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




 
                   EXAMINING CONCERNS REGARDING FDA'S
                    PROPOSED CHANGES TO GENERIC DRUG
                                LABELING

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

                                HEARING

                               BEFORE THE

                         SUBCOMMITTEE ON HEALTH

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             APRIL 1, 2014

                               __________

                           Serial No. 113-132
                           
                           
                           
                           
                           
[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                 Chairman Emeritus
JOHN SHIMKUS, Illinois               FRANK PALLONE, Jr., New Jersey
JOSEPH R. PITTS, Pennsylvania        BOBBY L. RUSH, Illinois
GREG WALDEN, Oregon                  ANNA G. ESHOO, California
LEE TERRY, Nebraska                  ELIOT L. ENGEL, New York
MIKE ROGERS, Michigan                GENE GREEN, Texas
TIM MURPHY, Pennsylvania             DIANA DeGETTE, Colorado
MICHAEL C. BURGESS, Texas            LOIS CAPPS, California
MARSHA BLACKBURN, Tennessee          MICHAEL F. DOYLE, Pennsylvania
  Vice Chairman                      JANICE D. SCHAKOWSKY, Illinois
PHIL GINGREY, Georgia                JIM MATHESON, Utah
STEVE SCALISE, Louisiana             G.K. BUTTERFIELD, North Carolina
ROBERT E. LATTA, Ohio                JOHN BARROW, Georgia
CATHY McMORRIS RODGERS, Washington   DORIS O. MATSUI, California
GREGG HARPER, Mississippi            DONNA M. CHRISTENSEN, Virgin 
LEONARD LANCE, New Jersey                Islands
BILL CASSIDY, Louisiana              KATHY CASTOR, Florida
BRETT GUTHRIE, Kentucky              JOHN P. SARBANES, Maryland
PETE OLSON, Texas                    JERRY McNERNEY, California
DAVID B. McKINLEY, West Virginia     BRUCE L. BRALEY, Iowa
CORY GARDNER, Colorado               PETER WELCH, Vermont
MIKE POMPEO, Kansas                  BEN RAY LUJAN, New Mexico
ADAM KINZINGER, Illinois             PAUL TONKO, New York
H. MORGAN GRIFFITH, Virginia         JOHN A. YARMUTH, Kentucky
GUS M. BILIRAKIS, Florida
BILL JOHNSON, Missouri
BILLY LONG, Missouri
RENEE L. ELLMERS, North Carolina



                                      (II)




                         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)





                                   (III)






  
                             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. Frank Pallone, Jr., a Representative in Congress from the 
  State of New Jersey, opening statement.........................     4
Hon. Henry A. Waxman, a Representative in Congress from the State 
  of California, opening statement...............................     5
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, prepared statement...................................     6

                               Witnesses

Janet Woodcock, M.D., Director, Center for Drug Evaluation and 
  Research, U.S. Food and Drug Administration....................     7
    Prepared statement...........................................     9
    Answers to submitted questions...............................   128
Michael D. Shumsky, Partner, Kirkland & Ellis, LLP...............    41
    Prepared statement...........................................    43
Ralph G. Neas, President and CEO, Generic Pharmaceutical 
  Association....................................................    48
    Prepared statement...........................................    51
    Answers to submitted questions...............................   139
Allison M. Zieve, General Counsel, Public Citizen................    66
    Prepared statement...........................................    68

                           Submitted Material

Material submitted by Mr. Pitts..................................    85


  EXAMINING CONCERNS REGARDING FDA'S PROPOSED CHANGES TO GENERIC DRUG 
                                LABELING

                              ----------                              


                         TUESDAY, APRIL 1, 2014

                  House of Representatives,
                            Subcommittee on Health,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 3:01 p.m., in 
room 2322 of the Rayburn House Office Building, Hon. Joseph 
Pitts (chairman of the subcommittee) presiding.
    Members present: Representatives Pitts, Burgess, Shimkus, 
Gingrey, Lance, Guthrie, Bilirakis, Pallone, Green, Barrow, 
Christensen, Sarbanes, and Waxman (ex officio).
    Also present: Representative Braley.
    Staff present: Clay Alspach, Chief Counsel, Health; Noelle 
Clemente, Press Secretary; Paul Edattel, Professional Staff 
Member, Health; Sydne Harwick, Legislative Clerk; Robert Horne, 
Professional Staff Member, Health; Carly McWilliams, 
Professional Staff Member, Health; Chris Sarley, Policy 
Coordinator, Environment & Economy; Heidi Stirrup, Health 
Policy Coordinator; John Stone, Counsel, Health; Tom Wilbur, 
Digital Media Advisor; Ziky Ababiya, Democratic Staff 
Assistant; Eric Flamm, Democratic FDA Detailee; Karen 
Lightfoot, Democratic Communications Director and Senior Policy 
Advisor; and Karen Nelson, Democratic Deputy Committee Staff 
Director for Health.

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

    Mr. Pitts. The subcommittee will come to order. The chair 
will recognize himself for an opening statement.
    One of the great successes in healthcare in the past 30 
years has been the introduction and widespread use of generic 
drugs, saving patients and taxpayers trillions of dollars. 
Today, nearly 85 percent of drugs dispensed in the U.S. are 
generics. This success has been possible because consumers and 
prescribers have confidence that generic drugs approved by the 
FDA are the ``same'' as their brand name counterparts, not only 
in terms of their chemical composition, but also with respect 
to their safety and effectiveness.
    This principle of ``sameness'' is the backbone of the 1984 
Hatch-Waxman Act, which provided the pathway for generic drugs 
to come to market. A generic product has the same benefits and 
risk as the brand name drug and, therefore, the same labeling 
is required. Ever since enactment, FDA has logically held that 
this is an ongoing requirement that extends beyond the date of 
approval. However, on November 13, 2013, the FDA issued a 
proposed rule that would allow manufacturers of generic drugs 
to unilaterally change their safety-related labeling, deviating 
from the brand. Both FDA's legal and policy rationale for this 
change is dubious at best.
    Currently, a generic can only change its label when the 
branded drug does so and FDA approves the change. In that case, 
all generics are then required to adopt the same new labeling 
in a timely manner. This system does not obviate the need for 
generics to bring new safety-related information to the agency 
as soon as possible.
    Ostensibly, the proposed change is designed to help speed 
newly acquired safety information about drugs to the consumer. 
However, FDA has not explained how this rule would actually 
improve communication of drug safety information to prescribers 
and patients other than establishing a Web site on which they 
will post the various labeling proposals.
    The only outcome I see if the rule is enacted is mass 
confusion. The FDA-approved labeling would essentially become 
just one in a crowd. The proposed rule undermines the 
``sameness'' requirement in Hatch-Waxman and will result in 
situations where multiple FDA-approved, therapeutically 
equivalent products will have different safety-related labeling 
prior to the FDA determining whether such changes are even 
necessary or appropriately tailored.
    Not only is the proposed rule in direct conflict with the 
plain language of the statute, but it directly contradicts 
numerous FDA statements and assertions over the years that 
consistent drug labeling is necessary if consumers and 
prescribers are to have confidence that generic drugs are as 
safe and effective as the reference brand name product.
    Finally, FDA has admitted that the proposed changes will 
open generic manufacturers up to greater liability under state 
tort lawsuits. The added cost of litigation will also cause 
generic prices to rise exponentially.
    I thank all of our witnesses for being here today to 
discuss these important issues. I look forward to your 
testimony, and I yield the remainder of my time to Dr. Burgess.
    [The prepared statement of Mr. Pitts follows:]

               Prepared statement of Hon. Joseph R. Pitts

    The subcommittee will come to order.
    The Chair will recognize himself for an opening statement.
    One of the great successes in health care in the past 30 
years has been the introduction and widespread use of generic 
drugs, saving patients and taxpayers trillions of dollars.
    Today, nearly 85% of drugs dispensed in the U.S. are 
generics.
    This success has been possible because consumers and 
prescribers have confidence that generic drugs are approved by 
the FDA as the ``same'' as their brand name counterparts-not 
only in terms of their chemical composition, but also with 
respect to their safety and effectiveness.
    This principle of ``sameness'' is the backbone of the 1984 
Hatch-Waxman Act, which provided the pathway for generic drugs 
to come to market. A generic product has the same benefits and 
risks as the brand name drug and, therefore, the same labeling 
is required. Ever since enactment, FDA has logically held that 
this is an ongoing requirement that extends beyond the date of 
approval.
    However, on November 13, 2013, the FDA issued a proposed 
rule that would allow manufacturers of generic drugs to 
unilaterally change their safety-related labeling, deviating 
from the brand. Both FDA's legal and policy rationale for this 
change is dubious at best.
    Currently, a generic can only change its label when the 
branded drug does so and FDA approves the change. In that case, 
all generics are then required to adopt the same new labeling 
in a timely manner. This system does not obviate the need for 
generics to bring new safety-related information to the agency 
as soon as possible.
    Ostensibly, the proposed change is designed to help speed 
newly acquired safety information about drugs to the consumer. 
However, FDA has not explained how this rule would actually 
improve communication of drug safety information to prescribers 
and patients other than establishing a Web site on which they 
will post the various labeling proposals.
    The only outcome I see if the rule is enacted is mass 
confusion. The FDA-approved labeling would essentially become 
just one in a crowd.
    The proposed rule undermines the ``sameness'' requirement 
in Hatch-Waxman, and will result in situations where multiple 
FDA-approved, therapeutically equivalent products will have 
different safety-related labeling prior to the FDA determining 
whether such changes are even necessary or appropriately 
tailored.
    Not only is the proposed rule in direct conflict with the 
plain language of the statute, but it directly contradicts 
numerous FDA statements and assertions over the years that 
consistent drug labeling is necessary if consumers and 
prescribers are to have confidence that generic drugs are as 
safe and effective as the reference brand name product.
    Finally, FDA has admitted that the proposed changes will 
open generic manufacturers up to greater liability under state 
tort lawsuits. The added costs of litigation will also cause 
generic prices to rise exponentially.
    I thank all of our witnesses for being here today to 
discuss these important issues, and I look forward to your 
testimony.
    Thank you, and I yield the remainder of my time to --------
----------------------------------.

    Mr. Burgess. Thank you, Mr. Chairman. And again, Dr. 
Woodcock, thank you for joining us this afternoon.
    For the past 30 years since the passage of the Hatch-Waxman 
amendments to the Food, Drug, and Cosmetic Act, a framework 
based on sameness between generic and brand name labeling has 
existed. Those amendments to the Food, Drug, and Cosmetic Act 
successfully created a safe and effective means by which safety 
information is relayed to the public. The Food and Drug 
Administration's proposed rule has the potential to upend three 
decades of stability, and unfortunately, upend the stability in 
a process that is working and working well. Allowing generic 
manufacturers to update safety labels unilaterally will lead to 
a fragmented system where confusion will abound. Multiple 
versions of important safety information existing for the same 
drug will result in confusion for patients and providers alike.
    As a doctor, when I prescribe a drug, brand or generic, I 
want to know what the indications and risks are, I want to know 
that a generic is truly a generic with the same indications and 
the same side effects of the brand. If I am not sure, then why 
not just prescribe the brand drug and never mind about the cost 
savings?
    Mr. Chairman, if patients and doctors don't have the 
certainty the benefits of utilizing generics, including cost 
savings could very well be at risk. Confusion extending to 
patients and pharmacists will accomplish nothing and could lead 
to an increase in issues with prescribing medication and the 
overall health of our beneficiaries. This appears to be the 
latest in a string of proposed rules in which the 
Administration is seeking a solution for a problem that simply 
does not exist. Safety is paramount.
    I thank the chairman for holding the hearing and I will 
yield back the balance of my time.
    Mr. Pitts. The chair thanks the gentleman and recognizes 
the ranking member, Mr. Pallone, 5 minutes for an opening 
statement.

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

    Mr. Pallone. Thank you, Chairman Pitts, for having this 
hearing.
    The issue regarding generic drug labeling and its impact on 
patient safety is an important one and merits a thoughtful 
discussion. Hatch-Waxman is a true success story, one of the 
many that my colleague, Mr. Waxman, has been part of in his 
great career here. And because of this groundbreaking law 
passed 30 years ago, the drug market has transformed.
    Today, more than 80 percent of all drugs dispensed are 
generic drugs. In fact, for 45 percent of generics sold, no 
branded product is currently on the market. So I think we all 
agree that this is a good thing for patients and payers.
    But despite this reality, the FDA's regulation over the way 
in which generic drugs are labeled has remained unchanged, and 
I believe that in order for consumers and doctors to have 
confidence in the drugs that they take and prescribe, the FDA 
should facilitate a process which ensures that the 
responsibilities upon drug manufacturers reflect the current 
marketplace.
    Last November, FDA proposed a regulation that would allow 
makers of generic drugs to update safety labels independently 
without waiting for FDA approval to reflect new information on 
safety issues. This is identical to the process that brand name 
drugs use to communicate safety issues as timely as possible. 
This proposal is also the result of a troubling decision by the 
Supreme Court in 2011 that generic drug manufacturers cannot be 
held liable under state tort law for an inadequate labeling, 
and therefore, patients who have been injured by inadequately 
labeled drugs have no recourse in court.
    Being able to hold manufacturers accountable for 
maintaining adequate labeling through the court system is an 
important added layer of a consumer protection. And what you 
will hear directly from the law's author is that Congress never 
intended to give generic drug companies immunity from 
liability. In fact, prior to 2011, they did not get immunity. 
And so I appreciate that FDA's proposal would address this 
interest. I agree that something needs to be done.
    Today, we will hear from critics about the consequences of 
the proposed regulation, in particular, that it will lead to 
over-warning, higher generic drug prices, and the potential for 
some companies to even stop making certain drug products. These 
are bold claims so I am interested in better understanding the 
basis for their views.
    I believe the FDA has taken a critical step forward for 
patient safety but I do have questions about FDA's approach. 
One issue in particular is that of sameness. Hatch-Waxman 
established the important principle of sameness for generic 
drugs relative to their branded counterparts and this principle 
is significant in many ways, not the least of which is to 
ensure consumer confidence that generic drugs are just as safe 
and efficacious as brand name drugs. So I am interested in 
learning more about FDA's consideration of the sameness 
principle, in particular, how such temporary differences in 
labeling as a result of this proposal may impinge on the 
benefits afforded by sameness.
    And, Mr. Chairman, this is a proposed rule, like with all 
other regulations, FDA will and should take a serious look at 
the many comments that they are sure to receive. But I want to 
make no mistake about it; I do support their efforts. In 
today's marketplace, consumers must have confidence in the 
generic drug industry and I look forward to our witnesses' 
testimony and I thank them for their participation.
    And I would yield back at this time.
    Mr. Pitts. The chair thanks the gentleman and now 
recognizes the ranking member of the full committee, Mr. 
Waxman, for 5 minutes for an opening statement.

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

    Mr. Waxman. Thank you, Mr. Chairman.
    Ordinarily, you would go to your side of the aisle? Oh, I 
see. OK.
    It has been 30 years since enactment of the Hatch-Waxman 
generic drug law. This law has been a tremendous success if I 
don't say so myself. Over 80 percent of prescriptions in the 
United States are generic. Consumers and payers have saved over 
$1 trillion over the last decade alone.
    Today, we are looking at one aspect of this law, and in 
particular, in light of the proposed rule by the Food and Drug 
Administration, to give generic drug manufacturers the same 
rights and responsibilities as brand name drug manufacturers to 
temporarily update safety information in their labeling without 
waiting for FDA approval.
    The proposed rule, if finalized in its current form, would 
be an important step forward for patient safety. It would 
remove obstacles to getting new safety information about drugs 
to doctors and patients at the earliest possible time. It would 
also restore the added incentive provided by state tort 
liability for generic manufacturers to comply with their 
obligations to conduct robust post-market monitoring and to 
keep their drug labels accurate and up-to-date. And it would 
restore the ability of patients harmed by taking an 
inadequately labeled generic drug to pursue redress through the 
courts just as they were able to do before the Pliva v. Mensing 
Supreme Court decision in June 2011.
    Now, critics of the proposed rule have argued that it will 
lead to over-warning. They have argued that it will result in 
higher generic drug prices. They have argued that it will drive 
generic drug companies out of business or cause them to stop 
making certain products. And they have argued that it conflicts 
with the sameness required in the Hatch-Waxman Act.
    I don't believe those claims. We have heard the exact same 
claims about over-warning and drug company economic distress 6 
years ago when the Supreme Court decided in Wyeth v. Levine 
cases. The Court ruled that the FDA regulation did not shield 
drug manufacturers from state failure-to-warn tort liability, 
but since then, we have not seen any of these dire predictions 
come to pass.
    When we enacted the Hatch-Waxman bill in 1984, we did not 
give generic drug companies immunity from liability. In fact, 
the industry did not get immunity until 2011 when this Pliva 
case was decided. The tremendous growth of generic drugs from 
'84 to 2011 proved that the generic drug industry can flourish 
without immunity from state liability.
    The one issue for which I do have some limited sympathy is 
that of sameness. Sameness is fundamental to Hatch-Waxman. 
Generic drugs are the same as their brand counterparts. They 
are proved based on demonstration that they are chemically the 
same and have the same effects in the body. And because they 
are the same, they are required to have the same labeling as 
the brand at the time of approval.
    It is also important that the labels remain the same 
thereafter. But this does not mean that there can be no 
differences. There can be differences for brief periods of time 
when labeling updates need to be made, just as there can be 
because of differences in inactive ingredients or indications. 
In fact, the existing regulatory policy under which brands may 
update their safety labeling without waiting for FDA approval 
also results in temporary differences between the brand and 
generic label. These temporary differences occur during the 
time between when the brand makes its label change and the time 
when FDA approves it and then the generic manufacturer actually 
makes conforming changes. Few would argue that the current 
process violates the sameness requirements.
    FDA has tried in its proposal to minimize these differences 
to the extent possible. Experience will tell us whether the 
mechanics of the process FDA has proposed will need to be 
improved. If refinements are needed, I hope the FDA will make 
them. But I applaud FDA for releasing this proposal now and 
urge the agency to finalize it quickly after reviewing and 
taking into account all the comments. I believe the rule will 
result in even greater consumer trust and confidence in the 
generic industry, trust and confidence that I am very proud to 
share.
    I thank the chairman for holding this hearing. I look 
forward to the testimony of the witnesses. I yield back the 
time.
    Mr. Pitts. The chair thanks the gentleman.
    All the other members' opening statements will be made part 
of the record.
    [The prepared statement of Mr. Upton follows:]

                 Prepared statement of Hon. Fred Upton

    In a bicameral letter sent earlier this year, my colleagues 
and I raised important questions and concerns regarding the 
Food and Drug Administration's recent proposed rule on generic 
drug labeling, and today I hope we can learn more about the 
agency's rationale. There are significant concerns regarding 
the legal basis for the proposed rule and its consequences on 
patients and providers.
    First, there is the question of whether FDA has the 
authority to even make this proposal. Since the passage of the 
Hatch-Waxman Act three decades ago, the agency has adamantly 
asserted that a generic drug must have the same labeling as the 
brand-name product and that this ongoing requirement is based 
in statute. In 2011, the Supreme Court agreed. With this 
proposed rule, FDA is taking a different view of the statute. 
If the law does actually need to be changed for whatever 
reason, the authority to do so belongs to Congress.
    Second, we want to find out why the FDA proposed this rule 
and who was involved in the decision-making process. FDA stated 
in the proposal that the generic market has matured and that 
manufacturers no longer have sufficient incentives to conduct 
post-market surveillance, evaluation, and reporting. They cited 
the need to get new safety-related information to patients 
faster and that allowing generic companies to change their 
labeling prior to FDA-approval would ensure that such companies 
actively participated in the process. Yet in their response to 
our letter from January, FDA cited no evidence that generics 
are not actively participating already and no evidence that 
there are public health concerns justifying such a fundamental 
shift in well-established policy. The agency made very 
contradictory statements in its brief to the Supreme Court just 
three years ago. What changed?
    Finally, and most importantly, we need to understand how 
this proposal would impact patients and providers both in terms 
of confusing warnings and raising the costs of generic drugs. 
Generic drugmakers like Perrigo in southwest Michigan provide 
medicines that countless Americans depend on. In fact, more 
than 80 percent of prescriptions are currently filled with 
generic drugs. But the FDA's proposed rule could drive the 
costs up for the drug manufacturers, patients, and the 
government.
    Simply, this proposed rule reverses years of successful 
practice and is built on questionable legal terms.
    I look forward to hearing from FDA and understanding the 
need for and rationale behind this proposed rule. I yield the 
remainder of my time to ----------------------------.

    Mr. Pitts. We have two panels before us today, and on our 
first panel we have Dr. Janet Woodcock, Director of the Center 
for Drug Evaluation and Research, U.S. Food and Drug 
Administration.
    Thank you for coming today, Dr. Woodcock. Your written 
testimony will be made part of the record and you will have 5 
minutes to summarize your testimony.
    So at this time, the chair recognizes Dr. Woodcock for 5 
minutes for an opening statement.

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

    Dr. Woodcock. Thank you, Mr. Chairman, and members of the 
subcommittee.
    I am Janet Woodcock, Director of the FDA's Center for Drug 
Evaluation and Research. And I appreciate the opportunity to 
testify.
    I am happy to discuss FDA's proposed rule that would 
provide generic drug makers with the same opportunity as brand 
drug makers to update their labels when they have new safety 
information. They would also be able to distribute the revised 
label before FDA reviewed it by submitting a Changes Being 
Effected supplement. It is known as a CBE supplement. This 
would be dissemination of new drug safety information to health 
professionals and patients.
    Now, this is a proposed rule. The comment period closed 
about 2 weeks ago and we are now reviewing comments. While I am 
free to discuss the proposal, I am not able to discuss what we 
may or may not do further.
    FDA-approved generic drugs are copies of brand drugs. They 
have the same safety and effectiveness as brand drugs for their 
approved indications. They are held to the same quality 
standards as brand drugs, and generic drug makers right now 
have the same obligation to monitor their drug safety as the 
brand drug makers do. But currently, only the brand drug makers 
can update their label with new safety information and 
distribute the revised label before FDA reviews the change. 
They do this by submitting a CBE supplement. Generic drug 
makers must wait to change their labels until the FDA approves 
the brand name change.
    In today's world when over 80 percent of all U S. 
prescription drugs dispensed are generics and brand drug makers 
may drop out of the market after generics are approved, FDA 
believes it is time to provide generic drug makers with the 
means to promptly update their labels. In fact, for over 400 
drugs, the only marketed drugs are generics and we expect that 
this number will increase over time.
    The proposed rule, if finalized, would allow the generic 
drug makers to use the same process that brand drug makers use 
to update their safety information. It would ensure that all 
manufacturers marketing the drug, other generics as well as the 
brand, would be promptly advised of the new safety information.
    And we also propose to establish a dedicated web page where 
FDA would post information about these proposed changes 
submitted in CBE supplements for all drug and biological 
products so that healthcare providers and patients could have 
access to this information while FDA is reviewing it.
    FDA would make an approval decision on the proposed change 
for the generic drug and the corresponding brand drug at the 
same time so that after FDA approved a change, the brand and 
generic drugs would all have the same FDA-approved label. After 
FDA approves a label change for the brand drug, the proposed 
rule would set up a 30-day time frame in which the generic drug 
makers would submit conforming changes to their label. Right 
now, the situation is FDA currently advises generic drug makers 
to update their drug labels at the very earliest time possible 
after a change to the innovator, and the time in which they 
actually do update that varies quite a bit.
    So in light of that range of time frames where generic drug 
makers currently submit supplements, the proposed procedures 
would likely minimize the current variation between brand and 
generic labels that is in existence right now and would cause I 
think less confusion because there are no time frames 
stipulated by FDA and there are often considerable delays 
before all the generic drug labels are dated. Therefore, any 
confusion that might be caused by different labels would be 
reduced by this proposal.
    In conclusion, I want to emphasize that this proposed rule, 
if finalized, is intended to improve the communication of 
important drug safety information to both prescribers and 
patients.
    Thank you and I look forward to answering questions.
    [The prepared statement of Dr. Woodcock follows:]
    
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]   
    
    
    
    Mr. Pitts. The chair thanks the gentlelady and I will begin 
the questioning and recognize myself 5 minutes for that 
purpose.
    Dr. Woodcock, in 2011 in a brief submitted to the Supreme 
Court in Pliva v. Mensing, FDA argued on the merits, and both 
the majority and dissenting opinions agreed that a generic 
manufacturer could not unilaterally change its labeling without 
violating the plain language of Hatch-Waxman. FDA has taken 
this position for more than 20 years over the course of various 
administrations.
    FDA argued in the 2011 brief that generics do however have 
a duty to provide adequate warnings and that they discharged 
this duty by promptly contacting the agency about new safety 
information so that FDA can make an informed decision about any 
labeling changes the agency determines are warranted.
    Without citing any evidence in the proposed rule or in the 
agency's response to the bicameral letter we sent in January, 
FDA now speculates that generic companies will stop meeting 
their post-market requirements under the law. Despite all their 
previous assertions to the contrary and despite the fact that 
they took the exact opposite position in 2011, FDA is now 
claiming that the Hatch-Waxman Act does not in fact preclude a 
generic company from unilaterally changing their labeling to 
strengthen warnings, that they should now be able to do so 
because the market has matured.
    Dr. Woodcock, the market has not matured all that much 
since 2011. What really prompted the FDA's decision to 
fundamentally change its position on these matters and what 
role did plaintiffs' lawyers play in the process?
    Dr. Woodcock. What prompted FDA to look into this rule was 
partly by the court ruling that pointed out a disparity in the 
obligations between the generics and the innovator drugs. And 
in today's world, a world where the generics are more than 80 
percent of all prescriptions dispensed to patients in this 
country, we feel the standards should be the same, the 
standards for manufacturing, the standards for safety and 
efficacy, the standards for overseeing safety, and the 
standards for reporting to FDA. So we wanted to have a level 
playing field, have the same standards, and correct this 
inconsistency.
    Mr. Pitts. Now, in February of 2013 while FDA was drafting 
this proposed rule, agency officials met with several 
plaintiffs' lawyers, including at least one representative from 
the American Association for Justice, also known as the 
Association of Trial Lawyers of America. In fact, according to 
FDA's public calendar, one of the agency participants in this 
meeting was Daniel Siegelman from the office of the 
Commissioner, who is himself a former prominent member of trial 
bar. Would you please provide the Committee with the minutes 
from this February 2013 meeting?
    Dr. Woodcock. We will get back to you with what we have.
    Mr. Pitts. Would you commit to working with the Committee 
to provide any other communications between agency officials, 
including Mr. Siegelman and representatives of the American 
Association for Justice relating to the proposed rule or other 
approaches that were considered?
    Dr. Woodcock. Certainly.
    Mr. Pitts. Now, I am going to read a statement from a 
separate brief submitted to the Supreme Court by Ranking Member 
Waxman and ask you to comment. ``It is clear that a generic and 
a brand name label must be the same and that a generic firm 
cannot unilaterally change its label. To permit individual 
generic drug labels to differ significantly from their brand 
name counterparts, particularly with respect to safety 
information, would thwart the sameness goal reflected in the 
Hatch-Waxman amendments.'' Dr. Woodcock, did the agency agree 
with this statement in 2011 and does the agency agree with this 
statement today?
    Dr. Woodcock. All right. Certainly with all due respect to 
Mr. Waxman, who has obviously authored the legislation, I would 
like to dispel the notion that the labels are the same now with 
respect to safety information.
    We have looked at this and it is not just the CBE-0, but 
when we, say, do a class labeling, say, for the NSAIDs, we put 
a box warning in, some major safety change is put into drug 
labels, there is a time frame that can be considerable under 
which the generics submit conforming labeling. And during that 
time frame, those labels are different.
    And in fact, I would submit to you from a practical point 
of view as I administer the program, these drug labels are 
dynamic and may change up to maybe 10 years, 15 years. I think 
our latest is 38 years after a drug has been on the market, we 
are still discovering safety information. That needs to get 
onto the label as quickly as possible. The generic copies may 
take quite a long time, months, perhaps a year or so before 
they make conforming changes to their label. And then of course 
that takes much longer to get out there in circulation because 
the print nature of the package insert.
    So, while in principle they are the same, because of the 
dynamic nature, they are not literally and exactly the same 
right now. And the proposed rule, if it were enacted, would 
actually narrow down that time, that disparity, that temporary 
difference. And after FDA would approve, maybe we would not put 
the safety label in or maybe we would decide that the safety 
update goes on a drug label, then all the manufacturers of that 
drug would have to change and the generics would have 30 days 
in which to do that.
    Mr. Pitts. The chair thanks the gentlelady and now 
recognizes the ranking member, Mr. Pallone, 5 minutes for 
questions.
    Mr. Pallone. Thank you, Mr. Chairman.
    Dr. Woodcock, Mr. Neas, who is here today representing the 
generic drug makers, argues that FDA should focus on assuring 
patient safety and not on preemption of state tort law. I agree 
with the FDA that state tort law complements FDA oversight and 
enhances patient safety. My reading of the FDA proposed rule is 
that its primary purpose is to realign FDA post-market safety 
monitoring and labeling requirements with the realities of the 
current marketplace and increase the speed at which new drug 
safety information gets to doctors and patients.
    So I just wanted to ask you initially is that a fair 
reading of the purpose of the proposed rule and if you wanted 
to comment on that?
    Dr. Woodcock. That is correct. With over 80 percent, as we 
have all said, of drugs taken by Americans today being generic 
drugs and many of the generic drugs not having an innovator 
copy on the market, the goal is to make sure that the whole 
system is searching for safety problems and promptly updating 
labels when they are found.
    Mr. Pallone. So another criticism made by Mr. Neas is that 
requiring generic manufacturers to make unilateral labeling 
changes will lead to a flood of unnecessary and different 
labeling changes and confuse doctors and patients. And he also 
claims that companies will exaggerate the risks of their drugs 
leaving patients to avoid taking needed medications.
    I know that in the lead up to the Wyeth vs. Levine case, 
brand drug companies made similar predictions of over-warning 
if the Supreme Court were to rule again preemption, as it did.
    So I guess, couple things. First, has FDA found that drug 
companies commonly over-warn?
    Dr. Woodcock. Well, we have existing precautions against 
that. Our regulations that we passed a few years ago called the 
physician labeling rule, which modernized the drug package 
insert, has specific caveats about doing such things and 
requires certain levels of evidence before you just put 
warnings in the label. Many of you may not have looked at a 
drug label, but long ago, they were what we called the laundry 
list. There were just long lists of things that might happen to 
you. And the modern drug label has eliminated much of that 
because it is not informative.
    Mr. Pallone. Did the FDA see a worrisome increase in over-
warning after Wyeth v. Levine?
    Dr. Woodcock. Not to my knowledge.
    Mr. Pallone. And the FDA believes that this concern about 
the over-warning, do you think that is warranted?
    Dr. Woodcock. I think it is important to stress that these 
warnings are temporary. They are put up there because something 
has been discovered and the company feels there is a reasonable 
link to the drug. Then after that occurs, right now with the 
innovator, we take a look at that and we gather up whatever 
evidence there might be and we may have studies or other things 
that are brought to bear. And then FDA makes a decision about 
whether that is actually going to be approved FDA labeling or 
not. And the same would be true here with this proposal.
    Mr. Pallone. All right. Let me ask you about the Mensing 
decision. Were generic drug companies subject to failure-to-
warn liability before Mensing?
    Dr. Woodcock. Well, first of all, may I remind everyone I 
am not a lawyer; I am a physician. But I understand that for 
many years prior to the Mensing decision, the generic drug 
manufacturers were generally considered to be potentially 
liable for failing to warn of important drug safety 
information. And during that time, they grew to about 75 
percent of the U.S. retail prescription market. In other words, 
the industry thrived during that time.
    Mr. Pallone. So is it fair to assume that finalizing the 
FDA rule essentially will bring the generic industry's 
liability situation back to something similar to what they 
faced before the Mensing decision in 2011?
    Dr. Woodcock. I think that is a reasonable assumption that 
I would again argue that I am not very qualified to opine on 
that.
    Mr. Pallone. I mean because we have all heard that--well, I 
guess the GPhA commissioned a study looking into the economic 
impact of the FDA rule, and it concluded that finalizing the 
FDA rule will lead to new liability protection costs for the 
generic drug industry of about $4 billion a year, and yet the 
cost attributable to the FDA rule sound like they may be, you 
know, really not different from the liability cost the industry 
faced prior to Mensing. So, I don't. I am questioning the value 
of the study. You don't have any comment?
    Dr. Woodcock. It requires a lot of assumptions to make 
those conclusions.
    Mr. Pallone. All right. Thank you, Mr. Chairman.
    Mr. Pitts. The chair thanks the gentleman and now 
recognizes the gentleman from Florida, Mr. Bilirakis, 5 minutes 
for questions.
    Mr. Bilirakis. Thank you, Mr. Chairman. Thank you, Dr. 
Woodcock. I appreciate it very much. Thanks for your testimony.
    First question, depending on the drug, there could be a 
dozen generic products for the same brand drug. From a public 
health stand point, don't you believe that the multiple 
different versions of labeling will lead to confusion among 
doctors?
    Dr. Woodcock. Well, in fact, the state is now when FDA 
makes a label change to the innovator, there will be multiple 
different versions because the generic drugs will be changing. 
We have seen the drug makers will change their label over a 
period of time. Some would change their label to conform very 
rapidly; others may take a year or so. So that is the current 
situation.
    Mr. Bilirakis. OK. Next question: the FDA frequently issues 
guidance documents better informing industry of FDA's 
expectations. How many guidance documents has FDA issued 
related to updating of generic drug labeling in the past 
decade? Can you give me that information?
    Dr. Woodcock. I can't but I could get back to you on it.
    Mr. Bilirakis. Please do.
    Isn't it true that the FDA currently has the regulatory 
authority to set specific time frames within which a generic 
company must update their labeling to conform to the brand name 
equivalent, and doesn't FDA have the authority to take 
regulatory action against any company that doesn't comply with 
the agency's requirements?
    Dr. Woodcock. For the second part of your question, do we 
have the ability to take action? Yes, I believe we do. And for 
the first part of your question, that is part of this rule. The 
proposed rule stipulates a time frame in which the generics 
would have to conform. So we do have that ability. We show that 
by proposing this rule.
    Mr. Bilirakis. OK. If FDA feels as though it is not getting 
adequate post-market safety information from companies----
    Dr. Woodcock. Yes.
    Mr. Bilirakis [continuing]. As required under the law, 
isn't it the agency's responsibility to better enforce these 
requirements to ensure that it does?
    Dr. Woodcock. Well, I think that is a more complicated 
question. It is a very complicated question. This proposed rule 
is about giving companies the ability to rapidly change their 
label and communicate information that they have found, all 
right. Generic drug companies do not frequently submit new 
safety information to the FDA.
    What we usually audit companies for is their required 
apparatus that they have to monitor for safety and to report to 
us to make sure that they operate those functions. For example, 
for a generic drug where there was no innovator on the market 
anymore, we would really like to know that the generic drug 
companies were out there watching and seeing what is happening 
with their drug and telling us if they come across any new 
safety problems.
    Mr. Bilirakis. OK. Thank you.
    I yield back, Mr. Chairman. Thank you.
    Mr. Pitts. The chair thanks the gentleman and now yields to 
the ranking member of the full committee, Mr. Waxman, 5 minutes 
for questions.
    Mr. Waxman. Thank you, Mr. Chairman.
    I feel like I am in a Woody Allen movie when they asked 
about Marshall McLuhan and the man in the back of the line said 
I am Marshall McLuhan and everything you said is absolutely 
wrong. Well, I am Henry Waxman from the Hatch-Waxman and I am 
here to set the record straight.
    I submitted a brief to the Supreme Court and I stated 
generic and brand name labels must be the same because, after 
all, the generic drug has to be the same as the brand name drug 
so the warning labels have to be the same. But that was in the 
context of the existing FDA regulation that said the brand name 
companies could change their label if they know something more 
that they ought to tell the consumer, but the generic companies 
could not change their label and they couldn't act 
unilaterally.
    So I was making the point that even within that context, 
generic manufacturers should be subject to the state failure-
to-warn tort liability. That was my argument. The Court didn't 
accept it. The Court said you have FDA regulations and what we 
were arguing was not consistent with them. Now you are 
proposing a new regulation.
    My amicus also contained the statement that to permit 
generic labels to differ significantly from their brand 
counterparts, particularly with respect to safety information, 
would thwart the sameness goal reflected by the Hatch-Waxman 
Act. So I still believe that to be true. However, I don't think 
allowing a temporary period of time in which the labels may be 
different thwarts the sameness goals.
    For example, you have existing regulations called CBE-0, 
and that allows the brand name company, when they learn some 
problem, to change their label even if FDA doesn't approve it. 
FDA may later approve it. They have to send it to FDA, but they 
can act on their own unilaterally. That would mean the warning 
label would be different than on the generic drug, isn't that 
right, Dr. Woodcock?
    Dr. Woodcock. That is correct. And also the generics may 
take various amounts of time even when FDA has approved a label 
change to conform their own label.
    Mr. Waxman. So we have a period in time I would like to be 
kept at a minimum before the labels are the same but there is a 
difference in time, and no one would argue that that violates 
the Hatch-Waxman Act.
    Dr. Woodcock. Yes.
    Mr. Waxman. Sameness in labeling is important but also 
finding out about new problems is important. You mentioned an 
example to Mr. Bilirakis. What if the generic was based on a 
brand that is no longer on the market?
    Dr. Woodcock. Yes.
    Mr. Waxman. Would we prohibit a generic that learns about 
problems from doing anything to warn the public about these 
problems? I think that was one of the issues that you had in 
mind in proposing this new regulation, isn't that right?
    Dr. Woodcock. That is correct. And increasingly, the 
innovator companies are concentrating on innovation----
    Mr. Waxman. Yes.
    Dr. Woodcock [continuing]. And dropping their drug or 
withdrawing it from the market or even withdrawing their 
application after the drug goes generic because they can't 
compete or they don't want to compete in that space.
    Mr. Waxman. Yes.
    Dr. Woodcock. And so there the generics are responsible. 
They must stand behind that drug because there is no one else 
watching the safety of that medication other than, of course, 
the FDA.
    Mr. Waxman. The FDA but the generic manufacturers which may 
be the only manufacturers of the drug are more likely to hear 
about the problems for which they need to warn the public and 
hopefully they will give that to FDA. But they are the ones 
that are making the drug that could be harmful unless people 
understand the warnings that should go with it, isn't that 
right?
    Dr. Woodcock. That is correct. And most of the reports we 
get--we get about 1 million reports a year about drug safety 
problems and about 80 percent of those are from the 
manufacturers.
    Mr. Waxman. Yes. OK.
    So I think there needs to be sameness in labeling. I think 
that is critical, but equally important is ensuring the 
patients know they will have the same right to access courts 
whether they are injured by taking a generic drug as they would 
if they took a brand drug. We don't want to scare consumers to 
think, oh, if I take a generic, I may be taking something that 
is not as safe. That has always been the brand name industry's 
claim, that it is not the same; it is not as safe. But of 
course if they are the same and the warnings are the same, then 
the consumers should relax. And we want to get to that same 
labeling.
    Mr. Neas and Mr. Shumsky claimed that the proposed rule 
fundamentally violates the sameness principle and that it 
undermines the statutory and regulatory framework for approving 
and overseeing generic drugs. How do you respond to that, Dr. 
Woodcock? There are differences that occur now between brand 
and generics. When brands use their existing CBE-0 process to 
update their safety labeling, what you would be doing is giving 
the generic that same opportunity. Do you think that this is 
going to mean that we are going to have less sameness in drug 
labeling?
    Dr. Woodcock. I believe the portions of the rule that call 
for the webpage and then call for all the labels to be 
conformed within 30 days will result in less differences among 
brand and generic labels in the future if this rule were to be 
made final.
    Mr. Waxman. That is a good objective.
    Thank you, Mr. Chairman.
    Mr. Pitts. The chair thanks the gentleman and now 
recognizes the gentleman from New Jersey, Mr. Lance, 5 minutes 
for questions.
    Mr. Lance. Thank you, Mr. Chairman. And good afternoon, Dr. 
Woodcock.
    This is a very complicated topic. As I understand the 
recent Supreme Court decisions, there is a question legally as 
to whether the proposed rule complies with those decisions. I 
certainly want the public to be as safe as possible, and at the 
same time, I don't want the public to be confused. Do you see 
any potential of a conflict between safety, which we all 
desire, and confusion among the public on this issue?
    Dr. Woodcock. Well, as we have been talking about a little 
bit, I believe if the proposed rule were implemented, it would 
reduce confusion caused by differing labels because there would 
be more conformity of labels.
    Mr. Lance. As I read the underlying statute, it appears to 
me to be clear and it is my own opinion that what is proposed 
may go beyond what is currently in the underlying statute. And 
obviously, agencies try to administer underlying statutory law 
to the best of your ability given your responsibilities in the 
executive branch. Would it have been better for the agency to 
come to us here to Congress to ask for an amendment if you 
thought that you needed to move forward in the way you are 
apparently moving forward?
    Dr. Woodcock. It is hard for me to speculate on that. I am 
not a lawyer. I would say that----
    Mr. Lance. That speaks well of you. Some of us are lawyers.
    Dr. Woodcock. Well, I don't, opine as a lawyer. I am not 
one. However, I will say that we have been administering this 
program a long time. The generic drug labels are actually 
different in many areas, some of which have been stipulated by 
Congress. For example, pediatric----
    Mr. Lance. Yes.
    Dr. Woodcock [continuing]. Exclusivity and et cetera, et 
cetera. And they are different in their safety information due 
to the time frame often it takes and due to the fact that the 
generic industry does not often update their label in a timely 
manner.
    Mr. Lance. Thank you. I would hope that on issues like this 
the executive branch and the legislative branch could work 
together and often where you stand on an important issue of 
public policy is based upon where you sit and sitting in the 
legislative branch of government and having reviewed the 
underlying statute and certainly having a great respect for 
those who wrote the statute, including Mr. Waxman, I tend to 
view the opinion of Mr. Shumsky and others as how I would read 
the underlying statute. I realize it is extremely complicated. 
But I would prefer if the executive branch and the various 
agencies might come to us if an amendment would clarify the 
situation and certainly statutory law from my perspective 
serving in the Congress is the bedrock by which agencies 
proceed, recognizing as I do that the safety and health of the 
American people is preeminent.
    Thank you, Mr. Chairman, and I yield back the balance of my 
time.
    Mr. Pitts. The chair thanks the gentleman and at this time 
recognizes the gentlelady from Virgin Islands, Dr. Christensen, 
for 5 minutes for questions.
    Mrs. Christensen. Thank you, Mr. Chairman. Welcome back, 
Dr. Woodcock.
    Dr. Woodcock, FDA describes both the existing and the 
proposed CBE-0 processes as an exercise of enforcement 
discretion, and that sounds like either the agency is 
deliberately flouting the will of Congress or the law is so 
badly written that FDA can only make it work by ignoring parts 
of it. Yet I know that FDA uses enforcement discretion in many 
areas of regulation with good effect.
    Could you put your use of enforcement discretion in the CBE 
regulations into context? Could you explain how the agency uses 
it elsewhere and its oversight of drugs or other FDA-related 
products and why you have chosen to use it in this instance to 
allow drug manufacturers to rapidly update their safety 
information?
    Dr. Woodcock. Well, first of all, I understand that 
originally when the CBE-0 regs were written, that was how it 
was described a long time ago. Maybe I was in high school. But 
I think that what I understand from our lawyers now is that we 
regard this as--the statute of course sets the framework, as 
has just been pointed out, that regulations are implementing of 
that framework. We regard this as implementing, interpreting 
part of the statute. So I am not sure we regard this in today's 
legal world as enforcement discretion.
    But we do use enforcement discretion in many areas. For 
example, one of the most poignant is probably our dealing with 
the shortage issues where we are getting products from around 
the world for critical medical needs that are being not met for 
our population. After we verify that they are correctly 
manufactured and of high quality, we will have them imported 
into the United States.
    Mrs. Christensen. Thank you. Well, whether it is 
enforcement or not, I think the whole process seems consistent 
with one of the overriding purposes of the food and drug law, 
to protect patient safety.
    Also in his testimony, Mr. Neas notes that generic 
manufacturers only have access to information about their 
individual products saying that FDA is the only entity with 
access to all safety information and is the only body in a 
position to decide whether a labeling change is warranted. How 
do you respond to those points?
    Dr. Woodcock. Well, what we are talking about here is sort 
of early notification. That can be done now by the innovator to 
change their label in advance of an FDA decision. And what we 
are proposing is that the generic industry should be able to 
change their label in advance of an FDA decision. After we get 
a safety signal and, we may evaluate it through our Sentinel 
system, we may do a literature search, seek data from other 
sources, and generally deliberate and finally make a final 
decision. You know, should this be a box warning? Should it be 
a precaution? Is it a contraindication or is it just another 
warning? Or maybe, as was raised earlier, it isn't adequately 
linked and should not be on the label.
    Mrs. Christensen. Yes.
    Dr. Woodcock. Once we make that decision, we then are 
proposing here that we tell everyone all at once you should 
change your label to conform to the FDA decision.
    So, yes, FDA would weigh in at the end of the day on this 
but what we will do now, and as a clinician you are aware of 
this, and it is frustrating somewhat but FDA will put out 
safety information that says we are looking at this.
    Mrs. Christensen. Yes.
    Dr. Woodcock. We just don't know what it means yet. But 
people became very unhappy that we weren't notifying them that 
we were evaluating this issue, so if it is an important safety 
issue, we actually put out a drug safety alert and say we are 
evaluating this. We don't know what the truth is yet, but we 
will keep you informed and let you know when we have made a 
decision.
    Mrs. Christensen. Thank you. And I agree basically. And as 
the proposal notes, not only do generic drugs now comprise over 
80 percent of drugs sold but they constitute 94 percent of the 
market for those drugs for which generics are available. So 
many of them may not have a preponderance on the market. Some 
are likely to have much more than the brand. And as the rule 
makes clear, FDA continues to reserve for itself the final 
decision regarding proper labeling.
    Thank you, Dr. Woodcock.
    Dr. Woodcock. Thank you.
    Mr. Pitts. The gentlelady yields back.
    The chair recognizes the gentleman from Illinois, Mr. 
Shimkus, for 5 minutes for questions.
    Mr. Shimkus. Thank you, Mr. Chairman. Welcome, Dr. 
Woodcock. Good to see you again.
    In proposing significant changes to prescription drug 
labeling requirements in December 2000, FDA, under the Clinton 
Administration, found ``the use of labeling and product 
liability and medical malpractice lawsuits, together with 
increasing litigation cost has caused manufacturers to become 
more cautious and include virtually all known adverse event 
information regardless of its importance or plausibility 
relationship to the drug.'' Do you agree with this statement or 
is this no longer a concern of the agency?
    Dr. Woodcock. That was the practitioners' labeling rule, 
the label modernization that you are talking about. And in 
there we put in some standards that prevent putting in the 
label events that are not really causally linked where we don't 
see a causal association. So we were basically putting people 
on notice that we did not think that those types of events, 
that laundry list, should get into a drug label. And the 
modernized drug labels do not have that feature.
    Mr. Shimkus. So it is no longer a concern of the agency?
    Dr. Woodcock. It is always a concern but we have put in 
safeguards to make sure the modernized labels----
    Mr. Shimkus. OK.
    Dr. Woodcock [continuing]. Don't contain that.
    Mr. Shimkus. All right. Before proposing the 2000 rule, the 
FDA held multiple focus groups and conducted a national survey 
of healthcare providers. Prior to issuing the proposed rule in 
November of 2013, did the FDA discuss these changes with 
physicians?
    Dr. Woodcock. Yes. Well, the physicians were part of the 
focus groups. We had a public----
    Mr. Shimkus. No, I am talking about this current rule that 
you are proposing.
    Dr. Woodcock. Oh, this one. Oh, I am sorry. No.
    Mr. Shimkus. Did the FDA meet with any pharmacists to hear 
their thoughts?
    Dr. Woodcock. No, not to my knowledge.
    Mr. Shimkus. Did you meet with any of the branded drug 
companies?
    Dr. Woodcock. Not to my knowledge.
    Mr. Shimkus. What about the generic drug companies?
    Dr. Woodcock. Not to my knowledge. I did not.
    Mr. Shimkus. Did the FDA meet with the trial lawyers?
    Dr. Woodcock. My understanding is that this is the case. 
However----
    Mr. Shimkus. So in 2000 you met with all these groups?
    Dr. Woodcock. That is correct.
    Mr. Shimkus. So you didn't meet with physicians, you didn't 
meet with pharmacists, you didn't meet with branded drug 
companies, you did not meet with generic drug companies, but 
you met with the trial lawyers?
    Dr. Woodcock. Well, after the----
    Mr. Shimkus. I think you have already testified it is yes.
    Dr. Woodcock. After the court decision I sat down with the 
staff at the Center for Drug Evaluation and Research and we 
went over options for dealing with this disparity in the 
treatment of the two groups. And we went ahead and drafted this 
rule. I was not aware----
    Mr. Shimkus. So let me get back. So the answer is yes?
    Dr. Woodcock. My understanding is----
    Mr. Shimkus. You can just say it. Come on. Get it out.
    Dr. Woodcock. Part of the agency did meet with the trial 
lawyers, yes.
    Mr. Shimkus. Thank you. Because in your responses earlier, 
you talked about how innovator drugs, right----
    Dr. Woodcock. Yes.
    Mr. Shimkus [continuing]. Who may not be in the market 
anymore and you have the generic drug----
    Dr. Woodcock. Yes.
    Mr. Shimkus [continuing]. But it is funny you are using 
that as an explanation but you didn't discuss this with 
innovator drugs and you didn't discuss this change with the 
generics. So even in your answers to our questions today, you 
are using what you would think would be support from and 
inclusive process of an evaluation of a new rule without 
talking to these two groups.
    So let me ask you this question. What role did the trial 
lawyers play in complying in the development of this new rule?
    Dr. Woodcock. To my knowledge, none, because, as I said----
    Mr. Shimkus. Wait, wait. You met with them, you changed the 
rule, and you are saying they had no role in developing this 
new rule?
    Dr. Woodcock. Right. I was trying to explain that.
    Mr. Shimkus. I know. I am trying to believe it.
    Dr. Woodcock. Well, I am explaining factually what 
happened, all right. The Center for Drugs, I asked our staff 
here at the Center for Drugs to look at this finding which 
pointed out we did not have a level playing field of sameness 
between the innovators and the generic drug firms. They 
developed a list of options. We picked the option we wanted to 
pursue and it was really a matter of feasibility and execution 
and we developed that rule. The personnel in the Center for 
Drugs did not meet with the trial lawyers----
    Mr. Shimkus. And you understand why we have questions about 
this rule if you met with just the trial lawyers and you didn't 
meet with any of the folks that are involved in this sector?
    Dr. Woodcock. Certainly.
    Mr. Shimkus. All right. Thank you. I yield back my time.
    Mr. Pitts. The chair thanks----
    Mr. Waxman. Mr. Chairman, I ask unanimous consent that the 
gentleman be given an additional minute so I can ask him to 
yield to me.
    Mr. Pitts. Do you want to have me recognize Mr. Sarbanes?
    Mr. Shimkus. No, the ranking member is asking for unanimous 
consent for me to be given another additional minute so I can 
then yield to the ranking member.
    Mr. Pitts. All right. The chair recognizes the gentleman 
for one minute.
    Mr. Shimkus. I would be happy to. And I would then yield to 
Mr. Waxman.
    Mr. Waxman. Whoever you met with before is interesting but 
don't you now have to have comments from everybody with a 
proposed rule and take those comments into consideration?
    Dr. Woodcock. Certainly. The folks we met with before were 
about parts of the label that would really impact them and this 
is more of a procedural issue. But we put together a procedure. 
We instantiated it in this proposed rule and we have received 
over 100 comments from a wide range of groups and we will be 
evaluating those comments.
    Mr. Waxman. Thank you.
    Mr. Shimkus. And reclaiming the rest of the minute, I 
understand that now you are going to receive comments. However, 
historically, you met with everyone involved in this sector. 
You now issue a new proposed rule with only meeting with the 
trial lawyers. I think that raises cause of concern and the 
reason why many of these questions are going to for what 
purpose and there is a question on intent.
    And I yield back my time.
    Mr. Pitts. The chair thanks the gentleman and now 
recognizes the gentleman from Maryland, Mr. Sarbanes, for 5 
minutes for questions.
    Mr. Sarbanes. Thank you, Mr. Chairman. Thank you, Dr. 
Woodcock. You are one of the best witnesses we get up here and 
I appreciate your testimony.
    I am sort of baffled at what the objection could be to the 
proposed rule and looking forward to the second panel to 
elucidate that for me. It seems eminently reasonable what you 
are trying to do. I think that it strikes exactly the right 
balance that we would want to see between the objectives, 
aspirations, and the success of the Hatch-Waxman Act and then 
having to deal with practical obstacles that that framework 
encounters over time. So it makes a lot of sense what is being 
proposed.
    And Congressman Waxman got right to the point I was going 
to make which is I gather now that comments have been in as of 
2 weeks ago, right?
    Dr. Woodcock. Yes.
    Mr. Sarbanes. And those include a lot of perspective from 
consumer groups out there, people that are concerned about 
safety issues, presumably, isn't that the case?
    Dr. Woodcock. Yes, there are comments from consumers, 
consumer groups.
    Mr. Sarbanes. It seems to me this notion that if a trial 
lawyer has a positive opinion of the proposal, that somehow 
that should taint, undermine, or eliminate the concerns that 
the broad public has about seeing this kind of proposal. In 
fact, my view would be that they are largely reflecting the 
opinions and perspective of the broad public and those people 
who could be potentially damaged if you don't have a proper 
framework in place. So it is good to hear that those comments 
include organizations that would represent that kind of 
perspective on safety. And we look forward to seeing how the 
rule will roll out from here.
    I was curious before the Mensing case, before this decision 
that appeared to protect or did protect the generic 
manufacturers from failure-to-warn cases at the state level, 
which was only a couple of years ago. Before that, as industry 
was developing, presumably they were getting more engaged in 
monitoring based on the exposure and liability that they 
properly had vis-a-vis the public and consumers. Would that be 
accurate to say?
    Dr. Woodcock. Yes. And as far as sameness, they have the 
same requirements for monitoring the recipients of their drug 
or any reports that they get of problems with their drug and 
reporting those to the FDA so that is the same as for the 
innovator industry.
    Mr. Sarbanes. You mentioned that you think probably there 
are some assumptions and the projection that this will result 
in a $4 billion hit to the generic drug industry as a result of 
having this liability there. I will be interested to hear 
testimony that backs those kinds of assumptions up because I am 
skeptical of them, as I think you are, and certainly 
Congressman Waxman has indicated his skepticism about that.
    I am a very intrigued by your testimony that not only does 
the proposed rule not add to the sameness problem----
    Dr. Woodcock. Yes.
    Mr. Sarbanes [continuing]. That has been discussed but in 
fact it would help to remedy----
    Dr. Woodcock. Yes.
    Mr. Sarbanes [continuing]. Some of the problems that there 
has been with sameness because there hasn't been in place the 
kind of timelines that would push the generic manufacturers to 
come in to conformity on a more expedited basis.
    Dr. Woodcock. That is correct.
    Mr. Sarbanes. So you have sameness issues now that are kind 
of initiated from the innovator brand side of the equation. You 
may now get situations where the sameness, you know, that sort 
of glitch gets initiated from the generic side. But all told, 
what you are proposing, as I understand it, is a structure that 
will lead to more sameness, to use that sort of odd phrase, 
than less. And so that will be actually an improvement over the 
current situation, is that correct?
    Dr. Woodcock. That is correct. We would anticipate that the 
amount of disparities between the generic label and innovator 
label will decrease with this proposal because it will put in a 
30-day clock for conformance to the labels.
    Mr. Sarbanes. Terrific. Thank you very much, and I yield 
back.
    Mr. Pitts. The chair thanks the gentleman. Because we have 
a just heard there may be some confusion over various views on 
this proposed rule, let me take this time to request unanimous 
consent to insert the following documents into the record: AARP 
letter to Commissioner Hamburg dated March 13, 2014; ``The 
FDA's Proposed Generic Drug Labeling Rule: An Economic 
Assessment'' by Alex Brill, February 5, 2014; a letter from FDA 
to Congressman Kevin Yoder, January 29, 2014; March 6, 2014, 
letter from 24 members of the Pharmaceutical Supply Chain to 
Commissioner Hamburg; of the labels on generics drugs, ``The 
FDA Should Take the Lead on Making Drug Warning Labels 
Consistent,'' LA Times, article, March 12, 2014; committee 
letter to Commissioner Hamburg regarding the proposed change to 
generic drug labeling policy dated January 22, 2014; and the 
FDA's response dated February 26, 2014; a letter dated March 
14, 2014, to Commissioner Hamburg from Minority Health Groups; 
and finally, a letter dated March 13, 2014, to Commissioner 
Hamburg from Patient Advocates.
    Without objection, so ordered.
    [The information appears at the conclusion of the hearing.]
    Mr. Pitts. The chair now recognizes the gentleman from 
Kentucky, Mr. Guthrie, 5 minutes for questions.
    Mr. Guthrie. Thank you, Mr. Chairman.
    Thank you for coming, Dr. Woodcock.
    A lot of discussion on the topic of changes being effected 
involves generic drugs. It occurs to me that CBE is also an 
important policy issue in the context of biosimilars. What is 
the current legal status of CBE with respect to biosimilars and 
would the proposed rule change the current legal status of CBE 
with respect to biosimilars? And I know that biosimilars, 
though none have been approved by the FDA yet, but when they 
are, will they have CBE or not?
    Dr. Woodcock. This rule does not pertain to that because 
those would be under the Public Health Service Act and they are 
not considered generics like the generics are. So that is a 
separate issue.
    Mr. Guthrie. Completely separate, thank you.
    In your testimony throughout the day, you stated four or 
five times that this rule would address the need for outdated 
generic labels to be updated. While that may be so, that was 
not the basis for why the FDA issued the proposal. In fact, I 
have been told that the goal was not even addressed in the 
proposed rule. What is the agency's stated rationale for 
proposing this rule change and if updating outdated generic 
labels is really the goal, can't you address those 
administratively or with better enforcement?
    Dr. Woodcock. Well, the goal of this, at least my goal and 
the Center for Drugs' goal was to update what we felt was a 
disparate playing field for the brand industry and the generic 
industry where the generic industry has really grown up to be 
taking care of much of the healthcare of your constituents in 
this country. The drugs they get at their pharmacy are generic 
drugs. And so that was the goal from my point of view.
    We are looking at updating old labels and this isn't just a 
fault of the generic industry; it is a fault of the innovator 
industry, too. Drug labels need to be modernized and the 
modernization effort that was talked about earlier only went 
back to, I think, 2003.
    Mr. Guthrie. Yes.
    Dr. Woodcock. And so we are looking at updating globally 
the drug labels in general.
    Mr. Guthrie. Is your FDA pilot project Sentinel, is that 
focused on that? Is that what that is, the Sentinel system?
    Dr. Woodcock. Sentinel system is using electronic health 
records to learn and look at safety signals that we get. So 
that is what Sentinel is about. We have electronic health 
records of 150 million people and we can look in there and find 
out what happens when they took a drug and find out whether a 
side effect is real. We are doing a different pilot on 
modernizing drug labels that have become out-of-date.
    Mr. Guthrie. OK. And I have one last question. Ranking 
Member Waxman discussed the brief he filed with the Supreme 
Court in 2011. My understanding of that brief a different 
approach than the one ultimately included in FDA's rule 
proposed was raised. I believe the brief suggests that FDA 
should formalize the process by which a generic manufacturer 
could provide the FDA with any new information they obtained 
regarding safety hazards associated with their products and 
that they could be held liable if they failed to do so. Why 
does the FDA feel that that was an inadequate approach and why 
you have to go this direction?
    Dr. Woodcock. I am sorry but I am unfamiliar with what 
mechanism that they were supposed to update their labels.
    Mr. Guthrie. Yes. I have a quote from the brief. ``Provide 
the FDA with any new information they obtain regarding safety 
hazards associated with their products.''
    Dr. Woodcock. Yes, well, generics have always supposed to 
have been able to do that. So this is simply a mechanism. This 
is really a procedural rule that allows a procedure that was 
always available to innovator to be made allowed to be 
available to generics as well.
    Mr. Guthrie. OK. Thank you. I yield back.
    Mr. Pitts. The chair thanks the gentleman and now 
recognizes the gentleman from Texas, Mr. Green, for 5 minutes 
for questions.
    Mr. Green. Thank you, Mr. Chairman. And I am glad you are 
here, Dr. Woodcock.
    I think the three main criticisms of the proposed rule is 
that it would restore tort liability to generic manufacturers, 
which I don't know if that was the intent but one criticism if 
the proposed rule restores the tort liability, which critics 
argue would lead to warning and significant higher generic drug 
rates.
    Two, the rule undermines the sameness principle that 
generic and brand name drugs have to be the same, including 
their labeling and therefore undermines the entire Hatch-Waxman 
justification.
    And three, the rule would lead to a multitude of different 
labels confusing doctors and patients and undermining 
confidence in generic drugs.
    Frankly, I don't mind if somebody is producing a drug, they 
ought to have some responsibility for it so I don't have that 
big a concern about the tort liability. But the other two I do 
have some concern about. It undermines the sameness principle 
that Hatch-Waxman did and also the multitude of labeling.
    Dr. Woodcock. Well, as I explained earlier, right now, 
there are different versions of the label because the innovator 
will change their label. Even after FDA approves that label, it 
takes some time, for some cases a year, maybe 2 years for some 
of the generics, not all of them, to change their label. So 
there are differences out there between the innovator and 
generic labels that are disparities now. And this proposal that 
we have would reduce the time of confusion if you want to call 
it confusion.
    Mr. Green. OK. But then the sameness principle issue that 
was brought up?
    Dr. Woodcock. I feel that the sameness applies and if you 
are a consumer or patient I think that you would want to know 
that the drug is the same as far as its chemical composition, 
as far as its pharmacology, and as far as the manufacturers 
standing behind that drug, all right, and doing the safety 
surveillance and the monitoring and keeping their label up-to-
date no matter whether they are innovator or a generic 
manufacturer.
    The sameness as a literal point of view that labels need to 
be exactly the same, they are not exactly the same and there 
are a number of reasons, for example, the pediatric 
exclusivity, there may be certain constituents that are 
slightly different that is allowed. There may be other 
carveouts to the label due to new indications that the 
innovator has that the generic doesn't have. And there are 
these differences due to the safety changes in other label 
updates that actually the generics don't necessarily update in 
a timely manner.
    Mr. Green. Well, Mr. Chairman, I think consumers actually 
do look at labeling, too, not just physicians obviously, for 
the prescription.
    Dr. Woodcock. Yes.
    Mr. Green. And I will give you an example. Zyrtec is 
something that has been successful but now it has lost its 
exclusivity and there is a generic available for it that I 
noticed still has the same compounds as Zyrtec. So consumers 
also look at it other than physicians.
    And I yield back my time.
    Mr. Pitts. The chair thanks the gentleman and now 
recognizes the gentleman from Georgia, Dr. Gingrey, 5 minutes 
for questions.
    Mr. Gingrey. Mr. Chairman, thank you. And, Dr. Woodcock, 
good to see you.
    What is wrong with the current process that the FDA has 
defended as being necessary to bring orderly change to the 
labeling when it is warranted? What is wrong with the current--
--
    Dr. Woodcock. As the universe has changed and time has 
changed, the generic industry is now in charge of much of the 
healthcare. It delivers most of the dispensed prescriptions in 
the United States.
    Mr. Gingrey. Well, I know the doctor from the Virgin 
Islands mentioned that a little earlier, that maybe 85 percent 
of the drugs that are dispensed today are generic. Is that what 
you are getting at?
    Dr. Woodcock. Yes. And, in fact, in that situation those 
manufacturers who are marketing those drugs, they need to be 
monitoring those drugs for safety. The people who market the 
drugs will get the reports, all right?
    Mr. Gingrey. Let me ask you this just a yes-or-no answer. 
The approach the FDA now proposes will result in an orderly 
process that gets evidence-based appropriately tailored 
labeling changes to prescribers in the best possible manner.
    Dr. Woodcock. Yes.
    Mr. Gingrey. It does, right? In this proposed rule--and, 
listen, I just came from another committee hearing where I was 
praising the trial attorneys, but this proposed rule sure seems 
to me to be led by the trial attorneys. I am following up on 
what the gentleman from Illinois, Mr. Shimkus, said. And as a 
physician like me, I hope that you would disagree with this 
implication that the FDA trusts the trial bar to be the chief 
stewards of public health policy.
    Dr. Woodcock. The impetus behind this rule was to have a 
level playing field in a situation where now the generic 
manufacturers make most of the drugs that your constituents 
take. And that they have the same opportunity to react to the 
reports that they get of safety problems and rapidly modify the 
labels and bring them to FDA's attention. There are about 420 
drugs right now that have no innovator on the market and so it 
will only be the generic manufacturers to whom those reports 
would come or to the FDA directly.
    Mr. Gingrey. Under the proposed rule, I understand that 
generic innovator--now, innovator is the same as the brand----
    Dr. Woodcock. Yes, sorry.
    Mr. Gingrey [continuing]. The original drug that the 
company brought. I understand that generic and innovator 
companies could propose labeling changes through the CBE 
process and that the agency would post all of these suggested 
changes on your Web site on the FDA Web site before you would 
approve them. That is correct, isn't it?
    Dr. Woodcock. Yes.
    Mr. Gingrey. And for multi-sourced drugs, those that are 
the exact same, they are made by both the innovator and the 
generic companies, isn't it possible that each manufacturer 
could have different warnings posted for the same risk?
    Dr. Woodcock. It is possible, but of course that would 
enable us to move very quickly. We get these now from 
innovators and they do a CBE-0 or we may hear from 
practitioners, we may have it reported to us, we may get it 
from the literature. We quickly evaluate those and we put out 
an FDA drug safety alert. I am sure you are familiar with 
these. Sometimes we say we are just looking at this issue. We 
don't know the answer yet.
    Mr. Gingrey. Yes.
    Dr. Woodcock. So we are an actor in this as well but we 
need to be made aware of what the manufacturers know.
    Mr. Gingrey. Yes. Well, it seems like to me it would be 
confusing for doctors and patients, let's say, to go online, 
up-to-date WebMD, you pick it, and find different warnings and 
contraindications for the exact same drug. I don't see how that 
benefits public health when that happens.
    Dr. Woodcock. Well, right now, of course there are drug 
safety controversies, as you know. And there is much on the 
blogosphere, on WebMD and everything else about different 
reported papers with this cardiovascular risk, this risk. 
Generally, FDA will put out a safety alert and say we are 
evaluating this issue. Here is what we know so far. Here is 
what we don't know. We will let you know when we have 
definitive information. When we do, then we would require all 
the manufacturers have the same label when we had----
    Mr. Gingrey. Well, that is good news in my concluding 10 
seconds because I was going to ask isn't it the FDA's job to 
referee these disputes and make class-wide labeling changes?
    Dr. Woodcock. Yes, it is, and we do that. Yes.
    Mr. Gingrey. Mr. Chairman, I yield back.
    Mr. Pitts. The chair thanks the gentleman. That concludes 
the questions of the Health Subcommittee members who are here. 
I am sure they will have written questions that they will 
submit.
    But at this time I would like to seek unanimous consent to 
permit the gentleman, Mr. Braley from Iowa, to ask questions. 
And without objection, so ordered.
    The chair recognizes Mr. Braley 5 minutes for questions.
    Mr. Braley. Thank you, Mr. Chairman. I really appreciate 
the Committee's indulgence in allowing me to be part of the 
hearing.
    I want to follow up with a question, Dr. Woodcock, that Mr. 
Shimkus raised about input from physicians or physician groups.
    Dr. Woodcock. Yes.
    Mr. Braley. We heard from Mr. Waxman about the friend-of-
the-court brief he filed in the Mensing case. Were you aware 
that the American Medical Association, the largest physician 
organization in the country, also filed a friend-of-the-court 
brief in that case?
    Dr. Woodcock. No.
    Mr. Braley. OK. Assume for the moment that they did and 
that one of the concerns they raised with the Supreme Court was 
the ethical dilemma that physicians face when they are 
confronted with inconsistent rules to protect their patients 
who receive brand name drugs----
    Dr. Woodcock. Yes.
    Mr. Braley [continuing]. As opposed to rules that protect 
their patients who purchase generic drugs.
    Dr. Woodcock. Yes.
    Mr. Braley. Is that the type of concern from healthcare 
providers that would be relevant to the agency in deciding 
whether or not to go forward with this rule?
    Dr. Woodcock. Well, we just several weeks ago closed the 
comment period and we got over 100 comments, some of them 
fairly voluminous, so I hope we have received input from a 
large number of sectors on this, including obviously the 
clinical community.
    Mr. Braley. Mr. Lance raised concerns about similarly 
situated consumers being treated the same, but wouldn't that be 
an example raised by a physician group, the largest in the 
country, that would show how these different consumers of 
medications can be treated differently and that could raise 
concerns?
    Dr. Woodcock. Well, I will say that certainly one of our 
issues is that the entities that are supplying medicine for a 
large number of patients in this country should stand behind 
their medicines.
    Mr. Braley. One of the things that came up was Sentinel 
systems in your testimony, and this is a common word that is 
used in trying to promote patient safety throughout the 
healthcare delivery system, correct?
    Dr. Woodcock. Yes.
    Mr. Braley. In fact, the Joint Commission on Accreditation 
of Healthcare Organizations uses a Sentinel event system that 
requires any adverse event to be reported and then followed up 
so you get to the root cause of what caused the problem and 
develop an action plan to correct it. Are you familiar with 
that concept generally?
    Dr. Woodcock. Yes, I am very familiar with it.
    Mr. Braley. So, don't generic manufacturers of drugs have 
the same safety incentives as a matter of public health to warn 
consumers as brand name manufacturers?
    Dr. Woodcock. Well, I would certainly hope so. They have 
the same regulatory requirements to be monitoring for the 
impact of their drug and to find out if any new safety event 
happened and to report it to the FDA.
    Mr. Braley. And one of the concerns about this proposed 
rule that I would think conservatives would be very happy about 
is that it promotes personal responsibility and not shifting 
the burden to take care of patients to taxpayers through 
publicly funded healthcare systems. Isn't that true?
    Dr. Woodcock. Not being a lawyer, it is difficult for me to 
comment on that.
    Mr. Braley. If we don't have a remedy for people harmed by 
generic drugs and they have to go on Medicare and Medicaid, we 
end up paying for it as taxpayers, don't we?
    Dr. Woodcock. That would apparently be the case sometimes.
    Mr. Waxman. Would the gentleman yield to me?
    Mr. Braley. I only have a few more minutes.
    Mr. Waxman. I know. I wanted to take it.
    Mr. Braley. One of the things that we know is there have 
been concerns raised about the cost of the proposed rule and we 
have heard testimony that 80 percent of the medications being 
dispensed are generics. The federal agency that is focused on 
promoting public health as part of the National Academy of 
Sciences is the Institute of Medicine----
    Dr. Woodcock. Yes.
    Mr. Braley [continuing]. And they have spent a lot of time 
studying this whole problem with preventable medical errors and 
especially medication errors. And this is a book they released 
in 2007 called Preventing Medication Errors.
    Dr. Woodcock. Right.
    Mr. Braley. And in here they write that in 2000, a study 
estimated that the cost of drug-related illnesses and deaths in 
the ambulatory setting in the United States was $177.4 billion.
    Dr. Woodcock. Yes.
    Mr. Braley. That is a lot of money.
    Dr. Woodcock. Absolutely.
    Mr. Braley. So if 80 percent of that marketplace is generic 
drugs and we would be talking about $140 billion cost 
associated with not reducing this problem and promoting patient 
safety. Isn't that true?
    Dr. Woodcock. Well, I am very familiar with that book. I 
think that put in a lot of different safety problems together 
when they made those estimates. However, I would say that it is 
imperative that everyone monitor safety drugs in the outpatient 
and the ambulatory setting and that we improve our outcomes 
with patients.
    Mr. Braley. Well, with my 5 seconds left I just want to 
mention Sophie Howe of Ames, Iowa, a young college student who 
was harmed by a generic drug and ended up having a lot of added 
cost associated with that, including payment of her student 
loans that were accelerated when she had to drop out of school 
because of her medical complications. And I think it is the 
human faces behind this problem that we should be thinking 
about.
    Thank you.
    Dr. Woodcock. Thank you.
    Mr. Braley. I yield back.
    Mr. Pitts. The chair thanks the gentleman. That concludes 
the questions.
    At this time, we will have written questions that we will 
provide to you if you can please respond to those.
    Thank you very much----
    Dr. Woodcock. Thank you.
    Mr. Pitts [continuing]. Dr. Woodcock, for your testimony 
and for your patience today.
    Before I call the second panel, I ask unanimous consent to 
recognize the ranking member of the full committee, Mr. Waxman, 
for 5 minutes for a statement.
    Mr. Waxman. Thank you very much, Mr. Chairman.
    I know this is extraordinary to allow this but I am not 
going to be able to be here for the testimony of the next 
panel.
    But I did want to comment on the fact that there is a 
disconnect at this hearing because people are talking about 
whether the label is going to be the same, how long it will 
take to be the same and whether the doctors are for this or not 
for it. I just want to point out what is really going on at 
this hearing.
    The Supreme Court decision said that a generic drug 
manufacturer cannot be held liable under state law to warn 
people about the dangers of a drug that they manufacture that 
they know about because they can't put it in the label because 
under the law they cannot change their label unless the FDA 
changes the label for the brand and the generic company.
    So in my brief to the Court I said, look, if they can't 
change their label, then they ought to be held liable under 
state law for the failure to let FDA know that there is a 
problem for which they ought to give some notice to the public. 
It seems reasonable to me but the Court on a 5-to-4 basis said 
no. The only thing that would make them liable is if they 
failed to warn by a label change. And they can't make that 
label change, and therefore, the generic drug industry could 
open their champagne and drink to the success that they are 
never going to be held liable for. And that is great if you are 
never going to be held liable for them perhaps but it is not 
great for the consumers.
    The FDA has looked at this issue and said, well, wait a 
minute. We have a requirement that brand name companies warn 
the consumer and they can even change their label, and then 
while we are considering whether or not we are going to impose 
that label requirement on everybody, they could go forward with 
it. But the generic drug companies can't do that.
    Now, FDA is not looking at it from a legal liability. They 
are just looking at it from patient safety. It doesn't make 
sense that if a generic company discovers there is a problem, 
not to have them warn people, just as it is required by the 
brand name company. So they are changing the rules to be sure 
the consumer is protected, but in the process, it could and 
most likely would reverse the Supreme Court decision and make 
the generic companies liable for failure to warn people if they 
have the ability to warn them in a new label, just as the brand 
name companies have.
    So while we are talking about all these other issues, we 
are missing what is really at stake here. We are going to hear 
that, I think, in this next panel because Mr. Neas and others 
are going to argue this is going to cost billions of dollars in 
liability that they hadn't had to worry about in the past. But 
I would submit that that doesn't make sense. Before the Supreme 
Court case, they were liable and they had to anticipate that, 
but they didn't have billions of dollars as a result of that 
vulnerability of liability. They were able to manage that 
reasonably well. And to expect, notwithstanding a report that 
we are going to hear about, which I very much doubt its 
validity, we are going to hear that, no, this is a big matter. 
This is going to be a huge liability for them.
    Well, whether it will or will not, they should be held to 
the same standards in order to protect the public, and I hope 
they are liable if they do something wrong by not warning 
people in a label change. Because if they have information that 
their drug, as they learn now, could harm people, they ought to 
make that label change. Certainly, the brand name companies 
have to do it.
    So I wanted this chance to make this statement now because 
I am not going to be able to be here to do it through 
questions.
    I just must say, Mr. Neas, you have got a report. I just 
don't see it possibly being valid and it will be held up to 
some further questioning by this panel. But I can't see how it 
is valid. It seems to me highly inflated. It is like all the 
people that come in here and we want to regulate them, they say 
this will drive us out of business. And then when the 
regulations go into effect, they do it for a fraction of the 
cost. So I just think that people ought to put in perspective 
what this hearing is really all about.
    And as I have now straightened everybody out about what is 
significant, I am going to leave you. Thank you, Mr. Chairman.
    Mr. Pitts. The chair thanks the gentleman.
    Now, we will have our second panel. Please come to the 
witness table and I will introduce them in the order that they 
will speak.
    On our second panel today we have Mr. Michael Shumsky, 
partner, Kirkland & Ellis; Mr. Ralph Neas, President and CEO of 
the Generic Pharmaceutical Association; and Ms. Allison Zieve, 
General Counsel, Public Citizen.
    Thank you all for coming. Your written testimony will be 
made part of the record. You will each have 5 minutes to 
summarize your testimony.
    And at this point the chair recognizes Mr. Shumsky, 5 
minutes for his opening statement.

 STATEMENTS OF MICHAEL D. SHUMSKY, PARTNER, KIRKLAND & ELLIS, 
 LLP; RALPH G. NEAS, PRESIDENT AND CEO, GENERIC PHARMACEUTICAL 
  ASSOCIATION; AND ALLISON M. ZIEVE, GENERAL COUNSEL, PUBLIC 
                            CITIZEN

                STATEMENT OF MICHAEL D. SHUMSKY

    Mr. Shumsky. Chairman Pitts, Ranking Member Pallone, and 
members of the subcommittee, thank you so much for inviting me 
to testify today. Though I filed administrative comments on 
these issues for a number of clients as part of my law 
practice, I would like to make clear at the outset that I am 
testifying today in my personal capacity and that the views I 
express are solely my own.
    Over the past 30 years, the Hatch-Waxman Act has generated 
trillions of dollars in cost savings. And that phenomenal 
success stems from a simple but brilliant insight. Because two 
drugs with the same chemical and biological properties will 
have the same safety profile, FDA can safely approve generic 
versions of a previously approved drug without requiring new 
independent clinical trials
    And it is precisely because two drug products with the same 
chemical and same biological properties will have the same 
safety profile that the statute naturally requires that generic 
drug labeling be ``the same as the labeling approved for'' that 
product's brand name equivalent. In a single word, sameness is 
both the statute's animating principle and the driving force of 
its success.
    FDA now wants to permit generic drug warnings that are 
``inconsistent with the labeling for the RLD.'' That is the 
brand name equivalent. The agency has no power to do so. In our 
system of separated powers, the executive branch is bound by 
the laws this Congress passes. Indeed, as the Supreme Court 
explained the very same year Congress patched Hatch-Waxman, 
``if the intent of Congress is clear, that is the end of the 
matter for the agency must give effect to the unambiguously 
expressed intent of Congress.'' By this standard, FDA's 
proposal is indefensible. It pays no heed to Hatch-Waxman's 
plain language which explicitly requires generic labeling to be 
``the same as the labeling approved for'' the brand name 
equivalent. And indeed, the statute further bars FDA from even 
approving a generic drug for sale in interstate commerce if its 
labeling is not ``the same as'' the approved labeling for the 
brand name drug.
    The proposal also ignores FDA's lengthy track record on 
this issue. Indeed, FDA has repeatedly recognized the generic 
labeling must be the same as the FDA-approved branded labeling 
at all times. It did so during the first Bush Administration, 
during the Clinton Administration, during the second Bush 
Administration and in its Supreme Court brief in the Mensing 
case earlier in this Administration.
    And finally, FDA's proposal conflicts with the Supreme 
Court's recognition in both Mensing and in Bartlett that it is 
this Congress' statute, not merely FDA's regulations, that bars 
generics from using different warnings on their products. As 
the Court put the point very clearly in Bartlett, ``Congress' 
decision to regulate the manufacture and sale of generic drugs 
in a way that reduces their cost to patients but leaves generic 
drug manufacturers incapable of modifying their warnings.'' In 
other words, Hatch-Waxman represents, as the Court said, 
''Congress' decision,'' not the FDA's.
    I firmly believe that Hatch-Waxman's sameness requirement 
is supported by sound public policy and that FDA's rulemaking 
proposal threatens to harm the public health, but those issues 
are beyond the scope of my testimony today.
    I also understand that the Court's recent decisions in this 
area are controversial, but as the Court recognized in Mensing 
and Bartlett, FDA has no power to adopt this proposal until 
this Congress changes Hatch-Waxman's core principle, the 
sameness requirement that has made that law one of the most 
successful pieces of legislation ever passed.
    I have one minute left and I do want to highlight one thing 
and it was I think a very telling and very important exchange 
between Dr. Christensen on the one hand and Dr. Woodcock on the 
other. Dr. Christensen asked Dr. Woodcock about the origins of 
FDA's CBE proposal, and as she made clear, that proposal 
originated as an exercise in the FDA's view of enforcement 
discretion, meaning that the agency would not enforce the law 
as Congress wrote it. She then said, however, over time, FDA 
has changed its mind and now they interpret that to flow from 
the statute itself as opposed to the agency's disregard for the 
statute.
    Let me translate that answer so that there is no mistaking 
what it was. FDA has ignored the law so long that the law has 
changed. That is a fundamental reordering of our Democratic 
process and a direct threat to the separation of powers. And I 
want to thank Chairman Pitts for holding this hearing so that 
we can explore those very important issues about the nature of 
our constitutional republic.
    [The prepared statement of Mr. Shumsky follows:]
    
    
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    Mr. Pitts. The chair thanks the gentleman and recognizes 
the gentleman, Mr. Neas, 5 minutes for an opening statement.

                   STATEMENT OF RALPH G. NEAS

    Mr. Neas. Good afternoon, Chairman Pitts, Ranking Member 
Pallone, and members of the subcommittee. Thank you for 
inviting me to testify on the FDA's proposed changes to generic 
drug labeling. I am Ralph G. Neas, President and CEO of the 
Generic Pharmaceutical Association.
    This year we commemorate the 30th anniversary of the Hatch-
Waxman Act, which by any measure has been one of our most 
effective laws ever passed. This remarkable law initially 
projected to save maybe a few million dollars a year has saved 
the U.S. healthcare system more than $1.2 trillion over the 
past decade, $217 billion in 2012 alone.
    The quality and affordability of generic medicines is vital 
to public health and the sustainability of the healthcare 
system. The very heart and soul of the Hatch-Waxman Act is the 
sameness principle under which generic manufacturers must prove 
to the FDA that their version of a drug contains the same 
active ingredient as the brand product, is identical in 
strength, dosage form, and route of administration, and 
importantly for today's discussion, has the same labeling. 
These requirements give consumers, doctors, and pharmacists 
confidence in the safety and effectiveness of generic 
medicines.
    The top priority for generic manufacturers is assuring 
patient safety for the hundreds of millions of people who rely 
on our products to live healthier and longer lives. The 
company's proactively participate with FDA to ensure the 
timeliness, accuracy, and completeness of drug safety labeling 
in accordance with all current regulations. These manufacturers 
report all serious and unexpected adverse events to the FDA 
within 15 days. All others report it quarterly or annually. The 
generic industry takes these responsibilities seriously.
    Unfortunately, the FDA's proposed rule would substantially 
undermine the enormously successful Hatch-Waxman Act and put 
both patient safety and healthcare savings at risk by directing 
generic manufacturers to make unilateral labeling changes 
without prior FDA approval. The rule creates a system whereby 
multiple different labels, including different warnings, can 
simultaneously exist in the marketplace for the same drug with 
the same active ingredient.
    Generic manufacturers only have access to the scientific 
and medical evidence for their individual products representing 
a fraction of the total market. They do not have access to the 
clinical trial data and other proprietary information of the 
brand manufacturer or current information and data from other 
generic manufacturers. Only the FDA has access to all the data 
and information. A generic manufacturer that unilaterally 
changes its label therefore does so with incomplete 
information.
    It is difficult to overstate the negative implications of 
the proposed rule on patient safety and on consumer access to 
affordable medicines. Allowing for multiple different drug 
labels in the market for the same product would upend 30 years 
of law and regulation and create substantial confusion for 
everyone in the healthcare system. Uniform safety information 
provides certainty for patients and providers that they can 
rely on consistent information and inform their decisions in 
medical conversations.
    Identical labels also underscore the critical point that 
once generic medicines are approved by the FDA, they are proven 
scientifically equal to the brand medicine in terms of safety, 
efficacy, and quality. The risk of over-warning and the flood 
of unnecessary labeling changes is substantial. Multiple 
versions of critical safety information would inaccurately 
imply therapeutic differences between the generic drug and 
brand drug that do not exist. The exaggeration of risk and 
inclusion of unsubstantiated warnings will cause provider 
confusion and discourage the use of beneficial treatments.
    In addition to seriously jeopardizing patient safety, the 
proposed rule would also burden consumers, businesses, and 
state and federal governments with billions of dollars in 
increased prescription drug costs. A recent economic analysis 
found that the proposed rule would conservatively add $4 
billion annually to the Nation's already high healthcare cost, 
including $1.5 billion in Medicare and other government 
programs.
    It should be no surprise that 19 organizations representing 
those populations that most rely on access to affordable 
generic drugs and representatives from virtually every sector 
of the pharmaceutical supply chain, most importantly 
pharmacists and pharmacy organizations representing more than 
100,000 pharmacists and 45,000 pharmacies, have submitted 
letters to the FDA raising their significant concerns that the 
proposed rule could jeopardize patient access and patient 
safety.
    Unfortunately, neither the FDA nor the Office of Management 
and Budget conducted a robust cost-benefit analysis as OMB is 
required to do to examine the economic implications of this 
rule in increased healthcare costs.
    I am here today with a simple message. We can do better. 
GPhA fully supports a streamlined, efficient, and transparent 
process for timely submission in updating their safety 
information for generic drugs for healthcare providers and the 
public. A key element of any new system must include timely FDA 
review of all available clinical data and safety signals, 
including the nonpublic data of the NDA holder.
    Underlying this process should be one bedrock principle: 
Generic drug labels must be FDA-approved; it must be based on 
scientific evidence. Such a system would advance our shared 
goals of protecting the public health and improving patient 
safety. Congress should ensure that the FDA has sufficient 
resources to do so. We would welcome the opportunity to work 
with others in the healthcare system in a multi-stakeholder 
collaboration on this matter. The FDA should hear from patient 
advocates, pharmacists, physicians, payers, not just trial 
lawyers, and others in the supply chain who could offer 
expertise, experience, and perspective.
    The sustainability of our healthcare system depends on the 
continued access to affordable generic medicines. We will work 
hard to make sure that any changes to labeling rules and 
regulations protect patient safety, align with federal law, and 
do not hinder patient access to more affordable generic 
medicines.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Neas follows:]
    
    
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    Mr. Pitts. The chair thanks the gentleman and now 
recognizes Ms. Zieve 5 minutes for an opening statement.

                 STATEMENT OF ALLISON M. ZIEVE

    Ms. Zieve. Thank you, Mr. Chairman.
    I am general counsel of Public Citizen and director of 
Public Citizen Litigation Group. Our office submitted the 
citizen petition that the FDA granted in part by issuing the 
proposed rule that we are discussing today.
    Since 1984, despite considerable changes in the market, FDA 
regulation of generic labeling has remained substantially 
unchanged. Since 1985, at the request of Pharma and other 
specific brand name manufacturers, the FDA has allowed the 
brands to make safety-related labeling changes without prior 
approval. The concerns that motivated the FDA to adopt these 
changes being affected or CBE option 30 years ago--the need to 
promptly inform patients and physicians and the interest and 
efficiency and resource management--apply equally today.
    FDA continues to lack the resources to be the primary 
instigator of post-approval labeling changes and cannot timely 
pre-approve every safety update. Therefore, today, with 
generics comprising such a large percentage of all 
prescriptions filled, to fulfill the goal of timely labeling 
updates to physicians and patients, the CBE process must be 
available to generic manufacturers as well.
    The majority of labeling changes are initiated by 
manufacturers, not by the FDA, and based on publicly available 
adverse event reports and medical literature. The brand name 
manufacturer drops to a small percentage of the market very 
quickly after generics enter the market and often stop selling 
the drug altogether. More than 400 unique drugs fall into this 
category. In these instances, if generic manufacturers are not 
actively monitoring and proposing safety updates, no 
manufacturer is doing so at all. But at the same time, it is 
undisputed that critical safety information may come to light 
after entry of the generic onto the market and after exit of 
the brand-name product.
    The concern that the proposal will result in confusing or 
inconsistent labeling is unwarranted, I think, based on 
unfounded worst-case scenarios and belied by current practice. 
For the past 30 years brand labeling has been different from 
generic for months, or as Dr. Woodcock testified, up to a year 
even in some cases after the brand updates the labeling. We 
have seen no evidence of confusion.
    And despite this sameness concern of Hatch-Waxman, 
variations of labeling are built into current regulations and 
have been for 30 years such as the listing of different 
formulations or a different indication. Sameness has never been 
a literal requirement of the law.
    Yet again, physicians and pharmacists have not complained 
of confusion. In fact, the National Physicians Alliance 
submitted a comment to the FDA 2 weeks ago saying that 
confusion is not their concern. Their concern is updated safety 
information.
    Finally, the manufacturers have argued, and I think this is 
the real objection, that the proposed rule, if finalized, will 
expose them to liability for failure to warn. They argue that 
the proposed rule will increase the cost of generic drugs and 
insurers may refuse to insure them and that some manufacturers 
may even decline to enter the market. But both recent history 
and current reality prove these theories wrong. Until 2011, 
generic drug manufacturers faced the same liability risk that 
they would under the revised rule because until the Court's 
decision in Pliva v. Mensing, generic companies could be and 
sometimes were sued for failure to warn and many cases were 
resolved favorably to the patient. Even today, some lawsuits, 
although far fewer, are brought in cases where the generic has 
failed to make a required update. So the proposal would not 
create a new cost but one borne and managed very well by the 
industry until just 30 years ago and still borne fully today by 
brand name manufacturers.
    It is important to keep in mind--I think this has gotten 
lost today--that lawsuits for failure to warn, when 
meritorious, occur because a patient suffered injury due to the 
lack of an adequate warning. Thus, the many lawsuits about 
metoclopramide, for example, people took a drug for reflux and 
developed the neurological disease tardive dyskinesia, which is 
often permanent. Adverse event reports and studies documented 
this problem for years but the brand name company did not 
revise the labeling and the generics said nothing.
    Of course, the manufacturer is not responsible every time a 
patient is injured but sometimes the manufacturers, including 
generic manufacturers, turn a blind eye and the current system 
allows the generic manufacturers to do this. The result is more 
injury and more cost because immunizing a company from 
liability does not make the patient's costs go away. They are 
carried by the patients, the health insurance, and taxpayers. 
For this reason, by giving generic manufacturers the tools and 
incentives to update safety labeling, the proposed rule will be 
to a cost savings, savings in medical care for the patients who 
will not be injured because they and their physicians are armed 
with updated information about safety risks.
    Thank you.
    [The prepared statement of Ms. Zieve follows:]
    
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    [The supplemental information provided with Ms. Zieve's 
statement is available at http://docs.house.gov/meetings/if/
if14/20140401/101823/hhrg-113-if14-wstate-zievea-20140401.pdf.]
    Mr. Pitts. The chair thanks the gentlelady. I will begin 
questioning. I recognize myself for 5 minutes for that purpose.
    Mr. Shumsky, in responding to the bicameral letter sent to 
the agency in January, FDA decided not to answer the question 
whether the other sameness requirements included in Sections 
505(j) of the Food, Drug, and Cosmetic Act extended beyond the 
date of approval. Now that FDA has taken the position that the 
statute does not in fact require sameness in labeling after the 
date of approval, could it now be argued that the sameness 
requirements for strength, dosage, route of administration only 
apply at the time of approval as well? Is this not an absurd 
result?
    Mr. Shumsky. Mr. Chairman, thank you for the question. And 
I think it really hits the nail on the head. It does 
demonstrate the real absurdity of FDA's proposal because once 
you take the position that sameness doesn't mean the same for 
labeling, there is no principle basis for saying that sameness 
does mean the same for strength, dosage, route of 
administration, or any of the other requirements in the 
statute.
    Mr. Pitts. Can you please explain why FDA cannot make this 
change without congressional action?
    Mr. Shumsky. Sure. There are several reasons, all of which 
were recognized by the Supreme Court originally in its Mensing 
decision in 2011 and then its Bartlett decision just this past 
term, in 2013.
    The central statutory provision at issue here is Section 
505(j) of the original statute, which specifically says the 
generic product labeling must be the same as the labeling 
approved for the brand name drug. There are a couple of other 
provisions in the statute that are equally relevant. One 
requires the secretary, which is the secretary of HHS whose 
vested authority and the Commissioner of food and drugs when it 
comes to drug approval determinations, it requires the 
secretary to reject an abbreviated new application, that is a 
generic drug application, where its labeling is not the same as 
the branded drug.
    And finally, there is a more recent provision of the 
statute which specifically says that there are certain limited 
exceptions to the sameness requirement. And we have heard about 
a couple of them where an inactive ingredient in a product like 
its coating is different than the brand manufacturer, there are 
some specific exceptions. None of those exceptions apply to 
warning or safety-related information and there is a further 
provision of the statute which says that for certain 
permissible exceptions, differences between generic and branded 
labeling will not be considered misbranded if certain criteria 
are met, but that language in the statute specifically 
excludes--in other words, it says ``but not changes to the 
warning section of the labeling,'' which I think represents 
Congress' explicit recognition that a generic drug which bore 
different warnings than its branded drug would be misbranded.
    Mr. Pitts. Now, some have stated that the proposed rule 
would simply return the legal landscape for generic drug 
manufacturers with respect to failure-to-warn cases to where it 
existed prior to 2011. Therefore, generic manufacturers would 
assume the same type of liability they had before the Supreme 
Court's decision. Is this an accurate assessment?
    Mr. Shumsky. I don't believe that it is, Mr. Chairman. 
Prior to 2011, no federal court of appeals had held the generic 
drug manufacturers could be held liable for failure to warn. To 
the contrary, one court had addressed that question. In 2008, 
the Third Circuit Court of Appeals, which is based in 
Philadelphia, ruled that state failure-to-warn lawsuits 
targeting generic drug products were preempted. And prior to 
the Supreme Court's 2009 decision in Wyeth, that was the 
definitive word in the federal judiciary, in the federal court 
system on generic liability. Two decisions came after Wyeth, 
which did expose generic drug manufacturers to liability, one 
of them was called Mensing out of the Eighth Circuit, the other 
was called Demahy out of the Fifth Circuit. And as we all know, 
the Supreme Court promptly reversed both those decisions.
    Mr. Pitts. I have one more question I want to ask. 
Currently, there is a period where the brand and generic drug 
labeling differs. Usually, this occurs when a brand makes a 
labeling change on their end and the generic drug manufacturer 
has to make conforming changes. How is this scenario envisioned 
under the proposed rule different in nature and scope from what 
currently takes place?
    Mr. Shumsky. Sure. It is a totally different situation. 
Start with the language of the statute, which says the generic 
drug has to have the same labeling that FDA has approved for 
the brand. And so there will be a period of time where a brand 
manufacturer executes one of these CBE-0 changes. FDA then has 
to consider it and approve it before a generic can implement 
it. This proposed rule has nothing to do with that scenario. 
This rule says a generic on its own acting unilaterally can go 
out, decide it doesn't think that the branded warning is good 
enough anymore and put a warning onto its product that the 
brand hasn't considered and that the FDA hasn't reviewed. It is 
an apples-and-oranges situation.
    Mr. Pitts. The chair thanks the gentleman. My time is 
expired. The chair now recognizes the ranking member, Mr. 
Pallone, 5 minutes for questions.
    Mr. Pallone. Thank you, Mr. Chairman.
    I wanted to ask Ms. Zieve. Today, we have heard a lot about 
liability and I think it will be important to begin our 
questions of this panel about the role it plays in this 
context. So for the benefit of our members, could you describe 
for us the role that tort liability plays regarding product 
safety generally, and more specifically, in promoting the 
safety of drugs and other FDA-regulated products? And could you 
describe some of the kinds of harm that have been the subject 
of failure-to-warn lawsuits?
    Ms. Zieve. Thank you, Mr. Pallone.
    I will start by quoting to you from what the Supreme Court 
has said about state failure-to-warn suits in the drug context. 
The Court wrote ``state tort suits uncover unknown drug hazards 
and provide incentives for drug manufacturers to disclose 
safety risks promptly. They also serve a distinct compensatory 
function that may motivate injured persons to come forward with 
information. Failure-to-warn actions in particular enforce the 
FDA's premise that manufacturers, not the FDA, their primary 
responsibility for their drug labeling at all times.''
    I think one sort of prominent example of some of the public 
health benefits beyond for the individual plaintiff comes 
through the Vioxx cases where a tremendous amount of 
information came to light only because of the personal injury 
suits, information that not even FDA had, and it really helped 
to move that process forward and eventually to get a very 
dangerous drug off the market and find out what had happened in 
that case.
    There are unfortunately a number of examples of drugs, 
branded and generic, that have caused serious safety problems. 
Unfortunately, only, according to one study, about half of 
serious problems are discovered in the first 7 years after new 
drug is on the market. So even after the generic comes on the 
market, we are still finding new safety risks.
    I mentioned metoclopramide, which was marketed under the 
brand name Reglan, in my opening remarks. Another example is 
Accutane. This one is sort of particularly heartbreaking 
because the patients who were injured were teenagers. They took 
the drug for acne. It is purely aesthetic, right, but it is 
very important to the teenagers. They take this, and 
unfortunately, it can cause bowel disease that requires in some 
cases surgery and it can really change their lives permanently 
and in devastating ways.
    And there was information for years and adverse event 
reports and medical literature that this drug could cause this 
serious problem and the brand name did nothing. And again, the 
FDA does not have primary responsibility for labeling updates. 
It can't. It doesn't have the resources. That is the premise of 
the Food, Drug, and Cosmetic Act and of the regulations. But 
the brand name manufacturer said nothing and the generics said 
nothing because they don't have to.
    When the FDA finally ordered a labeling change for Accutane 
to warn of this serious problem, the brand promptly removed it 
from the market. So today, this is a drug that has had serious 
risks added throughout its I think it is 20 or 30 years now on 
the market and the only products of Accutane sold today are the 
generic so nobody has responsibility for that labeling today.
    Mr. Pallone. And let me get to my second question. In my 
opening statement I mentioned that I am sympathetic to the 
questions surrounding sameness, which is the guiding principle 
in Hatch-Waxman. How do you respond to the claim that the FDA 
proposed rule fundamentally violates this sameness principal 
and will undermine the statutory and regulatory framework for 
approving and overseeing generic drugs?
    Ms. Zieve. Well, I am glad you didn't say sameness 
requirement because, as I mentioned, sameness has never been a 
requirement. The FDA regulations have a section that lists 
exceptions to sameness and these have been uncontroversial. The 
most relevant one is actually during the period after a brand 
makes a CBE change. The difference between the status quo today 
and after what I hope will be the FDA finalization of the rule 
is that that period of difference, that temporary deviation, 
may be instigated by the generics just like today it is 
instigated by the brands. And the FDA has fashioned the rule to 
make sure that this temporary exception actually works a little 
more efficiently than it works today.
    Mr. Pallone. All right. I don't know if I have enough time. 
I think I don't have enough time for my next question now, Mr. 
Chairman. Thanks.
    Mr. Pitts. The chair thanks the gentleman and now 
recognizes the gentleman from New Jersey, Mr. Lance, 5 minutes 
for questions.
    Mr. Lance. Thank you, Mr. Chairman.
    Ms. Zieve, were you an amicus in either the Mensing or the 
Bartlett cases or a litigant in some way?
    Ms. Zieve. My office filed an amicus brief in Mensing----
    Mr. Lance. In Mensing.
    Ms. Zieve [continuing]. And filed an amicus brief in 
Bartlett, I believe on behalf of Mr. Waxman.
    Mr. Lance. Thank you. And are you in agreement with the 
Mensing and the Bartlett decisions?
    Ms. Zieve. No, I think that they are wrong as a matter of 
legal jurisprudence as well as policy.
    Mr. Lance. I see. And certainly we can debate policy but 
you believe the Supreme Court was wrong in both the Mensing and 
Bartlett decisions?
    Ms. Zieve. Right, I do, but I also think it is important, 
particularly in Mensing today that the Supreme Court look to 
the FDA's regulations and defer to the FDA's view of those 
regulations in deciding that failure-to-warn suits were 
preempted. The Court didn't hold that Hatch-Waxman required 
that result but said specifically it was going to defer to the 
FDA's view about its own regulations.
    Mr. Lance. Thank you.
    Mr. Shumsky, your view on Mensing and Bartlett?
    Mr. Shumsky. I represented the petitioners in both of those 
lawsuits and I think the Supreme Court did a fabulous job.
    Mr. Lance. Thank you. Thank you. And this is a situation 
where the question was litigated to the Supreme Court and the 
Court made its decision. As I stated to Dr. Hamburg and I think 
very often in these matters where you stand on issues of public 
policy is based upon where you sit, if we want to modify the 
underlying statute, Mr. Shumsky, do you believe we should ask 
Congress to do that through our statutory power?
    Mr. Shumsky. I certainly believe that if Congress is of the 
mind that the public policy here needs to be altered to enable 
the kind of liability the Mensing and Bartlett decisions----
    Mr. Lance. Yes.
    Mr. Shumsky [continuing]. Rejected, that Congress needs to 
act to change the statute to do that. I remain firmly of the 
belief that FDA has no authority on its own to do that.
    Mr. Lance. Yes.
    Mr. Shumsky. And I would say I think there are very sound 
policy reasons underlying the Mensing and Bartlett decisions 
which would counsel against those changes.
    Mr. Lance. And your testimony would indicate that in the 
Administration of President Bush, senior President Bush, 
President Clinton, the junior President Bush, and President 
Obama, at least at the beginning of his tenure in office, your 
view was the view that was prevailing in the administrative 
agency. Have I got that right?
    Mr. Shumsky. Yes, Congressman, that is correct.
    Mr. Lance. Thank you. Why in your opinion has there been a 
change at the agency regarding this matter?
    Mr. Shumsky. I can't speculate on what has prompted them to 
turn around after 30 years of taking the position that these 
labeling changes are impermissible.
    Mr. Lance. And, Mr. Neas, do you have an opinion on that?
    Mr. Neas. It would be speculative. All we have, however, 
right now is that the FDA after, as Mike said, 30 years of 
enforcing the law in a certain manner under several different 
Democratic and Republican administrations made a change, and 
that change was precisely what the trial lawyers and Public 
Citizen recommended in 2011 and 2013, and they are the only 
ones I believe who met with the FDA and think that is a 
problem.
    Mr. Lance. I am sorry, Ms. Zieve. You are welcome to 
comment.
    Ms. Zieve. Sorry. We didn't meet with FDA for what it is 
worth.
    Mr. Neas. Just the trial lawyers.
    Mr. Lance. The trial lawyers, thank you. They have a 
perfect right to meet with the FDA.
    Mr. Neas. Absolutely.
    Mr. Lance. Let me be on the record as saying that.
    If the rule is finalized, will it likely be a matter of 
litigation?
    Mr. Neas. If the rule is finalized?
    Mr. Lance. In its current form.
    Mr. Neas. My guess is there is a strong likelihood that it 
could be the subject of litigation from a variety of different 
perspectives and constituencies.
    Mr. Lance. And, Ms. Zieve, what is your opinion on that? If 
the rule is finalized as it has been written, do you believe 
this is likely to be litigated?
    Ms. Zieve. Well, I would like to answer that in two ways. I 
think given what the industry has been saying, it is likely 
that they are going to want to litigate because they have been 
saying that they will. But I also think that the rule is 
perfectly permissible under the Food, Drug, and Cosmetic Act, 
including the Hatch-Waxman amendments to that act.
    Mr. Lance. Yes, thank you. I realize your opinion but you 
believe it will be litigated is my question. You think it will 
be litigated?
    Ms. Zieve. Well, I believe that the industry has said that 
they are going to litigate it.
    Mr. Lance. Yes.
    And, Mr. Shumsky, do you believe there will be litigation?
    Mr. Shumsky. It has certainly been discussed but no final 
decision has been made to the best of my knowledge.
    Mr. Lance. Thank you, Mr. Chairman.
    Mr. Pitts. The chair thanks the gentleman and now 
recognizes the gentleman from Maryland, Mr. Sarbanes, 5 minutes 
for questions.
    Mr. Sarbanes. Thank you, Mr. Chairman. I thank the 
panelists.
    I think this is the least absurd proposal to come forward 
from the FDA I have ever seen. I just wanted to mention that.
    I gather there are three basic objections to this rule or 
critiques of it. One is the increased costs that it represents 
and I am not convinced that the report that is forecasting 
those increased costs is based on valid assumptions. But let's 
assume that there will be increased cost. As an objection to 
the rule that should be the basis for not going forward, that 
is a dog that just doesn't hunt because the American public 
would say it is worth some additional cost in the system to 
make sure that we are protected. And frankly, the cost that 
will be saved to whatever industry is involved, as well as in 
terms of potential damage and harm to individuals and families 
and patients out there, the cost that will be saved make it 
worth that investment if you want to look at it in those terms. 
So I don't think the economic argument is going to carry the 
day here and I noticed that neither of you lead with that 
argument, Mr. Shumsky or Mr. Neas, probably because of that 
reason.
    The second objection is the notion that it will create 
confusion and I read the letter that the pharmacists, among 
others, submitted to Dr. Hamburg that you cited, Mr. Neas, and 
they don't outright advocate against this rule. They advise 
caution and they say the FDA and others need to fully explore 
the potential unintended consequences that the rule may have on 
patient access and national healthcare costs, et cetera. And I 
think that that is exactly what FDA is doing. They are trying 
to consider what the potential consequences here would be. They 
are also going to great lengths in the rule to actually reduce 
the potential for confusion and even reduce it from where it 
stands now, as I understand it. So I see that as progress.
    That then leaves the argument about kind of the statutory 
interpretation. I don't buy that either because if you 
subscribe completely to the notion that this sameness principle 
has to have total integrity, then you would also have to take 
the position that the brand name manufacturers should not be 
permitted to put these interim labels on their products as a 
matter of safety because for some period of time you would be 
violating a very strict and literal interpretation of the 
sameness concept because you would have a situation where you 
would have some drugs that are identical to other drugs that 
have different labeling on them.
    It seems to me it is a very reasonable position for the 
agency to have taken up until now that sameness ought to be 
interpreted in context of public safety, and that is why you 
have had a situation where innovators and brand-name 
manufacturers have been putting these interim labels on their 
products even though that for some period of time makes them 
different from the generic manufacturing labeling because there 
is an understanding that we are doing the best we can here to 
protect the public and we have to interpret sameness in the 
context.
    And I think bringing that same perspective and lens, as the 
agency is now trying to do by making it sensible for the 
generic manufacturers to also make this change in their 
labeling for some small period of time, is a perfectly sensible 
thing to do. And so I guess there are no questions in that. 
That is just my observation of the matter.
    But I continue to support fully the proposal that has been 
made. I think it is very, very reasonable and I don't think it 
represents overreaching of the enforcement or interpretive 
discretion and authority that the FDA has.
    And with that, I yield back.
    Mr. Pitts. The chair thanks the gentleman and now 
recognizes Mr. Braley 5 minutes for questions.
    Mr. Braley. Thank you, Mr. Chairman.
    Mr. Shumsky, in your opening remarks, you made clear that 
your testimony here today was in your personal capacity. Do you 
remember that?
    Mr. Shumsky. Yes, sir.
    Mr. Braley. Have you or one of your family members ever 
been harmed by a generic drug?
    Mr. Shumsky. I have experienced side effects associated 
with generic drugs. I am not sure I would characterize that or 
any of my family's experiences as being harmed.
    Mr. Braley. All right. Have you in your professional 
capacity ever represented a client who claimed to have been 
harmed by a generic drug?
    Mr. Shumsky. No, sir.
    Mr. Braley. You have represented generic drug manufacturers 
in front of the Supreme Court, is that correct?
    Mr. Shumsky. That is correct.
    Mr. Braley. And were you here in my earlier comments when I 
talked about a young woman from Ames, Iowa, who had taken a 
generic drug and had a really bad outcome?
    Mr. Shumsky. I was, Mr. Congressman.
    Mr. Braley. OK. This is her picture. Her name is Sophie 
Howe, and she began having some of the same problems with a 
complexion medication that we heard mentioned earlier here 
today, ended up having multiple pulmonary emboli, was 
hospitalized with that, and had significant complications. At 
the time she was a college student at Iowa State University, 
and because of the complications of her injury, she was forced 
to drop out of school. She had student loans that were paid for 
and insured by the Federal Government that became due, and that 
caused her to drop out of a community college program in order 
to work full-time to pay off her student loans.
    So when you walk into the Supreme Court building across the 
street, you will see a sign up above that says ``Equal Justice 
under Law,'' but the actual result of the Mensing decision is 
to tell those claimants like Sophie Howe you have equal justice 
under the law if you pay more for brand name drugs because she 
has no remedy under the Court's decision, does she?
    Mr. Shumsky. Not against the manufacturer of the generic 
drug product, no.
    Mr. Braley. Now, Mr. Neas, I want you to know that I am 
glad that generic drugs are helping American patients by giving 
them access to affordable medications where and when they need 
them. And I also believe it is just as important that the 
medications on the market are safe and that patients and 
providers are aware of any possible threat to their health. In 
this Mensing case we have been talking about, were you aware 
that there was a friend-of-the-court brief filed by 43 state 
attorneys general talking about the cost-shifting result of not 
providing this remedy?
    Mr. Neas. I do know that the state attorneys general took a 
certain decision, sure, as they do.
    Mr. Braley. In their brief they noted, ``Costs should not 
be shifted to taxpayer-funded healthcare programs. This implied 
preemption would put added pressure on state and federal 
budgets. Not only would it be a significant incentive for 
ensuring the safe use of prescription drugs be eliminated, but 
injuries to consumers would go uncompensated by the wrongdoer, 
and much of the resulting increase in healthcare costs would be 
borne by state-funded programs.''
    And, Mr. Chairman, I would ask unanimous consent for 
recognition that the brief was filed by the attorneys general 
from the States have Minnesota, Louisiana, Alabama, Alaska, 
Arizona, Arkansas, California, Colorado, Connecticut, Delaware, 
Hawaii, Idaho, Illinois, Indiana, Iowa, Kentucky, Maine, 
Maryland, Massachusetts, Mississippi, Missouri, Montana, 
Nebraska, Nevada, New Hampshire, New Mexico, New York, North 
Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, Rhode 
Island, South Carolina, South Dakota, Tennessee, Utah, Vermont, 
Washington, West Virginia, Wisconsin, Wyoming, and the District 
of Columbia.
    Mr. Pitts. Without objection, so ordered.
    Mr. Braley. Ms. Zieve, when we are talking about this cost-
shifting, are you aware that the same companies that are 
generic drug manufacturers were held accountable before the 
Mensing decision either through settlements or through claims 
in court for failure-to-warn claims?
    Ms. Zieve. Yes, I am aware that there were hundreds of 
suits and at least in a few years leading up to Mensing that 
there were a large number of settlements that are confidential 
at the manufacturer's request.
    Mr. Braley. After the Mensing decision, are you aware of 
any instance where an insurer for one of those generic drug 
manufacturers rebated portions of premiums that had been paid 
based on a potential assumption of liability for failure-to-
warn claims among generic manufacturers?
    Ms. Zieve. I am not aware of that. I am also not aware of 
any decrease in the cost of generics to consumers because of 
the elimination of liability.
    Mr. Braley. Thank you, Mr. Chairman. I yield back.
    Mr. Pitts. The chair thanks the gentleman. That concludes 
the questions of the Members.
    The ranking member has a unanimous consent request. He will 
be recognized for that purpose.
    Mr. Pallone. Thank you, Mr. Chairman.
    I ask unanimous consent that the Committee include in the 
record the following: a comment letter to the FDA on the rule 
by 41 Members of Congress, including myself and Mr. Waxman; New 
York Times editorial in support of the FDA rule; comment 
letters to FDA on the rule, well, three, one including the 
patient and consumer groups and the Consumer Union; the state 
attorneys general from 30 States, and from an attorney, Brandon 
Bogle.
    Mr. Pitts. Without objection, so ordered.
    [The information appears at the conclusion of the hearing.]
    Mr. Pitts. That concludes the questions from the Members 
who are present. We have another hearing going on and I am sure 
other Members will have questions. We will send those to you in 
writing. We ask that you please respond promptly.
    I remind Members that they have 10 business days to submit 
questions for the record and I ask the witnesses to respond 
promptly. Members should submit their questions by the close of 
business on Tuesday, April 15.
    Thank you very much for your testimony today. It has been a 
very informative hearing.
    And without objection, the subcommittee is adjourned.
    [Whereupon, at 5:13 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]
    
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