[Senate Hearing 113-] [From the U.S. Government Publishing Office] AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, AND RELATED AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2014 ---------- THURSDAY, APRIL 18, 2013 U.S. Senate, Subcommittee of the Committee on Appropriations, Washington, DC. The subcommittee met at 10:32 a.m., in room SD-124, Dirksen Senate Office Building, Hon. Mark L. Pryor (chairman) presiding. Present: Senators Pryor, Tester, Udall, Blunt, and Cochran. DEPARTMENT OF HEALTH AND HUMAN SERVICES Food and Drug Administration STATEMENT OF HON. DR. MARGARET A. HAMBURG, COMMISSIONER ACCOMPANIED BY: NORRIS COCHRAN, DEPUTY ASSISTANT SECRETARY FOR BUDGET, DEPARTMENT OF HEALTH AND HUMAN SERVICES JAMES TYLER, CHIEF FINANCIAL OFFICER, FOOD AND DRUG ADMINISTRATION opening statement of senator mark l. pryor Senator Pryor. We will go ahead and call the meeting to order. Let me call it to order and say that this is my first hearing as chairman of this subcommittee. So let me start by thanking my ranking member, Senator Blunt, who has already proven to be a very good and effective partner and wise counsel in many, many ways. And I look forward to working with Senator Blunt and with everybody on the subcommittee staff and the full committee, but I really value our working relationship. Roy, thank you for all that you have already done. I would also like to thank Commissioner Hamburg for being here and joining us today. I appreciate the working relationship that we have developed over the last few years, and I look forward to continuing that work with you. And I know that you are very serious about working with the subcommittee and the full committee on a full range of issues. So we want to thank you for that. I also want to take a minute to recognize the history and significance of what we are doing here today. The first appropriations bill was reported out of the Second Congress in 1791. A lot has changed since then. To illustrate one example of how times have changed, I have a copy of that legislation in my office. And the entire bill is 4 pages. Can you believe that? Four pages. Right now, you couldn't even get the table of contents on 4 pages on an appropriation bill. But nonetheless, one of the things that hasn't changed is our responsibilities to carry out the appropriations of this country, just like we are mandated in our Constitution. The function of this committee is actually mandated by the Constitution. I think that is very significant, and it is a responsibility that I and I know all the members of the subcommittee take very seriously. So what I would like to do is get down to business today, and that is fiscal year 2014 Food and Drug Administration (FDA) budget. The President's overall funding proposal for FDA is probably one of the most robust requests included in his budget. This is important because the responsibilities of the FDA are so vast, regulating consumer products worth 20 cents of every $1 spent. In Arkansas alone, there is over 1,300 facilities regulated by the FDA, as well as the National Center for Toxicological Research, which is a unique and important center within the agency that employs over 500 people in our State. And it is really some of the best and the brightest folks in the State. The total request for FDA is nearly $4.7 billion, which includes the budget authority that this subcommittee controls, to establish user fees, and some user fees FDA is proposing. Within that $4.7 billion, the budget request includes $2.558 billion in budget authority. This is an increase of nearly $48 million over the funding level provided last year without factoring in sequester. As we all know, this is a very complicated budget year, and we only finished our fiscal year 2013 appropriations bills last month. That means the FDA budget for fiscal year 2014 was written before you knew what you were getting in fiscal year 2013. Because of this, it appears that you have asked for many of the same things this year that we ultimately were able to provide in last year's budget. We understand that, and we understand that we are going to have to work through that. But that includes funding for increased inspections in China, medical countermeasure activities, and funds to complete a lab at your headquarters. So it is very important that we all do work together in the coming weeks to ensure that the funds we provide to fiscal year 2014 reflect the most up-to-date information and make sure the taxpayer dollars we are investing are used for the highest priority needs at FDA. We certainly don't want to pay for the same things twice, and we look forward to working with you about these issues. In addition, I would also like to discuss the impact that the sequester is having on the agency, including your user fee program, and I am interested to hear from you regarding the status of the new food safety user fees you are proposing. So we have a lot to talk about, but what I would like to do first is turn it over to Senator Blunt for his opening statement. Senator Blunt. STATEMENT OF SENATOR ROY BLUNT Senator Blunt. Well, thank you, Chairman Pryor. I look forward to working with you on this subcommittee. We are already able to work together and get some things done on the continuing resolution that allowed us to finish the business that Chairman Kohl and I started last year, and on this and other areas, you and I have been able to work closely together. I look forward to your leadership on the subcommittee and to working with you. I want to thank our witnesses for being here today. Certainly, as we look at FDA and the imprint it has on the country and on families, it is a significant one. The FDA budget request for direct appropriations represents an increase of almost $48 million above the fiscal year 2013 enacted level and an increase of $174 million above the current operating level because of the sequestration order once it is taken into consideration. As we begin, Mr. Chairman, to formally review the administration's budget request, we have to be mindful that our fiscal house is not in order. When we held our hearing on this budget 1 year ago, the national debt was at $15 trillion. Today, it is almost at $17 trillion. Americans are concerned about this, and they should be. And I think the appropriations process, along with the Budget Control Act, is going to begin to reflect those concerns this year, as it may not have in previous years. Commissioner Hamburg, the agency you head has authority over approximately, I am told, 20 cents of every $1 spent in America. Americans expect that the food they eat, the drugs they take will be safe and effective. Similarly, your private sector partners expect transparency and certainty from the FDA. The FDA's reach is vast. The agency has authority over more than 300,000 foreign establishments, 185,000 domestic establishments, ranging from food processing plants to facilities that manufacture lifesaving medications. Almost 2,800 of those facilities are in Missouri, and the others, of course, are all over the world. As FDA is implementing new requirements created by the Food Safety Modernization Act and the menu labeling legislation, the agency needs to be mindful that burdensome regulations and requirements can stifle innovation and lead to unnecessary expenses that limit the ability to create jobs. There is no doubt that your job is complicated, has many constituencies, and it is an agency that has to be careful to avoid the trappings of one-size-fits-all requirements because we all know that one size almost never fits anybody, let alone fitting everybody. Small businesses suffer under the one-size-fits-all practice, and too frequently, they have limited capital that doesn't allow them to respond to lots of new requirements. For example, when implementing menu labeling requirements, FDA needs to ensure regulations do not overburden businesses while still improving and providing customers with appropriate information so they can make decisions. In addition, FDA is currently receiving comments on two proposed rules required by the Food Safety Modernization Act. One of these rules, the produce safety rule, is estimated by the agency to cost over $460 million annually, which would be on the average of somewhere between $5,000 to $30,000 per farm, depending on the size of that operation. FDA readily admits the final rules resulting from the proposed rule will have a significant economic impact on a substantial number of small entities. Recent reports indicate that some farmers find the requirements impractical and that the agency misses the mark by focusing on products that have historically not been the cause of food safety outbreaks. In addition, some farmers report that some of the proposed requirements may simply price them out of the market, by making it impossible for them to compete with imports. As you are dealing with the final rules, these concerns should be seriously considered. Our economic recovery is fragile. 11.7 million Americans remain out of work. The labor force is at its lowest participation rate since the 1970s, and we need to be sure that we are not doing things that needlessly make that problem worse. Mr. Chairman, I look forward to the testimony. I am also pleased that joining us today we have the former chairman and the former ranking member of both this subcommittee and the full committee, and he continues to be very interested and involved in the work that this subcommittee does, and we are glad to have him join us today, I know. Thank you, Mr. Chairman. Senator Pryor. Thank you. Senator Cochran, my understanding you would like to put your statement into the record? STATEMENT OF SENATOR THAD COCHRAN Senator Cochran. Mr. Chairman, thank you. I am pleased to join you and our distinguished friend from Missouri at this hearing. And thank the Food and Drug Administration officials for being here and the hard work they do to carry out their responsibilities. I ask that the balance of my statement be printed in the record. [The referenced statement was not available at press time.] Senator Pryor. Okay. Thank you, Senator Cochran. Thank you. Dr. Hamburg, welcome. SUMMARY STATEMENT OF HON. DR. MARGARET A. HAMBURG Dr. Hamburg. Well, thank you very much, Chairman Pryor, Ranking Member Blunt, and Senator Cochran. And congratulations to you, Chairman Pryor, in your new important position. And I also want to thank the subcommittee for your past investments in FDA which have helped to reduce the gap between our budget and the demands of our increasingly complex mission. I am joined today by Norris Cochran, who is the Deputy Assistant Secretary for Budget at the Department of Health and Human Services, and Jay Tyler, who is the Chief Financial Officer at the FDA. Congress has given FDA responsibility for a vast range of products that are central to the health, safety, and well-being of every American. From spinach and breakfast cereals to vaccinations that save millions of children's lives, to new medicines that treat major killers like cancer and heart disease, Americans rely on products overseen by the FDA every single day. We also recognize that those who produce our Nation's food and medical products are vital components of the U.S. economy, as is a strong FDA. History shows that when the public trusts FDA's oversight, these industries flourish, and when there are problems with products, it can result in severe economic damage across the industry involved, not just to the offenders, but to non-offenders alike. I want to mention some of our measurable accomplishments this past year. In 2012, FDA approved 39 novel medicines, the highest number in over a decade. The majority of these drugs were approved in this country before they were approved anywhere else in the world and some in as little as 3\1/2\ months. The number of drug shortages were cut in half, compared to 2011. We successfully turned around a decade of lengthening medical device reviews and backlogs. Working together with 45 State and territorial partners, we have conducted more than 158,000 inspections of tobacco retailers to ensure that they are not selling cigarettes or smokeless tobacco to minors. And we just published our first two food safety proposed rules, as has been noted, as part of the implementation of the historic Food Safety Modernization Act. All of this indicates, I think, that FDA is a smart investment and a bargain, in fact. Consider, as all of you have commented, that the products we regulate represent more than 20 cents of every $1 that consumers spend on products in this country. But if you look at our budget, every American effectively pays only a little more than $8 a year for our services. And while FDA continues to oversee a multitude of products vitally significant to all of us, our job has become increasingly demanding. First, we are in the midst of dramatic changes in the ways that food, drugs, biologics, and devices are produced and reach the American public. We are witnessing revolutionary advances in science and technology that hold such promise to improve health and prevent disease, yet also bring new scientific and regulatory complexities. And we are facing the globalization of the food and medical product supplies, demonstrated by a quadrupling of FDA-regulated products over the past decade. For food, some 50 percent of fresh fruit and about 80 percent of seafood that we eat here comes from other countries. About 40 percent of finished drugs and 50 percent of devices are manufactured elsewhere, but cross our borders to be used in this country. Second, Congress has continued to expand our responsibilities with new laws, including FSMA, the most sweeping reform of our food safety laws in about 70 years; the Family Smoking Prevention and Tobacco Control Act, the landmark legislation giving FDA the responsibility to regulate tobacco products; and most recently, the passage of the FDA Safety and Innovation Act, or FDASIA, which, among other things, creates two new user fees to speed the review of more affordable versions of drugs, which are essential to holding down healthcare costs and also puts important focus on important aspects of advancing medical product innovation. As we look at our fiscal year 2014 budget needs, we must respond to the demands of complex and increasing responsibilities while recognizing the realities of a constrained economic environment. Thus, we must focus on a set of key mission-critical programs and activities and leverage limited resources to the greatest degree possible. The President's proposed fiscal year 2014 budget request is for a little over $4.6 billion, which includes $2.5 billion in budget authority and $2.1 billion in user fees. This represents an $821 million increase over fiscal year 2012, $52 million of which is budget authority and $769 million in user fees, including two new user fee proposals for food safety and cosmetics. A central component of the budget request supports our efforts to implement FSMA and create a modern food safety system based on prevention rather than responding after a problem occurs. FDA is committed to working with industry and our partners at all levels of Government along with the industry and produce community to put in place the necessary risk-based flexible system that recognizes and respects the varying needs of different components of our food enterprise. I want to thank you for the $40 million in one-time no-year money that was part of the recent continuing resolution, which will help us continue our outreach. For fiscal year 2014, our budget request is for $43 million in budget authority and $225 million in proposed user fees for food facility registration and inspection and imports. In addition, we must respond to and harness modern science to advance the pipeline of new medicines and vaccines. We are asking for about $18 million to equip a number of already constructed buildings, including two labs, so that we can carry out the work needed to accelerate the development, review, and ongoing assessment of these vital medical products. Without these funds, the labs cannot be used and the $300 million cost of constructing them will be wasted. Also, in our efforts to safeguard a vast and increasingly hazardous global supply chain, we are asking for $10 million to expand our presence in China, a major and growing exporter that has also been the source of contaminated food and medical products in the past. PREPARED STATEMENT I believe our fiscal year 2014 budget efficiently targets our needs, focusing on programs that are essential to providing Americans with the safe foods and effective medical products they expect and deserve. I look forward to answering your questions today and to working with you in the coming year. Thank you very much. [The statement follows:] Prepared Statement of Hon. Dr. Margaret A. Hamburg Good morning Chairman Pryor, Ranking Member Blunt, and members of the subcommittee. I'd like to extend my congratulations to you, Chairman Pryor, in your new role on the subcommittee. I am looking forward to working with you and your staff. And I would like to thank the subcommittee for its past investments in the Food and Drug Administration (FDA), which have helped us meet the demands of our broad and increasingly complex mission. FDA PLAYS A VITAL ROLE IN THE HEALTH OF OUR CITIZENS AND OUR REGULATED INDUSTRIES Congress has given FDA responsibility for a vast range of products that are central to the health and well-being of every American. From spinach and frozen dinners, to vaccinations that save millions of children's lives, to new medicines for the treatment of major killers like cancer and heart disease, Americans rely on products overseen by FDA every single day. A short list of what FDA oversees includes: --the safety of most of America's food supply; --the safety and effectiveness of drugs, biologics, vaccines, and medical devices; --the safety of the blood supply; --the development of medical countermeasures to address chemical, biological, radiological, and nuclear threats, and infectious diseases; --the safety of products that emit radiation; --the quality of mammography facilities services; --the safety of dietary supplements and cosmetics; --the nutritional quality of infant formula; --the safety of animal food and feed as well as the safety and effectiveness of drugs for use in livestock, pets, and other animals; and --Most recently, FDA has been charged with reducing harm from tobacco use. The products we oversee are capable of producing great benefits: sustaining human life, reducing suffering, treating previously untreatable diseases, and extending lives. FDA's recent approval of the first drug to treat one of the causes of cystic fibrosis, as well as the first bionic eye system for a rare genetic condition, illustrate the ability of these products to transform lives. Without proper oversight, however, many of these products are also capable of causing great harm. We need only look at the recent outbreaks of foodborne illnesses from peanut butter or the newest report of counterfeit cancer drugs being imported into the United States to understand those risks. FDA has a dual responsibility to the public health--to make safe and effective products available to Americans as quickly as possible, while at the same time protecting our citizens from those products that injure or kill. Our citizens' health depends on both. We also recognize that the producers of our Nation's food and medical products are vital to the health of our economy--and a strong FDA is vital to their health as well. Our history shows that when there is public trust in FDA's oversight, our industries flourish. Conversely, when food and medical products cause serious harm, the result is often severe economic damage across the industry involved--to offenders and non-offenders alike. FDA CARRIES OUT ITS FAR-REACHING RESPONSIBILITIES WITH FEW TAXPAYER DOLLARS FDA is a true bargain among Federal agencies. Added together, the products we regulate represent more than 20 cents of every consumer $1 spent on products in the United States. Americans each pay about $8 a year for FDA's appropriations, which is substantially less than the amount Americans spend each year on snack chips alone. And putting money into FDA is a smart investment. For about 2 cents a day, Americans get an extraordinary array of public health benefits, including: (1) life-saving medicines approved as fast or faster than anywhere in the world; (2) confidence in the medical products they rely on daily; and (3) a food supply that is among the safest in the world. But maintaining this level of performance for the American public, especially related to food safety, demands a fully funded FDA. Although FDA continues to be an effective and efficient investment, our job has become increasingly demanding. We are in the midst of dramatic technological and market-based changes in the way that foods, drugs, biologics, and devices are produced--from personalized medicine and nanotechnology to the globalization of our food and medical product supplies. Congress has also continued to pass new laws and expand our responsibilities. While we welcome these new responsibilities, they don't always come with added resources. These changes force us to stretch our limited resources, while finding ways to ensure the safety of a global supply chain. Our scientists must also adapt to, and even drive, new science and technology so that we can accelerate medical product innovation rather than impede it. Let me say a few words about the impact of globalization, which I believe to be among our greatest current challenges. Not that long ago, FDA's job was to oversee a largely domestic market of food and medical product suppliers. Most of the facilities in which these products were stored and manufactured were within our borders and relatively easy to inspect and oversee. Most of our producers and manufacturers were accustomed to operating under the rules of a modern regulatory system and most lived up to our high standards. We have now entered a brave new world--a world in which, very soon, the majority of our food and medical products will come in whole or in part from foreign countries. In the last 10 years, the number of imported shipments of FDA-regulated products has skyrocketed--in 2012, approximately 28 million shipments of imported food and medical products crossed our borders. That includes 50 percent of our fresh fruits and 20 percent of our fresh vegetables, around 80 percent of our seafood, and 40 percent of drugs on our shelves. Eighty percent of the manufacturers of active drug ingredients are located outside the United States, and more than half of medical devices are imported. Most of the increase in imports is coming from China and India, countries with limited regulatory oversight. Many other imports are from developing nations with even less regulation. The vast increase in imported foods raises the risk of contamination and illness. Of the imported produce and seafood refused entry at the border, 70-85 percent is for potentially dangerous violations, including the presence of disease-causing organisms and chemical contamination. The global marketplace also increases the threat of deliberate adulteration, fraud, and counterfeiting. Criminals exploit how hard it is to inspect and track products through the global supply chain. Chinese suppliers of heparin, a critical drug to prevent blood clots, substituted a lower cost, adulterated raw ingredient in their shipments to U.S. drug makers, causing deaths and severe allergic reactions. Chinese suppliers of wheat gluten substituted melamine, an ingredient used in making plastic, which was toxic when it was used in U.S. pet food and dairy products. The contaminated food sickened and killed pets across the United States and put many people at risk. The global supply chain itself is becoming increasingly complex. Each product may pass through a number of foreign links in the chain, and each additional link increases the risks to American consumers. Consider canned tuna. Once primarily canned in the United States, tuna processing and canning is now outsourced to foreign facilities, and tuna often takes a circuitous journey through processors and canners in Southeast Asia, Africa, and/or Latin America, before it is ultimately shipped to the United States for distribution to our grocery store shelves. The world has changed and our historical regulatory approaches and tools--such as hoping to intercept products at our borders--are outdated and often inadequate. Border inspections will remain important but they cannot guarantee the safety of even a small fraction of our 24 million food and medical imports a year. Globalization demands a major change in the way FDA fulfills its mission. If we are to continue to promise Americans a safe food and drug supply, FDA must continue to transform itself--from a primarily domestic agency to one that uses innovative global strategies to secure a vast global supply chain. Although challenges lie ahead, we have already made strides toward this goal using the resources you have provided. FDA IS DELIVERING RESULTS THAT HELP AMERICANS EVERY DAY Implementing Major New Laws We are partners with Congress in implementing the policies in three major new laws and several smaller ones that add to FDA's responsibilities in advancing the health of Americans. The Food and Drug Administration Safety and Innovation Act (FDASIA).--With the passage of FDASIA last year, Congress granted us important new authorities, reauthorized human drug and device user fees, and authorized new user fees for generic human drugs and biosimilars. These authorities and fees are intended to increase the speed and predictability of medical product reviews, better protect the drug supply chain, reduce drug shortages, and speed the review of more affordable versions of drugs that are essential in holding down healthcare costs. We are working hard to implement FDASIA and achieve these important goals. --Drug Approvals.--We continue to run a state-of-the-art drug approval process that brings important new drugs to Americans quickly and safely. In 2012, FDA approved 39 novel medicines, and the great majority were approved in the United States before any other country in the world. The drugs included 13 treatments for cancer patients, 13 orphan drugs, and the first brain imaging agent to help rule out Alzheimer's disease. Recognizing the need to bring safe, lifesaving drugs to Americans as quickly as possible, FDA approved some of them in as little as 3\1/2\ months. --Medical Device Approvals.--Over the past decade, important indicators of the efficiency of the FDA's medical device review program, including the average length of review and the size of the backlog of overdue applications, had steadily worsened. Since 2011, FDA has worked intensively to turn this around. Almost every major indicator has now reversed: review times are getting shorter and backlogs are shrinking. This important turnaround will allow the industry to bring safe and effective devices to market more quickly and at lower cost. --Drug Safety.--FDA has also used your investments to improve our oversight of the safety of marketed drugs. The new Mini- Sentinel system allows us to quickly assess potential drug safety problems using data from over 130 million patients. FDA used Mini-Sentinel to assess reports that a new blood thinner, Pradaxa, was causing more bleeding than similar drugs. The results gave reassurance that bleeding rates were not higher with Pradaxa than with the other drugs. --Drug Shortages.--FDA prevented 282 drug shortages in 2012--87 more than in 2011. Early notification to FDA of potential shortages has made a huge difference in our efforts. In 2012, we cut the number of new shortages by more than half (117 v. 251). --Affordable Drugs.--FDA is working to provide Americans with better, quicker access to affordable generic drugs and is also implementing an abbreviated pathway for approval of biological products shown to be ``biosimilar to'' or ``interchangeable'' with an FDA-approved biological product. Biosimilars are products that are similar to approved biologics, and while biologics are among the most important drugs Americans use today, they are also the most complex and expensive. We are developing a science-based process for bringing safe and effective biosimilar and interchangeable products to market, which should increase competition and create substantial savings for patients, healthcare providers, and insurers. The FDA Food Safety Modernization Act (FSMA).--Even though the U.S. food supply for humans and animals is among the safest in the world, the current rate of foodborne illness remains too high--according to CDC estimates, roughly one in six Americans (or 48 million people) get sick, 128,000 are hospitalized, and 3,000 die of foodborne diseases each year, leading researchers to estimate a cost of more than $75 billion due to medical expenses and lost productivity. This does not include costs to the food industry or public health agencies. These are preventable human and economic costs, and they reflect an outdated food safety system. FSMA, the most sweeping reform of our food safety laws in more than 70 years, creates a modern food safety system that shifts our traditional focus--responding to contamination after it occurs--to preventing it before it happens. This new prevention strategy involves all participants in the food system, domestic and foreign, government, industry, and consumers, doing their part to minimize the likelihood of harmful contamination. FDA is working on regulations on the kinds of risk-based measures food producers and importers should put in place to reduce the risk of contamination. We take pride in our release earlier this year of two proposed rules that set science-based standards for the prevention of foodborne illnesses--one on safe growing and handling practices for produce and another on prevention practices in facilities that process, handle, and store food. Before drafting the proposed rules, FDA conducted extensive outreach with farmers, manufacturers, consumer groups, State and local officials, and the research community. We have just completed three public meetings across the country to get additional input from stakeholders. The proposed rules are built on existing voluntary industry guidelines and recognized best practices for food safety. Many producers already follow these guidelines, so compliance will be less of a burden. For those who need to add new food safety practices to their operations, FDA, in collaboration with USDA, will offer technical assistance and guidance. FDA is committed to working with industry members to provide the support they need, especially the smallest businesses. We know that our rules and oversight practices must be responsive to the diversity of operations covered by FSMA, be risk-based and flexible, and address small business concerns. That's why we've included a number of exemptions for small businesses, including one for farms. The produce rule would also exempt low-risk products, like potatoes that are rarely consumed raw, or that will be further processed with a step that kills bacteria--like vegetables that will be canned. We've also proposed that small farms and other small business be given extra time to come into compliance with both rules. The Family Smoking Prevention and Tobacco Control Act (Tobacco Control Act).--The Tobacco Control Act gives FDA responsibility to reduce death and disease caused by tobacco and to lessen tobacco use, especially the initiation of smoking, by children and teens. This program is entirely supported by tobacco industry user fees. Since enactment, FDA has worked to enforce a ban on cigarettes with candy and fruit flavors, to make them less appealing to kids; prohibit claims like ``light'' or ``mild'' that misleadingly imply products are safer; and enforce new smokeless tobacco warnings. FDA has also joined with States and Territories to enforce laws against under-age sales. We have conducted over 131,000 retail inspections and sent over 6,800 warning letters and 420 civil money penalty complaints to retailers. Other New Authorities.--FDA is also implementing other recently enacted laws. Last month Congress passed the Pandemic and All-Hazards Preparedness Reauthorization Act, strengthening FDA's authority to prepare for chemical, biological, radiological, and nuclear threats, as well as infectious disease emergencies like pandemic flu, and to support rapid deployment of medical countermeasures. FDA is also carrying out new requirements in the Affordable Care Act, including provisions on biosimilars and nutrition information on menus. Safeguarding the Global Supply Chain Using the public's investments, the agency is working to transform itself into a public health agency capable of preserving the safety of our food and medical products in a complex global marketplace. We are developing better enforcement and regulatory tools, encouraging greater industry responsibility, increasing transparency and accountability in the supply chain, and increasing collaboration with international regulatory counterparts and other third parties. Foreign Posts.--To enhance our ability to oversee import safety, we now have 12 permanent FDA overseas posts in key locations around the world: three in China, two in India, three in Latin America, two in Europe, one in the Middle East, and one in South Africa. Foreign Inspections.--FDA conducted over 2,700 foreign inspections in fiscal year 2012, the largest number ever, exceeding last year by 23 percent. We are on track to surpass that record this year. Border Screening.--To make the most of our limited border inspection resources, FDA developed PREDICT, a sophisticated computer screening system that uses intelligence from many sources--such as intrinsic product risks, past inspection results, and information about such threats as extreme weather that could spoil a shipment--to flag the riskiest imports before they arrive. This allows FDA to focus its border resources on those imports that are most likely to pose a danger, and at the same time easing entry of low-risk products. PREDICT has helped stop many contaminated products at the border. Recently, PREDICT flagged a large shipment of cucumbers from the Dominican Republic, which were contaminated by salmonella. PREDICT has also identified products with illegal pesticides, heavy metal contamination, filth, and decomposition, as well as substandard medical devices and improperly canned food. FDA also developed mobile handheld devices that allow our investigators to immediately identify products that may be counterfeit or adulterated. The counterfeit detection device uses light waves to detect irregularities in the chemical composition or labeling of a drug, while the chemical detection (IMS) device identifies inappropriate chemical compounds in a product. The IMS recently identified an unlawful prescription drug--one taken off the market because it can cause heart attacks and strokes--in a large number of imported dietary supplements for weight loss. We hope to fund the development and use of more such mobile handheld devices. Collaboration With Other Nations.--To address the vast number of imports successfully, we must build a global public health safety net by partnering with other nations. FDA has signed over 120 international arrangements with foreign counterparts to create mechanisms for information sharing and collaboration. We are actively using information from, and conducting joint inspections with, trusted foreign counterparts, and engaging in harmonization efforts on foods and medical products. For example, we have signed an arrangement with Brazil, Canada, and Australia to implement a Medical Device Single Audit pilot program under which a medical device inspection done by one regulator can be relied on by other regulatory agencies. Such programs can cut duplicative requirements for industry and allow us to better allocate our resources. Supporting Biomedical Innovation The U.S. food and biomedical industries are among the most successful and respected in the world and FDA plays a key role in that. FDA is sometimes viewed as a barrier to the economic success and innovation of both industries, but that does not take into account the benefits FDA regulation brings them. Public confidence in a strong FDA fosters consumer trust in the safety, effectiveness and quality of the products we regulate. This, in turn, helps producers build their markets. For example, as FDA became the model for science-based drug approval around the world, its high standards spurred decades of medical advances and turned the U.S. pharmaceutical industry into the world leader in innovative medicines. As you know, I have made it a priority to help U.S. biomedical companies maintain their status as world leaders in innovation. It is well known that advances in biomedical research are not being translated into real world products as swiftly and surely as we all would hope. The time and costs of developing new drugs has been increasing. Yet despite increases in research and development, the pipeline of new, innovative drugs remains disturbingly limited. Serious public health needs, such as treatments for autism and Alzheimer's disease, are not yet being met, despite years of research and investment. And many drugs are not revealed to be unsafe or ineffective until the last stages of development, wasting valuable time and resources. Through its regulatory science programs, FDA is committed to helping to develop new knowledge and tools that can help translate basic scientific discoveries and approaches into life-saving medicines, and reducing the time, complexity and cost of drug and device development. Investment in FDA allows our scientists to support innovation through a range of activities, including: --the Innovation Pathway, which cuts the time and cost of developing and reviewing breakthrough device technologies--the first to benefit from the Pathway was a robotic arm controlled by a microchip in the brains of patients with spinal cord injuries or amputations; --greater use of genetic data to advance personalized medicine, especially in cancer therapies; --new scientific tools and partnerships to learn earlier in development whether a drug or device will work and be safe, saving time and money now wasted on late-stage product failures; --more guidance to industry early in technology development to help bring important new products, like the artificial pancreas, to market more quickly; and --more collaboration with companies earlier in development. When companies come to us for help early in the process of testing their products, experience shows that they can shave up to 5 years off their development time. That's a dramatic shortening of the path to market. Stretching Budget Dollars We have also made belt-tightening a priority. We have consolidated our information technology infrastructure and administrative functions across FDA, and put in place controls to cut the cost of travel, training and conferences. We are avoiding additional rent costs by making better use of existing office space through telework and office- sharing, and we are reviewing contracts to cut service and product duplication. CURRENT BUDGET REQUESTS The budget includes $4.7 billion, an $821 million increase from fiscal year 2012. Of this requested increase, user fees account for 94 percent ($770 million). Mindful of the need to reduce spending, we seek a reduced budget authority in several areas, including a $15.4 million decrease for human drug, biologic, and medical device programs. We are also asking for a small number of increases, which are necessary to meet our growing duties and preserve the safety of our food and medical products: --An additional $43 million to carry out our responsibilities under FSMA and to modernize our food safety system. These resources will go to building prevention-based food and animal food and feed safety systems, to reduce the toll of foodborne illnesses. --An additional $10 million, above fiscal year 2012, for overseeing the safety of goods from China. This increase will add 16 new inspectors in China, who can conduct more inspections and train Chinese counterparts, strengthening our ability to prevent safety problems before products reach the United States. --An additional $3.5 million, above fiscal year 2012, to improve the development timelines and success rates for medical countermeasures intended to protect against chemical, biological, radiological, and nuclear threats and new infectious diseases. The top priorities for these funds include care for U.S. soldiers suffering from traumatic brain injury, treatment of acute radiation syndrome, and supporting rapid deployment of critical medical countermeasures in emergency situations. --An additional $17.7 million to permit us to equip and obtain certification for four already-constructed buildings, including two labs, on the White Oak campus, so that they may begin carrying out research to support biomedical advances. Without these funds, the labs cannot be used and the $300 million cost of constructing them will have been wasted. Moreover, we will need to continue to pay rent for the old space occupied by FDA staff. Under agreements negotiated with industry, we seek an increase in current law user fees of $500 million to support our drug, device, animal drug, animal, food and feed, color additive, export, and tobacco product programs. We also seek $269 million in proposed user fees, including $225 million for food facility registration and inspection, and imports, $31 million for animal drug application fees that are up for reauthorization this year, $19 million to strengthen our oversight of cosmetic safety, and $15 million for reinspection of medical product facilities. I know that some of you have expressed concern that proposed user fees for food producers will impose unexpected burdens, especially on small producers. Please be assured that food-related user fees, if authorized, will be developed in close cooperation with stakeholders. CONCLUSION FDA's oversight of our food and medical products supply is indispensable to the health and well-being of every American. We carry out our broad public health responsibilities effectively and with few taxpayer dollars--even as those responsibilities are expanding as a result of new legislation, technological advances, and a globalized marketplace. Our fiscal year 2014 budget targets our spending efficiently, on programs that are essential to providing Americans with the safe foods and effective medical products they expect. I look forward to answering your questions today and to working with you in the coming year. Senator Pryor. And I know you have a couple of colleagues there to help if we get too bogged down in the weeds here. So we want to welcome them to the subcommittee as well. I know you introduced them. BUDGET REQUEST Let me start here and just jump right in to your budget generally. As we have talked about a few moments ago, you prepared this budget before we passed the fiscal year 2013 budget. That puts you at a real disadvantage, and we understand that. We are sensitive to that. We are not going to ask you to clarify that today, but I do hope that you and your team will work with us and our teams here on the subcommittee to try to update your requests and try to find the balance we need to find as we go forward. And I assume you are perfectly willing to do that and would agree to all work together on that? Dr. Hamburg. Absolutely. Willing and eager. Senator Pryor. Well, thank you very much. And again, we appreciate that. We just understand the circumstances, and I think everybody understands the circumstances we are in. SEQUESTRATION Let me ask about the sequester. This is something obviously that has been in the news a whole, whole lot. We know how important it is. We also know that there have been news reports about the FDA losing the ability to conduct approximately 2,100 domestic and foreign facility inspections for consumer safety. And now that the sequester is here and now that the cuts are taking effect, can you please provide us with an update on how the sequester is affecting your agency? Dr. Hamburg. Okay. Well, of course, the sequester is of significant concern to us, and overlaid on the additional issue of expanding responsibilities, these cuts will come at a cost. The sequester is about $209 million in terms of cut to FDA, $126 million in budget authority, and it is important to note also $83 million in user fees. We, at the present time, are trying to absorb the impact of sequester in ways that will have the least impact on the health of the public and our ability to move forward with critical programs. We are decreasing travel and conferences, training programs, cutting back on a range of consulting contracts and grants. Sad to say, we are already not at our full-time equivalent (FTE) caps, and so we won't be able to hire up as much as we would like. But we won't have to furlough anyone because we are under where we would like to be, where we think we actually need to be. But that is another area in which we will absorb some of the sequester cut. The issue around the user fees I think is an important one because we did work carefully with industry and with Congress to develop a program for the use of user fees in key areas of our medical product programs. And we will not be able to use all of those user fees to achieve the performance goals that were negotiated with industry, and I think that will be reflected in a slowing of some of our ability to build up key programs, to advance medical product review programs in critical ways. And I do think that this is a set of concerns for all of us. USER FEES Senator Pryor. You anticipated my next couple of questions about the user fee because I think a lot of people would be surprised to know that you can't use a user fee, something you negotiated with the industry and everybody understands the parameters and how they will be used. Do you think--have you thought about how that is going to affect your negotiations and discussions with the industry going forward? Dr. Hamburg. Why, of course, I am very concerned about that. The process involves us sitting with industry and also the engagement of a broader set of stakeholders to really identify what are the critical issues and concerns, how can we strengthen programs and activities, and what are our key performance goals to measure, and then how do we measure progress toward those goals? Industry clearly expects that the money that they are putting forward to the FDA will support these critical goals and programs and activities, and I think industry has been surprised, as have been many others, that they would be the subject of cuts in the same way as budget authority. And I do think that it is something to think about the next time we sit down across the table to discuss these fees. Nonetheless, without these user fees, our programs would be seriously compromised in our overall resources to do critical tasks. FOOD SAFETY USER FEE Senator Pryor. Yes, and I see that also with food safety user fees that you are proposing, and I have that concern that if--we can't act unless it is authorized by other committees here, and I am not sure those will be authorized. And I am wondering if you have thought through the possibility that they not be authorized, therefore not be appropriated. And how can you do the things you need to do on the food safety side if those user fees aren't there? Dr. Hamburg. Well, as we look at the program for food safety and the implementation of the Food Safety Modernization Act, clearly the goals of food safety modernization and moving toward this preventive model is a shared set of goals for industry and for the benefit of the American people, and I do think it is appropriate that our budget reflect a combination of a budget authority commitment and user fees. We have begun discussions with industry in this arena, and I think that those will be important discussions as we try to achieve what has been proposed in the President's budget and as we work with Congress in shaping the fiscal year 2014 budget. And the issue of how those user fees are authorized and appropriated is, of course, an important one, and there will need to be, of course, a legislative pathway for that. And I hope we can do it in a way that will maximize the benefits for everyone and protect those user fee funds for their intended use. Senator Pryor. Yes. Well, and I think, just as this develops over the course of the year, we just need to keep talking, and it is very important for us to know about your priorities. And we will work through all the ``what ifs'' as they come up. But again, thank you. I know we have been joined by several colleagues here. So I am going to turn it over to Senator Blunt and let you ask questions, and then we will move down the line. Thank you. Senator Blunt. Thank you, Mr. Chairman. BUDGET REQUEST On maybe the biggest issue that we will need to work together on regarding the budget is getting the request in synch with what you need now. Because as the chairman mentioned, some of your requests were met in the continuing resolution. WHITE OAK FACILITY For example, the move into the White Oak facility, I think that money is there now. Is that right? Dr. Hamburg. Well, we, in the continuing resolution--and we appreciate it greatly--there were monies given to us for the White Oak consolidation. We do have continuing needs. Unfortunately, those were not one-time only needs in terms of the White Oak consolidation. And as---- Senator Blunt. But the move-in needs were one-time only, and the completion needs were one-time only, right? Dr. Hamburg. There are additional needs in order to complete the buildings. Senator Blunt. We need to talk about what those are. Dr. Hamburg. We would be delighted to sit down with you on that. [The information follows:] The additional needs to complete the White Oak Campus are as follows: FDA has $17.6 million in additional requirements in fiscal year 2014 over the 2013 appropriation for the Offices and the Life Sciences- Biodefense Complex, also known as the LSBC. These funds will ensure final commissioning and certification of specialized laboratories prior to occupancy. This includes installing and testing specialized equipment ($1.3 million) for building automation, operation and monitoring, conducting high-efficiency particulate air filter, pressurization control, and power tests, installing air sensors, determining primary bio-containment device effectiveness, and providing special containment equipment for the Biosafety Level-3 labs, also known as BSL-3 labs. The BSL-3 labs containment equipment and the vivarium's pH waste neutralization system are specialized systems that will also be maintained with this request. The fiscal year 2014 increase also includes decommissioning ($8 million) the laboratories FDA is vacating at the National Institutes of Health and at Nicholson Lane, some of which we have occupied since the 1960s. Decommissioning activities include complying with environmental regulations and mitigating any contamination caused by chemical, radiological and biological materials. Funds are also needed for critical operational and logistical functions on the White Oak Campus, including completion of the remaining campus security infrastructure. FDA will experience, as part of the LSBC and office move, a 50-percent growth over the current campus population as well as a 50-percent increase in building square footage that must be supported. Specifically, these funds will be used to develop and implement additional safety programs ($3.1 million) to support complex laboratories, including high containment specialty laboratories, expand the Central Utility Plant to support the new LSBC and Office Complex, and increased operational and logistical functions ($5.2 million), including hazardous materials storage, handling, processing, and distribution. FDA must make this investment in early fiscal year 2014 to ensure that the offices and LSBC are operational and ready for occupancy. These buildings must be operational and meet safety requirements to serve critical CBER and CDER programs that help combat emerging infectious diseases and bioterrorism threats and ensure the safety of blood, tissues, stem cell therapies, vaccines and drug products. SEQUESTRATION Senator Blunt. All right. We need to talk about what those are. And what amount of money did you say was being sequestered in fees? Dr. Hamburg. It is about $83 million. Senator Blunt. Eighty-three million? Dr. Hamburg. Million, uh-huh, and that is across a number of user fee programs in the medical product arena. Senator Blunt. And your overall shortage in these areas between now and September 30 would be less than the amount of money you think you need to complete the year? Dr. Hamburg. Well, we will have cuts through sequester to the user fee and the budget authority component of programs---- Senator Blunt. Right. Dr. Hamburg [continuing]. That support our medical product review. So, overall, the sequester impact is $209 million. USER FEES Senator Blunt. Assuming we went forward with the Budget Control Act, would you be supportive of the user fee categories being exempt from sequester? Dr. Hamburg. I don't know that I am the best person to speak to the overall policy, but I would be very eager to see the user fee monies protected in terms of their intended use, which, as I have mentioned before, were negotiated very, very carefully with industry in terms of a set of critical programs and activities and performance goals. Senator Blunt. And again, for the rest of this year for the FDA budget, the user fee sequester is $83 million. So this is a big amount of money. Dr. Hamburg. It is a big amount of money. MENU LABELING Senator Blunt. All right. What about the easy to deal with topic of menu labeling? Where are you on that? When do you expect the FDA to issue its final rule? Dr. Hamburg. Well, we hope to issue that final rule soon. As you know, it has been an extended process. We have talked before about how I naively thought that menu labeling would be one of the easier to implement components of the law, but in fact, it has been very challenging. But we have had the opportunity for a process of notice and comment rulemaking, and we--in response to the proposed rule that we put forward, we did receive a very large number of comments. We are currently going through all of those and trying to finalize a final policy document, and we will be getting that out certainly by the end of this year, although, knock on wood, and as soon as we possibly can. Senator Blunt. By the end of this calendar year or by the end of this fiscal year? Dr. Hamburg. I was saying calendar year, but it is a high priority. We are trying to move forward with it. I can't tell you exactly when. And whenever I do make those kinds of statements, I always regret it. But we are moving into the home stretch, and I know that you have had many concerns about aspects of it. And we have heard those concerns, and they were reflected in the comments. But it has been a complex rulemaking process. Senator Blunt. Well, you and I both have learned a lot more about this than we would have ever expected to learn. Dr. Hamburg. Yes, exactly. Senator Blunt. And things like the small chain grocery stores, the food they have available in the store, drive- throughs, locations that are almost exclusively delivery locations, how much posting do they need to do at the location, all those are things that obviously people are going to look very closely at when that rule does come out. COSMETIC USER FEE The cosmetics industry, I understand that the FDA has been involved in some discussions with the industry looking for a science-based framework that would establish a uniform national standard. Do you want to comment on that at all? Dr. Hamburg. Well, we have had a number of discussions with industry about their desire for greater harmonization of approaches. There is an international forum for some of those discussions that meets regularly with other regulatory authorities engaged as well. We think it is an important set of activities, although different countries do have different legal regulatory frameworks for oversight of this area, which will not enable total convergence. But we think that these are important discussions to be having. We also do believe that there are opportunities for us to coordinate more closely with the cosmetics industry, and we expect to be having some more targeted discussions in the context of the proposed user fees. Senator Blunt. I think the industry is growing more concerned that there might be a lot of conflicting State laws, and some Federal definitions that were overriding would be helpful there. I know this is the second year in a row that you have asked for these cosmetics industry user fees. I think this year you estimate the fee would cost the industry a little over $19 million. I am glad to continue to talk about that. I was opposed to that at the end of our discussions last year and probably will be again this year, but it is a topic that I am willing to talk to you about. MEDICAL DEVICES On the medical device manufacturers, I understand that a number of countries have a country of origin first step. If you haven't been approved in the country the device is made, you just automatically cannot be approved in a number of countries around the world. Costa Rica appears to have been a very big beneficiary of this. I know there are 14,000 medical device jobs in San Jose now. Most of them are pretty new, and mostly because that government, more quickly than our Government, will give them the country of origin approval. Have you got some thoughts on how we deal with the medical device process going more quickly than it has been going? And they have a fee already that they are willing to pay. Is that right? Dr. Hamburg. Yes. Well, with respect to the issue of where manufacturing occurs, it often is a decision of companies in terms of costs of manufacturing, price of labor, and other incentives. And as you know, when the country requires that you be approved in that country in order to sell in that country, that is an important incentive as well. Senator Blunt. Yes, but to be sure we are talking about the same thing. This is where other countries require as their first step that you had to have approval in the country where the device was made before you could even apply for approval in the country you would like to sell it in. Dr. Hamburg. Well, that is a national policy. I do think with respect to Costa Rica, it is interesting to note that they accept the U.S. approval for devices as an approval within their own country because they do look to us in many ways as a gold standard for approval of these products. But we are working very hard with industry and within our own program processes and procedures to try to find ways to streamline our device review process as much as possible, to make it as clear and predictable as possible. We don't want it to be overly cumbersome, but we want it to provide appropriate protections to make sure that products are as safe and effective as possible for their intended use. We want to find ways to encourage manufacturers to remain in this country, to do their work in this country. And I think that we remain as a Nation a leader in medical device science and technology and continue to have strong exports in this area. But we want to make sure that our regulatory programs support that, but also, of course, address what is our core mission, which is the review of safety and efficacy. TISSUE BANKS Senator Blunt. Two quick questions I will ask for the record unless we have time for a second round. One is, first of all, to preface a question on tissue banks, I want to thank you for personally taking time to get involved in that. I think there were four areas, following up on their meeting with the agency, that you all were looking at. One was to reissue the jurisdictional update guidance document and allow for a formal comment period. Two was to stop publishing FDA's descriptions of Tissue Reference Group (TRG) decisions that they felt had in the past sometimes been misleading. Three, review the FDA's TRG process to ensure that it is appropriately addressing current challenges. And four, your very generous commitment to see that they were meeting with your organization twice a year. So just your sense of the time on those four issues---- Dr. Hamburg. Yes. Senator Blunt [continuing]. At some time when you could tell me that would be helpful. Dr. Hamburg. Okay. Terrific. I think we have had some good discussions and very useful to hear their concerns, and I think we are addressing them in a coordinated way. [The information follows:] 1. Reissue the Jurisdictional Update guidance document and allow for a formal comment period. Answer. We have heard that some stakeholders have questions about this policy document, and we understand that there is a need for improved communication regarding regulatory policy in this area. We are currently considering how best to address this concern. We agree to look at this issue and report back on how we are addressing stakeholder communications regarding the policies described in this document. 2. Stop publishing FDA's potentially misleading descriptions of Tissue Reference Group (TRG) decisions. Answer. The TRG was established in 1998. Since then, we annually have been publishing on our Web site summaries of TRG recommendations. We instituted this practice in recognition of the public interest in a transparent TRG process, an interest that was reiterated by Congress in the last appropriations report directing us to now publish these updates on a twice-yearly basis. Ending this practice would not serve important interests in transparency. However, we understand that industry has concerns that some readers generalize inappropriately from the summaries that we post on the Web site. In order to address that risk, we have added the following language to the TRG Web page where the updates are posted: Please keep in mind that updates to the TRG Annual Reports are stated in general terms in order to avoid revealing confidential information protected from disclosure. The TRG's recommendations are based on specific facts, which may not be provided in the updates. For these reasons, it may not be appropriate to generalize broadly from the updates. If you have questions about your specific product, please contact [email protected]. 3. Review the FDA's TRG process to ensure that it is appropriately addressing current challenges. Answer. An inter-center working group has analyzed and revised the TRG procedures, taking stakeholder comments and concerns into consideration. FDA has posted an updated Standard Operating Policy and Procedure (SOPP) for the TRG, and it is publicly available on the FDA Web site. 4. Conduct two liaison meetings per year. (We understand the Commissioner has agreed to this item.) Answer. This request was made in 2012, and CBER/Off ice of Cellular, Tissue and Gene Therapy (OCTGT) agreed then to a twice yearly schedule for meetings with AATB. The Commissioner confirmed this arrangement when she met with AATB in early 2013. FOOD SAFETY MODERNIZATION ACT Senator Blunt. And on the Food Safety Modernization Act rules, FDA took 2 years to draft the rules, yet they are allowing only 120 days for interested parties to comment. A number of those parties have requested an extension. I am hoping that you are looking at that extension, and I will be glad for some follow-up on that as well. Dr. Hamburg. Well, we appreciate that these are complex rules, the proposed rules, to go through and analyze, and we do intend to extend the comment period so that we can hear all of the concerns and address them fully. And I think it is a reasonable request. Senator Blunt. What are you going to extend by, 180 days? Dr. Hamburg. I think 120 days. Senator Blunt. So you are going to double the comment period? Dr. Hamburg. Yes. Senator Blunt. Okay. Thank you, Mr. Chairman. Senator Pryor. Thank you. Senator Cochran. MENU LABELING Senator Cochran. Mr. Chairman, Madam Commissioner, I understand the Food and Drug Administration is having some difficulty in complying with or figuring out how to respond to the requirement that menus be labeled to show various things for the consuming public. Food retailers in my State of Mississippi have expressed some concerns, too, about how this affects them and how they are supposed to comply. What type of establishments do you foresee will be affected or governed by these new requirements? Dr. Hamburg. Well, the law was quite explicit about chains of 20 or more restaurants or vending machines in terms of the applicability of FDA regulatory oversight. Defining exactly what a--restaurant is fairly straightforward. A restaurant-like establishment is a more complex challenge in our modern world, with fast food stores and pizza delivery and the different kinds of models of in-grocery store cafes, et cetera. And that is really where the greatest challenges have come and where we have gone through an extended process of putting out proposals, asking questions, and seeking public comment. And we are trying now to go through all of that and compile the issues and concerns and reflect those back in a final rule, which we hope will be published very soon. Senator Cochran. Thank you. One other concern of importance in my State is with the catfish industry and the fact that labeling and certification of the wholesomeness of foods that are going to wind up being sold in stores or restaurants, whether or not these apply to foreign fish that come in and are imported into our country. To what extent are you involved in trying to sort through those challenges? What is the status of that? Dr. Hamburg. Well, I think that it is the case that in terms of seafood in particular, as you mentioned, there is a growing component of seafood in this country that is coming in from overseas, and we play a critical role in the oversight of all of that. And the import of seafood is one of the areas that surprised me in terms of the shifting of more and more imports coming from overseas. You mentioned catfish. That is a particular area of some regulatory complexity because, as I understand it, several years ago, Congress actually asked to shift the oversight of catfish to USDA from FDA, and that process is still in transition. And until Food Safety and Inspection Service (FSIS) at FDA fully takes it over, we are continuing to provide oversight in that area as well. We work with our partners to try to ensure the safety and quality of the seafood that Americans eat, wherever it comes from. Senator Cochran. Well, we hope that that can be resolved at an early date. I know it may be complex and challenging, but a lot of producers and those who are in business here in the United States are worried that it is being unfairly--or it may be unfairly applied to domestic producers, as compared with foreign importers. So, anyway, your personal oversight of that would be appreciated. Dr. Hamburg. Thank you. Senator Cochran. Thank you. Senator Pryor. Senator Tester. Senator Tester. Thank you, Mr. Chairman. And I want to thank Dr. Hamburg for being here and her service. And I just want you to know that bringing Thad Cochran's son to the subcommittee is not going to sway this subcommittee in the questions and answers. I assume that is correct, right, Thad? At any rate, welcome. FOOD SAFETY MODERNIZATION ACT Look, I want to talk about the Food Safety Modernization Act a little bit, too. And I appreciate the ability to visit with you off the grid, too. I thank you very much for that. During the debate over the Food Safety Modernization Act, we had a very healthy discussion about where consumer risk comes from. One key question was whether the smallest companies, operating locally, selling at the farmer's market or at a local grocery store, pose the same kind of risk as the big national companies do. And while there were strong feelings on both sides of this debate, and they were strong, one thing that was lacking was any epidemiological data to support applying the same rules to small producers in isolated markets as we do to the big guys whose mistakes could reach every corner of the country in a very short order. So Congress, in order to avoid putting small producers out of business, did not apply those rules to qualified facilities. Congress did, however, require a study of the food processing sector, including facilities collocated on farms, and this report was to be completed before the promulgation of the new rules, and the rules were intended to be informed by the study. And correct me, if I am wrong on that. However, FDA did not release the study until January-- correct?--along with the proposed preventive control rule. Yet the study was dated November 2011. Can you please speak to why the agency did not release that report and seek comment on it before a proposed preventive control rule was released? It is about 13 months space. Dr. Hamburg. We are, as I said, trying to go forward with an open process with input from all stakeholders, and the opportunity to bring the best possible science to bear and data to bear and experience to bear on our rulemaking. I will have to get back to you on the specifics of the review process for that report. [The information follows:] Section 103(a) of the FDA Food Safety Modernization Act (FSMA) instructed FDA, in consultation with the Secretary of Agriculture, to conduct a study of the food processing sector. Section 103(a) of FSMA also instructed FDA to submit to Congress a report describing the results of the study not later than 18 months after FSMA's date of enactment. However, FSMA also required us to promulgate regulations to establish ``science-based minimum standards for conducting a hazard analysis, documenting hazards, implementing preventive controls, and documenting the implementation of preventive controls'' and to define the terms ``small business'' and ``very small business.'' The regulations were to be promulgated not later than 18 months after FSMA's enactment. Under contract with FDA, RTI International conducted the study, consistent with the FSMA requirements. Also consistent with FSMA, we have consulted with the U.S. Department of Agriculture (USDA) about the study. We also included the Food Processing Sector Study as a reference in the recently issued proposed rule for preventive controls for human food. The study provides information on the number of establishments and average sales per establishment by industry and size of operation. We used the study to inform the proposed rule's definitions of ``small business'' and ``very small business.'' Although section 103(a) of FSMA did not require us to do so, we released the study for public comment along with the proposed preventive controls rule and the proposed definitions of ``small business'' and ``very small business.'' We took this action so that we could evaluate and address the comments, before we reported to Congress on the results of the study. In the preamble to the proposed rule, we described our plan as follows: Consistent with section 418(l)(5) of the FD&C Act, FDA has consulted with USDA during its study of the food processing sector (Ref. 31). The study is available in the docket established for this proposed rule (Ref. 32). We request comment on that study. In section X.B.4 of this document, we discuss our proposed definitions for small business and very small business. We will consider comments regarding the study, as well as comments regarding our proposed definitions for small and very small business, in any final rule based on this proposed rule. 78 FR 3646 at 3658. Thus, because the study is part of the administrative record for the rulemaking, we will consider comments on the study in the same manner as we would consider comments on any other reference in the administrative record. Senator Tester. I would like to because---- Dr. Hamburg. Yes. Senator Tester [continuing]. In my review, it appears that the FDA did not examine any actual epidemiological data, but it relied on the process of expert elicitation. And essentially, academics in the field of food safety and research were surveyed on their experience. I think it is--well, point well taken. You will get back to me. Dr. Hamburg. I think we can have a rich conversation on all of the data that has gone into the development of these rules. Senator Tester. Super. And I thank you for that. FOOD SAFETY MODERNIZATION ACT One question that arose during the consideration of the Food Safety Modernization Act was again whether farms that sell directly to consumers from farm stands on their own farms should be treated the same as farmers who sell directly to consumers out of a truck at a farmer's market, and it is essentially the same thing. Under the existing rules, this question has never been clear. A farmer that sells from his or her own property is considered a retail food establishment and not a food facility. The Food Safety Modernization Act required FDA to adjust the definition of a retail food establishment to ensure that a farmer selling his or her own food at a market would be treated the same way. Can you explain why the rules that were proposed last January do not address this issue, and do you plan on addressing it in the final rule? Dr. Hamburg. Well, of course, in the Food Safety Modernization Act there was what we finally call the ``Tester exemption,'' which speaks to some of these issues. But we have also been trying to build in flexibility in terms of the proposed rules and how they would be applied, depending on the activities that were being undertaken and the level of risk. We have really tried to engage in a lot of outreach and discussion to understand, noting that there is not a one size fits all. This is a complex and diverse enterprise, the food enterprise, and the needs of the produce-growing community are very different, depending on what you are growing, who you are growing it for, the size of the facility, et cetera. And so, I think we are really striving to reach the right balance. And food safety matters to the American public, whether you are big or small. But I think in terms of our regulatory oversight role, we do not want to have a one size fits all. We recognize the differences. We are trying to achieve a risk- based approach that really does recognize the differences, and we are not striving to be unnecessarily burdensome. We are trying to find the right balance to protect health. Senator Tester. I very much appreciate particularly the statement the one size does not fit all. Because one size really doesn't fit all, and it doesn't fit all in most parts of Government and especially here. And where you have--and that is the whole thing. We want our food to be safe, no mistake about that. We are silly if we don't. But by the same token, we need to, just as we do in the financial area, fit the regulation to the risk. And so, I thank you for that. We will continue to follow up. My staff will continue to follow up with your staff on ways we can make this thing work because I think we both want it to work in the end and work well for the consumer without putting a bunch of folks who don't pose much of a risk at all out of business. So thank you for that. I talked to you a bit ago about a petition that was in front of the FDA that had over 1 million signatures on it that dealt with labeling of GMO [genetically modified organism] foods. Dr. Hamburg. Mm-hmm. GENETICALLY MODIFIED FOODS Senator Tester. I am going to back up a little bit. When we talk about chemicals that are applied to food, they go through a rigorous, and I mean a rigorous, bunch of tests. The GMO issue is fairly new, 15 to 20 years, and in my perspective, from my opinion as a dry land dirt farmer, I will tell you that the amount of testing that is done on genetically modified foods is slim to none, and slim just left town. And so, my question to you is, is that with this petition in hand, it was originally submitted about 1\1/2\ years ago, November 2011, what are your plans? And I know in previous conversations, you talked about the plant where their corn, soybean, cotton, whatever, is really not changed much. But I don't know if there is tests to prove that. It is certainly a different plant than it was initially because there are traits in the environment. So what is your opinion on labeling? Is it something FDA is going to do? Dr. Hamburg. Well, we certainly understand that there are concerns about safety and environmental issues related to genetically modified foods in the public at large, and it has been the focus of a lot of scientific work and investigation. We support a consumer's right to know and voluntary labeling of genetically modified foods. Senator Tester. The problem is, is that I am not sure voluntary labeling is ever going to happen, or it would have already happened. Just a point. Thank you, Mr. Chairman. Senator Pryor. Thank you, Senator Tester. COSMETICS I have a few follow-ups, if you don't mind, Dr. Hamburg? And that is on cosmetics. You know, we talked about user fees in other contexts. I am not sure we mentioned user fees in cosmetics. I know that you have been in negotiations with the industry on these. My understanding is they are concerned about timely and fairly rapid reviews of things and make sure that we have safe products to find that right balance we need. But are you in a position today to talk about your status of your negotiations with the cosmetics industry? Dr. Hamburg. You know, I think that we are at a very early stage in terms of some of the specifics, but we expect now that the President's budget has come out and there is a target as well, that we will be sitting down with the cosmetics industry in a much more focused way. And of course, we will be also bringing the fruits of our discussion to Congress as we move forward. Senator Pryor. Are you talking about setting up a national standard for regulation of cosmetics? Dr. Hamburg. Well, that, I think what we would be talking about with respect to the user fees would be more trying to define a shared agenda in terms of what are a couple of critical priorities in terms of our oversight of them in areas where the cosmetic industries think that they would benefit and where we think that through additional resources and identification of some key areas of activity, we could strengthen our program. NATIONAL CENTER FOR TOXICOLOGICAL RESEARCH Senator Pryor. Let me also just change the focus here for one moment to the National Center for Toxicological Research. I know that they do a lot of things in the nanotechnology world, which is very important. But this is a facility that also is looking at the safety of some high-profile issues like BPA and also antibiotics in food processing animals, pediatrics anesthetics, even something that is very current this week, ricin, trying to find the best inactivating agent for that. So, obviously, it does a lot of important work. And they certainly benefit your mission and are important to your mission. And I also know that you have a memorandum of understanding between the State of Arkansas, led by Governor Beebe, and also yourselves about trying to make sure that this is just a first-rate facility all the way around with a lot of collaboration and help going both ways between you and the University of Arkansas. VIRTUAL CENTER OF EXCELLENCE--NANOTECHNOLOGY Could you talk just a little bit about that memorandum of understanding (MOU) and the virtual Center of Excellence established by the MOU and just an update on that, please? Dr. Hamburg. Sure. Well, we are very excited about this project and the incredible support that we have gotten from the State of Arkansas and its outstanding academic institutions. It is an MOU with five academic institutions in the State, as well as the Government, and really enables us to move forward in a couple of critical ways. One is that we have created a training program in regulatory science, one of the first formal programs in the country, and we will be graduating our first group of accredited students in this area. And that really matters today and for the future, of course, in terms of really making sure that we have the strongest science-based regulatory programs. It also enables us to really focus on some critical issues like nanotechnology and study them at a very basic science level as well as all the way through the set of issues that arise, including clinical experience with the assessment of safety and efficacy of some of these products. So it really is a very unique resource. And as you note, the National Center for Toxicology Research is a unique entity in the country in terms of its focus, the kind of work it does, and its impact on critical issues to the American people. So I think this is really an outstanding program that we expect will yield a lot of benefits going forward. NANOTECHNOLOGY Senator Pryor. Well, and I know that nanotechnology is really an emerging field, and it is a rapidly developing field. Do you feel like the FDA has the resources necessary to stay on top of all the changes that are coming with nano materials and nanotechnology? Dr. Hamburg. Well, of course, we could always use more. But we have a strong program. Nanotechnology is a very challenging area for us in the sense that nanotechnology is emerging and nano-based products are emerging across many domains of our activity--drugs, devices, foods, cosmetics. And in these different areas, they may raise different concerns. So I think it is very, very important that as this field is evolving, we are very engaged from the get-go in terms of thinking about both some of the safety concerns that are important to address, but also how best to harness this new technology and approach to benefit the American people. BUILDING AND FACILITIES Senator Pryor. Right. I am not going to ask you to go through all the details on the answer to this next question. But I would ask you to provide us the documentation for your building and infrastructure needs. And I know you have been doing that, and obviously, it needs to be updated and made current. But I see the request that you have made, and I think it is important for us on the subcommittee to see all of your needs and look and see if there are ways that we can help with that, and we would like to really kind of do a top-to-bottom review of that and work with you on that because that is very important. And you can just submit that for the record when it is ready. Dr. Hamburg. Okay. Terrific. [The information follows:] The Building and Facilities (B&F) Program provides funding to construct, renovate, repair and improve FDA's 86 owned buildings and the associated infrastructure for at six sites where operations critical to FDA's public health mission are conducted. A total of approximately 1,400 staff and contractors are employed at these sites. FDA's owned assets include numerous laboratory facilities and a substantial amount of site infrastructure. It is critical to ensure a safe working environment for FDA employees. Improving the physical condition and operational reliability of these assets is also vital to supporting FDA's work to protect the Nation's health, security, and safety. FDA currently has an estimated Backlog of Maintenance and Repair (BMAR) of $120 million, which represents a comprehensive list of maintenance and repair deficiencies for buildings and site infrastructure. In addition, B&F funding is also needed to bring owned buildings into compliance with sustainable building standards and to accomplish renovations needed by FDA programs to meet regulatory and mission requirements. The Jefferson Lab Complex (JLC) site provides an excellent example of FDA's needs. FDA conducts mission research at its JLC site, which is occupied by the National Center for Toxicological Research (NCTR) and the Office of Regulatory Affairs' (ORA) Arkansas Regional Lab (ARL). This site represents more than 50 percent of FDA's owned square footage and BMAR. More specifically, there are at least seven laboratory and animal holding facilities that are in urgent need of attention with architectural, HVAC, electrical, and plumbing systems that have reached the end of their useful life. These buildings are in need of repairs and improvements to meet code and make them safe to meet FDA's mission. A Master Plan, which will identify required improvements and renovations to buildings and site infrastructure, and will propose a strategy to implement them over the next 5 to 20 years, is almost complete. In addition to addressing some of the above noted needs, the Master Plan also addresses critical needs for the construction of a Nanotechnology Core Facility and an addition to an existing Imaging Core Facility as well as initiating utility infrastructure support for a proposed Biotechnology Park (a.k.a., Bioplex) being spearheaded by The Economic Development Alliance of Jefferson County Arkansas of which FDA is an active member. Such vital improvement, renovation and construction projects cannot be completed without adequate B&F funding. Investing in FDA-owned facilities provides space for expansion and the ability to renovate and retool infrastructure to support the complex FDA mission while saving funds. By utilizing its owned space to maximum capacity, FDA can reduce the amount of rented space it requires. Jefferson Laboratories alone has approximately 40,000 square feet of space available for renovation and use, and 490 acres of land that could be made available for future construction. FDA ensures its mission support capabilities are resourced adequately to achieve program success and, in the past, has been able to defer its maintenance, repairs, and facilities improvement needs as program needs were of higher priority. But the scale has recently tipped due to the continuous decreased funding for the B&F Program. FDA has determined that years of underfunding this program has resulted in a risk to its mission and to the safety of its employees. The Agency can no longer defer its maintenance needs as we are experiencing system failures in our buildings and infrastructure which not only impact reliability and mission-critical research activities but also the health and safety of our employees. Funding is needed now for critical buildings and infrastructure projects to ensure mission accomplishment and a safe working environment for its personnel. FDA leadership is also weighing these needs heavily in the formulation of our fiscal year 2015 budget request. Below is information regarding FDA's six owned sites and the critical work conducted at these sites in support of FDA's public health mission: Jefferson Labs Complex (JLC)--Jefferson, Arkansas.--This site is occupied by NCTR and ORA's Arkansas Regional Lab. NCTR conducts critical research at this site that focuses on toxicity and risk assessment, nanotechnology, biomarker development, non-invasive imaging, and studying the extrapolation of data from animal studies to humans. ARL conducts testing and analysis in support of post market surveillance. ARL also conducts research, collaborative studies, regulatory inspections, and scientific consultations to support enforcement activities. Gulf Coast Seafood Laboratory--Dauphin Island, Alabama.--FDA's Gulf Coast Seafood Laboratory site is used by the Center for Food Safety and Applied Nutrition (CFSAN) to conduct research programs related to seafood safety, especially FDA-regulated seafood harvested from the Gulf of Mexico. Muirkirk Road Complex (MRC)--Laurel, Maryland.--This is a campus shared by CFSAN and the Center for Veterinary Medicine (CVM) to conduct research programs related to food and animal drug safety, toxicology, microbiology, and molecular biology. In addition, laboratories at this site are used as part of the Laboratory and Food Emergency Response Networks. Winchester Engineering and Analytical Center (WEAC)--Winchester, Massachusetts.--WEAC is an ORA specialty laboratory used to test the safety and performance of medical devices, microwaves, and radiopharmaceuticals; to conduct radionuclide testing with food samples; and to ensure seafood freshness. San Juan District Office and Laboratory--San Juan, Puerto Rico.-- The San Juan District Office is responsible for compliance with FDA regulations in the Commonwealth of Puerto Rico and the U.S. Virgin Islands (St. Thomas, St. Croix, and St. John). The San Juan District Laboratory is a National Servicing Laboratory that specializes in the testing and analysis of human drugs (pharmaceutical analysis) and provides support in team inspections as well as conducting independent inspections of contract laboratories, domestic and foreign. Los Angeles District Office and Pacific Regional Laboratory SW-- Irvine, California.--This location houses the Los Angeles District Office, which serves as ORA's inspection and compliance activity in Southern California and the State of Arizona. The pacific Regional Laboratory SW is a multi-functional laboratory performing predominantly import work in the Foods, Drugs, Cosmetics, Veterinary Feeds, and Medical Devices program areas. The lab also has specialized capabilities in the areas of Entomological basis of Filth and Sanitation, Regulatory Mass Spectrometry, and Regulatory Molecular Microbiology and Virology. DRUG COMPOUNDING Senator Pryor. And the last thing I have really is I understand that you recently made an appearance before the House of Representatives, and maybe the issue of drug compounding came up over there? Dr. Hamburg. This is true. Senator Pryor. And I, like everyone else in the country, certainly on this subcommittee is very, very concerned about the fungal meningitis outbreak that we saw linked to the New England Compounding Center. And I also notice that in the budget, you are requesting, what is it, $3 million, if I am not mistaken? Dr. Hamburg. In the continuing resolution fiscal year 2013 budget, we intend, with the agreement of this subcommittee and support of this subcommittee, to spend $3 million for issues related to expanding activities with respect to oversight of compounding pharmacies. We are, as you may know, very deeply involved in discussions with Congress, particularly on the Senate side, with respect to legislation that would give us new authorities that we very strongly feel we need to be able to provide better protection for some of the highest risk compounding facilities that are making sterile products that represent a greater risk, making them in advance of or without a prescription and selling them across State lines. We don't know what that legislation will look like. I am very hopeful that we will get it. But we will need to come back to you with additional requests over time as we really determine the nature and scope of our responsibilities in this area and what we will need to have the kind of strong and sustainable regulatory regime to address the safety of compounding pharmacies. Senator Pryor. Compounding pharmacies are a very important piece of the puzzle, and certainly we want those drugs to be as safe as they can be, just like all drugs. And obviously, a problem like we saw at the New England Compounding Center raises concern, and we look forward to working with you on that. Senator Blunt. Senator Blunt. Okay. Let us stay with that topic a little while. The $3 million that you would expect to commit between now and the end of this fiscal year on drug compounding, under what authority would you be getting more involved or do you need legislation to get involved? What would you spend it on? Dr. Hamburg. No, we have authority with respect to compounding pharmacies, but it is far more limited than the authorities. For example, we have over conventional manufacturers. As you probably know, compounding pharmacies have historically been regulated on a routine day-to-day basis by the States. But we are increasingly concerned that there are many large compounding pharmacies out there that are making these high- risk sterile products, and we feel an obligation to be as aggressive as possible with our existing authorities to know who is out there making what and to make sure that there are not serious sterility concerns and other concerns that would put the American people at risk. We do not feel we have all of the authorities that we need to regulate this arena of compounding pharmacies and particularly these large compounding pharmacies that are behaving essentially as outsourcers to hospital networks and providing critical products to the healthcare system and to patients. And that is why we are seeking legislation. We don't have the authority, for example, to require that all of these facilities register with us and tell us what they are making. We don't have the authority to go in and fully inspect them, get access to their records and take samples. We don't have the authority to hold them to a uniform set of national standards or the authority to require that these compounding pharmacies report adverse events to us when they learn about them and about their products. DRUG COMPOUNDING LEGISLATION So we think that everyone would benefit by legislation that would clarify and strengthen the FDA oversight role. Senator Blunt. Now I would think, and I would be pleased to have your comments on this, that there is an argument to be made on the manufacturing side where a compounder is making a significant quantity of a compounded product to then be sold, as opposed to the pharmaceutical side where a pharmacist is compounding one product for one prescription. That obviously would take a whole lot more oversight than on specific manufacturing facilities. Am I off base there in looking at that that way? Dr. Hamburg. Well, we recognize the role of traditional compounders, and we do not want to oversee all compounding pharmacies in this country. But the industry has been evolving, and the healthcare system needs have been evolving. And there is this new sort of hybrid of compounding pharmacies that are making larger volumes and higher risk products, and we do feel that that is a gap in our current regulatory framework. If we were, as has been suggested by some, to treat this group of compounding pharmacists and pharmacy facilities as manufacturers, because they are doing some things that look more like manufacturing in many ways in terms of volume and some of the kinds of products that they are making, that would have very, very serious implications for the healthcare system and patient needs. APPROACH TO DRUG COMPOUNDING REGULATION You spoke earlier about the need for sort of a thoughtful, balanced approach to regulation. Our current authorities might push us to treating a range of compounding pharmacies like conventional manufacturers, and that would almost certainly put many of those companies out of business, both the good actors and the bad actors. We don't want a system that will unnecessarily compromise important industry and important manufacture of critical medical products, but we also want to make sure that those compounding pharmacies are appropriately regulated. We believe that we can find a balanced approach that will require those pharmacies that are making the high-risk sterile products in advance of or without a prescription and shipping to other States in a way that fits appropriate safety standards and good manufacturing practice for the products they make so we can assure quality. We want to be able to know who they are and what they are making and to routinely inspect them and get access to everything that we need. We want to make sure that these compounding pharmacies are making safe, high-quality products. But we also don't want to apply a sledgehammer if that isn't what is needed. And that is why we want to work with Congress to achieve the kind of regulatory authorities that we need to best serve the American people at the end of the day. Senator Blunt. Well, I think it is very important how you define the role you want to play for the FDA in the future so that this doesn't later become: We have the right to go in and check on every pharmacist in America and how they filled every prescription. Dr. Hamburg. Believe me. Senator Blunt. You may have some right to do it, but clearly, the tools to do that would be, in my view, beyond our reach. Do you have any idea how many of these kinds of facilities there might be? Are we talking about hundreds or dozens? Dr. Hamburg. Well, we don't really know the full landscape because they aren't required to register with us in terms of these higher risk compounding pharmacy facilities. We know there are about 28,000 compounding pharmacies across the country, or at least these are the estimates that we get from industry. Of those, there are probably about 7,500 specialty compounders, and a subset of those, some 3,000 are making the higher risk sterile products that I was just talking about. Senator Blunt. Well, my thought on this would be to let us draw this line as appropriately and tightly as we can, if you really want to get this done, as opposed to broaden the scope to the point that so many people are so concerned that nothing happens. DRUG COMPOUNDING ISSUE IN MISSOURI We had a problem in Missouri with this, as I mentioned to you, on some cancer drugs. As I recall about 20 years ago a pharmacist was knowingly not giving the right prescriptions and saving the cost of those drugs. We have very tight laws because of that. I think we are one of only two States that give pharmacists a specific license to make a specific compounded product and that was a result of that problem. And still, if a pharmacist wants to violate the law and eventually run the risk of going to prison, they could still not do what they are legally obligated to do. I don't know what is in a pill or what is in a compounded product, either one. I have to trust somebody in that process, and I think there may a place that we can define this in a way that allows us to do that. DRUG COMPOUNDING FUNDING I still don't quite know what you are going to do with the $3 million between now and the end of the year. So why don't you have somebody prepare that information. Dr. Hamburg. Okay. Well, we would be happy to. But we are going to use it to continue some of the inspections that we have been doing, follow up on the inspections and---- Senator Blunt. Maybe when I see how you are going to spend that money, I will know what you are able to do now, compared to the gap that is still out there to be filled. And do you have an estimated cost of what it would take to regulate these manufacturers of the kinds of products you have described? Dr. Hamburg. Well, we are certainly looking at those costs. What an overall program would cost depends on ultimately how we move forward with legislation and new authorities and defining this category of nontraditional compounders that we were just discussing. Because as I said before, we understand the importance of traditional compounders, and we have no interest and clearly don't have the resources to take on the whole activity, and it has historically been a State responsibility. But we do have real concerns about the safety of the American people in light of an evolving industry, and we do feel that we do need additional legal regulatory tools and authorities and we will, in order to implement that, need additional resources as well. GENETICALLY MODIFIED ORGANISM FOODS Senator Blunt. Right. And on the topic that Senator Tester raised, I heard, I thought, two pretty different views of that. One was on the testing of GMO foods, he said the testing was somewhere between slim and none, and slim has left town. So I guess that means none. You said a lot of scientific work and investigation here. You do have to decide whether these products can become part of a consumable food product. Is that right? Dr. Hamburg. We do provide oversight of the safety and wholesomeness of foods, whether they are genetically modified or not, yes. Senator Blunt. And the scientific basis, the science that you look at has led you to believe that any of these products that are in our current food supply are safe, or they wouldn't be there? Dr. Hamburg. We do not believe that there are existing threats to health from these products. Senator Blunt. As I understand it, the Department of Agriculture is involved at deciding what products can be planted and grown, and then you come in at some point and decide what the potential food uses of those might be, as opposed to other uses? Dr. Hamburg. Well, there are many components to this question. Senator Blunt. If you want, the one question I will ask that maybe narrows that. Where does USDA leave off in a GMO product and you take over? Dr. Hamburg. Well, we don't proactively review the product in the way that we review a drug on a routine basis. We are reviewing now GE salmon, which I am sure you are aware of. And actually that is being reviewed under our veterinary drug program, and it is the first in its class in terms of a genetically modified product that is coming before us. And that is being reviewed in terms of safety clearly. But our overall food program, I mean, not every food that goes into the marketplace is reviewed and approved by the FDA for safety, but we monitor safety issues, of course. Senator Blunt. Then this is one of the topics you would be monitoring, along with lots of others? Dr. Hamburg. Genetically modified foods? We are responsible for overall safety, quality, wholesomeness of the food supply. With respect to those areas in the FDA domain, of course, as you know, USDA regulates meat, poultry, and processed eggs. Senator Blunt. Right. One of the few products we don't grow in our State, and I think Arkansas, is sugar beets. We grow no sugar beets. But I know there was a sugar beets case a few years ago. After the product was approved by USDA, within 5 years about 95 percent of the crop was this product. If you bought sugar beets, you were almost certain to be buying that sugar beet because it did whatever apparently the sugar beet growers wanted a sugar beet plant to do, and 95 percent of the crop was sugar beets. And there was a court case that was not about food safety, but whether it had been properly tested by USDA on environmental standards. A Federal judge said I think they ought to test it some more. USDA appealed that. The higher judge said, no, you have done all you needed to do to test it. But in the interim, there was some question about whether all the sugar beets in the country, or 95 percent of them, could be harvested and sold that year. But the question was not about the food quality or the food safety. It was about whether there were other environmental impacts, and higher court decided, no, there weren't. But I thought that there was a lot of science on this, and you apparently think so, too. Dr. Hamburg. I do. Senator Blunt. I thank you, Chairman. Senator Pryor. Thank you. Senator Cochran, do you have anything further? Senator Cochran. Mr. Chairman, I would like to express our appreciation to the panel for being here today and for the job you are doing, heading up this very important agency. Thank you for cooperating with our subcommittee. Dr. Hamburg. Thank you. Senator Pryor. And thank you. Dr. Hamburg, I would like to thank you again for being here and bringing your team here. I look forward to working with you. This was a great hearing. And Senator Blunt and I and the whole subcommittee here look forward to working with you on this year's bill as we go through that process. ADDITIONAL COMMITTEE QUESTIONS And for members of the subcommittee, if you have any additional questions that you would like to ask for the record, we would ask that you get those within 1 week. So that is Thursday, April 25. And Dr. Hamburg, if you could make your responses available within 4 weeks of that time, that would be very much appreciated. [The following questions were not asked at the hearing, but were submitted to the Department of response subsequent to the hearing:] Questions Submitted by Senator Mark L. Pryor PROPOSED FOOD SAFETY USER FEES Question. If the new proposed user fees aren't authorized, what does that mean for FDA's ability to implement the food safety law? Answer. The proposed user fees are critical to ensure that FDA is able to fully implement the FDA Food Safety Modernization Act of 2011 (FSMA). The two major food safety user fee proposals, a Food Import Fee and a Food Facility Registration and Inspection Fee, are estimated to generate $166 million and $59 million, respectively. Not having this $225 million in fees authorized and appropriated will severely limit FDA's ability to implement FSMA and to create a modern food and feed safety system that is prevention-oriented, science- and risk-based, and efficient. In particular, FDA would not have the resources necessary to modernize the import system by improving the accuracy and efficiency of inspections. Without additional resources, FDA will not have sufficient capacity to develop the guidance documents necessary to support implementation of the preventive controls and produce safety regulations and to conduct outreach and educational activities for industry and regulatory partners. FDA will not be able to hire and train investigators for import oversight, nor will it be able to modernize compliance programs and inspection practices to improve efficiency and overall effectiveness of FDA's public health activities. FDA will not be able to develop a network of shared State and Federal laboratory data and perform planned assessments of States enrolled in the Manufactured Food Regulatory Program Standards. We hope to continue to work with Congress and industry on this important issue. Question. Assuming we are working under the same budget restraints as you are, please send us information as quickly as possible on what the highest priority activities are that would have been funded with the user fees. Answer. FDA's highest priorities for the fiscal year 2014 food and feed safety program are developing and implementing preventive control and produce safety standards, increasing the frequency and accuracy of domestic and foreign inspections, training of regulatory partners in new inspection protocols, building the capacity of FDA State partners, and implementing FDA's new import authorities. Of these important priorities, FDA's efforts in import safety would be the most adversely affected if the new user fee proposals are not authorized and appropriated. The fiscal year 2014 resources would support comprehensive, prevention-focused import food and feed safety programs that will place greater responsibility on those in the food supply chain--food and feed manufacturers, processors, packers, distributors, transporters, and importers--to ensure that imported food and feed are as safe as those produced domestically. Without these resources, FDA would not able to develop and implement a variety of approaches to ensure the safety of imported foods and feeds, including assessments of foreign food safety systems and capacity building for foreign industry and regulatory partners. FDA would also not be able to use data generated by these activities to prioritize FDA food and feed safety monitoring activities and thereby enhance the safety of the U.S. food and feed supply. Not having these additional resources would hamper FDA's efforts to improve consumer protection by allowing FDA to make better informed decisions about the admissibility of imported food and feed products. BUILDING INFRASTRUCTURE NEEDS Question. Please provide the Committee with the funding that would be required to address the current backlog of essential maintenance and repairs at all FDA-owned facilities. Answer. FDA currently has an estimated Backlog of Maintenance and Repair (BMAR) of $122 million, which represents a comprehensive list of maintenance and repair deficiencies for buildings and site infrastructure. In addition, the Building and Facilities (B&F) Program funding is also needed to bring owned buildings into compliance with sustainable building standards and to accomplish renovations needed by FDA programs to meet regulatory and mission requirements. The B&F Program provides funding to construct, renovate, repair and improve FDA's 85-owned buildings and the associated infrastructure for six sites where operations critical to FDA's public health mission are conducted. Approximately 1,212 staff and contractors are employed at these sites. FDA's owned assets include numerous laboratory facilities and a substantial amount of site infrastructure. It is critical to ensure a safe working environment for FDA scientists. Improving the physical condition and operational reliability of these assets is also vital to supporting FDA's work to protect the Nation's health, security, and economy. The Agency can no longer defer its maintenance needs as we are realizing system failures to our buildings and infrastructure, which not only impact reliability and mission-critical research activities but also the health and safety of our employees. Funding is needed now for critical buildings and infrastructure projects to ensure mission accomplishment and a safe working environment for our personnel. Question. Please list the amount of maintenance and repairs necessary, by location, in order of the Facility Condition Index. Answer. The table below provides a breakdown of the BMAR for each of the FDA's six owned locations in order of their respective site Facility Condition Index scores. FOOD AND DRUG ADMINISTRATION OWNED ASSETS--BACKLOG OF MAINTENANCE AND REPAIR (BMAR) AND FACILITY CONDITION INDEX (FCI) ------------------------------------------------------------------------ Site Total BMAR Site FCI ------------------------------------------------------------------------ Winchester, MA.......................... 7,168,893 47.86 Jefferson, AR........................... 92,897,341 72.79 San Juan, PR............................ 2,936,248 77.88 Laurel, MD.............................. 17,368,120 80.91 Dauphin Island, AL...................... 775,482 82.96 Irvine,CA............................... 945,339 97.01 ------------------------------- Total............................. 122,091,423 .............. ------------------------------------------------------------------------ HIGHLY COMPLIANT IMPORTERS Question. The Committee included report language in fiscal year 2012 which strongly encouraged FDA to ``establish a pilot project to expedite imports for highly compliant importers.'' In addition, section 713 of the FDA Safety and Innovation Act directed FDA to establish a partnership program for highly compliant importers by January 2014. Can you update us on FDA's efforts to implement both of those pieces of guidance? Will you meet the January 2014 deadline and if not, why? Answer. FDA has implemented the PREDICT program that facilitates entry of lower risk products while targeting higher risk projects for additional review. Additionally, FDA is in the process of developing two programs that should help to facilitate the import entry of products from highly compliant importers: the Voluntary Qualified Importer Program (VQIP) for Food and Feed and the Secure Supply Chain Pilot Program for pharmaceuticals. VQIP is a voluntary program under which food and feed importers may submit an application for expedited review of entries, based on the risk of the food being imported. FDA continues to work on the operational design of VQIP authorized under FSMA and is close to completion. Currently, IT requirements are being addressed and importer user fees are in development. The Secure Supply Chain Pilot Program will increase the likelihood of expedited entry for pharmaceuticals that meet the criteria for selection under the program. The Secure Supply Chain Pilot Program should allow FDA to assess the various entities and processes involved in a repetitive-type import chain, and if found acceptable and if all information is accurately submitted at the time of entry, would allow for expedited processing of entries. FDA plans to announce the start of a pilot program in order to evaluate the Secure Supply Chain Program. FDA also is planning a public meeting to gather additional input on all the provisions of section 713 which is a much broader authority than the development of partnership programs. The information provided through the pilot program and the public meeting will help inform the regulations that need to be developed. FDA is developing a timeline for full implementation that ensures we have adequate public input. Question. How many importers have expressed their intention to enroll in the Secure Supply Chain Pilot, and has pursuing the pilot prevented FDA from implementing a partnership program like that described in section 713 of FDASIA? Answer. As the pilot program has yet to be announced, we do not have definite numbers on how many firms would be likely to participate. FDA intends to limit participation to 100 qualified applicants during the pilot phase. Question. Would FDA consider establishing an advisory panel, similar to the Commercial Operations Advisory Committee at the Customs and Border Protection, on import operations? The goal would be to help FDA incorporate or account for best practices of U.S. importers, as well as help coordinate import operations among its Centers. Answer. FDA would consider establishing an advisory panel. SEQUESTER FOR GENERIC DRUGS Question. Specific to the newly enacted Generic Drug User Fee Act, how will sequester of the user fee funds affect the progress of FDA's implementation of the new program? Answer. Sequestration may threaten FDA's ability to fulfill the 5- year performance commitments made under the Generic Drug User Fee Amendments of 2012. Delays in addressing the backlog of generic drug applications will slow patient access to new, more affordable generic drugs. Question. As you know, the program was enacted to address the previous backlog of more than 2,700 generic drug applications and to provide parity in domestic and overseas facility inspections. It was anticipated that approximately 900 new full-time equivalents (FTEs) would be added to FDA staff to address this backlog, and that 25 percent of these FTEs would be added in fiscal year 2013. Could sequester of the user fee funds delay hiring of these new FTEs and further delay addressing the backlog and providing parity in facility inspections? Answer. As a result of sequestration, FDA may be unable to fully implement the new user fee program. The fiscal year 2013 hiring goal of 25 percent is expected to be met, but the Agency's commitments to improving review timelines for generic drug submissions--including reviews of the previous backlog of applications--may not be achievable, including achieving risk-adjusted parity between domestic and foreign facility inspections. If sequestration continues to impact user fees after fiscal year 2013, the hiring goals outlined in the 5-year GDUFA agreement with industry may not be achieved. SEQUESTER IMPLEMENTATION Question. With the implementation of sequester, including the user fees paid by industry, how are you working to continue to meet performance goals set under the various user fee acts? Answer. As a result of the sequester, FDA will have fewer resources than we had assumed when we agreed to the performance goals in our user fee program commitment letters. Consequently, FDA may not be able to meet some of these performance goals. FDA continues to look for more efficient ways to use the resources we receive, and to apply those resources to the highest priority activities that will protect and promote public health by providing timely access to safe and effective medical products. In the short term, we have had to delay some less urgent yet still important activities, such as some of the new enhancements to our user fee programs, as well as certain training and professional development activities that allow our staff to stay current with emerging science and technology. Question. Are you prioritizing activities not directly related to drug and device review in such a manner to ensure that you are making the best effort to continue to meet those performance standards? Answer. Yes, FDA is setting priorities, using a risk-based approach, for both drug and device review goals and goals not related to review, to help ensure the health, safety, and well-being of the American people while we manage our programs with fewer resources than planned. We must balance our efforts to meet drug and device review performance goals with our responsibility to monitor the safety of the products that are already available, and our need to respond to emerging safety problems. DIETARY GUIDELINES FOR SEAFOOD Question. FDA has not yet updated its 2004 advice to pregnant women on seafood consumption, despite new USDA dietary guidelines and multiple commitments from the Agency to Congress to do so. Can you commit to issuing this updated advice this summer, and if not, by what date will this be issued? Answer. FDA first issued fish consumption advice relating to methylmercury in 1994. The advice was updated in 2001 and again in 2004. The 2004 advice was issued jointly by the Food and Drug Administration and the Environmental Protection Agency. Its purpose was to protect against the possibility of neurodevelopmental harm to the fetus and to infants from methylmercury as a result of their mother's consumption of fish and to protect young children from the possibility of neurodevelopmental harm from methylmercury as a result of their own consumption of fish. Since then, studies published in the scientific literature indicate that, under certain circumstances, fish consumption by pregnant women and young children may actually improve neurodevelopment. The Dietary Guidelines for Americans 2010, the Government's nutritional recommendations issued every 5 years by the Departments of Health and Human Services and Agriculture, have already taken this development into account by recommending that pregnant and nursing women eat at least 8 and as much as 12 ounces per week of fish lower in mercury. The 2004 FDA/EPA advice does not contain this consumption target nor does it mention a potential neurodevelopmental benefit from fish since the evidence for it did not exist in 2004. We are devoting a significant effort to update the fish consumption advice and to complete a quantitative assessment of the net effects of fish consumption during pregnancy on neurodevelopment in order to have a sound analytical underpinning for that advice. These continue to be top priorities for FDA. FDA will update the Committee when specific information about the timing of the release is available. ______ Questions Submitted by Senator Tom Udall SUNLAND PEANUT COMPANY Question. It is my understanding that Sunland worked very closely and cooperatively with the FDA to address the issues found at the peanut butter plant and that they will be coming back on line with the FDA's stamp of approval. Could you outline for the Committee how this use of new authority worked in New Mexico, and your thoughts on where the new authority was helpful in ensuring a safe product in the end? Answer. By using our new authority provided by the FDA Food Safety Modernization Act to suspend facility registrations, FDA was able to ensure the safety of public health by not allowing Sunland to distribute its peanut and nut butter products until appropriate action was taken to remedy the salmonella contamination in its facilities. The new tool allowed FDA to take swift action to prevent continued distribution of food that had a reasonable probability of causing serious adverse health consequences or death. Question. Has the FDA used this same authority to revoke operating certificates elsewhere since the process was carried out in New Mexico? Answer. FDA has not used this authority elsewhere. Question. Has the experience with Sunland led to any improvements in how the FDA will carry out this new authority in the future, especially as it relates to interaction with companies or businesses who are in violation of food safety standards? Answer. FDA has continued to refine our internal processes for utilizing the new suspension of facility registration authority based on the valuable experience acquired during the Sunland activity. This acquired knowledge and experience will facilitate further use of this new authority for companies or businesses that present a significant risk to public health. SMALL PRODUCER/PROCESSORS Question. In writing the Food Safety Modernization Act, Congress included a number of provisions to ensure that small and very small farms and food businesses were not unduly burdened by new regulations. I am pleased to see that the agency has included in its proposed rules longer compliance periods and modified requirements for certain small farms and businesses. Could you tell me what kind of feedback the FDA is getting from small farms and businesses on the proposed rules? Answer. FDA has engaged in extensive outreach efforts to inform farmers and businesses of the provisions of the proposed produce safety rule and the proposed preventive controls rule for human food. In addition to three public meetings held across the country, there have been six State-sponsored meetings (Ohio, Michigan, North Carolina, California (2), Georgia) about the proposed produce safety rule and numerous other outreach sessions via meetings and webinars. These efforts have allowed the FDA to answer questions regarding the proposed rule and to hear feedback from its various stakeholders. Organizations and groups whose stakeholders include small farms and businesses have been included in this outreach plan. Some small farms and businesses have expressed interest in the agency's compliance and enforcement plans for the proposed rules as well as the process of a withdrawal of a qualified exemption. Questions have been raised about the potential cost of compliance with the rules, particularly certain water testing requirements in the proposed produce safety rule. Additionally, small farmers have asked questions about the requirements in the proposed produce safety rule for application of untreated biological soil amendments of animal origin. FDA's outreach efforts have provided a platform to provide information regarding these and other questions. Generally, this particular stakeholder segment has indicated their interest and appreciation for the flexibility that was built into the proposed rules, such as the fact that the proposed rules would not apply to certain small farms and businesses and the establishment of a framework for alternatives to certain requirements of the proposed produce safety rule. Small farmers and businesses have also inquired about the availability of technical assistance or potential avenues that can provide such assistance. It is important to note that the comment period for the proposed rules will remain open until September 16, 2013, and we anticipate receiving further feedback. FDA is committed to continuing to work with small farms and businesses, to address their concerns and ensure that the final rules are flexible and practicable while enhancing public health protection. Question. I am concerned about the cost of compliance that FDA estimates for small businesses. I understand that FDA estimates that the costs to comply with its proposed produce rule for farms with less than $250,000 in annual revenue will face over $22,000 in compliance costs. These additional costs could make or break a small business. Do you expect that these estimates are accurate? Answer. Based on the data available and FDA's understanding of the current practices of the produce industry, these estimates represent the most accurate costs for a farm to comply with the proposed rule. The $22,000 estimate cited is actually an average cost for farms between $25,000 and $250,000 in annual revenue. This means that the cost of compliance may be higher for some farms closer to the high end of that distribution and lower for those farms closer to the low end. We recognize that the potential costs of the regulation are not trivial and that some covered farms, especially those that need to make significant changes in their practices to comply with the risk-based provisions of the rule, may find it difficult to comply. Therefore, when the rule is finalized we intend to offer considerable technical assistance to small farms, and to help them comply through later compliance dates for small and very small farms, guidance documents, and the efforts of the Produce Safety Alliance, a public-private partnership dedicated to the development and dissemination of science- and risk-based training and education programs. Question. Could you discuss what the agency plans to do to assist small businesses, including businesses operated by limited resource producers and beginning producers, in complying with the proposed rules and in easing this cost burden? In updating our Nation's food safety laws, Congress also recognized that training is an important part of a modern food safety system. Unfortunately, the current budget environment has made it difficult to provide additional funding for much-needed training for farmers and food processors on food safety practices. Answer. Regarding the proposed produce safety rule, FDA is committed to working with the produce community and with partners in the U.S. Department of Agriculture (USDA), State agencies, and foreign governments to facilitate compliance through education, technical assistance and regulatory guidance. The agency recognizes that the time needed to comply will vary and as such, the rule proposes to phase in compliance dates based on farm size. FDA has, together with USDA's Agricultural Marketing Service, established a jointly funded Produce Safety Alliance (PSA), a public-private partnership, housed at Cornell University, that will develop and disseminate science- and risk-based training and education programs to provide produce growers and packers with fundamental food safety knowledge. A first phase of PSA's work is intended to assist farms, especially small and very small farms, in establishing food safety programs consistent with the Good Agricultural Practices Guide and other existing guidances so that they will be better positioned to comply when we issue a final produce safety rule under section 419 of the Federal Food Drug and Cosmetic Act. In addition, FDA has also entered into a memorandum of understanding with USDA's National Institute of Food and Agriculture to establish a competitive grant program to provide food safety training, education, extension, outreach, and technical assistance to: (1) owners and operators of farms; (2) small food processors; and (3) small fruit and vegetable merchant wholesalers. FDA is currently working with USDA to execute the competitive grant program, which will prioritize projects that target small and medium-sized farms. Regarding the proposed preventive controls rule for human food, FDA is committed to working with the food industry, especially small and medium-sized businesses, to facilitate compliance. The rule proposes to have later compliance dates for small and very small facilities. In addition, FDA, in cooperation with the Institute for Food Safety and Health, has created the Food Safety Preventive Controls Alliance to develop training courses and materials to help industry, particularly small- and medium-sized companies, when the rule is finalized. Question. Could you discuss how FDA is addressing this need and what resources FDA would need to work with other agencies and organizations to address the need for training of processors and producers? Answer. FDA is committed to working with the food industry and with partners in the U.S. Department of Agriculture, State agencies, and foreign governments to facilitate compliance through education, technical assistance and regulatory guidance. We plan to work with our stakeholders to develop a network of institutions that can provide technical assistance to the food industry (including the farming community), especially small and very small businesses, as they endeavor to comply with the provisions of the final rules. FDA intends to further facilitate compliance with the final rules through the development and dissemination of guidance, in multiple languages. Additionally, FDA staff will continue engaging in various outreach efforts including listening sessions, webinars, teleconferences, and presentations as these provide the agency with an immeasurable opportunity to hear feedback from its various stakeholders. FDA has requested $27 million and 21 FTEs in the fiscal year 2014 President's budget for the development of science-based standards and guidance documents that support industry adoption of preventive controls for food processing and produce safety standards, as well as to provide training and outreach to regulatory partners and industry on these new FSMA standards. ______ Questions Submitted by Senator Roy Blunt Question. Commissioner Hamburg, in addition to providing incentives for innovation, the Biologics Price Competition and Innovation Act was intended to expand access and lower the cost of life-saving and life- improving medicines. How is the FDA progressing on implementing the pathway? Answer. FDA continues to develop rigorous scientific standards to ensure that all biosimilar and interchangeable products meet these statutory requirements, and thus will be safe and effective. Some of this effort is reflected in three draft guidances FDA issued in 2012 that provide FDA's scientific recommendations on demonstrating biosimilarity, and we have begun developing guidance on additional key scientific issues as well. FDA is actively engaging with sponsors interested in developing biosimilar products to ensure that the development programs will provide the necessary scientific evidence to meet the statutory requirements for biosimilarity. Healthcare professionals and consumers can be assured that FDA will require licensed biosimilar biological products to meet the Agency's exacting standards of safety and efficacy. Question. Have applications been filed or other significant actions taken by potential applicants? Answer. To date, FDA has not received an application for a proposed biosimilar product. The Center for Drug Evaluation and Research (CDER) continues to meet with sponsors interested in developing biosimilar products. As of May 21, 2013, CDER has received 56 requests for initial meetings to discuss development programs involving 12 different reference products and has held 38 initial meetings with sponsors. Many biosimilar development programs that have had an initial advisory meeting with CDER have moved into the development phase and are requesting biosimilar product development (BPD) meetings. CDER is actively engaging with these sponsors, including holding BPD meetings and providing written advice, for ongoing development programs for proposed biosimilar products. To date, CDER has received 17 Investigational New Drugs (INDs) for biosimilar development programs, but several additional development programs are proceeding under a pre- IND. Question. As to the naming of biosimilars, it is my understanding that the FDA in 2006 issued a statement in support of the international naming regime. Is that still the policy position of the FDA? If not, please explain what has changed and why? Answer. FDA is currently considering the appropriate naming convention for biosimilar and interchangeable products licensed under the pathway established by the Biologics Price Competition and Innovation Act of 2009 (BPCI Act) enacted as part of the Affordable Care Act. FDA is carefully reviewing and considering the comments submitted to FDA's biosimilar guidance and public hearing dockets. We will take into consideration all received comments as we move forward in finalizing the guidance documents and developing future policies regarding biosimilar products and interchangeable products. ______ Questions Submitted by Senator Mitch McConnell Question. In my home State of Kentucky, prescription drug abuse is responsible for about 100 drug overdose deaths a month. I have received letters from law enforcement and public health officials expressing their concern with the effects this epidemic is having throughout my State. In light of these grave statistics, I would appreciate answers to my questions regarding FDA's recent activity to prevent further misuse and abuse of prescription drugs. FDA has informed Members of Congress that it has the authority under the Federal Food, Drug, and Cosmetic Act to require that generic versions of an innovator drug with abuse-deterrent features also include similar features as a condition of approval. In addition, FDA has stated it has the authority ``to initiate procedures to withdraw non-abuse-deterrent versions already on the market.'' When and how will FDA act on this acknowledged authority to require non-abuse-deterrent drugs to be withdrawn from market? Answer. If FDA concludes that an extended-release opioid drug product has abuse-deterrent properties, it has authority under the Federal Food, Drug, and Cosmetic Act (FD&C Act) to require generic versions of that product to also have abuse-deterrent properties. FDA recently approved labeling regarding the abuse-deterrent properties of one product, OxyContin (oxycodone hydrochloride) controlled-release tablets, and determined that a previous formulation of OxyContin was withdrawn for safety and effectiveness reasons, thus precluding approval of a generic version of the previous formulation. Because there were no approved generic versions of the previous formulation, there was no need for a withdrawal. FDA will continue to review other purportedly abuse-deterrent opioid drug products on a case-by-case basis and will take regulatory action regarding each product as appropriate. Question. FDA's new drug product exclusivity regulations (21 U.S.C. 355(c)(3)(E)(iii)) prohibit the approval of an abbreviated new drug application (ANDA) for 3 years if certain criteria are met. While abuse-deterrent products are an important piece of prescription drug abuse prevention, providing access to lower cost, generic abuse- deterrent drugs is important for legitimate users. Does a new drug product applicant need to apply for additional exclusivity, or does FDA make the exclusivity determination regardless of the applicant's request? Answer. FDA determines whether any of the available exclusivity periods under the FD&C Act applies to a given drug product at or after the time of approval of a new drug application (NDA). An NDA applicant is not required to specifically request exclusivity. Question. Beyond Fast Track and Priority Review status, how does FDA plan to incentivize the development of generic and innovator abuse- deterrent formulations? Answer. FDA is working in variety of ways to incentivize the development of abuse-deterrent formulations of drugs with the potential for abuse, with a focus on opioids. First, as called for in FDASIA section 1139 and in the Office of the National Drug Control Policy National Plan on Prescription Drug Abuse, we published a draft guidance entitled Abuse-Deterrent Opioids: Evaluation and Labeling, in January 2013. In it, in addition to laying out the studies and analysis the FDA is looking at when we consider new formulations for their effects to reduce abuse, we also included FDA's current thinking on how we will reflect those data in labeling. The goal of this last activity is to incentivize the development of new formulations of opioids that we determine to be abuse-deterrent, by including a clear description of their effects on abuse in labeling. To further this work, we are participating in a public meeting in the Fall to discuss the draft Guidance and solicit scientific input on improving it. We know that there is broad interest in the development of generic drugs with abuse- deterrent properties, and we are working internally on the science needed to give guidance on how we will evaluate those products. We also intend to discuss generics at the meeting in the fall. Finally, the FD&C Act also provides for certain periods of marketing exclusivity if the applicable criteria are met. Question. What process and timeline will FDA use to make determinations on other innovator products on the market as to whether or not they meet the definition of abuse-deterrent and warrant a label change? Answer. FDA plans to make determinations regarding other potentially abuse-deterrent opioid drug products as promptly as possible using our standard review processes. For a labeling change, for instance, a sponsor will normally submit an application to request approval of labeling describing a product's abuse-deterrent properties and FDA would notify them in a letter whether their proposed labeling language is approved once our review and decisionmaking is completed. Question. How will these guidelines apply to generics seeking to come to market with abuse-deterrent features? Answer. FDA has not published any guidelines regarding generic versions of opioid products with abuse-deterrent features. As stated previously, if FDA determines that an extended-release opioid drug product has abuse-deterrent properties, it has authority under the FD&C Act to require generic versions of that product to also have abuse- deterrent properties. Question. How does FDA plan on monitoring the marketing of new abuse-deterrent products to ensure that unintended consequences of aggressive marketing tactics do not occur due to a label change? Answer. FDA will monitor drug marketing practices with that concern in mind. FDA will apply the standards applicable to promotional claims concerning any prescription drug; that is, among other things, all such claims must be truthful and not misleading. 21 U.S.C. 352(a) and (n). ______ Questions Submitted by Senator Susan M. Collins Question. Dr. Hamburg, I am pleased that the FDA issued the final guidance in November 2012 for the development of artificial pancreas systems. As you know, many of my colleagues and I are very interested in seeing that these potentially life-changing systems are made available to patients as soon as possible, with proper consideration given to safety and effectiveness. In development across the country but not yet approved by the FDA, these systems have the potential to address the serious problem of blood glucose control that exists for many people with type 1 diabetes using current treatments. Artificial pancreas systems could also save taxpayer dollars--a recent study found that Medicare could save almost $1 billion over 25 years with the use of this technology in adults. The FDA's official guidance is an important stepping stone in accelerating the development of the technology, as it provides the FDA's general expectations for conducting human outpatient clinical trials and for marketing approval of the devices. Dr. Hamburg, could you tell me how the FDA plans to support this momentum when new submissions for clinical trials or product approval are brought to you so that these innovative systems can be tested without delay and made available to those with type 1 diabetes in the near future? Answer. We believe that the development of an Artificial Pancreas (AP) is within technological reach and have assigned significant resources to facilitate such development. At the beginning of 2012, we streamlined the AP application review structure. This has resulted in quicker reviews of investigational protocols and premarket submissions. Among those, we have approved several outpatient studies in adults and a diabetes camp study in children. We co-sponsored a public workshop with the National Institutes of Health (NIH) and Juvenile Diabetes Research Foundation (JDRF) in March 2013. The workshop initiated a multidisciplinary discussion which will help to accelerate the development and delivery of an AP. We continue to pursue outreach efforts with researchers, clinicians, policymakers, manufacturers and patient advocates to help clarify expectations, and to help solve challenges as they arise. This collaborative effort is helping the FDA to make more rapid decisions on studies and will help to ensure that patients will receive these technologies as soon as possible. We look forward to working together with the diabetes community to advance quickly towards an approved AP. Question. I also would like to inquire about the rules recently published for public comment by the FDA under the Food Safety Modernization Act. The proposed rule governing standards for produce safety includes most fruits or vegetables while they are in their raw or natural (unprocessed) state. Apple growers in Maine are concerned that some of the new requirements might be overly burdensome and expensive to implement. They also question the inclusion of apples in the rule since apples are not a fruit which has been responsible for any significant food-borne disease outbreaks in our country. I realize that the comment period for the rule has been extended, Dr. Hamburg, and I am interested to hear your comments on this issue. Answer. The proposed rule's regulatory approach is aligned with the FDA Food Safety Modernization Act, which directs the Secretary to set forth procedures, processes, and practices that the Secretary determines are reasonably necessary to prevent the introduction of known or reasonably foreseeable hazards into produce and to provide reasonable assurances that the produce is not adulterated. As explained in the proposed rule, we tentatively concluded that an approach that considers both the risk associated with the commodity and that associated with the agricultural practices applied to the crop under the conditions in which it is grown would provide the most appropriate balance between public health protection, flexibility, and appropriate management of different levels of risk. The Produce Safety rule, as proposed, does not cover produce that is documented to receive commercial processing that adequately reduces the presence of microorganisms of public health significance. An example of commercial processing that meets this requirement is processing apples into juice in accordance with the Juice HACCP regulation (21 C.F.R. Part 120). In addition, the types of produce the Agency proposed to cover have one or more pathways through which they can become contaminated. FDA is proposing that farmers control only pathways that are relevant to their crop. For example, generally, water used for drip or furrow irrigation in apple orchards would not be subject to the proposed rule's requirements for agricultural water because the water is unlikely to contact the harvestable portion of the crop. We considered covering only those produce commodities or commodity groups that had been associated with foodborne illness outbreaks. Because only a small percentage of outbreaks are both reported and assigned to a food vehicle, outbreak data may not provide a complete picture of the commodities upon which we need to focus to minimize current and future risk of illness. Our data show that the patterns of outbreaks associated with produce commodities change over time. Occasionally a produce commodity that has not previously been linked to foodborne illness is associated with an outbreak. For these and other reasons discussed in detail in the proposed rule, our regulatory approach does not rely solely on a static list of commodities prepared solely from a history of outbreaks. In the Produce Safety proposed rule, we explicitly seek comment on our tentative conclusions related to our proposed regulatory approach. FDA will reach its final conclusions on this issue after considering comments received. The comment period for the proposed rule closes on September 16, 2013. Question. I would like to ask for your thoughts on a topic that has received a great deal of news coverage in recent years and one that is of much interest to many of my constituents, which is the issue of antimicrobial resistance. I have been working with Senator Gillibrand on legislation that, among other things, would call for the FDA to conduct a pilot study to better determine relationships between sales and use data of food animal drugs, and trends in antimicrobial resistance. As you know, each year the FDA's Center for Veterinary Medicine publishes sales data on the total volume of antibiotics used in the United States in food animals. Section 105 of the Animal Drug User Fee Act of 2008 requires antimicrobial drug sponsors to annually report not only the amount of antimicrobial active ingredient in the drugs they sold or distributed for use in food-producing animals, but also requires animal drug sponsors to list the target animal and production class specified on the approved labels of the products. The summary data that the FDA publishes each year, however, reports only total sales volume. Is FDA able to provide more specificity in this summary data in future reports, to include target animal species and production class, since this data is already required to be reported? Answer. On July 27, 2012, FDA published an Advance Notice of Proposed Rulemaking (ANPRM) to solicit comments from the public on possible enhancements to the existing requirements related to the collection of antimicrobial drug sales and distribution data. The ANPRM also solicited input on alternative methods for monitoring antimicrobial use in food-producing animals. Based on comments received, FDA is currently developing enhancements to the content and format of its annual summary report on the sale and distribution of antimicrobial drugs intended for use in food-producing animals. These enhancements would be consistent with current requirements. For example, FDA is exploring alternative approaches for reporting the data it currently receives. This includes approaches suggested in comments submitted in response to the July 2012 ANPRM, including presenting the data by dosage form, medical importance, and marketing status (i.e., over-the-counter drugs, prescription drugs, or the Veterinary Feed Directive Guidance). FDA expects to use such an enhanced format when it summarizes the data reported for 2012. FDA also expects to utilize the rulemaking process to enhance existing requirements related to the collection of drug sales and distribution data. For example, FDA is examining the feasibility of establishing requirements for obtaining estimates of sales broken down by animal species. Currently, sales data is not required to be reported by target animal species. To supplement the sales/distribution data that it already receives, FDA is also exploring possible mechanisms for collecting additional information that would be more reflective of what antimicrobial drugs are actually being used in food-producing animals, including information that could be used to correlate drug use practices with trends in antimicrobial resistance. Question. Are you able to provide the Committee an idea of when the final version of Guidance for Industry No. 213 might be published? Answer. A final version of Guidance for Industry No. 213 is currently undergoing review and clearance. Although FDA does not have a specific timeline, publication of final Guidance for Industry No. 213 remains a top Agency priority for 2013. ______ Questions Submitted by Senator Lamar Alexander Question. The budget for FDA includes an unprecedented amount of funds from industry user fees. Just last year, we established a new generic drug user fee program to help get more of these products to patients more quickly. However, I have heard from a constituent that the generic drug establishment fee would put them out of business, and they had no time or idea they needed to plan for the over $170,000 bill they received in March. How can we work together to make sure that all parties that will be affected are involved in the user fee negotiations, and how can we ensure that in the first year of new user fee programs that adjustments can be made as necessary to protect small businesses from unintended consequences? Answer. FDA engaged in significant public outreach, including convening a number of public meetings with industry and other stakeholders, to discuss GDUFA and the progress of negotiations. A fee waiver was considered during negotiations and rejected because it would have diminished the number of companies required to pay the fees which, in turn, would have raised the fees for the fee- paying companies. Unlike brand manufacturers, the majority of generic companies are small businesses. Furthermore, an exemption would have added to the administrative cost of the program by requiring additional staff to determine which companies met the exemption and handle disputes. This would have diverted user fee funds away from activities in support of meeting the goals contained in the user fee agreement, or would have required higher fees to accommodate the increased administrative complexity. Small and large generic companies alike are expected to benefit significantly from reductions in the review time needed to commercialize their products and from the certainty associated with GDUFA performance review metrics and program efficiencies. FDA does not have the current authority to create a fee waiver or reduction provision for small businesses. During the next round of generic drug user fee negotiations, FDA will again invite industry trade associations to participate in negotiations and hold open public meetings to provide a forum for industry, and other stakeholder input. All interested parties are encouraged to provide input. Question. In 2009, Congress passed the President enacted the Family Smoking Prevention and Tobacco Control Act, providing FDA broad authority to regulate tobacco products. I have a few questions on the implementation of this law. How did your department adjust and align FDA's new authority with the authority of other HHS agencies to reduce duplicative programs and target resources? Answer. FDA's responsibility with respect to tobacco control activities is to protect the public health by regulating the manufacture, distribution, and marketing of tobacco products, and educating Americans, especially young people, about tobacco products and their dangers. FDA works closely with other Federal public health agencies to ensure the various tobacco programs are coordinated and are not duplicative. The Tobacco Control Act authorizes FDA to collect quarterly fees from the tobacco industry. These fees are to be available only for the purposes of paying the costs of activities that support the regulatory mission of FDA-related to tobacco products. Furthermore, the Tobacco Control Act specifies that these tobacco user fees are the only funds authorized to be made available for FDA's tobacco regulation including research, compliance and enforcement, and science-based public education campaigns addressing the dangers of tobacco use. FDA has put a comprehensive financial stewardship plan in place to ensure that tobacco user fees only support its regulatory activities. Although many agencies and offices in HHS, including FDA, are working together to address the significant public health concerns created by the use of tobacco products, FDA does not, for example, provide direct cessation services or engage in community-based tobacco prevention activities, as some other HHS agencies do. Question. It is my understanding that there hasn't been a single product approved under this new law. Innovation will be necessary to reduce harm and give people who can't quit less risky alternatives. FDA focuses a lot on innovation, and how does that focus relate to the concept of tobacco-related harm reduction? Answer. To date, FDA has not received any new tobacco product applications and none of the modified risk tobacco product applications it has received have been accepted for filing. However, FDA has received over 3,000 ``provisional'' substantial equivalence (SE) reports for tobacco products introduced into interstate commerce between February 15, 2007, and March 22, 2011, for which a report was submitted prior to March 23, 2011. These provisional products can remain on the market unless FDA finds that they are ``not substantially equivalent.'' FDA has also received more than 500 ``regular'' SE reports for new products that manufacturers intend to introduce to market. FDA reviews all SE reports as expeditiously as possible and will continue to do so; however, FDA has observed deficiencies in nearly all initial SE reports reviewed to date from different tobacco product manufacturers. As the quality of reports improves and FDA gains more experience reviewing them, FDA expects both the review times and the backlog to decrease. With respect to innovation, tobacco companies have recently introduced newer forms of tobacco products. FDA is funding research to better understand these newer products with regard to their relative risks compared to other tobacco products. It is critically important to evaluate these products not only in terms of the relative health risks to individuals, but also to consider the likelihood that nonusers will start using the product, users who would otherwise stop using tobacco products will switch to the new product, tobacco users may use the new tobacco products in combination with other products, and former users will begin using the new product. The Modified Risk Tobacco Product provisions of the Tobacco Control Act may be valuable tools in the effort to protect public health by reducing the morbidity and mortality associated with tobacco use, particularly if tobacco product manufacturers can adequately demonstrate that product changes will substantially reduce, or even eliminate altogether, either the toxicity or addictiveness of tobacco products, or both. FDA is also funding research on reduced nicotine cigarettes, smokeless tobacco products, and the diversity of tobacco products including new and emerging tobacco products to inform the advancement of harm reduction at both the individual and population level. ______ Questions Submitted by Senator Daniel Coats Question. Medical device manufactures, while supportive of unique device identifiers (UDIs), remain concerned regarding implementation of the Proposed UDI Rule. These concerns include the FDA requirement that UDIs be applied to products in their existing inventory, as well as the requirement that UDIs be applied directly onto each implantable product, otherwise known as Direct Part Marking (DPM). Many medical devices have a significant shelf life allowing for products to remain in inventory for longer periods of time. Additionally, some segments of the medical device industry utilize the consignment model, meaning that devices remain under company control and are not sold to the customer until they are used or implanted. This method is used to ensure patients have the most appropriate options. Should the Proposed UDI Rule apply to these products, device manufacturers would be forced to recall each device to apply a UDI, potentially interrupting patient care. Additionally, because the UDI should already be in the patient record at the time of implantation, there doesn't seem to be any additional utility to place it directly on an implantable device. Please describe what steps the FDA is taking to consider the effects this UDI rule may have on patient quality and choice, as well as the burden placed upon medical device manufacturers and customers. Answer. FDA has reviewed the comments submitted to the UDI proposed rule--including a significant number that addressed the existing inventory issue and the direct marking requirement for implants. Although FDA cannot discuss how it will address these comments while the rule remains in clearance, we wish to assure you that we take these concerns very seriously and note that FDA's goal is not to require device manufacturers to recall or re-label already finished medical devices. Requiring manufacturers to mark medical devices with unique identifiers will improve postmarket surveillance and patient safety. Device tracking will ensure more efficient device recalls by assisting manufacturers, providers, hospitals and patients with quicker identification and remediation of faulty devices. We believe that the final rule appropriately strikes a balance between the needs of patients, clinicians, the healthcare system, and FDA--and the concerns of the medical device industry. In addition, FDA is taking a number of steps to ensure that the UDI will support patient safety, quality and choice. FDA's Global Unique Device Identification Database (GUDID), which will contain a robust set of data for every device marked with a UDI, will be publicly available and will allow patients and clinicians to search for the appropriate device. In addition to our work with the medical device industry FDA is also working with numerous stakeholders, including the Brookings Institution, National Coordinator for Health Information Technology (ONC), Centers for Medicare and Medicaid Services (CMS), private payers, solution providers, hospitals and Integrated Delivery Networks (IDNS) on the adoption and implementation of UDI throughout the healthcare system and the lifecycle of medical devices. SUBCOMMITTEE RECESS Senator Pryor. This subcommittee will meet again on Thursday, May 9 at 10 a.m. in this room, where we will have testimony from Secretary Vilsack regarding USDA fiscal year 2014 budget. Again, I want to thank everyone for being here, and this hearing is recessed. Dr. Hamburg. Thank you. [Whereupon, at 11:46 a.m., Thursday, April 18, the subcommittee was recessed, to reconvene at 10 a.m., Thursday, May 9.]