[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]



 
                       EXAMINING DRUG COMPOUNDING
=======================================================================

                                HEARING

                               BEFORE THE

                         SUBCOMMITTEE ON HEALTH

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              MAY 23, 2013

                               __________

                           Serial No. 113-48



[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]




      Printed for the use of the Committee on Energy and Commerce
                        energycommerce.house.gov


                              __________



                    U.S. GOVERNMENT PRINTING OFFICE
85-438                        WASHINGTON : 2014
________________________________________________________________________
For sale by the Superintendent of Documents, U.S. Government Printing Office, 
http://bookstore.gpo.gov. For more information, contact the GPO Customer Contact Center, U.S. Government Printing Office. Phone 202-512-1800, or 
866-512-1800 (toll-free). E-mail, [email protected]  







                    COMMITTEE ON ENERGY AND COMMERCE

                          FRED UPTON, Michigan
                                 Chairman
RALPH M. HALL, Texas                 HENRY A. WAXMAN, California
JOE BARTON, Texas                      Ranking Member
  Chairman Emeritus                  JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky                 Chairman Emeritus
JOHN SHIMKUS, Illinois               EDWARD J. MARKEY, Massachusetts
JOSEPH R. PITTS, Pennsylvania        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
TIM MURPHY, Pennsylvania             GENE GREEN, Texas
MICHAEL C. BURGESS, Texas            DIANA DeGETTE, Colorado
MARSHA BLACKBURN, Tennessee          LOIS CAPPS, California
  Vice Chairman                      MICHAEL F. DOYLE, Pennsylvania
PHIL GINGREY, Georgia                JANICE D. SCHAKOWSKY, Illinois
STEVE SCALISE, Louisiana             JIM MATHESON, Utah
ROBERT E. LATTA, Ohio                G.K. BUTTERFIELD, North Carolina
CATHY McMORRIS RODGERS, Washington   JOHN BARROW, Georgia
GREGG HARPER, Mississippi            DORIS O. MATSUI, California
LEONARD LANCE, New Jersey            DONNA M. CHRISTENSEN, Virgin 
BILL CASSIDY, Louisiana                  Islands
BRETT GUTHRIE, Kentucky              KATHY CASTOR, Florida
PETE OLSON, Texas                    JOHN P. SARBANES, Maryland
DAVID B. McKINLEY, West Virginia     JERRY McNERNEY, California
CORY GARDNER, Colorado               BRUCE L. BRALEY, Iowa
MIKE POMPEO, Kansas                  PETER WELCH, Vermont
ADAM KINZINGER, Illinois             BEN RAY LUJAN, New Mexico
H. MORGAN GRIFFITH, Virginia         PAUL TONKO, New York
GUS M. BILIRAKIS, Florida
BILL JOHNSON, Missouri
BILLY LONG, Missouri
RENEE L. ELLMERS, North Carolina
                         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               ELIOT L. ENGEL, New York
MIKE ROGERS, Michigan                LOIS CAPPS, California
TIM MURPHY, Pennsylvania             JANICE D. SCHAKOWSKY, Illinois
MARSHA BLACKBURN, Tennessee          JIM MATHESON, Utah
PHIL GINGREY, Georgia                GENE GREEN, Texas
CATHY McMORRIS RODGERS, Washington   G.K. BUTTERFIELD, North Carolina
LEONARD LANCE, New Jersey            JOHN BARROW, Georgia
BILL CASSIDY, Louisiana              DONNA M. CHRISTENSEN, Virgin 
BRETT GUTHRIE, Kentucky                  Islands
H. MORGAN GRIFFITH, Virginia         KATHY CASTOR, Florida
GUS M. BILIRAKIS, Florida            JOHN P. SARBANES, Maryland
RENEE L. ELLMERS, North Carolina     HENRY A. WAXMAN, California (ex 
JOE BARTON, Texas                        officio)
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...........................................     3
Hon. Joe Barton, a Representative in Congress from the State of 
  Texas, prepared statement......................................     4
Hon. Frank Pallone, Jr., a Representative in Congress from the 
  State of New Jersey, opening statement.........................     4
Hon. Michael C. Burgess, a Representative in Congress from the 
  State of Texas, opening statement..............................     6

                               Witnesses

Janet Woodcock, M.D., Director, Center for Drug Evaluation and 
  Research, Food and Drug Administration.........................     8
    Prepared statement...........................................    11
    Answers to submitted questions...............................   136
Scott Gottlieb, M.D., Resident Fellow, American Enterprise 
  Institute......................................................    52
    Prepared statement...........................................    55
Joseph H. Harmison, Owner, Harmison Pharmacies, on Behalf of 
  National Community Pharmacist Association......................    70
    Prepared statement...........................................    72
Elizabeth Scott (Scotti) Russell, Government Affairs Manager, 
  National Association of Boards of Pharmacy.....................    78
    Prepared statement...........................................    80
Gabrielle Cosel, Manager, Drug Safety, The Pew Charitable Trust..    84
    Prepared statement...........................................    86
Gerry Migliaccio, Quality Systems Consultant, Migliaccio 
  Consulting.....................................................    93
    Prepared statement...........................................    95

                           Submitted Material

Letter of October 9, 2012, from Mr. Dingell to United States Food 
  and Drug Administration........................................   110
    FDA response dated April 26, 2013............................   113
Letter of October 16, 2012, from Mr. Dingell to U.S. FDA.........   125
    FDA response dated April 26, 2013............................   127
Statement of the National Association of Chain Drug Stores, 
  submitted by Mr. Pitts.........................................   129
Statement of Central Admixture Pharmacy Services, Inc., submitted 
  by Mr. Pitts...................................................   133


                       EXAMINING DRUG COMPOUNDING

                              ----------                              


                         THURSDAY, MAY 23, 2013

                  House of Representatives,
                            Subcommittee on Health,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 9:58 a.m., in 
room 2322, Rayburn, Hon. Joseph R. Pitts (chairman of the 
subcommittee) presiding.
    Present: Representatives Pitts, Burgess, Shimkus, Murphy, 
Gingrey, Lance, Guthrie, Griffith, Bilirakis, Ellmers, Barton, 
Pallone, Dingell, Engel, Capps, Matheson, Green, Butterfield, 
Barrow, Christensen, Castor, and Waxman (ex officio).
    Staff Present: Clay Alspach, Chief Counsel, Health; Mike 
Bloomquist, General Counsel; Karen Christian, Chief Counsel, 
Oversight; Paul Edattel, Professional Staff Member, Health; 
Brad Grantz, Policy Coordinator, O&I; Sydne Harwick, 
Legislative Clerk; Nick Magallanes, Policy Coordinator, CMT; 
Carly McWilliams, Professional Staff Member, Health; Andrew 
Powaleny, Deputy Press Secretary; Krista Rosenthall, Counsel to 
Chairman Emeritus; Chris Sarley, Policy Coordinator, 
Environment & Economy; Heidi Stirrup, Health Policy 
Coordinator; John Stone, Counsel, Oversight; Brian Cohen, 
Minority Staff Director, Oversight & Investigations, Senior 
Policy Advisory; Alli Corr, Minority Policy Analyst; Eric 
Flamm, Minority FDA Detailee; Ruth Katz, Minority Chief Public 
Health Counsel; Elizabeth Letter, Minority Assistant Press 
Secretary; Karen Nelson, Minority Deputy Committee Staff 
Director for Health; Stephen Salsbury, Minority Special 
Assistant; Rachel Sher, Minority Senior Counsel; and Ryan 
Skukowski, Minority Staff Assistant.

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

    Mr. Pitts. The subcommittee will come to order. The Chair 
will recognize himself for an opening statement.
    The purpose of today's hearing is to hear from FDA and 
healthcare experts regarding the history and importance of drug 
compounding to patients and the current regulation of 
compounding on the Federal and State levels. As we are all 
aware, in the summer and fall of 2012 a Massachusetts company, 
the New England Compounding Center, NECC, shipped over 17,000 
vials of an injectable steroid solution from 3 contaminated 
lots to healthcare facilities across the country.
    After receiving injections of NECC's contaminated steroid, 
over 50 people died from complications associated with fungal 
meningitis; further, almost 700 others were stricken with 
meningitis or other persistent fungal infections. The outbreak 
ranks as one of the worst public health crises associated with 
contaminated drugs in the history of the United States.
    This committee began an investigation into the matter, and 
on October 9th a bipartisan committee letter was sent to FDA 
requesting details surrounding the outbreak and the prevention 
of future outbreaks. On October 17, the committee sent a letter 
to FDA asking for all documents related to the outbreak, 
including internal memoranda and communications with NECC. The 
Oversight and Investigations Subcommittee held a hearing on 
November 14, 2012, where Dr. Margaret Hamburg testified 
examining whether the meningitis outbreak could have been 
prevented. Two days later, on November 16th, the committee sent 
yet another letter to FDA stating that the agency had not 
provided any of the internal communications or memoranda in 
response to the October 17th letter.
    It was not until March 21st, 2013, over 5 months after the 
original request, and after being threatened with the 
possibility of a subpoena, that FDA fully complied with the 
committee's document request. It should be noted that the 
Massachusetts Department of Public Health had fully complied 
with the committee's document request, turning over thousands 
of pages of documents related to its interactions with NECC 
before the November hearing took place.
    On April 16, 2013, the O&I Subcommittee held another 
hearing entitled, ``A Continuing Investigation Into the Fungal 
Meningitis Outbreak: Could It Have Been Prevented?'' and 
released a 43-page report on its investigation into the NECC 
tragedy. The report stated that FDA had been aware of potential 
problems at NECC since 2002. During her testimony at the 
November hearing, Dr. Hamburg repeatedly expressed uncertainty 
about FDA's authority over compounding pharmacies, partially 
due to conflicting opinions on the matter issued by two 
different circuit courts of appeals in 2009.
    This uncertainty, however, has not stopped FDA from 
engaging in multiple enforcement activities against compounding 
pharmacies engaged in practices similar to those of NECC since 
the outbreak took place. This year alone, FDA has announced 
recalls from compounding pharmacies in Augusta, Georgia, and 
Lake Mary, Florida, and St. Petersburg, Florida. In addition, 
the FDA in October of 2012 was prepared to issue new guidance 
related to compounding enforcement under its authority under 
Section 503.
    Since the outbreak, however, the FDA has called for new 
authority that creates a new category of compounding 
manufacturers. From what I understand, there are concerns that 
creating this new category could undermine drug safety by 
lowering standards and also weaken intellectual property 
protection.
    I would like to thank Dr. Woodcock for appearing before us 
today to explain her understanding of FDA's authority over 
compounding pharmacies and what actions the agency is taking to 
ensure that future outbreaks can be prevented. And I would also 
like to thank all of our other witnesses for sharing their 
expertise on compounding and its importance to patients.
    Thank you. And I will yield the balance of my time to 
Congressman Barton.
    [The prepared statement of Mr. Pitts follows:]

               Prepared statement of Hon. Joseph R. Pitts

    The Subcommittee will come to order.
    The Chair will recognize himself for an opening 
statement.The purpose of today's hearing is to hear from FDA 
and health care experts regarding the history and importance of 
drug compounding to patients and the current regulation of 
compounding on the federal and state levels.
    As we are all aware, in the summer and fall of 2012, a 
Massachusetts company, the New England Compounding Center 
(NECC), shipped over 17,000 vials of an injectable steroid 
solution from three contaminated lots to health care facilities 
across the country.
    After receiving injections of NECC's contaminated steroid, 
over 50 people died from complications associated with fungal 
meningitis. Further, almost 700 others were stricken with 
meningitis or other persistent fungal infections.
    The outbreak ranks as one of the worst public health crises 
associated with contaminated drugs in the history of the United 
States.
    This Committee began an investigation into the matter, and 
on October 9th, a bipartisan Committee letter was sent to FDA, 
requesting details surrounding the outbreak and the prevention 
of future outbreaks.
    On October 17th, the Committee sent a letter to FDA asking 
for all documents related to the outbreak, including internal 
memoranda and communications with NECC.
    The Oversight and Investigations (O&I) Subcommittee held a 
hearing on November 14, 2012, where Dr. Margaret Hamburg 
testified, examining whether the meningitis outbreak could have 
been prevented.
    Two days later, on November 16th, the Committee sent yet 
another letter to FDA stating that the agency had not provided 
any of the internal communications or memoranda in response to 
the October 17th letter.
    It was not until March 21, 2013--over five months after the 
original request and after being threatened with the 
possibility of a subpoena--that FDA fully complied with the 
Committee's document request.
    It should be noted that the Massachusetts Department of 
Public Health (MDPH) had fully complied with the Committee's 
document request--turning over thousands of pages of documents 
related to its interactions with NECC--before the November 
hearing took place.
    On April 16, 2013, the O&I Subcommittee held another 
hearing entitled ``A Continuing Investigation into the Fungal 
Meningitis Outbreak: Could It Have Been Prevented?'' and 
released a 43-page report on its investigation into the NECC 
tragedy.
    The report stated that FDA had been aware of potential 
problems at NECC since 2002.
    During her testimony at the November hearing, Dr. Hamburg 
repeatedly expressed uncertainty about FDA's authority over 
compounding pharmacies, partially due to conflicting opinions 
on the matter issued by two different Circuit Courts of Appeals 
in 2009.
    This uncertainty, however, has not stopped FDA from 
engaging in multiple enforcement activities against compounding 
pharmacies engaged in practices similar to those of NECC's 
since the outbreak took place.
    This year alone, FDA has announced recalls from compounding 
pharmacies in Augusta, GA, and Lake Mary and St. Petersburg, 
FL.
    In addition, the FDA in October 2012 was prepared to issue 
new guidance related to compounding enforcement under its 
authority under Section 503. Since the outbreak, however, the 
FDA has called for new authority that creates a new category of 
compounding manufacturers.
    From what I understand, there are concerns that creating 
this new category could undermine drug safety by lowering 
standards and also weaken intellectual property protection.
    I would like to thank Dr. Woodcock for appearing before us 
today to explain her understanding of FDA's authority over 
compounding pharmacies and what actions the agency is taking to 
ensure that future outbreaks can be prevented.
    I would also thank our other witnesses for sharing their 
expertise on compounding and its importance to patients.
    Thank you, and I yield the balance of my time to Rep. ----
--------------------------------.

    Mr. Barton. Thank you, Mr. Chairman. I am glad to be here 
today. We are glad to have Dr. Woodcock. She is a longtime 
witness before the committee, and we have great respect for 
her. We look forward to hearing what you have to say.
    I think it is pretty obvious to neutral observers that the 
facts do indicate that the FDA had authority that it refused or 
chose not to use in the situation that we are investigating. I 
am sure Dr. Woodcock will elaborate on that and may have a 
counter point of view.
    Mr. Chairman, on the second panel I have a good friend and 
former constituent, Mr. Joe Harmison, who is in the audience. 
He is the past president of the Texas Pharmacy Association, the 
past president of the National Community Pharmacists 
Association. He is that rare breed, he still owns and operates 
his own pharmacy. The only thing I can find negative about him 
is that he graduated from the University of Oklahoma School of 
Pharmacy back in 1970. Other than that, he is a great guy and a 
good friend, and I am sure he will be very helpful in his 
testimony on the second panel.
    I might also take personal privilege just to say that Mr. 
Shimkus, to my right, threw out a runner at third base today in 
our intersquad game, as we get ready to battle the Democrats 
who have beat us the last 4 years in the congressional baseball 
game. So Shimkus is getting in game for that. With that, I 
yield back.
    [The prepared statement of Mr. Barton follows:]

                 Prepared statement of Hon. Joe Barton

    Thank you, Chairman Pitts for holding this hearing. I 
applaud the Committee's oversight and investigative work on the 
recent meningitis outbreak. The facts indicate that the Food 
and Drug Administration did not use its full authority and act 
quickly against the company compounding and distributing the 
tainted medication. I look forward to hearing from our 
witnesses today in the Health Subcommittee to determine what if 
anything needs to be done legislatively to prevent further harm 
to innocent Americans.
    In particular, I would like to welcome a fellow Texan to 
the hearing, Mr. Joe Harmison, testifying today on behalf of 
the National Community Pharmacists Association. I have known 
Mr. Harmison for twenty years or so and the Committee could not 
have asked a more respected and experienced pharmacist to come 
to DC to share the community pharmacy perspective regarding 
issues relating to drug compounding. I hope he can explain the 
vital role community pharmacies play in compounding drugs for 
their patients and the difference between his operation and 
those of his association versus what was happening at the 
companies compounding the drugs that caused the recent 
outbreak.
    With that Mr. Chairman, I welcome the witnesses, look 
forward to the hearing, and yield back.

    Mr. Pitts. Chair thanks the gentleman.
    Now recognize the ranking member of the subcommittee, Mr. 
Pallone, 5 minutes for an opening statement.

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

    Mr. Pallone. Thank you, Chairman Pitts. I am pleased that 
the Health Subcommittee is finally having a hearing to examine 
drug compounding. But, unfortunately, we are months behind. 
While we are having our first hearing today to gather 
information on this topic, our colleagues in the Senate have 
already worked together to produce and mark up bipartisan 
legislation in the Health Committee. And so I think this delay 
is regrettable here.
    Access to compounding drugs is crucial for patients who 
have unique medical needs. We know that the New England 
Compounding Center that distributed the contaminated compounded 
product last year, resulting in the meningitis outbreak that 
claimed over 50 lives and infected over 700 patients, was 
clearly a bad actor. However, NECC will not be the last bad 
actor. Similar tragedies will undoubtedly occur again unless we 
address the significant gaps that exist in the current 
regulation and oversight system of compounded products. If 
patients are to have confidence in the safety and quality of 
these drugs, we must ensure that compounders meet safety and 
quality standards.
    While traditional compounders who mix medications to fill a 
prescription for a specific person are regulated at the State 
level, and drug manufacturers are regulated by the Federal 
Government, there are a growing number of companies that do not 
fall into either of these categories. Many companies are 
compounding drugs without prescriptions and shipping large 
quantities of the products across State lines; in essence, 
acting more like manufacturers than the traditional 
compounders. In the absence of clear lines of authority, these 
companies experience very little State or Federal oversight.
    So as we begin to examine drug compounding, I urge my 
colleagues to use this as an opportunity to move forward to 
determine what changes are needed rather than looking back and 
casting blame. We must stop questioning whether the FDA needs 
new authority. In fact, the past few months of examination by 
our Oversight Committee and the Senate Health Committee it has 
become abundantly clear that conflicting court opinions and 
ambiguous language in the law show that the FDA does not have 
adequate authority to oversee compounders. And that is why I 
support efforts to help identify a new category of companies to 
be subject to Federal regulation and oversight and provide FDA 
the tools and resources it needs to properly regulate them.
    So, Mr. Chairman, I hope today can be the start to this 
committee coming together in a bipartisan manner to address 
this issue and create greater clarity in the law so the 
tragedies like the one involving NECC do not happen again. The 
American people should know that the drugs that they receive 
are safe and effective.
    So I thank all our witnesses. I know we have a second 
panel. I look forward to hearing about how Congress can best 
address the gaps in regulation and oversight that were 
unfortunately highlighted by the NECC meningitis outbreak and 
how all stakeholders can work together to protect the public 
health.
    I don't know if anybody wants any of my 2 minutes on my 
side. You would, Mr. Dingell? I yield to Mr. Dingell.
    Mr. Dingell. I thank the gentleman for yielding. I thank 
you for having this hearing. I welcome our first panel member 
today. Good to see her back before the committee.
    This committee has a great opportunity. We can quibble all 
we want about whether we have the authority, whether it is 
needed or not. Simple fact of the matter is people are dying, 
people are being made sick. And many people in this compounding 
industry, if that is what you want to say it is, have been 
studying ways to get around food and drug regulation and to 
continue, for all intents and purposes, becoming manufacturers.
    The question is, do we want to persist on that while we 
engage in a monstrous quibble, or do we want to get down and 
cut the corners that come from courts and judges trying to 
resolve a question that is probably well beyond their 
competency.
    Having said these things, I would urge us to move forward 
on legislation, effective legislation. This committee has a 
remarkable history in this Congress, which is noteworthy for 
having done very little, to have in fact moved forward with a 
number of important pieces of legislation in a bipartisan 
fashion. I see no reason why we should not continue that kind 
of effort with all the blessings to the public that that 
obtains.
    So I would urge us to move forward. Let's put these rascals 
in the compounding industry into a place where they have law to 
obey, where everyone understands what it is, and where we can 
make our people safe. My State of Michigan suffered huge losses 
to people in sickness and death stemming from wrongdoers who 
were deliberately skating around the law. And unsafe 
pharmaceuticals well beyond the reach of Food and Drug were in 
fact poisoning and killing our people.
    This is a wonderful opportunity. I commend you for making 
it possible. I look forward to working with you. I commend my 
colleague Mr. Pallone for his wise counsel and leadership. And 
I look forward to working on this matter in an effective way 
where we do go forward together to solve a major problem for 
our people. Thank you.
    Mr. Pitts. Chair thanks the gentleman.
    Now recognize the vice chairman of the subcommittee, Dr. 
Burgess, 5 minutes for an opening statement.

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

    Mr. Burgess. Thank the chairman for the recognition. And I 
do support the efforts to examine the role that traditional 
compounding pharmacists play in the healthcare system. I know 
the value that they provide, having used them in my practice 
for a number of years.
    But we are also going to hear this morning how this 
incident necessitates broad new authorities. Recently the Food 
and Drug Administration has inspected over 50 compounding 
facilities. You have to ask yourself, by what authority did 
these 50 inspections occur? If the FDA has the authority today, 
they had it 6 months ago. The fact is one of the following 
statements must be true: The agency is acting without authority 
and risking litigation or they have the authority and have 
always had the authority and have simply failed to use it.
    Documents obtained by the Oversight and Investigations 
Subcommittee are deeply troubling, and I believe show FDA 
negligence. New England Compounding Center was making upwards 
of 30,000 vials of product without prescriptions and yet the 
Food and Drug Administration questioned whether they had 
authority under the Food, Drug, and Cosmetic Act over 
manufacturing?
    The Food and Drug Administration was aware that this 
compounding facility was making poor products for years. They 
never followed up on warning letters. Frustrated FDA staff 
could not even warn the State of Massachusetts. Whistleblowers, 
doctors providing dozens of adverse event reports and law firms 
dealing with substandard conditions came forward and the FDA 
did nothing. They didn't even pick up the phone.
    This is an example of circling the wagons after the crisis, 
and this member is having none of it. The bureaucracy held up 
the guidance for years. Testimony that is as provided through 
our Oversight and Investigations Subcommittee--the testimony 
that has been provided to both the Oversight and Investigations 
Subcommittee and this subcommittee today has been carefully 
crafted to avoid asking who failed America and who allowed NECC 
to introduce contaminated product in its supply line.
    I cannot in good conscience entertain discussion of 
legislation when not one person has been fired, reprimanded, or 
held culpable at the Food and Drug Administration. In fact, 
legislating transfers the blood of those dead and harmed from 
the agency responsible to us, the subcommittee and to Congress.
    Massachusetts fired people because they should have known, 
and yet the Food and Drug Administration, who did know, now 
wants new authority. To what end is new authority going to 
provide protection to the public if the Food and Drug 
Administration, by its own admission and track record, refuses 
to pick up and use the tools they had at their disposal. The 
Food and Drug Administration refused to go after those 
operating so far outside the bounds of legality in traditional 
compounding. Why in the world would we trust them to regulate a 
legitimate compounder?
    Until the agency admits where it failed the American 
public, I for one am not going to be a party to letting them 
get away with this dereliction of responsibility. To do 
otherwise invites further incompetence from one of the most 
important agencies under our jurisdiction and sets a dangerous 
precedent for other agencies under our purview.
    I would like to yield the balance of the time to the 
gentleman from Virginia, Mr. Griffith.
    Mr. Griffith. Thank you, Dr. Burgess.
    Last fall's fungal meningitis outbreak was a true public 
health crisis for our Nation. In Virginia's Ninth Congressional 
District, which I represent, there were two deaths and 50 
confirmed cases of fungal meningitis associated with the 
sterile compounded injections from NECC. Approximately 1,400 
patients in southwest Virginia were notified they could have 
been exposed to fungal meningitis because they received tainted 
steroid injections.
    I clearly believe that FDA had the authority they needed to 
prevent the fungal meningitis outbreak. NECC was a 
manufacturer. The committee's thorough investigation has 
demonstrated the agency failed in their oversight and did not 
pursue regulatory action against NECC and Ameridose, who were 
acting illegally as manufacturers, not as compounding 
pharmacies, in violation of the Food, Drug, and Cosmetic Act.
    With well over 130 community pharmacists provided 
invaluable access to health care in rural and remote 
communities in the mountains of southwest Virginia, I do not 
support giving FDA broad new authority over the practice of 
pharmacy, which is the jurisdiction of our States. The type of 
compounding that goes on in our local pharmacies involves 
making special medications subject to the needs of the 
individuals based on a patient-specific prescription from their 
physician.
    The real problem is large-scale operations like NECC who 
are acting illegally as drug manufacturers by making large 
batches of drugs, some of which are just copies of FDA-approved 
drugs, and then selling and shipping them all over the country.
    In her testimony, Dr. Woodcock acknowledges that FDA was in 
the final stages of publishing new guidance differentiating 
pharmacy compounding from drug manufacturing. Three years 
later, FDA finally had all of its ducks in a row and was ready 
to go forward, but they did not do so in their draft guidance 
document. I believe there are some areas that need 
clarification. So we have been doing our due diligence to 
understand this issue and develop legislation that will make it 
clear how we define what a compounding pharmacy is, which is 
and should be regulated by the States, and what a drug 
manufacturer is, which should be regulated by the FDA.
    Yield back.
    Mr. Pitts. The chair thanks the gentleman.
    That concludes our opening statements. We have two panels 
today. Our first panel today we have Dr. Janet Woodcock, 
Director of the Center for Drug Evaluation and Research, U.S. 
Food and Drug Administration.
    Thank you for coming, Dr. Woodcock. You will have 5 minutes 
to summarize your testimony. Your entire written testimony will 
be placed in the record. You are welcome and recognized for 5 
minutes.

 STATEMENT OF JANET WOODCOCK, M.D., DIRECTOR, CENTER FOR DRUG 
     EVALUATION AND RESEARCH, FOOD AND DRUG ADMINISTRATION

    Dr. Woodcock. Thank you, Mr. Chairman, Vice Chairman, 
Ranking Member, and members of the committee. Thank you for the 
opportunity to testify.
    This has really been an appalling tragedy of a kind not 
seen really since the early 1900s, where American citizens were 
harmed by grossly contaminated drug. But this is just the worst 
of a long series of outbreaks over the past 2 decades that have 
involved compounding pharmacies, and these have included 
multiple deaths, blindness, hospitalizations, and other types 
of harm. So this was just the worst of a continuing series of 
outbreaks.
    As the Commissioner testified, we should have been more 
aggressive in applying our existing authorities to this 
industry, despite the ambiguities in the statute and despite 
challenges by industry. We are being more aggressive now, and 
we are inspecting the pharmacies that we know about that 
present the highest risk. And we are seeing really serious 
systemic quality issues, particularly around sterility 
practices.
    In light of recent events, though, even with the tragedy 
that has occurred, some of these firms challenge our authority 
when we try to go in and inspect them, and they delay or deny 
full access to our records. We have twice had to get 
administrative warrants from the court and have U.S. marshals 
accompany our inspectors. And we have had to threaten warrants 
in other cases to get cooperation to inspect these compounding 
pharmacies. And because we are inspecting and moving 
aggressively doesn't mean we are going to prevail in court.
    Make no mistake, if the approach to this isn't changed, and 
I think legislation is probably the best approach, we will see 
more of these tragedies. We are already, since the outbreak, we 
have seen several episodes involving human harm from compounded 
products.
    Lack of clarity in our statutory authorities really isn't 
the only concern. The industry has evolved tremendously since 
the time of the corner pharmacist and traditional compounding 
in response to a prescription. And this is still going on, and 
FDA has always said we felt this was appropriate. But another 
industry has grown up that is basically performing outsourcing 
for hospitals and making large amounts of dosage forms, often 
starting with FDA-approved products. And this industry was 
really never contemplated in the kind of authorities that we 
have.
    So we feel that we need legislation to preserve the 
benefits of traditional compounding, which is in response to a 
prescription, and which we are not proposing that we should 
have authority over, further authority over, while at the same 
time giving us the right tools to regulate high-risk practices 
and products. We feel we need legislation that requires 
compliance with Federal quality standards; requires Federal 
registration, because right now we don't know who they are, we 
don't know where they are, and we don't know what they are 
making; and requires reporting to FDA of adverse events so that 
we can act before the problems get out of hand. Right now there 
is no requirement to send us reports of death or other harm 
that might occur with these products.
    And for all pharmacy compounding we feel basic protections 
should be in place, including the fact that FDA should have 
access to the records so that we can go in and see whether they 
are shipping large amounts of product, all right, and what they 
are doing; and also, should there be an outbreak, we are not 
delayed by having to go to a marshal and have access to the 
shipping records.
    A prohibition on compounding the most complex and highest-
risk products. Our drug manufacturers, as you know, have 
problems manufacturing certain products because they are very 
complex, and they put a tremendous amount of science and effort 
into that. We don't think they should be compounded. That is a 
small list, but we think that list should be maintained. And 
clear labeling of compounded drugs to allow prescribers and 
patients to make more informed choices.
    We look forward to working with you to explore funding 
mechanisms to support this oversight, should it be put in 
place. Remember, I think it really is a matter of when this is 
going to occur the next time, not if. That is the state that we 
are observing of the industry when we are inspecting them. We 
are all on notice, we owe it to the public and the victims of 
this incident and the numerous outbreaks over the years to 
provide better protection in the future. I look forward to 
answering your questions.
    Mr. Pitts. Thank you, Dr. Woodcock.
    [The prepared statement of Dr. Woodcock follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
    
    
    Mr. Pitts. I will begin the questioning and recognize 
myself for 5 minutes for that purpose.
    Dr. Woodcock, since the outbreak, the FDA has executed 
dozens of inspections and at least 11 companies were ordered to 
stop producing some or all drugs. Have any of the companies you 
inspected challenged the FDA authority? If so, how many?
    Dr. Woodcock. Certainly, as I said, we have had several 
challenge our authority to even go in the firm and look at 
their records. Others have challenged and then yielded when we 
got the lawyers talking to one another. Now, as far as whether 
there will be court challenges, that is something I really 
can't speak to. But that certainly has been the history in the 
past.
    Mr. Pitts. Can you provide a list to the committee of the 
companies who you have inspected and who have challenged your 
authority?
    Dr. Woodcock. We will be happy to do so.
    Mr. Pitts. According to the Senate HELP report, I quote, 
``As a result of increased oversight from both State and 
Federal regulators, at least 48 compounding companies have been 
found to be producing and selling drugs that are contaminated 
or were created in unsafe conditions or otherwise violate State 
licensing requirements. Ten companies have issued nationwide 
recalls of drugs compounded at their facilities. In at least 
four cases, the recall was issued in response to documentation 
of actual contamination. Further, 11 compounding pharmacies 
have been ordered to cease and desist operations, including two 
of those that had issued nationwide recalls.''
    Now, as you said, some of these companies challenged the 
FDA's authority. Can you explain how State and Federal 
regulators executed this increased oversight?
    Dr. Woodcock. Well, we identified firms that we knew about 
basically from adverse event reports, from reports in the 
paper, from advertisements they had on a Web page and so forth, 
and we did a risk-based approach to inspecting what we felt 
were the highest-risk firms, based on what we knew. We don't 
know the whole universe of firms that are out there.
    We also continue to do for-cause inspections. For example, 
if we get a report from a health department about a cluster of 
cases of an outbreak of one sort or another, we will 
immediately go into that pharmacy and inspect them. In all of 
those for-cause cases, we have gone in with the State 
authority. So we have gone in together, all right. And in most 
of the other inspections that we did that we planned, the 31 
inspections, we have gone in with the State authorities as 
well.
    Mr. Pitts. What were the biggest challenges that you faced 
during that period?
    Dr. Woodcock. Well, the challenges mainly were getting 
access in some cases to be allowed to inspect, all right, 
particularly some of their records. But the real thing that we 
have found is that the aseptic processing practices, which 
means how you try to make a drug to ensure that it is sterile, 
are not anywhere near the quality that is necessary to mass 
produce sterile drugs. There is a tremendous deficit of quality 
in their practices that almost assure that these drugs will at 
some point be contaminated.
    Mr. Pitts. What are some of the lessons the agency has 
learned during the period of this outbreak?
    Dr. Woodcock. Well, I think we have learned that there are 
pervasive practices that are unsafe that are going on across 
the portion of this industry that we have investigated. 
Primarily, we are targeting those sterile manufacturers because 
that is the highest risk when you are actually injecting drugs 
into the body. So that is one thing we have learned, is the 
pervasive nature of unsafe practices across the section of 
industry that we have inspected.
    Mr. Pitts. In your testimony you reference nine separate 
incidents where compounded products caused deaths and serious 
injuries. Explain briefly the actions the FDA took following 
each of these incidents.
    Dr. Woodcock. Well, over the years, our actions have been 
primarily reactive. OK. So when we have learned of an outbreak, 
as I said, we have gone in. Often we go in with the State. The 
State, because they hold the pharmacy license, they are able to 
shut down the firm right away. Like that is how those 11 firms 
you referred to were shut down. OK.
    We have to call for and we often do talk to the firm and 
say we are going to go to the press if you don't do a recall, 
because we don't have the authority--they don't hold a license 
with us, so we can't just shut them down. We would have to then 
go court if they still refused to shut down their operations.
    Mr. Pitts. My time has expired. Chair recognize the ranking 
member 5 minutes for questions.
    Mr. Pallone. Thank you. Dr. Woodcock, your testimony 
mentions the various court challenges that the compounding 
industry has brought over the years regarding FDA's authority 
over compounding pharmacies. But I would like to learn more 
about that litigation and the impact it has had on FDA's 
ability to oversee the industry.
    Those cases center around Section 503A of the act, which 
was enacted as part of the 1997 FDA Modernization Act. And that 
law attempted to delineate when compounded drugs were new drugs 
and therefore subject to FDA regulation. Section 503A also 
restricted compounding pharmacies' right to advertise.
    So I am going to put a map of the U.S. up on the monitors 
here. It is up there. This map was not prepared by me or my 
staff, it was actually prepared by the International 
Association of Compounding Pharmacies, the main compounding 
industry lobbying group. On this map, the red States and blue 
States do not represent States that voted Democrat or 
Republican. They represent the different rules under which 
compounding pharmacies operate.
    So let's look at the red States. Those represent the Ninth 
Circuit Court, whose jurisdiction includes the Western States. 
And as IACP notes on this chart, in 2001, the Ninth Circuit 
Court ruled that the advertising component of Section 503A was 
unconstitutional and that the rest of 503A was void because it 
was inextricably tied to the advertising component, or that it 
was not severable, as we say. Is that correct?
    Dr. Woodcock. Yes.
    Mr. Pallone. OK. Then in 2002, the Supreme Court agreed 
with the Ninth Circuit that the advertising ban was not 
constitutional, but the Court did not address the question of 
whether that ban could be severed from the rest of Section 
503A. The result of that decision then was that the advertising 
ban was unconstitutional throughout the country, and the 
entirety of Section 503A remained invalid in those red States 
on the map. The Supreme Court decision also meant that whether 
the remaining parts of Section 503A was effective in the rest 
of the country was an open question. Is that your 
understanding?
    Dr. Woodcock. That is my understanding.
    Mr. Pallone. So let's look now at the blue States on the 
map, Texas, Louisiana, and Mississippi. Those States represent 
the Fifth Circuit. 2008, the Fifth Circuit Court of Appeals 
held that the unconstitutionality advertising restrictions did 
not affect the standing of the rest of Section 503A. So that 
means that in Texas, Louisiana, and Mississippi, Section 503A 
is in effect. Am I correct on that?
    Dr. Woodcock. That is my understanding.
    Mr. Pallone. And am I correct that the gray States on the 
map then represent the rest of the country, where we just don't 
know how courts would rule on whether Section 503A, apart from 
the advertising restriction, is or is not in effect?
    Can you tell us what the impact of this 503A patchwork has 
been on FDA's ability to oversee the compounding industry? Have 
compounding pharmacies been able to take advantage of this 
confusion over the law to block FDA's ability to aggressively 
enforce the court authority it does have over compounders?
    Dr. Woodcock. Yes, I think that definitely contributed to 
the inability of FDA to have an effective regulatory program. 
All right. We have different circuits with different meanings 
of the statute that was passed by Congress in 1997. In some 
areas, the statute is thrown out; in other areas, it is 
partially operational; in other areas, we don't know if we went 
to court what type of decision we would get.
    Mr. Pallone. So this seems to me to be all that we as 
Members of Congress need to see to understand the dire need for 
clarifying the FDA's authorities here. What I don't understand 
is I am hearing from the GOP here on the committee that they 
don't seem to want to give the FDA additional authority even 
though the Senate passed a bill on a bipartisan basis that 
does. And yet I don't see any alternative.
    In 1997, for better or worse, Congress spelled FDA's 
authorities over compounding pharmacies. I think that law is 
out of date and should be updated. But putting that aside, 
courts have invalidated that statute, our statute, in a major 
swathe of the country. I think it is irresponsible for us to 
stand by and expect FDA to cobble together a piecemeal approach 
to regulating the practice of compounding pharmacy, a practice 
that, as evidenced by the NECC, bears great risk for patients 
all over the country.
    I don't quite understand why my colleagues on the other 
side, at least here in the House, not in the Senate, don't want 
to step in and clarify the rules of the road. I think we have 
to do that, otherwise we are going to continue to have these 
problems with compounding pharmacies. And I hate to say 
anything positive about the Senate, but they are moving in that 
direction and we need to do the same.
    Thank you.
    Mr. Pitts. We are presently voting on the floor. We have 
two votes. We will recess until the second vote is over and 
then reconvene. We will have another series of vote around 
noon. So if you can stay, Dr. Woodcock, we will recess at this 
time for floor votes and be back as soon as the members finish 
their second vote.
    [Recess.]
    Mr. Pitts. Time of our recess having expired, we will 
reconvene and continue our Q&A session. Chair recognize the 
vice chair of the subcommittee, Dr. Burgess, 5 minutes for 
questions.
    Mr. Burgess. I thank the chairman.
    And thank you, Dr. Woodcock, again for being here.
    So between 2002 and 2012, according to our investigation on 
Oversight and Investigations Subcommittee, the New England 
Compounding Center was the subject of at least 52 adverse event 
reports. Numerous offenses documented throughout the 
investigation that was undertaken by both FDA and State 
regulators.
    So, you know, the big question is, why not do something? 
Why not take action? And to tell you the truth, it was a little 
hard to read through some of the emails that we finally got. 
Your folks were literally pulling their hair out about we can't 
just send another warning letter, we have already sent one to 
which it took us 2 years to respond and we will have to do 
something. And it was like they got right up to the point of 
having to do something and then no one wanted to do it. Is that 
an unfair assessment.
    Dr. Woodcock. Well, I am unable to comment specifically on 
NECC because of the ongoing criminal investigation. However, 
generally, I would say we should have been more aggressive 
overall in this industry. There was a pattern for many firms 
that we were looking at of adverse events. And, as I said, 
there were a series of outbreaks. Every year, practically, we 
would have an outbreak due to contaminated compounded product, 
and we should have been more aggressive in going after this 
industry.
    Mr. Burgess. Well, again, I just don't understand some of 
your folks. They just had to be losing their minds over this 
stuff. Samia Nasr, a name kept coming up in the emails that 
were provided to us. Does she still work at the agency?
    Dr. Woodcock. Yes.
    Mr. Burgess. I know you can't comment on employment. But, I 
mean, I think she did the right thing to bring all these things 
to people's attention, but it must have driven her crazy that 
the people just above her wouldn't do something.
    Dr. Woodcock. As I said, overall, we should have been more 
aggressive as this industry continued to be responsible for 
outbreaks. We investigated outbreaks, we investigated reports, 
and we did respond reactively to problems. But we did not 
proactively do everything we could.
    Mr. Burgess. And as a consequence you had 50 deaths and 500 
people who are living with long-term disability as a 
consequence of the Exserohilum in the betamethasone.
    Dr. Woodcock. Well, we have more people who have died than 
that. We have people blinded. We have people with disabilities 
as a result of these outbreaks over the last 12 years. And I 
would say, frankly, if you want my opinion, that we could have 
done more----
    Mr. Burgess. I do.
    Dr. Woodcock [continuing]. The States should have done 
more, and Congress could have intervened when these statutes 
were struck down.
    Mr. Burgess. You know, and the ranking member had a nice 
map up there. He made a nice little comment about red and blue 
States. But, honestly, the 503A limitation doesn't affect 
Massachusetts at all. I mean, we are talking about Texas and 
California, Fifth Circuit, Ninth Circuit, but Massachusetts is 
outside that. So what prevented you in Massachusetts?
    Dr. Woodcock. As I said, I can't specifically discuss this 
particular case because of the ongoing investigation.
    Mr. Burgess. OK.
    Let me ask you this: How difficult is it to get an 
injunction from a judge? You go a judge and say, we have got a 
problem here. How difficult is it to get an injunction?
    Dr. Woodcock. We, as I understand it, I am not one of the 
agency lawyers, I am a physician, as you know, but we make a 
recommendation to the Justice Department, who then proceeds to 
do the legal activities. And just because we initiate legal 
action doesn't necessarily mean we will prevail in court.
    Mr. Burgess. How many times have you not prevailed?
    Dr. Woodcock. I don't know. We can get back to you.
    Mr. Burgess. Would you get us that information?
    Dr. Woodcock. Absolutely.
    Mr. Burgess. Out of all of the challenges that you have 
submitted to companies, how many have actually stood up to you 
and said, we don't want to do it?
    Dr. Woodcock. I think there are--we do bring our cases that 
have the best facts, all right, as we sort through the cases we 
put forth those that have the best facts that we would be most 
likely to win.
    Mr. Burgess. Well, again, it is just so frustrating to 
think that the guidance that supposedly was going to come out, 
that was going to solve this problem, just really seemed to be 
enmeshed in the bureaucracy for 3 years. Is that a fair time 
length?
    Dr. Woodcock. I think that is fair. However, that was 
trying to make the best of a bad situation. We do not have the 
tools that fit this industry, right?
    Mr. Burgess. You know what? I disagree. Because do you not 
have power under the Food, Drug, and Cosmetic Act to regulate 
manufacturers?
    Dr. Woodcock. Yes.
    Mr. Burgess. You define manufacturers. Someone is making 
30,000 vials of stuff a month, is that a manufacturer?
    Dr. Woodcock. Well, say, if I am Janet the pharmacist, all 
right, and I have a pharmacy that is licensed in a State, 
right, and I am compounding drugs, right, and then I decide, 
well, I want to broaden my activities, and my State allows the 
anticipatory compounding and my State allows office stock, 
right, so I can compound those in advance of or without a 
prescription and send them. And there is no----
    Mr. Burgess. 30,000 vials a month?
    Dr. Woodcock. There is no--what is the number? That is the 
thing we have been struggling with for 12 years. Is it 10 
vials? Is it 1,000 vials?
    Mr. Burgess. Well, let me ask you this question.
    Dr. Woodcock. There is no volume limit in the statute. 
Excuse me for interrupting you.
    Mr. Burgess. Well, Massachusetts Board of Pharmacy fired 
people. Is the Food and Drug Administration going to let anyone 
go?
    Dr. Woodcock. No.
    Mr. Burgess. No?
    Dr. Woodcock. No.
    Mr. Burgess. I yield back, Mr. Chairman.
    Mr. Pitts. Chair thanks the gentleman.
    Now recognize the gentlelady from Florida, Ms. Castor, 5 
minutes for questions.
    Ms. Castor. Thank you very much.
    I wanted to get just to that point. Where do we draw the 
line? Because I think as legislation is developed, and your 
testimony is that you do not want and it is not appropriate to 
capture the community pharmacists who are compounding----
    Dr. Woodcock. That is correct.
    Ms. Castor [continuing]. And that is not the source of 
problems. So where do you recommend the dividing line should 
be? What is the criteria in law? Has the Senate addressed this 
in their bill? Where do they carve out so that the community 
pharmacists that are compounding are protected and others that 
have exceeded that and are really the large-scale 
manufacturers, how do we develop that criteria?
    Dr. Woodcock. Well, the Senate is attempting to set forth a 
framework, and we feel they are going in the right direction. 
But those clear lines between who is a drug manufacturer, who 
is a traditional compounder, and who is the new category of 
compounding manufacturing, we still feel are not clear enough. 
So that we could have people masquerading--and some of the 
other witnesses I think are going to talk about this, by my 
reading of their testimony, OK--that we could have people 
masquerading as traditional compounders or as compounding 
manufacturers who really were competing with the generic drug 
industry or the innovator drug industry and actually should 
have sent us applications and paid a user fee and gone through 
the established process that we have had in the United States 
since 1962. And so that is really the issue, is how do you draw 
those boundaries.
    Ms. Castor. And what are your recommendations then?
    Dr. Woodcock. Well, what we had proposed is that we pick 
off the highest risk category, which is those sterile products 
that are shipped interstate. All right. So they are shipped 
around the country. That is probably the highest risk, because 
the longer you store the sterile product the more likely, if 
they are contaminated, that there will growths that can grow 
up. And obviously sterile products are a high risk. And 
interstate is one sort of marker for volume.
    And this industry that has grown up, the outsourcing 
industry is valuable to hospitals. We have heard from the 
hospitals. They feel they can't do without these folk. And they 
generally take FDA-approved products and they mix them or they 
put into convenience dosage forms. If you have gone to a clinic 
in an office building and you have had a procedure, you may 
have received products from one of these firms that put you to 
sleep or whatever. And they package them, say, in syringes and 
so forth and send them to these various clinics and also to 
hospitals.
    We feel that type of industry, they produce in pretty high 
volume that is the highest risk. And they should have full 
aseptic processing controls, just like the regular drug 
industry does. So we agree with carving them out and having 
certain requirements for them, but not submitting a new drug 
application, having to pay a user fee, and going through that 
entire process.
    Ms. Castor. So highest risk, crossing State lines.
    Dr. Woodcock. State lines.
    Ms. Castor. Sterile products.
    Dr. Woodcock. Right.
    Ms. Castor. You recommend. And then to clarify your last 
part regarding--what if it is a compounding that is going to 
hospitals within a State.
    Dr. Woodcock. Well, what we propose is that would be 
regulated by the States. The States could decide whether they 
have capacity to do that. I think you may hear from some of the 
other witnesses that in fact that type of compounding, 
especially at volume, because it is the mass production that 
really increases the risk, both the risk of contamination and 
the consequences of contamination once it occurs, because it 
goes to so many people, right, and the risk is there for 
intrastate, but the States we feel could decide whether they 
would regulate those type of activities or not permit them, 
right.
    And then the traditional compounding is really where a 
doctor--and I have done this too, all right--a doctor writes a 
prescription to a pharmacy and asks them to, for an individual 
patient who has a specific need, to make a dosage form that 
isn't available commercially because they have a very specific 
medical need for that. We feel that should be preserved, but a 
box should be put around it and there shouldn't be competition 
with established generic products. Because there is always more 
risk than for a regular product for any of these compounded 
products.
    Ms. Castor. Thank you very much.
    Mr. Pitts. Chair thanks the gentlelady.
    Now recognize the chair emeritus of the full committee, Mr. 
Barton, for 5 minutes for questions.
    Mr. Barton. Thank you, Chairman Pitts.
    I have very troubled, Dr. Woodcock, by your opening 
statement. I do give you credit for integrity and honesty and 
forthrightness. But you ended up saying that it is not if this 
is going to happen again, it is when it is going to happen. 
That is pretty strong. You are talking about people dying.
    And I have attended, not in their entirety, but I have 
attended every hearing that we have done on this issue with 
NECC. And it is not that Republicans are not willing to 
regulate, it is not that we are not concerned. It is that we do 
think there is a true State-Federal partnership, and we do 
think that State regulatory authority is as good as Federal if 
it is within the State. And we don't see a reason to preempt 
the States unless the States either can't do it or won't do it.
    And what struck me in the answers to Dr. Burgess' questions 
was at some point in the process anybody at the FDA could have 
picked up the phone and called the State regulatory authority 
and apparently never did.
    Now, I don't understand that. If you really believe that 
what you said is true, that it is not if it is going to happen 
again, it is when it is going to happen again, if you have a 
list of compounders that you think are problematic or in danger 
of actually endangering human life, if you really think the FDA 
doesn't have the authority to shut those people down or make 
them clean up their act, you have an obligation, or somebody 
that is designated by you, to call the State regulatory 
authority to inform them of the problem and to take whatever 
steps are necessary to make sure that the State does.
    Now, why haven't you done that? Or why haven't people at 
your agency done that? That is what I don't understand.
    Dr. Woodcock. We have done that more recently. And we have, 
as I said, we have worked hand in glove with the State 
authorities. We have done joint inspections with them. They 
have taken the steps to close down many of these pharmacies 
after the inspection. And we are sending them our findings, we 
send them letters. We post our 483s, which are our findings of 
the inspection, so they that are available to the public. And 
we work very closely with the State authorities.
    However, there are 23,000 compounding pharmacies in the 
United States, according to the industry. They don't have to 
tell us who they are and they don't have to report to us if 
they have problems. So we are----
    Mr. Barton. Well, but they can't operate if they don't tell 
you or don't tell the State. You are not telling me there are 
23,000 compounding pharmacists that are operating out in the 
ether and that are not subject or not licensed by somebody.
    Dr. Woodcock. They are licensed by States. They are 
licensed pharmacies. And I read a report by some of the members 
who looked at what amount of control and tracking the States 
have over the different pharmacies, and many States do not have 
a lot of understanding of what activities those pharmacies are 
engaged in, particularly whether they are shipping to other 
States and so forth. Different patterns in different States, 
but not all States really have close control over what those 
pharmacies are doing as far as compounding.
    Mr. Barton. Well, the witness that is in my district, Mr. 
Harmison, I have been in his pharmacy. I mean, he is the true 
small independent businessman. He has got a compounding room, I 
think one or two rooms, and has two or three pharmacists, 
including himself.
    Now, I have also been in other compounding pharmacist 
situations in Texas where they have 10 or 15. And it is much 
more of a mass production-type situation. So there is a 
difference. But the FDA, in conjunction with the States, should 
be able to determine who has jurisdiction and what needs to be 
done.
    I don't think Mr. Pitts or Mr. Upton or any of the 
Republicans are unwilling to sit down and help clarify, to use 
your term, what needs to be done. If there truly is a gap and 
it truly is best to regulate at the Federal level, I would say 
that the Republicans are open to it. But if it is simply a 
question of communication between the Federal Government and 
the State regulatory authority, I would encourage you to 
facilitate that communication, because I don't want ``if'' to 
become ``when.''
    Dr. Woodcock. Right. Well, we had a 50-State meeting. We 
have been in close contact with the Association of National 
Boards of Pharmacy. So we are talking to them twice a week. We 
are talking to all the State boards in the States where we go 
in and have these inspections. And, as I said, we do the 
inspections with them.
    We have heard from many States that they would prefer 
Federal regulation of these larger-scale facilities. But the 
real question here is and has always been the question is where 
to draw the line. All right. So you have the traditional 
pharmacist, they are compounding in response to a prescription. 
I, as a physician, I have written prescriptions for compounded 
products that were very valuable to my patients. That is one. 
All right. And you mentioned, OK, then there is somebody, if 
they have five rooms----
    Mr. Barton. My time has expired, and the chairman has been 
very gracious. We can work on helping define and helping to 
clarify. I think there is a bipartisan trust on this committee 
and this subcommittee that can do that, if you and the 
stakeholders will begin to communicate with each other. I think 
this is a solvable problem. But it is not necessarily the 
answer it is going to be more Federal regulation. It may be, 
but it is not automatic that it will be.
    With that, Mr. Chairman, thanks your time, and I yield 
back.
    Mr. Pitts. Chair thanks the gentleman.
    And now recognize the ranking member emeritus of the full 
committee, Mr. Dingell, 5 minutes for questions.
    Mr. Dingell. You are most courteous. Thank you, Mr. 
Chairman. I ask unanimous consent to insert 2 letters which I 
wrote to FDA in the record----
    Mr. Pitts. Without objection, so ordered.
    Mr. Dingell [continuing]. As well as responses from FDA. 
And I thank you, Mr. Chairman.
    [The information appears at the conclusion of the hearing.]
    Mr. Dingell. Now, these questions will be mostly yes or no. 
Does FDA have the authority to require all compounding 
pharmacies to register with the agency?
    Dr. Woodcock. No.
    Mr. Dingell. Yes or no?
    Dr. Woodcock. No.
    Mr. Dingell. Please submit for the record the new authority 
that you need.
    Next question: Does FDA have the authority to require all 
compounding pharmacies to report adverse events?
    Dr. Woodcock. No.
    Mr. Dingell. What authority is needed? Submit for the 
record, please.
    Does FDA have the authority to require all compounding 
pharmacies to follow good manufacturing practices? Yes or no?
    Dr. Woodcock. No.
    Mr. Dingell. What authority is needed? Submit it for the 
record.
    Question four: Does FDA believe nontraditional compounders 
should be subject to appropriate good manufacturing practices 
the way manufacturers are? Yes or no?
    Dr. Woodcock. Yes, as appropriate.
    Mr. Dingell. What is the authority which is needed? Submit 
for the record.
    Does FDA believe risk-based inspection schedules are 
appropriate for nontraditional compounders? Yes or no?
    Dr. Woodcock. Yes.
    Mr. Dingell. What authorities do you need to achieve that 
end? Submit for the record.
    Does FDA have full authority to see all records when 
inspecting a compounding pharmacy? Yes or no?
    Dr. Woodcock. I think that is being contested, as you know.
    Mr. Dingell. Yes, you have that problem between the 
different circuits.
    Dr. Woodcock. Yes.
    Mr. Dingell. Plus submit to us what authority is needed.
    Does FDA need additional authorities in these areas to 
ensure that outbreaks of the kind we have seen does not happen 
again? Yes or no?
    Dr. Woodcock. Yes.
    Mr. Dingell. Yesterday, my colleagues in the Senate 
advanced bipartisan legislation giving FDA more authority over 
compounding pharmacies. It is my hope we in the House will do 
the same thing. I have long believed that we must provide 
agencies like FDA with clear authorities and necessary 
responses to properly help and to carry forward their mission. 
U.S. FDA has a fee system for the approval of pharmaceuticals 
and medical devices, amongst others. Please inform us whether 
you need that kind of authority, for purposes of the record.
    Now, if we gave FDA the authority in this area, and I 
believe we should, I believe we also should have a strong user 
fee program. Would you submit for the record some information 
justifying such thing if you believe that is appropriate, 
Doctor.
    Dr. Woodcock. Yes.
    Mr. Dingell. Now, would the user fee contained in the 
Senate bill provide the FDA with the necessary resources to 
carry out these new authorities? Yes or no?
    Dr. Woodcock. Partially, 50 percent.
    Mr. Dingell. OK. Now, I have got just a little bit of time 
left. I am reminded of the situation we have here. We have got 
people being killed because we have unclear authorities. We 
have a responsibility to see to it that we clarify that as a 
part of our oversight responsibilities.
    There is a great joke that they tell about a fellow who got 
a letter from an undertaker saying that his mother, or his 
mother-in-law, had just had a stroke and passed on. And he 
asked for instructions. He said should we cremate, should we 
bury, or should we embalm. And the guy thought for only a 
second and he sent back a telegram saying, do all three, take 
no chances.
    Now, I think here we have got a problem where people are 
being killed by a dichotomy in the industry. And, Doctor, I 
want you to tell me, you have roughly three classes of 
compounders. Right? You have got essentially the manufacturing 
compounders who ship all over the country, huge volumes. Right?
    Dr. Woodcock. Correct.
    Mr. Dingell. You don't have very clear authority over them, 
do you?
    Dr. Woodcock. No.
    Mr. Dingell. And the States don't have the resources to do 
it, do they?
    Dr. Woodcock. That has been documented.
    Mr. Dingell. OK. Now, having said that, you also have the 
ordinary pharmacies. We are not particularly after them. And 
they are supposed to be regulated by the States. They are 
licensed by the States. And they are identified by State 
regulations to the States. Right?
    Dr. Woodcock. Yes. We believe the traditional practice of 
pharmacy compounding should be preserved and regulated by the 
States.
    Mr. Dingell. OK. Now, then we have the additional situation 
where you have the hospitals. And they have either in-house or 
they have people who contract with them to compound them to 
meet the specific needs of patients in the hospitals. Right?
    Dr. Woodcock. Correct.
    Mr. Dingell. What authorities do you need there?
    Dr. Woodcock. Well, we believe that the hospitals could 
operate under the regular rules of pharmacy. These are hospital 
pharmacies that are licensed by the State and also regulated by 
other authorities. We believe that outsourced contractors 
should be regulated under the compounding manufacturing.
    Mr. Dingell. So here now you have a muddled situation where 
the courts are getting in and assisting us to confuse an 
already obfuscated situation, and we need to do something to 
clarify it. And since the great events in Michigan, where a 
bunch of my constituents and others were killed, we have seen 
that the compounders have continued their same merry practices 
of disregarding the law and proceeding to send noxious 
compounds around that are compounded in unsafe atmospheres and 
climates. Is that right?
    Dr. Woodcock. We have seen since the outbreak----
    Mr. Dingell. Yes or no?
    Dr. Woodcock. Yes. Yes.
    Mr. Dingell. Mr. Chairman, I have used 44 seconds too many. 
Thank you.
    Mr. Pitts. Chair thanks the gentleman.
    Now recognize the gentleman from Virginia, Mr. Griffith, 5 
minutes for questions. Mr. Griffith, you are recognized for 5 
minutes.
    Mr. Griffith. Thank you, Mr. Chairman.
    Thank you, Dr. Woodcock.
    I am looking at your draft, not for implementation report 
on pharmacy compounding that was done in August of this year, 
and I want to clarify this court issue. Disagree with me and 
tell me yes or no, I will ask you at the end of each part of 
this. But it appears that in April of 2002, based on this 
report, and I believe it to be correct, that the U.S. Supreme 
Court affirmed the Ninth Court's decision related to 
advertising and solicitation, but did not take up the 
severability as to whether or not the rest of the act would be 
in place after that date. Is that correct?
    Dr. Woodcock. My understanding, yes.
    Mr. Griffith. And is it also correct that the Fifth Circuit 
found it was severable, and that decision came out in 2008?
    Dr. Woodcock. Correct.
    Mr. Griffith. The FDA took no action--am I correct the FDA 
took no action to clarify the law between 2002 and 2008 when 
the Fifth Circuit came out with their opinion, isn't that 
correct? Yes or no.
    Dr. Woodcock. Yes.
    Mr. Griffith. And it would also be correct that from 2008 
until the incident with the fungal meningitis, the FDA never 
came to Congress and said we need clarification, isn't that 
true? Yes or no.
    Dr. Woodcock. Yes.
    Mr. Griffith. And isn't it true that you were working on 
these draft guidelines because you believe there was a way to 
figure out around the court decision issue and regulate to the 
best of your ability with the Ninth Circuit being a little more 
difficult but that is why you worked on these guidelines for 
over 3 years; isn't that correct?
    Dr. Woodcock. As I said, we were trying to make the best of 
a bad situation. 
    Mr. Griffith. Wouldn't the right thing to have done to have 
come for clarification on the severability and just reenact the 
old law and take the advertising section out, the only part 
that any court said actually violated the Constitution and the 
whole issue was severability; wouldn't that have been the 
better thing to do from 2002 until 2012?
    Dr. Woodcock. Yes, I think in retrospect that would have 
been better. I think there was a fear getting a worse----
    Mr. Griffith. Was there a fear of coming to Congress and 
asking for help when you needed it?
    Dr. Woodcock. Well, you know, the late Senator Kennedy did 
develop a bill and asked around about it with some other 
Senators and there was so much opposition that they never 
introduced that. And I think that was----
    Mr. Griffith. Did the bill do anything other than clarify 
that the bill could be severed and that the only parts that 
weren't in place or should be in place were the advertising 
restrictions?
    Dr. Woodcock. I am not familiar with what exactly it is.
    Mr. Griffith. Because I don't know what was in that bill 
and I suspect there was something other than clarifying the law 
was in there.
    Dr. Woodcock. Oh, yes.
    Mr. Griffith. And I would have to say in the draft guidance 
that you all were about to propose the FDA defined a new 
framework for compounded drugs that would be administered in a 
health care setting and basically what you proposed was was 
that you could compound for more than one patient in the 
hospital setting or in a medical practice setting as long as 
there was a prescription that followed if you knew you were 
going to use it in like in an ophthalmological setting or in a 
hospital setting as long as you could tie that later to a 
direct patient, isn't that correct?
    Dr. Woodcock. That is my understanding.
    Mr. Griffith. And so under that reading of that, other than 
clarifying that the advertising section is no longer the law, 
you really didn't need any new authority to do that, did you?
    Dr. Woodcock. To make that interpretation?
    Mr. Griffith. Yes or no? To make the interpretation.
    Dr. Woodcock. I don't understand your question.
    Mr. Griffith. It is in your guidance request so I assume 
that is correct. Is that correct?
    Dr. Woodcock. That is correct.
    Mr. Griffith. And I appreciate that. And I am looking up to 
see how much time I have left.
    We also have this business about talking to the States. 
There is nothing that prohibited you in the law from talking to 
the States when you got complaints from say Colorado or Ohio, 
which actually happened in the NECC case, nothing prevented you 
from calling Massachusetts, did it?
    Dr. Woodcock. No.
    Mr. Griffith. And, in fact, in the guidelines you are 
setting up a new way to make that work so it is efficient, 
isn't that correct?
    Dr. Woodcock. The guidelines----
    Mr. Griffith. The guidelines of sharing information between 
the States and making sure that everybody is keeping an eye on 
these folks.
    Dr. Woodcock. The guidance, hmm, yes.
    Mr. Griffith. So you didn't need any new authority to do 
that, did you?
    Dr. Woodcock. We don't need authority to talk to the 
States. We do that all the time in many different areas of 
regulation.
    Mr. Griffith. But you failed to do that in the NECC matter, 
and I guess my concern is, is that while I too have learned to 
respect your veracity and think you are a great witness, much 
better than that other lady that came in here, we couldn't get 
anything straight out of her, so I do appreciate it--but I 
would have to say that one of my concerns is that the FDA had 
all these tools available to it, if it had chosen to do so and 
I understand people make mistakes, things happen, I understand 
that, I am not being critical, but instead of asking for new 
authority shouldn't we just clarify the fact that the 
advertising restrictions aren't the law, and that if there are 
areas that need to be clarified, not giving new authority but 
just clarifying some things, that we could follow your guidance 
proposal from August of last year and come up with a pretty 
good proposal, isn't that true? Yes or no.
    Dr. Woodcock. No. I don't think so.
    Mr. Griffith. So that was a bad proposal that you all were 
putting guidelines out on?
    Dr. Woodcock. The guidance----
    Mr. Griffith. Yes or no. Were those guidance proposals bad?
    Dr. Woodcock. They were based on the 503, which is not 
really that workable for the current industry that we have. I 
am sorry I can't give you just a ``no'' answer. I don't think 
we have a good----
    Mr. Griffith. All right. I am out of time so if you could 
submit your recommendations I would greatly appreciate it.
    Mr. Chairman, I yield back.
    Mr. Pitts. The chair thanks the gentleman, and now 
recognize the gentleman from Texas, Mr. Green, 5 minutes for 
questions.
    Mr. Green. Thank you, Mr. Chairman.
    Dr. Woodcock, thank you for being here today, and I am 
concerned that the majority side has looked at this issue and 
said the FDA has the necessary authority to properly regulate. 
As Commissioner Hamburg explained at the last meeting, the 
current level of scrutiny being applied by the FDA is a result 
of the outbreak. The court case may be strengthened, but a 
favorable ruling on the authority over compounding 
manufacturers and non-traditional manufacturers is far from 
certain.
    As a result, I think we must pass limited legislation that 
allows the FDA to regulate compounding manufacturers across 
State lines. The draft currently being debated in the Senate is 
a good first step, but I think there are some changes we could 
made to strengthen the bill.
    In her testimony before the committee, and I won't judge on 
Commissioner Hamburg's testimony, asserted the agency needs 
greater authority over large compounding pharmacies that are 
essentially manufacturers. The Senate legislation would create 
a new category of compounding manufacturers that would be under 
FDA regulatory authority.
    Commissioner Hamburg also told us that the FDA agrees that 
the regulation of a traditional pharmacy compounding should be 
left to the State legislators and State boards of pharmacy. We 
have laws in my home State of Texas that allow when medically 
necessary and in very limited circumstances a compounding of 
medications before the receipt of a patient specific 
prescription for administration in the office of the 
prescribing physician. Those are called office use compounding. 
It is my understanding a majority of States have these similar 
laws.
    Dr. Woodcock, what do you recommend that Congress craft or 
how do you recommend that Congress craft language to give the 
FDA the necessary authority to regulate large, interstate 
compounding manufacturers while still preserving the ability of 
States to regulate the traditional compounders?
    Dr. Woodcock. It is a complicated question. We want to make 
sure that the traditional compounders can flourish because they 
provide a valuable service but not that they don't go to 20 
rooms or 50 rooms, right, and start making large scale. So 
there have to be boundaries there.
    Traditional manufacturers, obviously, have to submit 
applications to FDA, pay user fees and then undergo review and 
frequent inspections for GNPs. The hospitals have told us, the 
hospitals in your district and all around the country have told 
us that they rely on this industry now for the compounding 
manufacturing industry, if you wish to call it that, for 
certain services that used to be done in the hospitals but are 
now outsourced. However, these operations are proceeding under 
the rubric compounding right now but they are doing something 
quite different and in a larger scale. And so if Congress would 
see fit, what we are saying is not we want more regulation, we 
want regulation that would fit this new activity, right, and 
would be appropriate for that and allow them to flourish.
    Mr. Green. I only have a couple minutes. For example, if a 
hospital in Houston wants to contract with a company in 
Massachusetts, that still should be under FDA authority.
    Dr. Woodcock. For sterile products is what we are 
proposing, so if they want to get injectables from a New Jersey 
firm, they want to buy injectables and use it in their hospital 
or in their clinic, we think that should be under FDA authority 
if those are sterile products.
    Mr. Green. OK. Do you agree that legislation should clarify 
the current law in the area and protect the ability of States 
and boards to decide what is the appropriate scope of practice 
for traditional pharmacies?
    Dr. Woodcock. Absolutely.
    Mr. Green. Including the areas of anticipatory and office 
use compounding?
    Dr. Woodcock. Well, we have to make sure that it draws the 
line and doesn't allow them to produce, say, and how do you do 
that, is 17,000 vials, is that anticipatory compounding? You 
have to have some clarity on that.
    Mr. Green. It seems like it would be. What is the FDA's 
position on office use compounding pursuant to State law where 
it occurs? Under the current Federal law, FDCA, and under the 
legislation being considered in the Senate?
    Dr. Woodcock. Well, right now, under current Federal law it 
is blurry, all right, as far as how much you could make? You 
all are saying to me that you think you can tell what a 
manufacturer is but there is no bright line in the statute that 
says when you cross that line and become a manufacturer.
    Mr. Green. And that is our job to define that.
    Dr. Woodcock. That would be very useful.
    Mr. Green. The other thing I am concerned about is 
traditional compounder in an area that is close to State 
boundaries. Again in Massachusetts with New England there is 
maybe a different problem whereas in Texas it is not that big a 
problem except along our border with other States.
    How do we keep those traditional compounders from being 
classified if they work across State lines, geographically 
fairly close, from being classified as a compounding 
manufacturer?
    Dr. Woodcock. Well, we think there are some Federal 
standards that ought to be in place, OK, that distinguish even 
a traditional compounder so that there are certain things that 
they are held to do and then they remain traditional 
compounders.
    Mr. Green. Thank you, Mr. Chairman. I appreciate it and 
look forward to working on the legislation.
    Mr. Pitts. The chair thanks the gentleman. I now recognizes 
the gentleman from Pennsylvania, Dr. Murphy, 5 minutes for 
questions.
    Mr. Murphy. Thank you for being here, Dr. Woodcock, I have 
the highest respect for you and I appreciate your candid 
conversations.
    I want to cut to the chase here because I don't want this 
to be a political discussion and I think it is being mislabeled 
as that.
    I held hearings in my Subcommittee on Oversight and 
Investigation and it was my impression we weren't getting clear 
answers about missteps within the FDA. And I just want to make 
sure that I know that the FDA is saying we have learned from 
our problems and here is how we change.
    So let me run through a series of questions with you and 
help get that on the record.
    First of all, the FDA has repeatedly cited the fact that 
the Fifth and Ninth Circuit Courts of Appeals have issued 
conflicting decisions on whether section 503A of the Food, Drug 
and Cosmetic Act remains valid, and in a written statement on 
November 14th of last year oversight committee hearing 
Commissioner Hamburg cited the Circuit Court's split as having 
``amplified the perceived gaps and ambiguity associated with 
FDA's authority over compounding pharmacies.''
    Now the Fifth Circuit Court decision was July 2008, is that 
correct?
    Dr. Woodcock. Right.
    Mr. Murphy. In May 2009, just prior to Commissioner Hamburg 
being confirmed, a briefing was provided to Acting Commissioner 
Joshua Sharfstein proposing several paths forward in light of 
the Fifth Circuit's decision upholding 503A.
    Do you recall participating in that briefing? Yes or no.
    Dr. Woodcock. No.
    Mr. Murphy. The FDA produced to the committee an email 
chain from the Office of the Chief Counsel from July 2009. A 
copy of this document I think is now in front of you. The top 
email is from Michael Landa, FDA's Acting Chief Counsel at the 
time, and notes the plan is to enforce section 503A nationwide 
except in the Ninth Circuit and that, quote, Josh is on board, 
unquote.
    Mr. Landa then notes that Dr. Sharfstein, quote, would 
touch base with Peggy but did not think she would have any 
objection, unquote. Do you know whether or not Commissioner 
Hamburg was consulted in the decision to proceed with 
enforcement of section 503A?
    Dr. Woodcock. I do not know affirmatively, no.
    Mr. Murphy. Do you suspect that she did or----
    Dr. Woodcock. I would suspect that she was.
    Mr. Murphy. Thank you. And if you turn to the second page 
of that email chain, the leader of the compounding team in 
FDA's drug center, your center, notes that Dr. Sharfstein and 
Deb Otter asked to chart the timeframe for each step we plan to 
do to implement the new plan.
    Dr. Woodcock, this plan had yet to be implemented when the 
outbreak began in September, 2012, am I correct?
    Dr. Woodcock. That is correct.
    Mr. Murphy. And yes or no, prior to announcing the new plan 
FDA felt as though it needed to draft a new guidance document 
detailing the approach it would be taking as well as various 
regulations that 503 required? Yes or no.
    Dr. Woodcock. That is my understanding.
    Mr. Murphy. Thank you. And yes or no, during this time 
period inspections and enforcement actions came to a 
standstill.
    Dr. Woodcock. My understanding is that it is not true, that 
we did certainly went for cause inspections.
    Mr. Murphy. Certainly with NECC.
    Dr. Woodcock. I can't comment specifically on NECC. I am 
sorry.
    Mr. Murphy. Is that----
    Dr. Woodcock. Due to the ongoing criminal investigation.
    Mr. Murphy. I understand. By August 2012 your center signed 
off on another draft guidance document that was going through 
final clearance, yes or no.
    Dr. Woodcock. Yes, my understanding.
    Mr. Murphy. Thank and a briefing has been had, in fact been 
scheduled to discuss the new guidance documents with 
Commissioner Hamburg back in September 2012, is that correct.
    Dr. Woodcock. That is correct.
    Mr. Murphy. And yes or no, Commissioner Hamburg testified 
before O&I that she was really not that aware of issues related 
to drug compounding until after the meningitis outbreak; 
therefore, would any additional changes to this draft document 
guidance have been made based on Commissioner Hamburg's input.
    Dr. Woodcock. I don't know. That would be speculation.
    Mr. Murphy. OK. The point is the agency had a solution here 
that would have allowed it to conduct inspections was my 
understanding. But so the FDA failed to even acknowledge the 
existence of this guidance document until it produced it to 
this committee in March of 2013, well after the FDA promoted an 
entirely new regulatory paradigm.
    Here is where I want you to help clarify this for all of 
us. My question is what does FDA now know about the compounding 
industry that it did not incorporate in this guidance document 
and is provided as a learning experience to make some changes? 
You may respond.
    Dr. Woodcock. What we have seen as we have done inspections 
of this industry, we have focused on the highest risk areas and 
we have seen violations of aseptic processing, that basically 
mean that there is no insurance of sterility of the products 
coming out of these compounding pharmacies.
    And this means that this outbreak that we have seen will 
happen again. Since the outbreak, we have had an instance of 
fungal bodies being observed in an IV bag ready to be given to 
a cancer patient, all right, that came from a compounding 
pharmacy. We have also had other instances of patients having 
eye infections and other instances of non-sterility of 
products. So we have had harm as well as the nonsterile 
practices that lead to the harm.
    Mr. Murphy. With regard to the way that FDA approaches 
these things and I understand you are looking for more 
authority to handle some things but what we really need to know 
is within the realm of the authority you already had--and I am 
not asking you to hang anybody out right now, that is not the 
purpose of this hearing--but are there internal lessons that 
the FDA has learned they could have handled some things 
differently that could have possibly led to different results 
other than dealing with the lawyers' issues here.
    Dr. Woodcock. Well, I think we should have been more 
aggressive. There was great concern about our, the limitations 
of our authority and that we would lose and then have even less 
ability to influence this industry. But in retrospect I think 
it would have been more important to simply go forward and see 
how it turned out in the courts, aggressively exert our current 
authority, which is primarily new drug authority.
    Mr. Murphy. Thank you. That is why I like hearing from a 
physician instead of a lawyer. I will need to submit these e-
mails for the record if that is all right, Mr. Chairman.
    Mr. Pitts. Without objection, so ordered.
    Mr. Murphy. Subject to redactions by staff.
    Mr. Pitts. The chair thanks the gentleman and now 
recognizes the gentlelady from California, Mrs. Capps, for 5 
minutes for questions.
    Mrs. Capps. I believe--am I before Mr. Engel?
    Mr. Pitts. Yes.
    Mrs. Capps. Oh.
    Mr. Pitts. We are going in order of appearance.
    Mrs. Capps. OK, all right. I thank you. I just want to 
thank you for your testimony today, Dr. Woodcock, and I want to 
thank Mr. Pallone for holding this necessary hearing. This is 
an important issue and I believe needs to be revisited.
    Under current statute, a great deal of uncertainty and 
variation exists between regulations. And this uncertainty 
creates gaps that can lead to compromised patient safety, as we 
have seen most recently with the meningitis outbreak. We cannot 
wait for another public health crisis to act, and what we have 
right now isn't working.
    Dr. Woodcock. Right.
    Mrs. Capps. I believe you would agree. Families don't have 
the peace of mind they are receiving effective drugs that they 
can trust and compounding pharmacies across the States are not 
on a level playing field. Many States are inadequately 
inspecting facilities. After a similar incident in my State of 
California almost a decade ago, regulations were enhanced and 
sterile compounding pharmacies now require an inspection or 
accreditation through a national agency. You know, this isn't 
good enough because many hospitals and clinics in California 
buy drugs from out of state, compounding pharmacies in other 
States, including the Massachusetts pharmacy. So hospitals and 
States don't exist in isolation. Hospitals have a great need to 
be able to buy large quantities of compounded drugs.
    Mr. Migliaccio suggests in his written testimony that there 
should be no special regulatory program for these large scale 
drug compounders. Instead he implies that they should be 
treated like conventional drug manufacturers and should have to 
go through the new drug application process to manufacture and 
distribute any drugs.
    My question now, Dr. Woodcock, could you explain to us why 
you believe requiring new drug applications for all drugs would 
not be warranted and what the consequences would be 
particularly for hospitals if FDA were to take such an 
approach?
    Dr. Woodcock. Well, that approach would be our current 
authorities. It is not that we don't have current authorities. 
Our current authorities require submission of applications, 
payment of a user fee, thanks to the user fee bill you all 
passed for generics recently, and we have had the new drug one 
for a while, and review of all the information, a large package 
submitted to the agency, and then we inspect those facilities 
frequently, including a preapproval inspection to make sure 
everything is OK before the product gets out on the market. So 
that is our current authorities.
    Now many of these outsourcers, what they are actually doing 
is taking FDA approved products and putting them into 
convenience forms or putting them into, combining them, say for 
hyper alimentation or something like that, and then shipping 
them around the country based on patient need.
    The industry has basically told us that they can't make all 
these different very patient specific forms and convenience 
forms. And there are questions of efficacy that are related 
because these are already FDA approved products. The key is, 
and this used to be done by the hospital pharmacy, by the 
clinic they would do this. I did this when I was an intern, all 
right, when the interns were able, had to be kind of worker 
bees. So we made up the chemotherapy, we put things into bags 
and the nursing staff would do this as well or the hospital 
pharmacy.
    Now, with the very large scale of medicine they want to buy 
these, and many of the clinics are in office buildings, they 
don't have a pharmacy or clean room there. So they need to 
order these products, right.
    Mrs. Capps. I want to get to another question.
    Dr. Woodcock. I am sorry. It is so complicated. Let me 
finish then. So there isn't good regulatory fit right now. It 
isn't where we say we have to have all these broad new 
authorities, no, there is no fit for this industry that has 
grown up.
    Mrs. Capps. All right. I want to make sure that I am able 
to enter a statement from the American Society of Health System 
Pharmacists which addresses this issue as well. Their statement 
details the many ways in which hospitals have come to rely on 
compounded medications from outside compounding pharmacies 
which you are alluding to.
    And I want to ask that this statement that I am holding up 
be entered into the record.
    Dr. Woodcock, if there is a time for you to address this, 
would a two-tiered regulation system that clarifies a uniform 
set of rules for compounding manufacturers while preserving the 
State's role in traditional pharmacy compounding be a practical 
thing?
    I will just let you comment on that.
    Dr. Woodcock. Yes. We have proposed something like that as 
something that would be practical but it would require a new 
regulatory scheme for this new industry that has evolved to 
make sure they are making the product safely. It is no good to 
have convenience products if they are contaminated or they are 
super potent or there are other things wrong with them. 
However, of course that is up to Congress whether they want 
this industry to persist because our current regulatory 
authorities require submission of application.
    Mrs. Capps. I see. OK, thank you. I yield back.
    Mr. Pitts. And did you want to submit that for the record?
    Mrs. Capps. Yes, I would like to.
    Mr. Pitts. Without objection so ordered.
    The chair recognizes the gentlelady from North Carolina, 
Mrs. Ellmers, 5 minutes for questions.
    Mrs. Ellmers. Thank you, Mr. Chairman, and thank you, Dr. 
Woodcock, for being here today. I just want to clarify a few 
terms because we are putting terms out and I want to make sure 
I am understanding them. When we are talking about traditional 
compounders, who are we talking about?
    Dr. Woodcock. We are talking about pharmacies, licensed 
pharmacies who react to a prescription for a specific 
individual patient and make a specialized dosage.
    Mrs. Ellmers. And right now that is under the authority of 
the State, not under FDA, correct?
    Dr. Woodcock. Correct.
    Mrs. Ellmers. And when we are talking about the compounding 
manufacturers, how is that different from the term drug 
manufacturers.
    Dr. Woodcock. Compounding manufacturers is a new term that 
is contained in the Senate bill, OK----
    Mrs. Ellmers. Right, so this is Senate language.
    Dr. Woodcock [continuing]. To reflect this large scale 
industry. They are not usually reacting to a prescription. They 
are making things that hospitals need and order frequently so 
they make them at large scale like a drug manufacturer. But 
often they are not--a drug manufacturer starts from scratch. 
They start from what we call the active pharmaceutical 
ingredient, which often someone will buy from India or China, 
bring it in, test it and then make the product.
    Mrs. Ellmers. So sometimes it may be in a different form 
but is it not the same product, and you are saying that because 
products might be coming from somewhere else that that is the 
essential difference?
    Dr. Woodcock. No, there are two different activities that 
are lumped under this compounding manufacturing. One is what we 
call the outsourcers, OK, they get generally outsource from a 
hospital or clinic, something the clinic or hospital pharmacy 
used to do, all right, and that is putting things in syringes, 
little IV bags, diluting chemotherapy, getting everything all 
right so they can just hang it on the patient rather than 
having to do that----
    Mrs. Ellmers. Rather than having to actually do it in 
house. Now----
    Dr. Woodcock. That is one. And then the other is people who 
are doing larger scale compounding.
    Mrs. Ellmers. Larger scale. And that would currently fall 
under the jurisdiction of the FDA.
    Dr. Woodcock. That is what kind of is under dispute.
    Mrs. Ellmers. And that is what we are trying to get to is 
when do we make that distinction between compounding pharmacy 
and compounding manufacturer.
    Dr. Woodcock. And also a manufacturer who is already a 
pharmaceutical company has to submit an application to FDA and 
be under that regime.
    Mrs. Ellmers. Now, currently, so basically the compounders 
have the same regulations and requirements as the drug 
manufacturers? Yes or no?
    Dr. Woodcock. No.
    Mrs. Ellmers. And I am not just talking about numbers but I 
am just talking about regulations again, is this State versus 
Federal, is that the main difference that we are talking about?
    Dr. Woodcock. The States regulate pharmacies. They license 
pharmacies and these activities right now occur all in licensed 
pharmacies.
    Mrs. Ellmers. OK. What are the changes to compounding you 
propose making in order to prevent the meningitis outbreak last 
year to ensure compounded products are safe? If you can just 
quickly give us an idea of what you would like to see.
    Dr. Woodcock. Well, limit the traditional compounding to 
more or less reaction to a prescription, OK, and compounding 
something for a specific patient, that is traditional 
compounding. And don't allow compounding of really complicated 
dosage forms that even the traditional manufacturers have 
trouble making. Then we are saying establish a new group, the 
compounding manufacturers is what the Senate called them. They 
don't get prescriptions, but they have to register and list 
with FDA. Tell us who they are, what they are making and where 
they are located, right, and then they have to submit adverse 
events to us. And they would be subject to proper GMP 
requirements to make sure they make safe products, OK, but they 
wouldn't have to submit applications to us.
    Mrs. Ellmers. But you did mention application process a 
moment ago. Can you repeat that?
    Dr. Woodcock. Sure. Some of the members are talking we have 
current authorities, yes, we do have authorities. Our 
authorities are you are a new drug manufacturer or a generic 
drug manufacturer, you must submit an application to us. You 
must a pay user fee or you should not be producing drugs in the 
United States.
    Mrs. Ellmers. So once that application process is 
fulfilled, that, it is just so that you know that that 
particular facility exists and what their plan of action is?
    Dr. Woodcock. I am sorry, it is really hard to do this. 
That is our current authorities. That is how we regulate 
generic drugs and new drugs in the United States, all right, 
through that process. That is not what compounding is.
    Mrs. Ellmers. OK. Now let me ask this question. The number 
and how much a parmacy is making seems to be the issue of where 
it falls, what jurisdiction. In your own words, where do you, 
where would you see that line of action? What do you see, how 
much product can a compounder make without being designated a 
manufacturer?
    Dr. Woodcock. That is what we have been struggling with 
since the 503 was passed, OK, there is no line in there in the 
statute. And so what is an inordinate quantity? We don't know. 
Is it 10 units? Is it 1,000 units? Is it 17,000 units? So we 
have endeavored to use other criteria to say, OK, when you 
would be subject to Federal jurisdiction.
    Mrs. Ellmers. Well, my time is expired but obviously that 
is the main question here. So thank you.
    Dr. Woodcock. We would be happy to work with you.
    Mr. Pitts. The chair thanks the gentlelady and now 
recognizes the gentleman from New York, Mr. Engel, 5 minutes 
for questions.
    Mr. Engel. Thank you, Mr. Chairman.
    Dr. Woodcock, thank you for the good work that you do. We 
appreciate it very much.
    Dr. Woodcock. Thank you.
    Mr. Engel. I want to first ask a New York question. New 
York, it is my understanding that New York has no licensing 
requirements specific to compounding pharmacies and according 
to the National Conference of State Legislatures there is no 
requirement that New York pharmacies comply with the U.S. 
Pharmacopeia chapter 795 or 797 compounding standards and 
according to the Pharmacy Compounding Accreditation Board, 
which accreditation is entirely voluntary, they say there are 
only 10 pharmacies in all of New York accredited for pharmacy 
compounding.
    So that being said, I am pleased that no New York 
pharmacies were included as part of the FDA's most recent risk-
based priority inspections of 31 sterile compounding 
pharmacies. So what I want to ask New York specific is, does 
the FDA know which pharmacies in New York are compounding 
medications?
    Dr. Woodcock. We have no way of nothing in any State, OK, 
we have been told by the industry that there are 23,000 
pharmacies that may engage in some form of compounding across 
the country, but we don't know who they are, where they are or 
what they are making, because they don't have to tell us.
    Mr. Engel. So I assume then that the answer would be ``no'' 
to this, does the FDA currently have the authority to collect 
and test samples or examine the records of a compounding 
pharmacy in New York? And can you elaborate on why this 
information is critical for public health and safety?
    Dr. Woodcock. Well, we do believe we have the authority to 
go in and get samples and look at records but it has been 
contested.
    Mr. Engel. OK. Thank you. I am intrigued by the part of 
your written testimony which lays out a proposed risk-based 
framework for a new legislative approach to compounding to 
ensure patient safety and health.
    First, you proposed dividing the world of compounding into 
non-traditional compounders which would be subject to FDA's 
jurisdiction and traditional compounders who would remain under 
State oversight.
    Is there a concern that non-traditional compounders may 
create a category of pseudo drug manufacturers? And if so, how 
do you protect against that?
    Dr. Woodcock. Well, there is a concern that traditional 
manufacturers could actually be drug manufacturers in disguise 
and that non-traditional manufacturers could be. And for 
traditional we really feel that prescription requirement and 
the statement of medical need for the patient is important, for 
non-traditional we have proposed a series of things, including 
that they would register and list with us so we would not who 
they are and also not make copies of commercially available 
drugs.
    Mr. Engel. You mentioned the need for sort of do not 
compound list as part of this framework. Can you explain why 
this is necessary and why you cannot do this using your current 
authority?
    Dr. Woodcock. Yes. Well, we feel that products say we have 
withdrawn from the market for reasons of safety should not be 
allowed to be then compounded and U.S. citizens would then be 
exposed to them again. And we are seeing this now as you know 
in dietary supplements, we have to go after them because they 
sneak in drugs that have been pulled off the market, all right. 
So that is one category.
    Another category might be very difficult to manufacture 
dosage forms where the pharmaceutical industry that has a lot 
of science available to them and a lot of engineers and 
scientists still have trouble making them reliably, some of the 
patches, some of the inhalers and so forth.
    Mr. Engel. You sort of touched on this, but can you 
elaborate further on what steps the FDA is taking now utilizing 
the authority that you believe the that FDA has to conduct 
improved oversight over compounding pharmacies?
    Dr. Woodcock. Well, it is more oversight on whether it has 
improved because we are having to go to the ones we read about 
or we know about or we have had prior actions and we are doing 
a risk-based approach and going to those pharmacies as well as 
going to pharmacies where you have had reports of problems 
recently, all right, and for cause type of inspections.
    And as I said, we are going in with the States, the State 
board of pharmacy, their investigators, we often do an 
inspection together and we are taking very aggressive action. 
But we do not, for example, have recall authority, we cannot, 
we don't have the authority, we don't have recall authority for 
any drugs, right, and we do not have the authority to shut 
these pharmacies down, they are licensed by the State, but we 
have shared full information with the States, and they have 
shut 11 pharmacies down as a result of the findings in these 
inspections.
    So that is improved oversight, but we will see about if we 
go to court like what kind of response we get from the courts 
as far as our authority.
    Mr. Engel. Well, again thank you for the good work that you 
do. And I especially appreciate your testimony here this 
morning. It is concise, it is to the point. When we ask a 
question you respond very pointedly and it is very much 
appreciated. Thank you.
    Dr. Woodcock. Thank you.
    Mr. Pitts. The chair thanks the gentleman. The chair now 
recognizes the gentleman from New Jersey, Mr. Lance, 5 minutes 
for questions.
    Mr. Lance. Thank you, Mr. Chairman. And good morning to 
you, Doctor. You stated to Dr. Murphy that if you had it to do 
over, you might move more aggressively regarding the situation 
that, unfortunately, occurred, is that accurate?
    Dr. Woodcock. Well, I think we would have moved 
aggressively as we are now against all pharmacies. There was no 
way to predict at any time which of these pharmacies will cause 
this problem. And as I said, it will happen again because the 
conditions under which these sterile products are manufactured 
are not acceptable and the products are contaminated.
    I have learned, what I have learned from this is the 
resilience of the human body to microbial invasion because we 
have cultured many samples from these pharmacies and we have 
grown organisms. And we haven't had outbreaks and that is 
because both the human body can repel them and because some of 
them aren't human pathogens.
    Mr. Lance. Thank you. This is a very complicated subject 
and certainly I think answers require more than ``yes'' or 
``no.''
    Dr. Woodcock. I am sorry.
    Mr. Lance. And you don't have to be sorry at all, I think 
that this is extremely complicated.
    One of the difficulties as I read the background 
information is the split in the circuits.
    Are you advised by attorneys at the Department of Justice 
on these matters or do you have attorneys at your own agency 
regarding the significant split between the Fifth and the Ninth 
Circuit and the Supreme Court decision?
    Dr. Woodcock. We have our staff attorneys that belong to 
the Office of General Counsel at HHS and they are the FDA 
branch of that, and then they work with the Justice Department 
as well.
    Mr. Lance. Perhaps you are not the appropriate person to 
ask, but it seems to me, speaking as an attorney, that there 
needs to be much greater clarification so that there can be one 
standard across the Nation and not a split between the 
circuits, with the Supreme Court decision that did not answer 
the question fully.
    Would that be your understanding?
    Dr. Woodcock. That is my understanding. I am not a lawyer, 
but I appreciate clarity when I try to perform regulations.
    Mr. Lance. And I would hope moving forward in our 
responsibilities to protect the health of the Nation in 
conjunction with your responsibilities that we could work 
together to clarify the situation.
    I have 2-1/2 minutes, and I defer to Dr. Burgess.
    Mr. Burgess. I thank the gentleman for that. Well, Dr. 
Woodcock, what is it about the Exserohilum fungus that rendered 
it such a bad actor? You said sometimes the human body actually 
can resist these things, sometimes they don't even register. 
But Exserohilum was a bad one.
    Dr. Woodcock. Let me talk in general so I am not talking 
about NECC, but clearly it is the amount of bioburden of the 
contamination and that is why shipping these--bioburden means 
how many organisms are in there, OK, for the nonclinicians in 
the room--and so shipping something around unrefrigerated, 
which is happening a lot, OK, if you happen to get something in 
there, it gets a long chance to grow, all right. If you put it 
in a part of the body that is sort of protected from the immune 
system a little bit or is particularly vulnerable, if you 
inject with a steroid, we have had multiple outbreaks where 
there is an injection with a steroid and of course steroids 
suppress the immune system so then that weakens that part of 
the body and even systematically weakens the body's ability to 
respond to infectious attack because of the actual medicine 
that has been given. But we have had sepsis from IV products. 
Nine people died in 2011.
    Mr. Burgess. Let me just stop you there because we could 
obviously could go on. But that is significant because you have 
a steroid which inhibits fighting infection, you have a space 
in the epidural space that is relatively protected from white 
blood cells and things that normally fight infection, it is 
preservative-free because it is going into the epidural space 
if you had preservatives that would be bad for nerves so.
    Dr. Woodcock. High risk.
    Dr. Burgess. So it is the confluence of bad events. So you 
know this stuff is high risk.
    On the issue of manufacturing, I just have to tell you 
looking at the notes compiled by the other subcommittee, 
Oversight and Investigations, going back to May 10, 2012, when 
the Colorado Board of Pharmacy issued to NECC a cease and 
desist order and the same day FDA's Denver office informed New 
England the cease and desist order, New England compliance 
officer responsible for NECC spoke to an optometrist with the 
U.S. Department of Veterans Affairs inquiring about whether or 
not they could use NECC to repackage Avastin. This 
communication is significant because once again it confirms 
that FDA understood that NECC was acting like a manufacturer 
not a traditional compounding pharmacy. An email response ``I 
did not think they could use firms if profiles were 
unacceptable. NECC Framingham is profiled as a manufacturer 
because we determined that they are a manufacturer and not a 
compounding pharmacy,'' an email from the compliance officer 
for the New England district to FDA May 11, 2011.
    Dr. Woodcock. Well, I am not going to argue with you about 
this particular case because I can't talk about the case. But 
clearly the decision about whether a firm is making, is making 
product legally under 503A would be for the courts ultimately, 
all right, that is just how it was set up.
    Mr. Burgess. But under the Food, Drug and Cosmetic Act, if 
I may, you have the regulatory authority over manufacturers and 
your own compliance officers identified NECC is a manufacturer, 
acts like a manufacturer, walks like a manufacturer, they are a 
manufacturer.
    Mr. Chairman, I will yield back.
    Mr. Pitts. The chair thanks the gentleman and I now 
recognize the gentleman, Mr. Butterfield, for 5 minutes for 
questions.
    Mr. Butterfield. Thank you, Mr. Chairman. And thank you, 
Dr. Woodcock, for your testimony today.
    I will be brief. The hour is certainly getting late. But in 
studying this issue, Mr. Chairman, it seems that the FDA lacks 
clear direction and clear authority over what can be done once 
a compounding pharmacy is found to have failed to meet the 
standards.
    And so, Dr. Woodcock, after the meningitis outbreak at the 
New England Compounding Center about a year ago, FDA increased 
its inspection of compounding pharmacies. I think that is true. 
The findings by Federal investigators have been alarming. And 
hopefully there will be more aggressive investigations.
    I want to take you to the subject of sequestration. FDA is 
understaffed, underfunded and stretched very thin, at least 
that is what we have been told. How are the cuts from 
sequestration hindering the FDA and your inspectors from 
conducting the thorough oversight that is critical to patient 
health?
    Dr. Woodcock. Well, don't forget, the Energy and Commerce 
Committee overall have been very concerned that we haven't been 
to manufacturers overseas, traditional drug manufacturers, and 
that has been partly due to our resource limitations. Now we do 
have the user fee, the Generic Drug User Fee Act, and that will 
allow us to increase our inspectors who go overseas but my 
point is even the traditional industry we have difficulty 
covering that adequately. Now there are over 20,000 compounding 
pharmacies, and we don't know who is who. And so----
    Mr. Butterfield. Can some of your lack of resources be 
attributable to sequestration?
    Dr. Woodcock. Oh, yes, absolutely. Well, sequestration took 
another bite out of what was already a stressed agency, 
particularly as far as inspectional coverage and now, to give 
you perspective the whole drug industry has about 5,600 
establishments, all right, and so we try to inspect those on a 
regular basis. To say now that there are 20,000, 26,000, 28,000 
compounding pharmacies the question how do we get there, and 
then sequestration has reduced our funding, our user fee 
funding as well as our base appropriation funding.
    Mr. Butterfield. And is that really having a negative 
impact on your work?
    Dr. Woodcock. Absolutely.
    Mr. Butterfield. Now does your agency fully understand that 
sequestration is not a 1 year process, it is a 10-year process 
so unless it is repealed or modified it is going to continue 
for some years to come.
    Dr. Woodcock. We have grave concerns about our continued 
ability to operate our programs under the various financial 
stresses that we have and these new activities that we need to 
take on.
    Mr. Butterfield. What is an FDA Form 483?
    Dr. Woodcock. That is a form with the investigators' 
observations that is left with the firm at the end of the 
inspection.
    Mr. Butterfield. Are these posted on the Web site?
    Dr. Woodcock. Yes. They are public.
    Mr. Butterfield. OK. And from what we can gather, some 48 
form 483s that have been conducted are posted on the Web site?
    Dr. Woodcock. Yes. We are posting them publicly to make 
sure that people understand what our findings are.
    Mr. Butterfield. What are some of the worst conditions that 
have been observed by some of your inspectors?
    Dr. Woodcock. Well, primarily, it relates to not keeping, 
not having practices that would assure the product would be 
sterile. Don't forget, these are going to be injected in 
people's bodies, into their eyes, around their spinal cord into 
their veins and the practices would allow fungal spores, mold, 
contamination from the body of a person so that would be 
bacteria, to actually get into the products and then multiply.
    Mr. Butterfield. Finally, are there any tools other than 
money, of course, that Congress can provide to the FDA so the 
American people can feel more assured that the compounded drug 
they are taking is prepared in a safe and secure way?
    Dr. Woodcock. We need clear lines of authority. We need to 
know what the States regulate, what the Feds regulate and what 
our authorities are. If we regulate part of the industry, I 
would like to know who they are, where they are located and 
what they are making so that then we can then prioritize where 
to go because we are not going to get to thousands and 
thousands of sites in the next several months.
    Mr. Butterfield. Thank you. You have been very kind. I 
yield back.
    Mr. Pitts. The chair thanks the gentleman. I now recognize 
the gentleman from Utah, Mr. Matheson, 5 minutes for 
questioning.
    Mr. Matheson. Thank you, Mr. Chairman. Dr. Woodcock, it is 
always good to have you before the committee. I have always 
appreciated my conversations with you and I appreciate your 
trying to highlight an issue where I think it is all important 
we take a hard look at this and figure out a better way to go 
forward. If I want to oversimplify this hearing, that is kind 
of where we are.
    I fear my questions may be a bit repetitive for what you 
may have already covered that is the reality of being the last 
people asking questions.
    But I was interested as I understand it when you were 
discussing, when the FDA discussed some informant actions back 
in 2006, after--can you tell me at that point what actions--can 
you elaborate what actions were discussed by the agency 7 years 
ago? Are you familiar with that discussion that took place? 
That is before your time. Maybe you can't answer that.
    Dr. Woodcock. No. No. I wasn't. I wasn't head of Center for 
Drugs at that time either.
    Mr. Matheson. You present several policy options in your 
testimony, and it is going to provide FDA some different 
authorities for certain compounders. Can you describe how those 
options, how they might have played out, allowed the 2012 
outbreak to play out differently than it did if you had those 
options at that time?
    Dr. Woodcock. If we have clear Federal authority and a 
clear idea of what is traditional compounding and what is not 
traditional compounding because don't forget this industry 
maintained they are working within the scope of State pharmacy 
practice. That is what they have maintained all along, all 
right, and so we need a clear understanding of what is the 
scope of traditional pharmacy compounding practice which FDA 
has already supported as appropriate in providing 
individualized therapy for people, and what is beyond that and 
requires Federal oversight, and to make sure that is 
delineated. And I think you will hear from the other witnesses, 
that is delineated from people masquerading as one of these 
buckets who are actually drug manufacturers. So we need clarity 
in whatever.
    And if Congress decides not to allow compounding 
manufacturing at all, all right, then we have heard from the 
hospitals and the clinics that that would be a tremendous 
burden on them because they would have to take back all this 
that they had outsourced.
    Mr. Matheson. Mr. Chairman, that is all I am going to ask 
now. I will yield back.
    Mr. Pitts. The chair thanks the gentleman. I now recognize 
the ranking member of the full committee, Mr. Waxman, 5 minutes 
for questions.
    Mr. Waxman. Thank you very much, Mr. Chairman.
    Dr. Woodcock, your testimony states that the current legal 
framework does not provide FDA with the tools it needs to 
appropriately regulate the compounding industry in its current 
state. You explained that you are referring both to section 
503A and other parts of the Federal Food, Drug, and Cosmetic 
Act.
    I would like to start with section 503A. Obviously as you 
explained to Mr. Pallone, there are major questions about 
whether it would even remain in effect if challenged in most of 
the country apart from the Fifth Circuit. With regard to the 
circuit split, Representatives Barton and Griffith have asked 
why you could not fix this with guidance.
    Can you explain what a guidance could or could not do to 
address the circuit split?
    Dr. Woodcock. Certainly. A guidance says on every page that 
it is not binding either on FDA or the industry. That is what 
it says on every page. It is more or less an explanation of our 
thinking. It doesn't add new requirements or cannot solve 
differences in court opinions.
    Mr. Waxman. But putting that aside you say that section 
503A actually contains provisions that have impeded FDA's 
ability to effectively regulate pharmacy compounding.
    Can you elaborate on what those provisions are and how they 
have impacted FDA's oversight of compounding pharmacies?
    Dr. Woodcock. Yes, well, I think there are provisions in 
there that are vague, and so we need clarity about what is the 
line. So, for example, it says you shouldn't compound without a 
prescription in inordinate amounts. What is ``inordinate?'' 
That is in the eye of the beholder. The industry has maintained 
that all of their activities, regardless of their scale, are 
within the scope of traditional pharmacy compounding.
    Mr. Waxman. The Oversight and Investigations Subcommittee 
of Energy and Commerce conducted a detailed investigation 
involving thousands of pages of FDA documents.
    One thing we found in that investigation is that for years, 
going back to the Bush administration, key FDA decision makers 
have in numerous internal meetings and memoranda indicated that 
section 503A is inadequate and that new legislation is 
necessary.
    Are you familiar with any of these documents or any of 
these internal discussions?
    Dr. Woodcock. Well, I was present in the early 2000s when 
the court cases came down, all right. We had been preparing to 
try and implement 503A and making the preparations for that 
when the Circuit Court and then the Supreme Court ruled. So I 
am familiar with that set of discussions.
    Mr. Waxman. Well, is it fair to say that the agency leaders 
going back to the Bush administration understood that they 
needed new legislation because of fundamental weaknesses in 
section 503A?
    Dr. Woodcock. Yes, it was very difficult to implement in 
any reasonable manner.
    Mr. Waxman. Mr. Chairman, the notion that FDA is asking for 
legislation simply to cover for past mistakes or in some sort 
of power grab is not correct. For years through two different 
administrations, agency leaders have known that there were 
problems with the underlying law.
    Let's turn to the other provisions in the act apart from 
section 503A.
    Dr. Woodcock, your testimony indicated that you are 
encountering difficulty when you attempt to inspect compounding 
pharmacies now using your current authorities. You mentioned 
that you actually had to seek a warrant in two cases after the 
pharmacies delayed or refused your access to records.
    Can you describe in more detail exactly what has happened 
during those inspections and describe which current statutory 
provisions are contributing to the difficulties you have faced 
when attempting to conduct inspections?
    Dr. Woodcock. Well, I probably can't speak to statutory 
provisions. I am sorry. But what has happened is we have gone 
in there and, as I said, the industry has long maintained that 
we do not have authority over these licensed pharmacies that 
are in States, right, and so we go in and we ask to either 
inspect or to inspect records. And they say under some of the 
court cases that have occurred we don't have to turn over 
records to you.
    Mr. Waxman. So some might argue that there is no problem 
here since you were eventually able to conduct the inspections 
and obtain the records you were seeking. But can you----
    Dr. Woodcock. Certainly.
    Mr. Waxman [continuing]. Speak to that assertion?
    Dr. Woodcock. The real problem is what is clarity? What is 
a compounding pharmacy? What is a traditional compounding 
pharmacy? What about the status of these large scale and how do 
you define a large scale operation? You might say, well, I know 
it when I see it. OK, but how do you----
    Mr. Waxman. Well, I was amazed to hear during your 
responses to earlier questions that in order for FDA to begin 
conducting the more recent inspections, you had to actually 
look in the newspapers and at the television ads and Web sites 
to even know where the compounding pharmacies were.
    Obviously, we don't ask you to search the Internet or watch 
TV to figure out where drug manufacturers are.
    What is the difference here and do you need new authority 
to remedy the situation?
    And before you answer that, not only are we uncertain as to 
the continued validity of FDA's authorizing statutes with 
respect to compounding pharmacies, but that statute itself is 
plagued by problems. And so I think we need to clarify the 
situation.
    But why should you have to go on TV and the Internet to be 
able to do inspections?
    Dr. Woodcock. Because they don't have to tell us who they 
are, where they are operating, and what they are making. They 
don't have to submit anything to us. They are operating under 
State law. And they don't have to send us adverse events if 
they occur, even deaths, and we would read about them in the 
paper, hear about them from the CDC or State health department, 
or a consumer or doctor will call us.
    And that is how we learn about this. And we don't know of 
all this universe of 28,000 firms. We don't know what they are 
doing. And so you might say, well, you should know about this. 
But when it happens, most of our actions have been reactive to 
things that we have heard about.
    Mr. Waxman. Thank you very much. Thank you for your 
indulgence, Mr. Chairman.
    Mr. Pitts. The chair thanks the gentleman.
    We are voting now on the floor so we will again recess 
until the floor votes are concluded, and then we will come back 
and reconvene with the second panel.
    I think all of the members have asked their questions. 
There may be some follow-up questions and we will ask you to 
please respond when we send you those.
    Dr. Woodcock. Certainly.
    Mr. Pitts. So at this point we will recess until conclusion 
of floor votes.
    [Recess.]
    Mr. Pitts. The time of our recess having expired, we will 
reconvene our hearing. At this time, I would like to request 
unanimous consent to enter a statement from the National 
Association of Chain Drug Stores into the record. Without 
objection, so ordered.
    [The information appears at the conclusion of the hearing.]
    Mr. Pitts. At this point, I will introduce our second 
panel. Today on our second panel we have Dr. Scott Gottlieb, 
resident fellow, American Enterprise Institute. Mr. Joseph 
Harmison, owner, Harmison Pharmacies, on behalf of the National 
Community Pharmacist Association. Ms. Elizabeth Scott Russell, 
Government Affairs Manager of the National Association of 
Boards of Pharmacy. Ms. Gabrielle Cosel, Manager, Drug Safety 
Project, Pew Health Group at the Pew Charitable Trust. And Mr. 
Gerry Migliaccio, Quality Systems Consultant, Migliaccio 
Consulting.
    Thank you all for coming. You each will have 5 minutes to 
summarize your testimony. Your entire written statement will be 
entered into the record.
    So, Dr. Gottlieb, we will begin with you. You are 
recognized for 5 minutes for an opening statement.

 STATEMENTS OF SCOTT GOTTLIEB, M.D., RESIDENT FELLOW, AMERICAN 
   ENTERPRISE INSTITUTE; JOSEPH H. HARMISON, OWNER, HARMISON 
    PHARMACIES, ON BEHALF OF NATIONAL COMMUNITY PHARMACIST 
  ASSOCIATION; GERRY MIGLIACCIO, QUALITY SYSTEMS CONSULTANT, 
   MIGLIACCIO CONSULTING; ELIZABETH SCOTT (SCOTTI) RUSSELL, 
 GOVERNMENT AFFAIRS MANAGER, NATIONAL ASSOCIATION OF BOARDS OF 
   PHARMACY; GABRIELLE COSEL, MANAGER, DRUG SAFETY, THE PEW 
                       CHARITABLE TRUSTS

                  STATEMENT OF SCOTT GOTTLIEB

    Dr. Gottlieb. Thanks a lot, Mr. Chairman Pitts, Mr. Ranking 
Member Pallone, and members of the committee. Thanks for the 
opportunity to testify today. I have a longer statement for the 
record. I would like to summarize a few key points for you this 
morning.
    The tragic deaths of 55 Americans and the sickening of more 
than 740 resulting from contaminated steroid injections that 
were shipped by a disreputable firm have rightly focused public 
attention on a largely unfamiliar but prominent part of the 
drug supply chain, the practice of pharmacy compounding.
    Before this Congress are proposals to tighten Federal 
regulatory oversight of these compounding pharmacies and the 
practice of pharmacy more generally. Observers are calling on 
Congress to give the FDA more oversight of these firms. New 
laws merit consideration. We should articulate clear and bright 
lines between a legitimate practice of pharmacy compounding and 
those firms operating illegally as large-scale manufacturers 
under the guise of a pharmacy license. Some key considerations 
should, in my opinion, guide this work.
    First, there exists a practice of pharmacy. It was never 
intended that all compounding would create a new drug and be 
subject to FDA regulation but for the enforcement discretion or 
for the willingness of Congress to provide explicit exemption 
to certain pharmacists and certain activities that pharmacists 
undertake.
    Second, FDA has authority to target compounders that cross 
the line between the practice of pharmacy and engage in drug 
manufacturing under the guise of a pharmacy license. What FDA 
largely lacks is ease of administering this authority. FDA is 
generally not able to force firms to submit advance information 
to the agency before the firm is suspected of any wrongdoing, 
and so that the agency is more efficiently able to identify 
firms engaged in wrongdoing and target its oversight.
    Third, FDA generally lacks tools and resources to regulate 
a new class of firms that the agency has dubbed nontraditional 
compounders. I would argue that the firms in question here are 
not compounders, and calling them such confuses different 
issues. Rather, they are engaging in the bulk, large-scale 
repacking and manufacturing of sterile preparations of FDA-
approved drugs, typically in advance of and often not in 
response to prescriptions for individual patients.
    To the degree that these large-scale operations prepare 
sterile volumes of drugs in a bulk form and ship these units 
widely, they present some novel risks and they have the 
potential for what I would call distributed risks. The public 
health could benefit from applying additional oversight to 
these firms, especially requirements that they adhere to good 
manufacturing practices.
    Fourth, as we address issues of supply, we must also 
address the policy decisions that have increased demand for 
products from some disreputable firms, from large-scale 
compounders who are breaking existing law and violating 
existing regulations. For example, the recent crackdown on 
manufacturing of generic drugs have shifted a lot of the demand 
for generic preparations to compounders. Likewise, decisions by 
FDA to suspend enforcement against compounders in certain 
select situations where the agency and policymakers had 
concerns about the high cost of FDA-approved drugs relative to 
the low costs of compounded versions has also given greater 
license to certain compounders to bend, if not break existing 
law.
    Consistent enforcement is going to be especially important 
if we create a new class of compounders that FDA has dubbed the 
nontraditional compounding. If FDA doesn't exercise its 
enforcement evenly and consistently, which means not allowing 
firms to compound identical versions of FDA-approved products, 
then the agency will give more incentive for drug makers to 
remask themselves as nontraditional compounders to skirt FDA's 
new drug requirements.
    Finally, the market for compounding drugs is evolving very 
quickly. It is consolidating as other entities like 
distributors could well start buying out the large compounders. 
As this process unfolds, it will leave behind a much different 
compounding industry. This should serve as a cautionary tale to 
all of us. We should be mindful that the rules that we might 
write today would no longer be applicable to the market that we 
see tomorrow.
    Thank you for the opportunity to testify this morning. I 
look forward to your questions.
    Mr. Pitts. Thank you, Dr. Gottlieb.
    [The prepared statement of Dr. Gottlieb follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
        
    Mr. Pitts. Mr. Harmison, you are recognized for 5 minutes 
for opening statement.

                STATEMENT OF JOSEPH H. HARMISON

    Mr. Harmison. Thank you, Mr. Chairman. I wish I could speak 
as quickly----
    Mr. Pitts. Poke the button on that. If you will push the 
button, speak into the mike, please. Thank you.
    Mr. Harmison. OK. Excuse me.
    Chairman Pitts, Ranking Member Pallone, Vice Chairman 
Burgess, thank you for the opportunity to be here today. As 
stated, I am Joe Harmison. I am a practicing pharmacist, 
pharmacy owner, and past president of the Texas Pharmacy 
Association and the National Community Pharmacists Association. 
NCPA appreciates the opportunity to share the community 
pharmacist's perspective regarding issues relating to drug 
compounding. NCPA represents the views of community 
pharmacists, including 23,000 independently owned community 
pharmacies. According to an NCPA member survey, 86 percent of 
our members do some kind of compounding. This can range from 
flavoring pediatric liquids to changing dosage forms to pay for 
patients that can't take oral solids to topicals to injections. 
In my practice, we mainly emphasize pain medications. And we 
are U.S. Pharmacopeial 797 standard compliant.
    Our hearts go out to the families who have suffered from 
the tragic events surrounding New England Compounding Center, 
and NCPA is committed to working with Congress on the issues of 
practice that exceed State-regulated compounding. NCPA commends 
the committee for taking a closer look at those actions and 
inactions that led to the tragic NECC event. We believe the 
committee is taking the proper steps to address this tragedy by 
focusing its investigations on what steps should have been 
taken and oversight that ensures that the proper regulatory 
bodies are exercising their full authority.
    Compounding is the backbone of pharmacy. It goes back to 
the time of the alchemist. For centuries, pharmacy only did 
compounding, until World War II, then commercially prepared 
medicines became more prevalent, which is still the thing 
today. But it did start dawning on people a couple of decades 
ago that there are people that need something that just isn't 
commercially available. So compounding came back into being an 
important part of the pharmacy practice.
    Another thing, compounding serves to bridge a gap which we 
are experiencing more and more when commercial products are not 
available. Patients must be assured that they are not forced to 
go without medicines or their treatment because medications are 
unavailable and compounding for that medication is prohibited 
or tied up in a bureaucracy. It is important to reiterate that 
pharmacist compounding is an integral part of pharmacy 
profession and meets patients' needs in hospitals, long-term 
care, home infusion, hospice, every community setting I can 
think of.
    NCPA has always and will continue to advocate that pharmacy 
compounding is best regulated by the State boards of pharmacy 
while manufacturing oversight is the purview of the FDA. 
Pharmacy compounding medication is an important part of the 
medical care and allows dispensing custom-made medications and 
should continue to be related by State boards of pharmacy, as 
all other medical profession licenses are.
    State boards of pharmacies currently oversee all aspects of 
pharmacy and in most cases their records are public. So it is 
not hard to obtain who is doing what. If the FDA has concerns 
about appropriate licensed pharmacy, then the FDA currently has 
the authority to ask the State board of pharmacy to work with 
them to address the issues. If it is found that they have an 
entity that is acting under the guise of a pharmacy and is 
exceeding its State-regulated authority, then the States board 
of pharmacy should suspend the license of that pharmacy until 
it complies with the State regulations or meets the FDA 
regulations to be a manufacturer.
    All parties involved must make certain that the State 
boards of pharmacy are adequately staffed, trained, and funded 
to effectively regulate compounding. NCPA encourages the State 
boards of pharmacy to acquire uniform compliance with USP 797 
standards in order to provide more uniform product standards. 
As such, every State will be assured that resident and 
nonresident pharmacies alike are all in compliance with the USP 
standards.
    In most cases, compound medication must originate from a 
prescription for a specific patient. There are times that we 
may do things in advance, but we have to be able to prove that 
we use historically a certain amount in a very short period of 
time.
    I see I am out of time. Compounding should not be defined 
by nuance, such as types of product, whether it is sterile or 
nonsterile, as risk of complexity of compounding is not solely 
dependent on the product type. Neither is quantity of the 
product made in a pharmacy of bearing because we can make many 
different things and they are all safe. And interstate commerce 
should not be--because we, was stated earlier, we are a border 
State to 5 different States, and, being rural, there are places 
that just have to go across State lines. But if it is the 
issuance of a prescription for a specific patient for a 
specific malady, this should be allowed and under the purview 
of the States.
    Thank you for the opportunity to be here. NCPA pledges to 
work with Congress to put this to rest.
    Mr. Pitts. Chair thanks the gentleman.
    [The prepared statement of Mr. Harmison follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Pitts. Ms. Russell, you are recognized for 5 minutes 
for opening statement.

         STATEMENT OF ELIZABETH SCOTT (SCOTTI) RUSSELL

    Ms. Russell. Thank you. Good afternoon, Chairman Pitts, 
Ranking Member Pallone, and members of the subcommittee. The 
National Association of Boards of Pharmacy appreciates the 
opportunity to appear before you today and provide information 
related to pharmacy compounding. I am Elizabeth Scott Russell, 
government affairs manager for the association.
    As part of a comprehensive action plan that assists States 
following the meningitis outbreak, NABP partnered with the Iowa 
Board of Pharmacy to begin conducting inspections of all of its 
approximately 609 resident pharmacies, focusing first on those 
delivering compounded drugs into Iowa. Our inspections 
confirmed that the activities that occurred with NECC were also 
occurring in other facilities in other States.
    To date, NABP has inspected approximately 165 pharmacies 
and is in discussions about similar inspection programs with 
other States. We are building a system of proactive information 
exchange for all pharmacies that will include verifications of 
licensure, disciplinary checks, and assurances of a timely and 
robust inspection that meets uniform standards at no cost to 
boards to assist them in making licensure and registration 
determinations for nonresident pharmacies.
    NABP does believe that Federal legislation is needed to 
provide the needed distinction between compounding and 
manufacturing to address critical concerns and provide a safe 
and equitable environment for both to occur in the best 
interest of the patient. NABP supports the major concepts of 
the legislation proposed by the Senate HELP Committee and 
welcomes the proposed clarifications to the regulatory 
uncertainties that currently exist, uncertainties that were a 
primary factor leading to the recent meningitis tragedy.
    In particular, NABP affirms that the regulation of the 
practice of pharmacy remains the responsibility of the State 
boards of pharmacy and agrees with the language in the proposed 
Senate legislation that defines traditional pharmacy 
compounding as part of the practice of pharmacy to be regulated 
by State boards of pharmacy. NABP also supports the 
establishment in legislation of a new category for the 
preparation of nonpatient-specific sterile products that would 
be registered and regulated by FDA and a clear distinction 
between this new category and traditional pharmacy compounding.
    Although we understand that some terminology must be 
employed to describe this new category, we would prefer that 
the term ``compounding'' not be included in the name because of 
potential confusion with traditional pharmacy compounding.
    NABP supports Federal legislation prohibiting entities that 
fall into this new category also being licensed as a pharmacy 
by the State, as this separation is essential to addressing the 
ambiguous authority that currently exists between the States 
and FDA; that is, who is responsible. Our experience affirms 
the importance of a clear separation between manufacturing and 
compounding and clarifying what activities fall under Federal 
jurisdiction and what fall under State jurisdiction. Not having 
a clear separation could also provide a veil for unscrupulous 
entities to hide their activities.
    NABP does not believe that the interstate distribution of 
nonpatient-specific sterile products should be a required 
criteria for meeting this definition, this new category, as is 
in the Senate proposal. We understand the need to establish a 
delineation point, but such differentiation between intrastate 
and interstate distribution could create patient safety 
concerns by allowing large-scale intrastate entities to avoid 
Federal regulation. NABP could still support proposed 
legislation that exempts intrastate distributions from the 
definition for this new category provided the situation is 
monitored for any additional future action that may be 
necessary.
    In conclusion, NABP believes there is a need for Federal 
legislation that addresses the safe preparation of compounded 
medications for patients, that distinguishes between 
compounding and manufacturing, defines a new category of 
manufacturers under FDA regulation, balances effective 
regulation with reality, and carefully constructs the scope and 
activities of this new category to meet patient needs while 
maintaining necessary protections. We appreciate this 
opportunity for input and are available to discuss our comments 
and any legislative solution in greater detail. Thank you.
    Mr. Pitts. Chair thanks the gentlelady.
    [The prepared statement of Ms. Russell follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Pitts. Ms. Cosel, you are recognized for 5 minutes for 
an opening statement.

                  STATEMENT OF GABRIELLE COSEL

    Ms. Cosel. Thank you. Chairman Pitts, Ranking Member 
Pallone, Vice Chairman Burgess, and members of the 
subcommittee, thank you for the opportunity to testify on the 
need for Federal legislation to improve the safety of 
compounded medicines. My name is Gabrielle Cosel. I work on 
pharmaceutical quality and safety at the Pew Charitable Trusts, 
which is an independent research and public policy 
organization.
    Pharmacists have always compounded medicines. But many of 
the activities we refer to as compounding today are far removed 
from traditional pharmacy practice. In recent months, this 
committee has stressed the responsibility of FDA to ensure the 
safety of activities that depart from traditional compounding 
and are more akin to manufacturing. Today I will focus on a 
regulatory framework that clarifies the agency's role, ensures 
that limited resources are used wisely, and sets clear 
expectations for the industry.
    First, though, it is important to look over the risks. The 
fungal meningitis epidemic illustrates how patients can be 
harmed by substandard compounded drugs. But it is far from an 
isolated incident. My written testimony describes 19 additional 
pharmacy compounding errors from the past decade that have 
caused serious injuries and deaths in at least 29 different 
States. The list includes meningitis, blood stream infections, 
and at least 38 patients who suffered partial or complete 
vision loss.
    Recent history raises further concern. Two months ago, a 
New Jersey compounder recalled all of its products because of 
mold contamination. When a drug is produced in mass quantities, 
the potential harms from a quality failure also multiply. There 
are companies today that compound thousands of packages of 
vials of medicines and ship them to buyers all over the 
country. These activities have outgrown the State regulatory 
structures established to oversee them. Federal law already 
regulates some aspects of compounding, and today we urge you to 
make changes to ensure clarity and effective oversight.
    First, large-scale compounding should be subject to higher 
quality standards, specifically applicable good manufacturing 
practices. Second, the FDA is the appropriate agency to oversee 
GMPs, and States should not exercise redundant oversight. And 
finally, patients must be protected by ensuring that 
compounders do not undermine gold standard FDA-approved drugs.
    Compounding quality standards are currently set by the 
States, and they are variable. Pew recently joined with the 
American Hospital Association and the American Society for 
Health System Pharmacists to host a summit on sterile 
compounding, and experts at that meeting emphasized that 
pharmacy compounding standards were never intended and are not 
suitable for large-scale production. Compounding high volumes 
or repeat batches of medicines involves standardized processes 
and should be subject to applicable GMPs. The FDA is best 
placed to enforce these standards, but resources should be 
focused on activities that pose the highest public health risk. 
Facilities that produce large volumes of sterile products that 
may reach many patients or that carry out particularly high-
risk compounding, such as creating sterile products from a 
nonsterile bulk ingredient, should be required to register with 
the FDA.
    FDA should issue regulation clarifying the criteria for 
registration. As with pharmaceutical manufacturing, FDA should 
inspect compounding facilities on an ongoing basis with a 
frequency based on risk. And facilities should pay fees to 
ensure FDA is adequately resourced to provide this oversight.
    Under this framework, States may continue to require FDA-
registered compounding facilities to hold pharmacy licenses, 
but State enforcement of quality standards should be preempted 
for these facilities. To exercise effective oversight, the FDA 
must have access to the records of facilities it regulates or 
that it believes fall under its jurisdiction. This requires a 
fix to current law. Even today, compounders continue to 
challenge FDA's access to records. Key safety requirements 
should also be set at the Federal level, such as a ``do not 
compound list,'' and this should apply to all compounding 
facilities.
    It is important to state that large-scale compounding 
cannot be addressed simply by requiring these facilities to 
submit new drug applications. Some large compounders fill a 
niche in our health system, such as for hospitals that don't 
have sufficient capacity to mix drugs in-house. However, any 
new regulatory scheme must not undermine the approvals process 
and encourage compounding at the expense of traditional 
manufacturing. While the goal is to ensure the quality of 
compounded medicines, patients, doctors, and pharmacists should 
prefer FDA-approved products whenever possible. Only the latter 
go through pre-market review to establish safety, efficacy, and 
bioequivalence, along with pre-approval of manufacturing 
methods and facilities. Legislation should be clear that a 
compounder may not make a copy or a variation of a marketed 
drug except when that drug is in shortage or to address a 
specific medical need of a specific patient.
    In conclusion, I thank you for your leadership, and I urge 
you to create a clear, workable framework to protect patients. 
I welcome your questions.
    Mr. Pitts. Chair thanks the gentlelady.
    [The prepared statement of Ms. Cosel follows:]
    [GRAPHICS NOT AVAILABLE TIFF FORMAT]
    
    Mr. Pitts. Mr. Migliaccio, you are recognized for 5 minutes 
for opening statement.

                 STATEMENT OF GERRY MIGLIACCIO

    Mr. Migliaccio. Thank you, Chairman Pitts and Ranking 
Member Pallone, for inviting me here to speak today. My name is 
Gerry Migliaccio. I am a consultant in the area of 
pharmaceutical quality systems. In 2012, I retired from Pfizer, 
Incorporated, after a 33-year career in pharmaceutical 
manufacturing and quality operations. For 11 of those years, I 
served as the head of the Global Quality Organization at 
Pfizer. So this experience has provided me with quite an 
intimate knowledge of the quality requirements and regulatory 
framework applicable to manufacturing medicines for the United 
States public.
    Patient safety is the highest priority for pharmaceutical 
manufacturers. Companies comply with the gold standard of 
quality manufacturing as defined by FDA's current Good 
Manufacturing Practice regulations and the associated guidance 
documents. These regulations apply to all prescription drugs 
approved for sale in the United States, wherever they are made, 
and extend to all components of a finished drug product, 
including the active pharmaceutical ingredients.
    FDA's regulations are based on the fundamental principle 
that you cannot inspect or test quality into a finished 
product. Quality must be designed into the manufacturing 
process and designed into the product. The regulations also 
drive manufacturers to establish a quality systems approach to 
assure consistent quality.
    In pharmaceutical manufacturing, quality systems and GMP 
requirements begin at the investigational stage. FDA requires 
that a new drug application describe the quality safeguards for 
the proposed manufacturer of a new medicine in the Chemistry, 
Manufacturing, Control section of the application. Part of the 
evidence required by FDA to demonstrate safety and efficacy is 
the requirement that a manufacturer provide, and I quote, ``a 
full description of the methods used in and the facilities and 
controls used for the manufacture, processing, and packing of a 
new drug.''
    The manufacture of medicines, whether by NDA holders or 
large-scale compounders, involves similar activities and 
similar potential for risk. Large-scale compounding can involve 
mixing of active and inactive ingredients, as well as other 
manufacturing steps. Therefore, in order to assure the safety 
of the American public, the manufacture of medicines, whether 
by manufacturers or by pharmacies, should be regulated in a 
consistent risk-based manner. Large-scale commercial 
manufacturing of prescription medicines, whether the producer 
is designated as a pharmacy or as a manufacturer, should be 
governed by the same high standards currently in effect for 
pharmaceutical manufacturing and subject to the same inspection 
and enforcement actions by FDA.
    Moreover, large-scale compounders should be required to 
prove that they can manufacture medicines consistently and 
safely by submitting an application to FDA containing a 
Chemistry, Manufacturing, and Control section, and submitting 
to both pre-approval and routine GMP inspections.
    Let me give you a personal perspective on the importance of 
GMP regulations. During my career, I considered the regulatory 
framework in the United States as the blueprint for assuring 
safety and efficacy. Whether you are a small startup company or 
a large multinational manufacturer, the regulations and 
guidance documents provided a template for success. From 
designing quality into a manufacturing process to the selection 
of material suppliers to construction of facilities, the 
selection of equipment, the training of employees, all the way 
to the final approval to distribute the product, the 
regulations and guidance documents provide for a consistent 
risk-based approach to assure quality. The regulations have 
also evolved to encourage innovation and continuous improvement 
and to help support the justification of new technology to 
further enhance quality assurance.
    Therefore, it is just very logical to me that any large-
scale manufacturer of medicines, including compounders, should 
comply with these same regulations. A manufacturer in full 
compliance will have a high degree of assurance that the 
medicines they produce will be of consistently high quality. A 
large-scale company making thousands of doses of medicine with 
the name ``Pharmacy'' on the door and another with the name 
``Pharmaceutical Company'' on the door should be regulated in a 
similar manner when they perform similar manufacturing steps 
and present similar risks to patients.
    Thank you for your attention.
    Mr. Pitts. Chair thanks the gentleman.
    [The prepared statement of Mr. Migliaccio follows:]
    [GRAPHICS NOT AVAILABLE TIFF FORMAT]
    
    Mr. Pitts. I will begin the questioning. And I recognize 
myself for 5 minutes for that purpose.
    Dr. Gottlieb, the FDA has proposed creating a new category 
of, quote, ``nontraditional compounders,'' end quote. Do you 
believe this has the potential to add confusion rather than 
clarity to regulated industry?
    Dr. Gottlieb. I do believe there is this category of 
companies, large companies, that have grown up that basically 
do the outsourced work of the hospitals. And it is not really 
traditional compounding in the sense that we understand that 
word. What they are really doing is sterile preparations of 
drugs, breaking down FDA-approved products into different 
formulations that make it easier to administer to patients, and 
it is a completely different thing than what traditional 
compounding is.
    I do think it creates the potential that traditional 
manufacturers might have a temptation to recast themselves into 
this new category if we don't have very equal enforcement and 
very aggressive enforcement of the existing law because there 
will be an incentive to go into this pathway because it will be 
sort of a regulatory light pathway.
    The reason why Teva Pharmaceuticals doesn't, you know, 
manufacture all the formulations of Propofol that doctors might 
want is because if they went about doing that they would have 
to file an ANDA for each one and pay a user fee for each one. 
So if we create this category, it could be an incentive for 
traditional manufacturers to try to move back into this new 
category, and that wouldn't serve the public interest.
    Mr. Pitts. To follow up, impact on intellectual property 
rights. How would this new category potentially impact 
intellectual property rights?
    Dr. Gottlieb. Well, again, I think it could create an 
avenue for people to try to game around the new drug 
regulations to create products that would fit into this 
category. And it is not an argument for not trying to think 
about how we could apply GMP regulations to this emerging, this 
new category of manufacturers. But it is an argument for trying 
to make sure that we enforce existing law against compounders 
who, for example, compound versions of FDA-approved products.
    In recent years, the FDA has backed off enforcement that 
was put into place to crack down on people who are engaging in 
the compounding of drugs that exist in FDA-approved 
formulations. And so that creates an incentive to try to 
obviate existing intellectual property.
    Mr. Pitts. Mr. Migliaccio, Director Woodcock mentioned on 
the previous panel that the agency could not require 
compounders to register with the FDA. However, the FDA has the 
full authority to require manufacturers operating under the 
guise of compounders to register with the FDA, like NECC. Isn't 
that correct?
    Mr. Migliaccio. Yes. Well, every manufacturing 
establishment within a pharmaceutical company has to have an 
establishment registration with the FDA.
    Mr. Pitts. Hasn't the FDA recently used its manufacturing 
inspection authority to inspect manufacturers acting under the 
guise of compounding recently?
    Mr. Migliaccio. I believe they have used their inspection 
authority to attempt to inspect compounding manufacturers. And 
I understand that they have been turned away in certain cases.
    Mr. Pitts. Please explain the similar scope of risk between 
NDA holders manufacturing drugs and large-scale compounders.
    Mr. Migliaccio. Well, pharmaceutical manufacturers make 
pharmaceutical products at very different scales. I mean, we 
make small volume, we make large volume. Compounders are doing 
the same thing. We are following similar manufacturing steps. 
We are taking active ingredients and inactive ingredients, 
combining them, trying to yield a product that has the potency 
and purity required by the patient.
    Compounding the problem with sterile products is the risk 
around sterility. Sterility is not something that you can test 
into a product. Yes, you do a sterility test, but it is not a 
reliable measure of sterility. You have to have a very robust 
system to assure sterility. And the GMPs require that we 
actually prove that to the FDA before we can market the 
product. We have to prove that we can assure sterility to a 
very high degree before we can put a product on the market. 
That is not the case, the risks are the same for compounding 
pharmacies, but they don't have to provide that same evidence.
    Mr. Pitts. Could legislation that applies different 
standards adversely affect the quality of drugs made available 
to patients?
    Mr. Migliaccio. Oh, I believe that compounding pharmacies 
making product at large volume are manufacturers and should be 
regulated according to the manufacturing regulations, the GMPs, 
which have proven to be very successful in protecting the 
American public.
    Mr. Pitts. Let me squeeze one more question in here, Mr. 
Harmison. What safety precautions are you required to comply 
with?
    Mr. Harmison. I comply with USP 797 and State laws and 
rules and regulations of the State of Texas.
    Mr. Pitts. And can you briefly describe the importance of 
traditional compounding that occurs in independent pharmacies 
across the country?
    Mr. Harmison. Mr. Chairman, that is a very broad subject. 
If we are talking about somebody making a cream, there is one 
thing. If I am making a sterile injection, that is quite 
another thing. I am making a capsule for somebody. We still 
strive, basically, we are not going to make anything we 
wouldn't give to our children or grandchildren.
    Mr. Pitts. Thank you.
    My time has expired. Recognize the ranking member 5 minutes 
for questions.
    Mr. Pallone. I wanted to start with Ms. Russell. In your 
testimony, you cite the need for FDA to be given new and better 
authority over drug compounding. Obviously, your organization 
is made up of State agencies that regulate the practice of 
pharmacy, so you are in a unique position to have insight into 
whether FDA needed new authority in this area.
    So, Ms. Russell, your testimony describes the fact that 
there were regulatory uncertainties that were a major factor 
leading to the NECC meningitis tragedy. Can you elaborate on 
what those--I always hate to say elaborate--but can you tell us 
what those uncertainties were and how they contributed to the 
meningitis outbreak?
    Ms. Russell. Sure. I think that there are a number of 
entities in the United States, across the United States, that 
would tell boards of pharmacy that they were distributing 
nonpatient-specific sterile products as an FDA manufacturer. 
And they may have actually gone on FDA's Web site and 
registered as a manufacturer and State boards of pharmacy 
didn't think they had jurisdiction over those particular 
activities. FDA didn't necessarily recognize them as an 
approved manufacturer because they hadn't filed an NDA. So 
there were uncertainties and ambiguities in who had 
responsibility over these particular firms.
    Mr. Pallone. So you also indicate that NABP is supportive 
of the Senate legislation clarifying the distinction between 
compounding manufacturers and traditional compounders. And you 
further indicate that your recent inspections of compounding 
pharmacies has underscored the importance of getting this 
clarity through Federal legislation. So can you explain more 
about what you have done in your inspection's undertaking? I am 
curious about why, if any BP in the States have been able to 
conduct such widespread inspections recently, that isn't 
enough. In other words, what would be achieved by FDA through 
new Federal legislation that can't be accomplished by the State 
boards of pharmacy?
    Ms. Russell. Maybe I wasn't clear. We do think traditional 
pharmacy compounding should remain the purview of State boards 
of pharmacy. But we do think that there are these entities that 
are engaged in large-scale activities that more resemble 
manufacturing and that FDA should have jurisdiction to inspect 
and investigate those.
    Our initial inspections that we have been involved in for 
the State of Iowa, part of it has been trying to determine 
which of these large-scale entities are engaged in these more 
resembling manufacturing-type processes, and those are not 
condoned by the Iowa Board of Pharmacy, nor most other States. 
And we don't think that State boards of pharmacy have the 
resources to be able to adequately inspect basically 
manufacturing operators that are operating under the guise of 
legitimate pharmacy practice.
    Mr. Pallone. Thank you.
    Let me ask Ms. Cosel. I would like to ask you a question 
that we heard a little about during the first panel. That has 
to do with hospital use of compounding medications. As we 
heard, hospitals have increasingly come to rely on compounded 
medicines that they obtain from large-scale pharmacies, and Dr. 
Woodcock talked some about how FDA's authorities to oversees 
these large-scale facilities are not appropriately tailored to 
the task. So I wanted to ask you, do you agree that hospitals 
do have a legitimate need for drugs from these large-scale 
pharmacies? Can you explain more about why they have come to 
rely on them? And what are your views on whether the FDA has 
the right authorities to handle regulation of that type of 
entity.
    Ms. Cosel. Yes. And I think the question is very astute, 
because it hits on just what is at hand today. There is a 
question about bad actors and if they cross a certain line 
whether they should be shut down. Yes. But there is also a 
question of entities that do fill a niche in our healthcare 
system, such as the outsources you reference, sir. And it has 
become clear over the years that hospitals have increasingly 
looked to outsourced operations to provide them sterile mixed 
products, mixed variations of finished FDA drugs.
    And the simple answer can't just be calling these entities 
manufacturers and requiring them to submit a new drug approval. 
We need to make absolutely clear that when you are compounding 
on a large scale and filling this niche for the health system 
you should be held to high quality standards, GMPs, as my 
colleague Mr. Migliaccio testified on as well.
    Mr. Pallone. Mr. Harmison, I have got a little time. Your 
testimony can be summarized as follows: States always have and 
always should regulate compounders with no role for the FDA. 
But we know that numerous failure by Massachusetts regulators 
led to the NECC tragedy. In light of this tragedy, is it still 
your view--and I don't mean--you tell me if I am wrong--is it 
still your view that States are capable of regulating large-
scale compounders?
    Mr. Harmison. Yes, Mr. Pallone. I think if they have the 
willpower to do it, they have the ability.
    Mr. Pallone. So you don't think there is a role for FDA in 
the regulation of large-scale compounders like NECC.
    Mr. Harmison. I think the rule of the FDA is oversight. If 
they think that there is a problem, they should go talk to the 
State boards of pharmacy, say, come, go with me, let's inspect 
this. If it is in violation of the State law, then the State 
should take action on them. If they say, we don't have this, 
somebody decide if they are a manufacturer. If they are a 
manufacturer, certainly they are under the purview of the FDA.
    Mr. Pallone. I don't know. It just seems to me that what 
you are proposing sounds nice in theory, but I think much of 
the testimony seems to indicate it doesn't work out 
practically. But whatever, I don't want to put words in your 
mouth. Thanks a lot.
    Mr. Pitts. Chair thanks the gentleman.
    Now recognize the vice chair of the committee, Dr. Burgess, 
for 5 minutes for questions.
    Mr. Burgess. Mr. Harmison, let's continue on that line for 
a moment, because when another subcommittee of the Energy and 
Commerce Committee, the Oversight and Investigations 
Subcommittee first started this investigation, we were joined 
by the brand new head of the Massachusetts Board of Pharmacy. 
And the reason she was the brand new head was because the old 
head had been recently dismissed because of the problems that 
occurred.
    We have heard from the FDA this morning that, no, we are 
not going to replace anyone in our organization. And looks to 
me like the Massachusetts Board of Pharmacy acted. Although 
there may have been problems leading up to the crisis, their 
response to the crisis and after seems much more reasonable 
than what I have seen under the Federal regulatory agency. Is 
that a fair assessment that I am making?
    Mr. Harmison. As an employer, if I were in that position, 
somebody wouldn't be in my employ anymore.
    Mr. Burgess. Well, that is, you know, this was so baffling 
about all of this. I mean, again, the poor individual who was 
the head, the brand new head of the Massachusetts Board of 
Pharmacy had to come here and answer some pretty tough 
questions and some for which she no answer, and simply said 
those people are no longer working for us. And you have to 
wonder if whether or not there are civil or even criminal 
activities are going to follow them for a while. I wouldn't be 
surprised to learn that.
    But, again, you have a large Federal regulatory agency, and 
they are immobile. And not only are they immobile, after they 
find out that there is a problem, but the months and years 
leading up to this. Well, we are going to have to have 
guidance, and, well, it is bound up in some stuff.
    And I read you the email chain. From 18 months before this 
crisis hit, they recognized that it was manufacturing, that 
they were required to list these compounds, they were required 
to submit to GMP. The people in the FDA understood that. And 
for whatever reason it didn't translate to the street level to 
get it done. In fact, I don't think the people that were 
working in the agency, again, I just--the mental image, they 
must be tearing their hair because they keep coming up to this 
point waiting for someone to say ``go'' and no one ever said 
``go.''
    And that is the problem I see if we divested away from the 
State agencies. Bad news at Massachusetts Board of Pharmacy. 
You know, bad news at what happened. But at least they have 
reacted in what I would consider a sensible way. I can't say 
the same to the FDA. That is painful for me to say that.
    Mr. Harmison. Well, if I can go back to an old Paul Newman 
movie, it appears what we have is a failure to communicate 
between regulatory agencies and enforcement agencies.
    Mr. Burgess. Dr. Gottlieb, let me just ask you because you 
have some experience working within the agency. Is that not 
correct?
    Dr. Gottlieb. Look, I think NECC was breaking existing law. 
They were acting as a large-scale manufacturer under the guise 
of a pharmacy license. They were compounding identical versions 
of FDA-approved products, they were doing it in bulk, they 
weren't doing it in response to prescriptions. They had had 
previous GMP violations. So they were known bad actor.
    I think the issue isn't necessarily what is FDA's 
authority. FDA has extensive authority. I think that the 
challenge is that they don't have ease of administrating 
authority because they don't have the ability to compel the 
submission of certain information. And it is not the posture by 
which they typically regulate.
    In the case of compounding, in many cases FDA is forced to 
have to make an affirmative case before it could go in and 
start to do its work. Typically, the FDA doesn't regulate that 
way. Typically, the FDA regulates from a posture where they 
compel submission of information to the agency and then they 
are able to target their activities based on that information. 
You know, under existing law they have extensive authority, in 
my view, but it is authority that makes it administratively 
more burdensome for them in this area than others.
    Mr. Burgess. But, you know, the concept of an affirmative 
case, and for heaven sakes, the system was blinking red for 
years. For years. You had whistleblowers, you had people 
bringing brochures in, you had people showing up saying, this 
is what we heard at a conference. These guys were clearly 
skating way beyond the edge, way beyond the fringe. And, OK, 
well, it may not be the normal FDA posture to take an 
affirmative case, when the evidence is laid in front of you, it 
shouldn't take----
    Dr. Gottlieb. Well, this one was obvious.
    Mr. Burgess [continuing]. It shouldn't take years to come 
to the conclusion of filing the action that eventually closed 
the NECC. Is that correct?
    Dr. Gottlieb. This was a known bad actor over a long period 
of time--including, frankly, the time in which I was at FDA, we 
sent out a warning letter to this firm in 2006.
    Mr. Burgess. OK.
    Thank you, Mr. Chairman. I will yield back.
    Mr. Pitts. Chair thanks the gentleman.
    And now recognize the ranking member emeritus, Mr. Dingell, 
for 5 minutes for questions.
    Mr. Dingell. Mr. Chairman, I thank you.
    First question is for Ms. Russell of the National 
Association of Boards of Pharmacy and also Ms. Cosel of the Pew 
Charitable Trusts.
    Ladies, do you believe that there is regulatory uncertainty 
regarding the FDA's role in overseeing compounding pharmacies? 
Yes or no?
    Ms. Russell. Yes.
    Ms. Cosel. Yes.
    Mr. Dingell. Now, these next two questions are for Ms. 
Russell. In your testimony, you mentioned that NABP partnered 
with the Iowa Board of Pharmacy to inspect pharmacies which 
deliver compounded drugs into Iowa. Is that correct?
    Ms. Russell. Yes.
    Mr. Dingell. Now, in your testimony also, you also mention 
that your inspections found that what occurred at NECC was 
happening elsewhere. Is that correct?
    Ms. Russell. Yes.
    Mr. Dingell. Could you briefly describe what you found at 
some of the facilities where you found a repeat of this kind of 
situation?
    Ms. Russell. We found large-scale operations similar to 
what NECC was doing where they were allegedly compounding or 
producing bulk quantities of sterile injectable products, some 
that were essentially copies of commercial products. We found 
issues with compliance with standards for sterility compounding 
and basically that they were shipping nonpatient-specific drugs 
into the State of Iowa in violation of Iowa State law.
    Mr. Dingell. What did the Iowa agency do about this?
    Ms. Russell. Iowa is in the process of--they have got three 
attorneys now working on the inspections that we provided. And 
they have issued notices of regulatory hearing for 5 of the 
first 6 pharmacies that we went in, which were some of the 
larger-scale operations. Those hearings I believe will be held 
in June this year, next month.
    Mr. Dingell. They seem to be in great haste. Am I correct?
    Ms. Russell. Pardon?
    Mr. Dingell. They seem to be in great haste to get around 
to processing this matter. Yes or no?
    Ms. Russell. Yes.
    Mr. Dingell. I don't see it that way.
    Would you submit also for the record other details of the 
events that you found, if you please?
    Now, in your testimony you mentioned there has been 19 
significant compounding errors since 2001. Is that correct?
    Ms. Cosel. Yes, 20, including NECC.
    Mr. Dingell. OK. Would you for the record submit the 
details of those events, please, to us?
    Ms. Cosel. Yes, sir.
    Mr. Dingell. Now, how many people died as a result of these 
incidents?
    Ms. Cosel. Not including NECC, there were 22 deaths 
associated with these incidents, and including NECC there were 
77.
    Mr. Dingell. Could you submit for the record the details on 
these things, if you please?
    Ms. Cosel. Yes, sir.
    Mr. Dingell. Now, as far as you know, have there been 
further problems with compounding pharmacies after the NECC 
outbreak? Yes or no?
    Ms. Cosel. Yes. We have seen a number of recalls related to 
quality problems with compounded drugs this year.
    Mr. Dingell. Could you submit again for the record what you 
found in those matters?
    Ms. Cosel. Certainly.
    Mr. Dingell. Could you give us a brief perhaps picture of 
what you found done in these instances and whether this was the 
responsibility of the State agencies or the Feds?
    Ms. Cosel. Well, I can give one example. There was a recall 
by a Georgia compounder this year, I believe in March, of all 
sterile products, because there were serious eye infections in 
at least 5 patients associated with a contaminated eye 
injection. In this case, this was a nationwide recall. So if we 
are--if Congress is considering a new regulatory system that is 
clear that large-scale compounding of high-risk sterile 
products would be explicitly under FDA oversight, I think we 
would have had a much better chance of ensuring the safety of 
those processes.
    Mr. Dingell. Particularly since they are shipping all 
across the United States and this is touching many agencies, 
many States, and people in many States and agencies. Is that 
right?
    Ms. Cosel. Yes.
    Mr. Dingell. And, by the way, thank you for your patience. 
It lets me get a lot more questions in.
    Would you for the record please submit the information that 
you have on these instances?
    Ms. Cosel. Yes.
    Mr. Dingell. Now, in your opinion, is the outbreak at NECC 
an exception to the rule or do you believe that it is but one 
example of a larger problem?
    Ms. Cosel. It is certainly an extremely horrific example, 
but it is just one of the larger issues we face. We acutely 
need greater clarity on oversight structures for large-scale 
compounding.
    Mr. Dingell. And one of the things we have do is to clarify 
it so that everybody knows who is supposed to and who can do 
what. Is that right?
    Ms. Cosel. Yes.
    Mr. Dingell. Because we have the court cases that have 
screwed up the interpretation by both State and Federal 
agencies on this matter. Is that right?
    Ms. Cosel. Legal uncertainty is one problem, as is changes 
with the industry and the emergence of the large-scale sector.
    Mr. Dingell. I have used more than my time. Thank you, Mr. 
Chairman.
    Mr. Pitts. Chair thanks the gentleman.
    Now recognize the gentleman from Virginia, Mr. Griffith, 5 
minutes for questions.
    Mr. Griffith. Thank you, Mr. Chairman.
    I have to tell you all, and I appreciate all of you being 
here, that I think part of the problem is, is that we have a 
clash of two worlds, the legal world and the medical world. 
Because when I look at the authority granted to the FDA under 
the code, with the exception of the advertising overreach, 
which was stricken down, there is plenty of authority already 
there to get to every problem that you all have raised today. 
And that is my concern.
    And I asked the doctor earlier, and she was very kind, you 
know, this happened, the Supreme Court case came down that 
dealt with the Ninth Circuit in 2002. Where was the request to 
Congress to clarify? Because the only clarification is that the 
rest of the authority granted, with the exception of the 
advertising provision, should have been reenacted by Congress.
    Now, can we tweak it a little bit and make it a little bit 
better? I am sure we can. And I am certain that we will work on 
that, because none of us want to see this problem happen again. 
But I heard one of the witnesses, and I don't remember which 
one now, say that they understood that there had been problems, 
you know, getting the records and getting into things. And, in 
fact, I think because the medical world--and I was a courtroom 
attorney, and so maybe it is a little different, not attorneys, 
but courtroom attorneys, they see things differently.
    So I asked legal counsel who was here at a previous 
hearing, for the FDA, do you have any trouble getting warrants? 
And I expressed that my opinion always was as a defense 
attorney, criminal defense attorney, that the government didn't 
have too much trouble getting warrants. He said, that wasn't my 
experience. And I asked him to get me information. Yesterday, 
we received that information.
    And, sure enough, FDA cannot point to a single example of 
where they requested a warrant where they were denied that 
warrant. So while the common belief is they have a hard time 
getting this information, the data would indicate otherwise.
    I also asked, how long does it take you to get the warrant? 
And they said, in the most recent administrative warrant we 
sought for a pharmacy, 10 days passed between when the refusal 
was encountered and when the warrant was signed by the 
magistrate judge.
    I have got to believe that if, as somebody said earlier, 
the blinking light, the red light warning, warning had been 
going off for years, that if instead of being timid and being 
afraid of the law, the medical folks had burst in, as often 
police officers have to do--if they think somebody has a DUI, 
they may not win the case in the end, but they get that person 
off the road, at least temporarily, to see what is going on--
that is what should have happened in this situation.
    Would you agree with that, Mr. Harmison, that that is 
probably what should have happened, instead of coming in, 
trying to rewrite the law.
    Mr. Harmison. Yes, sir. If there is public safety at risk, 
the State board of pharmacy absolutely has the power to come in 
and say, wait a minute, you are shut down.
    Mr. Griffith. Yes. And I think that the guidelines that 
were worked on, never fully finalized, but that were worked on 
in the draft guidelines of August of last year that we didn't 
learn about until March of this year, make that clear as well. 
Because it goes through and when it talks about distinguishing 
between, as you all have called them different names, large-
scale producers or production of compounded drugs, large-scale 
manufacturers, I think they are manufacturers. And I said in 
one of the earlier hearings, you know, I can call myself the 
Duke of Earl if I want to, but that doesn't mean I am getting 
diplomatic immunity.
    And that is where I think we run into this problem. But 
when they did that draft, they said, when you are looking at 
whether or not somebody is doing a compounded drug product that 
qualifies for the exemptions, they came up with 10 guidelines. 
And they are all significant and important, but I noted with 
interest two of those. Number 8 says the licensed pharmacist or 
licensed physician does not compound regularly or in inordinate 
amounts any drug products. Number 10 says that you should have 
a memorandum of understanding with the States so that you can 
work out these areas that aren't clarified or in a State where 
they have not entered into a memorandum of understanding the 
pharmacists shouldn't be sending to another State more than 5 
percent of the total prescription orders dispensed or 
distributed by such pharmacy or physician.
    These seem to me to be reasonable restrictions, and it 
makes the definition that I think each one of the witnesses 
here today is looking for, distinguishing between the 
traditional pharmacy that is doing some things for their 
patients and their customers and these large-scale 
manufacturers who are, in fact, in my opinion, they are not 
compounders in the traditional pharmacy sense, but they are, in 
fact, manufacturers.
    I look forward to trying to make sure that we clarify some 
of that because I do think that part of the problem is, is not 
having some street lawyers at the FDA who know that sometimes 
you have got to go in and kick the courthouse door down and say 
here is what we are doing. And when the judge sees the risk to 
the public he will say, OK, I will sign the warrant, OK, we 
will shut them down at least until we can find out whether or 
not they are a risk to the public. I think the authority 
already exists for that. I just think there has been some 
timidity in the legal department at the FDA.
    And when you talk about registration, when you look at the 
rules in section 510 of the act, I think it is pretty clear 
that unless you are a small town pharmacist you are supposed to 
be registering anyway. Does anybody disagree with that?
    Dr. Gottlieb, do you disagree with that?
    Dr. Gottlieb. No, 510 has a requirement for registration. 
And I think 503A actually lays out some criteria to try to 
distinguish, you know, these illegitimate compounders from the 
legitimate ones. So the language does exist and this could--
even 503A could be better interpreted in regulation. But I 
think the compliance policy guide which you just quoted is a 
very good start for that.
    Mr. Griffith. I think they did a nice job in that guidance. 
I am not going to say I would agree with every word of it, but 
most of it is pretty good stuff and it indicates the FDA had 
the authority to move forward even under the rules that they 
now say they don't have the authority to do.
    With that, I see my time is up and I yield back. But I do 
appreciate all of you all staying through two vote series on a 
long day. Thank you.
    Mr. Pitts. The chair thanks the gentleman.
    And with that, we again thank the witnesses for your 
patience.
    That concludes the questions of the members who are 
present. There are other questions I am sure that other members 
who are not here will also like to submit to you and we will 
ask that you please respond promptly once you receive those 
questions.
    And I will remind members that they have 10 business days 
to submit questions for the record, and Members should submit 
those questions by the close of business on Thursday, June the 
6th.
    Very informative and important hearing. Thank you very much 
for your attendance.
    Without objection, the subcommittee is adjourned.
    [Whereupon, at 1:50 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]