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





       FDA CHECKUP: DRUG DEVELOPMENT AND MANUFACTURING CHALLENGES

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

                                HEARING

                               before the

                     SUBCOMMITTEE ON ENERGY POLICY,
                      HEALTH CARE AND ENTITLEMENTS

                                 of the

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                           DECEMBER 12, 2013

                               __________

                           Serial No. 113-101

                               __________

Printed for the use of the Committee on Oversight and Government Reform



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              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                 DARRELL E. ISSA, California, Chairman
JOHN L. MICA, Florida                ELIJAH E. CUMMINGS, Maryland, 
MICHAEL R. TURNER, Ohio                  Ranking Minority Member
JOHN J. DUNCAN, JR., Tennessee       CAROLYN B. MALONEY, New York
PATRICK T. McHENRY, North Carolina   ELEANOR HOLMES NORTON, District of 
JIM JORDAN, Ohio                         Columbia
JASON CHAFFETZ, Utah                 JOHN F. TIERNEY, Massachusetts
TIM WALBERG, Michigan                WM. LACY CLAY, Missouri
JAMES LANKFORD, Oklahoma             STEPHEN F. LYNCH, Massachusetts
JUSTIN AMASH, Michigan               JIM COOPER, Tennessee
PAUL A. GOSAR, Arizona               GERALD E. CONNOLLY, Virginia
PATRICK MEEHAN, Pennsylvania         JACKIE SPEIER, California
SCOTT DesJARLAIS, Tennessee          MATTHEW A. CARTWRIGHT, 
TREY GOWDY, South Carolina               Pennsylvania
BLAKE FARENTHOLD, Texas              TAMMY DUCKWORTH, Illinois
DOC HASTINGS, Washington             ROBIN L. KELLY, Illinois
CYNTHIA M. LUMMIS, Wyoming           DANNY K. DAVIS, Illinois
ROB WOODALL, Georgia                 PETER WELCH, Vermont
THOMAS MASSIE, Kentucky              TONY CARDENAS, California
DOUG COLLINS, Georgia                STEVEN A. HORSFORD, Nevada
MARK MEADOWS, North Carolina         MICHELLE LUJAN GRISHAM, New Mexico
KERRY L. BENTIVOLIO, Michigan        Vacancy
RON DeSANTIS, Florida

                   Lawrence J. Brady, Staff Director
                John D. Cuaderes, Deputy Staff Director
                    Stephen Castor, General Counsel
                       Linda A. Good, Chief Clerk
                 David Rapallo, Minority Staff Director

      Subcommittee on Energy Policy, Health Care and Entitlements

                   JAMES LANKFORD, Oklahoma, Chairman
PATRICK T. McHENRY, North Carolina   JACKIE SPEIER, California, Ranking 
PAUL GOSAR, Arizona                      Minority Member
JIM JORDAN, Ohio                     ELEANOR HOLMES NORTON, District of 
JASON CHAFFETZ, Utah                     Columbia
TIM WALBERG, Michigan                JIM COOPER, Tennessee
PATRICK MEEHAN, Pennsylvania         MATTHEW CARTWRIGHT, Pennsylvania
SCOTT DesJARLAIS, Tennessee          TAMMY DUCKWORTH, Illinois
BLAKE FARENTHOLD, Texas              DANNY K. DAVIS, Illinois
DOC HASTINGS, Washington             TONY CARDENAS, California
ROB WOODALL, Georgia                 STEVEN A. HORSFORD, Nevada
THOMAS MASSIE, Kentucky              MICHELLE LUJAN GRISHAM, New Mexico




















                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on December 12, 2013................................     1

                               WITNESSES

Scott Gottlieb, M.D., Resident Fellow, American Enterprise 
  Institute
    Oral Statement...............................................     2
    Written Statement............................................     5
Peter Huber, Ph.D., Senior Fellow, Manhattan Institute
    Oral Statement...............................................    13
    Written Statement............................................    15
Mr. Paul Hastings, President and Chief Executive Officer, Oncomed 
  Pharmaceuticals, Inc.
    Oral Statement...............................................    20
    Written Statement............................................    22
Janet Woodcock, M.D., Director, Center for Drug Evaluation and 
  Research, Food and Drug Administration
    Oral Statement...............................................    42
    Written Statement............................................    45

                                APPENDIX

Opening Statement by Rep. Speier.................................    74
Opening Statement by Rep. Cartwright.............................    76
Department of Health and Human Services Response to Questions for 
  the Record.....................................................    77

 
       FDA CHECKUP: DRUG DEVELOPMENT AND MANUFACTURING CHALLENGES

                              ----------                              


                      Thursday, December 12, 2013

                  House of Representatives,
    Subcommittee on Energy Policy, Health Care and 
                                      Entitlements,
              Committee on Oversight and Government Reform,
                                                   Washington, D.C.
    The subcommittee met, pursuant to call, at 1:35 p.m., in 
Room 2154, Rayburn House Office Building, Hon. James Lankford 
[chairman of the subcommittee] presiding.
    Present: Representatives Lankford, Gosar, Meehan, Speier, 
Duckworth, and Lujan Grisham.
    Staff Present: Will L. Boyington, Press Assistant; Molly 
Boyl, Deputy General Counsel and Parliamentarian; Daniel 
Bucheli, Assistant Clerk; Katelyn E. Christ, Professional Staff 
Member; John Cuaderes, Deputy Staff Director; Linda Good, Chief 
Clerk; Emily Martin, Counsel; Sharon Meredith Utz, Professional 
Staff Member; Sarah Vance, Assistant Clerk; Jaron Bourke, 
Minority Director of Administration; Krista Boyd, Minority 
Deputy Director of Legislation/Counsel; Aryele Bradford, 
Minority Press Secretary; Courtney Cochran, Minority Press 
Secretary; Yvette Cravins, Minority Counsel; Adam Koshkin, 
Minority Research Assistant; Juan McCullum, Minority Clerk; and 
Daniel Roberts, Minority Staff Assistant/Legislative 
Correspondent.
    Mr. Lankford. Committee will come to order. I would like to 
begin this hearing by stating the Oversight Committee mission 
statement. We exist to secure two fundamental principles. 
First, Americans have the right to know that the money 
Washington takes from them is well spent. And second, Americans 
deserve an efficient, effective government that works for them.
    Our duty on the Oversight and Government Reform Committee 
is to protect these rights. Our solemn responsibility is to 
hold government accountable to taxpayers because taxpayers have 
the right to know what they get from their government, we will 
work tirelessly,in partnership with citizen watchdogs, to 
deliver the facts to the American people and bring genuine 
reform to the Federal bureaucracy. This is the mission of the 
Oversight and Government Reform Committee.
    I am going to waive our opening statements today from the 
ranking member and myself because we have votes that are coming 
very soon and I want to make sure that we get the opening 
statements from our guests that are here on the first panel. It 
looks like those votes will be called fairly shortly. When they 
are called, we'll slip away, vote, and then we'll come back and 
we'll do questions from then and then obviously move on to our 
second panel.
    But with that, I would like to recognize Ms. Speier. One of 
the panelists is from her district, actually. I want to give a 
chance for her to be able to recognize him.
    Ms. Speier. Mr. Chairman, thank you, and I, too, will 
submit my opening statement for the record.
    I do want to take great pleasure in introducing someone who 
I have known professionally for a number of years. He is the 
CEO of OncoMed Pharmaceuticals, and that's Paul Hastings, who 
is with us this afternoon. OncoMed is located in my district 
and is doing groundbreaking work on stem cell therapies that 
could provide important alternatives for the treatment of 
cancer. And Mr. Hastings is what you would refer to as a serial 
startup CEO and has done great work over many decades.
    So, thank you, Mr. Chairman.
    Mr. Lankford. All members will actually have 7 days to be 
able to submit opening statements for the record as well.
    Let me introduce the other two panelists as well. We have 
two prolific writers that are here. Dr. Scott Gottlieb is the 
resident fellow at the American Enterprise Institute, and Mr. 
Peter Huber is a senior fellow at the Manhattan Institute, all 
done significant work and research in the area. If you are not 
familiar with our topic today, we are dealing with the FDA and 
the drug approval process.
    And so glad to have all three of you here as experts in 
this conversation.
    So, pursuant to committee rules, all witnesses are sworn in 
before they testify, so if you could please stand. Raise your 
right hand.
    Do you solemnly swear or affirm the testimony you are about 
to give will be the truth, the whole truth, and nothing but the 
truth, so help you God?
    Thank you. You may be seated.
    Let the record reflect all the witnesses answered in the 
affirmative.
    In order to allow time for discussion, I would ask you to 
keep your testimony, your oral testimony to about 5 minutes. 
You'll see the clock in front of you. All of you are veterans 
at this table before, and so we would ask you to do that oral 
statement, as you know full well. All of you have submitted a 
tremendous amount of written information as well. That will go 
into the permanent record also.
    Mr. Gottlieb, be glad to be able to receive your opening 
statement.

                       WITNESS STATEMENTS

                  STATEMENT OF SCOTT GOTTLIEB

    Dr. Gottlieb. Thanks a lot, Mr. Chairman, Ms. Ranking 
Member. Thank you for the opportunity to testify today before 
the committee. My name is Scott Gottlieb. I am a physician and 
resident fellow at the American Enterprise Institute. I 
previously worked at FDA as the agency's deputy commissioner 
and at CMS as a senior adviser to the administrator.
    I want to address the issues related to FDA's review and 
approval of novel treatments for serious diseases that aren't 
adequately addressed by available medicine. The FDA has been 
effectively implementing provisions included in the last 
reauthorization of the Prescription Drug User Fee Act related 
to breakthrough therapies. I believe these provisions are 
having a noticeable impact on FDA's willingness to embrace new 
approaches to expedite the development of these sorts of new 
treatments, but I still believe there is more that can be done.
    The drug development process itself has become long and 
costly owing to regulation that serves to add to premarket 
burdens, but often without meaningfully improving the safety of 
drugs or what we know about their effectiveness, and we are not 
taking full advantage of what science has made available, not 
only in terms of new and more targeted therapies, but better 
ways for evaluating them.
    The review staff at FDA is a dedicated and well-intentioned 
clinical group of people who are often leading experts in their 
respective fields, but they are also heavily influenced by 
outside voices, and it's often the critics talking the loudest. 
Years of complaints about FDA's oversight of drug safety, about 
the high cost of drugs relative to their perceived benefits at 
the time of initial market entry, and criticism about the 
science that FDA uses in its review processes from vocal 
academics who often have their own parochial views in these 
matters, all of these things have taken a toll on FDA's 
culture.
    Over time, it is sanding down people's willingness to take 
the risk of adopting new approaches to the agency's work, even 
around areas of unmet medical needs that might not have 
anything to do with the concerns that incited the initial 
concerns.
    The result is that a fear of uncertainty now pervades the 
review process. When it comes to drugs targeted to unmet 
medical needs, I believe it's a fear of uncertainty around 
efficacy that is having the most profound impact of how drugs 
are being developed. FDA staff is often unwilling to take risk 
when it comes to observations around drug efficacy. They 
require experiments that leave little doubt that the magnitude 
of the benefit observed in a trial is not a function of any 
statistical chance. In short, they want to conduct pristine 
experiments that leave little uncertainty about the results 
describing a drug's efficacy that they are precise and beyond 
any statistical doubt.
    Here it's important to distinguish between the magnitude of 
the benefit being observed and the believability of that 
result. I am not talking here about FDA's concern that a drug 
must show a certain amount of benefit. Some threshold of 
measurable benefit is always necessary to provide a proper 
balance against known risks.
    Rather, it's how FDA guarantees the believability of that 
observation of benefit that I believe is having the most 
significant delay on the development of new drugs. FDA requires 
longer, larger trials to get pristine statistical results. This 
makes their ultimate decision around the approval easier since 
evidence is clear, but it also adds to time and cost.
    I believe there are ways to enable faster development of 
new drugs for unmet diseases and timelier access, while still 
ensuring that future patients will have appropriate 
information. We need to focus on reforms that will help the 
review culture at FDA evolve when it comes to these issues. I 
want to offer some suggestions that are aimed towards these 
ends.
    First, we should consider changing how clinical 
effectiveness is defined in the setting of rare diseases. FDA 
insists that there is a single standard for establishing safety 
and effectiveness. I think the FDA needs clearer direction 
around when we as a society want it to exercise its existing 
discretion to streamline development programs. This doesn't 
mean that safety and effectiveness isn't firmly established for 
the drugs aimed at rare disorders. It only means that we are 
making a much more explicit acknowledgment of FDA's existing 
discretion to adjust trial requirements based on the 
circumstances.
    Second, the breakthrough therapies pathway has been a 
successful legislative effort and its implementation by FDA has 
had a palpable impact on the review process. But a full-
throated embrace of the spirit of this legislation requires a 
cultural change at FDA that is invariably slow to unfold. For 
these reasons, we might also consider changing the 
organizational structure of FDA to hasten the adoption of these 
provisions.
    Specifically, rather than allow drugs aimed at very rare 
disorders to be reviewed alongside drugs targeted to more 
common maladies, we might consider carving out the novel 
breakthrough drugs into a separate group inside FDA, a sort of 
skunk works charged with implementing novel review requirements 
and regulatory science. Such a group might more readily embrace 
concepts that can change how we develop drugs, introducing 
greater efficiency, ideas like the use of adaptive trial 
designs, Bayesian statistical techniques, and wider use of 
molecular profiling and targeting of medicines.
    These are not new concepts, but they are very slow to gain 
adoption. In an agency where reviewers are under constant 
political pressure and time constraints, they don't feel a lot 
of liberty to incorporate unfamiliar and new approaches, or 
take new risks in embracing concepts that are untried. So they 
stick with familiar constructs, even if these traditional 
approaches are unnecessarily costly and burdensome.
    These are just a few ideas on how to advance FDA's science 
and make the process for the consideration of drugs aimed at 
vexing and unmet medical diseases more efficient. FDA has made 
great strides towards these ends through its recent 
implementation of breakthrough therapies. I would argue that to 
make further reforms, it would require measures that start to 
change the culture of FDA as it relates to these challenges. 
Thank you.
    [Prepared statement of Dr. Gottlieb follows:]


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Mr. Lankford. Mr. Huber.

                    STATEMENT OF PETER HUBER

    Mr. Huber. Mr. Chairman, Madam Ranking Member, among 
Federal regulators, the FDA plays a uniquely strong role in 
regulating not just the product, but the development of the 
core science that allows the industry to design the products 
that do what we want them to do.
    The science at stake here is not drug science. There is no 
such thing. It is drug patient science. It is how the drug's 
chemistry interacts with the patients. And drug designers can 
learn quite a bit by just studying biology, but at the end of 
the day, to get the science right, you do have to start 
prescribing the drug to patients and study what happens.
    So before it licenses a drug, the FDA issues something 
called an investigational license that scripts how we set about 
systematically and scientifically developing drug patient 
science, and those scripts have simply not kept pace, in recent 
years particularly, with what the best scientific 
investigations can now do and should be doing.
    The blinded, randomized trial protocols that the FDA still 
relies on overwhelmingly to this day were first used in 1938. 
They were expanded and formalized in the 1960s. They begin with 
conventional clinical definitions of the disease. The criteria 
used to select the patients to participate in the trials must 
be specified before the trial begins, or to a limited extent 
resolved in the very early phases of the trial when very few 
patients are involved. The doctors involved aren't allowed to 
systematically explore molecular factors that affect how one 
patient may respond well to a drug and another may respond 
badly to the same drug even if they are presenting the same 
clinical symptoms.
    The only issues that these protocols address systematically 
are something called selection bias, which is a deliberate or 
inadvertent stacking of the data by doctors, or the placebo 
effect, which is wishful thinking by patients. The trials teach 
us next to nothing about how variations in patient chemistry 
affect responses to the drug.
    The FDA's concerns about selection bias are legitimate, but 
modern molecular medicine hinges on the deliberate scientific 
selection of the right drug-patient molecular combinations. 
Patients suffering from the same clinically defined disease 
often present different clusters of molecular targets deep 
down. There is no such disease as breast cancer. There are at 
least 10 biochemically distinct breast cancers down there. We 
treat some with estrogen blockers and we treat others with 
estrogen itself. One of the estrogen blockers, its performance 
depends on liver genes, which determine whether the patient 
metabolizes that drug properly or not.
    And I could go on and on. There are diseases that change 
rapidly on the fly. The chemistry of cancer cells changes at a 
wild pace as it progress. So do HIV infections. Many of these 
fast-changing diseases require multi drug regimens and 
cocktails. Side effects add still more relevant patient side 
variation in the chemistry.
    A good trial of a good drug should culminate in 
prescription protocols that will make it possible for future 
doctors to prescribe the drug to the patients who present the 
molecular profiles that will interact well with that drug. When 
we don't do that, there are two major consequences. The first 
one is little noted but deserves a lot more attention. During 
the trials themselves, we may quite often be doing real harm 
unnecessarily to significant numbers of the patients involved. 
A consensus report issued a few years ago by a coalition of 
cancer experts drawn from the industry, academia, and the FDA 
itself says the FDA still relies on, ``traditional population-
based models of clinical trials...that may form the antithesis 
of personalized medicine, and accordingly these trials expose 
large numbers of patients to drugs from which they may not 
benefit.''
    If you are saying that you are exposing large numbers of 
patients to cancer drugs from which they won't benefit, you are 
saying quite something, because these drugs are very often 
toxic and powerful drugs, and you really don't want to be 
prescribing them to the wrong patients for long.
    The second consequence follows directly from the first. If 
we are testing drugs in many of the wrong patients, many drugs 
that we do in fact need, because they would benefit significant 
numbers of patients, will not make it through these trial 
protocols, because to perform well, a drug has to be prescribed 
well. We know how to design what are called adaptive trials. In 
brief, you gather a great deal of data tracking, genomes, and 
proteins and other biomarkers that may affect the trajectory of 
the disease and side effects and cause different patients to 
respond in different ways. Patients can be added or removed 
from trials or treatment regimens can be altered to improve our 
understanding of the drug-patient molecular science.
    There are sophisticated statistical profile processes and 
algorithms that can handle this very complex data. Because the 
adapters learn and because the investigators learn and adapt as 
they go, the patients involved receive on average much better 
treatments. It really is high time to dispense with these old 
trial protocols and use the statistical methods of the future 
and the modern molecular tools that let us track and learn 
about all these factors.
    Mr. Lankford. Thank you.
    [Prepared statement of Mr. Huber follows:]


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Mr. Lankford. Mr. Hastings.

                   STATEMENT OF PAUL HASTINGS

    Mr. Hastings. Thank you, Chairman Lankford.
    Mr. Lankford. Mr. Hastings, do you mind turning your 
microphone on there? Thank you.
    Mr. Hastings. Sorry about that.
    Chairman Lankford and Ranking Member Speier, members of the 
committee, My name is Paul Hastings, chairman and CEO of 
OncoMed Pharmaceuticals, headquartered in Redwood City, 
California. I also serve as chairman of the BIO Emerging 
Companies Section Governing Board, which represents the small 
entrepreneurial and emerging biotechnology companies that often 
do not yet have a product on the market, and we are the 
majority of BIOs over 1,000 members.
    I personally have 27 years of experience in biotechnology 
and the pharmaceutical industry. My current company, OncoMed 
Pharmaceuticals, is working at the cutting edge of oncology 
research, focused on antibodies that target a specific set of 
cells within tumors known as tumor initiating cells. These 
cells drive the growth and metathesis of the tumor of the 
spread, and they can differentiate into various cell types 
within the tumor. Currently we have five products in clinical 
development, all discovered at OncoMed, and over 13 completed 
or ongoing clinical trials, with more than 280 patients 
receiving our investigational agents.
    We continue to pursue the discovery of additional 
disruptive and novel antitumor initiating product candidates. 
The U.S. biotechnology industry is working on treatments and 
therapies that have the potential to deliver new solutions to 
our most pressing healthcare needs and is a key element of an 
innovation-driven economy. We've come a long way in turning 
incurable disease to treatable disease, increasing the ability 
of patients to maintain independent lives. With the number of 
people over 65 increasing, improving the quality of life and 
ability for patients to maintain independence is a national 
imperative. Hundreds of companies like mine are working on 
these solutions with over 400 clinical trials currently 
underway focused on developing the next generation of medicines 
for over 200 diseases.
    This is also an industry poised to be a major contributor 
to a 21st century innovation-driven economy in the United 
States. However, we continue to face intense competition from 
other countries, as well as increasing R&D costs, regulatory 
challenges, and a contracted funding environment.
    This year, working with the FDA, we have seen positive 
signs that the biotechnology industry is recovering not only 
from some of the regulatory hurdles, but also from the economic 
crisis. Thirty-nine biotech companies have gone public this 
year, including my own, marking the most active IPO market in a 
decade. Additionally, in 2012 the FDA approved 39 new molecular 
entities, the most approvals we have seen in 16 years.
    Now, while this is good news, the financial and regulatory 
environment continues to pose significant challenges to 
innovation and drug and biologic developers like ourselves. For 
example, first-time private financings, not public financings, 
but private financings, venture capital financings, the 
lifeblood of the innovation biotechnology industry, these 
first-time financings for new companies are actually at the 
lowest we've seen since 1995. And while we've seen an increase 
in the number of approvals, we have also seen a steep increase 
in research and develop cost, much of which is associated with 
increased requirements and costs to run clinical trials.
    FDASIA contains several provisions designed in cooperation 
with industry and the FDA specifically to provide FDA with the 
resources and processes that encourage the utilization of 
modern tools and approaches, such as adaptive clinical trial 
design, and allow for more interactive scientific dialogue 
between the FDA, the industry, and patients. Some of the most 
exciting provisions in FDASIA now include an expanded 
accelerated approval pathway designed to improve on the 
historical success this program has had with developing game-
changing medicines to treat HIV and AIDS and other cancers, as 
well as other diseases, and expand its utilization in other 
disease areas, and a new breakthrough therapy designation 
designed to get the most promising medicines to patients much 
more efficiently.
    However, while FDASIA included an agreement by the industry 
to significantly increase user fee funding for the FDA to help 
support FDA's drug review activities and enable them and these 
new programs, sequestration has diverted a portion of these 
industry fees to an escrow account that has no practical 
purpose for the FDA, industry, or patients. This has severely 
hindered FDA's ability to fully implement critical provisions 
of FDASIA that would improve our ability to more effectively 
develop and deliver innovative medicines to patients. This is 
the equivalent of our paying our utility bills and then being 
told we can't access power, lights, or heat.
    BIO would like to thank Congress for proposing a 2-year 
delay in sequestration of user fees in the proposed budget 
agreement but urges Congress to rectify this irrational and 
counterintuitive situation by passing the FDA Safety Over 
Sequestration Act of 2013, sponsored by Representatives Leonard 
Lance and Anna Eshoo, with broad bipartisan support.
    While many new measures have been embraced and encouraged 
by Dr. Hamburg, Dr. Woodcock, and their colleagues and 
management at the FDA, it's yet to be seen if the regulatory 
flexibility afforded by FDASIA is being fully embraced at and 
across the FDA reviewer level to advance the development of new 
therapies for unmet medical needs. Releasing user fees from 
sequestration, successful implementation of FDASIA, and 
enabling our colleagues at the FDA could significantly improve 
the ability of our industry to more effectively develop new 
medicines and get them to patients who need them.
    These actions could also help stimulate investment in early 
stage companies that are working on the next generation of 
medical discoveries and breakthroughs. The Biotechnology 
Industry Organization is committed to working with FDA and 
Congress to ensure these goals are achieved. Thank you for this 
opportunity, and I look forward to your questions.
    Mr. Lankford. Thank you.
    [Prepared statement of Mr. Hastings follows:]


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Mr. Lankford. I recognize myself for the first round of 
questions, and we will go through the questions as we can, and 
we're still not called for votes yet. You'll hear the bells and 
the lights and everything else go off when that happens, and 
we'll have a little bit of time to be able to move from there.
    Let me ask a couple of quick questions on this. I think I 
am going to work in reverse.
    Mr. Hastings, you talk about the venture capital being the 
lowest it's been since 1995 on that. Do you have a gut feeling 
on why that is, why is the venture capital suddenly drying up 
when we have a record number of IPOs happening?
    Mr. Hastings. It's a cycle. So, while now the public 
markets are doing well, the venture capitalists who have fueled 
all these early stage companies, had fueled them for so many 
years before the IPO market was open, that they drained 
themselves of a lot of their resources. They weren't able to 
provide the returns to their investors.
    So when the public markets opened up and the public 
investors embraced the public markets, everybody on the public 
side did really well, but there's a lot of catchup that's being 
done now by the venture capitalists. So they now look like they 
haven't provided their returns over the course of the 10 or so 
years prior to the public market opening up that their 
investors required, so those same investors invest in the 
public markets as well.
    Mr. Lankford. Okay. So, what's your gut on how quickly that 
turns around? You've tracked this for a while, it sounds like.
    Yes, I track this constantly. It's going to take a few 
years. So once the public markets continue to reward the 
venture capitalists for delivering these companies. So now, by 
the way, all those private investors, all the investors that 
are in OncoMed Pharmaceuticals on the private side, they won't 
be able to cash out until the lockup period is over, and even 
then they have to see the company do well on the public markets 
in order for them to get their exit. All that takes a little 
bit of time, probably a couple of years before people start 
reinvesting now in the early stage venture financing.
    Mr. Lankford. Mr. Huber and Dr. Gottlieb, they are both 
recommending different ways of doing some of the trials and 
processes and things, and I want to be able to get to both of 
those in a moment.
    Mr. Hastings, though, what is the most expensive part or 
the most difficult or cumbersome part of the clinical trial or 
the R&D or approval process--you can broaden that as broad as 
you need to make it--of getting the actual drug through the 
research to development. What is the pricey, cumbersome part of 
that?
    Mr. Hastings. I'll give you one example. There are many 
places along the development cascade where it gets expensive. 
In the early stages, for young companies, it gets expensive 
even in the Phase I or Phase II portion of the trial, 
particularly in Phase I when there is a lot of communication 
back and forth with regard to safety of the drug. And one of 
the areas that we've been working on is this informal 
communication where rather than having a letter-writing 
campaign back and forth, there is more dialogue between the 
reviewer and the company. Saving a month on that communication 
process could save a small company, and there has been a lot of 
effort from both the FDA and the industry to work on that 
together. That's been an example of something that's improved 
dramatically.
    Mr. Lankford. Okay.
    Mr. Huber, let me ask you a quick question on it as well. 
The statement is interesting to me, the molecular profiles. How 
would that work for them, and expand that somewhat is what I'm 
saying, as far as the FDA, because that's obviously a 
completely different paradigm than what they are currently 
doing on it. So how would that function in real life for them.
    Mr. Huber. I was having dinner last night with a prominent 
oncologist from MD Anderson in Houston, and he said the real 
clinical trials begin after the drug is licensed. Now, I will 
emphasize, first of all, that cancer a very distinctive 
disease. It's wildly dynamic. The cells are constantly 
mutating. And by the time a tumor grows at all, you don't have 
one disease in there. You have a whole bunch. That's what makes 
it so hard to attack it and why so often drug cocktails are 
used and so on.
    But in any event, the fact is that oncology has been the 
beneficiary of the accelerated approval quite often as one of 
two diseases. The other are HIV infections have gotten this. 
And the main advantage of accelerated approval in my book is 
that it releases oncologists to practice and to work out what 
the patient needs step by step. The answer is you begin 
prescribing drugs. These are targeted drugs increasingly that 
target one molecular receptor. And you can track very early on 
with modern diagnostic tools what's going, not up at the 
clinical level, which takes quite a lot longer to surface, but 
much deeper down inside the patient's body. I mean, it can be 
things that are not that much deeper down, like tumor shrinkage 
or so on, but you can also be looking at densities of cancer 
cells being shed from the tumor and circulating in the 
patient's blood. The FDA calls these surrogate end points or 
intermediate end points.
    And you get feedback much faster. If you begin getting 
that, you can early on begin saying, look, we begin seeing 
different patterns of response. And it gets eye glazing when 
you talk about the statistics, but the fact is the 
statisticians know how to handle multidimensional trials where 
you're exploring multiple factors as you go. We have 
mechanistic understandings of why certain receptors should be 
accelerating the progress of the disease, or if you inhibit 
them, slowing it down. You study these things and you adapt.
    I could give you one vivid example, if you will allow me. 
Memorial Sloan-Kettering in New York some years ago launched a 
trial using a kidney cancer drug to treat bladder cancer. It 
was an abysmal failure. Almost everybody that was treated with 
this drug did not respond well. However, one 73-year old woman 
responded extraordinarily well. In fact, 2 years later she is 
completely cancer free.
    Now, in the past, and certainly if this were all within the 
confines of one trial, you'd ignore that. I mean, one patient 
does not license a drug. Memorial Sloan-Kettering doctors went 
in and they searched for the biomarkers associated with cancer, 
they explain this, they couldn't find one. They then did a 
whole tumor sequence. They just looked for everything that was 
in this one patient's tumor and they found the receptor that 
was being targeted by the kidney cancer drug. One patient in 
that group. It turns out about 8 percent of bladder cancers 
have this receptor. And so then they launched a new trial.
    That is a slow motion adaptive trial. You learn something 
and then you change. You can do that internal to a single trial 
if you are working hard at it, but you have to do things that 
the FDA doesn't allow. You actually have to be saying these are 
the people who are being treated with the drug. Let's look at 
what's the details. I mean, if you have toxicity problems and 
metabolism problems, same thing, we've got biomarkers for 
livers that metabolize things well or badly. You can look for 
them, and you can then converge on treatment protocols that 
work better.
    Mr. Lankford. Okay. We will follow up with FDA in the days 
ahead. Let me yield to Ms. Speier for her questions. They have 
called votes now. We have around 11 minutes or so on the vote 
count. I think what we will do is take Ms. Speier's questions, 
then we'll take a quick recess. We'll have three different 
votes that are happening, and then we'll come back and we'll go 
at you with some more questions. Okay with that? So we get a 
quick break.
    Ms. Speier.
    Ms. Speier. Mr. Chairman, thank you.
    And thank you all for your testimony.
    The sequestration has really cut the limbs off of NIH 
funding to the tune of about $1.2 billion a year. From your 
perspectives, each of you, I want to know how that affects your 
ability to do your science.
    Mr. Hastings. Well, that's a wide open question. So to me 
it goes all the way back to what and how we want to be 
perceived as a Nation, right? If we're not getting behind STEM 
education from kindergarten through grade 12, all the way up 
through our university system and the NIH and getting behind 
innovation, it's not then going to leave the technology 
transfer offices of our universities or the halls of the NIH 
and come with a license to an entrepreneur who then can develop 
that drug.
    So it's a little hard to pinpoint exactly what 
sequestration does with the NIH in terms of what it might bring 
to our industry other than to say it's huge, very broadly. You 
can't really look at any one drug that came out recently and 
say that wouldn't have happened under sequestration. I can't 
think of one off the top of my head. But that's the kind of 
thing that comes out, the thought process, the focus on 
innovation. And without that and without those jobs for those 
people to do those things, they are going to go to other 
places.
    Dr. Gottlieb. I'm less focused on NIH, just to pick up on 
what Mr. Hastings said about FDA. I think the sequestration has 
been problematic for the FDA insofar as what I see, and I wrote 
an article about this. A lot of the sequestered funds were 
funds that would have been targeted towards the areas of new 
regulatory policymaking, the things that were embedded in 
PDUFA, in particular, where FDA was going to advance or try to 
advance some of the scientific principles that we're talking 
about here today.
    There were unfilled positions at the time that the 
sequester was imposed that will continue to probably go 
unfilled, but a large chunk of the money that was taken out was 
taken out of the programs of new regulatory policymaking.
    Ms. Speier. Dr. Gottlieb, you suggest that there is a 
certain amount of risk that we should just be willing to 
accept, and I'd like to know what you think that percentage of 
risk should be in terms of the FDA process.
    Dr. Gottlieb. Yeah, I'm not sure you can, you know, 
articulate it in terms of a percentage. There is obviously a 
certain level of palpable risk we are always willing to 
tolerate, and it adjusts based on what the clinical 
circumstances are. And if you are facing a grave disorder and 
you don't have other options, you're willing to embrace quite a 
bit of risk.
    I cited in my written testimony the case of 
mucopolyscaccharide diseases, diseases that are inborn, there's 
a metabolism where children are born, these are largely fatal 
diseases, they are terribly debilitating. I think families who 
have children with those disorders would be willing to embrace 
a large degree of uncertainty around a new drug, but in many 
circumstances say they are not able to because the clinical 
trial requirements are getting more difficult.
    Remember, I'm talking here about, in particular, risk 
around the benefit, not the safety. I'm talking about 
situations where the magnitude of the benefit that's observed 
in a clinical trial can't be firmly established because the 
statistical rigor hasn't reached a high enough degree of, you 
know, suredness, if you will. So you see a certain magnitude of 
benefit and you have to probability address that and say, well, 
since it wasn't a large trial and there were these flaws in the 
trial, we can be 70 percent certain that it's going to deliver 
that 40 percent benefit. That's the situation.
    Ms. Speier. But my understanding is that--and I've actually 
accessed compassionate use for the FDA for a number of 
constituents from time to time--my understanding has been that 
they have been very willing to allow the drugs to be used for 
compassionate use, which typically you would say in a case of a 
young child would be embraced. So do you find that at all being 
restricted in its availability?
    Dr. Gottlieb. No. I think FDA has been very flexible when 
it comes to individual patient INDs, but keep in mind there is 
two challenges there. One is that only certain physicians are 
going to be able to navigate that process in collaboration with 
their patients. It takes a certain level of sophistication and 
resources to work through that process. And that's not a 
criticism of FDA. It's just a hard process. So it is putting at 
a disadvantage a whole lot of patients who will never have 
access to that.
    The other thing is that if that's what we're dependent upon 
to make therapeutics available in these kinds of, you know, 
sort of grave situations, situations where there's a real unmet 
need, the framework, the sort of framework on the industry side 
won't be in place to make the drug broadly available. In 
today's environment, especially with a lot of 
biopharmaceuticals, the manufacturing isn't available until the 
time of approval.
    Ms. Speier. All right. Thank you.
    Dr Gottlieb. And so we are dependent upon that approval.
    Ms. Speier. I am going to try to get one more question to 
Mr. Hastings.
    Dr Gottlieb. All right.
    Ms. Speier. Mr. Hastings, if there is one thing that you 
would recommend that we do to assist the emerging BIO companies 
to be successful in their interactions with the FDA, what would 
that be?
    Mr. Hastings. Enable the FDA, through some of the policies 
that we've put forth, some of the breakthrough therapeutic 
areas, which would allow us to, with appropriate risk, also see 
the reward for these patients. So taking some of the risk that 
Dr. Gottlieb was just talking about. There are certain 
diseases, like cancer, there are other diseases, chronic 
diseases, chronic inflammatory diseases where patients 
recognize some of the risks associated with therapies. And so 
enabling some of these breakthrough areas where we can get 
drugs approved quickly, safely to patients faster is the way to 
go, and there's a number of those initiatives that I outlined 
in my testimony.
    Ms. Speier. Thank you. My time is up.
    Mr. Lankford. Actually all of our time is up for this 
point. I would like to take a recess for about 20 minutes. We 
have three votes in the series. Each one of the votes is about 
5 minutes apiece in between. We'll go over and do the votes, 
we'll come right back, and then we'll jump right back into 
pummeling you with some more questions if that's all right with 
you. So let's take a short recess.
    [recess.]
    Mr. Lankford. The committee will come back to order. I 
apologize for the delay on that one. We should not have votes 
again until about 4:30 or so, so that will be in the middle of 
the time period that we will have our FDA witness, so we will 
still have her on the stand at least until 10 I would assume 
tonight. Thanks for the delay on that. I would like to 
recognize Dr. Gosar for the next line of questioning.
    Mr. Gosar. Thank you very much. Mr. Hastings, how much 
would you say the typical biopharmaceutical company spends 
annually on drug research and development?
    Mr. Hastings. It depends on the size of the company. But an 
innovative company, our company has 90 employees, roughly $55 
million to $60 million a year. You could spend, companies with 
400 or 500 employees with multiple drugs in the clinic, you 
could spend $1 billion a year in R&D.
    Mr. Gosar. And has that gone up over the years?
    Mr. Hastings. Yes.
    Mr. Gosar. And what are driving those factors of raising 
those costs, R&D costs?
    Mr. Hastings. So in certain instances, it is what trial 
designs have turned into, the numbers of patients one needs to 
go into clinical trials, the amount of time it takes to file an 
I&D and get your first patient treated on a therapy, to 
enrolling patients in Phase I, II, and III clinical trials, not 
only in the U.S., but also globally. So it is a very large 
undertaking to do, even randomized Phase II clinical trials 
today. I call the randomized Phase II clinical trials today the 
old randomized Phase III trials of the past. They are roughly 
the same size as Phase III's used to be.
    Mr. Gosar. Got you. Mr. Huber, in his written remarks Mr. 
Hastings cites a 2012 Manhattan Institute study that found as 
much as 90 percent of the development cost for many drugs 
approved by the FDA are incurred during Phase III clinical 
trials. Are you aware of this study?
    Mr. Huber. I do definitely remember seeing it, but those 
numbers are not of my origin and I cannot speak further about 
them.
    Mr. Gosar. So what would be your thoughts on those 
findings?
    Mr. Huber. Clinical trials and certainly the time value of 
money are a very large component of the cost of getting a drug 
to market. I could not be any more specific than that.
    Mr. Gosar. Got you. I am going to stay with you, Mr. Huber. 
How would you define a good clinical trial?
    Mr. Huber. A good clinical trial is one that if the drug is 
good, ends up with enough guidance on prescription protocols 
that future doctors with high confidence prescribe the drug in 
ways that are likely to do more good than harm. Likewise, I 
might add one that rejects drugs that aren't going to be able 
to meet that criterion.
    Mr. Gosar. So do you think that randomized control trials 
are out-of-date?
    Mr. Huber. Well, yes, I think they are. Yes. Yes is the 
answer. Not--I mean, there are some exceptions to every general 
statement, but, yes, they are not making full use of the tools 
we should be using.
    Mr. Gosar. So what steps would you use to update those?
    Mr. Huber. Well, President Obama's Council of Scientific 
Advisors on Science and Technology issued a report last year 
that I cite in my written testimony. It is a pretty good 
starting point. I think things should go further. Others will 
be testifying before you today saying they have already gone 
further, and if they are, terrific, and the faster they move, 
the better.
    I do know that we should have been heading down this road a 
decade ago and high officials with excellent qualifications who 
I greatly admire who were sketching out what needs to be done 
to develop multi-dimensional data on how drugs operate. If it 
is happening, it sure is happening slowly.
    Mr. Gosar. Very slowly. Dr. Gottlieb, can you define the 
clinical end point that the FDA requires in its trials?
    Dr. Gottlieb. Well, clinical end point is an end point. You 
know, the simple way to define it is it is something that can 
be experienced by a patient, so some kind of measure of 
clinical improvement that is going to be of benefit that the 
patient can appreciate. So the ability to breath better, a 
reduction in pain, certainly living longer, changes in 
morbidity and mortality, as opposed to a surrogate end point, 
which is an interim measure that presumably could correlate 
with a clinical outcome but isn't something that is perceivable 
by the patient. It is a marker.
    Mr. Gosar. Would you enhance that or enlarge that from your 
personal experience?
    Dr. Gottlieb. Enhance the use of surrogate measures? 
Certainly. I mean, FDA, I think, over a period of time, made 
wider use of surrogate measures, particularly in oncology, 
things like tumor shrinkage. I think the agency's experience 
with that was mixed insofar as some of the surrogates that they 
relied on didn't necessarily correlate with clinical benefit 
when they did the larger studies, and so it left somewhat of an 
unhappy experience, and the agency became more skeptical of 
using surrogates generally.
    So I think where I would try to advance this is in trying 
to create some kind of pathway to better validate these 
surrogates more quickly. There is a lot of surrogates that make 
a whole lot of clinical sense, there is good theoretical 
reasons why they should correlate with a clinical benefit, but 
FDA is unwilling to rely on them or reluctant to rely on them 
because nobody has demonstrated that, and it is very hard to 
demonstrate that until you actually do the very long trial in 
the context of a drug, and by then you have sort of, you know, 
put a drug through an enormous clinical development program.
    Mr. Gosar. Do you see any interim type of facility or group 
that could actually mitigate that?
    Dr. Gottlieb. Well, you know, people always talk about 
having independent entities like the NIH invest in trials just 
for the purposes of validating surrogates. You know, I think 
the FDA has flexibility, has a lot of authorities that it could 
use to, you know, take some risk around the uncertainty that 
pervades these surrogate measures to allow drug trials to go 
forward.
    You know, one of the examples that I cited recently was 
polycystic kidney disease where it is a genetic disease. You 
inherit it over the course of a lifetime. You develop cysts in 
your kidneys and eventually your kidneys fail and you go on to 
end stage renal disease. The question is could a reduction in 
the accumulation of these cysts be a valid surrogate for a 
clinical trial?
    FDA has been reluctant to accept cyst reduction or 
reduction in the propagation of cysts as a valid surrogate in 
the past, although it makes a whole lot of theoretical sense 
that if you can reduce the accumulation of these cysts, 
obviously it is going to, you know, prolong the length that 
your kidneys function.
    These are the kinds of things I think we need to look for 
these opportunities where there are these surrogates that make 
a whole lot of clinical sense and theoretical sense and either 
take the risk of allowing the trials to go forward on the basis 
of them or find a way to validate them more quickly.
    Mr. Gosar. You kind of breached my next question. How 
important is it for the FDA to use its accumulating experience 
when conducting clinical trials as outlined in your written 
remarks?
    Dr. Gottlieb. Right. And I cite the example of 
mucopolysaccharide diseases where if you look at--this is a 
sort of cluster of related disorders, but they are each treated 
by distinct drugs. Very rare. Some of them only have hundreds 
of afflicted patients. If you look at the initial drug that was 
approved in this broader class, it was approved on the basis 
of, I think, about a 20-patient open label non-randomized 
study, probably as least rigorous as you can conceive of. And 
then there were subsequent approvals for a number of other 
drugs and with each approval, the theoretical basis for 
understanding why a replacement enzyme would work in one of 
these diseases was more firmly established, yet with each 
subsequent approval, the clinical trial requirements got harder 
and not less. And you can't argue that it was a function of the 
fact that there was available therapy because there wasn't. 
Each disease was distinct, so the subsequent therapies were 
only going to treat one of these diseases.
    I think those are situations where when the agency has 
knowledge that it is accumulating in a clinical setting like 
that, it needs to find a way to make wider use of that so that 
it can lower barriers to entry as it gains more knowledge in an 
area and not raise them.
    Mr. Gosar. Got you. Thank you, Chairman.
    Mr. Lankford. Ms. Duckworth.
    Ms. Duckworth. Thank you, Mr. Chairman.
    Mr. Hastings, thank you for appearing here today and 
offering your testimony. I want to touch on a few points you 
highlighted where you speak to FDA's regulatory environment has 
improved in recent years, but you noted that there are 
additional ways to improve efficiency, timeliness and 
consistency of drug evaluation. I am specifically interested in 
how the FDA communicates with you and your members.
    I understand that according to your internal survey, the 
majority of your member companies believe that communications 
with FDA, while it has improved, it has really been affected by 
sequestration, especially recently. Have your members, Mr. 
Hastings, expressed disappointment that the Industry Liaison 
Office that was anticipated by PDUFA V has yet to be fully 
staffed because of sequestration?
    Mr. Hastings. So, yes. The Office of Enhanced 
Communication, I am paraphrasing it, was an attempt to create 
an office whereby folks could call in if there were 
communications issues. But one of the things I was just sharing 
with Dr. Woodcock earlier is that the whole intention of the 
enhanced communication provision we had in PDUFA was for a 
cultural shift to occur inside the agency such that we actually 
wouldn't need that office to communicate with our reviewers.
    What has interestingly happened and could be a side effect 
of sequestration, there is only one person in that office that 
I know of right now versus the five or six that were going to 
be there, but some of the communication between reviewers and 
companies has gotten better. And when you look at the survey, 
in areas like oncology, which is the area that we are studying, 
that communication has gotten markedly better. So rather than 
writing letters back and forth and taking 30 days each time a 
letter gets written to have the other person have the 
opportunity to respond, a simple phone call takes place. So a 
cultural shift has been very beneficial.
    The issue that we have right now is we would like to that 
very positive example and make it extend across all the 
division and all the reviewers so that each company, no matter 
what therapeutic area they are, is benefiting from that same 
enhanced communication. Now, would that office, the Office of 
Enhanced Communications, had it been staffed up without 
sequestration, would that have helped? It probably would have 
in some of those other areas.
    So I think the main beef we have about sequestration, 
again, is that these are fees that we are paying on top of what 
we pay in taxes and everything else, and we are paying those 
fees in order to enable. And like I mentioned, it is a little 
bit like paying your electric bill and then being told you 
can't have power.
    Ms. Duckworth. No, the power is there. You are just not 
allowed to access it.
    Mr. Hastings. Right. But I think--and we have been working 
on this for many, many years now, enhanced communications, and 
we are seeing some good progress. So I don't want to pin this 
all on, well, it is that one office that is going to solve this 
issue. It is more a reviewer cultural issue. And I will say for 
the Office of Oncology, there is an openness to communication. 
Now, again, what is going to help them communicate more openly 
with us is that they are effectively staffed, they are 
effectively funded, so they actually have time to pick up the 
phone and have a conversation with us.
    Ms. Duckworth. So I am just a teeny bit confused. So you 
said that office should be staffed at--should have four or five 
people right now only has one because FDA can't staff it up due 
to sequestration. But you are saying just that one person is 
more responsive. Or are you saying because they are not there 
you are just talking directly to the reviewer and not going 
through the office?
    Mr. Hastings. What I am saying is it is great to have that 
office and that office is going to be helpful, but the whole 
concept was to have open communication with reviewers which are 
not in that office.
    Ms. Duckworth. Okay. But that is happening now and that has 
improved?
    Mr. Hastings. Right. So the mere fact that we are paying 
attention to the issue on both sides has made the issue better, 
right?
    Ms. Duckworth. Right.
    Mr. Hastings. And so the fact that--it would be great for 
the office to be staffed because I think in general being 
staffed appropriately is going to help, but equally important 
as that office are individual reviewers in individual divisions 
having good communications with sponsor companies.
    Ms. Duckworth. Are there any fears that if that office 
staffs up completely, there will be another layer of 
bureaucracy and that the communications directly with the 
reviewers will stop because people will feel like they have to 
go through that office?
    Mr. Hastings. No.
    Ms. Duckworth. No fears of that?
    Mr. Hastings. Absolutely not. No. I mean, companies don't 
work that way. You have a relationship with your reviewer and 
you have communication with that reviewer. If a hiccup should 
occur, there are a number of ways one can help to remedy that, 
including talking to that office about ways to enhance the 
communication.
    Ms. Duckworth. Great. Thank you very much. I yield back, 
Mr. Chairman.
    Mr. Lankford. Thank you. Mr. Meehan.
    Mr. Meehan. Thank you, Mr. Chairman, and I want to thank 
this very distinguished panel for taking your time and giving 
us your expertise in this area. I represent an area in which 
there are a higher degree than normal of businesses associated 
with bio and technology and others and have actually tried to 
work with some of my constituents as we have negotiated the 
process of dealing with the agencies, and I also worked as a 
prosecutor acting on behalf of the agencies at certain times.
    So I have seen it from both sides. But if I was to look 
from 500 feet, there is just a tremendous frustration with the 
inability to have people make decisions, and I am not sure that 
I understand exactly why that is. What I see, frequently, is 
the process being used as a mechanism to avoid decisionmaking. 
And I can appreciate that if a wrong decision is made, there 
can be implications. But the very process we have is designed 
to somehow negotiate that fine area.
    My experience, in a number of cases, was the concern of 
clients, when I say clients, I mean constituents, who were 
afraid to be too aggressive in dealing with the FDA for the 
very fear that what would happen is now we will be further 
pushed back in their efforts. And every time a new order is 
made for a new trial, you are implicating potentially millions 
of dollars and longer periods of time. So why does it take so 
much time to make decisions?
    And I will conclude my questions with what I would find 
would be these 30-day periods, Mr. Hastings, you are talking 
about the communication, no communications would take place. 
There would be substantial amounts of information put together 
by very qualified people, the best in the business, in the form 
of making the case. And on the 29th day, they would get another 
letter asking for more information. So it was almost like every 
time the clock would reach the moment, something else would be 
put into place, the time would toll and there would be more 
requests, until ultimately you got to a point there was a 
decision-maker and somebody would say you know, what you are 
right, and a few times we broke through. But I am struggling 
with this problem. And I want to see both sides. But you are 
out there too. What do you see? What is the solution?
    Dr. Gottlieb, your written testimony speaks to, I think 
what you said was a failure for people to--you know the 
language--the fear of uncertainty pervading. So you understand 
my questions. Maybe you could each in order respond to my 
concerns and tell me what you think.
    Dr. Gottlieb. Well, I think generally there is a lack of 
appreciation for the time and cost of capital inside FDA, and 
it is probably not something you would expect them to be very 
cognizant of. But there is a significant time--cost to time 
when you are running a development program, even more so than 
getting advice back from the FDA that you have to run a bigger 
clinical trial. That can be funded and financed if you are a 
biotech company, but the time itself is a lot of lost capital.
    And the cycling has always been a problem. The multiple 
cycles has always been a problem. In FDA, there has been over 
time various efforts to try to address multiple cycle reviews 
but it is a significant problem.
    I would argue the process isn't just used to avoid 
decisions. I think the process is used to try to tee up easy 
decisions. From my perspective, the reviewers in the early 
development stages of a drug program have a lot of autonomy or 
a fair measure of autonomy to prescribe what they think the 
clinical trial requirements should be to the companies. And 
when the companies get advice back from the medical reviewer 
they are very reluctant to challenge it in many cases. They 
follow it.
    So if you are a medical reviewer and you know you are going 
to be ultimately responsible for making an approval decision or 
a decision to reject the drug, what you want is very clear 
evidence to make that decision. And so if you have discretion, 
you could prescribe a very rigorous clinical trial that is 
going to lead you to a place where you are ultimately are going 
to have very clear evidence. But there is a significant cost to 
that.
    So I think the process is used to try to make easier 
decisionmaking and that is what--and that is what ends up 
delaying the development programs.
    Mr. Meehan. Let me ask the other panelists to respond to 
sort of the sentiments that I expressed. Mr. Huber.
    Mr. Huber. Well, I would like to try answering from a 
slightly different perspective. In 1981, or 1982 it was, that 
HIV surfaced as AIDS, people hadn't yet identified the virus, 
it was a real sense of panic. I arrived in Washington right 
around that time and there was a palpable sense of, gee, 
something really terrible is happening once people realized 
what is going on.
    In the late '80s as AZT emerged and through the 1990s, the 
FDA was remarkably agile and willing to bend its rules. It 
carved--the accelerated approval rule was spawned during that 
time. They began doing treatment INDs during that period, 
basically a parallel track of actually prescribing the drugs 
through hospitals and clinics and so on to make what was 
available, and there wasn't that much available, broadly 
available.
    It is astonishing what was accomplished during that period 
of a substantial number of drugs to treat the secondary effects 
of HIV, the AIDS-related disorders, and then a whole series of 
HIV drugs. We needed a whole bunch because the virus is so 
nimble you have to attack it from multiple points to subdue it. 
And also a number of cancer drugs were also the beneficiaries 
during that decade.
    And I think anybody who looks retrospectively at this 
believes that--you know, medicine was really advancing very 
well. We accomplished fantastic stuff. There was--despite talk 
of the biases of one side or the other, there was really quite 
a bipartisan coalition to do this, and we beat what was thought 
to be and what was, in fact, an extraordinarily difficult 
virus.
    You know, it is possible to make decisions fast in this 
city when people are really sufficiently united and scared. And 
the President's own, the PCAST report I mentioned earlier, by 
all accounts the accelerated approval process overall, which 
does what it says, it is a conditional approval, but it does 
approve drugs much faster, has had--I think very few people 
think it has done anything other than more good than harm, 
okay? You can move these things quickly if you want to and you 
can get, I won't say invariably good results, but many more 
good results than bad ones.
    Mr. Meehan. Thank you. Mr. Hastings.
    Mr. Hastings. I would like to first speak to the fear of 
retribution comment you made earlier. If I was fearful of 
retribution, I wouldn't be sitting here, I have to say.
    Mr. Meehan. Was it a fair comment? Do you think others may 
feel that way?
    Mr. Hastings. I think it is. I think it is. I just want to 
say I think it is a very individual thing, but I do believe 
with good dialogue and adults in the room, decisions can get 
made. And I will tell you that in my experience, now having 
been doing this for a number of years, what we need to do in 
Washington now is become 25 percent of our jobs as CEOs of 
biotechnology companies, and that engagement, when you have 
that engagement and there is good dialogue, good things can 
come out of that.
    Now, I will just give you an example from my company and I 
will juxtapose that to an example from a colleague of mine. One 
of the benefits of being the chairman of the Emerging Company 
Section of the Biotech Industry Organization is I am with a 
roomful of CEOs as big as this room every quarter.
    So we had a situation not too long ago where there was a 
30-day period and on the 30th day we got an answer and it was 
yes, where you might get an answer and it could be no. So if 
the answer is no, invariably they are going to ask for more 
information if they want you to turn it around to a yes.
    But what we are seeing, what I was seeing recently was that 
particular case took 30 days. I have had situations where it 
has happened sooner, okay? But 30 days I got a yes. Great. Now 
I have a colleague who didn't get an answer in 30 days in 
another division. So I think that inconsistency needs to be 
dealt with. But I also think that part of that inconsistency 
has to do with the volume of work people have and the proper 
staffing and the proper funding of the agency, and, again, 
going back to user fees, making sure that user fees are being 
spent to actually enable the FDA.
    So I do think there is variability. I think the retribution 
thing, there are mechanisms now within the FDA that if there is 
a person who is behaving in a way which is professionally 
inappropriate, that you can go and get that issue solved. And I 
don't know how many folks may have mentioned to you the fear of 
retribution if you had asked them what did you do about that, 
but that is what I often do. And sometimes there are--you know, 
they are not aware of the mechanism or they don't partake in 
the mechanism and then all of a sudden this becomes a big 
problem.
    Mr. Meehan. I think they often make cost benefit analysis 
of the things.
    Mr. Hastings. Could be. Could be.
    Mr. Meehan. I don't want to overstep my time, so I 
appreciate the time you gave me, Mr. Chairman.
    Mr. Lankford. Thank you. To the panel, let me recognize Ms. 
Speier again.
    Ms. Speier. Thank you, Mr. Chairman. I just want to thank 
our panelists for participating today under what are difficult 
circumstances at the end of the year with everything else being 
equal.
    I do want to make a point though as they have presented. I 
think that we here in Congress have to take a certain amount of 
blame for the period of time, and I don't believe it is right 
now, but the period of time when the FDA started to hold back, 
because the first thing that would happen when there was a bad 
outcome with a drug is that the FDA was hauled up here by us 
and scrutinized and beaten up and pummeled about their process 
and how could this have happened? And I think the result was 
that these FDA representatives would go back and say, all 
right, then, you know, we will just put the brakes on many of 
these approvals. So we have got to take some responsibility I 
think for what has happened.
    I think more recently, and I think it has been testified to 
today, there has been a loosening of the process within the FDA 
and strategies employed that show that there are new pathways 
that are working, maybe not in every area, but certainly in 
some that show promise. And I guess the silver lining in the 
sequestration is that if it gets to the point where people 
actually get on the phone and talk to each other, that is 
really a good sign. So maybe we can enlist more of that in the 
future.
    Mr. Lankford. And the good news of that comment for me, Ms. 
Speier, is that Mr. Meehan and I, we were not here earlier 
during that time in Congress, so we can--I am grateful for your 
time here. Thank you for what you have contributed both in 
written form and oral form. We will continue to tap on your 
research in the days ahead, both in what is being written and 
the insight you can bring. So I appreciate you very much. We 
will take a short recess in order to reset the panel and to 
have our second panel.
    We now welcome our second panel of witnesses. Dr. Janet 
Woodcock is the Director of the Center For Drug Evaluation and 
Research of the Food and Drug Administration. I am very glad 
you are here and that you sat in obviously on the first panel 
as well, and I look forward to just some of the conversation 
about that.
    Pursuant to committee rules, we do swear in all of our 
witnesses before they testify, so if you would please rise and 
raise your right hand. (Sworn.)
    Mr. Lankford. Let the record reflect that the witness 
answered in the affirmative. Since you are the sole witness on 
this panel, we typically do a 5 minute time period on the 
clock. You are welcome to do that. We are going to receive your 
written testimony which will be part of the permanent record. 
We will be glad to be able to receive your oral testimony now. 
We won't be as attentive to the clock, and we will follow up 
with questions from there. Thank you.

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

    Dr. Woodcock. Thank you. Mr. Chairman, Ranking Member 
Speier and distinguished members of the committee, I am Janet 
Woodcock. I am head of the Center For Drug Evaluation and 
Research at FDA. This hearing explores current challenges in 
drug development and manufacturing. And given the critical role 
that medicines play in the health of our population, these, I 
think, are very important and timely issues.
    One challenge that the other panelists already alluded to 
is the escalating costs and time required to develop new 
therapies. This problem was identified in FDA's report on the 
critical path identified in 2004, but has only really gotten 
more serious since that time.
    The root cause, in my opinion, probably in 
contradistinction to some of the panelists can be boiled down 
to two major factors. The first is most investigational drugs 
that are taken into clinical trials are not successful. Perhaps 
10 percent of the drugs get to the market. And about half of 
the drugs that are taken into Phase III trials don't work or 
are too toxic and are dropped at that point, which is a very 
expensive point.
    This extremely expensive failure rate has been difficult to 
address, although companies have been trying to address this in 
the last decade. And also over this decade, we have been 
working with academia and the industry to try and improve drug 
development tools, including biomarkers and other tools, that 
could help raise the success rate over this 10 percent mark. 
Until this happens, there are huge opportunity costs generated 
by this large scale of clinical failure.
    Now, the second factor is the hugely escalating cost of 
clinical trials, which have already been alluded to. Clinical 
development programs are plagued with multiple problems, 
including slow or no accrual at some sites, ever-increasing per 
patient cost, patient shortages and lack of data standards. The 
traditional clinical development program is inefficient and 
does not utilize most up-to-date technologies. Patient access 
is limited because only sites at major medical centers enroll 
patients typically.
    FDA has been working on these problems. We have been 
working in the clinical trial transformation initiative, which 
is a consortium we have with Duke University and multiple other 
stakeholders. We have been working on data standards. And we 
have been working very intensively with groups that are doing 
new trials, such as the I-Spy trial which is an adaptive trial 
that is being done in breast cancer, and a new master protocol 
for lung cancer. And both of these trials are innovative 
because they study multiple different drugs in the same trial, 
and thus enable a lot of savings of setting up one trial after 
another for each investigational drug, and I am happy to 
discuss any of this with you.
    Also we have been talking about the use of telemedicine to 
better reach patients who live outside of major medical 
centers.
    Now, a second issue and challenge relates to modernizing 
drug manufacturing. The United States is no longer the world 
leader in drug manufacturing, like many other manufacturing 
sectors that we have lost. We rely on foreign sources around 
the world for drugs critical to the health of U.S. citizens. 
The trend of moving drug manufacturing offshore is continuing. 
However, we now may have a chance to reverse this trend.
    Modern manufacturing methods that have only recently become 
technically feasible allow for continuous manufacturing from 
drug synthesis to the final drug form such as tablets or 
capsules. So you put in the raw chemicals at one end and you 
can get out pills at the other end. Such manufacturing requires 
much smaller but high-tech facilities staffed by a highly-
educated workforce. There is also a trend toward using 
disposable manufacturing for the biologics, which again 
provides much savings. Environmental burdens for both of these 
are greatly diminished, and this was one of the barriers to 
continuing to building pharmaceutical plants in the United 
States.
    I believe the U.S. Should do whatever is needed to 
incentivize this type of manufacturing sector growth in the 
United States, both because we need better security of our drug 
supply, and because it would provide a manufacturing sector 
that would be very valuable. The FDA has been encouraging and 
collaborating on this for about a decade, but I think there is 
now a unique opportunity.
    So there are multiple areas in which drug development 
continues to be a big challenge in also manufacturing and 
maintaining the drug supply, and I would be happy to discuss 
all of this with the committee.
    [Prepared statement of Dr. Woodcock follows:]


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Mr. Lankford. Thank you. Let's run through a few questions. 
We will take 5 minutes at a time and then come back and do a 
second round of conversation as well.
    The sequestration issue has come up multiple times in this, 
the sequestration of the user fees itself. These are paid by 
the companies to be able to expedite this. You and I have 
spoken on this before as well. What has been done at this point 
from FDA? Has there been communication with OMB to have a 
discussion about this? Because that is a user fee, and there is 
a lot of bipartisan frustration with OMB to say why has that 
been sequestered as well. That was different from the start. 
Tell me about the communications that is happening right now 
between the FDA and OMB?
    Dr. Woodcock. Well, I believe the administration certainly 
has communicated within itself. This was a ruling by OMB that 
according to how the budget was structured, that the user fees 
would be subject to sequestration, and that was done at the 
time the original sequestration was put into effect.
    Now, I realize Members of Congress have written to OMB 
about this and there has been multiple discussions, but it 
seems to be that it is felt that some type of overt action by 
Congress might be necessary to change this situation.
    Mr. Lankford. Has there been communication between FDA 
directly to OMB to talk about that, or is there just the 
assumption that that conversation was at OMB?
    Dr. Woodcock. No, I am sure that OMB--I personally haven't 
had those conversations, but I believe those conversations have 
been--OMB is quite aware of this situation.
    Mr. Lankford. Oh, yes. Several comments have also come up 
on the President's recommendations--the recommendations. There 
are several of them again that have been itemized as we have 
gone through the earlier panel as well. One of them, 
recommendation number three; expand the use and practice of 
FDA's existing authorities for accelerated approval and 
confirmatory evidence. The FDA should make full use of 
accelerated approval for all drugs meeting the statutory 
standard of addressing an unmet need for a serious or life-
threatening disease and demonstrating an impact on clinical end 
points other than survival or irreversible morbidity, or on a 
surrogate end point likely to predict clinical benefit.
    How is that coming in the conversation? I know you all 
already looked at this as well. Where is that?
    Dr. Woodcock. Yes. Well, some of that was substantiated in 
FDASIA that was passed last year. So we have issued a guidance 
on our expedited programs that further defines what unmet 
medical need is to make a standard definition of that. We 
certainly have talked about and are working on the issue of 
clinical endpoints short of clinical benefits, but likely 
predict clinical benefit. And we have full intent of applying 
accelerated approval to any area of unmet medical need. And I 
believe our breakthrough drug program that also was put in 
FDASIA demonstrates that we are very interested in this. Many 
of those have had potential clinical benefits based on 
surrogates and so forth.
    Mr. Lankford. So the guidance is being written currently on 
that. Tell me the timeframe on this as far as when this moves 
from conversation and we are drafting to done.
    Dr. Woodcock. The draft guidance is out for comment and we 
should issue a final guidance soon.
    Mr. Lankford. Soon being tomorrow? Soon being six months?
    Dr. Woodcock. Within months I would expect.
    Mr. Lankford. Okay. Great. And then this ongoing 
conversation that has happened earlier that you are extremely 
aware of as well, this balance between safety and efficacy, 
access from patients coming in, whether it be the compassionate 
use that Ms. Speier had mentioned before or other methods to 
get patients that are terminal access to drugs faster, or even 
the information about the clinical trials out.
    So let me do two different sets of questions on that. One 
is the compassionate use and getting the information to doctors 
about how to go through that process and connecting and what 
the steps would be. So that is an information part of it. And 
the second part of it is the clinicaltrials.gov site, the 
information there, the access to that, helping more patients 
get involved in the trial process so they can be in the 
structure which not only helps them but helps others as well. 
Where are we on those two issues?
    Dr. Woodcock. Well, clinicaltrials.gov is intended to--is 
run by the National Library of Medicine and is intended to, 
among other things, alert patients or caregivers to where a 
trial might be opening up that they might be eligible for.
    Mr. Lankford. Do you consider that site up-to-date and the 
information accurate?
    Dr. Woodcock. I think the site is up-to-date on the 
existence of the trials. There has been a lot of controversy 
about the results section of that and whether that is up-to-
date. But if you are talking about patients being able to enter 
into the trials, except for Phase I trials were not included, 
so there may be some Phase I trials. But those are dose 
escalation, early safety trials.
    Mr. Lankford. It has all the beauty of Craigslist when you 
go there as far as the site itself and its functionality, but 
the access to some of the results and the information is part 
of what my consideration is. How do we make sure that people 
not only get good accurate information there, but there is the 
possibility of they know about this early enough to get 
involved, and that physicians have access to that information. 
They know it is very, very timely.
    Dr. Woodcock. Well, I think that would be a matter of more 
publicity about the site through various patient groups, 
through other professional organizations that treat those given 
diseases, so that the information is disseminated out in that 
manner.
    Mr. Lankford. Does FDA have a good relationship with those 
patient advocacy groups? Is there an ongoing communication 
there?
    Dr. Woodcock. I have recently set up in the Center for 
Drugs a new group office for patient advocacy relations and 
professional relations, so we plan to be building that capacity 
within the Center For Drugs.
    Mr. Lankford. Okay. That would be very helpful, not only to 
patients, but also to physicians as well.
    Dr. Woodcock. Agreed.
    Mr. Lankford. And I want more information on that. I am 
going to try to honor time on this and recognize Ms. Speier.
    Ms. Speier. Mr. Chairman, thank you.
    Dr. Woodcock, thank you for your decades and decades of 
service to our country and to the health of our country.
    Mr. Huber had mentioned in his testimony that the FDA 
clinical trials process is not suitable for new biologic and 
molecular medicines, and it essentially results in economically 
incurable diseases. How is the FDA responding to these new 
medical technologies?
    Dr. Woodcock. Well, I had a conversation with Mr. Huber. I 
don't agree with his analysis. We have been in the forefront of 
pushing molecular medicine since 2000. FDA, I can offer this 
for the record, recently put out a booklet on all the things we 
are doing on personalized medicine. But for example, I think in 
2003 I accepted the first award from the Personalized Medicine 
Coalition really on behalf of the center for our work, the 
first award they had ever given, for our work in driving 
personalized medicine along.
    And why would we do that? Because personalized medicine 
allows--because you try to eliminate people who don't respond, 
you increase the size of the treatment effect so that you 
actually see how well a drug works in people and has a chance 
in working. Then on the safety side, you can eliminate people 
in advance who are at risk so the drugs can become safer by 
screening out people who are at high risk of side effects.
    So from our point of view, and I think from the patient's 
point of view, personalized medicine can only be a positive. We 
have, in fact, been criticized by some in the community for 
pushing it too hard. So I believe we really--and I believe it 
is paying off now. It is paying off with the targeted 
therapies. A lot of the breakthrough drugs are targeted 
therapies, and I think that we are going to see increasingly 
targeted medicines over the next decade.
    Ms. Speier. I appreciate that clarification. Now, Mr. 
Gottlieb also stated that he saw one of the greatest challenges 
for the FDA in terms of innovation was the culture, and he 
believed that there is significant influence exerted by outside 
groups upon the FDA clinical group. I would like to give you 
the opportunity to respond to that.
    Dr. Woodcock. Well, I certainly read Dr. Gottlieb's 
testimony. I have had conversations with him about this. And, 
of course, FDA has considerable flexibility in applying the 
safety and efficacy standards, and we basically use a sliding 
scale. So for a headache, a drug has to be pretty safe because 
no one wants to risk their life to cure their headache, right? 
On the other hand, for serious and life threatening diseases 
where there isn't any alternative, there is a lot of tolerance 
of risk, and there is also greater tolerance of uncertainty 
about the effects, which is what Dr. Gottlieb was talking 
about. And as I understand his comment, it is very similar to 
what you said, which is that a lot of the criticisms over the 
years about drug safety issues have, in his mind, led to 
conservatism, even in the area where a lot of flexibility is 
indicated.
    Ms. Speier. So give us some good news, because I think 
there is some good news coming out of FDA, and particularly 
your area. So tell us from your perspective some of the good 
news.
    Dr. Woodcock. Well, I think from my point of view the good 
news is that the industry, we are really seeing, I think, a 
renaissance in the industry. We are approving a lot of drugs 
now that are first in class or that are treating untreatable 
diseases, or that are advances in therapy and they are treating 
bad diseases better.
    The breakthrough program that was put in place by Congress 
last year, we have had over 100, I believe, requests and we 
have granted 34. And those designations that we give are where 
we think the drug is really a game changer in that disease, and 
if we grant that designation, we offer to really do a full 
court press on that drug and do everything we can to get it 
developed basically in the most, I call it parsimonious manner 
possible. In other words, what is the shortest path between 
where the drug is now, what we know about it, and what we need 
to know to get it on the market in the hands of doctors and 
patients. And I think there is a lot of enthusiasm, both 
internally and externally, about this breakthrough drug program 
and the promise of these drugs.
    Ms. Speier. Okay. Let's talk about manufacturing for a 
moment. It is pretty stunning, and I think if the American 
people knew that 40 percent of the drugs that we take are 
manufactured outside of the country, and 80 percent of the 
ingredients are manufactured outside of the country, they would 
be pretty appalled because there is just consternation about 
the supervision and oversight that goes on overseas.
    So tell us, and to your point, when there are shortages and 
there are tsunamis and there are other conditions that prevent 
us from accessing the drugs that our population needs, we are 
really left with a very difficult position to be in. So, how do 
we create more opportunities for manufacturing, or what is it 
going to take?
    I mean, I am thrilled that Apple computer has decided to 
bring jobs back to America. I might actually buy more Apple 
products now. But that was a ways in coming, and part of it is 
because we are now seeing transportation costs are more 
expensive. There are lots of reason why on the bottom line they 
are doing that. How can we create incentives for manufacturers 
to be manufacturing in the United States?
    Dr. Woodcock. Well, that is a very good question, and 
because I am not an economist, I am not like probably the best 
person to consult. What I am going to say is that FDA is trying 
to provide encouragement for advanced manufacturing, wherever 
it might be, because it is going to be safer, it is going to be 
reliable, it is going to enable personalized medicine because 
it is going to be much more agile than the kind of 
manufacturing that we have right now.
    But I do believe that it should be considered--incentives 
should be considered and States should consider this as perhaps 
an industry they would want to put in place incentives to bring 
back into the State, because I believe this will be a viable 
sector for a very long time, making drugs.
    But the technology, I am here to say that the technology 
has reached a point where this is reality; where we can see 
these plants can be built, they can decrease our vulnerability 
in the sense that we are relying on foreign sites of supply 
that may have many different things that might happen that mean 
a drug might become unavailable in the United States, and yet 
it is also a very good, I think, source of jobs.
    Ms. Speier. Thank you. My time has expired.
    Mr. Lankford. Mr. Meehan.
    Mr. Meehan. Thank you, Mr. Chairman.
    Dr. Woodcock, I want to thank you too for your long 
distinguished career working in this area, and congratulations 
for your recognition. It is nice to receive an award. That is 
one of the few benefits of public service, that you don't get 
the compensation sometimes in other ways.
    But I want to step off of the questioning that my good 
friend and colleague from California was asking you because you 
made a comment about the industry now expanding in Europe and 
other places and not here. But why do you think that is?
    Dr. Woodcock. My understanding is it is primarily they are 
setting up plants in India, China and many other parts of the 
developing world. And I don't know, as I said, I am not an 
economic expert, but the analyses that have been published 
about this say that it is the environmental regulations, 
certain tax advantages, a lower cost labor force and the usual 
kind of factors that we see with manufacturing moving offshore 
from here.
    However, the new manufacturing methods require a high-tech 
labor force. They will have low environmental impact. It will 
be much diminished, all right? And it will require not a very 
large footprint of size of a factory to operate. So it is more 
like the kind of innovative high-tech industries that we really 
do see coming back to the United States or we would like to 
retain in the U.S.
    Mr. Meehan. What do we do? I mean, I accept the analysis. I 
don't have a better analysis of it, and I suspect and do 
believe that it includes all among those, including tax 
policies and other things. But I do hear as well the time that 
it takes from somebody who has effectively a start-up concept 
to have it moved through Europe and approved and put into, you 
know--the chain of treatment, so-to-speak, is much shorter than 
what we deal with in the United States. And you talked about 
time and cost being an expanded aspect of FDA, or at least the 
process here which FDA participates in here. And since we can 
hopefully deal with those other issues as well at some point in 
time, tax policy and those sorts of things, what can we do to 
do a better job of enabling the FDA to be timely in their 
response, or are you doing it correct? I am moved by your point 
that only 10 percent of the drugs actually get approved, that 
there are good reasons why it is appropriate to make sure we 
don't put bad products out. But what is the difference between 
what Europe is doing and here? Why can they do it faster than 
we can?
    Dr. Woodcock. Which part do you say they are doing faster?
    Mr. Meehan. Well, it is my understanding, and maybe correct 
me if I am wrong, that there is an ability to take a start-up 
idea and move it through the clinical trials and get it to a 
point where it can be approved and put into commerce quicker 
than is done here, and that that is one of the driving forces, 
is the tremendous cost associated and the time delay. That if 
you can manufacture--get the drug approved and begin to 
manufacture and get it in, once it starts to work, it will find 
its way back here to the United States. But we have lost jobs 
and the other kinds of things that are associated with the 
development of the industry.
    Dr. Woodcock. Well, we keep figures on what we call the new 
molecular entities, the novel drugs, right, and where they are 
approved first in the world. And consistently over the past, at 
least 5 years, we have led the world in approvals of first on 
the market and we are above Europe. We are not in any 
competition with Europe, but we are about 50, 60 percent 
compared to all other markets, and then each sector, Japan, 
Europe, has a smaller percentage up to 100 percent. Last year I 
think we were at 60 percent of all new molecular entities. I 
can get you that figure. So I am not sure. That used to be, 
before the user fee program PDUFA, FDA approved drugs much 
later than in Europe. But that hasn't been true for some time.
    Now, as far as manufacturing, we have more or less the same 
manufacturing regulations as the Europeans. So if a plant can 
be got up quicker in Europe, it would do with other permitting 
and, you know, other regulations related probably. But 
generally the manufacturing is going to India, China, other 
places, Brazil.
    Mr. Meehan. Okay. My time has expired, Mr. Chairman. I look 
forward to a round of follow-up questions.
    Mr. Lankford. And we will. And, Dr. Woodcock, if you don't 
mind, we are just going to open the microphones and just have 
an ongoing conversation, so there may be multiple of us instead 
of a structured time period. That has been our habit I would 
say here once we get into the second round. So we will start 
throwing questions at you back and forth.
    You had mentioned first about the approval process faster 
here for some of the types--faster than Europe or Japan, and 
that has changed over the last several years. Is that still 
true for all types or are there certain types where Europe and 
Japan are still approving drugs faster than we are?
    Dr. Woodcock. Well, since I am under oath, my impression is 
that we--because of the user fee program we have deadlines. We 
approve most of the drugs on the first cycle, all right? So it 
is submitted in. The companies have really figured out what 
they need to give to us to get an approval and we have 
timelines for when. And I think my impression is for all the 
types of new drug applications, we are ahead of other 
countries.
    Mr. Lankford. Okay. Your ideas to bring down the cost, as I 
walked through the several issues of this particular hearing 
and got a chance to explore where FDA is moving on this and 
what is happening, the cost of drugs is significant, and every 
one of those companies say it is because of the cost of 
actually the trials process and everything else. So your idea 
is that you have seen to bring down the cost of that. I also 
want to ask you several other questions. But can we spend a 
little time on that?
    Dr. Woodcock. Certainly. To bring down the costs, we have 
been working on this for at least a decade, and recently, my 
idea of having these standing trials where many drugs could be 
tested in the same trial and you just keep running them through 
instead of setting up a new trial for every drug, which is 
extremely expensive and time-consuming. And the goal then would 
be to reach out to the community and enroll patients all 
through the United States, not limit it to major medical 
centers, so more patients have the opportunity. It decreases 
the time taken to recruit patients.
    Mr. Lankford. Who has done that at this point? How many 
have done that? Is that a pilot issue that you are working with 
or how would companies know they can try that?
    Dr. Woodcock. It has to be done by consortia, and the I-Spy 
trial, the I-Spy 2 trial was the pioneer in this, okay.
    Ms. Speier. Where was that done?
    Dr. Woodcock. It was led out of UCSF through the foundation 
for NIH as a consortium, all right. So many companies, the FDA, 
NIH, everybody would be a part of that, set up that trial. It 
is a screening trial, and they screen breast cancer drugs with 
a bio-marker to the point about personalized medicine. So they 
take high risk breast cancer patients and they are trying to 
improve the treatment so they can screen many drugs, and I 
won't go into how that is designed.
    And then another one is now being set up by the National 
Cancer Institute, the FNIH, and FDA is participating in this, 
for lung cancer, where many patients can be recruited and they 
already have five drugs, and all investigational drugs, that 
they will be testing using biomarkers in that trial. So those 
are prototypes. But it is not widely adopted yet.
    Mr. Lankford. But that is obviously in an area where you 
are having a lot of patients and a lot of opportunity. You 
mentioned breast cancer. Lung cancer. Unfortunately, we have a 
lot of people in that. What can be done in some of the other 
drug processes where we don't have as many people?
    Dr. Woodcock. Well, in rare diseases, I think certain 
groups like the Cystic Fibrosis Foundation have led the way. We 
recently approved a drug for cystic fibrosis, and that is a 
rare disease to start with, but it only treats 7 percent of 
those patients. But that Cystic Fibrosis Foundation already had 
the patients genotyped so we were able to identify--the company 
who was developing the drug was able to identify which patients 
that drug might work in and rapidly test them. So that drug is 
approved and on the market for cystic fibrosis.
    Mr. Lankford. So what kind of time period and cost did that 
change for that? That went from 12 years, 10 years I would 
assume is a typical process?
    Dr. Woodcock. Yes. I think it was remarkably shortened, but 
I can't tell you how short that was. They did randomized trial, 
because this is a very novel approach, and they were able to 
show in a 48-week trial that they really improved markers for 
cystic fibrosis, lung function, and the children gained weight.
    So another idea that we have also is we have been 
discussing, and I know you all have been discussing with the 
community is a way to speed the introduction of antibiotics for 
drug resistant organisms. And that is a different idea that has 
been discussed, which is putting some kind of mark or logo or 
having Congress speak to a special mechanism that we would have 
a very limited drug development program, get those drugs into 
the hands of doctors, who are serious drug resistant organism 
infections, and have some kind of notation or mark on those 
drugs so that the doctors knew they had been developed by a 
very limited program and that good antibiotic stewardship 
should be used with them.
    Mr. Lankford. Okay. Only antibiotics in that program, 
though.
    Dr. Woodcock. It's been discussed wider, and I think that's 
a matter for ongoing discussion. But that would be one way to 
do it. Because the need is very great. The CDC said, I think, 
last year, I believe, they said 23,000 people died from 
infections with drug resistant organisms, and we are behind 
that epidemic. As you have said, it takes a while to develop a 
drug, even if we shorten the time, and so we don't have time, 
you know, anymore. We're running out of time to get a handle on 
this epidemic.
    Mr. Lankford. Okay. So clarify that for me because you said 
``we're working on'' several times there. Is this a process 
that is set, that you've done guidelines for, that's done, or 
again, what is the timeframe on this? Is this done tomorrow? Is 
this done 6 months, 6 years from now?
    Dr. Woodcock. What we've been discussing is that Congress 
would speak on this and tell us to establish a program.
    Mr. Lankford. You do not have the statutory authority to do 
that right now you feel?
    Dr. Woodcock. It would require regulations.
    Mr. Lankford. But if we did statute, you would have to 
promulgate regulations off that statute as well.
    Dr. Woodcock. I'm not a lawyer. Being under oath, I want to 
give you an exact answer. But I think we could probably do it 
with the statute. We might have to do guidance to help 
companies figure out how to do the programs, but I believe that 
we could probably implement something if we're directed to in a 
statute directly.
    Mr. Lankford. Okay. I'll just make sure.
    Congresswoman Speier.
    Ms. Speier. Dr. Woodcock, the experience that Gilead just 
had where it had their hepatitis C drug approved with the 
recommendation by FDA to do additional trials, I believe, with 
a different cohort, maybe you could just explain. Because it 
was unusual but it showed flexibility within FDA, and Gilead 
was thrilled with the opportunity to kind of move that process 
quickly.
    Dr. Woodcock. Uh-huh.
    Ms. Speier. And I think it would be good for all of us to 
understand it.
    Dr. Woodcock. I would have to get back to you on that 
because I don't know the details of it, but I will say that you 
asked for good news, I think the new generation of drugs for 
hepatitis that we are going to see is really good news because 
we have a lot of patients in this country who develop liver 
failure from hepatitis or develop liver cancer, and we believe 
the new generation of drugs may well be curative of hepatitis 
C, and that's really big news.
    Ms. Speier. And it's big news on a lot of levels because 
they become disability insurance recipients and Medicaid 
recipients and Medicare recipients, and that is a very costly 
procedure that they then go through in terms of dialysis and 
the like. So that's good.
    Let me ask you this. You said that only 10 percent of the 
drugs that are considered actually get approved because there's 
a failure in Phase III. Can you explain that to us? Is there 
some way we can find that out sooner so there's not as much 
money invested by the drug companies?
    Dr. Woodcock. That's the $64,000 question. All right. What 
happens is there's attrition all the way through the drug 
development process. The attrition, before you get into people, 
so you do animal studies or something and you find toxicity, 
that's not that expensive. But once you start doing trials, 
losing a drug somewhere during the clinical development program 
is very expensive, and the longer you go and study the drug, 
the more sunk costs you have in that drug.
    And so in Phase I there is attrition often for toxicity. In 
Phase II there may be attrition because a drug doesn't work. 
But remarkably, in Phase III, at least several years ago, the 
last time this was studied, there's about 50 percent of 
attrition is in Phase III when you've spent a huge amount, 
maybe, you know, upwards of a billion dollars on developing the 
drug, and you find out it doesn't work. Some of the drugs in 
Phase III don't have any effect compared to placebo.
    Ms. Speier. But is that because for the first time they are 
being used or human beings? They are being used on human beings 
in Phase II, are they not?
    Dr. Woodcock. Uh-huh.
    Ms. Speier. So what is happening?
    Dr. Woodcock. It's hard. For some diseases you can't tell 
in Phase II. All you're doing in Phase II is trying to get the 
dose right, maybe using a biomarker to try and figure out, you 
know, are you affecting the disease? But the disease may be a 
longer-term disease or it may take a while, and so you have to 
do a Phase III trial to see whether or not it actually works or 
not, and then you're very sadly disappointed.
    For example, we just had a couple trials in Alzheimer's 
disease, you know, that did not affect Alzheimer's disease, and 
that is a bitter disappointment because we need treatments for 
Alzheimer's disease, but it's hard to tell in earlier trials 
whether or not you're affecting dementia.
    Mr. Lankford. I'm jumping on this as well.
    Ms. Speier. Sure.
    Mr. Lankford. Going back to a statement, Doctor, that Mr. 
Huber made earlier where he talked about the drug that was set 
up for kidneys and they were using it for bladders and it was 
not successful on anyone but one, and it was flawless on that 
one.
    Dr. Woodcock. Uh-huh.
    Mr. Lankford. Is that the type of thing that we're finding 
or we're finding it's effective on some so we're looking for 
the molecular markers for that group and why you had, you know, 
500 people in the study and it worked great on 12 and not on 
the rest, and so now you're studying it, or you're blanket 
saying this doesn't work for everyone?
    Dr. Woodcock. It really varies by the disease. In 
Alzheimer's we have don't really have any good molecular 
markers yet. That's what those biomarkers are working on. So 
those studies are what you call empirical. In other words, they 
are trial and error. And that's a lot of the problem with drug 
development, it's still trial and error.
    But in cancer, because we did the war on cancer that you 
all funded, and we have a tremendous amount of information 
about what makes that cancer a cancer. And as Mr. Huber was 
saying, it's molecular changes, genetic changes in the tumor 
that do that, and some of them are driving the cancerous 
behavior. And if we can target that and turn it off, then the 
cancer subsides to some extent. And so that's a new way of 
developing a drug where you actually understand the mechanism 
and you can target that mechanism.
    And so, in cancer, we used to talk about breast cancer and 
colon cancer, but now we really talk about what is the driver, 
what mutation is driving that tumorous behavior and how can we 
turn that off. So that's been a revolution, and I think that's 
going to get better and better, but we need to focus on curing 
cancer.
    Mr. Lankford. Right. No, the point I'm trying to drive at, 
though, is in a large-scale study, it's a Phase III, you have a 
lot of people that are involved in it. What do you do if you 
have a small group in there that it is successful for, that it 
is effective, but statistically, across the size of the group, 
it's not? Is that something the drug company goes back and goes 
back to the drawing board and tries to determine that, or is it 
something FDA is involved in? What happens?
    Dr. Woodcock. Usually companies will submit subgroup 
analyses and they would give them a hypothesis, well, maybe it 
works in this group, okay, we don't know why, but maybe it 
works in this group. And they would have to do more trials. 
Why? Okay, well, in a famous example, Richard Peto, who's a 
statistician in the UK, did a subset analysis of a trial, and 
he showed that people with the astrological sign Virgo, okay, 
did much better than all the other people. And, you know, 
people say we should approve the drug based on these subset 
analyses, but the actual fact is you can do many of them and 
there's always going to be one that the drug appears to work, 
and we see this all the time. That doesn't necessarily mean it 
actually does work, just like the astrological sign Virgo is 
not a predictor of better cardiovascular outcomes.
    So, yes, if there is a convincing molecular marker, though, 
okay, that's a hard scientific thing, not some kind of fishing 
expedition, then we might have a different approach.
    Ms. Speier. Could we talk about your staffing. Is all of 
your staffing--I should know this and don't--subject to user 
fees or is there a percentage that is not subject to user fees?
    Dr. Woodcock. We have S&E funding that is subject to 
sequestration. We have PDUFA funding, and we have GDUFA, the 
generic drug user fee program has just set up funding, and 
funding for biosimilars drug user fee. The S&E is maybe about 
30 percent of our funding.
    Ms. Speier. S&E is?
    Dr. Woodcock. The appropriated taxpayer's dollars.
    Ms. Speier. It's about 30 percent.
    Dr. Woodcock. Uh-huh.
    Ms. Speier. So what has that meant in terms of 
sequestration. I mean, how many jobs are no longer being----
    Dr. Woodcock. I wish I could remember these figures, but 
it's been a pretty significant hit that we've taken. Now, we're 
able to hire under GDUFA anyway, but what you've been talking 
about here about the interaction of companies, innovator 
companies with the review divisions, has been hampered because 
those review divisions did not get the hires they expected 
under the new PDUFA program because of the sequester.
    Mr. Lankford. The generic group, you're still able to hire. 
That money was not sequestered?
    Dr. Woodcock. I'm very confused about this. I know that we 
had so many hires that we had to make, that we certainly are 
able to hire under GDUFA. I don't understand. We could get back 
to you on the impact of the sequester.
    Mr. Lankford. Yeah, the question is whether user fees 
sequestered for the generic are not sequestered for the 
generic, do you know? You've made some hires there. I just 
didn't know if that's a function of the user fees.
    Dr. Woodcock. I think the answer is yes and no. I think the 
first year weren't maybe because it was a new program. That's 
why I'm confused.
    Mr. Lankford. Okay.
    Dr. Woodcock. And then it will be, but we can----
    Mr. Lankford. Can we follow up on that? Because obviously 
it has been this ongoing conversation should the user fees have 
been sequestered at all. Okay.
    Dr. Woodcock. Yeah, okay. Uh-huh.
    Mr. Lankford. Pat, did you have anything you wanted to add? 
Jump in any time.
    Mr. Meehan. Well, I don't want to jump in while you're on a 
roll. And I kind of laughed to myself when you were hesitant to 
answer the question because you said, I'm not a lawyer. I was 
just with a guy who said, he saw the high priced lawyer and he 
asked him, he said, I've got two quick questions. If I give you 
a thousand dollars, can I ask you? And the guy said, 
absolutely, what's your second question? So a bit of levity to 
help us. As a recovering lawyer, I have to take chances.
    The sort of the dialogue I exchanged with Dr. Gottlieb, 
among others, was not just anecdotal, dealing with the concerns 
about the timeliness of responsiveness, and you didn't really 
have a chance to talk to it.
    Dr. Woodcock. Uh-huh.
    Mr. Meehan. And I think it has sometimes to do with the 
ease with which it is just to ask one more question and send it 
back. What can be done to assure that those who are managing 
their portfolios, particularly in light of the fact that PDUFA, 
MDUFA, have been put in place to ameliorate just this issue, 
that we are getting timely and responsive communication? And 
maybe it is just as, you know, Mr. Hastings identified, better 
communication all along. But I'm talking from knowledge of 
specifics where there would be communication, and in effect, 
send me what you have, 28 days, no response, 29th day, the 
whole new raft of questions. So how as an agency can you 
oversee to assure that those who are managing their portfolios 
are doing it effectively?
    Dr. Woodcock. Well, it is a complicated question. These 
interactions are governed by agreements that are made under 
PDUFA, many of them, all right, and we track something like 
25,000 transactions, right, every year. Don't quote me on this. 
Something like that, or I can't give you the exact number, 
right, but it is a very large number of transactions that 
occur, because we track not only all the filings for the 
marketing applications, but we have type A, B, and C meetings, 
we track how timely the meeting minutes are to get back on 
these meetings, how timely scheduling of the meetings are, et 
cetera, et cetera. So it's very micromanaged, but again, that's 
the process. It's not the content.
    And I will say, in my opinion, if you pay too much 
attention to process, you often give short shrift to content, 
and to me that seems to underlie your question, too.
    Mr. Meehan. It did. I mean, I think that was the example, 
that once they got somebody else to step in and took the time 
to evaluate it, they realized the information was there and it 
was sufficiently explained.
    But I just appreciate the process, but I do think it's this 
balance of when people feel comfortable to make decisions. And 
I do adopt my colleagues' concerns that obviously people have 
come and been lambasted for having made the wrong decision, and 
it creates an environment in which people say, well, no 
decision is easier on me, so they don't do it. How do we have 
to work together to assure that that happens?
    I just have a couple of follow-up questions. The 
President's Council on Science and Technology put together 
their innovation package, and they had eight recommendations. 
I'm looking forward to going into greater detail into that. But 
you've been through it. What do you think, what stood out with 
you, to you, in that report, and what do you think we can work 
with you on to help do a better job of getting, you know, more 
effective cures to the market?
    Dr. Woodcock. Well, I think some of the things that 
Congress has already sort of instantiated in FDASIA around 
accelerated approval already alluded to have been helpful in 
having us pay more attention to our expedited programs. The 
other thing that struck me about the proposals in the PCAST 
report called for more translational science, because it's hard 
for us to make decisions, you know, if the science isn't there.
    Mr. Meehan. What do you mean by translational science?
    Dr. Woodcock. Well, you know, there's basic science you can 
say, well, this pathway inside of a cell does this and that and 
the other thing, and then there is translational science which 
said this biomarker really is predictive of a good outcome. The 
more data a company or we have on that, the more confident 
everyone feels that we can, you know, put our money down on 
that, right. But if we have no data or say the rare diseases 
you're talk about, we don't have any data on the natural 
history of the rare disease, what people do is get a bunch of 
experts together and say, in my opinion, the disease progresses 
in this manner.
    Now, that's been a problem not just for us, for the 
companies, because it turns out the disease does not progress 
in that manner and therefore their study they designed, you 
know, didn't work. It wasn't long enough, or, you know, it 
didn't measure the right things or whatever. And so that's 
translational science, is the science that supports actually 
studying the drug in people and actually enables you to study 
the drug effectively and quickly.
    So PCAST called for formation of a consortium where 
everyone would work together to enable this translational 
science and move it along, and I think that would be very 
helpful. I also think this other mechanism I already talked 
about for antibiotics would also be helpful in dealing with 
some part of that epidemic.
    Mr. Lankford. Can now jump in as well? Help me understand 
again why you think you need a statute for the antibiotics in 
the new process, why you don't feel like you already have 
statutory authority to do that, based on so many other areas, 
with the breakthrough, with the accelerated process, with all 
those things that are already in place, why do you need another 
statute for that?
    Dr. Woodcock. I think we have statutory authority or we 
could claim we did and do a regulation. That would take many 
years, in my experience nowadays.
    Mr. Lankford. Have you noticed how long it takes to get a 
bill through Congress?
    Dr. Woodcock. Well, I just have great faith in you.
    Mr. Lankford. That makes one.
    My concern is, as deadlocked as we are in so many different 
areas, my preference, and I'm not going to speak for all of us, 
would be you get started on what you feel like you have 
statutory authority for now and so we can have something in 
process.
    Dr. Woodcock. Right.
    Mr. Lankford. We have a responsibility to get our stuff 
done as well, but that has not gone as smoothly as it should 
and that we are capable of, obviously. And I would hate for FDA 
to sit back for 2 or 3 years and wait on us to get something 
done, and then once it's done, you have to promulgate rules 
based on that, and then we're even farther behind.
    Dr. Woodcock. We had a public meeting on this, which is 
often a prelude to rulemaking. We have certainly been in 
discussions with companies that are interested in utilizing 
this pathway.
    Mr. Lankford. Okay. I do not want you to try to feel like 
I'm saying to you, though, leave statutory authority. If you do 
not have statutory authority, obviously don't go outside of 
statutory authority. But if you have it and you feel like you 
already have it, validate it, and I would encourage you to get 
moving on it.
    Dr. Woodcock. Uh-huh.
    Mr. Lankford. So, again, I'm not going to try and speak for 
all of us, but while we do have a responsibility, things have 
bogged down significantly here. Fairly obvious, I think.
    Ms. Speier. I have a question. There was a period of time 
in the not-so-distant past when a number of companies had come 
to me with questions about their approval when they had two 
drugs that had been previously approved by the FDA. They were 
combining them for obesity and were having either a difficult 
time getting it approved or actually getting it denied, even 
though both of those drugs independently had already been 
approved by FDA.
    Can you talk about that on the one hand, and also about 
where we are in terms of obesity drugs? Because we all know 
this is a huge issue in terms of American health.
    Dr. Woodcock. Certainly. Well, when you----
    Ms. Speier. And I need a quick fix.
    Dr. Woodcock. We've had a lot of obesity drugs have to be 
pulled off the market for safety problems, and primarily they 
were cardiovascular safety problems. And so, I think the FDA is 
trying to exercise caution on new obesity drugs but recognize 
this is another epidemic that we're facing that needs some kind 
of new thinking as far as how to deal with it.
    The sliding scale I talked to you about before. So if you 
have a drug that's indicated for seizures, say, that drug's 
benefit risk will be looked at in the light of what is 
epilepsy, what are the available treatments, who might use it, 
how much risk would they be willing to take, okay, to control 
their seizures. If you move a seizure drug or a drug for heart 
failure or something over to obesity, you say to yourself 30 
percent of all adult Americans have obesity. How much risk of 
uncertainty of, say, heart attacks or strokes are we willing to 
take in that population--all right, that's just an example--
versus where you're treating epilepsy where the people are 
facing risks if they continue to have seizures, right. And 
that's the conundrum that we're in. These drugs that we would 
approve for obesity, millions of Americans might be exposed to 
them, and they need to be relatively safe, unless, again, we 
were able to restrict them to the very people suffering from 
the most severe types of obesity. But that would be unlikely 
given the prevalence of the condition in the United States.
    In fact, we initially talked about this limited use 
scenario that we're talking about for antibiotics also for 
obesity because the benefit risk for somebody who is severely 
obese is different than someone with mild obesity, or somebody 
who is severely obese and has a lot of morbidities from it. 
Heart disease. They have severe arthritis, mobility problems, 
and so forth.
    So the problem with, I think, obesity drugs is that eating 
is such a basic human instinct and function, any drug that's 
going to significantly interfere with that is going to have 
powerful effects and may have effects in multiple domains, and 
we need a lot of creativity in that area to move forward.
    Mr. Lankford. We get into the issue of FDA making decisions 
for doctors and the labeling issues and the warnings and that 
kind of such, and I know that's a constant struggle for you 
because you're testing for a certain thing and you haven't 
tested for other things. You put that into the market and 
physicians may use it off label.
    Dr. Woodcock. Uh-huh.
    Mr. Lankford. How is that moving within FDA? And quite 
frankly, with your opinion, in the culture of FDA? Do you feel 
like you're clamping down on labeling and adding more because 
there's this barrier between do you restrict more or do you 
give more information to doctors and just overload them with 
information and say, read it, make the decision, because you're 
going to go off label anyway, or is it stronger off label, 
don't use it, restrict it, from FDA's perspective?
    Dr. Woodcock. Well, generally speaking, and I think this 
isn't well understood, but FDA accepts the fact that off label 
use can be appropriate, and that's a part of the practice of 
medicine for most drugs, okay.
    There are drugs that we have special restrictions that are 
called REMS, and these were put in as part of the FDAAA 
legislation 6 years ago, I believe, and we had them before 
through regulation where you'd restrict distribution of a drug, 
and sometimes you have to say we're only using it for this.
    And a premier example is, like, the drug Accutane is for 
severe acne. It's a very effective drug, and severe acne can be 
a really bad condition, but it was widely used for all kind of 
acne because it works, right. But it's a major human teratogen, 
and so it causes major birth defects if used in a pregnant 
woman. And we were getting reports every year of use in 
pregnant women every year, every year, even women who were 
started on the drug and never had a pregnancy test.
    So we, you know, put gradually more and more restrictions, 
and now that drug is highly restricted in that you have to get 
pregnancy tests before or not be of childbearing potential to 
get Accutane if you're a woman. And we hate to do that because 
that really burdens the healthcare system. On the other hand, 
we have some of these very dire side effects that the 
healthcare system has not shown itself to be capable of 
managing without further intervention.
    So you're right, we walk a narrow line there. We don't want 
to overly restrict, but sometimes the side effects are so dire, 
and it might be that the drug might not be available unless he 
had that restricted program in place.
    Ms. Speier. Can we speak about pediatric cancer for a 
moment? Within the NIH budget less than 4 percent of the 
funding goes to the research around pediatric cancer, and 
there's a lot of off label use of drugs for pediatric cancer. 
So can you just give us a sense of where FDA is in terms of 
evaluating drugs for paeds, as they refer to them.
    Dr. Woodcock. Well, we've had a strong pediatric program 
because the Best Pharmaceuticals for Children Act, BPCA, and so 
there has been quite a response by the pharmaceutical industry 
to those programs. And, you know, they get extra exclusivity if 
they fulfill certain requirements. We just celebrated 500 drug 
labels that have been updated with pediatric information.
    Now, that said, though, pediatric cancer is different, and 
why? Because the cancer arising in a child is usually not the 
same as the adult condition. And these pediatric programs were 
set up to study conditions that occur in adults and then study 
them lower and lower ages and then get that information. But it 
stands to reason that the kind of mutation that would occur in 
a child, you know, when they are just born or when they're 
young, is different than the kind of mutations that occur over 
a lifetime in a cell type and cause cancer. So that progression 
that we see in other diseases hasn't happened as much in the 
pediatric diseases, and I believe the pediatric cancer 
community is concerned about this.
    We've tried to encourage companies to study right away 
drugs in childhood cancers if they seem appropriate. Often 
you'd study a disease in adults first and then study children, 
but in fact, when you have a life-threatening disease like 
cancer it's appropriate to study the children right away also. 
But the question is, what is the right drug for that cancer in 
children?
    I personally believe that the genomic revolution that we 
were talking about earlier where we begin to understand the 
sequences, the driving mutations in the cancers is really going 
to help us, but we also are finding some of the pediatric 
cancers are actually multiple diseases put together, just like 
an adult cancer is.
    So we have a pediatric oncologist, a very senior pediatric 
oncologist on staff at the Center for Drugs, and we are really 
trying to encourage development in this area.
    Mr. Lankford. Mr. Meehan, you had a question?
    Mr. Meehan. Just a final question, and maybe it's not fair 
to even ask it, and if you don't want to respond don't. But 
thinking outside the box, I mean, you labor in the vineyard, 
and there must be times where you sit and think, you know, if 
we built the mousetrap a little different way, maybe we could 
have success. And I'm asking the question sort of guided by the 
fact that you're hearing some of these wealthy industrialists 
or others who are saying that with their life's savings now 
they want to be the person, for instance, that cures 
Alzheimer's, and they're going to put everything into this 
effort. And I don't know whether that is the kind of thing that 
we ought to be encouraging, where we say, let's just cure 
Alzheimer's, let's create this Center for Excellence that does 
it, let's keep it here in the United States so they don't send 
it overseas to do it, which they're referring to. Does that 
make sense or are we better off doing what we're doing trying 
to not choose winners and losers?
    Dr. Woodcock. That's a really profound question, I think. I 
mean, I really can't give advice to Congress. I believe that 
patient advocacy groups in many diseases have made tremendous 
strides in advancing the treatments and cures for their 
diseases. So that disease focus can be very beneficial in 
getting treatments advanced and so forth, and they've done a 
great job, partly because they understand what's needed. And 
often what's needed is these clinical trial networks getting 
the outcome measures, doing the natural history, really 
understanding the disease very well, so when treatments come 
along they don't fail, you know, they can be tested rapidly and 
figure out how desirable they are.
    Mr. Meehan. You have mentioned communication a number of 
times. Are we missing opportunities in this age of the ability 
of the NSA to drill down into the most intimate details 
anywhere? But no, we're collecting more information than we've 
ever done before. We've got the ability to assimilate 
information better than we have before, and we are creating 
more medical records, albeit they're still too much on paper 
and other kinds of things. But with this bulk of records out 
there, are we losing an opportunity to mine what we already 
know to significantly enhance or advance the ability to 
understand the things that we're trying to take on?
    Dr. Woodcock. I don't know. Often the medical records, for 
example, aren't detailed and standardized well enough to 
provide these natural history outcomes that we'd really like to 
have. We have the Sentinel System that we've set up, which is 
really pretty, I think, novel and innovative. We have 120 
million lives of data all behind the firewalls of the data 
partners, the insurance companies, or healthcare system. But we 
have it all standardized, we can query it, and we use that for 
drug safety analysis, okay. So we use that existing data. And 
they're starting to randomize, cluster randomize within these 
kind of systems and answer important questions by doing 
experiments out there.
    I believe that telemedicine and recruiting people through 
social media and so forth is probably something we really 
should do, and that would be a way to really reach patients who 
are out there and whose doctors aren't telling them or they 
don't know about availability of trials and so forth. I think 
we've just started to scratch the surface on how well that can 
serve us.
    Mr. Meehan. Well, I thank you. I guess we could go on all 
day. But I am very, very grateful for the work that you do and 
for your presentations here today. Thank you.
    Thank you, Mr. Chairman and Ranking Member, for holding 
this hearing.
    Ms. Speier. Actually, the gentleman from Pennsylvania just 
triggered, and your response triggered a question for me. The 
ClinicalTrials.gov. At Google you can actually elevate your 
status, so to speak, by paying for it. And so if you were to 
Google cancer, you can have ClinicalTrials.gov come up first. 
Who would be responsible for making that decision as to whether 
or not that should be an expenditure we make?
    Dr. Woodcock. That site is maintained by the National 
Library of Medicine, it's part of NIH.
    Ms. Speier. Okay. So that's a question to ask them.
    Let me just conclude, Mr. Chairman, by saying that I think 
we've got just a gold mine in you, Dr. Woodcock, and I thank 
you for the competency and professionalism that you've showed 
for so very long. And I hope that this will be a beginning of 
an opportunity for us to find more ways to work together, and I 
really think that pursuing the manufacturing of drugs here in 
the United States is worthy of our time and attention, and your 
assistance would be greatly appreciated.
    Dr. Woodcock. Absolutely.
    Mr. Lankford. I'd agree with that as well. And I also want 
to thank you for the time to be able to spend here and the 
time, both in preparation of your written statements. You made 
a comment earlier that you don't give advice to Congress. 
Again, that would be one of the few Americans that doesn't do 
that. That's the wonderful thing about a republic, everyone can 
give advice to Congress.
    But through this there were a lot of to-do's that come out 
of this. Let me give one statement just from me on it. You're 
doing a lot of pilots, you're doing some outside-the-box 
thinking of what can we do on that. We want to encourage that 
and to say continue to do that. The companies, we have a lot of 
companies that are now IPOs that are jumping in with different 
ideas.
    Dr. Woodcock. Uh-huh.
    Mr. Lankford. We want to continue to encourage the 
innovation that helps everyone. I'd also like to continue to 
encourage you, as you've already started in your office, in 
communicating with the advocacy groups for each of these 
different diseases. They want the communication with you.
    Dr. Woodcock. Yes.
    Mr. Lankford. As much as you can spur that and then also 
connect the dots between groups, for instance, what's happened, 
as you mentioned before, with the cystic fibrosis organization. 
There may be others that are interested in that that may not 
even know that is occurring, but if it fast tracks that and if 
there are ways that these different outside groups can do, they 
are looking for things that will help. If there are things you 
can clearly articulate that would help, they would like to know 
that, and they need to be able to hear that from you. They are 
very connected to NIH in the funding. They need to be connected 
to you in the same way to know not only what's the research out 
there that's being done, once the research is done, how can we 
fast track solutions.
    Dr. Woodcock. That's right.
    Mr. Lankford. So, I would encourage that, as well as 
increased information to physicians on clinical trials so that 
for these rare diseases, especially, physicians know about the 
clinical trial process and can get their patients into it. Be 
much better than the compassionate use and other ways, and we 
can have the research ongoing on it.
    So those are quick admonitions in that, but you need to let 
us know as well what we need to do statutorily, and we'll 
continue the conversation about the antibiotics. But if there 
are things that you need from us, we want to help in that.
    Dr. Woodcock. Thank you.
    Mr. Lankford. And we'll work in a bipartisan way to be able 
to get that done.
    So with that, with no other questions on the dais on that, 
this hearing is adjourned.
    [Whereupon, at 4:25 p.m., the subcommittee was adjourned.]









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               Material Submitted for the Hearing Record


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