earlier submission 
of pediatric plans, give the FDA new enforcement tools to make 
sure sponsors meet their PREA commitments and improve FDA's 
ability to track pediatric studies. I believe our bill strikes 
that right balance and will improve pediatric drug research, 
and I hope all members on the committee can support it.
    Dr. Woodcock, as you know, there was some language actually 
authored in 2007 that began the process of developing a 
standard numerical identifier, or SNI, to help the tracking and 
tracking of prescription drugs. However, the FDA currently does 
not have the authority to require the use of SNIs throughout 
the supply chain. Is that correct?
    Dr. Woodcock. That is correct.
    Mr. Rogers. So you are familiar with the proposal put 
forward by a broad group of stakeholders in the drug supply 
chain on this particular issue?
    Dr. Woodcock. Yes.
    Mr. Rogers. Great. So if you agree that additional 
statutory authority is needed to protect the drug supply chain, 
and I assume you aren't comfortable waiting another 5 years, at 
least I hope you are not, for the next UFA reauthorization, to 
create a system that protects patient safety, I would encourage 
you to roll up your sleeves and sit down with this coalition, 
and I hope you can do that soon. I think it would be highly 
productive, and I believe there is a solution here that 
provides FDA with more authority than it has today but does so 
in a reasonable, thoughtful way that balances costs and 
enhancements to patient safety and the supply chain, so I am 
hoping that we can get a commitment that you will sit down with 
that coalition and begin that process.
    Dr. Woodcock. I would be happy to do so, and we obviously 
need to make advancements in this area. We are seeing, as we 
saw recently with the counterfeit Avastin and others, we are 
seeing more incursions of actual drugs that are totally fake 
into the U.S. drug supply.
    Mr. Rogers. Which is highly concerning, and concerning for 
you as well. So I look forward to hearing reports on those 
coalition meetings. Hopefully they will happen soon.
    Dr. Shuren, I have some concerns about that new proposal, 
and I know Mr. Shimkus talked about it a little bit on the 
510(k) submissions. It is my understanding that they would have 
to submit these submissions under your new rules for small 
manufacturing issues like changing suppliers. Is that correct?
    Dr. Shuren. In a number of cases, it depends. The supplier 
change may be something that actually doesn't get reported to 
us.
    Mr. Rogers. But apparently there has been some confusion, 
but in some cases it would and in some cases it would not. Is 
that correct?
    Dr. Shuren. Yes, and we can actually get back to you with 
more details.
    Mr. Rogers. So there are details, so if I read that in 
total, as a manufacturer I would understand when exactly I have 
to report or when I do not have to report. Because my 
understanding is, there is confusion in the way it is written, 
and if you are on the manufacturing side of that, you are going 
to have to err on the side of reporting.
    Dr. Shuren. So there are a number of parts in that guidance 
where confusion has arisen. We recognize that. Our intent in 
the guidance was to clarify circumstances for submitting a 
modification because we had guidance out there beforehand and 
manufacturers were then running into circumstances where we 
have never addressed the question. They didn't know what to do. 
Our intent was to actually clarify those circumstances. We 
recognize there still is a lot of confusion, which is why we 
have taken the effort to try to work with industry and we will 
continue to do so to provide clarity that will be most helpful 
to them, but our goal is not to suddenly raise up the bar and 
see many more 510(k)s getting in the door.
    Mr. Rogers. But unfortunately, the reality is, that is what 
is happening and they are going through these processes now 
believing that they have to do it, so having future 
conversations aren't really all that helpful.
    Dr. Shuren. Well, it is a draft guidance, so nothing has 
changed, and that is the whole point of the guidance process. 
We go out there, we get public comments and we can work this 
through. That happens all the time. If you actually look at the 
guidances we put out last year, it is about 44. We heard 
concerns about maybe three of them in any big way, and that 
kind of shows the process ultimately works.
    Mr. Rogers. I hear you, but that is the difference between 
not having to meet a payroll, meeting a payroll, meeting the 
guidelines for the government that regulates you. They will 
start to make adjustments based on those guidelines. It will 
cost them money. They are doing it today, which is exactly why 
we are hearing from innovators, this isn't worth it anymore, it 
is easier for me to head overseas than it is to try to deal 
with what is an untenable regulatory environment. That is what 
concerns me, and this notion that it is all just fine and it is 
only guidance and nobody should worry about it is absolutely 
incongruent with the real world. That worries me greatly, and I 
hope you will take a hard look at this and come back, and if 
that is the case, then start making serious indications to the 
folks who are actually under the gun for this investment to 
save kids' lives or devices or fill in the blank that you will 
make that early. Otherwise they are going to have to make these 
adjustments, and I think that is what you are missing and that 
is where the frustration is coming from. And I see my time is 
done, and I thank you, Mr. Chairman. I look forward to hearing 
about your progress in the coalition's effort to bring 
manufacturing and clinical trials back to the United States.
    Dr. Shuren. We would be happy to do it. We would actually 
be happy to come and talk to you in more detail on what is 
going on with clinical trials. In fact, some of the policies, 
if you really want to get technology to this country and keep 
it here, you focus on the very first clinical studies because 
the innovators have said loud and clear, if there is a good 
opportunity to start clinical studies here, we bring the 
technology here, we keep it here, because we keep going back to 
the same doctors and we put out policy in November to actually 
make it easier to start those early studies and start it 
earlier in device development than ever before. The feedback 
was very positive. In fact, companies have wanted to act under 
a draft policy, and we have allowed them if they wanted to 
because they like that policy so much, and we have heard very 
good feedback from the innovators on that.
    For modifications, it is a draft policy, it is not in 
effect, and we will work with companies and we are happy to 
come back and give you updates on it to finally get it right, 
and as I said, this is one where we anticipate we would go out 
with another draft before even moving to final.
    Mr. Rogers. Thank you, Doctor.
    Mr. Pitts. The chair thanks the gentleman and now 
recognizes the gentlelady from California, Ms. Capps, for 5 
minutes for questions.
    Mrs. Capps. Thank you very much, Mr. Chairman, and to our 
guests, thank you very much for being here today. I appreciate 
your testimony, Dr. Shuren.
    A couple of months ago at our hearing on medical device 
user fees, I had asked you about the Sentinel system for 
postmarket surveillance. The PDUFA V agreement allows for 
postmarket surveillance of prescription drugs through the 
Sentinel system. However, the same progress has not been made 
on the device side and the bill draft before us does not 
address this issue, and that is why I am working on language 
that would start the process of adding devices to the Sentinel 
program. I believe this would be a win-win for patients and the 
industry because patients would gain the security that 
potential device issues would be found early and recalls 
targeted to only those devices at risk. Similarly, industry 
would have the knowledge that data, not newspaper articles, 
would drive safety decisions. So I am going to have a question 
for Dr. Woodcock as well, but I would like you to discuss, 
please, the opportunities for Sentinel in the device base as 
you see them.
    Dr. Shuren. We think greater engagement for devices in 
Sentinel could be of tremendous value for not only patients but 
also for companies as we can identify if there is a problem 
more quickly so we don't get those big newspaper articles, and 
even more robust systems that we might be able to leverage in 
terms of informing for premarket review and ease some of the 
burden there. The barriers right now, the biggest one is, we 
don't have there a unique device identifier as we have on the 
drug side and therefore it is hard to link an actual device 
with a patient's experience with the device, and we have 
developed proposed legislation that--regulation--we can't do 
legislation yet--a regulation that is currently under review by 
the Administration that will help, and it was helpful when 
Congress said that Sentinel should be there, should be for 
drugs, because it gave a push for people to engage. We don't 
have quite the same push on the device side.
    Mrs. Capps. Well, so if we could get some language in this 
bill that would give you that push, if you will, would that be 
a value to you and do you see that it is not a one-to-one 
corollary, I am sure, but there are ways to make it possible 
for a direct connection to be made, at least some kind of 
connection to be made from the device to the patient's 
experience?
    Dr. Shuren. Yes, we do think that could be helpful.
    Mrs. Capps. I appreciate that. Thank you very much.
    Dr. Woodcock, I appreciate your testimony as well. Back in 
February at our hearing where you testified on generic drug 
user fees, you and I had discussed the drug shortage problems 
this country is facing. It is still facing them. It is a very 
important issue that affected then and continues to affect a 
great number of people including many of my constituents, and I 
had shared one story at that hearing. Given the gravity of this 
situation, I am pleased to see that current legislation now 
before us includes measures to try to address this problem, but 
I am concerned that the way the draft is written, it could 
preclude some health care providers from being involved. 
Currently, in three separate sections of the FDA user fee 
discussion draft, the bill lists stakeholders to be consulted 
with in regards to drug shortages. However, it doesn't specify 
what kind of stakeholders and health providers like nurse 
practitioners and physician assistants are notably absent from 
these lists, despite the fact that the work they do have been 
affected by drug shortages, in some ways even more directly 
because they are so much on the front lines. This is evident, 
for example, in a nurse anesthetist's difficulty in finding 
anesthesia drugs or an oncology nurse practitioner who is the 
actual person who dispenses the medication under the doctor's 
direction and they see firsthand the cancer drug shortages, so 
would you share with us your thoughts on the kinds of 
stakeholder engagement with regard to drug shortages?
    Dr. Woodcock. Well, we believe that we need to hear from 
the whole prescribing community, which includes a wide range of 
individuals. Also, the entire pharmacy community is a very 
important resource for us. So the stakeholders are almost 
anyone who uses, dispenses, prescribes or manages drug supply 
in this country and so it is a very broad group of people.
    Mrs. Capps. And I thank you for that. I believe there is an 
easy fix here, which I am sort of saying to our committee 
members to ensure participation and then just including the 
phrase ``all relevant health professionals'' not just doctors 
and hospitals, and that is something you would then agree with?
    Dr. Woodcock. Yes.
    Mrs. Capps. That would be useful language to include?
    Dr. Woodcock. Yes.
    Mrs. Capps. I appreciate that. Thank you, and I yield back 
the balance of my time.
    Mr. Pitts. The chair thanks the gentlelady and now 
recognizes the gentlelady from North Carolina, Ms. Myrick, for 
5 minutes for questions.
    Mrs. Myrick. Thank you, Mr. Chairman, and I thank both of 
you for being here.
    Dr. Woodcock, as you know, the discussion draft at hand 
makes an effort to further address the drug shortage issue, and 
I know the FDA is playing close attention to shortage issues as 
well as working with DOJ on issues of price gouging and 
stockpiling, but it recently came to my attention that there 
appears to be a growing problem with drug shortages for trauma 
and critical-care patients so I have got two questions for you. 
Does the FDA have a sense of how widespread the shortage is for 
drugs often used in trauma and critical-care settings, and how 
do the FDA and DEA need to work together to prevent further 
shortages in controlled substances used in the critical-care 
field? For example, are there changes that need to be made to 
the DEA number assignment system for controlled substances that 
are being substituted in the event of a shortage or are there 
other interagency solutions that could alleviate the shortage 
problem for DEA-controlled drugs, you know, short of an act of 
Congress, something that you could do internally or with the 
other agencies?
    Dr. Woodcock. Well, on the first question, we are well 
aware that both critical-care settings and trauma settings are 
being impacted by drug shortages. The shortages are for sterile 
injectable products, products that are injected directly into, 
say, a vein or your IV line primarily, and these actually are 
used in a wide variety and unfortunately very important medical 
illnesses, very serious and life-threatening illnesses. They 
are used in ICUs and emergency rooms as well as in cancer 
treatment, and we are aware of these shortages. We have heard 
from the professional societies, I have heard personally, and 
we are doing everything we can. This year we have averted 22 
shortages already because we have heard early notification. 
However, shortages do remain and they are causing serious 
consequences for the public.
    As far as the DEA, we work closely with the DEA. They have 
a system of allocating materials to companies based on--we 
provide information to the DEA on projected use for each year 
as part of their process, and we work with them on shortages, 
informing them and so forth, but I believe that further 
discussion of this might require going into more detail, and we 
would be happy to work with you on that.
    Mrs. Myrick. I would appreciate it very much if you could 
get back to us because that is an issue I think that there may 
be some solutions as other people have said with other things.
    I have got a second question too. Your testimony goes into 
some detail about FDA's calculation of risk and benefit when it 
comes to approving treatments for fatal diseases, and you list 
a recently approved metastatic-melanoma drug as an example of 
this risk-benefit approval calculation. It is stated it poses 
severe and even fatal autoimmune reactions in 12.9 percent of 
the patients treated yet the drug was approved. The drug is not 
a cure but, you know, patients successfully treated live much 
longer than with others. My question is, was this drug approved 
in tandem with a screening test to distinguish the patients who 
might respond well from those who might suffer serious 
autoimmune responses?
    Dr. Woodcock. No. I think scientifically we aren't there 
yet to be able to predict that. I am a rheumatologist, and I 
can tell you our understanding of rheumatic diseases and 
autoimmunity is still not as advanced as it should be.
    Mrs. Myrick. Well, would it not be helpful to do some 
screening test to try and figure out in addition to what you 
are doing on this issue?
    Dr. Woodcock. Absolutely, and we support at FDA the concept 
of personalized medicine. It is simply that scientifically we 
don't have the tools to develop such a test, and because the 
patients can develop a wide range of autoimmune symptoms, and 
to predict each one of those and whether people would develop 
autoimmunity against their thyroid or their brain or their 
vessels, we don't have the technology to do that right now. But 
in the future, that is the future of medicine.
    Mrs. Myrick. Thank you, Mr. Chairman.
    Mr. Pitts. The chair thanks the gentlelady and now 
recognizes the gentlelady from Illinois, Ms. Schakowsky, 5 
minutes for questions.
    Ms. Schakowsky. Thank you, Mr. Chairman, and I want to 
thank both of you for your testimony.
    Dr. Shuren, I want to revisit a topic we discussed at the 
February 15th MDUFA reauthorization hearing. There had been 
suggestions that FDA's mission statement should be changed to 
include things like job creation and innovation, and in fact, 
the draft House user fee bill does include those changes to the 
FDA mission statement. And when you testified in February, you 
spoke about the ``unintended consequences'' that could lead to 
``troublesome changes'' at the agency, changes that could 
actually slow down or complicate the review process, not to 
mention change the standard of evidence for product approvals. 
You also said that changing the mission statement could even 
force the FDA to expose confidential industry information, 
something industry was telling you please don't do, and could 
require the FDA to review commercial financial records. So I am 
asking if you could comment on the implications of revising the 
FDA mission statement to include things like promoting 
innovation, economic growth, competitiveness, and I am 
particularly interested in whether you think these should be a 
part of the core mission of a public health agency. I would 
also like to know whether these and other requirements in the 
mission statement might be the basis for lawsuits or other 
challenges against the agency.
    Dr. Shuren. Well, we do have concerns about some of the 
changes that would be made to our mission statement, and the 
highlighted economic growth or job creation is of concern. If 
this now becomes a part of what we take into account in making 
decisions, think about approval decisions. Whose jobs are we 
talking about, the job of the companies coming in with a 
product and they may get some more jobs or the competitors who 
may lose jobs? In fact, when there is disruptive technology, 
many of the competitors, there are shakeups in the market and 
some of the companies, their product lines go and people's jobs 
may go. Are we talking about foreign companies? Are we talking 
about U.S. companies? Are we now taking into account financial 
considerations in terms of those companies' anticipated market 
growth or not? Those are things our scientists shouldn't be 
dealing with. We should focus on science in assuring that the 
products that come on the market are safe and effective, and 
that is protecting public health and we are also promoting 
public health, which is already in our mission statement.
    Regarding lawsuits, just within the past few months we have 
had two lawsuits where the mission was cited as one of the 
bases for that lawsuit, and we do see that coming. So if there 
are changes to the mission statement, yes, people will use that 
as a basis for lawsuits.
    Ms. Schakowsky. Thank you. Those changes concern me very 
much as taking away from the core mission that you have, and I 
would also like to ask Dr. Woodcock, because the dramatic 
changes to the FDA mission statement would apply across all 
product areas including drugs, I wonder if you could also 
comment on those proposed changes.
    Dr. Woodcock. I agree with Dr. Shuren. We neither have the 
expertise to figure out the economic consequences and parse 
them finally nor--our primary public is the people who take 
medicines and the people prescribing give those medicines. To 
them we owe our central obligation of making sure those drugs 
are safe and effective and they reach them as rapidly as 
possible. So I see this could have negative consequences.
    Ms. Schakowsky. And you are suggesting that those negative 
consequences could be patients, industry, the agency. What are 
your main concerns? I mean, would you view this as a 
distraction from what you are currently doing?
    Dr. Woodcock. Yes, and it would be primarily that we would 
have challenges of our approval decisions based on factors that 
most people would consider extraneous to whether the product 
will really help people. That has to be our main consideration, 
is it effective in the population, is it safe, and if we are 
asked--that is what I believe we should be focused on: impact 
on patients.
    Ms. Schakowsky. Well, I agree. I think this would be a 
dramatic shift in focus and one that really the agency has no 
historical expertise nor in my view should it. So I thank you 
and yield back.
    Mr. Pitts. The chair thanks the gentlelady and recognizes 
the gentleman from Pennsylvania, Dr. Murphy, for 5 minutes for 
questions.
    Mr. Murphy. Thank you very much.
    Dr. Woodcock, welcome back. I always appreciate your candor 
and information to us. I also want to thank my colleague, Mr. 
Dingell, for working with us on some of the issues involving 
GDUFA. And finally, in your testimony, I want to thank you for 
working on the accelerated approval of Kalydeco for cystic 
fibrosis. Many of the patients I know in my area are grateful 
for that. I know it is a small step but it is a significant 
step, and I think it is an example of why we need to be moving 
on some things with accelerated action here.
    At a recent Senate hearing, you stated--you were talking 
about the challenges in international factory inspections. Here 
is your answer. You said there are two issues here. One is the 
FDA's ability to inspect to inspect those foreign facilities 
and the generic drug user fee program squarely addresses that, 
and I will level the playing field and make sure that the 
intensity of inspection, domestic, foreign, no matter where, 
will be the same and will be able to use a risk-based approach 
to inspection. Now, under the GDUFA goals letter, the FDA says 
it wants to achieve biannual inspection of foreign plants 
within 5 years, so here is my two-part question. First, is your 
answer from the Senate hearing still true, and two, can the FDA 
achieve parity between foreign and domestic facility 
inspections within the 5-year $1.5 billion time zone outlined 
in GDUFA?
    Dr. Woodcock. Yes, we believe that the answer is true. I 
was at a meeting yesterday where we were discussing this with 
our field organization and the Center for Drugs how we would 
implement this inspectional program, and we would really look 
forward to having that global safety net in place.
    Mr. Murphy. Thank you. Now, I should disclose an important 
generic drug manufacturer, Mylan, is headquartered in my 
district, and we want to make sure that any inspections they 
have to go through are equivalent to what takes place overseas. 
Now, my understanding is that based on the current statute, the 
FDA inspects domestic plants more frequently because they are 
looking for so-called ``known risks'' even if the plant has no 
history of problems but inspectors don't have the same body of 
knowledge about foreign factories because they haven't been 
there, and sometimes not in the last decade. So Dr. Woodcock, 
will you agree that inspectors have a certain comfort level 
visiting domestic factories because there is a record of 
inspection history that helps to identify known risks to these 
factories?
    Dr. Woodcock. My understanding is that we have a statutory 
requirement to inspect domestic facilities every 2 years, and 
that is partly what drives the frequency of inspection. It is 
also that there is considerable logistical challenges to 
covering the globe. But the Center for Drugs has a risk-based 
approach to inspecting facilities. We try to identify the 
facilities that pose the most risk including the fact that we 
don't very much about them and try to target out inspections 
based on those risks. In addition, we do preapproval 
inspections, so that drives quite a few inspections because 
before a drug is released on the market, we want to know that 
the facility that is producing it and often it is multiple 
facilities are in compliance.
    Mr. Murphy. Thank you. I am just concerned here that if you 
go to a domestic factory, you see a problem, you can follow up 
or even a suspicion something might have happened but if we 
have long time delays--and I understand the global problems 
there but it is a concern that there is not the same follow-up. 
If Congress directs the FDA away from a statutory requirement 
to inspect facilities once every 2 years and instead allows the 
agency to adopt a risk-based approach, what factors might the 
agency consider using to determine what is a facility in need 
of inspection versus one that may not be?
    Dr. Woodcock. Well, we currently have a model. Obviously 
one of them is how recently have we been to the facility and 
how much do we know about it, and really, the less we know, the 
more important it is to know more and to visit the facility but 
also, for example, parenteral drugs that have to be sterile are 
a higher bar of manufacturing than tablets or capsules or 
creams, so that is a factor. The number of products that are 
produced in a facility ups the ante of risk, so to speak, 
because it is harder. There are more changes for mix-ups and so 
on if you have a lot of products made on the line. We have 
multiple factors like that that are technical on the challenges 
of manufacturing that go into the calculation as well as the 
history of the firm--have they been having problems, has that 
facility had problems in the past. That should prompt more 
frequent visits.
    Mr. Murphy. Well, thank you. I know that I am just about 
out of time but I wanted to also note that I am exploring 
putting guidance into the FDA for placing higher priority on 
inspecting foreign plants that have not been visited within the 
last 4 years. I could see this is beneficial for public safety 
because I think it would establish something of a psychology 
for plants that haven't been visited in the past 4 years that 
the FDA might be visiting soon, and I welcome your thoughts on 
that too, and also, in the goals letter for GDUFA, the FDA 
estimates that are 2,000 finished dosage form and active 
pharmaceutical ingredients manufacturing facilities that are 
associated with generic drug applications. I hope you can get 
to me in the future and let us know if this estimated all 
included the FDF and API facilities and does the FDA believe 
that there are other registered facilities under its 
jurisdiction that solely support branded applications. I will 
get you those questions in writing and I appreciate some 
feedback. Again, Doctor, thank you for your candor. I really 
respect your comments. I yield back.
    Dr. Woodcock. Thank you.
    Mr. Pitts. The chair thanks the gentleman and recognizes 
the gentleman from Utah, Mr. Matheson, 5 minutes for questions.
    Mr. Matheson. Thank you, Mr. Chairman. And Mr. Chairman, I 
want to acknowledge how you have been working in a bipartisan 
manner on the reauthorization of this. I really appreciate 
that.
    Over the past several years, I have worked with drug supply 
chain stakeholders in crafting legislation to develop a 
national system to better protect our Nation's drug supply 
against counterfeiting threats. Last year, I introduced 
legislation along with my colleague, Mr. Bilbray, to address 
this issue, and I certainly want to thank him for all the work 
he has done with me on that bill. Recently, a consortium of 
stakeholders from all sectors of the supply chain have come 
together to craft a proposal to address counterfeiting and 
supply chain safety. I am pleased to see that many of the 
elements of the legislation that I have worked on were included 
in this RxTEC proposal. I am supportive of this proposal, and I 
hope to see its inclusion in this year's user fee 
reauthorization, and I would like to note that the last time 
this committee attempted to work on a national track-and-trace 
system, we failed because there was no consensus among the 
supply chain stakeholders. The FDA has raised concerns over 
this proposal because it does not mandate a unit-level system 
by a date certain.
    Dr. Woodcock, in your written testimony, you note that 
Congress should provide FDA with the authority to require a 
``cost-effective track-and-trace system in order to improve the 
security and integrity of the drug supply and show transparency 
and accountability in product manufacturing and distribution.'' 
However, many in the supply chain have raised concerns that a 
date-certain mandate approach would be cost-prohibitive and 
create a logistical challenge that could actually endanger the 
drug supply chain. So the question that I have for you, Dr. 
Woodcock, first, how do we ensure that a date-certain approach 
is in fact cost-effective and does not have unintended 
consequences such as job loss or further exacerbating the 
growing drug shortage problem in this country?
    Dr. Woodcock. Well, to start with, I would like to say 
again that we need to look at the problem we are trying to 
solve and make sure that any interventions we take will solve 
the problems that we are trying to address. My understanding 
with track and trace is, we are trying to deal with 
counterfeits, stolen drugs that are reintroduced, recalls, 
substandard drugs and so forth and prevent them from actually 
reaching patients and harming people. Our concern about the 
current proposal by the coalition, we have talked to them. As I 
said, I am happy to meet with them but that it will not meet 
the objectives of preventing those problems. It may help--in my 
analysis, it may help in reconstructing what went wrong after 
the fact, but if you want to interdict counterfeits and 
tampered drugs and so forth from reaching patients, then you 
have to be able to recognize it at the time it is introduced 
into the system, and so any system, any new requirements that 
don't accomplish that may not be worth the cost because they 
may be additional things that people have to do, but if they 
don't accomplish the objectives of protecting patients, they 
may not be worth it.
    Mr. Matheson. I am all for looking for the objective but 
you just mentioned cost, it may not be worth the cost, so I am 
suggesting that the concerns raised that if you want a date-
certain mandate that that is going to have negative cost 
consequences, and so my question is, how do we evaluate, how do 
you intend to look at if there is going to be--the cost effect 
is not going to be a problem here?
    Dr. Woodcock. Well, we have been looking at this. We plan 
to develop and are developing voluntary standards that we would 
put out that people could use and hoping that the technology 
which many products in the market are tracked this way already, 
not pharmaceuticals, so hoping that the technology will reach a 
state where it will be cost-effective and not excessively 
burdensome.
    Mr. Matheson. I have to admit, hoping technology gets there 
and seeing date certain, those things in my mind are in 
conflict. I don't actually think that matches well.
    Noting some of the challenges that the California law is 
facing, I am trying to understand why this date-certain 
approach would work at a federal level when it has caused 
difficulties at the State level in California, and should we 
not look at the types of systems that are feasible across the 
supply chain system before we decide what and when to mandate?
    Dr. Woodcock. Well, I do believe that we should look at 
feasibility, absolutely. However, many of the stakeholders have 
told us they are worried about having 50 different systems.
    Mr. Matheson. That is why I introduced my bill. I hear you. 
We need a national standard. I am just trying to figure out how 
we are going to manage it.
    Dr. Woodcock. But that means we have to settle on the 
technology if we do that, and what is going to be tracked and 
how it is going to be tracked, and that has been difficult 
because right now the costs have been fairly significant to 
some of the stakeholders because they don't do this now. They 
don't electronically track the products as they move through 
the supply chain and all the way to the patient. So I agree, 
there are tradeoffs here, and it will cost money to put such a 
system into place.
    Mr. Matheson. I will just close by saying I think the RxTEC 
proposal represents a consensus of a lot of the stakeholders. 
It does agree on a one-size-fits-all for the country and not 50 
different State approaches. And I think we ought to continue 
this discussion about looking for if there is a way to 
accommodate this proposal without mandating a date-certain 
approach.
    With that, Mr. Chairman, I will yield back.
    Mr. Pitts. The chair thanks the gentleman and recognizes 
the gentleman from Ohio, Mr. Latta, for 5 minutes for 
questions.
    Mr. Latta. Thank you, Mr. Chairman, and welcome back to the 
committee. Great to see you again.
    Kind of going in a little bit different direction here. Dr. 
Woodcock, I know of a number of hospital systems that are 
coping with the hospital drug shortage by repackaging those 
drugs into smaller dosages, and these hospitals have also noted 
that the current law does not allow for the hospital to 
repackage a drug for use in another hospital within their own 
system, and we have quite a few systems, of course, not only in 
Ohio but across the country, and this appears to be an older 
regulation dating back to when hospitals were typically only in 
one building before they became the hospital systems. Has the 
FDA looked at updating this requirement to allow for 
repackaging within the same hospital system?
    Dr. Woodcock. I would have to get back to you on that. I do 
not think that we would object to such practices if they would 
help alleviate shortages but whether there is a law on the 
books that is being interpreted as prohibiting that, I am not 
aware of that.
    Mr. Latta. And again, I am glad to hear that because again, 
it seems a logical way to help solve it, because again, if one 
hospital has it, they could get it out to one or others in the 
same locale. That would be helpful because, again, it would 
help alleviate those shortages.
    Dr. Woodcock. If I may interject?
    Mr. Latta. Absolutely.
    Dr. Woodcock. We allow pharmacy compounding. Usually the 
hospital pharmacy would be handling these products and they 
would be the ones to put it into smaller vials or whatever. So 
that is why I am confused about why they feel that that isn't 
allowed, and we will get back to you on that.
    Mr. Latta. I appreciate that. And over time, it would help 
alleviate the problem, because again, we are talking about 
these shortages, I know you have been here before. We have 
quite a bit of discussion about that as to how to alleviate it, 
and when you have the situation that at least in the chain that 
one of the hospitals has the ability to supply the other ones, 
it would be very helpful, and so I look forward to your 
response on that. I would like to get back to these hospitals 
to be able to say that they can get this done and help 
alleviate that problem.
    And with that, Mr. Chairman, I yield back.
    Mr. Pitts. The chair thanks the gentleman and recognizes 
the gentleman from Louisiana, Dr. Cassidy, for 5 minutes for 
questions.
    Dr. Cassidy. I always enjoy both your testimonies. Thank 
you. And as a practicing physician, I respect what you said 
earlier, Dr. Shuren, that the FDA's obligation is to protect 
patients' health. I thank you for that too.
    I would like to build upon, Dr. Woodcock, our conversation 
last time which was very good. The last time, I think we agreed 
that a valid prescription would be important to have, not just 
for controlled substances as currently but also for non-
controlled drugs. So I just wanted to state that for the 
record.
    Dr. Woodcock. I agree.
    Dr. Cassidy. Secondly, we also spoke a lot about 
illegitimate online pharmacies. Now, you had mentioned the 
VIPPS program, which I had mentioned as a practicing physician 
married to a physician we did not know about, but since then we 
have kind of looked at it. I gather that this, although a good 
effort, only has about 30 pharmacies listed even though it is 
estimated there are about 1,500 legitimate pharmacies and just 
an explosion of illegitimate pharmacies. And secondly, that we 
still have, despite our conversation last time, there continues 
to be reports of adulterated drugs causing harmful effects to 
patients here in the United States. So with that said, 
Representative Ross and I in a companion bill to something that 
Senators Feinstein and Cornyn and others have introduced on the 
other side have an online pharmacy bill requesting that FDA 
compile a registry of legitimate online pharmacies so that I as 
a doc or I as a patient or I as a dad of a patient could log on 
and see, is this a legitimate online pharmacy. I gather FDA has 
some objections to that. Could you kind of go through those 
objections?
    Dr. Woodcock. Certainly. Basically there are practical 
difficulties in us doing that. As you said, there is a huge 
plethora of pharmacies that are probably not legitimate that 
consumers do order their drugs from and often they have no 
assurance that those are actual drugs.
    Dr. Cassidy. That is why we have the bill.
    Dr. Woodcock. Yes, so we are in agreement on the problem. 
We have trouble certifying Internet sites that would be 
legitimate. We have difficulties----
    Dr. Cassidy. But see, the National Association of Boards of 
Pharmacy, the NABP, currently does that.
    Dr. Woodcock. Yes.
    Dr. Cassidy. So why can they do it and the government 
cannot, or why could you just not contract with them to ask 
them to do it?
    Dr. Woodcock. I think it is worth discussion on how to 
establish a broader list of legitimate pharmacies. It is 
another work stream that we don't actually understand how we 
could accomplish very well.
    Dr. Cassidy. Now, in our bill, we allow you to contract 
that. I mean, I can tell you, Google can tell you who is 
legitimate and who is illegitimate, you know, Google, the big 
Internet----
    Dr. Woodcock. I know Google but we are talking about a 
pharmacy here and so----
    Dr. Cassidy. But they advertise via Google, and so I 
suspect that--I mean, it is not an impossibility to do it. You 
may not have expertise nor I but I promise you, NAPB has that 
expertise, and our bill allows you to contract out to them. Why 
not?
    Dr. Woodcock. Well, we are not sure that a certification by 
the federal government could--it would have to be very frequent 
inspection of the distribution center because you have a web 
page but there is not necessarily a brick-and-mortar entity 
behind that.
    Dr. Cassidy. Now, in there we do require to have some sort 
of U.S. asset, and we have spoken with NABP. Obviously, we 
weren't concerned if someone could come in as legitimate and 
flip to being rogue.
    Dr. Woodcock. Exactly. That is one of our concerns.
    Dr. Cassidy. NABP says that has never occurred in their 
experience.
    Dr. Woodcock. Of course, they only have 15 in there.
    Dr. Cassidy. Thirty. That said, at some point we have to 
move beyond existential fear, oh, my gosh, we don't know all 
the unknowns, and say if we are going to protect patient safety 
and we know this is an incredible problem, let us embrace the 
fear, if you will. Again, why do we allow existential fear to 
paralyze our efforts to protect our patients?
    Dr. Woodcock. I don't think it is existential fear. I 
believe that we are having difficulty conceiving of how we 
would add this program to our existing programs. So we would be 
very happy to work with you on this and talk to you about it.
    Dr. Cassidy. I would love it if you would support the bill 
because we will contract this out and there is someone out 
there that can do it, which I think is a logical thing. Someone 
out there knows how to do it even if the federal government 
doesn't. When I go through TSA, they know everything about me. 
To think that we can't figure who is legitimate and 
illegitimate just seems not quite to make sense to me.
    I have 2 seconds left but you have been giving everybody 
slack. Can I quickly ask one more question?
    Dr. Shuren, the unique identifier that has been suggested 
for medical devices, it is my understanding it has been held up 
at OMB for 5 years. That is what I was told. Maybe it not 5 
years, maybe it is a shorter period of time. But even at the 
glacial pace at which government works, that seems a way to 
take a proposal and never get it out. Any thoughts about why 
OMB is holding up a unique ID system which really could help us 
improve safety of medical devices?
    Dr. Shuren. It is probably a question best put to the 
Administration. I will say the rule has been under review since 
July of 2011, so not 5 years.
    Dr. Cassidy. Oh, good. I am comforted by that.
    Dr. Shuren. Well, sometimes when people hear that things 
take longer, sometimes it is not always correct.
    Dr. Cassidy. OK. So any idea? Is there ongoing discussion 
or is it just a wall of silence? Do you have any sense of is 
progress being made on this?
    Dr. Shuren. We continue to engage with OMB. We certainly 
believe it is important to have a unique device identification 
system in place in the United States. It will be critical to 
have a robust postmarket surveillance system. It will help in 
terms of recalls and adverse-event reporting but can also allow 
us to have a system in which we may get sufficiently good data 
that can be used to support new products coming to market. So 
it is not just about better understanding of benefit-risk 
profile once out the gate. It may actually be able to help 
companies in reducing the new evidence they need to generate to 
bring a new device to the United States.
    Dr. Cassidy. I yield back. Thank you.
    Mr. Pitts. The chair thanks the gentleman and recognizes 
the gentleman from Kentucky, Mr. Guthrie, for 5 minutes for 
questions.
    Mr. Guthrie. Thank you, Mr. Chairman, and first, Dr. 
Shuren, I just have a comment. I know we have met in my office 
over medical device approval processes. I thought that was a 
very good, productive meeting, and you have talked today about 
the first-time approvals or the innovators and the least 
burdensome and getting it right, being safe and effective, but 
also efficient. I think that is important. I appreciate that, 
because it has been a big concern of mine that we are having 
people go overseas to get their products approved but not going 
to the least common denominator, going to the European Union 
and other areas and trying to get approved. And so we are 
interested as oversight monitor how that goes forward and 
appreciate your openness in meeting on that.
    Dr. Woodcock, there is a question I have. I talked to 
anesthesiologists and anesthetists and of course in the 
childcare cancer drugs of the shortages. When there is a 
shortage in a drug, I guess you can go to an alternative source 
if a manufacturer can't produce the drug. How does that process 
work? How do you actually make that happen?
    Dr. Woodcock. We hope usually we would get early 
notification from a manufacturer that they may be having to go 
out of production or reduce production and not meet the supply. 
We will then look around to all other manufacturers who have 
ever made that drug and see if they can ramp up so that we 
would avert the shortage. If that doesn't happen, then we might 
look outside the United States to people making a comparable 
drug elsewhere and we would check with other regulatory 
authorities to make sure their production was proper and the 
history of the drug so make sure we are not introducing a 
substandard drug into the United States, and then we would 
allow importation of that drug to cover if a shortage actually 
developed and we would talk to that manufacturer.
    Mr. Guthrie. Is there a formal process for that?
    Dr. Woodcock. A formal process?
    Mr. Guthrie. A formal process. Does somebody have to notify 
you when they know they are not going to make shipments and 
things like that or it is something that you have to react to?
    Dr. Woodcock. Well, there is some requirement to notify us 
but of course there is interest in more formalizing that 
notification process, and we think that would be helpful.
    Mr. Guthrie. And I have had people talking about having to 
delay surgeries for anesthesia and childhood cancers. Those are 
the two I mentioned. I know there are others. But since you 
have a handful that seem to be the bigger issue, do you have 
like a list of the people that can come online when you need to 
get them online?
    Dr. Woodcock. We have done extraordinary efforts to try and 
deal with this situation. The problem is that these are sterile 
injectables. There were only a few facilities in the United 
States that made these. They made large numbers of products so 
hundreds of products, and they had problems that they had to 
take their production offline and it almost sort of happened--
it was like a perfect storm of problems. So we are having to 
look elsewhere and we are working with them as closely as 
possible to try to bring them back up into production of these 
medically necessary drugs.
    Mr. Guthrie. Do you think it would be helpful to have some 
kind of program that maybe manufacturers could voluntarily 
participate in? I know there are some areas you are just going 
to get blindsided because something happened in manufacturing. 
I know sometimes things happen in a manufacturing facility. But 
do you think if there would be a more formal program that maybe 
companies could volunteer to participate in, manufacturers 
could that could react quicker or do you think----
    Dr. Woodcock. We have heard from the private sector, and 
they are putting together some efforts on exchanging 
information and providing better information to us, and we 
think that things like that would help also. I would stress 
that we already have the flexibility. We will allow the 
manufacturers to continue in production even if they are having 
manufacturing problems. Maybe they will release batch by batch. 
We have even had manufacturers sent a filter with the product 
that had particulates in it which can't go into your veins, but 
we let them put a filter in after tests showed that would work 
and shipped that with the product so that that product so 
people could have anesthesia or they could have their cancer 
drugs. So we have a lot of flexibility. We do a lot of things 
now but it would probably help us to get more information 
earlier.
    Mr. Guthrie. OK. Thanks. I appreciate that very much, and I 
yield back.
    Mr. Pitts. The chair thanks the gentleman and recognizes 
the gentlelady from Tennessee, Ms. Blackburn, for 5 minutes for 
questions.
    Mrs. Blackburn. Thank you, Mr. Chairman.
    Dr. Shuren, I had a couple of questions for you. I really 
wanted to follow up on a letter that some of my colleagues and 
I sent to you earlier regarding the wireless medical devices 
and the mobile medical applications. You have talked a little 
bit about bringing technology and keeping technology-based jobs 
here in the country, talking to innovators. So I wish that you 
would take a couple of minutes and just detail what primary 
activities related to wireless health services and health 
devices are underway at the FDA including the independent and 
jointly with the FCC and the ONC, if you will, if you will just 
talk about what is underway there. And then I would also like 
to know who is tasked, if you have got one person that is 
tasked with overseeing the policy development in this area 
looking at regulations, guidance, documents, etc.
    Dr. Shuren. Certainly. For wireless technologies 
specifically, we are working on guidance to provide greater 
clarity to industry. We know this is a booming market and we 
want to make sure that innovators have the information they 
need to help bring those products to market. We have been 
working with the FCC. We sort of have split responsibility 
because they oversee what spectrum may be available and then we 
assure that when we are dealing with medical devices that they 
are safe and effective and so we have been getting together 
periodically to assure this good coordination where there are 
those areas in which we engage and to also make sure that we 
stay out of each other's way.
    Mrs. Blackburn. And do you have one specific point person 
that is handling that?
    Dr. Shuren. The person on our end who handles that 
engagement is Bakul Patel, and he is in my office.
    Mrs. Blackburn. OK. And then is he handling the intra-
agency coordination as well as the interagency?
    Dr. Shuren. Yes, that is correct, so one person.
    Mrs. Blackburn. So he is the guy in charge basically on 
that?
    Dr. Shuren. So to speak, yes.
    Mrs. Blackburn. And then could we get a listing or a memo 
that would give us more or less the primary activities related 
to these wireless devices that are underway? Could you give us 
a little bit more information or guidance on that? And you can 
submit that in writing.
    Dr. Shuren. We would be happy to do so. We can also provide 
more information regarding medical apps, an area where I think 
you know we took a position that while many of these apps could 
be under FDA authority, we actually made the decision that you 
know what, for the majority of these, they shouldn't come to us 
even if they should as a matter of law and we are willing now 
to----
    Mrs. Blackburn. So are you traveling then with your 
guidance to which--and this is one of my other questions for 
you. Realizing that there is a difference between medical 
devices and medical software, are you moving that direction to 
being able to provide that guidance?
    Dr. Shuren. So there is also guidance on clinical decision 
support software. Some software has been regulated as medical 
devices for years. What we are doing is going back for those 
kind of software to say some of these things, you know what, we 
shouldn't even look at even though they might fall under our 
purview and a lot of things that otherwise we would, we are 
going to come out with a policy that says we are leaving you 
alone.
    Mrs. Blackburn. So you are adjusting what would and would 
not fall under the Drug and Cosmetics Act of 1970?
    Dr. Shuren. We are going even further to say even if you 
fall under it, we may go out and say we will exercise 
enforcement discretion, don't worry about it, you don't have to 
come to us. We are going to narrow actually our purview even 
further than what the law may otherwise say. We are trying to 
adapt to the emerging technologies and adapt our approach to 
the business models for software, because we realize that even 
in those cases where it comes to us, you can't apply a 
traditional approach. There needs to be the ability to make 
frequent updates and for us not to get in the way of that 
technology.
    Mrs. Blackburn. OK. Should we as legislators go in here and 
update the definitions of devices and software based on those 
advances in technology that you just touched on?
    Dr. Shuren. We don't think there is a need for it, and, you 
know, one of the challenges is, when you make the change in 
statute, it winds up having broad ramifications. It is very 
hard to put in something that applies the appropriate touch, if 
you will, and that is why we are able to do through a public 
process with policy changes where we can----
    Mrs. Blackburn. OK. Let me ask you this then. You just 
talked about some of the software updates. I get notices for 
updates for different software packages all the time. I mean, 
it seems like almost a daily occurrence. So would each update 
that goes out, if it is under your jurisdiction, would each 
update need a separate approval process, or how do you envision 
that working?
    Dr. Shuren. No, and in fact, we are kind of looking to have 
an approach where you can make those kind of routine changes in 
software and not have to bother coming to us. It would only be 
certain things where you really change the technology itself 
and what it was about where that is an issue, and even there, 
the universe where we are going to be focusing is very, very 
narrow, even though more things might fall under our purview, 
so we are truly restricting where we would focus, and at the 
end of the day there is the value added, but you will see that 
the majority of the stuff out there, our intent is to just 
leave it alone.
    Mrs. Blackburn. OK. Thank you. I yield back.
    Mr. Pitts. The chair thanks the gentlelady and recognizes 
the gentleman from Georgia, Dr. Gingrey, for 5 minutes for 
questions.
    Dr. Gingrey. Mr. Chairman, thank you very much.
    I will address my first question to Dr. Woodcock. First of 
all, let me apologize for coming in at the last minute. We had 
a concurrent hearing that I chaired, so I apologize for that.
    In reference to antibiotic shortages in general and 
specifically the GAIN Act in particular, I know that my 
colleague on the other side of the aisle, the ranking member, 
Mr. Waxman, had talked about that a little earlier this morning 
in regard to this limited population antibiotic drug proposal. 
Staff at FDA told my staff just this Monday that the FDA has 
not officially endorsed the LPAD, if you can call it that, that 
proposal. Has the FDA officially endorsed the Limited 
Population Antibiotic Drug proposal as part of the GAIN Act or 
in any way?
    Dr. Woodcock. Well, the Commissioner, Dr. Hamburg, and I 
have talked about this, a program like this to many different 
stakeholders so we certainly feel that is something that should 
be considered by Congress. But if course, there is nothing 
specific in the GAIN Act right now that reflects this proposal. 
So we do feel that it would be beneficial. The GAIN Act 
provides long-term incentives for companies to move back into 
the antibiotic space. A shortened development program, a very 
narrow development program would provide that short-term 
incentive. In fact, I have already heard from a company that 
has written me a letter asking if they could be designated as 
one of these products because they would be interested in 
entering that space if they had a very clear development path 
to market.
    Dr. Gingrey. Well, I understand, and you said that you and 
Dr. Hamburg have discussed it and certainly I am not saying 
that the proposal does not have merit. I am just suggesting 
that at this late date, industry has some concerns in regard to 
making this part of the GAIN Act and subsequently of course 
part of PDUFA. I wanted to very specifically ask, and I will do 
that one more time. The FDA has not officially endorsed this. 
Is that correct?
    Dr. Woodcock. Well, the Administration has not put forth a 
proposal.
    Dr. Gingrey. Thank you very much, Dr. Woodcock.
    Dr. Shuren, there is a line in the FDA industry agreement 
that reads ``The FDA proposes to work with industry to develop 
a transitional IVD, in vitro diagnostics, approach for the 
regulation of emerging diagnostics.'' Dr. Shuren, explain to me 
what this means exactly.
    Dr. Shuren. Well, actually this is something that industry 
put on the table, and they put it after 13 months of 
negotiation back and forth. It actually came up in our second 
to last meeting, so it was at the very end. And even though we 
have committed in MDUFA III to talk about it, we have actually 
already been meeting with industry on it. What we have seen is 
to date a very broad brush proposal that needs a lot of work 
but we will work with industry and MDUFA III in putting it 
forward, and the broad brush strokes are for certain IVDs yet 
to kind of be determined. Would they come on the market under a 
lower standard than currently is in place for products to get 
on the market in the United States with the requirement that 
they provide the additional data to show that they are 
ultimately safe and effective at a later date in time, and if 
not, to then come off the market. Those are the broad 
brushstrokes. One of the issues we will also have to wrestle 
with are the implications for the FDA because even if we went 
down that path, it involves two reviews and two decisions on 
the part of the FDA for every single one of those devices going 
through as opposed to the one review and the one decision, and 
those kind of resource applications we didn't address in----
    Dr. Gingrey. Let me ask you this, Dr. Shuren. I am about to 
run out of time. I have one other question I wanted to ask. 
Does the FDA see the benefit and support transitional pathway 
approaches? Do you believe that such a pathway can benefit 
patients and industry?
    Dr. Shuren. Right now we need to work with industry on 
exactly what this is and what the ramifications would be.
    Dr. Gingrey. Will you keep the committee updated on the 
talks with industry in these coming months?
    Dr. Shuren. Yes.
    Dr. Gingrey. I very much appreciate that. And real quickly, 
Mr. Chairman, get it in under the line, and this is also Dr. 
Shuren. A review of the Office of Device Evaluation's annual 
report shows a decline in the percentage of IDEs approved on 
the first IDE review cycle. They dropped actually from 76 
percent approval in fiscal year 2000 down to 56 percent 9 years 
later, 2009. What is the explanation for the huge drop in IDEs 
approved on the first review cycle between 2009 and 2010? And 
real quickly, is it true that with each new review cycle, a 
company must pay an additional user fee for one product and 
these multiple review cycles are a strain on the FDA's valuable 
time and resources?
    Mr. Chairman, thank you for your indulgence, if maybe Dr. 
Shuren could quickly respond to that.
    Dr. Shuren. Certainly. There are no user fees tied to the 
review of IDEs, so we don't get any additional funding from 
industry for that. What has happened over time, and this is 
what we are addressing, is that we have got cases where we were 
not consistently applying the least-burdensome principle. So a 
decision was held up because a reviewer might be coming back to 
say we think you should be doing a better study when in fact 
the study was really good enough for its intended purpose 
moving forward. And the second is where approvals were being 
held up to get answers to questions that either did not need to 
be answered at that time, it may be something for later on, or 
there were questions that it would be nice to know but we don't 
need to know it, and that is why we put out draft policy in 
November of 2011 to sort of free that up to lay out very 
clearly here are all the different circumstances where we 
should approve that trial and these are other issues that can 
be put off to later, in fact, allowing for some cases where we 
never would have let the trial go through even in the past 
where we might actually do a staged approval, let some patients 
come in, make sure there is good data for safety and let it 
move forward. That is the kind of flexibility we are trying 
to----
    Dr. Gingrey. Well, I am real encouraged to hear that 
response, Dr. Shuren. Thank you.
    Mr. Chairman, thank you for your indulgence.
    Dr. Shuren. And if I can just add that the IDE first cycles 
have dropped. This year in 2012, they have actually been going 
upwards for the first time.
    Mr. Pitts. The chair thanks the gentleman. That concludes 
the subcommittee questioning. We have a couple of members on 
the full committee who would like to ask questions. Without 
objection, we will go to them at this time.
    Mr. Markey from Massachusetts, you are recognized for 5 
minutes for questions.
    Mr. Markey. Thank you, Mr. Chairman and Ranking Member 
Pallone, for allowing me to participate in today's legislative 
hearing. I also thank you for including the bipartisan 
Pediatric Research Equity Act and the Best Pharmaceuticals for 
Children Act that I was proud to work on with Mr. Rogers and 
Ms. Eshoo, and I look forward to continuing to work on these 
important bills.
    Dr. Shuren, I am concerned that the current discussion 
draft misses an important opportunity to improve the safety of 
medical devices. If a car is recalled because it had faulty 
brakes, no consumer would want to purchase a new car with the 
same brake problem. Yet when it comes to medical devices that 
are implanted in patients' bodies, companies can and do base 
their products on faulty predecessor technologies. The 
definition of insanity is doing the same thing over and over 
again and expecting a different result, but when it comes to 
medical devices, we have an insane policy that makes no sense. 
Devices have been recalled because they severely injured 
patients and they are used again and again as models for new 
devices with devastating, life-altering consequences for the 
patients who are injured by them.
    In fact, just last month, I issued a report that documented 
this problem in detail and shared the stories of patients whose 
lives were destroyed as a result of this federal loophole. 
Under current law, the vast majority of medical devices are not 
required to undergo clinical testing in humans before being 
sold. Instead, companies need only prove that their new device 
is substantially equivalent in technology in use to a device 
that FDA has previously cleared, known as the predicate 
technology. As we heard, Dr. Shuren, from your exchange with 
Dr. Burgess, if the device proves to be substantially 
equivalent to a device that is now known to be defective, the 
FDA has no choice. The FDA is legally obligated to clear that 
product for market. The law does not clearly provide the FDA 
the authority it needs to protect patient safety so that new 
victims are not created from a technology that we already known 
is defective.
    Dr. Shuren, if a new device proves substantial equivalence 
to a predicate technology that has been voluntarily recalled 
for a serious design flaw that could seriously injure people 
who used it, would FDA have the legal authority to reject that 
application?
    Dr. Shuren. We would have to find that it is substantially 
equivalent but we will then look for other opportunities to 
clarify this, use other mitigations to address it and protect 
the public. The challenge becomes more about having the ability 
to just get information.
    Mr. Markey. But if you found that it was substantially 
equivalent, would you be able to reject it?
    Dr. Shuren. Not for purposes of substantial equivalence 
determinations.
    Mr. Markey. You could not reject it even though you knew it 
was defective. Is that correct?
    Dr. Shuren. That is correct.
    Mr. Markey. Well, what if the FDA had knowledge that the 
new device repeated the same flaw as the predicate technology? 
Would the FDA still be required to find it substantially 
equivalent?
    Dr. Shuren. We would have to find it substantially 
equivalent. We oftentimes with the company at least try to look 
for changes in labeling or other things that----
    Mr. Markey. But that would be voluntary? You would not have 
the legal authority to reject it. Is that correct?
    Dr. Shuren. That is correct.
    Mr. Markey. Now, the device industry argues that FDA has 
complete authority to assure the safety and effectiveness of a 
product including demanding clinical trails when they deem it 
necessary. Is that true in a case where the product has been 
shown is substantially equivalent to its defective predicate 
technology?
    Dr. Shuren. No.
    Mr. Markey. You do not have that authority?
    Dr. Shuren. We don't.
    Mr. Markey. Does FDA currently have any authority to 
invalidate defective predicate technologies?
    Dr. Shuren. So to invalidate a predicate where there is a 
problem, we would either rescind the 510(k) as a matter of law. 
We could do that, a mandatory recall, or of by judicial order 
the device is found----
    Mr. Markey. So you can only do something after the fact, 
labeling, etc. right? That is what you can do? But you can't 
reject it. Is that correct?
    Dr. Shuren. Yes, and the labeling we will do before the 
product comes on the market.
    Mr. Markey. Does FDA--some have argued that to get around 
the lack of authority, FDA could just issue more mandatory 
recalls, thereby invalidating the defective device as a 
predicate. Why is that not a feasible response?
    Dr. Shuren. If there is sufficient justification to do a 
recall, we would actually work with the company on a voluntary 
recall, and companies generally comply with it. To run to a 
mandatory recall is profoundly resource-intensive, and because 
there is a formal hearing that can actually take years to do.
    Mr. Markey. You are saying it is a huge resource drain, not 
often the best use of FDA's limited resources, but a device 
recall voluntarily is still available to be cited as predicate. 
Is that not correct?
    Dr. Shuren. No, that is correct, and quite frankly, it is 
not a case of necessarily that predicate shouldn't be out there 
to be used as a predicate but rather having the ability to 
assure that if there was a problem, one, it is either not 
replicated in the device, or if it is replicated, there is 
adequate mitigation, and right now while we can try to work 
with the company----
    Mr. Markey. Final question. Would you like----
    Dr. Shuren [continuing]. Having the ability to----
    Mr. Markey [continuing]. The authority to reject certain 
devices if they repeatedly had the same dangerous design flaws 
as other previously recalled defective devices? Would you like 
that authority?
    Dr. Shuren. We would be happy to work with the committee on 
what may be the best approach on how to deal with those----
    Mr. Markey. Would you like to have the authority or not 
have the authority?
    Dr. Shuren. We would like to have appropriately tailored 
authority.
    Mr. Markey. OK. Great. I think I would like to work with 
you to hopefully accomplish that goal so you do have that 
appropriate authority.
    I thank you, Mr. Chairman.
    Mr. Pitts. The chair thanks the gentleman and now 
recognizes the gentleman from California, Mr. Bilbray, for 5 
minutes for questions.
    Mr. Bilbray. Following up on that line of questioning, Mr. 
Chairman, if you had an inhaler, let us just say an insulin 
inhaler, that was a new model that could be produced cheaper 
and was smaller than the original but gave the same dosage, 
same reliability, it was a different design but basically the 
outcome to the patient was the same. Do we have the ability to 
say yes, that is comparable, and thus you don't have to go 
through the entire review process over again?
    Dr. Shuren. It depends upon the changes you make. If those 
changes made would not significantly affect safety and 
effectiveness, then you don't have to----
    Mr. Bilbray. Basically, my point is, you have two little 
devices. One is this big and one is this big. Your doses are 
the same, the same insulin is being used, it is just a 
different--basically has been upgraded. You get a call from a 
flip phone or you get a call from an iPhone, same product, same 
delivery, different ways of doing it but the same deal. Do we 
have the ability for you to say OK, this is comparable and thus 
we can allow it to move forward or does the iPhone now have to 
go through the whole thing, the review process all over again?
    Dr. Shuren. So for some changes, size actually could affect 
safety and effectiveness. If it does, that modification comes 
to us. So you have things like certain joint replacements that 
when you change the size, that can actually affect----
    Mr. Bilbray. That is inside the body, though. I am talking 
about an external----
    Dr. Shuren. So some of the other things that may change in 
size----
    Mr. Bilbray. Like bringing an inhaler down from the size of 
a liter bottle down to the size, you know, smaller than a 
lighter. Do you have a comment on that?
    Dr. Woodcock. Yes. We have a lot of experience in inhaled 
drugs, regulating them, and----
    Mr. Bilbray. Well, I have a lot of family members that have 
that same problem, but that is a different issue.
    Dr. Woodcock. So the problem with the inhalation devices is 
that we do not have a good way to determine bioprevalance, and 
that has hampered us in fact in improving generics of, say, 
asthma drugs that are out there because we can't determine 
whether they deliver the same dose as the innovator, so that is 
the real question, OK. So if you move from one inhalation 
device to another, it may be the same plume--we do plume 
testing which is particle size, distribution, right? However, 
the user interface is very important in inhaled devices because 
some people--you know, we had some devices they were using 
upside down or sucking on the wrong end, and so there are a lot 
of issues with user interface with inhaled medicines that 
influence whether or not how equivalent we can determine them 
to be another version.
    Mr. Bilbray. Dr. Woodcock, the question that us 
Californians are talking about, and it has been a few years, 
the State of California is going to start putting mandates on 
the issue that had been talked about before, and that is the 
pedigree issue or the tracing. The fact is, they are talking 
about going to requiring every unit to be tagged and 
identified, and we are hearing from a lot of manufacturers that 
there is just no way they can follow that physically or cost-
effectively. What is the possibility of us working on a 
compromise proposal with being able to trace lots and at least 
start the process down the road sooner rather than waiting for 
the crisis that is coming down the road in a couple years when 
you have a State like California that controls over 12 percent 
of the market, probably almost 20 percent of the market all at 
once starting to have a standard that the rest of the country 
doesn't have?
    Dr. Woodcock. Well, number one, we agree that it is better 
to have uniform standards than develop 50 different standards, 
which would be a nightmare. Number two, you have to, I think, 
determine what problem you are trying to solve and then see if 
your solution will address the problem that you are trying to 
prevent or solve, and then think about how much it would cost 
to implement it and then you decide the tradeoffs between the 
costs and the investment you have to make and the benefits that 
it will bring. We are concerned that the coalition's proposal 
doesn't provide enough benefits to justify doing that, but you 
need to think about what else could be done, and I think we are 
willing to work on that.
    Mr. Bilbray. Are you willing to commit to work on that 
within this year so that we get some definitive approach or at 
least some unified strategy on this issue within the year?
    Dr. Woodcock. I am certainly willing to sit down and work 
with the coalition on this, absolutely.
    Mr. Bilbray. Thank you very much, Mr. Chairman.
    Mr. Pitts. The chair thanks the gentleman. That concludes 
the questioning. We have one follow-up on each side. We will go 
to Mr. Pallone for 5 minutes for follow-up.
    Mr. Pallone. So Mr. Chairman, I would like to yield time to 
Mr. Markey.
    Mr. Markey. It would be just Dr. Shuren, if you could. I 
had a woman that I brought to Washington and we had a press 
conference about 2 weeks ago, and it was a bladder mesh that 
she had surgically inserted into her body, and she was assured 
that it was safe and had been FDA approved, and since then, 
because of that faulty bladder mesh, she has lost her 
livelihood as a truck driver, had to undergo multiple 
corrective surgeries, and because of the medical bills is now 
being foreclosed upon by the bank, and she has a mother who is 
living with her, an elderly woman, and there are thousands of 
other people who have had this faulty bladder mesh inserted in 
them as well and it is all FDA approved because you cannot 
reject something that is based upon this predicate technology.
    So maybe you could explain a little bit about what happens 
out there in the real world because the FDA does not have this 
authority to protect women like that and thousands of others 
like them that have FDA approval on a technology that has a 
defect in it that you know about but you cannot take off the 
market.
    Dr. Shuren. First of all, we empathize with that patient 
and for other people who may have had adverse effects from 
medical devices. I will say in the case of surgical mesh, 
generally the issues we are dealing with may be more of, are 
they in the right regulatory framework, and we just went 
through in the case of surgical mesh for pelvic organ prolapse 
where in fact we held an advisory panel meeting to say should 
these actually be 510(k) devices or should they be subject to 
the more stringent requirements for a high-risk device or PMA, 
and that is a process we are moving forward towards. If we make 
that decision and if it is rulemaking, and that is the 
challenge. If we change classification and we up-classify, it 
is rulemaking.
    Mr. Markey. What do you say to this woman? What can you do 
for the thousands of other women out there? The device is still 
out on the market, so what can you say to all these tens of 
thousands of additional women who are being advised by their 
doctors right now that it is an FDA-approved technology. I 
mean, this is something that doesn't work and in fact it harms 
women. What should we say to that woman?
    Dr. Shuren. So I will tell you in the case of pelvic organ 
prolapse, one, we have gone out with information communications 
to patients. We have been working with the health care 
professional community.
    Mr. Markey. This woman is a truck driver, and her physician 
in some town in Colorado told her it was safe. What can we say 
to her in terms of other women who are just in the same 
similarly situated predicament?
    Dr. Shuren. Again, I empathize.
    Mr. Markey. I understand. Empathy is important, and we 
appreciate your empathy. But what can you say to her beyond 
empathy in terms of she is concerned and she is like a Paul 
Revere trying to warn these defective bladder meshes are 
coming?
    Dr. Gingrey. Would the gentleman yield?
    Mr. Markey. Sure, I would be glad to yield.
    Dr. Gingrey. And I appreciate the gentleman from 
Massachusetts yielding to me. Of course, as he knows, I am a 
physician member, and I am, like Dr. Shuren, certainly 
tremendously empathetic to this individual's situation but 
meshes have been used in surgery for years and years, and 
whether it is an abdominal hernia situation where just a simple 
repair and trying to stitch things back together is not 
sufficient, you need that insert product to give a little 
strength to the repair. You know, again, in this particular 
situation, is it the product or could it have been an 
improperly placed stitch to sew the product in place? Could it 
have been an iatrogenic hospital-acquired infection that 
occasionally happens that made the procedure unsuccessful or it 
is really a defective product? Thank you for yielding. I just 
wanted to----
    Mr. Markey. Thank you, Doctor. In this particular case, it 
is in fact a recurrence of a defect in the technology that had 
already been identified and was in the original predicate 
technology that the FDA did not have the ability to take off 
the market as another company is making the same technology 
with the same defect in it that was correctable but the new 
company did not feel it had to correct it because the FDA was 
still approving it. So that was where the problem originated, 
and thousands of women are still having it inserted into them. 
Is that not correct?
    Dr. Shuren. Most of the issues we are dealing with with 
surgical mesh are probably not a matter of replicating a 
problem in the predicate. Many of the things we are seeing may 
be issues about, are they in the right framework to begin with, 
are we actually getting adequate assurances in the way they are 
currently regulated generally that they are in fact safe and 
effective.
    Mr. Markey. But you do need authority here, don't you? 
Don't you need stronger authority to protect women like this, 
or what do you say to a woman like that? You need appropriate 
authority here to make sure that a woman like this is not 
victimized and thousands of others. Don't you agree?
    Dr. Shuren. Again, in her particular case, I don't know 
what happened, and I know people don't want to hear 
``empathize'' but I do. I do think the case, if we wind up 
making a change in surgical mesh, and again, we are looking at 
pelvic organ prolapse but also urinary incontinence, the 
challenge for us is, if we change classification, this is a 
slightly different issue but an important one, we go through a 
rulemaking process, and in those rare cases where that product 
based upon new evidence should move to a different 
classification, we have to take years to make that change. That 
is a challenge that we do face. We are going through questions 
now with metal-on-metal hips. You have raised it in terms of 
pre-amendment devices. Our barrier is actually in those cases 
statutory requirement to do rulemaking, and that makes it hard, 
and you want to know something? I don't know what you tell 
patients if you find a problem like that and you make a 
decision to up-classify, what you do for all that time and all 
those----
    Mr. Markey. This woman's life is ruined, and the only thing 
I could tell her is that her now ruined life in her own words, 
will now pay dividends for other women who won't be facing the 
same thing.
    Mr. Pitts. The chair thanks the gentleman.
    Mr. Markey. I thank you, Mr. Chairman.
    Mr. Pitts. We will proceed for a follow-up to Dr. Burgess.
    Mr. Burgess. I thank the chairman, and I have got some 
other things I want to ask, but I just feel obligated. Once 
again, substantial equivalence does not necessarily equate 
clearance, and your own information that you sent to a company 
that receives a substantial equivalence determination, ``Please 
be advised the FDA's issuance of a substantial equivalence 
determination does not mean that the FDA has made a 
determination that this complies with other requirements of the 
Act.'' They are referring to the Food, Drug and Cosmetic Act. I 
think you have authority there. Now, this situation is perhaps 
a little bit more ambiguous than an implantable pacemaker. I 
would be happy to work with you too on this issue of 
implantable mesh because I do think it is an important one. As 
the baby boom generation ages, we are going to see a lot of 
demand for these type of procedures, and as Mr. Markey points 
out, it is important that we get it right because the problems 
with defects down the road can be significant.
    Dr. Woodcock, let me just ask you a question. I know we 
visited drug shortages in these hearings, and I appreciate the 
work that you have done, and while I wish there were some 
single legislative product that would correct the defect, I am 
not sure that there is, and then the problem is with 
legislative products that we may make things worse if it leads 
to hoarding and that sort of activity. But it also seems like, 
you know, we brought specific examples in these hearings to 
your attention--methotrexate, doxorubicin--and things have 
happened then as a consequence, and I am very grateful for 
that. I am sure the patients are grateful. But it also makes me 
wonder if the problem isn't one of maybe if there were a little 
more flexibility or creativity on the part of the FDA that some 
of these shortages could be mitigated without having them 
become a national crisis. You provided us a long list at 
another hearing. Do you have someone on your staff who is 
looking at that? There may be unique ways to mitigate some of 
these shortages and perhaps we ought to get busy about doing 
that rather than trying to find ideal legislation.
    Dr. Woodcock. Well, we were working on methotrexate and 
doxorubicin for quite a long time and we had different 
solutions emerge for both of those. In every case, we are using 
almost every tool we have. We don't make the drugs. The 
manufacturers make the drugs, and we try to provide them with 
encouragement and flexibility and lot release, like we said, 
batch by batch. Even if their manufacturing isn't perfect, we 
can mitigate many of these things. So I think we have tools to 
do this. We think that additional notification may be helpful. 
We think the proposals by the private sector for more 
information sharing will be helpful. We feel that some of the 
proposed discussion draft legislative might have unintended 
consequences. For example, we have this expedited review. If we 
have a lot of people requesting that and we know that other 
companies are going to be able to come up and provide the 
product, because we have talked to them, then we don't want to 
be reviewing a lot of people or clamoring for expedited review 
if we feel there is not going to be a shortage and the company 
is in production. We think deeming compliance would be a 
problem, all right? Because people are either in compliance or 
not in compliance. If they are not in compliance with GMPs, we 
have flexibility and they don't have to be in full compliance 
to be producing these shortage drugs. They just have to be 
producing drugs that are of good enough quality that we feel 
comfortable with them going into the veins of our patients, 
right?
    Mr. Burgess. Right. Well, the only point I was trying to 
make is, it does seem like there are sometimes out there that 
if we just worked a little harder, we would come up with them, 
and I just encourage you to keep doing that.
    Dr. Woodcock. We are working very hard.
    Mr. Burgess. But one specific instance, of course, a 
shortage occurs right now today at any pharmacy across the 
country that an asthmatic cannot walk into a pharmacy and buy 
an over-the-counter asthma inhaler like they used to be able to 
before January 1st. So there is a solution there, and that 
would be to allow the manufacturer of the old CFC product to 
sell what stock they have left. This product was not deemed to 
be defective. It was an EPA requirement that they stop selling, 
not an FDA requirement, and I appreciate the fact that you are 
working through this problem with getting a new over-the-
counter preparation available, but as you pointed out, you have 
difficulty with bioequivalency, and I will also readily admit 
that HFA is not nearly as good a propellant as CFC, and don't 
blame the victim. It was not because I was holding the thing 
upside down. It is just not as good. But having said all of 
that, could you help us with the EPA if you were to write 
Administrator Jackson that because of the difficulties you are 
having with assessing bioequivalence of these new products that 
it would be helpful to allow the company to sell the product 
that it already has manufactured. We are not asking them to 
make a single vial. All the CFC that is going to be put into 
vials has already been put in. The only problem is, we are 
preventing asthmatics from having it accessible. Can I get your 
help to write a letter to Administrator Jackson to let her know 
of your problem so that maybe she can help us with the problem 
that asthmatics are having?
    Dr. Woodcock. We have been discussing and working with the 
EPA on this matter.
    Mr. Burgess. Yes, but this is something that people just 
frankly do not understand why one federal agency and another 
federal agency cannot come together on a reasonable solution. 
That reasonable solution is, be able to sell the product as it 
exists in warehouses today. Again, not one single molecule of 
CFC is going to be produced that has not already been produced. 
The hole in the ozone is not going to get one millimeter bigger 
because we are allowing this product to be sold. Again, the CFC 
has already been produced and it is already in the canisters. 
One day it is going to come out by some mechanism or another. I 
just think it would helpful to the patients of America. We 
could eliminate this one drug shortage overnight if you could 
get some cooperation with the EPA.
    Mr. Pitts. The chair thanks the gentleman. Mr. Engel for 5 
minutes for questions.
    Mr. Engel. Thank you, Mr. Chairman.
    Dr. Woodcock, I just have two quick questions. I want to 
get back to the issue of drug shortages again because during 
your last appearance before the subcommittee, I mentioned my 
concerns about drug shortages of medications that overlap with 
the DEA's controlled-substance jurisdiction, and I am pleased 
to see in this discussion draft there are provisions for the 
Attorney General to increase quotas as necessary within 30 days 
of a request from a manufacturer. So let me ask you this. Do 
you believe that the majority of drug shortages in the 
controlled-substance category can be effectively prevented if 
the Attorney General addresses this request within the 30-day 
window or do you believe a shorter window would be necessary to 
ensure patient access to needed medications?
    Dr. Woodcock. I am not familiar enough with DEA procedures 
to answer your question accurately. There are many causes of 
drug shortages, and certainly not all shortages of controlled 
substances may be related to DEA procedures or quotas or what 
have you. So I think it is a complicated issue and we would be 
glad to work with you.
    Mr. Engel. OK. How about the 30 days, though? Do you think 
that is sufficient? It might be a little too long if someone 
really needs a medication.
    Dr. Woodcock. Again, it is very difficult for me to put 
that into--to understand what impact 30 versus a shorter time 
would have on an unfolding shortage situation.
    Mr. Engel. OK. Well, we will work with you on it.
    During the last PDUFA reauthorization, I worked--this is a 
couple years ago--I worked with Congresswoman Blackburn and 
Congresswoman Giffords at that time to authorize critical path 
public-private partnerships, and to date, the Critical Path 
Institute in Arizona and the Clinical Data Interchange 
Standards Consortium have worked under this partnership to 
improve the regulatory science that FDA and industry depend on 
when developing and improving new pharmaceuticals and medical 
devices. So I am wondering if you could comment on that? It is 
sort of loaded question, but I want you to be on the record, 
because I feel strongly about the importance of the critical 
path public-private partnerships and the FDA's work, so I would 
like you to comment on that and what role you see for these 
partnerships in the future.
    Dr. Woodcock. Well, first of all, the Critical Path 
Institute has done a number of projects that are essential. For 
example, we have new biomarkers now being tested in the clinic 
for drug-induced renal failure, something we don't have any 
sensitive indicators for, and so this is a tremendous advance 
in regulatory science if we can get these. We have qualified 
them for animal studies. If we can use them in humans, that 
would be a tremendous advance for drug development.
    As far as the clinical data standards, as we move into 
developing electronic health records for the public and so 
forth, having unified standards for how you collect data in 
clinical trials not only will help companies, it will help the 
FDA and it will help all the investigators in efficiently 
performing clinical trials. Right now, we have a tremendous 
problem of loss of clinical studies from the United States and 
going elsewhere, and harmonized standards within the United 
States for clinical data are a tremendous requirement and would 
really help both drug development and understanding the role of 
medical products and their outcomes in our population. So this 
type of regulatory science that is being done by the Critical 
Path Institute and other public-private partnerships is really 
building for the future, and we really endorse it.
    Mr. Engel. Well, thank you. I couldn't agree with you more, 
and you gave me the answer I wanted, so thank you very much.
    Mr. Chairman, I yield back the balance of my time.
    Mr. Pitts. The chair thanks the gentleman and yields to the 
ranking member for a unanimous consent request.
    Mr. Pallone. Thank you, Mr. Chairman. I just would like to 
make a unanimous consent request that the statement of 
Congresswoman Anna Eshoo as well as some questions that she is 
promulgating to Dr. Janet Woodcock be entered into the record.
    Mr. Pitts. Without objection, so ordered.
    We will make sure you get all of the questions for follow-
up, if you would respond in writing.
    That concludes our first panel. Thank you, Dr. Woodcock, 
thank you, Dr. Shuren, for your testimony and your responses. 
The committee will recess for 5 minutes as we change for panel 
number two and we will reconvene in 5 minutes.
    [Recess.]
    Mr. Pitts. The 5 minutes having expired, we will reconvene 
the subcommittee, and we now have panel number two. I would 
like to thank all of you for agreeing to testify before the 
subcommittee today. I would like to quickly introduce our 
expert panel.
    First, Dr. David Wheadon is Senior Vice President of 
Scientific and Regulatory Affairs at Pharmaceutical Research 
and Manufacturers of America. Dr. Sara Radcliffe is Executive 
Vice President of Health at Biotechnology Industry 
Organization. Mr. David Gaugh is Vice President of Regulatory 
Sciences at the Generic Pharmaceutical Association. Mr. Joseph 
Levitt is Partner at Hogan Lovells and is testifying on behalf 
of Advanced Medical Technology Association. And Mr. Allan 
Coukell is Director of Medical Programs of Pew Health Group at 
the Pew Charitable Trust.
    Again, thank you all for coming. We have your prepared 
statements. They will be entered into the record. We ask that 
you summarize your opening statements in 5 minutes. We are 
scheduled to vote in about 20 minutes. We will try to get 
through the presentations before having to go to the floor for 
the vote.
    So with that, Dr. Wheadon, we will begin with you. You are 
recognized for 5 minutes to summarize your testimony.

 STATEMENTS OF DAVID E. WHEADON, M.D., SENIOR VICE PRESIDENT, 
SCIENTIFIC AND REGULATORY AFFAIRS, PHARMACEUTICAL RESEARCH AND 
   MANUFACTURERS OF AMERICA; SARA RADCLIFFE, EXECUTIVE VICE 
PRESIDENT OF HEALTH, BIOTECHNOLOGY INDUSTRY ORGANIZATION; DAVID 
  GAUGH, R.PH., VICE PRESIDENT, REGULATORY SCIENCES, GENERIC 
 PHARMACEUTICAL ASSOCIATION; JOSEPH A. LEVITT, J.D., PARTNER, 
HOGAN LOVELLS US LLP, ON BEHALF OF ADVANCED MEDICAL TECHNOLOGY 
 ASSOCIATION; AND ALLAN COUKELL, DIRECTOR OF MEDICAL PROGRAMS, 
          PEW HEALTH GROUP, THE PEW CHARITABLE TRUSTS

                 STATEMENT OF DAVID E. WHEADON

    Dr. Wheadon. Chairman Pitts, Ranking Member Pallone and 
members of the subcommittee, good afternoon. I am David 
Wheadon, Senior Vice President, Scientific and Regulatory 
Affairs, at the Pharmaceutical Research and Manufacturers of 
America, better known as PhRMA. PhRMA appreciates this 
opportunity to appear before you again today in order to share 
our views on the 5th reauthorization of the Prescription Drug 
User Fee Act and on the reauthorization of the Best 
Pharmaceuticals for Children Act and the Pediatric Research 
Equity Act.
    PhRMA and its member 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. PDUFA has also played a role in 
improving America's competitiveness around the world.
    Since the passage of the original PDUFA 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.
    The PDUFA V performance goals letter was created with an 
impressive inner transparency and involvement from diverse 
stakeholders including patients, health care providers and 
academia. This agreement will provide FDA with the resources 
and tools required for further enhancing 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. 
PhRMA strongly endorses the recommendations of the PDUFA V 
performance goals letter and urges Congress to reauthorize this 
important legislation in a timely manner based on the 
negotiated agreement. Failure to reauthorize PDUFA in a timely 
fashion would have catastrophic effects on the ability of FDA 
to carry out its important role in bringing innovative 
medicines to patients.
    I would like to focus for a moment on one specific aspect 
of PDUFA. The enhanced New Molecular Entity review model, or 
NME review model, will improve the review process for new 
molecular entity drug and biologic applications. This 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 
model 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 in 2015 and 2017.
    PDUFA V will continue to provide FDA with the necessary 
tools and resources 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 consequences 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 create 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 
improved pediatric medical care in the face of rising research 
costs.
    Since its 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.
    We would particularly like to thank Representatives Eshoo, 
Rogers and Markey for their work towards a bipartisan effort 
for a permanent reauthorization of these important pieces of 
legislation.
    In summary, PhRMA and its member companies are committed to 
working closely with FDA, Congress and all stakeholders to 
ensure the continued success of PDUFA in bringing safe, 
effective and innovative medicines forward to address unmet 
medical needs for all patients including children. PhRMA 
therefore urges Congress to reauthorize PDUFA V and to 
permanently reauthorize BPCA and PREA in the most expeditious 
manner possible.
    Thank you, and I would be happy to entertain any questions.
    [The prepared statement of Dr. Wheadon follows:]

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    Mr. Pitts. The chair thanks the gentleman.
    Ms. Radcliffe, you are recognized for 5 minutes.

                  STATEMENT OF SARA RADCLIFFE

    Ms. Radcliffe. Thank you. Chairman Pitts and Ranking Member 
Pallone, I appreciate the opportunity to be here today. I am 
Sara Radcliffe, Executive Vice President for Health for the 
Biotechnology Industry Organization, BIO. I led BIO's 
engagement in the Prescription Drug User Fee Act technical 
discussions with the Food and Drug Administration and managed 
BIO's involvement in the biosimilars user fee technical 
discussions as well.
    BIO supports quick enactment of the PDUFA V recommendations 
and we are supportive of the draft user fee package that the 
committee has released. This committee has reached strong 
bipartisan compromises on many issues that of critical 
importance to our industry. We believe that enhancements under 
PDUFA V will improve the drug development and review process 
through increased transparency and scientific dialog, advance 
regulatory science and strength postmarket surveillance. Most 
importantly, from the standpoint of young, innovative 
companies, our hope is that PDUFA V will provide patients and 
doctors with earlier access to the cures and treatments of 
tomorrow.
    The PDUFA V legislation will reinforce FDA's review 
performance and get back to basics for patients. These 
enhancements include a New Molecular Entity review program that 
will lead to fewer review cycles and earlier patient to needed 
treatment, enhanced communication during drug development, 
regulatory science modernization and robust drug safety and 
postmarket surveillance capacities.
    BIO supports FDA's ongoing implementation of a well-
constructed, science-based pathway for the approval of 
biosimilar products. Establishing a sound BSUFA was also a 
priority for us. A transparent, predictable and balanced 
regulatory framework for the review and approval of biosimilars 
accompanied by reasonable performance goals and a dedicated 
independent funding stream will ensure that FDA can facilitate 
the development and evaluation of biosimilar products.
    There are a number of other important provisions included 
in the draft that are of critical importance to BIO. 
Modernizing the Accelerated Approval pathway has been a top 
priority, and we are extremely pleased that the draft included 
H.R. 4132, the Faster Access to Specialized Treatments, or FAST 
Act, introduced by Congressmen Cliff Stearns and Ed Towns. FAST 
will ensure that FDA can utilize the Accelerated Approval 
pathway as fully and frequently as possible while maintaining 
FDA's safety and effectiveness standards.
    The Accelerated Approval pathway has been a great success 
story. In certain disease areas such as cancer and HIV, the 
pathway has stimulated an explosion of investment in innovation 
and has brought immense benefit to patients. We appreciate 
Congress working to expand the pathway so that patients 
suffering from other life-threatening and rare diseases can 
benefit as well.
    The Best Pharmaceuticals for Children Act and Pediatric 
Research Equity Act have greatly improved health outcomes for 
children. However, the 5-year sunset periods have resulted in 
an uncertain regulatory environment for pediatric drug 
development that makes it difficult for our company and 
practically impossible for the FDA to issuance guidance to 
promote understanding of the current regulatory framework. BIO 
thanks Congressman Mike Rogers, Congresswoman Anna Eshoo and 
Congressman Ed Markey on their championship of this important 
issue and we support the inclusion of their legislation in the 
committee draft.
    It is also important that FDA has access to the most 
knowledgeable and most qualified scientific minds to help 
inform key public health decisions and evaluate the safety and 
effectiveness of innovative new cures and treatments for 
patients. BIO thanks Representative Burgess and Ranking Member 
Pallone for their work to enhance FDA's ability to impanel 
highly qualified external scientific advisors while maintaining 
the highest levels of integrity for these proceedings.
    Additionally, BIO looks forward to continuing to work with 
the committee to enhance oversight over the upstream supply 
chain for pharmaceutical ingredients and modernizing the 
downstream domestic supply chain for finished pharmaceutical 
products. BIO supports the establishment of strong, uniform 
national standards for serialization and tracing systems rather 
than relying on the emerging patchwork of individual State 
mandates. In this case, BIO believes that Congress should enact 
laws governing drug product serialization and traceability 
systems that regulators can leverage to hold supply chain 
member accountable for ensuring that legitimate product reaches 
the patient. A national system using existing and proven 
technologies would best protect supply chain integrity and 
patient safety.
    Thank you again for the opportunity to testify. We look 
forward to working with all of you to ensure that the user fee 
package is quickly enacted.
    [The prepared statement of Ms. Radcliffe follows:]

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    Mr. Pitts. The chair thanks the gentlelady.
    Mr. Gaugh, you are recognized for 5 minutes for an opening 
statement.

                    STATEMENT OF DAVID GAUGH

    Mr. Gaugh. Good afternoon, Chairman Pitts, Ranking Member 
Pallone and members of the subcommittee. I am David Gaugh, Vice 
President of Regulatory Science for the Generic Pharmaceutical 
Association and a Licensed Pharmacist. GPhA represents the 
manufacturers and distributors of finished dose pharmaceuticals 
and bulk pharmaceutical chemicals.
    Generic pharmaceuticals account for 80 percent of all 
prescription drugs dispensed in the United States but consume 
just 27 percent of the total drug spending for prescription 
medicines. Today's generic industry is one marked by diverse, 
innovative companies who have grown to become global leaders in 
providing equivalent medicines. At the same time, generic 
competition continues to play a vital role in driving 
pharmaceutical innovation. This growth in the generic industry 
has led to the creation of tens of thousands of new American 
jobs and dozens of States across the country. It has also 
served to underscore the critically important role of the Food 
and Drug Administration. However, the administration remains 
underfunded and responsibility of ensuring access to safe and 
affordable medicines is one that is shared with the rest of the 
entire pharmaceutical industry, not just the FDA. That is why 
the generic industry has stepped up to help provide the FDA 
with additional resources to address the ongoing challenges 
caused by an increasing global drug supply chain, the increase 
in the agency's workload and the regulation of complex 
technologies.
    Currently, more than 2,700 generic drug applications are 
awaiting approval from the FDA's Office of Generic Drugs, and 
the average approval time for an application is now stretching 
beyond 30 months, more than five times longer than the 
statutory six-month review time that was called for in Hatch-
Waxman. Unfortunately, this backlog keeps safe, low-cost 
generic drugs off the market and reduces competition that may 
drive prices down even further.
    The proposed Generic Drug User Fee Act, or GDUFA, that we 
are discussing today will help alleviate this backlog and 
expedite consumer access to these generic drugs. GPhA also 
recognizes, however, that while providing early access to 
effective medicines is critical and is a key aim of the other 
user fee programs, an equally important pillar of FDA and 
industry is to ensure drug safety. That is why GDUFA takes the 
unprecedented step of holding all players contributing to the 
U.S. generic drug system both foreign and domestic to the same 
inspection standards and enhances FDA's ability to identify and 
require the registration of active pharmaceutical ingredients 
and finished fill dosage for manufacturers involved in each 
generic drug product that is sold in the United States. It is 
paramount that we work to shape the future of our country's 
generic drug industry. We also work to bring the FDA into the 
21st century and ensure that the agency's authorities to 
achieve its mission in this global age are up to date.
    This is further exemplified by the other fee program we 
will discuss today, which is for generic biologic drugs or 
biosimilars. Biologic medicines are often the only lifesaving 
treatment for many of the more severe diseases encountered in 
patients today. In many respects, they represent the future of 
medicine. However, their price tag can keep these products out 
of the reach of many patients.
    During the biosimilar user fee negotiations, GPhA expressed 
its support for the user fee funding to provide FDA with the 
adequate resources to apply consistent regulatory standards to 
all biologics and review new applications as they are filed. 
Both industry and patients will benefit from this user fee 
program by gaining a higher degree of certainty in the 
timeliness of applications and their reviews. We applaud the 
FDA for recognizing the importance of the biosimilars and the 
need to apply state-of-the-art science in an agency activity 
governing the review and approval of these very important 
drugs.
    Now let me turn to drug shortages. The generic 
pharmaceutical industry has spearheaded the development of an 
unprecedented multi-stakeholder private sector collaboration 
which we believe will accelerate the recovery of certain 
critical drugs in short supply to the patients in need. This 
solution, which has been labeled the Accelerated Recovery 
Initiative, will play a crucial role in assisting the FDA with 
a more accurate, timely and comprehensive review of current 
potential drug shortages and in establishing practices to 
lessen or even eliminate in some cases current shortages.
    Finally, we urge the inclusion in the user fee legislation 
of a proposal introduced by Ranking Member Pallone and 
Representative Guthrie, H.R. 4332, the Generic Drug Application 
Review Fairness Act, which will ensure that generic drug 
manufacturers are not unfairly penalized for delays in the drug 
application approval process.
    In conclusion, Mr. Chairman, this is truly an historic time 
for GPhA. Nothing is more important to our industry than 
ensuring patients have access to lifesaving generic medications 
they require and these historic agreements will provide the 
critical step towards accomplishing that goal. Thank you.
    [The prepared statement of Mr. Gaugh follows:]

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    Mr. Pitts. The chair thanks the gentleman.
    Mr. Levitt, you are recognized for 5 minutes.

                 STATEMENT OF JOSEPH A. LEVITT

    Mr. Levitt. Thank you. Chairman Pitts, Ranking Member 
Pallone and members of the committee, my name is Joe Levitt. I 
am a partner in the law firm of Hogan Lovells, and I am here 
today on behalf of AdvaMed, MDMA and MITA, the three trade 
associations who participated in the MDUFA negotiations with 
the FDA. I was on that negotiating team throughout that 
process, and I am pleased to be testifying with you here today. 
I also spent 25 year at the FDA and for 6\1/2\ of those years 
during the 1990s I held the senior position in FDA's Medical 
Device Center.
    As many of you know, the medical technology industry has 
been a true success story for patients and for the U.S. 
economy. Our industry truly leads the world but our leadership 
is slipping. One key reason, perhaps the most important reason, 
is the decline we have seen in FDA efficiency, consistency and 
predictability in recent years. To their credit, the FDA 
leadership has recognized the need to vigorously address the 
issues affecting the device center. The new user fee agreement 
has the potential to be a significant additional step in the 
right direction. It is good for industry, it is good for FDA, 
and most of all, it is good for American patients.
    The user fee agreement builds the conditions for success in 
a number of major ways. First, for the first time ever, this 
user fee agreement establishes average total time goals for FDA 
review. Our previous agreements had set goals only for terms of 
the FDA clock but what matters most to industry and to patients 
is the actual calendar, the time from beginning of submission 
to final FDA decision. By setting in place this new goal, 
efforts will be focused on the metric that truly matters.
    Second, the agreement also establishes improved goals for 
time on the FDA clock. These goals are a key management tool 
for the agency and they work in concert with the total time 
goal to produce better performance than either could achieve 
alone.
    Third, the agreement includes new procedures that we 
anticipate will improve the review process. These include 
before the review actually begins meaningful presubmission 
interactions between FDA and companies to be sure everybody is 
on the same wavelength going in, during the review process a 
mandatory mid-course substantive interaction between FDA and 
the company midway through the process to check in and be sure 
we are all on the right wavelength there, and finally at the 
tail end, a new procedure that we call ``no submission left 
behind'' so that if FDA time target is missed, that submission 
does not fall off the radar screen.
    Fourth, the agreement provides for greater accountability. 
Under the agreement, there will be quarterly and annual 
reporting on a variety of key metrics that both industry and 
FDA agree are important. In addition, the agreement provides an 
analysis of FDA's management of the review process by an 
independent consulting organization coupled with FDA corrective 
action plan to address opportunities for improvements. We see 
this as being critical. It is a way to bring fresh eyes to the 
issues and work constructively towards meaningful process 
improvements.
    Finally, to give FDA the additional tools to meet the new 
goals, the agreement provides for $595 million in user fees 
over the life of the agreement. Additional reviewers, lower 
management-to-reviewer ratios, enhanced training and other 
resources totaling about 200 additional FTEs for the agency are 
provided by the agreement and will give FDA what it needs to 
improve performance.
    Of course, no agreement, no matter how good on paper, is 
self-executing. Making it work as intended will require the 
full efforts of all concerned. Continued oversight and interest 
from the Congress will also be important. Patients are 
depending on all of us.
    In conclusion, I should note that a number of legislation 
proposals have been introduced with the goal of improving FDA's 
operations also. We are appreciative of efforts by all members 
who seek to give FDA the tools and structure it needs to 
succeed. At the same time, I want to emphasize that we are 
strongly committed to the user fee agreement as negotiated and 
do not support any proposals that would change the terms of the 
agreement or undermine its goals. Just as the user fee 
agreement has the potential to help FDA move in a positive 
direction, failure to reauthorize the program in a timely way 
would be nothing short of catastrophic, as my colleagues on the 
panel have also echoed.
    So I thank the committee for the opportunity to testify and 
urge it act promptly to reauthorize the program which is so 
critical to patients, to FDA and to our industry.
    [The prepared statement of Mr. Levitt follows:]

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    Mr. Pitts. The chair thanks the gentleman.
    We are in the middle of a vote on the floor. We have about 
10 minutes. We will take one more witness and then we will 
break for the vote.
    Mr. Coukell, you are recognized for 5 minutes.

                   STATEMENT OF ALLAN COUKELL

    Mr. Coukell. Thank you, Mr. Chairman, Ranking Member 
Pallone and committee members. I appreciate the opportunity to 
testify.
    My name is Allan Coukell, and I am the Director of Medical 
Programs for the Pew Health Group. Our research and analysis 
aim to improve the safety and well-being of American consumers 
with the major focus on drugs, medical devices and the FDA. I 
will focus today on the importance of the FDA user fee 
agreements to patients and public health and about three key 
policy areas that the committee is considering.
    Since 1992, PDUFA agreements have given FDA significant and 
sustained resources, allowing for faster reviews of new 
products. Indeed, preliminary results of a study that Pew has 
funded show that FDA reviews drugs faster than its counterparts 
in the E.U. and Canada. The development of new antibiotics is a 
particular focus for Pew's Antibiotics and Innovation Project, 
and we thank this committee for consideration of the GAIN Act, 
the bipartisan bill introduced by Mr. Gingrey that would grant 
extra market protection to certain antibiotics.
    Unlike other drugs, antibacterials lose their effectiveness 
over time as the bugs become resistant. That is why experts are 
so alarmed about the years-long decline in new antibiotics and 
the dearth of products in late-stage development. We look 
forward to working with this committee to see that this 
provision targets and incentivizes the drugs we most need, 
those that treat serious or life-threatening infections.
    Turning now to medical devices, we ask Congress to swiftly 
reauthorize MDUFA. Under this new agreement, FDA would add 200 
device staff and nearly $600 million for the review of device 
applications. Let me illustrate the importance of this funding 
with an analysis recently commissioned by Pew showing that 
FDA's Device Center has a higher attrition rate than the 
Centers for Drugs and Biologics or the Office of Regulatory 
Affairs. In fact, nearly 10 percent of FDA's device staff left 
in fiscal year 2010, and the majority reported not having 
sufficient resources to get their job done. To function 
effectively, the center must have adequate funding.
    But let us never forget that true innovation is not just 
about speed to market but about developing products that are 
safer or more effective than existing drugs and devices, and 
because medical devices often enter the market with little or 
no clinical data, it is especially important that we have a 
robust system for postmarket surveillance, and we urge this 
committee to include legislation that will medical devices to 
FDA's Sentinel Surveillance System which is currently on for 
drugs, require that FDA issue and implement rules that assign a 
unique identifier like a barcode to each new device as we have 
on most other things that we buy, and clarify the agency's 
authority to order safety studies when necessary for high-risk 
devices. We must also ensure that these studies are completed 
in a timely way. Such a system would detect safety problems 
faster and would facilitate innovation by increasing the 
confidence of the public and the FDA on marketed devices.
    On safety, I am pleased to note that the landmark new 
generic drug user fee agreement while speeding the review of 
these products will also enhance safety by ensuring that FDA 
performs more inspections of overseas generic drug plants. As 
Pew's drug safety project has noted, 80 percent of the 
ingredients in our drug supply now come from overseas yet we 
inspect U.S.-based drug makers every 2 years, as the law 
requires. Meanwhile, the FDA inspections in China, for example, 
average out about every 17 years. Addressing this disparity 
will level the playing field for U.S.-based manufacturers and 
help to protect patients. Congress should hold FDA accountable 
by ensuring that no facility goes indefinitely without an 
inspection. But inspections are only part of the story. Several 
additional key measures would improve confidence in the supply 
chain.
    For example, we should ensure that every company takes 
responsibility for its own upstream suppliers, verifying that 
appropriate quality systems are in place. We should reward 
manufacturers who have strong systems. We support a national 
track-and-trace system for drugs but such a system must include 
standards that will detect counterfeits before they get to 
patients and, for example, provide law enforcement with the 
tools needed to address illegal-drug diversion.
    We thank the committee for its bipartisan work on the 
prescription drug supply chain. A poll we commissioned showed 
that Americans of all political persuasions recognize the risks 
and support Congressional action.
    I will conclude with a reference to FDA's mission 
statement, which acknowledges the agency's dual role: 
protecting patients and ensuring innovation. The user fee 
agreements support both aims, and we urge Congress to pass them 
quickly along with the three essential additions: drug supply 
chain safety, antibiotic development and medical device safety.
    Thank you, and I welcome your questions.
    [The prepared statement of Mr. Coukell follows:]

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    Mr. Pitts. The chair thanks the gentleman.
    That concludes the opening statements. We are in the middle 
of a vote. I think we have about 5 minutes left, so at this 
point the subcommittee will break until the third vote. Five 
minutes after the third vote, we will reconvene. The 
subcommittee stands in recess.
    [Recess.]
    Mr. Pitts. The recess having expired, we will reconvene the 
Subcommittee and go to the questioning. I will now begin the 
questioning and recognize myself for 5 minutes for that 
purpose.
    First of all, Dr. Wheadon, how does the PDUFA agreement 
help mitigate the issue of delayed reviews of drug applications 
at FDA and help America maintain their role as the leading 
innovator in the pharmaceutical space? If you would please 
elaborate on that.
    Dr. Wheadon. I will answer that, Chairman Pitts, on two 
fronts, focusing initially on the New Molecular Entity----
    Mr. Pitts. Is your microphone on? Just pull it down. Yes.
    Dr. Wheadon. Focusing initially on the New Molecular Entity 
Review Program, that was really set up to enhance ongoing 
communication between drug sponsors and FDA such that sponsors 
would understand up front what FDA expectations may be as they 
enter into the review. As the review progresses, there would be 
feedback to the sponsor. There are questions that come out of 
the review that could be answered contemporaneously rather than 
waiting until the end of the review. The intention is that by 
the time you get to the end of the review, most of the issues 
could have been discussed and hopefully rectified, allowing for 
FDA to make a final action, hopefully an approval, thus 
allowing the drug to be approved in the first cycle and 
available to patients.
    Beyond that, the other aspects of the agreement, the 
availability of innovative medicines to patients, really looks 
at the regulatory science initiatives, things like benefit-
risk, biomarker development, pharmacogenomic processes, 
enhancing the utilization of REMS in terms of standardizing 
that process rather than starting from square one with each 
necessity for utilizing of REMS for approval.
    So taken as a whole, the intention is to make the review 
process more efficient and more effective use of FDA resources, 
allowing for a thorough review but hopefully a one-cycle review 
and ultimately really addressing the issue that we started out 
looking at, and that is for roughly 50 percent of applications, 
they don't get approved in the first cycle. They ultimately do 
get approved with following cycles of review. That is an 
inefficient use of FDA resources and that is really what we are 
trying to tackle with the agreement.
    Mr. Pitts. Ms. Radcliffe, would you like to add to that as 
far as bio is concerned?
    Ms. Radcliffe. Yes, I would. Thank you. I would like to 
support everything that Dr. Wheadon said about the weight of 
the PDUFA Technical Agreement will enhance the availability of 
products for patients but mention also one other thing. It was 
particularly important for our small companies and that was a 
provision to enhance timely interactive communication during 
the drug development phase. Our small companies tell us that 
very often they have simple, informal questions where they need 
timely answers in order to proceed. We were very pleased that 
the Agency agreed to state explicitly that they have a 
philosophy of timely, interactive communication with sponsors 
and also that we were able to agree to establish a liaison 
staff that would work to ensure that that communication occurs.
    Mr. Pitts. Thank you.
    Mr. Gaugh, the discussion draft includes a section on 
expediting manufacturing changes to alleviate a drug shortage. 
Would you comment on this provision, tell us how it would help?
    Mr. Gaugh. I am sorry. Could you repeat that?
    Mr. Pitts. Yes. The draft includes a section on expediting 
manufacturing changes to alleviate drug shortages. Comment on 
that provision.
    Mr. Gaugh. Yes, in today's environment it takes anywhere 
from 18 to 24 months for those review cycles to occur, so if 
you have a product that is in drug shortage, that is an 
additional time point with everything else that you are adding 
to it. The provisions in here are going to be for expedited 
review, which could be as quickly they say as 3 to 6 months, 
which would help tremendously.
    Mr. Pitts. Mr. Levitt, can you explain IDEs--what are they, 
what companies get IDEs traditionally, how does FDA evaluate 
IDEs? I understand FDA has a new policy on IDEs. How does that 
differ from previous policy and what is your opinion of the new 
policy?
    Mr. Levitt. OK. An IDE stands for Investigational Device 
Exemption. What it basically means is that FDA reviews 
applications for new clinical studies. New clinical studies are 
needed generally for all Class 3 devices going through the 
premarket approval process and for a small minority of 510(k) 
products. But if a company wants to test their device in humans 
and it doesn't fit into one of the minor categories that they 
are exempt from submitting, then they submit an application to 
the FDA that includes the data to show that the device is safe 
enough to test in humans. So the first question is safety. And 
the second question is, what is the protocol that they are 
going to use during the study? They will submit those to FDA. 
FDA has 30 days only to review that, reflecting that FDA's 
review is really just to focus on is it safe and is this 
essentially a bona fide study where the potential benefits 
outweigh the potential risks. So that is the historical 
process.
    What has happened recently is that FDA has brought greater 
scrutiny to the clinical protocol part and they are trying to 
say that you can only do this clinical study if it is good 
enough to get final approval. And there is a lot of concern 
within the industry that that is much more than has ever been 
done in the past and is certainly much more than the 
regulations their statute require, that the process should be 
able to go forward at the pace that the company is prepared to 
undertake. It might be a preliminary study, it might be a study 
that will depend on how strong the results are, how big you 
need.
    And so I think the concern that you are hearing is that 
that study should not be the most robust possible, but instead, 
the FDA should allow the study to go forward if it is safe and 
if it is bona fide research where the potential benefits 
outweigh the potential risks and there is valid information to 
be learned from the study. That essentially is the company's 
call on how they want to investigate the device and develop the 
program.
    Mr. Pitts. The chair thanks the gentleman. My time is 
expired.
    The ranking member is recognized for 5 minutes for 
questions.
    Mr. Pallone. Thank you, Mr. Chairman.
    I wanted to start with Mr. Gaugh. I appreciated GPhA's 
support for the bill that Representative Guthrie and I recently 
introduced, the Generic Drug Application Review Fairness Act. 
We heard earlier from Dr. Woodcock about the long review times 
for generic drug applications that currently exist. If the 
median review time for generic drug applications currently 
exceeds 30 months, how does that impact the generic 
manufacturers and what are the consequences if you will?
    Mr. Gaugh. Well, you heard in earlier testimonies if you go 
back to the statute that it is 6-month review time, which we 
are well, well past that, 30 months, so almost 2 years past the 
statute. So in that 2-year time point, once you have put your 
drug application in, market dynamics can change significantly 
in that additional 2 years. So it may be a situation where by 
the time the 30 months has expired, the market is not still 
effective for the company to get into. That is one issue.
    Mr. Pallone. And what about the significance of the 180-day 
exclusivity period for generic firms?
    Mr. Gaugh. The 180-day exclusivity has become a real factor 
because in that approval process, it affects first-filers in 
paragraph 4 certifications, and if you don't have the product 
approved or tentatively approved by the FDA within that 30-day 
time point, you lose your 180-day exclusivity.
    Mr. Pallone. Do you know how many applications since maybe 
2003 have unfairly lost the 180-day exclusivity because of the 
FDA review delay?
    Mr. Gaugh. Somewhere in the range of 8 to 10.
    Mr. Pallone. OK. I mean, it seems to me that the increasing 
meeting of approval time of generic drug applications is 
unintentionally placed into jeopardy the 180 days of 
exclusivity rewarded to the generic applicants, and I am 
hopeful that my colleagues will support inclusion of the 
Generic Drug Application Fairness Act into the User Fee 
package, which is being considered, because this would at least 
temporarily fix the consequences that you discussed.
    Let me ask Mr. Wheadon, if you would, we heard from Dr. 
Woodcock a little bit ago that there is added language to the 
discussion draft that was not part of the negotiated PDUFA 
agreement, and in FDA's view, these extensive reporting 
requirements would place a burden on the Agency and could 
result in an unwarranted reshuffling of resources in other 
areas. What is PhRMA's view on this added provision?
    Dr. Wheadon. Well, there are two aspects to consider. In 
many meetings with the FDA we have asked for data going down to 
the division level so that we can see whether or not there were 
some learnings to be garnered in terms of divisions that 
actually are more efficient versus those that may not be as 
efficient. Having said that, we also recognize that we don't 
want to burden the Agency with a panoply of measurements coming 
out of the PDUFA agreement. As Dr. Woodcock described, that may 
have the unintended effect of diverting resources from the 
needed activities of reviewing applications and getting those 
applications acted upon. So it is a very nuanced position if 
you will that in terms of getting data down to the review 
division can be useful and we certainly have asked for such 
data, but we don't want to have so many measurements loaded 
onto the Agency such that they aren't able to do the basic work 
that they are there to do.
    Mr. Pallone. But I mean you said--and I think she said--
that this wasn't part of your original agreement, correct?
    Dr. Wheadon. The review division data was not part of the 
original, no.
    Mr. Pallone. OK. You are kind of answering it but, you 
know, I know you are trying to kind of--you are expressing your 
concern that we have to be careful but I guess my concern would 
be even if we knew that FDA could fail to accomplish other 
activities because of the need to shift their times and 
resources, you know, do you think that adding that would make 
sense if that were the consequence?
    Dr. Wheadon. Certainly if it was resource-neutral, if we 
could, for example, substitute review division data for other 
measurements that are currently being collected such that the 
resources are not diverted from needed activities along drug 
approval----
    Mr. Pallone. Yes, but she said that is not likely.
    Dr. Wheadon. But if there are ways that you can do it and 
not be overly burdensome, we would be supportive of getting 
review division data.
    Mr. Pallone. I think that we all agree that we have to be 
careful. If we were to tinker with the negotiated language that 
PhRMA signed off on we could very well hinder FDA's ability to 
accomplish their other performance goals. So I think you are 
basically expressing the view that you wish there were some way 
to accomplish this without jeopardizing the other.
    Dr. Wheadon. Exactly.
    Mr. Pallone. All right. Thanks. My time is completed. Thank 
you, Mr. Chairman.
    Mr. Pitts. The chair thanks the gentleman. I recognize the 
vice chairman of the subcommittee for 5 minutes for questions.
    Mr. Burgess. I thank the chairman for the recognition.
    Mr. Levitt, let me ask you a question just so I have my 
facts correct. Your previous experience was as a deputy 
director at the Center for Devices and Radiological Health?
    Mr. Levitt. That is correct. I was deputy director for 
regulations and policy.
    Mr. Burgess. And currently, you are with the Medical Device 
Manufacturers, is that correct?
    Mr. Levitt. Currently, I am a lawyer at the law firm Hogan 
Lovells, and I am representing AdvaMed and the other trade 
associations here today.
    Mr. Burgess. In either role, can you imagine a scenario 
where it would be a company's business plan to go to market 
with something that they knew was flawed and going to cause 
harm or damage to patients? Would that be a viable business 
strategy?
    Mr. Levitt. It is hard for me to imagine anybody having 
that business strategy.
    Mr. Burgess. But you have heard the exchanges this morning 
between Mr. Markey and Dr. Shuren, myself and Dr. Shuren. Do 
you have any thoughts on what you have heard this morning? Do 
you think there is a risk out there that rogue companies are 
going to be putting damaging products out there on the market 
that the FDA's hands are essentially tied and they can't do 
anything?
    Mr. Levitt. I think it is hard for me to believe that there 
is a significant issue, problem there that needs legislation. 
The reviewers have enormous latitude to ask questions on 
devices. There almost always are incremental differences 
between new devices and old ones, and as has been pointed out, 
even after a final 510(k) decision is made, the Agency has 
additional authorities to prevent adulterated or misbranded 
devices from going onto the market. It is hard for me to 
believe--and Dr. Shuren, I thought, said as much--that the 
Agency doesn't believe it has let out onto the market unsafe 
devices.
    Mr. Burgess. And just from where I sit here, that was 
pretty troubling. Even if there is only a handful, we really 
need to know those devices and where the system failed us if 
that is happening. And I am with you. I cannot believe that it 
actually is happening. In today's medical legal climate, I 
don't think a company could exist if it pursued such a 
strategy.
    Mr. Levitt. Right. I think we would have to see the 
examples, but I can't imagine any company going in with a 
business plan to say I am going to sell a flawed device.
    Mr. Burgess. Additionally--and of course your testimony 
and, Mr. Coukell, I think your testimony as well--the 
indication was that specifically the Center for Devices and 
Radiological Health required an additional 200 employees. Did I 
pick up that information correctly?
    Mr. Coukell. Yes, sir, that is a consequence of the User 
Fee Agreement that has been negotiated between the industry and 
FDA.
    Mr. Burgess. And will these 200 new employees, will they be 
housed at White Oak or will they be reviewers out somewhere 
else in the country or will they be put on the job inspecting 
manufacturing plants? Where do they go? I visited Dr. Shuren. 
It is very lovely and spacious offices out there at White Oak, 
but I didn't see space for 200 more people.
    Mr. Coukell. Well, there is a lot of construction out 
there, sir, but I don't know the answer to that.
    Mr. Burgess. OK. So we are expanding government in the 
process of doing this. And I am not disputing that they are not 
necessary, but at the same time, maybe, Mr. Chairman, we can, 
as a written question, follow up to Dr. Shuren. We can get a 
breakdown on the activities and duties of those 200 new 
personnel that are going to be hired under the monies provided 
by the User Fee Agreement.
    Ms. Radcliffe, let me ask you a question. I have worked on 
the issue of conflicts. 2007, when the reauthorization was done 
that year, I thought the language on conflicts went a little 
bit too far and was too restrictive. Do you think that the 
concerns I had that day in June were justified about the 
conflicts language being a little too restrictive?
    Ms. Radcliffe. We do and we thank you very much for your 
work on that issue. The conflicts of interest are extremely 
important and we respect the need to ensure that conflicts of 
interest don't affect the way----
    Mr. Burgess. Correct.
    Ms. Radcliffe [continuing]. That FDA does its very 
important work. That being said, we have heard from many 
stakeholders that the provisions that were put in place have 
limited FDA's ability to put the right expertise on its 
advisory committees, and that is also I think of great concern 
to patients and certainly to industry. And so we appreciate the 
effort to return FDA to being governed by the same conflict-of-
interest provisions that the rest of the U.S. Government is 
governed by.
    Mr. Burgess. And certainly I want to thank you for working 
with committee staff to try to get that issue resolved.
    Mr. Gaugh, let me just ask you a question. I mean drug 
shortages come up every time we have a hearing such as this. Do 
you have an opinion as to is there enough in the User Fee 
Agreements, the draft that you have, is there enough in there 
to deal with the issue of drug shortages from the generic 
manufacturers' standpoint?
    Mr. Gaugh. We believe that the draft, including to the 
draft would be the private stakeholder group, the ARI, 
Accelerated Recovery Initiative. Between those two, there would 
be enough, yes.
    Mr. Burgess. Let me ask you this. Sometimes it occurs to me 
that maybe we have tightened things down too much, that the 
hyper-competition that has been introduced into the marketplace 
has made it unprofitable for a manufacturer to continue 
manufacture of something. And then if a problem occurs with 
their manufacturing floor, they just say forget it. I am out of 
the business. Is that in fact happening?
    Mr. Gaugh. I think part of the answer to that is, as Dr. 
Woodcock said today, the majority of the drug shortages in our 
environment as we see today is the sterile injectables, and 
sterile injectables are a highly sophisticated process and 
there is really only a handful in the United States that make 
the sterile injectables. So when an issue happens with the 
line, as you have said, that puts a severe crunch on the entire 
pipeline.
    Mr. Burgess. OK. Thank you, Mr. Chairman. I will yield 
back.
    Mr. Pitts. The chair thanks the gentleman and recognizes 
the ranking member emeritus, Mr. Dingell, for 5 minutes for 
questions.
    Mr. Dingell. Thank you, Mr. Chairman.
    And again, I want to thank you for this hearing but I also 
want to thank my colleague, Mr. Murphy, for working with me on 
the important system and issue of priority in inspections. 
These questions will go first to Mr. Gaugh.
    Mr. Gaugh, yes or no, under the User Fee Agreement 
negotiated by the generic drug industry, your industry is 
committed to paying additional fees to ensure that both foreign 
and domestic manufacturers are held to the same inspection 
standards? Is that correct? Yes or no?
    Mr. Gaugh. Yes.
    Mr. Dingell. And I believe that it is in good part because 
you are concerned that our domestic industry is inspected 
rather more and is policed rather more carefully than the 
foreigners, is that right?
    Mr. Gaugh. Yes.
    Mr. Dingell. Now, again, Mr. Gaugh, yes or no, these 
additional fees will ensure foreign and domestic manufacturers 
are held to the same inspection frequency and standards? Is 
that correct?
    Mr. Gaugh. Yes.
    Mr. Dingell. Now, again, if you please, the same inspection 
frequency as agreed to by FDA and the generic drug industry 
under the User Fee Agreement is routine inspection every 2 
years, is that correct?
    Mr. Gaugh. That is correct, yes.
    Mr. Dingell. Now, again, do you agree routine inspections 
with parity between foreign and domestic manufacturers will 
help level the playing field for your industry? Yes or no?
    Mr. Gaugh. Yes.
    Mr. Dingell. Is it fair to say that those in your industry 
are comfortable with being inspected every 2 years?
    Mr. Gaugh. Yes.
    Mr. Dingell. Now, thank you for your kindness.
    Mr. Coukell, these questions for you, yes or no again to 
the degree you can. FDA is currently required by the Federal 
Food and Drug and Cosmetic Act to conduct a GMP inspection of 
domestic drug manufacturers every 2 years. Is that correct?
    Mr. Coukell. Yes, sir.
    Mr. Dingell. Many have proposed removing the requirement 
for biannual inspections and instead moving to a fully risk-
based inspection system with no minimum inspection frequency. 
FDA currently uses a fully risk-based approach for inspections 
of foreign drug manufacturing facilities with no minimum 
inspection frequency. Is that correct?
    Mr. Coukell. Yes.
    Mr. Dingell. Under this approach, how is FDA currently 
inspecting foreign drug manufacturing facilities?
    Mr. Coukell. We look at all facilities outside the U.S. it 
is about every 9 years. If we look at China, for example, it is 
about every 17. Those are averages that come from the GAO.
    Mr. Dingell. Now, would a fully risk-based inspection 
schedule guarantee that no drug manufacturing facility went 
indefinitely without an inspection?
    Mr. Coukell. No.
    Mr. Dingell. But it could, could it not?
    Mr. Coukell. Would a fully risk-based system----
    Mr. Dingell. Yes.
    Mr. Coukell [continuing]. Guarantee that----
    Mr. Dingell. Yes, if it just says that we are going to do 
this on the basis of risk, they could say, well, we don't find 
any basis for inspecting this particular facility.
    Mr. Coukell. Yes, I agree with you.
    Mr. Dingell. OK. Now, would a minimum inspection frequency 
provide regulatory certainty to our drug manufacturers, promote 
parity between our domestic and foreign drug manufacturers, and 
better protect the public's health and safety?
    Mr. Coukell. Yes, it would.
    Mr. Dingell. Mr. Chairman, I am giving you back a minute 
and 14 seconds.
    Mr. Pitts. The chair thanks the gentleman.
    Mr. Dingell. Thank you.
    Mr. Pitts. Recognizes the gentleman from Louisiana, Dr. 
Cassidy, for 5 minutes for questions.
    Dr. Cassidy. I see in your testimony you are concerned 
regarding the tracking of drugs in order to detect 
counterfeiting. One of my concerns though, and which Dr. 
Woodcock agreed, if somebody is buying from an illegitimate 
online pharmacy, they are buying straight from an overseas 
provider, then really the absence of an RID or something 
similar, a unique identifier, would not provide any benefit. 
The person is going to open up their package and they are going 
to open it and they are not going to look to see, oh, my gosh, 
is there something tracking it? Would you agree with that?
    Mr. Coukell. I think it is important to note that there are 
both legitimate and illegitimate online pharmacies and many of 
our big retail chains operate online pharmacies. So if a person 
is obtaining drugs from the legitimate supply, whether they are 
going to a brick-and-mortar pharmacy or online----
    Dr. Cassidy. Well, I agree with that totally----
    Mr. Coukell [continuing]. Then it is difficult.
    Dr. Cassidy [continuing]. And I don't mean to interrupt; it 
is limited time.
    Mr. Coukell. But----
    Dr. Cassidy. In fact, that is my point. Right now, the 
consumer has limited ability to tell the difference between a 
legitimate and an illegitimate. And even though one of the 
things we can use to track counterfeits would be this unique ID 
system. Nonetheless, it still would not identify counterfeit 
drugs arriving in your mailbox from an illegitimate pharmacy.
    Mr. Coukell. That is correct.
    Dr. Cassidy. Yes. So now, that said, Ms. Radcliffe and Dr. 
Wheadon, I am very interested in these rare pediatric diseases. 
Your heart tugs, they affect so few, it is hard to get an 
adequate in for a clinical trial, and there is never going to 
be a major investment by a pharmaceutical company if it is 
based upon return, OK. I read your testimony regarding the 
bills we have to promote pediatrics. What ideas do you have in 
order to encourage research into cures for these terribly 
tragic but rare diseases? You see where I am going with that.
    Ms. Radcliffe. This is an issue of extreme interest to many 
of our companies for the reason that you say. It tugs on the 
heartstrings when there are these very rare pediatric 
conditions and there are no cures for them. We have worked on 
this issue in a number of different ways. Specific to the issue 
at hand in this hearing today within the PDUFA agreement there 
is a provision for helping companies to move forward with drug 
development on rare conditions where FDA will have additional 
resources to hire expertise and to reach out to the community 
and gain input on how that may be done.
    Additionally, we support--as I said in my both written and 
oral testimony--the Faster Access to Specialized Treatments 
Act, which seeks to expand accelerated approval in a way that 
would allow the use of that pathway for more conditions by 
encouraging FDA to take advantage of modern tools, whether it 
is biomarkers, pharmacogenomics, predictive toxicology and so 
forth, and to expand these so that pathway to----
    Dr. Cassidy. Let me ask you because that seems as if those 
products would be a byproduct of research focused elsewhere. 
Does that make sense?
    Ms. Radcliffe. In some cases, yes, but that may be a very 
effective way of ensuring that those products do get developed.
    Dr. Cassidy. Is there a way to encourage the pharmaceutical 
companies in a market-based approach to focus resources on a 
particular illness? You are more likely to get to your 
destination if you go there directly theoretically than if you 
just kind of as a, you know, circuitous route end up there.
    Ms. Radcliffe. Right. That gets to a much broader 
discussion, I think, about the incentives that are available 
for research and development, whether it is R&D tax credits, 
whether it is the way the products are reimbursed and so forth, 
a very complicated decision that I think goes far beyond what 
FDA could accomplish. FDA, however, has a huge role in ensuring 
that companies have the information that they need to create 
drug development programs in rare disease which encounter 
challenges that are, honestly, not just related to the return 
that companies get----
    Dr. Cassidy. A friend of my who has such a child--so there 
is kind of a personal interest in mine----
    Ms. Radcliffe. Yes.
    Dr. Cassidy [continuing]. He tells me that there is a bill 
being considered or proposed and if the company came up with 
such a drug for such a rare condition, they would get a 
transferrable sort of expedited review of any other drug. Now, 
would that be an effective way to do this or would that be--and 
I will open that up to the panel if anybody has a thought on 
this.
    Ms. Radcliffe. Sure. We are aware of that legislation and 
we haven't taken a position on it. That mechanism has been 
tried in other settings and we certainly think that where such 
a mechanism could be put in place, it is useful to do so, but 
it hasn't proven so far to really be a major incentive for this 
type of work.
    Dr. Cassidy. Thank you. I yield back. Thank you.
    Mr. Pitts. The chair thanks the gentleman and recognizes 
the ranking member of the full committee, Mr. Waxman, for 5 
minutes for questions.
    Mr. Waxman. Thank you very much, Mr. Chairman.
    Mr. Coukell, I am going to ask you about antibiotics. I 
know that Pew has had a longstanding interest in making sure 
that we get more antibiotics, new antibiotics, so our arsenal 
is full, but I don't think we just want any antibiotics. We 
don't need two versions of the same antibiotics we already 
have. That would I am sure only serve to worsen the problem of 
antibiotic resistance. So I want to search your views on 
whether the language in the discussion draft for this hearing 
will achieve this goal.
    The bill, as it is currently written, would grant 
exclusivity for any antibiotic to treat essentially any 
resistant bacterial pathogen. Is that approach adequate to 
ensure that we get only the antibiotics that we truly need? And 
if not, is there another approach that you would suggest we 
take so that we can better target those drugs?
    Mr. Coukell. Thank you for that question, sir. I think the 
goal in the discussion draft is to make it more attractive for 
companies to be in the business of antibiotics. So that means 
they need predictability. We need to address the serious public 
health problem and we need to make sure that we are using 
taxpayer resources wisely. While we are on predictability, 
right now, the discussion draft has a list of bugs in it, and 
the question is if you get qualified early on as you do under 
the Orphan Drug Act as a qualified product, how does that carry 
through to you doing your clinical studies and coming to 
market? Bleach will kill resistant bugs; nobody would suggest 
it is a good drug. And so the question is, is there an 
established way to look at antibiotics and say here are the 
ones we need and here is how it would work through to market? 
And we think that looking at serious and life-threatening 
infections would be a very workable way to do it. It would 
address the public health need and provide great 
predictability.
    Mr. Waxman. So target it in that way and not have it more 
general----
    Mr. Coukell. In some ways that is broader in the sense that 
you don't have to have activity against the resistant organism 
but you are tackling the public health aide, which is a 
treatment for a serious or life-threatening infection.
    Mr. Waxman. OK. Now, the LPAD offers an approach that I 
think should be given serious consideration because it has a 
potential to get important new antibiotics into market more 
quickly than usually possible. However, when we are getting 
products to market more quickly based on more limited clinical 
data they usually require, it becomes that much more important 
that we are confident that they will be used only in the small 
populations for which the drug was approved.
    With antibiotics, this concern is doubled. We must worry 
not only about patients receiving medications that could be 
dangerous to them because their safety has not been established 
in broader populations, we also need to act in a way that will 
preserve the efficacy of new antibiotics by using them only 
when truly necessary. Do you believe that the mechanism for 
limiting off-label use of antibiotics approved under LPAD will 
be effective in achieving both of these goals, and if not, do 
you have suggestions for additional mechanisms?
    Mr. Coukell. We think it is an interesting proposal. And 
let me make a couple of points about what we are thinking as we 
consider it. And we are still trying to understand how it would 
work. But first, it is attractive if you could have a faster 
pathway and then use the drugs only in patients that you 
couldn't treat with existing drugs. That would be good for 
public health and it would be good for the companies assuming 
there is a viable business model there. So one question is what 
does it take to get these drugs to market and get that 
particular designation?
    And then the limited population part of the Limited 
Population Provision is how do we ensure that if they are 
coming with a higher risk or lower evidence that they are used 
the way we intend--and there is nothing in the statutory 
language that ensure that--so the question is how would 
individual providers, how would payers, how would hospital 
formulary committees use these drugs and ensure that they were 
used only on label. And that is something that we are still 
trying to understand.
    And then the other thing I think you would want to know is 
if you are approving drugs based on less evidence, do we have a 
mechanism of post-market surveillance so we can continue to 
learn as they are in clinical use?
    Mr. Waxman. Well, what is your reaction to what is in the 
draft?
    Mr. Coukell. We are still studying. We think it is 
interesting, but as I say, we are trying to understand----
    Mr. Waxman. You are still thinking but it needs to be 
refined in some way. You are trying to think it through?
    Mr. Coukell. Trying to think it through.
    Mr. Waxman. Is that it? OK. Well, we are, too, and so we 
would appreciate your suggestions.
    Mr. Chairman, I am going to yield back my time. Thank you.
    Mr. Pitts. The chair thanks the gentleman and recognizes 
the gentleman from Illinois, Mr. Shimkus, for 5 minutes for 
questions.
    Mr. Shimkus. Thank you, Mr. Chairman.
    And it may have been noted before but I see Dr. Shuren is 
still in the committee room. Thank you for being here. This is 
important. Even my follow-up is going to be on the, again, 
working on the IDEs and the 510(k) a little bit more. Most of 
my questions will be directed to Mr. Levitt, but I do 
appreciate you being here. I did like Dr. Woodcock's statement 
Congress needs to define a problem that we want to address, and 
we really do think there is a problem with the change in the 
process in these two areas.
    So with that, Mr. Levitt, you said in the explanation to 
the chairman's question about--kind of explain the 
Investigative Device Exemption, safety and protocol were the 
two primary issues. And then the FDA's change in the 
processing, that it has to be good enough for final approval. 
Are there benefits to going through the Investigational Device 
Exemption process even though you might not eventually get to a 
final approval in the process? Are there positives going 
through this process?
    Mr. Levitt. Well, I think there are positives any time you 
are learning new information in a structured setting under 
informed consent of course about the performance of new devices 
or improved devices both for safety and for effectiveness. Very 
often, a company may want to try something and if it is not 
working have a small trial and learn that quickly and pursue 
another direction. Or they may want to proceed in a more robust 
way because they have greater confidence. So I think there is 
value in any clinical study that is safe and that has a bona 
fide research protocol to greater learning.
    Mr. Shimkus. So the FDA's change in focus--I do think there 
are benefits from going through--if you meet the two criteria 
of safety and bona fide protocol--and that the information you 
learn may help you or may help the sector move in a more robust 
path forward or to change course and start anew. That is 
summarizing what you said?
    Mr. Levitt. Yes.
    Mr. Shimkus. I am not going to go over the issue of what is 
the legal law and what is the--what was the other thing I had 
here on the Administrative Procedures Act? And there are some, 
I think, legal concerns with the change without it being bona 
fide. You might have some experience in your legal background 
and your other history with that, but I think I addressed that 
enough.
    On the 510(k) process, can you walk us through what 
currently happens when a company makes a modification to 
existing 510(k)?
    Mr. Levitt. Yes. When companies often make changes to their 
devices, FDA has a flowchart to help companies walk through is 
this a significant change affecting safety and effectiveness? 
If it is, then the company submits a new 510(k). If it isn't, 
the company documents what their decision and a basis is. They 
make the change and they move on. That information is available 
to FDA during an FDA inspection so there is still transparency.
    Mr. Shimkus. So have you heard--obviously, from the sector 
now that you are representing--the concern that with the 
changed rules, there may be a projected backlog of 300 to 500 
percent and that this is harmful to the process, not helpful?
    Mr. Levitt. Yes, I have certainly heard that. I mean what 
Dr. Shuren testified this morning, if I heard him correctly, 
was that FDA really was just trying to affect a little gray 
zone, a small number around the margin. But as companies went 
back and applied the examples, companies saying oh, no. You, 
FDA, really missed the mark. This would result in just a flood 
of new 510(k)s where there really is not a significant change. 
But the examples that FDA gave led them to believe they would 
have to submit this. So there is clearly a gap between what FDA 
intended and how the industry is perceiving it. And I think Dr. 
Shuren testified he recognized that and he needs to address 
that.
    Mr. Shimkus. I appreciate you all being here today and, Dr. 
Shuren, that is why I appreciate you remaining in the committee 
room because, you know, the other issue is resources, which we 
can agree to disagree. But I do think we want to improve the 
system. This is our one opportunity to do that.
    And my time is expired, Mr. Chairman. Thank you.
    Mr. Pitts. The chair thanks the gentleman.
    That concludes the questioning. I would like to thank the 
panel. This has been an extremely valuable hearing, very 
important information.
    I have a unanimous consent request to enter into the record 
statements from the National Alliance on Mental Illness and the 
California Healthcare Institute. That has been shared without 
objection, so ordered.
    [The information appears at the conclusion of the hearing.]
    Mr. Pitts. I remind Members that they have 10 business days 
to submit questions for the record, and I ask all witnesses to 
respond to questions promptly. Members should submit their 
questions by the close of business on Wednesday, May the 2nd.
    Without objection, the subcommittee is adjourned.
    [Whereupon, at 2:44 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]

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