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









      EXAMINING DRUG SHORTAGES AND RECENT EFFORTS TO ADDRESS THEM

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

                                HEARING

                               BEFORE THE

                         SUBCOMMITTEE ON HEALTH

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                           FEBRUARY 10, 2014

                               __________

                           Serial No. 113-117




[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]






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                    COMMITTEE ON ENERGY AND COMMERCE

                          FRED UPTON, Michigan
                                 Chairman

RALPH M. HALL, Texas                 HENRY A. WAXMAN, California
JOE BARTON, Texas                      Ranking Member
  Chairman Emeritus                  JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky               FRANK PALLONE, Jr., New Jersey
JOHN SHIMKUS, Illinois               BOBBY L. RUSH, Illinois
JOSEPH R. PITTS, Pennsylvania        ANNA G. ESHOO, California
GREG WALDEN, Oregon                  ELIOT L. ENGEL, New York
LEE TERRY, Nebraska                  GENE GREEN, Texas
MIKE ROGERS, Michigan                DIANA DeGETTE, Colorado
TIM MURPHY, Pennsylvania             LOIS CAPPS, California
MICHAEL C. BURGESS, Texas            MICHAEL F. DOYLE, Pennsylvania
MARSHA BLACKBURN, Tennessee          JANICE D. SCHAKOWSKY, Illinois
  Vice Chairman                      JIM MATHESON, Utah
PHIL GINGREY, Georgia                G.K. BUTTERFIELD, North Carolina
STEVE SCALISE, Louisiana             JOHN BARROW, Georgia
ROBERT E. LATTA, Ohio                DORIS O. MATSUI, California
CATHY McMORRIS RODGERS, Washington   DONNA M. CHRISTENSEN, Virgin 
GREGG HARPER, Mississippi            Islands
LEONARD LANCE, New Jersey            KATHY CASTOR, Florida
BILL CASSIDY, Louisiana              JOHN P. SARBANES, Maryland
BRETT GUTHRIE, Kentucky              JERRY McNERNEY, California
PETE OLSON, Texas                    BRUCE L. BRALEY, Iowa
DAVID B. McKINLEY, West Virginia     PETER WELCH, Vermont
CORY GARDNER, Colorado               BEN RAY LUJAN, New Mexico
MIKE POMPEO, Kansas                  PAUL TONKO, New York
ADAM KINZINGER, Illinois             JOHN A. YARMUTH, Kentucky
H. MORGAN GRIFFITH, Virginia
GUS M. BILIRAKIS, Florida
BILL JOHNSON, Ohio
BILLY LONG, Missouri
RENEE L. ELLMERS, North Carolina

                                 _____

                         Subcommittee on Health

                     JOSEPH R. PITTS, Pennsylvania
                                 Chairman
MICHAEL C. BURGESS, Texas            FRANK PALLONE, Jr., New Jersey
  Vice Chairman                        Ranking Member
ED WHITFIELD, Kentucky               JOHN D. DINGELL, Michigan
JOHN SHIMKUS, Illinois               ELIOT L. ENGEL, New York
MIKE ROGERS, Michigan                LOIS CAPPS, California
TIM MURPHY, Pennsylvania             JANICE D. SCHAKOWSKY, Illinois
MARSHA BLACKBURN, Tennessee          JIM MATHESON, Utah
PHIL GINGREY, Georgia                GENE GREEN, Texas
CATHY McMORRIS RODGERS, Washington   G.K. BUTTERFIELD, North Carolina
LEONARD LANCE, New Jersey            JOHN BARROW, Georgia
BILL CASSIDY, Louisiana              DONNA M. CHRISTENSEN, Virgin 
BRETT GUTHRIE, Kentucky                  Islands
H. MORGAN GRIFFITH, Virginia         KATHY CASTOR, Florida
GUS M. BILIRAKIS, Florida            JOHN P. SARBANES, Maryland
RENEE L. ELLMERS, North Carolina     HENRY A. WAXMAN, California (ex 
JOE BARTON, Texas                        officio)
FRED UPTON, Michigan (ex officio)

                                  (ii)











                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Joseph R. Pitts, a Representative in Congress from the 
  Commonwealth of Pennsylvania, opening statement................     1
    Prepared statement...........................................     2
Hon. Michael C. Burgess, a Representative in Congress from the 
  State of Texas, opening statement..............................     3
Hon. Frank Pallone, Jr., a Representative in Congress from the 
  State of New Jersey, opening statement.........................     4
Hon. Marsha Blackburn, a Representative in Congress from the 
  State of Tennessee, opening statement..........................     5
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, prepared statement...................................    55
Hon. Henry A. Waxman, a Representative in Congress from the State 
  of California, prepared statement..............................    57

                               Witnesses

Marcia Crosse, Director, Health Care, Government Accountability 
  Office.........................................................     6
    Prepared statement...........................................     8
    Answers to submitted questions...............................    59
Douglas C. Throckmorton, Deputy Director of Regulatory Programs, 
  Center for Drug Evaluation and Research, Food and Drug 
  Administration, Department of Health & Human Services..........    21
    Prepared statement...........................................    23
    Answers to submitted questions...............................    71

                           Submitted Material

Chart, ``Number of active drug shortages,'' 2007 to June 30, 
  2013, Government Accountability Office analysis of University 
  of Utah Drug Information Service data, submitted by Mr. Shimkus    48

 
      EXAMINING DRUG SHORTAGES AND RECENT EFFORTS TO ADDRESS THEM

                              ----------                              


                       MONDAY, FEBRUARY 10, 2014

                  House of Representatives,
                            Subcommittee on Health,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 2:00 p.m., in 
room 2123, Rayburn House Office Building, Hon. Joseph R. Pitts 
(chairman of the subcommittee) presiding.
    Members present: Representatives Pitts, Burgess, Shimkus, 
Blackburn, Guthrie, Griffith, Ellmers, Pallone, Dingell, 
Barrow, and Christensen.
    Staff present: Clay Alspach, Chief Counsel, Health; Gary 
Andres, Staff Director; Sean Bonyun, Communications Director; 
Matt Bravo, Professional Staff Member; Noelle Clemente, Press 
Secretary; Paul Edattel, Professional Staff Member, Health; 
Sydne Harwick, Legislative Clerk; Carly McWilliams, 
Professional Staff Member, Health; Katie Novaria, Professional 
Staff Member, Health; Heidi Stirrup, Health Policy Coordinator; 
John Stone, Counsel, Health; Josh Trent, Professional Staff 
Member, Health; Tom Wilbur, Digital Media Advisor; Ziky 
Ababiya, Democratic Staff Assistant; and Eric Flamm, Democratic 
FDA Detailee.
    Mr. Pitts. The subcommittee will come to order. The Chair 
will recognize himself for an opening statement.

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

    In recent years, we have seen a dramatic increase in the 
number of drug shortages in the United States, particularly 
with generic sterile injectable drugs. While the number of new 
shortages dipped in 2012 and 2013, the total number of ongoing 
shortages has continued to increase. This is unacceptable. 
Numerous drugs have remained on FDA's shortage list for some 
time. What is the Agency doing to help address these 
situations?
    Recent news reports have highlighted shortages of oncology 
products, parenteral nutrition products and even common, yet 
critically important, saline solutions. Such shortages lead to 
delays in treatment, rationing of care and higher costs. They 
can also pose greater risks to patients in the form of 
medication errors and as providers are forced to seek 
alternative treatments. Drug shortages are a very challenging 
problem and it is clear that there is no simple solution. We 
recognize the complicated nature of this issue as well as the 
severity.
    Last Congress, the subcommittee took action by including a 
section on drug shortages in the Food and Drug Administration 
Safety and Innovation Act, FDASIA, which was signed into law on 
July 9th, 2012. Title 10 of FDASIA sought to address drug 
shortages by giving new authorities and responsibilities to the 
Food and Drug Administration and placing expanded requirements 
on drug manufacturers to notify FDA of an interruption or 
discontinuance in production. Among other provisions, under 
FDASIA, the Secretary of Health & Human Services is required 
to, one, maintain a publicly available up-to-date drug shortage 
list; two, establish a task force to implement a strategic plan 
to prevent and mitigate drug shortages; and three, submit 
annual reports to Congress, including relating actions taken by 
the Agency. FDASIA also required GAO to examine the cause of 
drug shortages and formulate recommendations on how to prevent 
or alleviate drug shortages.
    Last October, FDA issued its strategic plan for preventing 
and mitigating drug shortages. Further, we now have FDA's first 
annual report on drug shortages, though it only covers the 
first three quarters of 2013. And today, GAO released its final 
report pursuant to FDASIA.
    While drug shortages continue to plague our health care 
system, statistics do indicate progress on some fronts. I am 
pleased to see that legislation coming out of this subcommittee 
has had a positive impact.
    I would like to welcome our witnesses, Marcia Crosse, 
health care director at GAO, and Douglas Throckmorton, deputy 
director of regulatory programs at the FDA.
    I would particularly like to thank GAO for their 
comprehensive report and the time they have spent with my staff 
on this issue.
    [The prepared statement of Mr. Pitts follows:]

               Prepared statement of Hon. Joseph R. Pitts

    In recent years, we have seen a dramatic increase in the 
number of drug shortages in the United States, particularly 
with generic sterile injectable drugs.
    While the number of new shortages dipped in 2012 and 2013, 
the total number of ongoing shortages has continued to 
increase. This is unacceptable. Numerous drugs have remained on 
FDA's shortage list for some time. What is the agency doing to 
help address these situations?
    Recent news reports have highlighted shortages of oncology 
products, parenteral nutrition products, and even common, yet 
critically important saline solutions.
    Such shortages lead to delays in treatment, rationing of 
care, and higher costs. They can also pose greater risk to 
patients in the form of medication errors and as providers are 
forced to seek alternative treatments.
    Drug shortages are a very challenging problem and it is 
clear that there is no simple solution. We recognize the 
complicated nature of this issue as well as the severity. Last 
Congress, the subcommittee took action by including a section 
on drug shortages in the Food and Drug Administration Safety 
and Innovation Act (FDASIA), which was signed into law on July 
9, 2012.
    Title X of FDASIA sought to address drug shortages by 
giving new authorities and responsibilities to the Food and 
Drug Administration and placing expanded requirements on drug 
manufacturers to notify FDA of an interruption or 
discontinuance in production.
    Among other provisions, under FDASIA, the Secretary of 
Health & Human Services is required to: (1) maintain a publicly 
available, up-to-date drug shortage list; (2) establish a task 
force to implement a strategic plan to prevent and mitigatedrug 
shortages; and (3) submit annual reports to Congress including 
relating actions taken by the agency.
    FDASIA also required GAO to ``examine the cause of drug 
shortages and formulate recommendations on how to prevent or 
alleviate such shortages.''
    Last October, FDA issued its ``Strategic Plan for 
Preventing and Mitigating Drug Shortages.'' Further, we now 
have FDA's first annual report on drug shortages, though it 
only covers the first three quarters of 2013.
    And, today, GAO released its final report pursuant to 
FDASIA.
    While drug shortages continue to plague our healthcare 
system, statistics do indicate progress on some fronts. I am 
pleased to see that legislation coming out of this subcommittee 
has had a positive impact.
    I would like to welcome our witnesses, Marcia Crosse, 
Health Care Director at GAO, and Douglas Throckmorton, Deputy 
Director of Regulatory Programs at the FDA. I would 
particularly like to thank GAO for their comprehensive report 
and the time they have spent with my staff on this issue.

    Mr. Pitts. I will yield the remainder of my time to Vice 
Chair Dr. Burgess.

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

    Mr. Burgess. Thank you, Mr. Chairman.
    You know, when doctors don't have the essential tools, they 
are restricted in what they can do for their patients. Members 
of this committee have taken the lead and made major strides in 
working to reduce drug shortages by passing the Food and Drug 
Administration Safety and Innovation Act of 2012. In addition, 
I have worked very closely with Chairman Upton and Chairman 
Pitts on several of the provisions contained therein, and 
things have gotten better, but the problems have not completely 
gone away.
    As recently as last week, the Food and Drug Administration 
listed sodium chloride injection bags as a drug shortage. Now, 
sodium chloride is not a particularly esoteric or exotic 
molecule, so if we are having that much trouble with salt, it 
only makes you wonder what other more difficult molecules may--
the shortages that we may encounter there.
    The Food and Drug Administration has a role in addressing 
drug shortages, but it is a complex issue. In 2010, over 240 
drugs were in short supply or unavailable, and more than 400 
generic equivalents were back ordered. In fact, many generic 
lines operate at margins so tight, that when production becomes 
corrupted, the company simply cannot afford to continue its 
manufacture. This inevitably leads to one of the more than 
3,000 backlogs of generic applications.
    Physicians are still faced with having to tell patients 
that they can't receive the care they need, not because there 
is no treatment but because a product is simply not available.
    I thank the chairman for holding this hearing so we can 
learn more about the progress that is being made on the 
Nation's drug shortage problem. I am pleased that the 
Government Accountability Office report is being released and 
look forward to hearing from them on their findings. The law is 
aimed to ensure that providers have the tools they need to 
alleviate suffering, the suffering of every patient, and 
certainly, I am anxious to hear the testimony today.
    I yield back to the chairman.
    Mr. Pitts. The Chair thanks the gentleman.
    Now yields 5 minutes for opening statement to Mr. Pallone.

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

    Mr. Pallone. Thank you, Chairman Pitts. I am glad we are 
having the hearing today on this critical issue of drug 
shortages.
    Over the past several years, we saw an alarming trend of 
increases in drug shortages, and we all know the devastating 
effects this can have on patients, potentially prolonging 
disease or causing permanent disability or even death. This is 
an issue I and many of my colleagues on the committee have long 
been concerned about. Congress took action to provide the Food 
and Drug Administration with tools to help address this problem 
through provisions in the Food and Drug Administration Safety 
and Innovation Act, or FDASIA, which passed on a strong 
bipartisan basis in the summer of 2012.
    In FDASIA, we asked the Government Accountability Office to 
review several factors related to drug shortages, updating work 
it had done previously, and they released that report today. 
And I am glad Dr. Crosse is here to discuss it further with us.
    I also want to take a moment to highlight some of the other 
aspects of FDASIA that addressed the drug shortage problem. In 
its 2012 report on drug shortages, the GAO recommended and we 
heard this from other stakeholders, too, an early notification 
requirement for potential shortages so that FDA can work with 
manufacturers sooner to take steps to prevent or mitigate 
shortages. We included such a requirement in FDASIA, and it is 
encouraging that the number of new drug shortages declined in 
2012 compared to the previous 2 years and that partial data 
from 2013 indicates that the trend is continuing.
    The FDA has cited this and other FDASIA drug shortage 
provisions as contributing to their ability to prevent, by 
their calculation, 140 drug shortages in the first three 
quarters of 2013.
    We also heard from stakeholders the need for faster review 
times for generic drug applications and to reduce the 
significant backlog of pending applications, and the generic 
user fee agreement that was passed as parts of FDASIA was 
important in getting FDA the resources it needs to make that 
happen.
    We have learned that it can be important to have multiple 
manufacturers, especially for the most medically important 
drugs, to help alleviate drug shortages. As we heard from FDA a 
few months ago, the Agency has been aggressively hiring FTEs 
for its generic drug program, meeting hiring goals in the law 
as part of its efforts to tackle the backlog and speed up 
review times.
    And these are just some of the steps that have been taken 
to address drug shortages, which is, of course, a complex 
problem. As I am sure we will hear today from our witnesses, 
drug shortages remain high and remain a problem. Many of the 
shortages are still of sterile injectable drugs, and I am aware 
that these types of drugs face unique challenges, because they 
are technically difficult to manufacture. And each drug is 
often manufactured by one or a small number of companies, 
making it difficult for other companies to be able to fill the 
need if any one company develops manufacturing problems.
    So it is clear that while we have made progress in some 
areas, our work is not over. I thank our witnesses from FDA and 
GAO for being here today to continue our discussion on the 
topic of drug shortages, and I look forward to learning more 
about what we can do to further prevent them. Thank you very 
much.
    Thank you, Mr. Chairman. I yield back.
    Mr. Pitts. At this time, the Chair recognizes the vice 
chair of the committee, the gentlelady from Tennessee, Mrs. 
Blackburn, for 5 minutes for opening statement.

OPENING STATEMENT OF HON. MARSHA BLACKBURN, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF TENNESSEE

    Mrs. Blackburn. Thank you, Mr. Chairman.
    And I want to welcome our witnesses. I thank you all for 
being here. And I thank the chairman and the vice chairman of 
the committee for their attention to this issue.
    As you all know, 2011, 2012, we held hearings, we have 
looked at this process and what the factors are that are 
causing the drug shortages, and we know that they have 
increased in recent years. And I am one of those I believe 
let's get to the root cause and to the root problem so that we 
are solving this. And I continue to talk with those health 
professionals in the community in Tennessee and get their input 
on this.
    We did take a bipartisan action, as the chairman and the 
ranking member have mentioned, and that was to address through 
FDASIA the shortages. And FDASIA did provide FDA with the 
authority that they needed. It put new requirements on the 
manufacturers to help prevent and to mitigate the shortages, or 
supposedly, on paper, that is what they are to do.
    So this is a wonderful opportunity for us to look at the 
GAO report, to question you, to hear from you and to continue 
to try to look at this systemically, holistically and to get to 
the root causes of solving this problem.
    And, Mr. Chairman, I yield back to you for further 
yielding.
    Mr. Pitts. The Chair thanks the gentlelady. That concludes 
the panel's--or members' opening statements.
    On the panel today, we have two witnesses: Dr. Marcia 
Crosse, Director of Health Care, U.S. Government Accountability 
Office, and Dr. Doug Throckmorton, Deputy Director for 
Regulatory Programs, Center for Drug Evaluation and Research, 
U.S. Food and Drug Administration.
    Thank you for coming. Your written testimony will be made 
part of the record. You will have 5 minutes to summarize your 
opening statement.
    And at this time, the Chair recognizes Dr. Crosse for 5 
minutes for her summary.

STATEMENTS OF MARCIA CROSSE, DIRECTOR, HEALTH CARE, GOVERNMENT 
  ACCOUNTABILITY OFFICE, AND DOUGLAS C. THROCKMORTON, DEPUTY 
DIRECTOR OF REGULATORY PROGRAMS, CENTER FOR DRUG EVALUATION AND 
RESEARCH, FOOD AND DRUG ADMINISTRATION, DEPARTMENT OF HEALTH & 
                         HUMAN SERVICES

                   STATEMENT OF MARCIA CROSSE

    Ms. Crosse. Chairman Pitts, Ranking Member Pallone and 
members of the subcommittee, I am pleased to be here today to 
discuss our work on drug shortages.
    As you know, prescription drugs are a critical part of 
medical care, but over the last decade, there has been an 
increase in the number of drugs that are in shortage. This has 
included drugs to stabilize trauma victims, to control pain 
during surgery, to treat heart disease and cancer, and to 
provide nutritional support to premature infants.
    Today, GAO released our report on drug shortages, a study 
you mandated in the FDA Safety and Innovation Act, and I am 
happy to discuss our key findings. We found that the number of 
drug shortages remains high and that providers experience 
challenges responding to shortages without adversely affecting 
patient care. Beginning in 2007, the number of new drug 
shortages increased each year until 2012, when the number of 
new shortages declined, and that downward trend appears to have 
continued through 2013, based on the partial year data we 
analyzed.
    However, while the number of new drug shortages has begun 
to decline, the total number of shortages active during a given 
year, including both new shortages and ongoing shortages that 
began in a prior year, has continued to increase, because many 
shortages are prolonged, with some spanning multiple years. The 
majority of shortages are of sterile injectable drugs, 
particularly generics.
    Shortages of medically necessary drugs can have a range of 
negative effects. A drug shortage may require providers to 
delay or ration care, create difficulties finding alternative 
drugs, increase the risk of medication errors, lead to higher 
costs, reduce time for patient care, and result in the hoarding 
or stockpiling of drugs in shortage. For example, providers may 
have to ration care by prioritizing the patients who have a 
greater need for the drug.
    The immediate cause of a drug shortage can generally be 
traced to a manufacturer halting or slowing production to 
address quality problems, triggering a supply disruption. Other 
manufacturers have a limited ability to respond to supply 
disruptions due to constrained manufacturing capacity.
    We also identified potential underlying causes specific to 
the economics of the generic sterile injectable drug market, 
such as that low profit margins have limited infrastructure 
investments or led some manufacturers to exit the market. 
Although there are few studies of underlying causes, among the 
issues that have been examined are that purchasers focus 
primarily on price rather than quality, reducing incentives for 
manufacturers to invest in maintenance or quality improvements; 
that group purchasing organizations negotiate reduced drug 
prices on behalf of hospitals and other providers, lowering 
profit margins for manufacturers that win contracts and leading 
losing manufacturers to exit the market; and that a 2005 change 
in Medicare Part B drug reimbursement policy for outpatient 
providers decreased both demand and prices for generic drugs.
    The stakeholders we met with, which included manufacturers 
and group purchasing organizations, had mixed views on these 
potential underlying causes, with no general agreement on the 
role such factors may play.
    In examining FDA activities, we found that the Agency has 
prevented more potential shortages and improved its ability to 
respond to shortages in the last 2 years. The new requirement 
that manufacturers must notify FDA in advance of a potential 
shortage has allowed FDA to take steps to prevent and mitigate 
shortages sooner. For example, it has expedited application 
reviews and inspections, exercised enforcement discretion, and 
helped manufacturers respond to quality problems.
    These steps are important to respond to some of the 
immediate causes of shortages. However, some of the underlying 
causes we identified are beyond the Agency's authority, as FDA 
does not have control over private companies' business 
decisions. For example, the Agency is unable to require 
manufacturers to start producing or continue producing drugs or 
to build redundant manufacturing capacity, regardless of the 
severity of a shortage.
    Nonetheless, FDA can take steps to maximize the Agency's 
use of the information it has to address drug shortages. We 
identified shortcomings in its management and use of the 
Agency's drug shortage data. In our report, we made 
recommendations to FDA to improve its database and to conduct 
routine analyses, and the Agency has agreed with these 
recommendations.
    In summary, while FDA has made progress in preventing 
potential drug shortages and responding to actual shortages, 
the number of shortages remains high and many persist for 
months and even years. The large number of potential shortages 
reported to the Agency suggests the market is still at risk of 
supply disruptions. As a result, patients and providers will 
continue to struggle as essential and life-saving medications 
remain in short supply.
    Mr. Chairman, this completes my prepared statement, and I 
would be happy to respond to any questions you or other members 
of the subcommittee may have.
    Mr. Pitts. Thank you.
    [The prepared statement of Ms. Crosse follows:]


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    
    Mr. Pitts. The Chair now recognizes Dr. Throckmorton, 5 
minutes to summarize his opening statement.

              STATEMENT OF DOUGLAS C. THROCKMORTON

    Mr. Throckmorton. Mr. Chairman and members of the 
subcommittee, I am Douglas Throckmorton, Deputy Director of 
FDA's Center for Drug Evaluation and Research. Thank you for 
the opportunity to speak with you today about the work FDA is 
doing to address drug shortages.
    I would like to begin by discussing their causes. Drug 
shortages, as others have said, are usually preceded by a 
disruption in manufacturing of a product. Some product 
disruptions are manufacturer controlled, such as decisions to 
permanently discontinue production of a drug that is no longer 
profitable. Other factors are outside the manufacturer's 
control, such as natural disasters or the unavailability of 
materials needed for manufacturing, a particular problem when 
materials are only available from one supplier.
    Most often, however, shortages are the result of quality 
failures within manufacturing facilities, such as failing to 
follow proper sterilization procedures that allow bacteria to 
grow in a sterile product. Quality failures can also result 
from failures to maintain a manufacturing line: For example, 
poorly maintained, old equipment has led to the introduction of 
iron particulates in injectable products. Preventing these 
supply disruptions requires the manufacturer to commit to 
quality manufacturing.
    Turning to drug shortages in the U.S. today, while work 
remains, progress has been made in the prevention and 
resolution of drug shortages in the United States. The Agency 
is well positioned to work with manufacturers to find ways to 
prevent or reduce a shortage's impact on patients, provided we 
are aware that there is the potential for a shortage. Early and 
timely notification by manufacturers has been aided importantly 
by the Executive Order of the President as well as by passage 
of FDASIA and has enabled FDA and manufacturers to prevent 170 
shortages in 2013.
    We are also seeing fewer new shortages. The number of new 
drug shortages in the United States rose steadily from 60 in 
2005 to an all-time high in 2011 of 251 new shortages. After a 
series of interventions, the number of new drug shortages has 
fallen to a low of 44 in 2013.
    There do, however, continue to be shortages that persist 
for longer periods. Here, while progress is being made, the FDA 
is tracking and working to resolve 97 total shortages that 
began in 2013 or earlier. This work has been accomplished by 
FDA working closely with manufacturers, and some of the tools 
we have applied include identifying manufacturers who are 
willing and able to increase production of a drug in shortage; 
expediting FDA inspections and reviews of submissions, both 
from manufacturers that are currently producing as well as 
manufacturers who are interested in starting new production of 
a drug in shortage; and, finally, exploring risk mitigation 
measures for products initially not meeting established 
standards to allow them to remain available safely.
    While FDA's standards of safety, efficacy and quality do 
not change in a shortage situation, FDA does balance our 
standards with the needs of patients for particular products, 
especially patients with limited treatment options. FDA makes 
certain that drug shortages are considered before taking 
enforcement actions or issuing warning letters. In appropriate 
cases, temporary exercise of regulatory flexibility is an 
important tool in ensuring access to needed drugs.
    As a part of FDA's work on drug shortages in 2013, the FDA 
released its strategic plan, as called for in FDASIA. The goals 
of the plan are to improve the Agency's response to drug 
shortages and to advance longer-term approaches for addressing 
the underlying causes of shortage.
    First, to improve how we address imminent or existing 
shortages, FDA is focusing on three areas: First, we are 
improving communications within CDER within the FDA to ensure 
that our decisions are efficient and appropriate. Second, we 
are improving our databases related to drug shortages, creating 
a dedicated drug shortage data system to improve how we track 
drug shortages and allow us to better assess progress on 
prevention and mitigation of those shortages, including the 
work we do to produce the annual report to Congress required 
under FDASIA. Third, FDA continues to work to improve timely 
and accurate communication about drug shortages to patients and 
caregivers.
    Recognizing that drug shortages commonly begin with the 
supply disruption related to product quality, FDA's long-range 
efforts include a focus on preventing supply disruptions and 
shortages by encouraging and sustaining improvements in 
manufacturing quality. For over a decade, FDA has been working 
with academics and industry experts to stimulate the 
development of novel manufacturing technologies which can help 
prevent drug shortages linked to manufacturing quality.
    In conclusion, progress has been made in efforts to prevent 
and mitigate important drug shortages, aided by early 
communications with sponsors about potential shortages. 
Shortages do continue to occur. FDA will continue to work to 
address them. Importantly, FDA will continue to work with 
others to support the pharmaceutical industry in their long-
term efforts to modernize drug manufacturing to prevent 
shortages. By working together, we can prevent drug shortages 
from occurring, address them when they do occur, and provide 
patients with access to medicines when they are in critical 
need.
    I am happy to answer any questions that you have.
    Mr. Pitts. The Chair thanks the gentleman.
    [The prepared statement of Mr. Throckmorton follows:]


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Mr. Pitts. That concludes the opening statements of the 
panel. We will now begin questioning, and I will recognize 
myself for that purpose for 5 minutes.
    Dr. Throckmorton, while FDASIA required that the report be 
submitted by no later than December 31st, 2013, FDA's first 
annual shortages report was submitted to the committee on 
February the 5th and with data from only the first three 
quarters of 2013. You notice in your testimony that 170 new 
shortages were prevented in 2013. This is up from 140 in the 
report FDA submitted to the Congress. I assume that means that 
FDA claims to have prevented 30 shortages in the fourth quarter 
of the year. Is that correct?
    Mr. Throckmorton. We do have our full-year data available 
now, and we would be happy to share that with you, Mr. 
Chairman.
    Mr. Pitts. All right. Well, let's use that smaller sample 
size for sake of discussion. It would be helpful to have more 
detailed information about how FDA prevented these shortages. 
What specific actions did the Agency take? Which drug products 
would currently be in shortage if not for the Agency's actions?
    Mr. Throckmorton. I can get you some specific information, 
but I can give you a general sense of some of the activities 
that we took in this last year, if that would be helpful.
    Mr. Pitts. All right.
    Mr. Throckmorton. One issue regards something called 
regulatory flexibility. So these are places where we have 
either expedited additional actions that otherwise would have 
taken a bit longer or taken a review under hand and done 
additional work on it. And last year, we had 76 instances of 
regulatory flexibility that we exercised, affecting a total of 
68 products.
    There is another way of thinking about the actions that we 
have taken recently to try to speed the development of products 
or assure that products that potentially go into shortage 
remain available; that is by looking at the kinds of expedited 
reviews that my review staff do. So several of the offices 
receive applications from sponsors for new factories, for new 
lines within a factory. Last year, my Office of Generic Drugs 
expedited 118 applications, involving a total of 62 accelerated 
new drug applications, so an important number of products where 
we worked hard to make certain that they were more quickly 
reviewed than normal. Our Office of New Drug Quality, which is 
another office looking at supplemental applications to approve 
drugs, approved innovator drugs, looked at 52 supplemental 
applications in an expedited forum last year. And then finally, 
my Office of Biologic Products, which looks at new biologic 
products, obviously, a very important issue in terms of 
therapeutics and therapeutic development, they expedited seven 
reviews last year.
    I think, so, in total, those things reflect the kind of 
commitment that my center has to looking at these things, 
expediting wherever we are able to devote our resources to do 
it.
    Mr. Pitts. OK. Now, you mentioned the Office of Generic 
Drugs expedited 118 applications, including 62 abbreviated new 
drug applications. ANDA, is that what you call it?
    Mr. Throckmorton. Yes.
    Mr. Pitts. In order to prevent or mitigate a shortage, how 
many of those applications were actually approved?
    Mr. Throckmorton. You know, I would need to get back with 
you about that information. Obviously, we are applying our 
usual standards, but 118 applications, I think, speaks to the 
level of effort that we undertook.
    Mr. Pitts. On average, how long did it take FDA to approve 
an ANDA that was given expedited review status? Do you know?
    Mr. Throckmorton. It is a good question, and I will get 
back with you with that information.
    Mr. Pitts. OK. And I would like to know more about what 
expedited review means in this situation. Does an ANDA 
referencing a product in shortage go to the top of the queue? 
Is there a special team within the Office of Generic Drugs 
responsible for moving them through the review process faster?
    Mr. Throckmorton. This will be a longer conversation. As I 
am sure you are aware, we have new resources under GDUFA, under 
the Generics Drugs User Fee Act. As a part of those resources, 
we have reorganized the Office of Generic Drugs. We are 
elevating it in terms of its importance within the Center for 
Drugs, and as a part of that action, we are looking to be as 
efficient as we possibly can. So to answer your question, I am 
going to need to get back and look at the kinds of changes that 
that office has made about the review staff.
    Mr. Pitts. All right.
    Dr. Crosse, did you have any discussions with FDA review 
staff about what it means for a shortage product to receive 
expedited review status within OGD?
    Ms. Crosse. We did talk with FDA about this. We actually 
are continuing our work looking at drug shortages where we are 
planning on taking a more in-depth review of the number of drug 
shortages that have been expedited and how that relates to the 
number of applications that are sitting in the queue for drugs 
that are in shortage. One issue, of course, is that even when 
you expedite an application, if it is approved, that doesn't 
mean that the manufacturer is ready to begin production that 
day. And there is some concern that approving one ANDA may 
displace another drug within that manufacturer's facility if 
you are trying to move very quickly to move something to the 
top of the line without the sort of normal planning time, so 
that is something we heard about, but we are looking further to 
try to get some statistics for you on how frequently FDA is 
moving on these applications and what proportion of the 
applications are getting moved on.
    Mr. Pitts. Yes. And I would also be interested in how FDA 
works with the manufacturer to address their targets to assess 
when production capacity and output has addressed the shortage.
    My time has expired.
    The Chair recognizes the ranking member, Mr. Pallone, 5 
minutes for questions.
    Mr. Pallone. Thank you, Mr. Chairman.
    I wanted to start with Dr. Throckmorton. I would like to 
know how helpful you are finding the drug shortage provisions 
in FDASIA, and whether there are other things that you think 
Congress should do to help address drug shortages. And I would 
also like to hear more about FDA's strategic plan for 
preventing and mitigating drug shortages. I was pleased to see 
that it was released last October, in fulfillment of one of 
your FDASIA obligations.
    So essentially three questions: Would you update us on how 
things stand today with regard to drug shortages and the 
Agency's plan to address them? And now that FDA has some 
experience with FDASIA, are there parts of the law that don't 
work as intended or, you know, as well as they should? And 
then, third, are there other areas we should be thinking about 
to help address the shortages?
    Mr. Throckmorton. Well, thank you. So, first, let me just 
say the provision of FDASIA that expanded the notification that 
manufacturers have been providing for us has been enormously 
helpful. It is hard for me to overstate that. We are learning 
about shortages earlier than we had previously, and it is 
giving us the opportunity to talk with manufacturers in ways 
that we hadn't had an opportunity before, and we have been able 
to prevent shortages as a result. So, unquestionably, that 
aspect of FDASIA has been useful from the FDA's perspective. We 
continue to make use of it. As you know, we are continuing to 
write rulemaking and things related to it, but it is 
fundamentally a valuable aspect of the work that we are doing 
that is very useful.
    The other aspects of FDASIA, I think, have also been useful 
for us as well. The requirement to produce an annual report, I 
think, is valuable, because it does give us an opportunity on 
an annual basis to look back and assess whether there are 
things that we need to continue to work on or where progress 
has been made. That is a piece that we were able to provide to 
you recently for three quarters of the year's data. We, 
obviously, need to update you with the full-year data, because 
we think that gives a fuller picture of the activities that the 
FDA--that the--that FDA has conducted. And so, fundamentally, 
FDASIA has been valuable to us from a shortage prevention 
strategy.
    Now, you asked us whether additional things were identified 
in the strategic plan that needed also to be done, and the 
short answer is yes. So there are many things that we can do 
internally. There are things that we need to do from a process 
perspective to make sure that the FDA continues to improve our 
responses to the drug shortages issue, and that--those relate, 
many of them, to process. So I chair the task force that has 
been steering our response to drug shortages since FDASIA's 
passage. That task force is made up of individuals from across 
the Agency, so not just simply my center, but also the Center 
for Biologics, the inspectional branch of the FDA. All of us 
are coming together to talk about the things we need to do, the 
things that we need to communicate about better, to be able to, 
you know, basically do the job more efficiently and more 
appropriately.
    We also recognize we need to improve our communications. 
The communications we place on the Web site are looked at 
hundreds of thousands of times by individuals looking for 
information about shortages. We heard loud and clear when we 
talked to our stakeholders what needed to be improved, so that 
the information was easier to find, so that topical information 
was easier to identify, that the normal saline shortage, for 
instance, was at the top of the queue, when you opened up that 
Web page, that you could get that information quickly. We have 
heard those kinds of comments, and we are doing what we can to 
improve those communications.
    Separately, however, there are things that are, as Dr. 
Crosse said, outside of our scope, outside of the things that 
the FDA is able to undertake. There are things that the 
manufacturers, we believe, have a role to explore, and there 
are other things that other stakeholders could explore as well 
that have great potential, I believe, in addressing the 
underlying causes of shortage. Happy to talk with you about 
those if you are interested.
    Mr. 1Pallone. All right. Let me just get into one more 
question, because my time is almost gone here. One of the GAO's 
recommendations is that FDA conduct routine analysis of its 
drug shortage database to identify trends, and that seems like 
a reasonable suggestion. Seems like FDA already does this to 
some extent but perhaps not in as formalized a process as the 
GAO.
    Can you just tell us a little more on the problems of the 
current FDA databases and what you hope the improvements will 
accomplish, and does FDA believe that performing analysis such 
as GAO recommends would help it come up with the 
recommendations for avoiding shortages?
    I think you will have 15 minutes--15 seconds.
    Mr. Throckmorton. Fundamentally, we agree with the 
recommendations that the GAO has made. We understand that the 
quality of the decisionmaking that we can have with regards to 
shortage depends on the quality of the data. So we are putting 
in place a new drug shortage data system that is going to make 
the data more robust, make it more standardized and improve our 
assessment of those data.
    Mr. Pallone. OK. All right. Thanks a lot.
    Thanks, Mr. Chairman.
    Mr. Pitts. The Chair thanks the gentleman.
    Now recognize the gentlelady from Tennessee, Mrs. 
Blackburn, 5 minutes for questions.
    Mrs. Blackburn. Thank you, Mr. Chairman.
    And, again, I thank each of you for being here with us.
    I want to--I have got just a couple of questions. I know 
that the FDA report said, you know, the number of reported new 
shortages has declined in 2012 and for the first three quarters 
of 2013, but then GAO says the total number of active shortages 
continues to be high. So do you each agree with that?
    Dr. Crosse?
    Ms. Crosse. Yes, we do agree. The number of new shortages 
has decreased, and we think that the FDASIA early notification 
has been very helpful in that regard, but a number of shortages 
have persisted across time.
    Mrs. Blackburn. OK.
    Ms. Crosse. I think we present that information in our 
report.
    Mrs. Blackburn. Yes, you do.
    Dr. Throckmorton, do you continue to--do you agree with 
that, that the shortages continue to be too high?
    Mr. Throckmorton. Absolutely. I mean----
    Mrs. Blackburn. OK. Just want to be sure everybody is in 
complete agreement on that, because what I am hearing from the 
providers in Tennessee, they agree with the GAO report.
    And, Dr. Throckmorton, they look at yours, and it is kind 
of a head scratcher, because they are not seeing the amount of 
improvement that your report would lead people to believe is 
there. And we continue to hear about the shortages with the 
generic sterile injectable drugs, the IV fluids, the 
medications for anesthesia, some of the cancer therapies. So 
these are problems, and you might be making some progress, but 
it is not coming fast enough.
    And so let's talk about FDA implementing the system and 
preventing--getting to the point that they can prevent new 
shortages and decrease the backlog of the current shortages.
    So, Ms. Crosse, give me the couple of things that we need 
to be holding them responsible for doing. What is going to 
speed this up, because we can't do this where we are saying 10 
years from now, we are going to have this in place?
    Ms. Crosse. Well, we do continue to look at some of the 
underlying causes. You know, I think we need to look a little 
more closely at those generic drug applications that are 
sitting at FDA and the extent to which FDA has been able to 
expedite the applications, which could be something that would 
help, but----
    Mrs. Blackburn. OK. Let me.
    Ms. Crosse [continuing]. There are still a number of----
    Mrs. Blackburn. If I can engage you right there for just a 
minute.
    Ms. Crosse. Sure.
    Mrs. Blackburn. So Dr. Throckmorton, you said you expedited 
118 this year.
    Mr. Throckmorton. Generic applications, yes.
    Mrs. Blackburn. OK.
    Dr. Crosse, what would be a better number? What--if you 
were setting a goal for him, how many should they be expediting 
every year? Two hundred?
    Ms. Crosse. I don't know.
    Mrs. Blackburn. You don't know.
    Ms. Crosse. I don't know. And I think there is a concern 
that if you expedite too many, that then you are creating a 
clog at the top.
    Mrs. Blackburn. OK.
    Ms. Crosse. It is difficult. You need--you know, there--
even within the priorities----
    Mrs. Blackburn. Thank you. So----
    Ms. Crosse [continuing]. There are priorities.
    Mrs. Blackburn [continuing]. It may be approved, but then 
they can't put it straight into manufacturing.
    Ms. Crosse. Right. So there needs to be conversations with 
the manufacturers about how quickly they could come on line.
    Mrs. Blackburn. So they need to be engaging them on the 
front end rather than the back end----
    Ms. Crosse. Yes.
    Mrs. Blackburn [continuing]. Or at the point of approval.
    Would predictability in this process with the review 
system, because as I talked to some that are working in the 
generic space, the bio-therapeutic space, the unpredictability 
at the FDA seems to be a problem?
    Dr. Crosse, would that help?
    Ms. Crosse. You know, that is not something that we heard 
from the manufacturers----
    Mrs. Blackburn. OK.
    Ms. Crosse [continuing]. Particularly. I think that, you 
know, certainly that is always an issue in any review process 
for the applications, but it is not something that they 
particularly pointed to here, because of the unpredictability 
of when a shortage might occur.
    Mrs. Blackburn. OK.
    Dr. Throckmorton?
    Mr. Throckmorton. I want to try to draw a distinction 
between the numbers of ongoing shortages, those that last 
extended periods of time, which are important--and that is one 
group of shortages that I think we know less about than we need 
to, I think that is a group that bears additional exploration--
and the numbers of new shortages and the numbers of new 
shortages prevented. So when I answered your question that 
there are too many shortages, I--there are too many shortages 
because they are shortages that impact on human access to drugs 
in the U.S. I mean, that is--
    Mrs. Blackburn. Sure.
    Mr. Throckmorton [continuing]. We would have to do away 
with those before there would not be too many shortages.
    Having said that, however, I think we have to acknowledge 
that there has been work that has been important, that has been 
able to prevent new shortages from adding onto that pile, if 
you were. We are able to prevent shortages that matter. Our 
next important task, a task that I think we need to undertake, 
is to understand those longer duration shortages, those 
shortages that mean no product is in the marketplace at all; 
there is no manufacturer willing and interested in 
manufacturing the product.
    Mrs. Blackburn. My time has expired. I thank you for that 
additional explanation.
    Mr. Chairman, as I yield back to you, I do want to take a 
moment and wish happy birthday to Congressman Guthrie.
    Yield back.
    Mr. Pitts. The Chair thanks the gentlelady and, well----
    Mr. Guthrie. You didn't say which birthday.
    Mr. Pitts [continuing]. Wishes Mr. Guthrie a happy 
birthday.
    At this time, the Chair recognizes the ranking member 
emeritus of the full committee, Mr. Dingell, 5 minutes for 
questions.
    Mr. Dingell. Mr. Chairman, I thank you for your courtesy 
and for holding this important hearing. I am pleased the 
committee is turning again to the important topic of drug 
shortages. There are many causes for this: the availability of 
raw materials, complexity of manufacturing, certain treatments, 
sudden increases in demand. We have also got a significant 
problem in adequate funding for FDA and an adequate number of 
personnel to properly address the business of that Agency. 
While we have made some progress in this area, such as the 
passage of the FDA Safety and Innovation Act, which improved 
communication and reporting of drug shortages, we all agree, I 
think, that there is more work to be done. So I hope our 
witnesses will answer the questions yes or no.
    Dr. Throckmorton, the last time this committee held a 
hearing on drug shortages, the situation was dire. Is it 
correct that the number of new drug shortages quadrupled from 
2005 to 2011, yes or no?
    Mr. Throckmorton. Yes.
    Mr. Dingell. Now, Doctor, is it correct that there are only 
44 new drug shortages in 2013 compared with 117 during the year 
2012, yes or no?
    Mr. Throckmorton. Yes.
    Mr. Dingell. Now, Doctor, is it correct that FDA 
successfully prevented 170 drug shortages in 2013, yes or no?
    Mr. Throckmorton. Working with manufacturers, yes.
    Mr. Dingell. Now, Dr. Crosse, although GAO used slightly 
different metrics, did your Agency also find a decrease in new 
drug shortages during 2012, yes or no?
    Ms. Crosse. Yes.
    Mr. Dingell. Dr. Throckmorton, did the new authorities 
provided in the--to the Agency in FDASIA help FDA to reduce the 
number of new drug shortages, yes or no?
    Mr. Throckmorton. Yes.
    Mr. Dingell. Would you submit for the record additional 
changes that need to be made to further reduce the delays and 
the shortages when they occur?
    Mr. Throckmorton. Yes.
    Mr. Dingell. I also would like to know, would more 
personnel and more money assist FDA in terms of addressing 
these questions?
    Mr. Throckmorton. We are devoting resources we need to this 
problem.
    Mr. Dingell. And so, Doctor, would you submit us a short 
monograph on that----
    Mr. Throckmorton. Yes.
    Mr. Dingell [continuing]. To assist the committee?
    Dr. Throckmorton, does FDA need additional authorities to 
help combat both existing and future drug shortages, yes or no?
    Mr. Throckmorton. Existing authorities are providing us 
important tools.
    Mr. Dingell. Would you please submit a detailed response to 
the record, including the resources needed by the Agency?
    Mr. Throckmorton. Yes.
    Mr. Dingell. Dr. Crosse, GAO's report on drug shortages 
makes two recommendations to FDA. Specifically, you recommend 
that the Agency use its drug shortage database in a more 
proactive manner to identify trends and patterns to help 
prevent shortages before they occur. Is that correct?
    Ms. Crosse. Yes.
    Mr. Dingell. Now, Dr. Throckmorton, does FDA agree with 
this recommendation?
    Mr. Throckmorton. Yes.
    Mr. Dingell. Would you please both submit a detailed 
response for the record regarding how FDA could use this 
database more proactively and whether you need more resources 
to implement the recommendations?
    Mr. Throckmorton. Yes.
    Ms. Crosse. Yes.
    Mr. Dingell. Now, I am pleased with the progress made in 
preventing drug shortages since the passage of FDASIA. We need 
to take a step back and look at the big picture. Fundamentally, 
drugs are in shortage because we simply aren't making enough of 
them. As you know, many current shortages are of generic 
sterile injectable drugs.
    Dr. Throckmorton, does FDA believe there is sufficient 
incentives to enter this market today, or are more needed?
    Mr. Throckmorton. Important question. I can't answer it 
without a fuller discussion with other stakeholders.
    Mr. Dingell. Would you submit a proper analysis, then, in 
response to this?
    Mr. Throckmorton. Yes.
    Mr. Dingell. Now, I think it is time to start thinking 
outside the box about how we can continue to make progress on 
preventing these drug shortages and combating existing 
shortages. We need new and new innovative ideas to help solve 
the problem as well as cooperation from all stakeholders. I 
look forward to working with my colleagues on the committee, 
the FDA and all stakeholders on this critical issue moving 
forward.
    Mr. Chairman, I thank you and I yield back the balance of 
my time.
    Mr. Pitts. The Chair thanks the gentleman.
    Now yields 5 minutes to the vice chairman of the 
subcommittee, Dr. Burgess, for questions.
    Mr. Burgess. Thank you, Mr. Chairman.
    Dr. Throckmorton, you know, we had the Executive order from 
October of 2011 and then, of course, Food and Drug 
reauthorization in July of 2012, but for the casual observer to 
this problem of drug shortages, can you kind of just give us a 
thumbnail of what is being done to deal with the existing drug 
shortages?
    Mr. Throckmorton. We have a number of things. First off, I 
would say existing drug shortages, especially those that have 
lasted for a prolonged period of time, are hard. They are hard 
to resolve, because the factors that have led to them have 
meant manufacturers have left that space entirely, so resolving 
those is going to require finding tools to encourage a new 
manufacturer to decide to add a product to a manufacturing 
line, make a decision that that is a product that they can make 
a profit at, decide to design that line and get approvals and 
things. So that--those long-term shortages are things I think 
we need to explore further than we have to date to now.
    Mr. Burgess. Hold that thought for just a second. Let me 
just ask you, have the manufacturers been responsive?
    Mr. Throckmorton. Manufacturers understand this issue. We 
have been in close discussion with many of the manufacturing 
organizations, ISPE and PDA and other groups. They have 
identified this group, these groups of longer-term shortages as 
things that we need to continue to talk about, absolutely.
    Mr. Burgess. You know, Dr. Crosse talked about enforcement 
discretion and you talked about exercise of regulatory 
flexibility. Can you give us some practical examples of where 
that exercise of regulatory flexibility--I mean, for example, 
the anesthetic drug propofol, has there been any? Is there 
anywhere where regulatory flexibility may help in that 
particular shortage?
    Mr. Throckmorton. Let me give you a slightly different 
example, and then we can return to propofol if it isn't useful, 
but let's talk about total parenteral nutrition, or the 
nutritional supplements that were in critical shortage recently 
that are used in newborn infants, where it is just really life 
or death for them to be able to get access to these medicines.
    Those products were in limited availability because the 
manufacturers are having a hard time producing enough 
sufficient materials. FDA expedited any and every review, 
expedited all of our inspectional activities to make certain 
that whatever the manufacturer was able to provide, we were 
able to make certain was available to serve the infants, the 
newborns as quickly as possible.
    We have had other examples where particulates have been 
found, examples of drugs in shortage where particulates have on 
surface required cessation of manufacture, cessation of 
distribution of the product. Because of their critical nature, 
we worked with the manufacturers, we have worked to find 
filters that could be placed in line when that product is 
administered to the patient, allowing them to continue to be 
used. Even though that there is this product defect, these 
particulates that exist, we have determined they have to be 
made available to the patients, we have worked with the 
manufacturers to make that happen. So----
    Mr. Burgess. And so that has been successful. Talk about 
propofol, though, because I get a lot of questions about that. 
I mean, lack of an anesthetic, a reliable, safe anesthetic drug 
is a--I mean, it is a big deal.
    Mr. Throckmorton. Absolutely. And propofol's a slightly 
different situation, because there the issue is a large 
fraction of the propofol comes from outside the U.S. Well over 
90 percent of the propofol is imported into the country, and 
there have been some concerns about importation as--because of 
some use of propofol in unapproved uses.
    The FDA's interest, the focus that we have had, has been to 
make certain that the propofol is available for patients who 
are using it on label as indicated, as you said, in outpatient 
settings for anesthesia and those things. So our work there has 
been to work with the sponsor to do anything we needed to make 
sure the patients received it when it was indicated for them; 5 
million units, dosages a month or something, it is an 
enormously important product that we are paying very close 
attention to.
    Mr. Burgess. Well, and it has revolutionized outpatient 
surgery because the recovery time is so abbreviated with that 
as opposed to the other compounds that were previously 
available in days gone by.
    Mr. Throckmorton. Absolutely. And we know that when in the 
past, there was a propofol shortage a few years ago, and what 
we learned in that shortage was that when physicians moved from 
propofol to other products that they were less familiar with, 
you know, mistakes occurred, because they were not as familiar 
with the dosage and how to monitor patients and things like 
that. So making certain that that product is available is 
something that is very important for the U.S.
    Mr. Burgess. Just very briefly, I have heard anecdotally 
that difficulties getting proper amounts of Tamiflu during this 
last flu season and that the cost for Tamiflu had really 
exponentially increased. Can you speak to that at all?
    Mr. Throckmorton. I haven't heard that the cost of Tamiflu 
has spiked. There are other increases in pricing that we have 
been hearing about, although that is not something that the FDA 
normally, you know, has the statutory authority over. And while 
there were some spot shortages with Tamiflu, we think at 
present we are able to produce the needed--the necessary 
amounts of Tamiflu necessary.
    Mr. Burgess. Thanks, Mr. Chairman.
    I have some additional questions I will submit in writing, 
but I thank you for the courtesy.
    Mr. Pitts. The Chair thanks the gentleman.
    Now recognize the gentlelady from Virgin Islands, Dr. 
Christensen, for 5 minutes for questions.
    Ms. Christensen. Thanks, Mr. Chairman. And I want to thank 
you and the ranking member for this hearing today.
    While I am very happy to hear that the drug shortages are 
reducing, as everyone has said, they still remain too high, and 
we know that rural areas, communities of color, territories 
like my district will be some of those where we will feel it 
the most when there is a drug shortage.
    I have a question that sort of digs a little deeper into my 
colleague from Tennessee, the vice chair's question, I think. 
And I am asking both--I will start with Dr. Throckmorton, but 
also ask Dr. Crosse to comment. One of the explanations I have 
heard for the increase in drug shortages was that FDA was 
forcing manufacturers to come up with the state-of-the-art 
manufacturing practices, even though the old tried and true 
were completely adequate to ensure safety and effectiveness. 
The argument went that to meet the new standards, some 
companies had to shut down their lines to upgrade their 
facilities, resulting in the shortages.
    I have also heard something that is almost the opposite 
argument, that FDA had been telling some companies for years 
that their facilities were in decline and needed to be upgraded 
to avoid problems in the future, even though the facilities 
were currently meeting inspection standards, and eventually, 
those warnings, unfortunately, came through.
    So, Dr. Throckmorton, can you comment on these two 
different perspectives? You mentioned in your testimony that 
FDA is trying to encourage industry to adopt new technologies 
but, at the same time, that FDA is not raising the bar, is not 
raising the bar on standards for existing appropriate 
technologies. That seems a very nuanced point. Could you just 
elaborate for me?
    Mr. Throckmorton. Absolutely. So there are a set of 
standards that are in place right now for manufacturing, for 
sort of quality manufacturing that we would expect a firm that 
is making propofol, a firm that is making a tablet form, 
whatever, a set of standards that they have in place that would 
guide, you know, the manufacture of a product so that it is 
sufficiently safe and efficacious in quality manufacturing. 
Those things are working, and we are not changing those 
standards at all.
    What we also see is that there are more efficient ways to 
be manufacturing products, especially products that are very 
complicated, products that are like sterile injectables or 
products that are biologics, places where you want to use the 
state-of-the-art manufacturing processes. We have been working 
for over a decade now trying to identify those manufacturing 
processes to help guide drug manufacturing and then make 
recommendations in the form of guidance in ways that 
manufacturers can look at to do better than the current.
    So we are not looking to change the current acceptable 
process practices; we are looking to find a way to incentivize 
a move toward a more efficient, a more continuous kind of 
manufacturing that we think offers a lot of potential for 
preventing shortages by improving the overall quality of 
manufacturing.
    Ms. Christensen. Thank you.
    Dr. Crosse, would you like to add anything?
    Ms. Crosse. Well, we too heard from industry these--the 
same concerns and from FDA the same response. You know, FDA has 
moved increasingly and, now under FDASIA, explicitly is moving 
to a risk-based inspection decisionmaking process about which 
manufacturers they should be inspecting with which frequency.
    The drugs that are in shortage, the sterile injectables, 
are inherently risky in their manufacture, and so you would 
expect there to be a higher level of inspection of those 
facilities just because of the risk of the product. We, as part 
of the ongoing work I mentioned before, we are going to be 
looking at the pattern of inspections that FDA has had across a 
number of years of these facilities to see if we are seeing any 
change, because it was a concern raised to us by manufacturers, 
but the standards, as posed in regulation and guidance, have 
not changed.
    Ms. Christensen. Thank you. I have a number of other 
questions that I will submit for the record, but I have a short 
one.
    Dr. Crosse, the GAO report doesn't focus on shortages of 
medically important drugs. Can you tell us how closely the 
shortage characteristics and trends provided in the report are 
likely to track with or predict those from medically important 
drugs? Is that something you can focus on in the future?
    Ms. Crosse. We are very--it tracks very closely. We did use 
a different data source. We used information from the 
University of Utah Drug Information Service, because they have 
had a database for much longer, and so we were able to look at 
trends across time. FDA didn't develop its database until 2011, 
and we wanted data that would go back to 2007. But the 
majority, the vast majority of the data that Utah posts are of 
medically necessary drugs. There is a very close alignment 
there. There are some differences in the way the two--that FDA 
and Utah count the drugs, so the numbers may look different 
even though you are talking about the same drug shortage.
    Ms. Christensen. And my time is up, so, thank you, Mr. 
Chairman.
    Mr. Pitts. The Chair thanks the gentlelady.
    Now recognize the gentleman from Illinois, Mr. Shimkus, 5 
minutes for questions.
    Mr. Shimkus. Thank you, Mr. Chairman.
    Thank you for being here. And obviously, a follow up to the 
GAO report. A few comments before I begin. You know, we are 
never going to have enough money to do whatever we want to do, 
and more people and more money, sometimes it is just assumed 
that is going to make things better, but this really--it is 
important for me to always remember the whole budget pie. When 
65 percent is mandatory spending, 35 percent is discretionary 
spending, if we don't get control of our mandatory spending, 
spending stays the same, discretionary keeps shrinking, which 
will affect all agencies, the military and the like.
    And so, in this budget debate, as people say, and we hear 
the discretionary part of the budget, it--we are ill-advised 
not to always talk about the problems of mandatory spending.
    I would also say that FDA was one of the few agencies that 
got additional money through these budgetary fights than a lot 
of other agencies.
    So, with that, Sydne, can you put up this--because a lot of 
the questions, I think, are pertaining to this that is in the 
GAO report. And I have it on--that is why I have been playing 
around with my iPad, trying to figure out everything that this 
chart says, but I think it is very illustrative, whether it is 
Marsha Blackburn or John Dingell, I think they have all been 
referring to this chart. And the dark blue is ongoing shortages 
which began in prior years.
    [The chart follows:]


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    Mr. Shimkus. Now, I guess the first question I have is, so 
like in the 2000, you have 40. Those don't always carry--some 
of those must fall off. Is that true?
    Ms. Crosse. Yes, that is--that is true. It is not the 
same----
    Mr. Shimkus. Cumulative.
    Ms. Crosse. It is not cumulative of all of them. Some drug 
shortages are resolved, and so they drop out. Those that have 
not been resolved by the end of the year roll over into our 
data for the next year.
    Mr. Shimkus. And forgive me if I didn't read the report as 
closely as I should have, from 2007, even until what is 
projected on the final bar chart, which isn't finished with the 
fiscal year, are there pending drugs that follow that whole 
time period?
    Ms. Crosse. There--I am not aware of any that followed the 
entire time period. We do have some that have extended for 5 
years, a very small number. Most drug shortages are resolved 
within 1 year or 2 years, but there are a very small number of 
shortages that have continued across multiple years.
    Mr. Shimkus. Thank you. Now--and so then the lighter blue 
portion is really kind of, Dr. Throckmorton, that is what you 
have been referring to, is that success has been made in the 
new shortages, right? So--and we see that on this chart.
    And that is--Dr. Crosse, you have concurred with that, too. 
There is some--there is progress being made on that, as we can 
see from that pending chart. Correct? And that is both in the 
testimony.
    Ms. Crosse. Yes. Yes, that is correct.
    Mr. Shimkus. So I guess the--so that is my kind of 
summation. I think this chart is very illustrative in the 
report and kind of highlighted what most people had talked 
about.
    I guess the--a couple years ago, when we have been having 
these debates, I always wondered why the market itself doesn't 
respond to alleviate these shortages based upon a price signal. 
Now, there--Dr. Burgess kind of mentioned, which Dr. 
Throckmorton, you may have dismissed that there was a Tamiflu 
signal sent. I don't know that. You said you didn't know that. 
Why, in my minute left, is there something structurally about 
how we, either the government in its coding or its spending 
through Medicare and Medicaid or the insurance applications of 
purchasing drugs, is there something that distorts the market 
signals for shortages?
    Ms. Crosse. I am not sure. You know, we didn't really look 
at it that way.
    Mr. Shimkus. That is fair. Maybe that is something, Mr. 
Chairman, to follow up with in another question in the future.
    Dr. Throckmorton, what do you think?
    Mr. Throckmorton. I think, as others have commented, 
economics have got to be playing a role in the decisions that 
the manufacturers are making here. I think we know less about 
that, at least speaking for myself, speaking for the FDA, than 
we might like to, but those are important----
    Mr. Shimkus. A lot of these shortages are low-margin 
generic drugs, too, so if they are very low margin, they are 
making a penny on whatever the application is. And that is hard 
to get a price signal on a return on a major if you only have 
one plan operating full speed producing all this product.
    Mr. Throckmorton. Dr. Burgess' propofol--others would 
remember better--someone has said that the profit on a dose is 
in the tens of cents.
    Mr. Shimkus. Yes, great. Excellent.
    Thank you very much. Mr. Chairman, I yield back.
    Mr. Pitts. Chair thanks the gentleman.
    Now recognize the gentleman from Kentucky, Mr. Guthrie. 
Five minutes for your question.
    Mr. Guthrie. Thanks. I appreciate what the gentleman from 
Illinois is asking because I had a kind of high school reunion 
with some friends. A friend of mine is an emergency room 
physician in Auburn, Alabama, and he was telling me about the 
shortage of drugs. And he said it wasn't the expensive stuff. 
And he couldn't do his service properly sometimes because of 
that. And, you know, classic price controls in economics--I am 
not saying there are price controls, but when there is not 
ability to move the price for some reason, it is something to 
investigate--then you would say it is going to be a shortage in 
quality. That is the two things you mentioned is shortage of 
ability and quality, and it seems there is not a price signal, 
that the gentleman from Illinois, to allow other people to 
enter.
    We are not talking about even hundreds of dollars or 
thousands of dollars. We are talking about sometimes cents and 
sometimes just dollars, and people aren't getting over that.
    But, Dr. Crosse, in your testimony, you noted that FDA 
officials have told you that FDASIA's requirements that 
manufacturers notify the FDA in advance have helped the 
situation that they are able to take some steps, but you also 
note that while FDA is planning to establish a new information 
system to track data, there are significant concerns, 
specifically that they are not conducting routine analysis of 
existing data, drug shortages in the database to identify or 
respond proactively. Can you elaborate, or will you elaborate 
on what----
    Ms. Crosse. Yes. Well, we did have concerns about what we 
call internal controls, the extent to which FDA was ensuring 
the accuracy of the information in their database and then the 
extent to which they were doing broader analyses to look at 
such things as the ongoing shortages, as opposed to using it as 
a tool to help them track the status of an individual shortage. 
So what we weren't seeing were those kinds of larger analyses 
looking at trends. And as time goes on and they have more fully 
developed data, we believe it is important for them to engage 
in that. And they have agreed with us that that is something 
that they plan to start doing now that they have a little more 
data for a little longer period of time, that that is something 
that they can do.
    But, you know, we do talk a little bit, to your earlier 
point, about the, kind of, the economics. That is part of what 
we are trying to continue to look at. There have been issues 
raised to us but no agreement on whether or not there is any 
one source of what is holding down those prices.
    Mr. Guthrie. OK. Thanks. And so also I noticed, in 2011, 
inspections were at their peak. FDA inspections were at their 
peak, and also the shortages were at their peak. Has GAO 
examined the correlation between inspections and drug 
shortages?
    Ms. Crosse. We haven't. And that is also part of what we 
are going to continue to look at, is to go and see if there was 
a change across time in inspections. But as I noted before, 
these are high-risk products for the most part. Most of these 
are the sterile injectable drugs, and they are high-risk 
products where you would expect FDA to be going with some 
greater frequency to those facilities than to someplace that is 
making, you know, a tablet that has been in operation for a 
long time with a good safety record.
    Mr. Guthrie. And then, Dr. Throckmorton, drug shortages 
often require practitioners to utilize alternative treatments 
that may not be as effective. Does the FDA compile and 
disseminate information regarding alternative treatments in 
times of shortage for practitioners or patients?
    Mr. Throckmorton. We have typically left that to other 
groups, particularly the pharmacists and ASHP, for instance, 
with their Web site that Dr. Crosse has been using for her data 
and things, do identify alternative uses. We are able to 
identify other drugs with the same indication, but we recognize 
the practice of medicine is such that people look for other 
alternative therapies that may or may not be on label, and so 
we tend to use the other--where we take advantage of other 
people's expertise to have them do that for us.
    Mr. Guthrie. Can GAO provide more detail about FDA's 
regulatory actions to prevent or mitigate drug shortages based 
on your discussions with Agency staff as well as manufacturers? 
And bottom line, are FDA's actions or decisions being exercised 
consistently?
    Ms. Crosse. I don't know that I can speak to whether they 
are be exercised consistently. We certainly can provide you 
with some additional detail on what actions they have taken.
    Mr. Guthrie. Mr. Chairman, I yield back.
    Mr. Pitts. The Chair thanks the gentleman.
    I now recognize the gentleman from Virginia, Mr. Griffith, 
for 5 minutes.
    Mr. Griffith. Thank you, Mr. Chairman. I appreciate.
    Thank you all for being here today and answering these 
questions.
    I would be remiss to not remind everybody that drug 
shortages, particularly of sterile injectables, led to some 
health care providers feeling dependent on the supposedly 
sterile compounded drugs that ultimately led to the fungal 
meningitis outbreak in 2012 that killed 64 Americans, including 
two in my area.
    Because these drugs were more difficult to obtain, illegal 
manufacturers that called themselves compounding pharmacies, 
like NECC, entered the market to fill the need of hospitals and 
outpatient clinics for sterile injectables.
    Thankfully Congress put the FDA on notice with FDASIA to 
deal with the drug shortages, much like Congress did with the 
Drug Quality and Security Act with large-scale compounding and 
illegal manufacturing.
    FDA officials have signalled that the Agency has begun to 
identify signals to better predict quality issues at 
manufacturing facilities.
    Dr. Throckmorton, can you comment on these improvements?
    Mr. Throckmorton. Mostly to say that we understand the 
importance of getting that right, so identifying what those 
metrics are and then having a discussion about how they would 
be used is very important. And so part of our ongoing efforts, 
efforts this coming year and beyond, are to speak with 
manufacturing experts that can talk about the kinds of measures 
that a plant uses to follow their own manufacturing quality, 
understand those things better, and then talk about how a 
purchaser might make use of those kinds of information.
    Mr. Griffith. And I appreciate that, and one of the 
concerns that I had was that it appeared in that fungal 
meningitis outbreak that the lawyers at FDA were not using all 
the powers that were available to them to oversee. And while we 
don't want too much oversight that stops manufacturers who are 
doing the right things from producing their product, I am 
hopeful that the lawyers are being more aggressive if they see 
something that looks like it is out of line, because while we 
want to have a good supply, we want to have a safe supply as 
well. Would you not agree with that, and do you think the 
lawyers are being a little more aggressive post the outbreak of 
the fungal meningitis problem?
    Mr. Throckmorton. I would absolutely agree we need to do 
anything we can to assure a safe supply.
    Mr. Griffith. All right.
    Dr. Crosse, GAO recommended that the FDA improve its 
databases so the Agency can employ more predictive analyses to 
its preventative activities. How did the Agency respond to this 
critique, and how far off are they from putting your 
recommendations into practice?
    Ms. Crosse. FDA agreed with our recommendations, and my 
understanding is they are beginning to do it immediately.
    Mr. Griffith. All right. Also, the GAO report found that 
the FDA lacked policies, procedures and specific training 
materials related to management and use of its existing drug 
shortage database. What impact does this have on the Agency's 
ability to use this database to prevent or mitigate shortages?
    Ms. Crosse. Well, we think they do need to have these kind 
of standard procedures in place to assure the accuracy of the 
data and the understanding on the part of their staff of 
exactly how data should be entered and how it should be 
analyzed. They also agreed that they would move forward on 
those steps.
    Mr. Griffith. I appreciate it. What role do you think this 
database could play in addressing future drug shortages?
    Ms. Crosse. Well, we think it is important for the Agency 
to have good information because they need to be able to look 
at this more broadly, to look within classes, to look across 
time to see, to be able to measure whether or not they are 
putting the right steps in place and having the kind of impact 
to improve the situation rather than treating these as each 
individual kind of situation that has to uniquely be solved.
    Mr. Griffith. I appreciate it. Thank you very much.
    With that, Mr. Chairman, I yield back.
    Mr. Pitts. Chair thanks the gentleman.
    I now recognize the gentlelady from North Carolina, Ms. 
Ellmers. Five minutes for questions.
    Mrs. Ellmers. Thank you, Mr. Chairman, and thank you to our 
panel for being here today. In my district, this is a very 
specific situation and I am hearing from all of my hospitals. 
In particular, I will focus on Wake Med Hospital System. They 
are an 870-bed health care system with multiple facilities 
around Raleigh, North Carolina. They basically deal with the 
three primary vendors for IV infusions. And all three have 
experienced quality manufacturing issues as well as holiday 
production shutdowns that contributed to the shortage. Wake 
Med's pharmacy spent an additional $80,000 in January to stock 
up on the drugs in anticipation.
    I appreciate the efforts of the FDA to address the 
shortage, but it appears that they are only addressing the 
symptoms and not the real causes.
    I am also concerned about the Medicare reimbursement 
system, especially the explosion of the 340(b) discounts, which 
is reducing margins for generic manufacturers. This is pushing 
them to stop producing low-cost generic injectables, just like 
the system is driving community cancer clinics into hospitals. 
It also appears that these manufacturers simply don't have the 
margins to invest in their manufacturing plans, which is why we 
see many of the quality problems.
    My question has to do with what is and how are we 
addressing these issues right now. I want to focus my questions 
today on the FDA's work with the industry to make sure everyone 
is working together to find solutions.
    Dr. Throckmorton, there remains virtually no transparency 
in the process for how drugs that make it onto the shortage 
list ultimately get off this list. How does the Agency decide 
that a product is no longer in shortage, and is there a 
consistent and standardized formula for FDA uses to produce a 
product from the shortage list?
    Mr. Throckmorton. The short answer is, yes, we do have a 
consistent process that we use to apply to drugs to decide when 
they come onto the shortage list and when a shortage is no 
longer existing and they can come off.
    Our focus is on determining whether or not patients in the 
U.S. can get the treatments that they need. So it is not 
focused on product-by-product shortage, so there may be a 
shortage of a buffered aspirin because one manufacturer of a 
kind of buffered aspirin may no longer be manufacturing. But 
there may be four other kinds of aspirin that are available. 
That will not be a shortage from our perspective because the 
other products can and will ramp up. That is something our 
people know about, talk with those other manufacturers, were 
able to assess using prescription data, using other data that 
we have access to; we can determine whether those other 
manufacturers can fill in for that manufacturer that has made a 
decision to not manufacture or needed to stop manufacturing to 
improve a plant or improve a product line.
    That is slightly different than the kinds of data that the 
University of Utah counts, the data that Dr. Crosse is 
referring to. We are looking at the totality of the data, the 
availability of a given therapy, not an individual product. And 
so our numbers are slightly different than ASHP that the 
University of Utah have.
    We believe fundamentally ours reflect the availability of 
the therapy for the patients, which is our public health goal, 
if you will. But behind that, we have a process in place to 
determine when available production is not able to meet demand 
and then work with manufacturers, and when production returns 
and is once again able to meet demand, to take something off of 
the shortage list.
    Mrs. Ellmers. OK.
    Also, very specifically, there again, Dr. Throckmorton, the 
FDA's inspection of API can remain a barrier and ANDA holder 
can market the generic drug. How has the Agency tried to 
improve its record on this issue to ensure that the ANDA 
holders can market a drug and potentially address a drug 
shortage?
    Mr. Throckmorton. Two parts to that answer. The first part 
would be some of the actions that we have already talked about, 
the expedited reviews and some of the expedited inspections 
that the FDA is being able to do, particularly in shortage 
situations.
    There is a second longer term, and it relates to the 
passage of GDUFA. So the Generic Drug User Fee Act has provided 
us additional resources and additional opportunity to sort of 
balance the playing field, if you will, so that we are able to 
devote the resources we need to the generics market, which--85 
percent of the U.S. drug market is generics now. We are able to 
allocate the resources that we need to that area to make 
certain they are getting the inspectional attention, the 
compliance history, the reviews from our reviewers that they 
need to, so that is an important addition for us.
    Mrs. Ellmers. Thank you so much.
    And I see my time is expired. Thank you, Mr. Chairman.
    Mr. Pitts. Chair thanks of the gentlelady.
    That concludes the questions of the members who are 
present. We will have additional questions we will send to you 
in writing. If you would please respond promptly.
    I remind members that they have 10 business days to submit 
questions for the record, and members should submit their 
questions by the close of business on Tuesday, February 25. 
Thank you very much for the testimony, the good information, 
and we look forward to continued work with you.
    With that, without objection, the subcommittee is 
adjourned.
    [Whereupon, at 3:15 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]


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