[Senate Hearing 114-583]
[From the U.S. Government Publishing Office]






                                                        S. Hrg. 114-583

CONTINUING AMERICA'S LEADERSHIP: ADVANCING RESEARCH AND DEVELOPMENT FOR 
                                PATIENTS

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

                                HEARING

                                 OF THE

                    COMMITTEE ON HEALTH, EDUCATION,
                          LABOR, AND PENSIONS

                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                                   ON

   EXAMINING CONTINUING AMERICA'S LEADERSHIP, FOCUSING ON ADVANCING 
                 RESEARCH AND DEVELOPMENT FOR PATIENTS

                               __________

                             MARCH 24, 2015

                               __________

 Printed for the use of the Committee on Health, Education, Labor, and 
                                Pensions




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          COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS

                  LAMAR ALEXANDER, Tennessee, Chairman

MICHAEL B. ENZI, Wyoming            PATTY MURRAY, Washington
RICHARD BURR, North Carolina        BARBARA A. MIKULSKI, Maryland
JOHNNY ISAKSON, Georgia             BERNARD SANDERS (I), Vermont
RAND PAUL, Kentucky                 ROBERT P. CASEY, JR., Pennsylvania
SUSAN COLLINS, Maine                AL FRANKEN, Minnesota
LISA MURKOWSKI, Alaska              MICHAEL F. BENNET, Colorado
MARK KIRK, Illinois                 SHELDON WHITEHOUSE, Rhode Island
TIM SCOTT, South Carolina           TAMMY BALDWIN, Wisconsin
ORRIN G. HATCH, Utah                CHRISTOPHER S. MURPHY, Connecticut 
PAT ROBERTS, Kansas                 ELIZABETH WARREN, Massachusetts   
BILL CASSIDY, M.D., Louisiana

                    David P. Cleary, Staff Director
               Lindsey Ward Seidman Deputy Staff Director
                  Evan Schatz, Democrat Staff Director
              John Righter, Democrat Deputy Staff Director

                                  (ii)

  






















                            C O N T E N T S

                               __________

                               STATEMENTS

                        THURSDAY, MARCH 24, 2015

                                                                   Page

                           Committee Members

Alexander, Hon. Lamar, Chairman, Committee on Health, Education, 
  Labor, and Pensions, opening statement.........................     1
Murray, Hon. Patty, a U.S. Senator from the State of Washington, 
  opening statement..............................................     3
Burr, Hon. Richard, a U.S. Senator from the State of North 
  Carolina.......................................................     5
Cassidy, Hon. Bill, M.D., a U.S. Senator from the State of 
  Louisiana......................................................    40
Mikulski, Hon. Barbara A., a U.S. Senator from the State of 
  Maryland.......................................................    42
Bennet, Hon. Michael F., a U.S. Senator from the State of 
  Colorado.......................................................    46
Franken, Hon. Al, a U.S. Senator from the State of Minnesota.....    48
Warren, Hon. Elizabeth, a U.S. Senator from the State of 
  Massachusetts..................................................    50

                               Witnesses

Sullenger, Bruce A., Ph.D., Director, Duke Translational Research 
  Institute, Professor of Surgery, Duke University Medical 
  Center, Durham, NC.............................................     6
    Prepared statement...........................................     7
Borisy, Alexis, Partner, Third Rock Ventures, Boston, MA.........     9
    Prepared statement...........................................    11
Mussallem, Michael A., Chairman and CEO, Edwards Lifesciences, 
  Irvine, CA.....................................................    16
    Prepared statement...........................................    17
Coukell, Allan, Senior Director, Health Programs, Pew Charitable 
  Trusts, Washington, DC.........................................    26
    Prepared statement...........................................    28

                          ADDITIONAL MATERIAL

Statements, articles, publications, letters, etc.:
    Response by Bruce Sullenger, Ph.D. to questions of:
        Senator Alexander........................................    54
        Senator Isakson..........................................    55
        Senator Collins..........................................    56
        Senator Whitehouse.......................................    57
    Response by Michael A. Mussallem to questions of:
        Senator Alexander........................................    57
        Senator Isakson..........................................    60
        Senator Collins..........................................    61
        Senator Whitehouse.......................................    62
    Response by Allan Coukell to questions of:
        Senator Alexander........................................    62
        Senator Isakson..........................................    69
        Senator Whitehouse.......................................    69

                                 (iii)

  

 
CONTINUING AMERICA'S LEADERSHIP: ADVANCING RESEARCH AND DEVELOPMENT FOR 
                                PATIENTS

                              ----------                              


                        TUESDAY, MARCH 24, 2015

                                       U.S. Senate,
       Committee on Health, Education, Labor, and Pensions,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10 a.m., in room 
SD-430, Dirksen Senate Office Building, Hon. Lamar Alexander, 
chairman of the committee, presiding.
    Present: Senators Alexander, Murray, Burr, Collins, Hatch, 
Cassidy, Mikulski, Casey, Franken, Bennet, and Warren.

                 Opening Statement of Senator Alexander

    The Chairman. The Senate Committee on Health, Education, 
Labor, and Pensions will please come to order. This morning, 
we're holding a hearing on Continuing America's Leadership: 
Advancing Research and Development for Patients. Ranking Member 
Senator Murray and I will each have an opening statement, and 
then we'll introduce our panel of witnesses. After our 
witnesses' testimony, Senators will each have 5 minutes of 
questioning.
    We welcome Senator Cassidy and Senator Warren to their 
usual positions and Senator Franken and Senator Mikulski and 
Senator Bennet. A lot of people are here today.
    This is the second hearing on a major initiative of this 
committee: our effort to examine how we get drugs, devices, and 
treatments from the discovery process through the regulatory 
process into the medicine cabinets and doctors' offices.
    I'd like to begin today by telling a story that illustrates 
why we're doing this and why it's important to get a result. 
Just last week, Ginger Birnbaum from Chattanooga visited my 
office and told me about her 3-year-old son, King. King has 
cystic fibrosis, and today there is no medicine to treat his 
form of the disease.
    King's family must simply treat his symptoms. His older 
sister, Virginia, who is 6, helps set up his feeding tube at 
night since the disease doesn't allow him to digest and absorb 
the nutrients he needs. She walks with her friends to help 
raise money, to try to raise funds for research. They left me 
with their Christmas card with the children on it.
    There is good news for some cystic fibrosis patients. We 
heard about it when the President announced his Precision 
Medicine Initiative at the White House. There is a drug that 
can actually treat the underlying cause of cystic fibrosis in 
just about 9 percent of cases.
    This drug, the first personalized drug for cystic fibrosis, 
was approved in 2012, 3 months after the developer of the drug 
submitted to the FDA a new drug application. That's the good 
news. The bad news is that it took 15 years from discovery to 
the FDA's door. It also took another 3 years from that approval 
in 2012 to approve the same drug for children 2 to 5 years old.
    The same company is currently studying other therapies for 
different forms of cystic fibrosis. If all goes well, King, the 
child I was talking about, could have a drug that treats his 
form of cystic fibrosis soon.
    My question is: What can we do here in Congress to help 
shorten that process? Or, if that drug is not successful, what 
can we do to shorten the discovery and development process so 
that King doesn't have to wait another 15 to 18 years for the 
next personalized medicine?
    Earlier this month, we heard from Dr. Collins, the head of 
NIH, and Dr. Hamburg, the Food and Drug Administration 
Commissioner. They provided insights into what NIH and FDA have 
been doing to try to improve the discovery, research and 
development, and regulatory processes from the government 
perspective.
    Today, our goal is to hear from the researchers and the 
innovators that interact with the NIH and FDA and can tell us, 
in their opinion, how this is working and what are potential 
solutions.
    I've found the best ideas often come from outside of 
Washington. The witnesses today are from outside of Washington. 
Senator Murray and I have agreed on them. We call this a 
bipartisan hearing for that reason, and it represents much of 
the biomedical research and development system.
    We'll hear from the academic who makes the discovery, from 
the venture capital community who funds further development, 
and from a company who takes discoveries through the regulatory 
process and makes them for patients. We'll also hear from a 
group that has been studying how to improve the discovery and 
development process, from improving clinical trial efficiency 
to creating a more predictable FDA. We plan to hear from 
patients and their families, like King, throughout this process 
as well.
    I'm looking forward to hearing today about how to decrease 
red tape and administrative burden. We'll hear about exciting 
new technologies. One of our goals is to make sure that the FDA 
and others are ready for these technological advancements.
    Senator Burr and I released a white paper in January that 
looked at the process of getting drugs and devices from 
discovery to medicine cabinets, and much of what the report 
covered is relevant here today. We found that medical products 
take more time and money to discover, develop, and reach 
American patients than ever before.
    We also found that FDA has struggled to regulate the most 
cutting edge medical products. This disparity between the pace 
of scientific discovery and FDA's scientific knowledge is 
threatening America's position as a global leader in medical 
innovation.
    We reported that the venture capital community is shifting 
investments away from early stage drugs and devices as a result 
of increasing regulatory burden and uncertainty. We also found 
that countries across the globe have sought to capitalize on 
America's shrinking competitive advantage in the biomedical 
space.
    These are big challenges that are slowing down the process 
for getting the cutting edge innovations we are discovering 
into the medicine cabinet and the doctor's office. The NIH and 
FDA must keep pace with today's cutting edge scientific 
advancements.
    I'm looking forward to hearing your unique perspectives on 
these challenges and others you see as standing in the way of 
innovation. I am especially interested in your ideas about how 
to solve these problems.
    Senator Murray.

                  Opening Statement of Senator Murray

    Senator Murray. Thank you very much, Chairman.
    Thank you to all of our witnesses for being here today.
    As Senator Alexander mentioned, at our last hearing on 
advancing medical innovation, we had the opportunity to hear 
from NIH Director Collins and FDA Commissioner Hamburg. They 
talked about their agencies' roles in helping drive development 
and approval of treatments that save and improve lives across 
our country.
    At that time, I laid out some principles I will be very 
focused on, including supporting NIH and basic investments in 
research, finding ways to get patients safe and effective 
treatments as quickly as possible, and prioritizing the needs 
of women and children in the product development and approval 
process, and above all, protecting and upholding the deep trust 
that families place in FDA when they reach into their medicine 
cabinet or take a trip to the drug store.
    It's very clear in my home State of Washington and across 
the country that medical innovation is at a critical moment 
right now. Researchers and physicians are looking at prevention 
and treatment in a whole new way. And medical advances have 
changed the way we tackle devastating diseases like cancer, 
cystic fibrosis, and many others.
    At the same time, the life sciences are helping to drive 
economic growth and job creation. I have seen this first hand 
in my home State of Washington. According to our State 
Department of Commerce, the life sciences sector in Washington 
State directly employs 34,000 individuals and indirectly 
employs another 57,000, and that's continuing to grow.
    Thinking about ways we can continue to advance medical 
innovation is both good for families' health and good for our 
economy. The HELP committee has a strong tradition of 
bipartisan process in this area.
    In 2012, for example, we added accelerated approval to 
allow the FDA to approve new drugs faster for serious 
conditions and unmet medical needs. We also added a 
breakthrough designation for promising new drugs so that 
researchers can find out earlier whether these treatments are 
effective.
    These bipartisan successes have made a real difference for 
patients and families. While we learned from Commissioner 
Hamburg just 2 weeks ago that FDA's drug approval times are the 
fastest in the world, we must continue to look for new 
efficiencies.
    We all know that Congress can't legislate new cures into 
existence. If we could, I know we would. But what we can and 
must do is give our Nation's biomedical community the right 
tools to innovate for patients, now and for generations to 
come.
    That means making sure that NIH is well-supported, as 
Director Collins urged us to do. This also means making sure 
that the doctors and scientists at the FDA have all the tools 
and resources they need so they can be engaged early in the 
development of new products and can help innovators get new 
safe and effective treatments to patients as soon as possible.
    We also need to expand our use of medical data. We have a 
wealth of medical information that, when shared in a timely and 
secure way, will help us make sure the right treatments are 
reaching the right patients and help us better understand 
different groups' unique health needs, including women.
    It is important we look at the entire spectrum of medical 
innovation, from basic research, through development and 
approval, and into the post-market setting.
    While we, of course, want to get patients treatments as 
quickly as possible, speed cannot come at the expense of 
safety. New doesn't always mean better.
    As the Institute of Medicine warned us in 2007, a 
regulatory culture too focused on speed can seriously damage 
public confidence in product safety. We need to ensure we are 
both encouraging innovation and upholding the highest standards 
of patient and consumer protection.
    I'm pleased that today we will be able to hear from key 
players in medical innovation, from the private sector to 
academia, about the ways you all think we can step up to these 
challenges and help more patients and families get life-
changing, lifesaving cures and treatments.
    Thank you all for being here and sharing your expertise. 
I'm really confident our bipartisan work to advance medical 
innovation for patients will be stronger with your input. As 
our discussions continue, I'm looking forward to hearing from 
patients and advocates who can share insights into the 
improvements our communities want to see.
    It's so important to me that the perspective of patients 
and their families be prioritized throughout this effort. They 
are the ones hoping for new cures, searching for better 
treatments, and looking to all of us here for solutions. I'm 
very hopeful that working together, we can continue the strong 
tradition of bipartisan success we have had in advancing 
medical innovation and deliver for the families we serve.
    With that, I'll turn it back to you, Mr. Chairman. Thank 
you.
    The Chairman. Thank you, Senator Murray.
    I'll introduce three witnesses, and then I'll let Senator 
Burr introduce the first witness. The second witness is Mr. 
Alexis Borisy. Mr. Borisy is a partner in Third Rock Ventures, 
a venture capital firm based in Boston that invests in biotech 
startup companies. He has more than 20 years of experience 
building and operating innovative science-based organizations.
    Our third witness, Mr. Michael Mussallem, is chairman and 
CEO of Edwards Lifesciences. He is considered a global leader 
in heart valve transplants. The medical device development 
process and challenges are distinct from the challenges facing 
drug development.
    I thank you for being here to share that perspective.
    Our fourth and final witness is Mr. Allan Coukell, who 
leads the health projects at the Pew Charitable Trust. Mr. 
Coukell has led many projects at Pew examining how to improve 
medical product development and regulatory processes.
    Now I'll ask Senator Burr to introduce the first witness.

                       Statement of Senator Burr

    Senator Burr. Thank you, Mr. Chairman, for the opportunity 
to introduce Dr. Bruce Sullenger from Duke University in North 
Carolina. As I often remind my colleagues on this committee, 
I'm proud of North Carolina's innovative biomedical research 
and development. It's good for North Carolina and it's good for 
patients across the country. I'm delighted that one of our 
leaders in this area is here with us today.
    Dr. Sullenger, thank you for taking the time to be with us 
to speak to us about the great work you and your colleagues are 
doing at Duke, particularly your expertise about how we can 
accelerate and successfully commercialize promising concepts 
off the research bench that will reach America's patients in as 
timely a manner as possible.
    Dr. Sullenger is a professor in the Department of Surgery 
and the director of Duke's Translational Research Institute at 
Duke University Medical Center. For almost 30 years, Dr. 
Sullenger has been working on the development of DNA and RNA-
based translational therapies, and he is one of the pioneers in 
this field.
    Since joining Duke in 1994, Dr. Sullenger has developed an 
internationally recognized translational research program and 
has served as the director of Duke's Translational Research 
Institute since 2007. In this post, Dr. Sullenger leads the 
university's efforts in translating scientific discoveries to 
uses in a clinical setting. Much of his work has been funded by 
the National Heart, Lung, and Blood Institute of the National 
Institutes of Health.
    Dr. Sullenger received his undergraduate degree from 
Indiana University and completed his Ph.D. work at Cornell 
Medical Center and the Memorial Sloan-Kettering Center in New 
York. Following his Ph.D., Dr. Sullenger studied under Nobel 
Laureate, Dr. Thomas Cech, at the University of Colorado.
    Thank you, Dr. Sullenger, for being here and probably 
representing the next champion of the NCAA basketball 
tournament yet to be finished, the Duke University Blue Devils. 
Welcome.
    The Chairman. An appropriately parochial comment from 
Senator Burr. But he may be right.
    [Laughter.]
    Thank you, Senator Burr, and thanks to the witnesses.
    If you can summarize your comments in about 5 minutes, 
that'll give Senators more time to have a conversation with 
you. Why don't we start with Dr. Sullenger--and good luck in 
the NCAA--and let's go right down the row.

    STATEMENT OF BRUCE A. SULLENGER, Ph.D., DIRECTOR, DUKE 
 TRANSLATIONAL RESEARCH INSTITUTE, PROFESSOR OF SURGERY, DUKE 
             UNIVERSITY MEDICAL CENTER, DURHAM, NC

    Mr. Sullenger. Thank you for that introduction, Senator 
Burr, and good morning, Chairman Alexander, Ranking Member 
Murray and other committee members. I would like to thank you 
for the opportunity to share with this committee my perspective 
as an academic biomedical researcher working on the front lines 
of medical innovation.
    In addition to being an innovator and entrepreneur, I help 
other faculty at Duke University apply their medical 
innovations to human health in my role as director of the Duke 
Translational Research Institute. This institute provides 
preclinical and early stage clinical trial seed funding and 
project management support to build collaborative, 
translational research teams.
    I was trained really as a basic scientist in one of the 
pre-eminent biochemistry labs in the world, Dr. Cech's lab at 
the University of Colorado, with a goal of pursuing knowledge 
for the sake of knowledge. However, in 1994, I sought a new 
career path and focused on what came to be known subsequently 
as translational research.
    I joined the faculty in the Department of Surgery at Duke 
so I could work closely with physicians and surgeons to develop 
new approaches to effectively and safely treat the patients 
they saw every day. During the past two decades, this 
unorthodox career has been incredibly rewarding. Unfortunately, 
it has also become increasingly challenging.
    With cardiologists, cardiothoracic surgeons, and 
neurosurgeons, we invented new ways to deliver rapidly 
reversible anticoagulants for the potential treatment of 
cardiovascular disease and stroke patients. I work with 
surgical and medical oncologists to develop new classes of 
compounds to precisely deliver cytotoxic agents to prostate, 
pancreatic, and other types of cancers.
    Most recently, working with rheumatologists, we invented 
novel anti-inflammatory agents for the treatment of lupus, 
arthritis, and other chronic inflammatory disorders without 
serious side effects. As you can see, we've been very busy, but 
there's so much more that we could be doing.
    Creativity and ingenuity are not limiting. What is 
preventing these ideas from becoming realities is ever 
dwindling resources. All of the preclinical work leading to 
these medical innovations I described was possible because of 
funding by the NIH and its associated Institutes.
    With a 20-plus percent decline in the purchasing power of 
the NIH budget over the past decade, it has become increasingly 
challenging to create a path to move these inventions from the 
bench to the clinic. Moreover, it's challenging to move these 
inventions from the academic setting to the private sector. It 
is difficult to obtain investments from the private sector for 
IND enabling or preclinical enabling work such as compound 
optimization, preclinical pharmacology, and toxicology and 
manufacturing.
    I applaud the NIH and Congress for recognizing this 
transla-
tional bottleneck and for establishing the Clinical and 
Transla-
tional Science Award program and the National Center for 
Advancing Translational Sciences to begin to address this 
critical issue. In addition, the NHLBI and the NCI and other 
institutes at the NIH have established some programs, such as 
the NHLBI network for Translational Research Centers for 
treating Thrombotic and Hemostatic Disorders, that supports 
translation of basic sciences into clinical applications.
    These new initiatives are critical for our success and will 
be essential if the United States is to remain the 
international leader in medical innovation.
    Finally, precision medicine, as you mentioned, Senator 
Alexander, is the future of medicine. Yet it is a major 
challenge to all of us who translate basic science into health 
care. This new frontier in medicine combines the information 
age, which is upon us, with the ability to look at personalized 
genomics to really collect unparalleled intelligence on health 
and disease as well as to help us identify what therapies may 
help each one of us.
    To meet these challenges and opportunities head on, we will 
need to reposition and train a new generation of biomedical 
researchers that looks very different from the one we have 
today. Engineers, physicians, mathematicians, and biologists 
will need to come together as a team to effectively combat 
disease, disability, aging, and death.
    I would suggest there are four tractable issues that we 
should work on together. No. 1, is how to train and expand a 
biomedical research workforce that is ready to utilize this 
genomic and informatics revolution that is underway. No. 2, is 
how to rebalance and right-size the support of all phases of 
biomedical research as we transition from gathering 
intelligence on health and disease through basic research to 
rationally using those large amounts of research that we've 
obtained to combat disease through translational and clinical 
research.
    No. 3, is how to reduce the administrative and compliance 
burdens upon investigators and academic institutions to reduce 
costs and improve productivity. And, finally, No. 4, is how to 
further encourage academic institutions like mine to more 
effectively engage with the private sector.
    Thank you.
    [The prepared statement of Mr. Sullenger follows:]

            Prepared Statement of Bruce A. Sullenger, Ph.D.

    Thank you for the introduction Senator Burr and good morning 
Chairman Alexander, Ranking Member Murray and other committee members. 
I would like to thank you for the opportunity to share with this 
committee my perspective as an academic biomedical researcher working 
on the front lines of medical innovation. In addition to being an 
innovator and entrepreneur, I help other faculty at Duke University 
apply their medical innovations to human health in my role as director 
of the Duke Translational Research Institute. This Institute provides 
preclinical and early stage clinical trial seed funding and project 
management support to build collaborative, translational research teams 
(https://www.dtmi.duke.edu/about-us/organization/duke-translational-
research-institute/pilot-program/leadership).
    I was trained as a basic scientist in one of the pre-eminent 
biochemistry laboratories in the world, Dr. Cech's lab at the 
University of Colorado with a goal of pursuing knowledge for the sake 
of knowledge. However in 1994, I sought a new scientific path and 
focused on what came to be known as ``translational research.'' I 
joined the faculty in the Department of Surgery at Duke so I could work 
closely with physicians and surgeons to develop new approaches to 
effectively and safely treat the patients they saw every day. During 
the past two decades, this unorthodox career path has been enormously 
rewarding. Unfortunately, it has also become increasingly challenging.
    With cardiologists, cardiothoracic surgeons and neurosurgeons, we 
invented new ways to deliver reversible anticoagulants for the 
potential treatment of cardiovascular disease and stroke patients. I 
also worked with surgical and medical oncologists to develop new 
classes of compounds that precisely deliver cytotoxic and immune-
modulatory medicines to prostate, pancreatic and other types of cancer 
cells. Most recently working with rheumatologists we invented a novel 
anti-inflammatory drug for the treatment of lupus, arthritis and other 
chronic inflammatory disorders without serious side effects.
    We have been busy but there is so much more we could be doing. 
Creativity and ingenuity is not in short supply. What is preventing 
these ideas from becoming realities are ever dwindling resources. All 
of the preclinical work leading to the medical innovations I described 
was possible because of funding by the NIH and its associated 
institutes. With a 20 percent decline in the purchasing powers of the 
NIH budget over the past decade, it has become increasingly challenging 
to create a path to move these inventions from the bench top to the 
clinic. And moving these inventions from an academic setting to the 
private sector has become even more challenging and rate limiting. It 
is extremely difficult to obtain investments from the private sector 
for IND (Investigational New Drug) enabling work such as compound 
optimization, preclinical pharmacology and toxicology studies and 
manufacturing. I applaud the NIH and Congress for recognizing this 
translational bottleneck and for establishing the Clinical and 
Translational Science Award (CTSA) program and the National Center for 
Advancing Translational Sciences (NCATS) to begin to address this 
critical issue. In addition, the NHLBI, NCI and other institutes at the 
NIH have established some programs such as the NHLBI national network 
of Translational Research Centers for Thrombotic and Hemostatic 
Disorders that supports the translation of basic sciences into clinical 
applications. These new initiatives are critical for our success and 
will be essential if the United States is to remain the international 
leader in medical innovation.
    Finally, precision medicine--the future of medicine--is a major 
challenge to all of us who translate basic research into health care. 
This new frontier in medicine combines the information age with 
personalized genomics to collect unparalleled intelligence as to what 
makes us sick and what therapies can be tailored to each of us. To meet 
these challenges--and opportunities---head on, we will need to 
reposition and train a new generation of the biomedical researchers. 
This next generation will look very different from the one we have 
today: Engineers, physicians, mathematicians, and biologists will need 
to come together to effectively combat disease, disability, aging and 
death.
    To prepare for the coming challenges, I would encourage this Senate 
Committee to work with the NIH, FDA, academic community and private 
sector to consider four tractable issues:

    1. How to train and expand a biomedical research workforce that is 
ready to utilize and act upon the genomic and informatics revolution;
    2. How to rebalance and right size support for all phases of 
biomedical research as we transition from gathering intelligence on 
health and disease (basic research) to rationally using the large 
amounts of information to combat disease (translational and clinical 
research);
    3. How to reduce the administrative and compliance burdens placed 
upon investigators and academic institutions to reduce costs and 
improve productivity; and
    4. How to further encourage academic institutions to more 
effectively engage with the private sector and clarify the NIH conflict 
of interest policy to facilitate such endeavors without restricting 
innovation.
                               References
               references regarding these considerations
    1. How training should be expanded to create a biomedical research 
workforce that is ready to utilize and act upon this emerging 
information;
    References describing strategies to revise the training of the 
biomedical workforce and how team science will be important for 
translational medicine.

         https://www.aau.edu/WorkArea/
        DownloadAsset.aspx?id=15491;
         http://www.hhmi.org/programs/med-into-grad-initiative;
         https://www.dtmi.duke.edu/about-us/organization/duke-
        translational-research-institute/pilot-program/leadership; and
         http://www.pnas.org/content/111/16/5773.

    2. How to rebalance and right size support for all phases of 
biomedical research as we transition from gathering intelligence on 
health and disease (basic research) and move toward rationally applying 
the large amounts of information being amassed to combat disease 
(translational and clinical research);
    Breakdown in basic versus applied funding from the NINDS.

         http://blog.ninds.nih.gov/2014/03/27/back-to-basics/.

    3. How to reduce the administrative and grant writing burden upon 
translational investigators and academic institutions to reduce costs 
and improve productivity; and
    Link to DTRI Project Management and Consultation Office which 
offers professions trained in the private sector to act as faculty 
extenders and facilitate translational team builders.

     https://www.dtmi.duke.edu/research-facilities-and-support/
duke-translational-research-institute-dtri/project-management.



    4. How to further encourage academic institutions to more 
effectively engage with the private sector and clarify the NIH conflict 
of interest (COI) policy to facilitate such endeavors without 
restricting innovation.
    Links to NIH COI policy and the Duke's approach to complying with 
the policy:

     http://grants.nih.gov/archive/grants/policy/coi/tutorial/
fcoi.htm; and
     http://duke.edu/services/ethicscompliance/coi/fcoi/
index.php.

    The Chairman. Thank you, Dr. Sullenger.
    We'll now go to Mr. Borisy.

   STATEMENT OF ALEXIS BORISY, PARTNER, THIRD ROCK VENTURES, 
                           BOSTON, MA

    Mr. Borisy. Good morning, Chairman Alexander, Ranking 
Member Murray, and members of the committee. My name is Alexis 
Borisy, and I am a partner at Third Rock Ventures.
    At Third Rock, our mission is to form, launch, and build 
great companies in areas of disruptive science and medicine to 
discover and develop new products that will make a meaningful 
difference for patients, physicians, and our healthcare system 
overall. I applaud this committee for its commitment to 
advancing research and development for patients.
    Part of what makes life science innovation so successful 
here in America is the functioning of the entire innovation 
ecosystem from basic research to venture and industry 
investment in early discovery through extensive investment in 
development and then to commercialization. The development of 
modern medicines and technologies from the handoff of basic 
research onward is a risky and expensive endeavor, taking over 
a decade and more than a billion dollars to deliver a single 
new product.
    But there can be no question of the reward. Over the past 
decades, we have provided medicines and technologies that have 
vastly improved the quality and longevity of the lives of 
patients.
    The current conditions for private investment into life 
sciences are strong in many areas, but also difficult in 
others. Policy actions have strengthened the investment into 
areas such as therapeutics for oncology and rare genetic 
diseases, while conditions have challenged other areas such as 
devices and diagnostics.
    Overall, venture investments in 2014 in the life sciences 
has been the highest since 2008. One must note that although 
therapeutics venture investments are robust, medical devices 
and diagnostics have not fared as well, and first-time 
investments into new companies has fallen last year to the 
lowest number since 1995. A primary reason for this decline is 
the increased time and cost of developing new devices and 
diagnostics with an increased uncertainty about reimbursement 
once on the market.
    Looking forward, I must note that a keystone to ensuring a 
robust life sciences industry is a national commitment to 
supporting basic research. Our Nation's historical commitment 
to life sciences basic research is viewed as a precious jewel 
among nations. However, funding for the NIH has been 
effectively declining for the past years.
    Basic research is the key to unlocking the mysteries of 
diseases and providing foundational discoveries that enable the 
venture and biopharmaceutical industry to ultimately develop 
new medicines for patients. It is a long, expensive, and risky 
road from basic research to breakthrough medical products. 
Investors and industry are willing to make those investments 
and take on those risks, but the investments and risks cannot 
be made without the substratum in basic research to start from.
    Building from basic research, venture funding is the life 
blood of the small biotechnology companies working on 
disruptive science. These venture-backed small biotechnology 
companies are the life blood of innovative new medicines. The 
decision to deploy capital is directly impacted by the 
regulatory decisions and behaviors. Better enabling and 
encouraging FDA to utilize flexible approaches has had a very 
positive impact on venture funding.
    The 41 novel new drugs approved last year, in part 
reflecting the successes of accelerated approval and 
breakthrough therapy designations, is a substantial positive 
signal for innovation. Investments in early stage potentially 
breakthrough innovation in life sciences follow these signals, 
and venture investment in rare genetic disease and oncology 
remains very strong and has been increasing.
    It is important to note the positive effect that steady 
leadership over these past recent years has had at the FDA. I 
cannot underscore enough the importance to the venture 
community of having stable, long-term leadership at the agency. 
It is also important to note the positive effect that policy 
initiatives, such as breakthrough therapy, have had and its 
successful implementation in some areas.
    As a society, while we celebrate these successes, we have 
to ask ourselves about what we want to do to improve how we 
treat some of the other egregious diseases that affect some of 
our citizenry, including obesity, diabetes, Alzheimer's, 
depression, antibiotic resistance, as well as many others. As 
we examine the successes of the programs I mentioned before, we 
should endeavor to learn from the flexible and modern 
approaches utilized under those programs and work to apply them 
more broadly across therapeutic areas.
    Recent ideas such as approval based on identified 
subpopulations in Europe's adaptive licensing pilot could serve 
to modernize our current system. Limited population approval 
could make a significant difference, not only for antibiotic 
resistance, but for many subpopulations of disease.
    We need to incorporate the perspective of the patients 
closely and make sure that we are examining the right benefits 
and risk tradeoffs. These approaches could serve to ensure that 
the right drugs are getting to the right patients in a much 
more effective manner.
    Thank you for the opportunity to provide my testimony.
    [The prepared statement of Mr. Borisy follows:]

                  Prepared Statement of Alexis Borisy

    Chairman Alexander, Ranking Member Murray, and members of the 
committee, my name is Alexis Borisy, and I am a partner at Third Rock 
Ventures. Our firm's mission is to build great companies that discover 
and develop products that make a difference for the patients we serve. 
Our work focuses on forming, launching, and building innovative 
companies in areas of disruptive science and medicine, and matching 
that to the right business and strategy. We work to advance pipelines 
of discovery projects to the clinic and develop new products that will 
make a meaningful difference for patients, physicians, and our 
healthcare system overall. I personally have over 20 years of 
experience in building and operating innovative science-based companies 
and currently am chairman of the board and co-founder of NASDAQ-listed 
foundation medicine, chairman of Warp Drive Bio, director for Blueprint 
Medicines, which I co-founded, and director for Editas Medicines and 
Revolution Medicine. I also serve on the board of the National Venture 
Capital Association and was formerly on the board of the Biotechnology 
Industry Organization.
    I applaud this committee for its commitment to advancing research 
and development for patients. Our understanding of diseases and how we 
develop medicines has advanced tremendously over the last 20 years. 
With over 3,400 medicines in development and over 2,000 public and 
private companies in the United States, the promise of this industry 
for our society is great.\3\ We have the potential to transform how we 
treat patients with life-threatening and chronic diseases, a goal that 
not only would improve the lives of patients and their families, but 
create new solutions to our Nation's most pressing health care needs. 
We must work together to ensure the United States' biopharmaceutical 
and medical device and diagnostic industries are best equipped to 
maintain global leadership and empowered to deliver the next generation 
of medicines and therapies.
    This hearing is focused on the critical components of fostering 
continued investments in research and development and advancing 
therapies for patients. America's leadership in this space historically 
has led to translation of cutting edge science, medicine, and 
technology into products that manage or treat medical conditions that 
otherwise would decrease quality of life and productivity for 
Americans. There is much that has been done right in the past few years 
to encourage this investment into companies focused on breakthrough 
science and its application to products. Yet there are also areas of 
significant opportunities to improve, and the patients are waiting.
    It is important to understand that successful development of new 
medicines, devices, and diagnostics is dependent on policies that 
support the entire life science ecosystem--beginning with basic 
research and ending with providing treatments and therapies to 
patients. Disruption or weakening of policies that negatively impact 
any part of this ecosystem weakens the entire enterprise. Part of what 
makes life sciences innovation so successful here in America is the 
functioning of this entire ecosystem, from basic research, to venture 
and industry investment in early discovery, through extensive 
investment in development, and then to commercialization.
    Assuming that a strong foundation of societal investment in basic 
research exits, the development of modern medicines and technologies 
from that point onward is a capital- and time-intensive endeavor taking 
an average of 10 years and $1 billion to deliver a single new drug.\3\ 
It is also a high-risk endeavor involving finding solutions to complex 
scientific and medical problems. However, when successful there can be 
no question of the reward. Over the last 20 years we have provided 
medicines that have vastly improved the quality and longevity of lives 
for patients dealing with diseases such as HIV/AIDS, cancer, and heart 
disease.
    The current conditions for private investments into life sciences 
are strong in some areas but difficult in others, and I will attempt to 
exemplify in my comments how policy conditions have strengthened 
investment into some of these areas, such as therapeutics for oncology 
and rare genetic diseases, while conditions have challenged other areas 
such as devices and diagnostics.
    In general terms of first-time financings, industries that captured 
the highest total of venture capital dollars and deals in 2014 were 
software, media and entertainment, and biotechnology. Overall, 
investments in 2014 in the life sciences sector, both Biotechnology and 
Medical Devices combined, rose to the highest level since 2008 with 
$8.6 billion invested into 789 deals. While there was a 29 percent 
increase in dollars there was also a 3 percent drop in deals compared 
to 2013. Dollars invested into life sciences companies accounted for 18 
percent of total venture capital investments in 2014. Venture 
capitalists alone invested $6 billion into private biotechnology 
companies.
    These private investments trends are a result of a positive 
regulatory and policymaking environment for the biotechnology and 
pharmaceutical arenas, with one particular example being the success of 
FDA's Breakthrough Therapy Designation. Medical device and diagnostics 
did not fare as well, as venture capitalists invested $2.6 billion in 
private medical device companies in 2014, down more than 27 percent 
from the 2008 peak of $3.6 billion. Of even greater concern, first-time 
investments into medical device companies tell an even starker story. 
In 2014, there were only 58 medical device companies that raised their 
first round of venture capital financing, the lowest number of 
companies since 1995. A primary reason for this decline is the 
increased time and cost of developing new devices coupled with an 
increased uncertainty about reimbursement once on the market.
           the united states must commit to funding discovery
    A keystone to ensuring a robust life science industry is a national 
commitment to support basic research. Our nation's historical 
commitment to life sciences basic research is viewed as a precious 
jewel among nations. However, funding for the National Institutes of 
Health has been directly or effectively declining for the past several 
years with decreased or flat budgets that have not recognized 
inflation.\4\ Basic research is the key to unlocking the mysteries of 
diseases and providing foundational discoveries that enable the 
biopharmaceutical industry to continue to research and ultimately 
develop new medicines for patients. It is a long, expensive, and risky 
road from basic research to a breakthrough medical product, and 
investors and industry are willing to make those investments and take 
on those risks, but the investments and risks cannot be made without 
the substratum in basic research to start from. Diminished support for 
basic research will lead to a smaller pipeline of next-generation 
medicines and impede our country's potential to transform how we treat 
diseases.
    Research dollars provided by the National Institutes of Health to 
universities and colleges throughout the country also serve to train 
future scientists for jobs of the future. Currently, the U.S. 
biomedical research sector supports over 5 million high-paying jobs in 
the United States and has tremendous potential for growth.\5\ However, 
we must understand that our position as the global leader in medical 
science is constantly being challenged, and without a sustained 
commitment for scientific discovery, this is not a position that will 
be maintained.
 enabling adoption of modern approaches to drug, device and diagnostic 
           development & approval will incentivize investment
    Venture funding is the life-blood of the small biotechnology 
companies working on disruptive science, and these venture-backed small 
biotechnology companies are the life-blood of innovative new medicines. 
In fact, a study published in 2010 found that in the United States a 
majority of scientifically innovative drugs were discovered or 
developed by biotechnology companies.\6\ Large pharmaceutical companies 
may take over late-stage development and commercialization of many 
small biotech drug development programs.
    However, without innovative small biotech companies, many of 
today's innovative medicines would not exist, which in turn would not 
exist without the early-stage venture capital funding.
    The decision to deploy capital is directly impacted by regulatory 
decisions and behaviors. Better enabling and encouraging FDA to utilize 
flexible approaches reflective of our understanding of the disease and 
patient being treated, as well as incorporation of modern approaches to 
development and approval, have a positive impact on venture funding. 
For example, since the implementation of the Accelerated Approval 
pathway in 1992 over 80 drugs have been approved utilizing this 
pathway, including 29 to treat cancer and 32 to treat HIV.\7\ This 
pathway allows for approval based on surrogate endpoints such as 
shrinking tumors or decreasing viral loads indicative of clinical 
benefits to patients with a commitment by the company to conduct 
confirmatory trials post-market to confirm the benefit. This has 
allowed oncology and HIV drugs to enter the public market in a 
significantly more effective manner. It is no coincidence that oncology 
has been and is projected to be one of the most active and innovative 
therapeutic markets.\8\
    Likewise, in recent years FDA has shown an increased willingness to 
work with companies to develop more effective clinical development 
programs for rare diseases. This, along with added exclusivity for 
orphan drugs, has led to a significant increase in venture investment 
in rare diseases. The results are clear. In 2012, FDA reported that 
from 2007 to 2012 approximately one-third of the NMEs (New Molecular 
Entities) approved were drugs for rare diseases.\9\ This trend 
continued in 2013, when 33 percent of NMEs approved were drugs to treat 
rare diseases.\10\ Again, we see that investment in early stage, 
potentially breakthrough innovation in life sciences follows these 
signals, as venture investment in rare genetic diseases has 
significantly increased over the past few years.\11\
    We have seen continued commitment from FDA and policymakers to work 
on ensuring an effective development and review process. In fact, in 
2014, the FDA approved 41 novel new drugs the highest number of novel 
drugs approved in the past 10 years. In 2012, the Food and Drug 
Administration Safety and Innovation Act (FDASIA) created a new 
Breakthrough Therapy designation that provides increased interactions 
with FDA to ensure the most effective development and approval 
processes for promising new treatments. As of February 2015 there have 
been 80 breakthrough designations granted by FDA.\12\ Similar to 
statistics for accelerated approval, many of these designations have 
been given to oncology and rare disease treatments and therapies.\13\
    It is important to note the positive effect that steady leadership 
over these past recent years has had at the FDA, and I cannot 
underscore enough the importance to the venture community of having 
stable, long term leadership at the agency. It is also important to 
note the positive effect of policy initiatives such as Breakthrough 
Therapy, and its successful implementation in some areas. Currently, 
FDA is in the process of implementing these improvements. Ensuring FDA 
can hire, retain, recruit and has tools to ensure the organization is 
best able to carry out its mission is also critically important.
    The benefit of these programs has clearly been mostly realized in 
the oncology and rare disease space. Much has been written regarding 
the enormous increase in requirements, duration, and expense of 
clinical trials.\14\ \15\ \16\  \17\ These increases are especially 
acute for drugs designed to treat chronic diseases with larger patient 
populations. As a consequence, the cost and regulatory uncertainty of 
developing drugs for these populations has been increasing, and we must 
ask if there is more we could do to get these potential therapies to 
patients.
    As a society, while we celebrate the incredible successes, and 
indeed we should celebrate these successes, we have to ask ourselves 
what we want to do to improve how we treat some of the other egregious 
diseases affecting great numbers of our citizenry and long-term health 
costs, such as obesity, diabetes, Alzheimer's, and depression among 
others, as well as pressing issues such as antibiotic resistance. As we 
examine the successes of these programs in terms of number of approvals 
for cancer and rare genetic diseases, we should endeavor to learn from 
the flexible and modern approaches utilized under these programs and 
work to apply them more broadly across therapeutic areas.
    The fact is that while there are several examples where FDA has 
allowed for the utilization of novel endpoints, advanced tools such as 
biomarkers, and non-traditional clinical trial designs, the basis for 
such decisions is still poorly understood and inconsistent across 
review divisions. Without a more transparent and consistent approach as 
to what criteria such decisions are based on, the private sector will 
be hesitant to develop or utilize advanced approaches. Guidance from 
and involvement of FDA are critical to creating processes for data 
collection to support the utilization and adoption of novel endpoints 
and modern drug development tools and approaches would incentivize 
investment and enable a modern and effective approach to drug 
development and review.
    However, while there is a lot to be excited about when it comes to 
the number of FDA approvals and programs discussed above, when it comes 
to chronic diseases with varying stages of progression and severity, 
there seems to be an actual reticence to employ modern tools and 
approaches. Recent ideas such as approval based on identified 
subpopulations, and Europe's adaptive licensing pilot could serve to 
modernize our current system.
    Limited population approvals could make a significant difference, 
not only for antibiotic resistance, but for many subpopulations of 
disease. Currently, our regulatory system is based on a philosophy that 
more information before approval is better. We must always support the 
highest standard of safety, but we must advance to a system that 
critically examines information required and determine whether it is 
actually informative as to the potential success of the drug in the 
real world. Creating approval pathways that enable the development of 
drugs for subpopulations of patients in areas like Alzheimer's, 
diabetes, and antibiotic resistance could be a game-changer. We need to 
incorporate the perspective of the patients closely, and make sure that 
we are examining the right benefit and risk tradeoffs. These approaches 
could serve to ensure the right drugs are getting to right patients in 
a much more effective manner.
    From early stage life sciences venture investment perspective, we 
know that when we start a company with breakthrough innovations in new 
areas of science and medicine it will take a long time to turn that 
innovation into a drug that will reach patients and physicians and 
improve public health. The reality is the time required to put a drug 
on the market is, more often than not, longer than the length of our 
investment funds. Thus, when we create a new innovative company in a 
new area of science and medicine we are counting on the new medicine 
being developed being seen as important and valuable when it is still 
in the early stages of development. This is often referred to as the 
``proof of concept in the clinic,'' or Phase IIA. At that point, we are 
counting on the company and the product being sufficient to either take 
the company public on the NASDAQ or to have the company and/or product 
acquired by a pharmaceutical or larger biotech company.
    The modern approach to regulation that exists now for cancer and 
rare genetic diseases allows this to work very well for three reasons. 
First, the regulatory process is more interactive, flexible, and 
reflective of the disease and patient being treated. Second, the 
amount, of time, and size of investment required to fund a company 
through ``proof of concept'' is better understood. And, third, the next 
steps in our innovation ecosystem, larger companies and public 
investors, value the early stage proof of concept data because they 
feel more confident about the development and approval process for 
these drugs. However, the same cannot be said for diseases such as 
obesity, diabetes, and Alzheimer's, where the time, amount of funds, 
and regulatory requirements are greater and there is less understanding 
about how to utilize modern tools and approaches. Without improving 
these processes, it is very difficult to imagine how early stage 
investment can occur in such important areas.
    In addition to understanding the criteria needed for FDA to allow 
for utilization of modern tools, such as biomarkers and diagnostics--
which are key to advancing personalized medicine by enabling the 
ability to diagnostically define subsets of patients suffering from a 
disease--there is also a need to provide incentives and clarity for the 
development of such tools. This is particularly important for the 
development of new diagnostics. It is imperative that regulatory 
processes for personalized medicine encourage early collaboration for 
the approval of therapeutics and companion diagnostics, as well as the 
development of advanced diagnostics in general. Furthermore, the lack 
of clarity around approval of advanced molecular diagnostics, coupled 
with an enormous lack of clarity on reimbursement for them once 
approved, has been making investment into this necessary space to 
recognize the vision of precision medicine quite challenging.
    A key barrier to the advancement of diagnostic development is the 
fact that there are no consistent reimbursement policies for 
diagnostics. Last year, Congress passed the Protecting Access to 
Medicare Act of 2014 which included the Improving Medicare Policies for 
Clinical Diagnostic Laboratory Tests provision. This provision is an 
important and positive step forward. How transformative depends on 
whether the potential benefits of this provision are realized and 
implemented in the regulations. There remains substantial uncertainty 
in the private and public world of reimbursement for molecular 
diagnostics.
    This uncertainty continues to hold back investment in breakthrough 
personalized medicine innovation that could significantly advance how 
we develop drugs and treat patients with critically important diseases 
such as Alzheimer's, diabetes, and others. Lack of regulatory clarity 
coupled with lack of clarity on reimbursement also limits investment in 
medical devices. For both diagnostics and devices, it may take 2-5 
years after the product is approved to secure reimbursement. This 
uncertainty is a significant factor in limiting investment. A recent 
NVCA survey found that regulatory concerns were cited as the No. 1 
reason investors were moving away from putting funds into medical 
technology companies.
    There are two more areas critical to modernizing our approach to 
developing medicines and ensuring continued investment in new solutions 
that will benefit patients. We must strengthen the ability to integrate 
patient perspectives in the drug development and review process. The 
ability to provide information about patients' perspectives about their 
diseases and what they believe to be benefits or acceptable risks would 
help ensure that the medicines being developed are seen as helpful to 
the patients they are being designed to treat.
    Protection of intellectual property and patents is also paramount. 
Patents are the only asset a small company has to attract investment. 
If patents are weakened, the already high-risk proposition becomes one 
that is too much and investment in this industry will be decimated. We 
must ensure that the patent system protects the patent owners, abuses 
of the system for sheer monetary gain and not the advancement of 
science and discovery should not be supported.
    Last, we must ensure that reimbursement policies are determined in 
the context of the disease and patient being treated and the impact of 
a drug is evaluated over appropriate time lines. With regard to devices 
and diagnostics we must make the same policy strides as we have in 
other medical spaces. Appropriate Federal investments and a robust and 
transparent and predictable process for approvals will allow for 
increased private investments. We must not create a system that will 
severely diminish investment in the next generation of cures and 
treatments.
    Thank you for the opportunity to provide my testimony on this 
important topic. There are other critical policy areas that have the 
ability to impact or weaken the life science ecosystem not mentioned in 
this statement, but I would be happy to discuss these areas further 
with this committee.
                               References
    1. http://www.phrma.org/pipeline.
    2. Copley, Caroline. With biotech hot on Wall Street, VCs look to 
Europe for promising companies. MedCity News. August 7, 2013.
    3. Adams CP and Bratner VV (2006) Spending on New Drug Development. 
Health Economics. 19, 13-141.
    4. Federation of American Societies for Experimental Biology. 
``Budget Cuts Reduce Biomedical Research.'' http://222.faseb.org/
portals/2/PDFs/opa/5.16.13%20
Funding%20Cuts%202-pager.pdf.
    5. Battelle Technology Partnership Practice. ``Battelle/BIO State 
Bioscience Industry Development 2012.'' June 2012. http://ww.bio.org/
sites/default/files/vebattelle-bio_2012_industry_development.pdf.
    6. Kneller, Robert. ``The importance of new companies for drug 
discovery: origins of a decade of new drugs'' Nature Reviews Drug 
Discovery 9, 867-82 (2010).
    7. FDA. Fiscal year 2012 Innovative Drug Approvals. December 2012.
    8. JP Morgan. 2014 Global Biotech Outlook. January 6, 2014.
    9. FDA fiscal year 2013 Innovative Drug Approvals. December 2012.
    10. FDA. Approved Drugs 2013.
    11. Jarvis, Lisa M. Orphans Find a Home. C&EN Volume 91 Issue 19 / 
pp. 10-12. May 13, 2013.
    12. FDA.
    13. Aggarwal, Saurabh (Rob). A Survey of Breakthrough Designations. 
Nature Biotechnology 32, 323-30 (2014).
    14. Scannell, J.W., Blanckley, A., Boldon, H., and Warrington, B. 
(2012) Diagnosing the decline in pharmaceutical R&D efficiency. Nature 
Reviews: Drug Discovery 11, 191-200.
    15. Avik, R. (2012) The Stifling Cost of Lengthy Clinical Drug 
Trials. Manhattan Institute. http://www.manhattan-institute.org/pdf/
fda_05.pdf.
    16. Tufts Center for the Study of Drug Development (12 April 2010) 
PDUFA V Meeting.
    17. Allison M (2012) Reinventing clinical trials. Nature 
Biotechnology 30 (1): 41-49.

    The Chairman. Thank you, Mr. Borisy.
    Mr. Mussallem.

 STATEMENT OF MICHAEL A. MUSSALLEM, CHAIRMAN AND CEO, EDWARDS 
                    LIFESCIENCES, IRVINE, CA

    Mr. Mussallem. Chairman Alexander, Ranking Member Murray, 
and members of the subcommittee, thanks very much for taking on 
this important subject. It's very meaningful.
    I'm Mike Mussallem. I'm the chairman and CEO of Edwards 
Lifesciences. I'm here representing AdvaMed and the hundreds of 
thousands of U.S. medical device industry employees who are 
passionate about helping patients, and I'm truly honored to 
join my fellow panelists today.
    We should all be concerned that innovation in the United 
States is suffering from a costly, cumbersome, and risk-averse 
regulatory system. I'm privileged to lead a company that's been 
the world leader in developing and manufacturing heart valve 
replacements for more than 50 years.
    Our recent experience in a transformational therapy to 
replace heart valves has given us a unique perspective on the 
current climate. This technology allows a heart team to deliver 
a collapsible prosthetic valve into the body via a catheter, 
thus avoid cracking the chest, stopping the heart, and a long 
and painful recovery.
    This is the most extensively studied heart valve, including 
an unprecedented four New England Journal of Medicine 
publications, that demonstrated a triple win, a substantial and 
sustained clinical benefit, cost effectiveness, and 
extraordinary quality of life enhancements. Unfortunately, the 
United States was the 42d country to get this new technology, 4 
years after Europe.
    Since then, Dr. Shuren and the leadership of FDA have been 
working to improve the regulatory pathway, and they've made 
commendable progress in this area, including facilitating early 
feasibility trials in the United States, enabling more rapid 
approvals of next-generation therapies, and using post-market 
registry data to expand patient access. Additionally, this 
breakthrough technology benefited from a close collaboration 
between FDA and CMS so that when new patient populations were 
approved, they were immediately covered by Medicare.
    If these techniques and the others in AdvaMed's innovation 
agenda could be applied to other technologies more broadly, 
that would go a long way toward revitalizing innovation in the 
United States.
    We see several additional opportunities to remove barriers. 
First, FDA's vision to improve the regulatory process must be 
accelerated. FDA has recently proposed a number of improvements 
to the pre-market clinical trial process and post-market 
surveillance. For example, improving the process to incorporate 
patients' perspectives on risk tolerance is an important step 
in the right direction.
    In addition to these regulatory enhancements, we believe 
there should be a separate breakthrough technology designation 
for transformative therapies to receive preferential regulatory 
treatment. We also believe a central investigational review 
board could reduce the cost and delays of initiating clinical 
trials.
    Second, we should strengthen the R&D infrastructure such 
that it is second to none. We support steady growth of funding 
to the NIH and the National Science Foundation. Additionally, 
the SBIR and tech transfer programs can be improved by raising 
the amount of funding to better recognize the costs actually 
incurred by startup companies.
    Third, to encourage innovation, there are a few essential 
elements for a robust ecosystem that rewards our unique 
American culture of innovation: ready access to capital, timely 
and predictable regulatory processes, a reimbursement system 
that supports promising therapies as they go through their 
iterative improvement process, and a strong intellectual 
property protection. In addition, the United States needs to 
foster a supportive business environment through tax policies 
that encourage the development of high-wage and high-value 
industries like the medical device industry.
    Finally, no discussion about medical technology is complete 
without understanding the true impact that medical advancements 
have on patients, and we are fortunate to meet a lot of 
patients. Earlier this month, we welcomed more than 100 heart 
valve patients and caregivers to Edwards to connect and support 
one another and learn how they can use their voice to help 
other patients.
    I met a woman from Colorado who survived Hodgkin's lymphoma 
only to find out that she needed a heart valve replacement. 
Thanks to transcatheter heart valve therapy, her radiation-
damaged chest did not have to be opened, and today she is doing 
well and back to work as a middle school teacher.
    It's patients like these, ranging in age from teenagers to 
folks in their nineties, that remind us daily that our work is 
personal and impacts people individually. We welcome your 
support to remove the barriers to innovation that may delay 
patient access to lifesaving therapies developed and made right 
here in America.
    Thank you.
    [The prepared statement of Mr. Mussallem follows:]

               Prepared Statement of Michael A. Mussallem

                                summary
    I am here because I am passionate about helping patients. That's 
why I and hundreds of thousands of U.S. medical device industry 
employees like me come to work each day. We love what we do because it 
can have such an amazing, direct impact on the lives of patients.
    But the balanced ecosystem that has supported medical innovation in 
the United States has been eroded by an increasingly costly and 
cumbersome regulatory process, and a risk-averse payment culture. Based 
on Edwards Lifesciences' experience in developing and delivering new 
therapies to American patients over the last several decades, I am very 
concerned that we are seeing an alarming decline in U.S. medical 
innovation.
    As an innovator, Edwards has the unique opportunity to live and 
breathe the current regulatory process on a daily basis. Our experience 
with transcatheter aortic heart valve replacement (TAVR), a 
revolutionary approach to replacing a patient's aortic heart valve 
without open-heart surgery, has provided us a unique perspective on the 
current state of the regulatory process. On behalf of the AdvaMed, the 
Advanced Medical Technology Association, today I will focus on three 
primary areas:

    1. FDA's vision to improve the regulatory process must be 
accelerated.
    2. We should strengthen the R&D infrastructure so that it is second 
to none.
    3. To encourage innovation, we need to address issues throughout 
the entire ecosystem.

    FDA has made improvements to the regulatory approval process over 
the past few years. In particular, progress has been made with TAVR 
therapies, including early feasibility trials in the United States, 
approvals of new generations of TAVR therapies, and the use of registry 
data to expand patient access. My testimony will touch on how FDA can 
apply these improvements, and other concepts put forward by AdvaMed in 
our Innovation Agenda, to provide innovators and entrepreneurs with the 
incentives to make investments in new, breakthrough therapies. It will 
also acknowledge a robust research and development infrastructure is a 
critical component of the innovation ecosystem. Finally, it will 
outline ideas on fostering an ecosystem that incentivizes curiosity and 
rewards innovators.
    At Edwards, patients help remind us daily that our work is 
personal. Each heart valve represents a patient and their family, who 
otherwise would miss out on both the extraordinary and precious 
experiences of their daily lives. We encourage you to ensure that our 
healthcare system listens carefully to the patient's voice, and look 
forward to continuing to work with you to support a vital U.S. 
innovation ecosystem that addresses patients' needs.
                                 ______
                                 
                              introduction
    Chairman Alexander, Ranking Member Murray and members of the 
committee, I am Mike Mussallem, chairman and CEO of Edwards 
Lifesciences, based in Irvine, CA, and I am testifying today on behalf 
of AdvaMed, the Advanced Medical Technology Association. I am truly 
honored to join my fellow panelists today to discuss a path to 
revitalizing medical device innovation in the United States.
    I am here because I am passionate about helping patients. That's 
why I and hundreds of thousands of U.S. medical device industry 
employees like me come to work each day. We love what we do because it 
can have such an amazing, direct impact on the lives of patients.
    Based on Edwards' experience in developing and delivering new 
therapies to American patients over the last several decades, I am very 
concerned that we are seeing an alarming decline in U.S. medical 
innovation.\1\ The balanced ecosystem that has supported innovation in 
the United States has been eroded by an increasingly costly and 
cumbersome regulatory process, and risk-averse payment culture.
---------------------------------------------------------------------------
    \1\ National Venture Capital Association. (2014). NVCA 2014 
Yearbook. Arlington, VA: Thomson Reuters.
---------------------------------------------------------------------------
    The United States has been the world leader in medical technology 
for more than a generation, but our leadership is eroding. Venture 
capital investment, especially investment in the early stage ideas that 
are the future of innovative therapies, has plummeted--a decline of 
almost three-quarters between 1997 and 2013.\2\ While the current FDA 
leadership has begun to make dramatic improvements, the regulatory 
process remains time-consuming, inefficient, and unpredictable. The 
payment environment is far less hospitable to new technology today than 
ever before, meaning investment in new treatments is discouraged and 
patients are deprived timely access to important new therapies. 
Additionally, uncompetitive tax policies disincentivize the location of 
R&D and manufacturing in the United States.
---------------------------------------------------------------------------
    \2\ PWC and National Venture Capital Association, ``Venture Capital 
Investments Q1. 2014--Money Tree Results,'' April, 18, 2014. There was 
an increase in 2014 from the low of 2013, but much of the increase was 
concentrated in digital health, informatics and self-pay technologies, 
leaving potential technological breakthroughs to diagnose and treat 
major diseases still starved for resources.
---------------------------------------------------------------------------
    Over the 35 years I have spent working in medical devices, I have 
had the opportunity to be involved with the development of dozens of 
innovative therapies. Today, I am privileged to lead the more than 
9,000 employees of Edwards Lifesciences, who dedicate their lives in a 
very personal way to helping critically ill patients and those 
suffering from heart valve disease around the world. We have been the 
leaders in heart valve innovation for more than 50 years, starting when 
an engineer, Miles Lowell Edwards of California, partnered with a 
cardiac surgeon, Dr. Albert Starr of Oregon, to develop the first 
commercially available artificial heart valve. I also had the honor of 
representing our industry in a number of leadership roles, noteworthy 
among them my term as chairman of our trade association, AdvaMed.
    It is my experience that successful medical device innovators keep 
an unwavering focus on patients. We count it a privilege to serve these 
patients, creating and supplying devices and therapies that save, 
enhance and prolong lives. We are the toolmakers for clinicians, 
working closely with them to develop technologies to address unmet 
patient needs. Each new innovation is also a stepping stone that lays 
the path to something even better. Innovation is a powerful and 
iterative force, and those who are involved in it are never satisfied 
with the status quo. It is our passion and mission to keep finding 
better solutions to improve human health.
    Edwards' innovation story is similar to many companies that have 
made medical technology a uniquely American success story. The medical 
technology industry is central to the development of devices and 
diagnostics that will provide the life-saving and life-enhancing 
treatments of the future. Patient access to advanced medical technology 
generates efficiencies cost savings for the health care system and 
improves the quality of patient care. Over the last three decades 
(between 1980 and 2010), advanced medical technology helped cut the 
number of days people spent in hospitals by more than half and added 5 
years to U.S. life expectancy while reducing fatalities from heart 
disease and stroke by more than half.
    The industry is also an engine of economic growth for the United 
States, generating high wage manufacturing jobs and a favorable balance 
of trade. Medical technology is responsible for more than two million 
U.S. jobs, including both direct and indirect employment.\3\ Clusters 
of innovation in States like California, Texas, Minnesota, 
Massachusetts, New York and North Carolina, are responsible for 
addressing the world's most serious health challenges, while, at the 
same time, serving as a robust economic engine, providing attractive 
U.S. jobs and economic growth far into the future.
---------------------------------------------------------------------------
    \3\ The Lewin Group, ``State Economic Impact of the Medical 
Technology Industry,'' June 7, 2010 and February 2007.
---------------------------------------------------------------------------
    As innovators, we have the unique opportunity to live and breathe 
the current regulatory process on a daily basis. Our experience with 
transcatheter aortic heart valve replacement (TAVR), a revolutionary 
approach to replacing a patient's aortic heart valve without open-heart 
surgery, has provided us a unique perspective on the current regulatory 
process. As we have navigated the regulatory channels to bring this 
therapy to U.S. patients over the last decade, we have taken note of 
not only the challenges, but also the forward-looking vision of the 
leaders of FDA and CMS to develop opportunities for better 
collaboration with the agencies. FDA has learned from the last several 
years, and we are already seeing much-needed improvements being made.
    We believe opportunities remain to reduce barriers in regulatory 
approval and reimbursement that will help promote America's continued 
worldwide leadership in the area of medical device development and 
support innovation. AdvaMed has proposed a new Innovation Agenda 
(attached). Enactment of this agenda can unleash the potential of 
medical technology to extend and improve lives, reduce the cost and 
burden of disease, and maintain and enhance U.S. scientific and 
economic leadership. I know the committee shares these same goals and I 
applaud you for your focus on these important issues. Today I will 
focus on three primary areas:

    1. FDA's vision to improve the regulatory process must be 
accelerated.
    2. We should strengthen the R&D infrastructure so that it is second 
to none.
    3. To encourage innovation, we need to address issues throughout 
the entire ecosystem.
                      edwards' unique perspective
    Edwards Lifesciences has been at the forefront of an ambitious 
effort to impact the lives of patients suffering from a deadly heart 
valve disease called aortic stenosis. The Edwards SAPIEN transcatheter 
aortic heart valves deliver a collapsible prosthetic valve into the 
body via a catheter-based delivery system. The valve is designed to 
replace a patient's diseased native aortic valve while the heart 
continues to beat--avoiding the need to saw open the patient's chest, 
connect them to a heart-lung machine, and stop the heart. Those of you 
who have a friend or relative who has had open-heart surgery knows 
first-hand how difficult this procedure and its arduous recovery can 
be. In fact, it is so invasive that some patients simply cannot have 
surgery because the risk of death is too high. Our new heart valve 
procedure allows patients to avoid that pain and suffering.
    Some patients who receive the SAPIEN transcatheter valves can leave 
the hospital and return home the next day. It's extremely gratifying to 
hear physicians and patients describe the immediate improvement in 
patients' health after TAVR. They can breathe and speak more easily, 
their skin transforms from gray to pink as their vital organs once 
again receive the oxygen-rich blood they need, and their vibrancy 
returns within hours.
    Patients receiving the Edwards SAPIEN valve return home with 
potential years of good health added on to their lifespan. Extensive 
study of this valve--including an unprecedented record of four New 
England Journal of Medicine papers--has demonstrated the ``triple 
win'': a substantial and sustainable clinical benefit, extraordinary 
quality-of-life improvement, and cost effectiveness in inoperable 
patients. In fact, the SAPIEN valves are the most studied heart valve 
in history. There are more than 3,000 peer-reviewed publications on 
transcatheter aortic valve replacement (TAVR). There are also more than 
60 cost effectiveness studies and at least 30 publications on quality 
of life related to TAVR.
    While our experience with SAPIEN and TAVR, transcatheter aortic 
valve replacement, has ultimately been successful, it is important to 
reflect on its unique and challenging regulatory pathway, including 
some key milestones:

     In 1999, Edwards began an internal program exploring 
transcatheter valve replacement.
     In 2002, Professor Alain Cribier performed the first-in-
human procedure of a transcatheter aortic valve replacement in France.
     In 2007, the Edwards SAPIEN valve, our first commercial 
transcatheter heart valve, received CE Mark for European commercial 
sale. The next-generation SAPIEN XT valve received CE Mark 3 years 
later.
     Before SAPIEN was approved by FDA, CMS took the unusual 
step of initiating a National Coverage Determination (NCD) in October 
2011.
     Four years after obtaining CE Mark in Europe, and after 
one of the largest, randomized controlled trials in the history of 
medical devices, the SAPIEN valve was approved by FDA in November 2011 
for the treatment of inoperable patients, making the United States the 
42d country in the world to approve the device.
     We received regulatory approval for our second-generation 
device in 2014 and are working on getting the third-generation approved 
in the United States in the near future.

    We are encouraged to see that FDA leadership has taken the initial 
device lag experience with TAVR as a catalyst to improve. In fact, the 
Agency has made significant progress in bringing newer generations of 
TAVR products to patients faster. They have been very actively engaged 
with many constituencies in the healthcare system, working to better 
understand and improve predictability and shorten the approval timeline 
for future generations of transcatheter heart valve devices. In doing 
so, the device lag for TAVR has narrowed significantly.
    One way FDA has worked to improve the process is to use registry 
data to expand patient access. Under the TAVR NCD, CMS requires that 
every U.S. patient be enrolled in a qualified prospective registry that 
tracks appropriate outcomes data to the patient level. In a remarkable 
effort of collaboration between the medical societies, regulators and 
other interested stakeholders, the American College of Cardiology (ACC) 
and the Society of Thoracic Surgeons (STS) helped build what has become 
one of the most robust clinical evidence and quality measurement tools 
ever created: the STS/ACC TVT Registry. In an unprecedented step, data 
from the STS/ACC TVT Registry for transcatheter aortic valve 
replacement procedures were used by FDA in 2013 to help expand the 
indications for use of our SAPIEN technology, allowing access to a 
broader patient population.
    At the same time, through close collaboration between FDA and CMS, 
when new patient populations are approved, they were immediately 
covered by Medicare. This collaboration took vision and commitment by 
both FDA and CMS, and they should be commended for their work. We think 
that these novel approaches reflect agency views that take promotion of 
public health as seriously as they take patient protection, which as 
consumers of the system we should all welcome.
    We realize that TAVR is a unique example of a breakthrough 
technology that perhaps warrants this kind of attention from FDA and 
CMS. If these techniques can be applied to other technologies more 
broadly, that would go a long way toward revitalizing innovation in the 
United States
   fda's vision to improve the regulatory process must be accelerated
    As noted through the Edwards transcatheter heart valve experience, 
improvements in the FDA device review process can reduce the time and 
cost associated with the development and approval of devices and 
diagnostics. They can also ensure that the CDRH's stated vision--that 
American patients will be the first in the world to have access to new 
devices--is achieved, while maintaining the highest standards of safety 
and efficacy.
    One important area where FDA is heading in the right direction is 
through its efforts to better involve patients in the regulatory 
process. Specifically, its guidance document and work through the 
Medical Device Innovation Consortium, to create a framework and catalog 
of patient preference measurement tools, will help regulators and 
device sponsors better incorporate patients' perspectives into the 
approval process. It is frustrating to Americans to hear that Europeans 
have access to innovations not available in the United States. Many 
patients have asked me and petitioned our company directly: ``It is my 
life; why can't I make the decision?'' The steps that FDA is already 
taking to listen to the patient perspective can help adjust the 
regulatory requirements to meet patient demands so that American 
patients don't feel compelled to seek alternatives.
    FDA is taking a number of other initiatives to improve the 
regulatory processes to help patients access innovative therapies. 
Thanks to the Food and Drug Administration Safety and Innovation Act 
(FDASIA), FDA has agreed to improved review and approval performance 
metrics tied to dramatic increases in manufacturer user fees, and we 
are just beginning to see positive trends in performance. Beyond that, 
during the last few years, Dr. Shuren and his team at FDA have outlined 
strategic priorities to strengthen the clinical trial enterprise, 
striking the right balance between premarket and postmarket data 
collection and improving customer service.
    Over the past year, a number of guidance documents have been 
drafted to provide manufacturers and FDA reviewers more clarity, 
including:

     Priority review for premarket submissions
     IDE and IRB approvals
     IDEs for Early Feasibility clinical studies
     Balancing premarket and postmarket data collection
     Expedited access for certain premarket approval devices

    In addition, FDA's expanded efforts to improve device quality and 
safety by shifting the focus from the old regulatory compliance 
approach to an upfront quality assurance effort through its ``Case for 
Quality'' initiative is promising. Finally, FDA's efforts to improve 
its regulatory management processes and structure through the 
recommendations coming from its Program Alignment Group are an 
important step in the right direction. It would be worthwhile for 
Congress to spend time assessing how we can move this process forward.
    It is important to note the distinction of our industry as compared 
with others in the healthcare space. Whether created by large or small 
firms, medical technologies are characterized by a rapid innovation 
cycle. The typical medical device is replaced by an improved version 
every 18-24 months. To fuel innovation, the medical device industry is 
research intensive. U.S. medical technology firms spend over twice the 
U.S. average on research and development.
    Research in our industry means that to support regulatory decisions 
for approval and reimbursement of new medical technologies in the 
United States, manufacturers are required to gather a great deal of 
clinical and economic evidence. Evidence development can be an 
extremely costly endeavor at each stage of the process. Focus should be 
put on reducing the delay and expense that data collection adds at 
every step in the process.
    FDA has recently proposed a number of improvements to the premarket 
clinical trial process that hold promise, many of which have already 
been discussed by the House of Representatives through their 21st 
Century Cures hearings. Some of these improvements that we support 
include:

     Streamlining the investigational device exemption (IDE) 
approval process to reduce IDE approval timeframes.
     Reducing the legal complexity and inconsistency between 
each hospital Institutional Review Board (IRB) through the creation of 
a centralized or standardized review process.
     Addressing potentially duplicative clinical evidence 
through the consideration of surrogate endpoints and greater use of 
data developed outside of the United States.

    In addition to these actions that FDA has already taken, AdvaMed 
has several proposals that would improve FDA's regulatory processes and 
support innovation:

     The creation of a ``Breakthrough Technology'' designation, 
which would clearly identify which specific and innovative attributes 
qualify to receive preferential treatment in both the approval and 
reimbursement process.
     Revitalize the ``least burdensome standard'' for 
regulatory review to allow for enhanced reviewer training and the 
ability for device manufacturers to use valid evidence from alternative 
sources.
     Encourage FDA to accept international consensus standards.
     Reduce the review burden on FDA and companies by allowing 
companies to self-certify certain changes to devices if their quality 
system has been certified as capable of evaluating such changes.
     Streamline the CLIA waiver process to accelerate the 
availability of point-of-care, rapid diagnostic information to 
physicians and patients.
     Improve the advisory committee process to reduce delays in 
product approvals and enhance the fairness and transparency of the 
process.
     Encourage the development of technologies for rare 
diseases and pediatric populations.
     Work with FDA to assure that post-market surveillance is 
effective and efficient; provides timely, reliable, and actionable 
data; minimizes unnecessary burdens on providers and industry; and is 
facilitated by smooth implementation of the Unique Device Identifier 
program.

    We look forward to working with the committee and the FDA on these 
proposals.
  we should strengthen the r&d infrastructure so that it is second to 
                                  none
    A robust research and development infrastructure is a critical 
component of the innovation ecosystem. This committee appreciates the 
important role that the National Institutes of Health (NIH) plays in 
advancing science. To continue this work, we support steady growth in 
funding for the NIH and the National Science Foundation.
    Additionally, the Small Business Innovation Research and Small 
Business Technology Transfer (SBIR/STTR) programs can be improved by 
raising the amount of funding, allowing larger individual grants to 
better recognize the costs actually incurred by startup companies.
    Last, we can more effectively tap the vast intellectual resources 
of our Nation's universities and academic health centers by providing 
Federal technical assistance to establish and diffuse technology 
transfer best practices.
     to encourage innovation, we need to address issues throughout 
                          the entire ecosystem
    It is important to acknowledge that while we take steps to improve 
the FDA device review process or strengthen the R&D infrastructure, we 
must also look at the innovation ecosystem as a whole to retain our 
innovation leadership. There are a few essential elements to fostering 
an ecosystem that incentivizes curiosity and rewards innovators who 
develop new therapies for patients:

     Patient/physician need.
     Ready access to capital and supportive economic climate.
     Functional/timely/predictable regulatory processes.
     Reimbursement system that welcomes novel therapies as they 
undergo a continuous improvement process.
     Strong intellectual property protection.

    Unfortunately, however, for the Nation's medical technology 
industry, every part of the innovation ecosystem is under stress. The 
danger signs include:

     Reduced investment. Venture capital flowing to the medical 
device sector is both an essential generator of future progress and an 
index of the attractiveness of investing in the development of new 
treatments and cures. Venture investment in medical technology declined 
by 42 percent between 2007 and 2013. First-time funding for medical 
technology startups dropped by almost three-quarters over the same 
period.\4\
---------------------------------------------------------------------------
    \4\ PWC and National Venture Capital Association, ``Venture Capital 
Investments Q1. 2014--Money Tree Results,'' April, 18, 2014.
---------------------------------------------------------------------------
     Movement of clinical trials and first product introduction 
out of the United States. For more complex products, the new normal is 
to conduct the first clinical trials and product introductions outside 
of the United States. Often, patients in other nations get the second 
or even third version of a novel treatment or diagnostic while patients 
in the United States are still waiting to get the first version.\5\ 
Among other factors, the decisions to introduce abroad first are driven 
by the higher cost and time involved in conducting clinical trials in 
the United States; delays and inconsistencies in FDA review; and, 
increasingly, uncertainties about coverage and payment. We believe this 
trend is bad for patients and for American jobs. Where research goes, 
so goes the high-paying research, engineering and manufacturing jobs. 
We are encouraged that FDA has made some recent progress in this area 
through FDA's Early Feasibility Program, which supports the early-stage 
clinical research. Edwards Lifesciences has been among the fortunate 
first few companies to benefit from this program through a U.S.-based 
early feasibility study of a minimally invasive mitral valve 
replacement technology. We are hopeful the program can be expanded to 
benefit many other technologies in the future.
---------------------------------------------------------------------------
    \5\ California Healthcare Institute and Boston Consulting Group, 
``Taking the Pulse of Medical Device Regulation and Innovation,'' 2014.
---------------------------------------------------------------------------
     Increasing difficulty in achieving coverage by public and 
private insurers for new medical devices and diagnostics. Start-up 
companies are now reporting that one of the first questions investors 
now often ask is about the prospects for coverage and payment, while 
the previous focus was almost exclusively on the FDA. Public and 
private insurers have been raising the evidentiary threshold for 
coverage over the last decade. A new study found that in the 10 years 
between 2002 and 2012, technologies being considered for national 
coverage in Medicare were 20 times less likely to be successful.\6\ 
When coverage was granted, it was more limited than the FDA approved 
indications in 40 percent of the cases.\7\
---------------------------------------------------------------------------
    \6\ James D. Chambers, et al., ``Medicare is Scrutinizing Evidence 
More Tightly for National Coverage Determinations,'' Health Affairs, 
February 2015.
    \7\ James D. Chambers, et al., ``Factors Predicting Medicare 
National Coverage: an Empirical Analysis,'' Medical Care, March 2012.
---------------------------------------------------------------------------
     Declining U.S. competitiveness. The U.S. medical 
technology industry has been the unchallenged world leader for many 
years. We still lead, but our continued leadership is threatened as 
other countries are anxious to wrest leadership from the United States. 
Other countries not only have lower general tax rates but many provide 
specific tax incentives, such as ``patent'' or ``innovation boxes'' 
designed to further reduce rates for domestic development of 
intellectual property and manufacturing based on that property, in 
order to attract high-wage, high value-added knowledge-based 
manufacturing industries.
     Shrinking public research infrastructure. The United 
States has historically led the world in cutting-edge biomedical 
research. Public funding of NIH and our great universities and academic 
health centers has been central to the basic and clinical research that 
has proven to be the foundation of new treatments and cures. But total 
U.S.-medical research effort, as a share of global medical research, 
declined by more than one-fifth in between 2002 and 2012.\8\
---------------------------------------------------------------------------
    \8\ Hamilton Moses, III, M.D., et al., ``The Anatomy of Medical 
Research: U.S. and International Comparisons,'' JAMA, 2015;313(2): 174-
189.

    I realize that this committee's jurisdiction does not extend to 
Medicare, but a true innovation agenda must address both FDA and 
Medicare and I urge this committee and the Senate Finance Committee to 
consult with each other as you move forward to find ways to promote 
innovation. One of the most important of our innovation agenda 
proposals--the breakthrough pathway--spans the jurisdiction of both 
committees and can only effectively be enacted cooperatively.
                         the patient experience
    No discussion about medical technology is complete without 
understanding the true impact medical advancements have on patients--
and we meet a lot of patients.
    Earlier this month, we had the pleasure of hosting 50 patients who 
participated in our first ever Edwards Patient Day held at our Irvine, 
CA headquarters. We brought them there to connect with one another, and 
to meet the dedicated team of employees who hand-sew every heart valve, 
stitch by careful stitch. Needless to say, it was a very emotional day 
for the patients as well as the teams who created their lifesaving 
valve.
    During Patient Day, we met a woman from Colorado who survived 
Hodgkins lymphoma, but found out she needed a heart valve replacement 
due to severe aortic stenosis. Since her doctors were not about to 
crack open her chest made frail by radiation, she was a candidate to 
receive a transcatheter valve replacement. She told us how her new 
valve has kept her healthy and allowed her to get back to her life as a 
middle school teacher.
    We also met a Marine Corps veteran who received TAVR treatment at 
the VA in Ann Arbor, and was discharged only 48 hours after his 
procedure. His valve was replaced in January, completely recovered, 
making the trip from Michigan to Irvine a few weeks ago to share his 
story with other veterans and Patient Day participants.
    It is patients like these--a Salt Lake City father of 10 and 
grandfather to 25 who received a valve replacement as part of a 
clinical trial studying the next-generation treatment, and a New York 
marathoner who, after heart valve replacement, was able to return to 
running--that remind us of the importance of our daily work, and the 
chance to bring our ideas out of the lab, into the clinic and to the 
patients and physicians that need them most.
    These and the tens of thousands of other patients we have had an 
opportunity to help remind us daily that our work is personal, and it 
impacts people individually. Each heart valve represents a patient and 
their family, who otherwise would miss out on both the extraordinary 
and precious ordinary experiences of their daily lives.
    Our mission is focused and our way forward is clear. I thank 
Chairman Alexander, Ranking Member Murray and members of the committee 
for the opportunity to testify today, and to share Edwards' experience 
in delivering an important new therapy to U.S. patients in need. We 
look forward to continuing to work with you to support the U.S. 
innovation ecosystem.

                               Attachment


                      innovation agenda background
    The medical technology industry is central to the development of 
medical devices and diagnostics that will provide the life-saving and 
life-enhancing treatments of the future. Patient access to advanced 
medical technology generates efficiencies and cost savings for the 
health care system, and improves the quality of patient care. Between 
1980 and 2010, advanced medical technology helped cut the number of 
days people spent in hospitals by more than half and add 5 years to 
U.S. life expectancy while reducing fatalities from heart disease and 
stroke by more than half. The industry is also an engine of economic 
growth for the United States, generating high wage manufacturing jobs 
and a favorable balance of payments.
    But the innovation ecosystem that supports medical technology is 
severely stressed. The United States has historically been the world 
leader in medical technology, but our leadership is eroding. Venture 
capital investment, especially investment in the startup firms that are 
the seed corn of the industry, has plummeted. While there have been 
recent improvements at the FDA, the regulatory process remains too 
time-consuming, too inefficient, and too inconsistent. The payment 
environment is far less hospitable to new technology today than ever 
before, with the result that investment in new treatments is 
discouraged and patient access to new treatments that are developed is 
slower and more difficult. The U.S. tax system is uncompetitive and 
discourages location of research and development and manufacturing in 
the United States, a situation that has dramatically worsened as the 
result of the medical device excise tax. The basic and applied public 
infrastructure that is critical to long-term advances in the life 
sciences is eroding.
    To respond to these challenges and rebuild the innovation 
ecosystem, AdvaMed proposes a new Innovation Agenda. Enactment of this 
agenda will unleash the potential of medical technology to extend and 
improve lives, reduce the cost and burden of disease, and maintain and 
enhance U.S. scientific and economic leadership. Failure to act will 
mean lost lives, unnecessary suffering, reduced job formation, and 
diminished economic growth.

                                    The Five Pillars of the Innovation Agenda
----------------------------------------------------------------------------------------------------------------
                1                          2                   3                   4                   5
----------------------------------------------------------------------------------------------------------------
Improving FDA's regulatory        Restructuring       Reform the U.S.     Improving access    Supporting the
 processes so that the cost and    CMS's coverage      tax system to       to international    maintenance and
 time of development and           and payment         create a level      markets by          growth of an R&D
 approval of devices and           processes to        playing field,      insisting on free   infrastructure
 diagnostics is reduced and the    support             starting with       and fair trade in   second to none.
 CDRH mission statement that       development of      repeal of the       medical
 American patients will be the     new technologies    medical device      technology and
 first in the world to have        that improve        excise tax--a tax   working with
 access to new devices is          treatment,          that is draining    foreign
 achieved, while maintaining the   diagnosis or        resources from      governments to
 highest standards of safety and   prevention, and     American            achieve
 efficacy.                         provide prompt      manufacturing       innovation-
                                   patient access to   jobs and research.  friendly
                                   these                                   regulatory and
                                   technologies.                           payment policies.
----------------------------------------------------------------------------------------------------------------

              proposals to implement the innovation agenda
    Establish access to breakthrough products

     Establish a streamlined, seamless path for FDA approval 
and CMS coverage and payment under the Medicare and Medicaid programs 
for breakthrough products that make significant improvements in 
treatment or diagnosis of life-threatening or irreversibly debilitating 
diseases or conditions.

    Improve the FDA's regulatory processes

    Responding to patient challenges and to rebuild the innovation 
ecosystem, AdvaMed proposes a new Innovation Agenda.

     Meet and exceed the groundbreaking 2012 user-fee agreement 
goals for such key objectives as reductions in total review times and 
more frequent and substantive interactions between FDA and product 
sponsors.
     Revitalize the ``least burdensome standard'' for 
regulatory review through enhanced reviewer training and encouraging 
the use of valid scientific evidence from such sources as registries, 
experience in foreign markets, and peer-reviewed journal articles, 
where appropriate, to support safety or effectiveness determinations.
     Encourage FDA to accept international consensus standards.
     Streamline the CLIA waiver process to accelerate the 
availability of point-of-care, rapid diagnostic information to 
physicians and patients.
     Allow the use of central Institutional Review Boards to 
facilitate the conduct of multicenter clinical trials.
     Reduce the review burden on FDA and companies by allowing 
companies to self-certify minor changes to devices if their quality 
system has been certified as capable of evaluating such changes.
     Improve the advisory committee process to reduce delays in 
product approvals and enhance the fairness and transparency of the 
process.
     Encourage the development of technologies for rare 
diseases and pediatric populations.
     Work with FDA to assure that post-market surveillance is 
effective and efficient; provides timely, reliable, and actionable 
data; minimizes unnecessary burdens on providers and industry; and is 
facilitated by smooth implementation of the Unique Device Identifier 
program.

    Restructure CMS's coverage and payment processes

    Enactment of AdvaMed's Innovation Agenda will unleash the potential 
of medical technology to improve lives, reduce the cost and burden of 
disease, and enhance U.S. scientific and economic leadership.

     Establish automatic Medicare coverage of FDA-approved 
clinical trials rather than requiring a duplicative and potentially 
time-consuming separate Medicare approval process.
     Expand coverage of telehealth services, including remote 
monitoring, and of disposable, prevention and treatment technologies 
used in the home.
     Streamline Medicare's process for granting temporary 
outpatient and physician payment codes to new technologies and prohibit 
Medicare contractors from arbitrarily denying payment for these 
technologies.
     Require State Medicaid programs to take patient views into 
account in making coverage decisions.
     Increase the transparency and fairness of the local 
coverage determination process.
     Improve the new technology add-on payment program to 
capture a larger share of important new technologies and set payments 
more appropriately.
     Establish payment levels more promptly for new 
technologies used in the inpatient setting, using the best available 
data.
     Improve the methodology for establishing payment for 
technologies used in the outpatient setting and for updating payments 
to ambulatory surgical centers.
     Implement ICD-10 this fiscal year.

    Reform the U.S. tax system

     Repeal the medical device excise tax.
     In the context of comprehensive tax reform, create a level 
competitive playing field for made-in-America medical technology:

         Enact new tax incentives to invest in startup 
        companies creating new treatments and diagnostics;
         Lower the overall corporate tax rate;
         Provide incentives comparable to those of other 
        countries for development and manufacturing of technology; and
         Conform the treatment of international earnings to 
        that of competitor nations.

    Improve access to international markets

     Work with the U.S. Government to encourage foreign 
governments to establish regulatory and payment systems for medical 
technology that are fair, transparent, nondiscriminatory and based on 
international best practices.
     Enact Trade Promotion Authority to negotiate the Trans-
Pacific Partnership and the Trans-Atlantic Trade and Investment 
Partnership, and assure that those agreements include provisions that 
improve market access for medical technology.
     Enforce provisions of existing trade agreements such as 
the U.S.-Korea Free Trade Agreement to assure fair access for U.S. 
technology products.

    Support the maintenance and growth of an R&D infrastructure second 
to none

    The medical technology industry is central to the development of 
medical devices and diagnostics that provide life-saving and life-
enhancing treatments of the future.

     Provide steady growth in funding for the National 
Institutes of Health and the National Science Foundation.
     Improve the Small Business Innovation Research and Small 
Business Technology Transfer programs by raising the amount of funding 
(in the context of rising NIH and NSF funding), allowing larger 
individual grants to better recognize the costs actually incurred by 
startup companies.
     More effectively tap the vast intellectual resources of 
our Nation's universities and academic health centers by providing 
Federal technical assistance to establish and diffuse technology 
transfer best practices.
     Streamline Institutional Review Board activities to reduce 
barriers to initiating collection of clinical data on new treatments, 
particularly for multicenter trials, without sacrificing protection of 
human subjects.

    The Chairman. Thank you, Mr. Mussallem.
    Mr. Coukell.

 STATEMENT OF ALLAN COUKELL, SENIOR DIRECTOR, HEALTH PROGRAMS, 
             PEW CHARITABLE TRUSTS, WASHINGTON, DC

    Mr. Coukell. Chairman Alexander, Ranking Member Murray, and 
members of the committee, thank you for the opportunity to be 
here. My name is Allan Coukell. I direct health programs at the 
Pew Charitable Trusts. We're an independent, nonpartisan 
research and policy organization that operates a number of drug 
and medical device initiatives.
    My testimony today makes three main points. First, the 
rising cost of medical innovation is a serious concern with 
multiple underlying causes. Second, the FDA has great 
flexibility but would benefit from additional tools in some 
areas. And, third, the need for robust clinical data is higher 
than ever, and there are steps Congress could take to improve 
the efficiency of data collection.
    We live in a time of exciting scientific and therapeutic 
advances, and yet the cost of bringing drugs to market has 
risen steadily. To give just one fact, the per-patient cost of 
clinical trials jumped 86 percent over 3 years, by one recent 
estimate.
    Numerous reviews and analyses have shown that the 
regulatory environment is not the sole or even the main cause 
of declining industry productivity. Nevertheless, it's 
imperative that FDA regulation and the other public programs 
that support innovation work as efficiently as possible.
    Yet we must recognize the challenge. For many drugs and 
devices, the clinical effects are subtle. Unless you study a 
lot of patients, using carefully controlled experiments to 
reduce accidental bias, you can't necessarily tell if they 
work. The crucial point is that the size of clinical trials is 
driven not by the approval standard written into the law, but 
by the difficulty of discerning the effect of treatment.
    To my second point about FDA flexibility, there is no one-
size-fits-all requirement for evidence to support drug or 
device approval. Drugs can be and are approved based on a 
single trial about a third of the time, using historical 
controls and so on as suited to that product.
    Congress has created a variety of pathways to speed 
approvals. For example, 20 percent of novel new drugs last year 
came to market through accelerated approval based on surrogate 
outcomes. Now, a similar approach has been proposed for medical 
devices, FDA's expedited access PMA pathway. If Congress 
codifies this program, it should ensure that FDA also has the 
ability to remove devices that ultimately are not found to be 
safe and effective.
    These various mechanisms are especially important for 
products that advance care for patients with serious unmet 
needs. One area where Congress could facilitate innovation is 
the development of a new regulatory pathway for antibiotics. 
Senators Hatch and Bennet have introduced the PATH Act which 
would direct FDA to approve drugs for specific limited 
populations of patients who have life-threatening infections 
and few other treatment options or none.
    Such resistant infections are on the rise and threaten to 
become a public health crisis. A number of key stakeholders, 
including public health groups, providers, industry, and 
venture capital, support this legislation. Pew asks the 
committee to move it quickly and to limit the pathway to 
antibiotics.
    Let me now turn to my third point, the efficiency of 
clinical data collection. My written testimony contains a 
number of suggestions, but let me focus here on the potential 
for far-reaching change. I'll give you an example of the kind 
of study that we should be conducting in the United States but 
right now can't, at least not routinely.
    A few years ago, investigators in Scandinavia randomized 
7,000 patients to two different surgical treatments for blocked 
coronary vessels. A traditional trial like this in the United 
States would cost hundreds of millions of dollars. This one in 
Europe cost $300,000, $50 per patient.
    Why was it so cheap? Because the data for the trial were 
drawn from a cardiovascular disease registry, a database that 
collects information on groups of patients treated for a given 
condition. Registries have been used to a limited extent in the 
United States, and Mr. Mussallem mentioned that his product, an 
innovative heart valve, got an expanded indication based on 
registry data in lieu of a clinical trial.
    Pew worked with a range of stakeholders to develop a report 
on what it would take to make registries cheaper and more 
common in the United States. We found that one of the major 
barriers is the lack of electronic health record 
interoperability. Another is legal confusion between research 
and quality improvement. Finally, there's the need for a 
sustainable funding model.
    Addressing these challenges could put us on a footing to 
reduce the cost of innovation, speed approvals, and make better 
decisions about performance and cost once the product is on the 
market.
    In conclusion, Mr. Chairman, medical product innovation 
involves partnerships across the private sector, basic science 
and academia, the regulatory environment, and the public 
programs that pay for new technology. We should continue to 
improve the system, recognizing that each part has its role to 
play and that patients rely on it.
    Thank you, and I'd welcome any questions.
    [The prepared statement of Mr. Coukell follows:]

                  Prepared Statement of Allan Coukell

                                summary
    In addition to touching briefly on FDA operations, my testimony 
makes three key points:

     The rising cost of medical product innovation is a serious 
concern, with multiple underlying causes.
     The FDA has great flexibility, but would benefit from 
additional tools in some areas.
     The need for robust clinical data is higher than ever, and 
there are steps Congress could take to improve the efficiency of data 
collection.

    Since 1950, the Food and Drug Administration (FDA) has approved 
more than 1,400 drugs, at a relatively constant annual rate. Numerous 
recent approvals demonstrate scientific novelty and exciting 
therapeutic potential. However, the inflation-adjusted cost of bringing 
these products to market has risen steadily. As numerous reviews and 
analyses have shown, the regulatory environment is not the sole, nor 
even the principal, cause of this declining productivity.
    Nevertheless, it is imperative that FDA regulation and other public 
programs that support innovation work as efficiently as possible. 
Patients, clinicians, and product developers rely on the FDA's careful 
and efficient review of new products.
    There is no ``one-size-fits-all'' requirement for evidence to 
support drug or device approval. FDA's drug and device centers have, 
and routinely use, flexibility in approving new products, including use 
of a variety of pathways and mechanisms created by Congress.
    One proposed new pathway--the expedited access premarket approval 
(EAP) process for medical devices--would support the marketing of new 
medical devices based on surrogate endpoints, shorter clinical trials 
or other adaptive designs, but its enactment should include mechanisms 
to ensure that sufficient data is collected in the post-market setting 
and that devices do not remain on the market absent such data.
    Another area where Congress could facilitate innovation is the 
development of a new regulatory pathway for FDA to approve new 
antibiotics for specific, limited populations of patients with life-
threatening infections where few or no treatment options currently 
exist.
    Senators Hatch and Bennet have introduced the PATH Act, S. 185, 
which would direct FDA to create this pathway for antibiotics. A number 
of key stakeholders, including public health groups, providers, 
industry, and venture capital, support this legislation and we ask the 
committee to move this bill quickly.
    To facilitate more efficient innovation and better evaluation of 
product performance in the pre- and post-market setting, it is 
important to address the rising cost of clinical trials and clinical 
data acquisition. Clinical trials remain the most reliable source of 
unbiased information for evaluating clinical effectiveness and Congress 
could help address these costs by facilitating faster trial initiation 
through, for example, greater use of central institutional review 
boards (IRBs). More far-reaching reforms would increase the use of 
clinical registries (databases) as a source of clinical data.
    While sponsors have concerns about the speed and predictability of 
FDA review, they generally feel that requests for data are appropriate 
and the agency makes the correct decision in most cases. There is 
general support for increased investment in FDA training and personnel 
and in regulatory science.
                                 ______
                                 
    Chairman Alexander, Ranking Member Murray, and members of the 
committee. My name is Allan Coukell. I direct health programs at The 
Pew Charitable Trusts, an independent, non-partisan research and policy 
organization with a number of initiatives focused on drug and medical 
device safety and innovation.
    Thank you for the opportunity to present testimony on the medical 
product development landscape. I will focus today on steps that could 
support innovation, with a particular emphasis on the need for robust 
clinical data to evaluate product performance both before and after 
approval. I will touch, in particular, on drug approvals and Pew's 
medical device and antibiotic innovation work, as well as on FDA 
predictability.
    In addition to touching briefly on FDA operations, my testimony 
makes three key points:

     The rising cost of medical product innovation is a serious 
concern, with multiple underlying causes.
     The FDA has great flexibility, but would benefit from 
additional tools in some areas.
     The need for robust clinical data is higher than ever, and 
there are steps Congress could take to improve the efficiency of data 
collection.

    Since 1950, the Food and Drug Administration (FDA) has approved 
more than 1,400 drugs. Aside from an increase in approvals after the 
enactment of the first Prescription Drug User Fee Act (PDUFA), the 
number of annual approvals has been relatively constant over this 
period,\1\ while the inflation-adjusted cost of bringing these products 
to market has risen steadily. As numerous reviews and analyses have 
shown, the regulatory environment is not the sole, nor even the 
principal, cause of this declining productivity.\1\ \2\ \3\
    Nevertheless, it is imperative that FDA regulation and other public 
programs that support innovation work as efficiently as possible. 
Patients, clinicians, and product developers rely on the FDA's careful 
and efficient review of new products.
    Pharmaceutical research and development investment in the United 
States has remained flat over the past decade, while investments in 
medical device and biotechnology, though much smaller, have grown 
steadily.\4\ The United States continues to lead the world in many 
aspects of biomedical innovation,\4\ \5\ \6\ and recent scientific and 
clinical advances are encouraging; however, there are very real strains 
in the business models for both drug and medical device development--
and in our ability to manage the associated costs of these products.
                     fda approvals and flexibility
    In approving new drugs, FDA relies on a ``substantial evidence of 
effectiveness'' standard established by ``adequate and well-controlled 
investigations, including clinical investigations.'' The medical device 
standard is similar: ``reasonable assurance of safety and 
effectiveness'' based on ``valid scientific evidence.''
    There is no ``one-size-fits-all'' requirement for evidence to 
support drug or device approval. For example, an analysis by the 
National Organization for Rare Disorders found that of 135 drug 
approvals for non-cancer rare disease, 45 met traditional data 
requirements, 32 reflected ``administrative flexibility'' based on a 
previously documented FDA system, and 58 reflected flexibility applied 
on a case-by-case basis.\7\ Another recent analysis of all drug 
approvals (funded by Pew) found that while FDA generally relied on 
randomized clinical trials to approve therapeutics, over one-third of 
approvals were based on a single efficacy trial.\8\ This same analysis 
also showed that FDA used flexibility with regards to which outcomes 
these trials had to measure.
    FDA's review of safety and effectiveness data is essential to 
inform patients and physicians. For many drugs and devices, the 
clinical effects are difficult to distinguish from the normal variation 
in outcomes seen in the relevant population of patients. Often, a 
drug's effect can only be assessed across large numbers of patients 
through careful experiments designed to reduce confounding and 
accidental bias. The crucial point is that the size of clinical trials 
is driven, not by the approval standard written in statute, but by the 
difficulty of discerning the effect of the treatment.
    It is important to note that early promise for drugs and devices 
may not be borne out as the products proceed through development. A 
recent Pew study found that even among medical devices that the FDA had 
identified as sufficiently innovative to qualify for priority review 
status, approximately one-third were not ultimately approved.\9\ This 
shows, again, that novelty and early promise are not always borne out 
by more thorough testing.
    Several existing mechanisms provide flexibility for the data 
collected. The accelerated approval pathway for drugs, which Congress 
codified into law in 2012, allows FDA approval based on surrogate--
rather than clinical--endpoints, with the goal of enabling more 
efficient premarket studies. In 2014, FDA approved 20 percent of novel 
new drugs through this pathway.\10\
    Similarly, for devices that treat or diagnose conditions affecting 
fewer than 4,000 patients per year, FDA can grant a humanitarian device 
exemption, which allows the marketing of a product that is considered 
safe and is expected to provide benefits, even if less evidence on 
effectiveness is available. The FDA's proposed expedited access 
premarket approval (EAP) process for medical devices would also support 
the marketing of new medical devices based on surrogate endpoints, 
shorter clinical trials or other adaptive designs. The success of this 
policy, though, relies on the efficient collection of data--both pre- 
and post-market. Congress should explore codifying this program in 
statute, and should address some gaps in FDA's authority to accelerate 
patient access to new medical devices while still collecting sufficient 
information throughout a product's entire life cycle. In particular, 
Congress should assess the agency's ability to promptly remove the 
approval of devices that ultimately were not found to be safe and 
effective.\11\
    These programs provide FDA with significant latitude to tailor the 
data collected by sponsors and the agency's review process to reflect 
the severity of the disease and availability of alternative treatments, 
not to mention each product's risks and benefits.
Limited Population Antibacterial Drug Approvals
    One area where Congress could facilitate innovation is the 
development of a new regulatory pathway for FDA to approve new 
antibiotics for specific, limited populations of patients with life-
threatening infections where few or no treatment options currently 
exist.\12\ We have an urgent need for new antibiotics. Antibiotic 
resistance is rising and there are increasing infections for which we 
have almost no treatments. Currently, for the FDA to approve a new 
antibiotic the FDA generally requires extensive clinical trials in the 
larger population due to concerns about safety risks resulting from 
possible use in broader groups. It would be desirable to have a 
pathway--twice endorsed by the President's Council of Advisors on 
Science and Technology (PCAST) \13\--under which such drugs could 
rapidly reach high-need patients while reducing the risks from wider 
use of the drug. There would also be clear public health benefits to 
limiting the use of new antibiotics effective against drug-resistant 
bacteria, to stave off the emergence of drug-resistant strains.
    Senators Hatch and Bennet have introduced the PATH Act, S. 185, 
which would direct FDA to create this pathway for antibiotics. A number 
of key stakeholders, including public health groups, providers, 
industry, and venture capital, support this legislation, and we ask the 
committee to move this bill quickly.
Patients May Need More Evidence
    It is important to note that current approval standards speak only 
to efficacy and safety. Stakeholders beyond the FDA--notably patients 
and payors--may frequently need additional information to make informed 
choices. For a patient, the question may not be whether a drug is 
effective compared with a placebo, but whether it is superior to other 
existing treatments. Patients and payors alike may seek to evaluate 
that information and weigh it against the drug's cost. These are 
crucial questions for the individual that are not addressed by the 
current approval standard. In addition, drug costs--particularly for 
high-cost biologics that make up an increasing share of drug 
approvals--are rising faster than healthcare costs as a whole. The need 
to sustainably mange health-care spending is likely to drive further 
demands for data to assess the value of new drugs and treatments, and 
not merely their effectiveness.\14\ For example, one of the Nation's 
leading cancer centers recently announced that it would not utilize a 
particular new cancer drug because the drug was more expensive than its 
competitors, but did not confer additional benefit.\15\
                       better data at lower cost
    To facilitate more efficient collection of evidence in both the 
pre-market and post-market setting, it is important to address the 
rising cost of clinical trials and clinical data acquisition. Clinical 
trials remain the most reliable source of unbiased information for 
evaluating clinical effectiveness,\16\ and Congress could help address 
these costs by facilitating faster trial initiation through, for 
example, greater use of central institutional review boards (IRBs) 
instead of multiple local reviews. For medical devices in particular, 
trials are currently required by statute to obtain IRB review at each 
facility participating in a study.\17\ Removing this requirement could 
help streamline the approval of these trials.
    Personalized, or precision, medicine has the potential to identify 
sub-populations of patients with specific genetic profiles who are more 
likely to respond to a particular therapy--particularly in cancer 
treatment. To take full advantage of this potential will require 
innovative trial designs, which the FDA has encouraged. For example, 
the recently developed Lung-MAP trial has the potential to improve 
efficiency by allowing simultaneous and sequential comparisons of 
multiple drugs (from multiple companies) and stratification of patients 
by genotype.\18\
Per Patient Costs and Large Simple Trials
    Independent of the size of the trial, per-patient clinical trial 
costs have risen sharply. A 2013 survey found that phase III costs rose 
by 86 to 88 percent over 3 years (from $25,000 to $40,000 per 
patient).\19\ Across all development phases, the increase was 70 
percent. The report notes that finding a sufficient number of general 
clinical sites is a challenge, but that,

          ``The biggest driver behind higher vendor costs and site 
        recruitment issues is an increasingly intense competition for 
        top-performing investigator sites.''

    One source of cost in any trial is the number of data elements that 
are collected. Another approach to reducing trial costs involves 
``large, simple trials.'' \20\ Such trials have the potential to reduce 
costs by simplifying eligibility criteria and reducing the number of 
outcomes tracked. No statutory or regulatory barrier precludes adoption 
of such trial designs. Rather, a participant in an IOM workshop 
described the barrier as risk aversion, with researchers preferring to 
collect 100 unnecessary variables than to miss one important one.\20\
Registries
    One successful large simple trial randomized patients through use 
of an existing cardiovascular disease registry in Sweden. Registries 
are large databases that collect information on groups of patients 
treated for a particular medical condition. The TASTE trial enrolled 
more than 7,000 patients, and--in unprecedented fashion--allowed 
investigators to keep track of every patient throughout the course of 
the research at a total cost of $50 per patient, or only $300,000 for 
the entire trial.\21\ Conducting a traditional study of this size in 
the United States would cost hundreds of millions of dollars, if not 
more.
    Registries have been used to a limited extent in the United States 
to expedite patient access to new products. Notably, the FDA has 
approved an expanded indication for an innovative heart valve based on 
data from an existing registry, in lieu of a randomized clinical trial. 
Pew, together with the Blue Cross Blue Shield Association and the 
Medical Device Epidemiology Network, convened experts from the medical 
device industry, the registry community and government to consider how 
to achieve the full potential of registries in a financially 
sustainable way.\22\
    Several barriers exist to fully achieving the promise of 
registries. Despite the dramatic uptake of electronic health 
information sources, these systems cannot easily transmit data among 
one another. This lack of interoperability, for example, hinders the 
ability of registries to extract clinical and outcomes data from EHRs. 
Instead, registries must develop the ability to extract information 
from the EHR systems at each facility, or require manual entry from 
providers. Additionally, many registries have sought clarity on when 
their studies are considered research, rather than quality improvement 
efforts. This confusion has slowed their use by hospitals and their 
ability to make a meaningful contribution.
Post-market Data and Expedited Device Approval
    Better post-market data--from registries and other sources--would 
facilitate more effective FDA regulation across the total product life 
cycle. For example, FDA has proposed an expedited access premarket 
approval policy for devices that fill serious, unmet medical needs. 
Under this program, FDA would implement a total-product-life-cycle 
approach to regulation by accepting more uncertainty on some of the 
effects of new products and require the answers to those questions from 
post-market studies. As a result, FDA could accept smaller trials and 
the use of surrogate endpoints or short followup on patients in the 
premarket setting, with additional data collected after approval. This 
approach--so long as it remains tailored to only those devices that 
will significantly improve the options available for patients with 
serious conditions--can help reduce the time to market of new products 
without sacrificing the data collected on the products.
                  ``real world'' and post-market data
    As FDA continues to implement a total-product-life-cycle approach 
to regulation, better post-market controls and data can provide 
assurances that any problems not detected by clinical trials are 
promptly identified after approval. The FDA may be reluctant to approve 
products more quickly if the agency is not confident that safety 
problems will be detected in the post-market setting. At present, the 
ability to assess product performance based on claims, electronic 
health record and registry data is extremely limited (see, for example, 
Madigan et al.'s description of varying results depending on the choice 
of database).\23\
    As previously stated, developing the infrastructure to more 
efficiently collect and evaluate such information could substantially 
reduce the long-term cost of acquiring clinical data. It may also allow 
for evaluation of products across a wider range of conditions and 
patient populations. However, it is important to note that building 
this capacity will require investment in both infrastructure and 
methods development.
    Along with the use of registries to gather this information, 
systems such as the FDA's post-market surveillance Sentinel Initiative 
can provide better longitudinal data on product performance. Sentinel, 
a distributed database that includes data from 178 million individuals, 
illustrates the potential of real world evidence, but also its 
challenges.\24\ The FDA already uses Sentinel to evaluate drug safety, 
and Congress instructed the agency to expand this initiative to 
devices. However, the Sentinel program relies primarily on claims data, 
which lack information on the specific device used in care. If 
integrated into claims, the new unique device identifier (UDI) system 
can provide that specificity by clearly indicating the manufacturer and 
model of the device used. The Centers for Medicare & Medicaid Services 
must issue regulations to update the claims form to include this 
information so that FDA can utilize Sentinel--in accordance with the 
congressional directive--to evaluate device safety.
    In addition, a report released last month from a multi-stakeholder 
group of medical device safety experts recommended several reforms and 
investments to support more robust data on the performance of new 
technologies after approval. For example, the National Medical Device 
Post-market Surveillance System Planning Board endorsed the inclusion 
of documenting UDI in claims to develop better data on the long-term 
performance of medical devices. In addition, the Planning Board 
recommended the development of a public-private partnership to advance, 
oversee and coordinate efforts to evaluate the quality of marketed 
devices. Congress should evaluate the Planning Board proposal and 
encourage all stakeholders--including FDA, CMS, manufacturers, 
clinicians and health plans--to develop a more robust post-market 
surveillance infrastructure.
                        systemic fda challenges
    FDA's most important resource is its staff, including physicians, 
statisticians, scientists and biomedical engineers that review medical 
product applications, data from clinical trials and post-market 
information.
    A 2012 Pew-funded report from the Partnership for Public Service 
(PPS) found several challenges to FDA's hiring, recruitment and 
retention of these scientific and medical experts. PPS recommended that 
FDA develop targeted recruitment programs to fill its talent pipeline, 
invest in career training and leadership development programs, and 
implement strategies to reduce attrition rates.\25\
    Perhaps the most commonly cited measure of FDA performance is drug 
approval time. Recent studies have demonstrated that FDA approves drugs 
more quickly than regulators in Europe and Canada.\8\ \26\ Moreover, 
median time to approval today is substantially lower than prior to the 
implementation of PDUFA goals.\27\ Over recent decades, the overall 
success rate for New Drug Applications (NDAs) has been relatively 
consistent (averaging 79 percent from 1993-2012), but the share of 
drugs approved at the first action date has increased markedly (45 
percent over 20 years, but 77 percent in 2011-12).\28\ To a large 
extent that is a function of the quality of the applications.\29\ FDA 
has some capacity to influence submission quality through its 
communication with industry, either during individual meetings or 
through guidance documents. According to a recent PwC survey of 
industry executives, 78 percent responded that FDA has improved the 
quality and frequency of its communications with industry over the last 
2 years, and 76 percent responded that the agency provided ``actionable 
feedback.'' \30\
    Successive FDA user-fee agreements have provided the agency with 
resources to facilitate the evaluation of medical products and have 
established new FDA performance metrics and formal mechanisms for 
interaction between the FDA and sponsors. Nevertheless, a frequently 
cited barrier to medical product development is an absence of 
predictability in the FDA's regulatory review processes.\31\ \32\ \33\ 
\34\ As part of negotiations to reauthorize the prescription drug and 
medical device user fees through the 2012 Food and Drug Administration 
Safety and Innovation Act (FDASIA), both industries highlighted 
improving regulatory predictability as a major goal and, in the case of 
devices, a ``paramount'' concern.\35\ \36\
    Regulatory predictability may be defined as agency decisions that 
are not arbitrary, arrived at through transparent procedures, 
consistently enforced, and free of bias.\37\ However, discussions about 
regulatory predictability frequently lack specificity. Efforts to 
assess or improve predictability may be confounded by the complex 
scientific and regulatory environment in which drug and device 
regulation occurs. Moreover, this environment is not static; no two 
products are exactly alike, and the understanding of disease changes 
and improves over time, as does the science of evaluating product 
performance. And science itself is unpredictable: the act of evaluating 
a product may generate information that raises further questions or 
undermines confidence in the outcome of a study, thus requiring further 
investigation. Fundamentally, regulatory decisions involve value 
judgments about the acceptable level of uncertainty in the data used to 
assess both safety and efficacy.
    An upcoming Pew report summarizes the results of an industry survey 
and expert conference with industry and FDA leaders on predictability. 
The survey showed concern about FDA processes and timing, but found 
that a large majority agrees with FDA's ultimate decisions--saying the 
FDA makes the appropriate decision on new medical products ``most or 
all of the time.'' In addition, about 62 percent of the respondents 
said FDA's data requirements are necessary in ``all or more cases,'' 
with only 2 percent saying the requirements were necessary in ``very 
few cases.''
    When probed further, most respondents to the survey as well as 
workshop participants expressed concerns regarding the agency's 
predictability. Thirty-eight percent of industry respondents said, 
based on their personal experiences, that the FDA's regulatory review 
process is ``completely or fairly'' predictable (higher among 
biotechnology and pharmaceutical professionals and lower among medical 
device professionals). The discrepancy among drug versus device 
executives was a consistent pattern, perhaps attributable to the 
greater diversity of medical devices products and companies and the 
breadth of approaches to testing their safety and efficacy, as well as 
staffing issues within CDRH, which the division acknowledged.
    Overall, 68 percent of respondents said that such unpredictability 
discouraged the development of new products. A third (36 percent) said 
the agency strikes the right balance between speed and safety. Industry 
professionals were divided on the degree to which they believed the 
system needs to be fixed. Nearly half (49 percent) believe the agency's 
product review systems need a ``complete or major overhaul.'' The same 
number said the systems worked ``fine as-is'' or needed only ``minor 
modifications.''
    It is important to recognize that regulatory predictability is a 
broad and subjective term used to describe a variety of issues. 
Therefore, attempts to solve ``regulatory predictability'' are less 
likely to succeed because the problem itself is not defined precisely 
enough. Rather than relying on this broad diagnosis, stakeholders would 
be better served to articulate issues regarding, for example, 
communications, staff experience, or data accessibility.
    To aid in that process, we briefly characterize several of these 
commonly cited facets of unpredictability and potential solutions to 
address them. These proposals reflect ideas raised by sponsors, FDA 
officials, analysts, researchers, and other stakeholders during the 
course of our research:

     Establishing clear data requirements;
     Inconsistency among FDA reviewers and review divisions;
     Issues related to the publication of guidances;
     Data integration and accessibility; and
     Sponsor inexperience with regulatory review.

    Sponsors sometimes assert that there is often a lack of clarity or 
explicit rationale regarding the type and quantity of additional safety 
and efficacy data that FDA staff requests. Specifically, several 
sponsors asserted that such requests are manifestations of an inherent 
and unwarranted ``risk-aversion'' on the part of FDA staff. Sponsors 
assert that some officials lack an understanding about how much risk 
the agency is willing to tolerate. As they submit documents to the 
agency, FDA staff will request additional information to address 
possible concerns with a product or learn more about how a drug will 
affect patients. Sponsors contend that many of these data requests 
would negligibly affect FDA's decisions but are burdensome and 
expensive. Similarly, they assert that some data requests are too 
academic and not germane to the safety and efficacy of a product.
    Current and former FDA officials we spoke with contend that the FDA 
must maintain some measure of flexibility when evaluating sponsors' 
applications. Over the course of a product's lifecycle new information 
may become available--from the scientific literature, from its 
regulatory counterparts in other jurisdictions, among other places--
that compels the FDA to look at a sponsor's application in a new light. 
Moreover, in the course of reviewing applications from other sponsors 
on a similar product, and through post-marketing surveillance 
monitoring, FDA reviewers identify potential safety and efficacy issues 
with a product class and uses that information to make additional data 
requests of sponsors. Because specific reference to other sponsor's 
applications is prohibited by commercial confidentiality laws, FDA 
staff cannot always be specific about the reasons underlying a 
particular data request, leading to sponsor perceptions of FDA 
capriciousness or arbitrariness.
    To achieve greater predictability, our conference found substantial 
support for the suggestion that the FDA should release all documents--
such as Complete Response Letters--that provide information on why the 
agency requested additional information or declined to approve a 
product. (Complete Response letters are effectively the FDA's 
communication to a sponsor of why a product is not approved; currently 
the FDA does not release these letters publicly.) That information will 
help all companies understand the data sought for certain diseases and 
about classes of medical products.
    Most respondents (78 percent) suggested that investing in human 
resources, such as training staff, would be a ``fairly'' or ``very'' 
effective strategy for improving FDA's review process, making this the 
most popular proposal offered in the survey.
    The FDA's centers for drugs and devices both have established a 
number of programs and pathways that facilitate earlier and more 
frequent interactions between sponsors and agency staff. When meeting 
with the FDA about adaptive trial designs or other issues that are not 
typical for a standard drug application, sponsors should request the 
attendance and input of senior FDA leadership. Such input could provide 
needed reassurance to reviewers and assuage their concerns with a 
product review.
    Inexperience submitting products for FDA review leads to sponsors 
maintaining inaccurate expectations about data requirements and agency 
processes, ultimately resulting in perceptions of unpredictability when 
those expectations are not met. Small companies are especially 
susceptible to this problem. A study by Booz Allen Hamilton found that 
large companies obtain approval on their original submission 58 percent 
of the time, whereas that is true for only 41 percent of small company 
submissions.\29\ More recently, a PriceWaterhouseCoopers survey found 
that large companies were more likely to avail themselves of 
interactions with the FDA; smaller companies were more likely to rely 
on guidance.\30\
    Sponsors that have not previously submitted products to the FDA for 
review may lack an accurate understanding of the data requirements and 
agency processes. Moreover, many small companies fail to hire 
experienced consultants and regulatory experts to assist with product 
submissions. Without this help, companies may submit inadequate or 
noncompliant submissions to the FDA.
    Other measures provide insights on additional aspects of agency 
operations, such as presentations to societies, consortia, industry and 
government organizations (around 100 per month for the center for 
drugs).\38\ Of particular interest may be issuance of FDA guidance 
documents, which serve to communicate the agency's current thinking on 
specific topics. The center for drugs, for example, issued 51 draft 
guidances in 2014, but only 13 final guidances.\39\ Earlier years 
follow a similar pattern. The reasons for this discrepancy are unclear. 
It may be that the agency seeks a wide range of input during 
development of a draft guidance, which then serves as an effective tool 
for communicating with stakeholders. Alternatively, it may be that the 
process for administrative clearance deters the agency from finalizing 
guidances. Congress could evaluate the balance between finalizing 
guidances and the potential opportunity cost of fewer new draft 
guidances on other topics, and potentially identify administrative 
simplifications that would facilitate finalization. A similar 
investigation of the time required to develop and finalize a formal FDA 
rule (often several years) might lead to solutions that would support 
greater overall efficiency.
           regulatory science and public private partnerships
    FDA has focused on the need for better tools to inform its 
decisionmaking at least since the Critical Path report in 2004, and 
more recently through its Regulatory Science strategic plan and 
associated initiatives.\40\ The regulatory science rubric is used by 
the agency and stakeholders to refer both to the development of tools 
and approaches for use by sponsors and to the development of approaches 
the agency may use in decisionmaking.
    Pew's predictability survey found strong support for investment in 
regulatory science as a ``very or fairly effective'' means to improve 
the review process.
    Mittleman et al.\41\ provide an excellent overview of the 
opportunities for precompetitive consortia, noting both their potential 
and the need for more investment. They find that these organizations 
succeed by bringing together industry, academics, government and 
mission-driven non-profits to deliver on separate and shared interests. 
However, these organizations require time and resources to produce 
results. For example, the Biomarkers Consortium took nearly 2 years of 
negotiations to bridge the divergent standards and practices, including 
IP considerations, of various stakeholders. That organization has now 
initiated 15 projects, with its first completed in 2009. In contrast 
with the $2.7 billion European investment in the Innovative Medicines 
Initiative, U.S. support of the various consortia has been limited.
    While universities and government are not configured to develop 
medicines, public-private partnerships have the potential to spur 
innovation. For example, Pew's focus on antibiotic development has 
shown that there are key scientific questions that could underpin a 
resurgence in antibiotic discovery, but are currently the province of 
neither industry nor academia. One barrier to progress, or at least to 
efficient progress, is that academic scientists may not have complete 
information about what avenues have been pursued by other researchers, 
particularly those in industry. Even where needs are clear, there are 
limits to the ability of current research funding mechanisms to 
encourage progress on the most fundamental questions.
    Pew has convened experts to identify barriers to scientific 
breakthroughs in antibiotic drug discovery and develop a roadmap for 
addressing them. That process is ongoing, but initial discussions have 
identified factors such as inter-disciplinary expertise, co-location, 
common mission/goals, and sustained funding efforts as crucial for 
making headway. These are features that may be difficult to capture 
with traditional ``bottom-up'' funding mechanisms.
                               conclusion
    The medical products ecosystem continues to produce innovative 
products that, in aggregate, benefit Americans and improve health. 
Products with the greatest potential to address unmet medical needs 
enjoy a variety of advantages that speed development and review. The 
FDA, lawmakers, industry, clinicians, patients, venture capitalists, 
and other interested stakeholders share complementary goals: ensuring 
that patients have access to safe and effective novel medical products 
and enabling U.S. companies to stay competitive.
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    The Chairman. Thank you very much. Thanks for the excellent 
testimony. We'll now begin a round of 5-minute questions.
    Dr. Sullenger, the National Academies has done two studies 
that show that 42 percent of the investigators' time on 
research grants is spent on administrative matters. I asked the 
head of the National Academies what he thought might be a 
reasonable amount of time. He said it would vary depending on 
the grant, but maybe 10 percent.
    Congress appropriated $30 billion to the NIH, 80 percent of 
which goes to extramural research mostly at universities. 
Vanderbilt University did a study in conjunction with a report 
that Senators Mikulski, Bennet, Burr and I asked for about 
Federal regulation of higher education.
    Vanderbilt, based on their figures, would roughly say that 
a quarter of all the research dollars that they get goes to 
administrative costs. That would be about $125 million out of 
$500 million, more or less.
    What's your reaction to that? What do you see at Duke, and 
what suggestions do you have for reducing that problem? If we 
could save billions of dollars there, that would be one place 
to get more money for new investigations.
    Mr. Sullenger. Thank you for the question, Senator 
Alexander. I would say my general impression is it's a similar 
number. We're spending increasing amounts of time on regulatory 
issues. Some of them don't seem to even pass the commonsense 
test, I would say, in some sense.
    For example, in my group, we study blood coagulation. We 
draw blood from healthy volunteers. But regulatory requirements 
for doing that, which doesn't really put anybody at much risk, 
is similar to you doing a clinical trial with a new drug. So at 
some level, stratifying and applying some commonsense measures 
to the regulatory issue would help a lot.
    The other challenge with administrative burden goes back to 
what the whole group or, at least, the panelists have 
mentioned, which is the stress that we have on the NIH funding 
system. It means that each investigator is writing many more 
grants, going through all the process of administering, doing 
the budgets for the grants, et cetera, which takes a tremendous 
amount of time.
    The math is pretty simple. It's basically that now it's 
about half--we have about half the probability of getting a 
grant as we did a decade ago. That means to get two or three 
grants, we're writing four or eight times as many grants over a 
4-year period to get the same amount of support for research.
    The Chairman. I understand that. But what is your reaction 
to the suggestion that the 42 percent figure, in terms of the 
amount of time spent, might be closer to 10 percent? Does that 
sound reasonable to you?
    Mr. Sullenger. Ten percent may be tough. I think to get 
there, what we have to think about--and one of the things we've 
tried to do in our institute is to basically borrow from the 
private sector some of the strategists they use, to say,

          ``Could we get sort of professional project leaders 
        who are much less expensive and much better trained to 
        do these things to reduce that burden.''

    The Chairman. But if we only got it from 42 percent to 20 
percent or 25 percent, we're talking billions of dollars of 
Federal taxpayer dollars that could be used for research, not 
necessarily as a substitute for increased funding, but as one 
way to find more dollars.
    Mr. Sullenger. I absolutely agree with that. I think that 
reducing those burdens is a way to find a big cost savings, and 
also let researchers spend their time on what they're trained 
to really do, which is to do the science.
    The Chairman. I want to stay within my time. Let me ask Mr. 
Borisy this question, and others of you may want to talk about 
it. Dr. Hamburg said at our hearing that the FDA had a record 
number of new drug approvals last year and talked about the 
breakthrough therapies program.
    She said,

          ``The past calendar year, FDA approved 51 novel drugs 
        and biologics, the most in 20 years. Today, FDA's 
        average drug review times are consistently faster than 
        other advanced regulatory agencies around the world, 
        providing Americans earlier access to new innovative 
        drugs than patients in any other country.''

    Any comment on that?
    Mr. Borisy. I think those numbers are accurate. If you are 
developing a drug in an area that will qualify for accelerated 
approval or the breakthrough therapy designation, I think 
that's a very productive interaction with the agency. If you 
are out of those areas, then there becomes a lot more 
uncertainty and a lot higher degree of questions.
    The Chairman. Mr. Mussallem.
    Mr. Mussallem. Yes, I think those numbers are accurate. I'm 
not sure that that experience necessarily translates over to 
the medical technology and diagnostics side. By and large, 
although those trends are positive and there are some great 
moves on the part of leadership in the right direction, there 
has not been that sort of trajectory that's going on in 
devices.
    The Chairman. Thank you. My 5 minutes is up.
    Senator Murray.
    Senator Murray. Thank you very much, Mr. Chairman.
    Mr. Mussallem, let me start with you. Your company has made 
some really significant advances in medical device product 
development. Your testimony talked about both the regulatory 
challenges you face as well as the progress that is being made 
at the FDA.
    Can you tell us more about how you have seen FDA engaging 
with developers and the effect that it's having on the 
development of new therapies?
    Mr. Mussallem. Yes. I'm very encouraged by what's going on 
with the leadership of FDA, particularly on the device side. 
Dr. Shuren and company have reached out to the industry and 
really tried to advance an agenda that is responsive to the 
feedback that they've gotten. Frankly, they've been 
disappointed with what's happened in the past, and trends are 
going in the right direction.
    I do think also that they're managing quite a large 
bureaucracy, and it's not so easy to move sort of the day in 
and day out bureaucracy at the same pace that leadership is 
moving, which is why we encourage that to continue. There's a 
particular initiative called MDIC, which is a public and 
private partnership, which really gets deeper into regulatory 
science which could be a really good example of the way to make 
advancements.
    Senator Murray. Thank you.
    Mr. Coukell, in your written testimony, you discussed 
innovative ways to perform clinical trials so that trials are 
more flexible and efficient. You stressed that the data 
collected through robust clinical trials is critical and 
provides patients and healthcare providers the information they 
need so they can make well-informed decisions.
    Can you discuss in more detail how we can move forward with 
innovative clinical trials without compromising the data needed 
to help patients and healthcare providers make informed 
decisions about their products?
    Mr. Coukell. Thank you for that question. I think that the 
key point is that the randomized trial has been an essential 
tool in figuring out if something works, and we have a legacy 
of examples where we didn't do a randomized trial and only 
later learned that it was not working or causing harm.
    But it has become increasingly expensive to do these 
trials. I talked in my testimony about ways that we could get 
better at pulling information out of the electronic health 
record to do trials. We also need to get faster at the 
contracting process, at the consent process, at the 
institutional review board process. All of these things could 
help streamline trials.
    We could use more clinical trial networks to get better at 
finding patients. The Scandinavian trial that I mentioned in my 
statement enrolled half of all patients getting that particular 
procedure. If we could populate our trials faster, just take 
advantage of the patients that are already in our healthcare 
system now, the time it would take to do a trial--and time is 
money--would be so much shorter.
    Senator Murray. I've heard from a lot of families in my 
home State of Washington about the terrible situation of a 
loved one having a disease and there's no treatment available. 
I know we all have, which is part of the reason why we in 
Congress put in place the FDA breakthrough designation and 
accelerated drug approval in 2012.
    Can you talk a little bit about how these new authorities 
are working to help meet the serious medical needs of patients?
    Mr. Coukell. The breakthrough therapy is widely viewed to 
have been a success. It's essentially an all hands on deck 
approach, where if a new drug is identified as being especially 
promising or an especially important advance, the agency puts 
everything in service to get that review done faster. It 
doesn't change the upstream evidentiary standard. But it does 
help get those products to market more quickly.
    Senator Murray. One last question for you. We're all about 
helping patients. That's basically the backbone of everything 
we do. As I mentioned earlier, the perspective of patients and 
their families has to be prioritized in the product development 
and approval process.
    I know you've spent a lot of time examining that issue. Can 
you tell us more about how you believe patients can be more 
involved in this process?
    Mr. Coukell. Senator, I think you're absolutely right. At 
the end of the day, what matters is the patient experience, and 
that's suitable for some indications and not others. It doesn't 
matter too much for a blood pressure drug. But if you were 
treating something like arthritis, understanding how it has 
actually influenced the patient's life, their function, their 
quality of life is really fundamentally the most important 
thing.
    Those patient-reported outcomes are still challenging to 
measure and challenging to know how much of a change matters. 
So measurement remains hard. But building those kinds of things 
into our assessment of new medical technologies is really 
important.
    Senator Murray. Thank you. I really appreciate that.
    My time is up, Mr. Chairman.
    The Chairman. Thank you, Senator Murray.
    Senator Cassidy and then Senator Mikulski.

                      Statement of Senator Cassidy

    Senator Cassidy. Implicit in what you were saying is that 
different divisions of the FDA have different rates of 
approval.
    I have something from the Manhattan Institute which shows 
that oncology and antiviral has a median time and a mean time 
of approval substantially better than that for neurology, 
cardiovascular, and renal.
    I'm trying to understand why some divisions at FDA do 
really well, and others, at least judged by time to approval, 
do far less well. Do you have thoughts on that? Because 
implicit in your testimony is that people acknowledge that 
there's differences--I think you mentioned several times 
diabetes and Alzheimer's as being something--I think it was 
your testimony--as having delayed approval times.
    Any thoughts on that? Can we understand why some divisions 
do well and others do poorly?
    Mr. Coukell. I think it's a crucial question, and I'm not 
sure I have a good answer. Part of it is leadership and 
engagement with the stakeholder community. I think that one of 
the things that we have seen happening, in particular, over the 
past 6 years is this increasing focus on public-private 
partnerships to develop the kinds of regulatory tools that we 
need to assess----
    Senator Cassidy. I see that oncology has like 200 days, 
whereas neurology has close to 600, as a median time to 
approval by FDA division. Again, your survey seemed to find 
that different groups found that, oh, yes, the FDA is working 
well, and other groups found that FDA is not working very well.
    So if you did a crosstab, would the people that found FDA 
working well--would those be the oncologic researchers? And 
those that found it working less well--would those be the 
diabetes researchers?
    Sir, you're shaking your head. You're nodding as if you 
agree. Can you comment on this?
    Mr. Borisy. Yes. I think you would tend to find those 
differences by the different groupings within the agency. Some 
of those are people related, cultural related. It is a very 
large agency, as was mentioned.
    Senator Cassidy. I keep hearing people and leadership. Dr. 
Hamburg, for example, has done a great job. We can see all 
these improvements. So it tells me that it's division 
leadership. It's not necessarily overall leadership. I'm not 
putting you on the spot, because I don't want to sabotage any 
approvals that you have currently before a division.
    [Laughter.]
    But I am struck that there must be some sublevel division 
that is not working as well, that is keeping needed drugs for 
diabetes, et cetera, from being approved in a more rapid 
fashion.
    Mr. Borisy. I would agree with your statement that there's 
been strong senior level leadership, and we need to pay 
attention to making sure that we continue to have consistent 
senior leadership at the agency going forward. A question is 
how can we help the agency from a human resources perspective, 
from a--hiring the talent that's necessary throughout the 
agency, to be able to take the----
    Senator Cassidy. First, let me say somebody's testimony 
spoke--and maybe Pew's--as to how we should have people 
surveyed, so there should be more training. In another 
document, in another hearing, I think I read that the average 
person studies for 2 years before they become a reviewer. I'm 
thinking, ``Oh, my gosh. If we have more training than 2 more 
years, this is a master's.'' The University of Maryland now has 
master's training for becoming an FDA reviewer.
    At some point, there has to be something besides training 
which is a solution. I guess I'm trying to put my finger on 
what that training is.
    Mike.
    Mr. Mussallem. In a slightly related subject, there's a 
vast difference between devices and diagnostics inside the FDA, 
and it goes on in drugs and biologics. That's just because 
there's a different development process, and it deserves a 
different regulatory system. Devices are developed with 
engineers and scientists working closely with doctors, and then 
there's an iterative process in which there's a rapid 
improvement that takes place rather than a single entity----
    Senator Cassidy. Can I interrupt you because I'm almost out 
of time.
    Mr. Mussallem. Yes.
    Senator Cassidy. I've also noted, again in someone's 
testimony--they're jumbled together--that in some cases, there 
is a sort of collaborative iterative process. In the other, 
they look for guidance, and it's the guidance which is not 
quite as useful.
    Are there some divisions that are better at giving this 
constant communication, and are there others that put out 
guidance that is like reading tea leaves and you're not quite 
sure? Is that part of what this leadership is about? We need to 
understand why FDA works really well for onc and poorly for 
Alzheimer's drugs. Do you follow what I'm saying? Are there 
some divisions that are better, given this iterative 
interactive process and others not?
    Mr. Borisy. There are some divisions where the accelerated 
approval pathway is more directly applicable to. In other 
words, just the diseases and the conditions those divisions are 
treating have been under accelerated approval. Then with 
breakthrough therapy that is having the clear sense of 
Congress, as was legislated in FDASIA, that made a big 
difference throughout the agency, not only at the senior 
leadership level, but throughout the depth of the agency.
    The communication of policy from Congress does have a big 
effect on the agency. Different groups have had more experience 
with the accelerated approval because the way that's written, 
it applies more to some disease areas than to others.
    Senator Cassidy. I yield back. Thank you.
    The Chairman. Thank you, Senator Cassidy.
    Senator Mikulski.

                     Statement of Senator Mikulski

    Senator Mikulski. Thank you, Mr. Chairman. I really want to 
thank this panel for a very content-rich testimony.
    My interest in this is threefold. No. 1 is to improve the 
lives, save the lives of people both in our own country and 
around the world, to have clinical products that actually 
improve their lives. I'm also interested in the jobs that are 
created by having them right here in the United States of 
America.
    Mr. Borisy, your description of your life and your 
companies are very similar to Maryland. We have FDA, we have 
NIH, and great institutions at Maryland, and Hopkins, and then, 
of course, our vibrant biotech industry. But the other is also 
to be able to export products, because if they do have the FDA 
approval, we can sell easily abroad, particularly to countries 
that don't have the FDA. So that's where I come in.
    Let me go to my questions. Much has been said about FDA and 
its approval process. My question is this. In the approval 
process at FDA, do you feel that not only does it require 
leadership, but certainty of leadership, and then certainty of 
financial resources? In other words, that FDA really knows what 
it's going to get, and it can really count on it, that NIH and 
its institute directors, not only the CEO of NIH, the director, 
but the institutes.
    Do you feel that reliability, certainty, and predictability 
of what they will get from the government budget is essential 
to both the recruitment, hiring, and kind of the experience 
needed in the regulatory process?
    Mr. Borisy, you and then Mr. Mussallem.
    Mr. Borisy. Yes. Stability at the agency, both in terms of 
leadership and resources so that we can have a stable and 
predictable regulatory process is very important.
    Senator Mikulski. Why do you say that?
    Mr. Borisy. In creating innovation, in funding new 
companies, which we do at Third Rock, we're embarking on a 
journey that's a 10- to 15-year product development cycle that 
will cost--the total journey--north of a billion dollars. That 
is a long time and a lot of money.
    When we start that in the beginning, we're trying to say: 
What is the path of that going forward? How much will be spent 
when? When will we get to what point? When will we be able to 
show things to convince other people downstream that value has 
been created?
    So much of that interaction is with the agency. Knowing 
what those paths will be, knowing how much it will take, and 
what the hurdles will be is crucial. If those change 
unexpectedly, it makes it impossible to be able to invest that 
type of resources over those types of timelines.
    Senator Mikulski. Mr. Mussallem.
    Mr. Mussallem. Yes. In terms of creating jobs and making a 
commitment from the private sector, certainty is very helpful, 
and so we ask for a certainty in our regulatory processes. If 
you just move upstream from that, the point that you're making, 
Senator, about them having certainty in their funding is 
certainly aligned with that.
    If they have the ability to count on the resources, and 
they can make the investments in training to keep up with the 
rapid advancements and technology that they're going to be 
constantly dealing with in the future, it puts them in a far 
better position to be able to deliver what we need from them, 
which is an efficient process that really, in a timely fashion, 
moves through these processes.
    Senator Mikulski. First of all, respect to the people who 
work there, because their morale is absolutely important. 
There's a whole culture in Washington--let's blame the 
bureaucrat, let's not fund them, and then let's complain when 
the job doesn't get done--so starting with respect. But 
resources can't be like a one-shot deal. It has to have 
continuity and stability.
    No. 3 is targeted reform. I'm very much interested in the 
fact--what you said, Mr. Coukell, which is that one set of 
processes costs hundreds of millions of dollars. Using new 
techniques could reduce it to like $300,000. That's a stunning 
number.
    Are you saying that registries would be the answer to all 
problems? Or what would be the limitations of registries?
    Mr. Coukell. I wish there was a single answer to the 
problems.
    Senator Mikulski. So do I.
    Mr. Coukell. Unfortunately, there isn't. I think that being 
able to get better at extracting the information from our 
healthcare system, finding patients, putting them into trials, 
learning before and after a product reaches market from the 
information that's in the electronic health record, and being 
able to do it in a more cost effective way would be a very 
important contribution. It, unfortunately, won't solve all 
problems, and we have to take a broad-based look at other 
approaches to reducing the cost of acquiring clinical data.
    Senator Mikulski. My time is up. Mr. Chairman and 
colleagues, we have a big opportunity, that in this budget 
debate we could end sequester, which is very demoralizing and 
disruptive. We want disruptive technologies, but not disruption 
in resources.
    We could also lift the caps. I know there's a big move to 
lift the caps in defense, and, of course, we worry about the 
threats to America. But there are these other threats that 
these men and women have devoted their lives to fighting, the 
threats of arthritis, depression, and Alzheimer's and all these 
things, and cystic fibrosis.
    I think we ought to just lift the caps and end sequester, 
it would be a big down payment on what is being recommended 
here.
    The Chairman. Thank you, Senator Mikulski.
    Senator Burr.
    Senator Burr. Thank you, Mr. Chairman.
    Mr. Coukell, should the FDA be required to use foreign 
clinical data as they review and approve new applications?
    Mr. Coukell. The short answer, sir, is no. If a trial was 
conducted outside the United States, and it was a patient 
population that wasn't like ours, or we had reason to believe 
the trial was badly conducted, we wouldn't want that to go into 
our evaluation of a product.
    But should they be able to, and do they use clinical data 
that's generated outside the United States? Absolutely.
    Senator Burr. They've had that ability since 1997 and 
rarely chose to do it. And in cases where applicants have asked 
the FDA to use foreign clinical data, because the population 
was similar or there was merit to it, the FDA's response has 
been we weren't involved in the consultation of how the trial 
was designed. Therefore, we can't use the data. Do you call 
that cooperative and helpful?
    Mr. Coukell. Sir, I served for a couple of years on the 
Cardiovascular and Renal Drugs Advisory Committee, and I would 
say virtually every product we looked at brought data from both 
the United States and outside the United States.
    Senator Burr. Mike, the FDA Act of 1997 required the FDA to 
eliminate unnecessary burdens that may delay the marketing of 
beneficial new products. But the statutory requirements for 
clearance and approval remained exactly the same. The goal of 
least burdensome requirements was to streamline the regulatory 
process and reduce burdens to improve patient access to 
breakthrough therapies.
    In your opinion, is the letter and the spirit of the least 
burdensome provision being applied on a day-to-day basis at the 
agency?
    Mr. Mussallem. Thank you, Senator. You're onto a very key 
point. It's been there. It's been in the background. But my 
sense is that least burdensome needs to be revitalized. It 
needs to be focused on.
    I think of all the new reviewers that have come into FDA as 
part of the recent funding from industry. I wonder how much 
training they've really had on least burdensome and how to 
really bring that to practice. There's something there that's 
valuable, and it's one that we should encourage FDA to look at 
even more seriously than they do today.
    Senator Burr. Thank you.
    Dr. Sullenger, earlier this year, the Chairman and I penned 
our Innovation for Healthier Americans report in which we asked 
the simple but critical question: How can we do medical product 
research and development better on behalf of America's 
patients?
    Based on your experiences across the pipeline, are there 
specific proposals or ideas that you would encourage us to 
focus on in this committee as we examine that critical 
question?
    Mr. Sullenger. One of the things that we're very interested 
in is how do we educate people to be thinking along those lines 
more. Traditionally, I would say most of our science training 
isn't focused in this translational space that you're alluding 
to, which is how do we take innovation and apply it to help 
improve healthcare.
    I was fortunate enough that--there have been some pilot 
programs along this way. The Howard Hughes Medical Institute 
actually had a pilot program of trying to train scientists to 
work more at the medical interface. They hoped that the NIH 
would pick up that program after they seeded it, and because of 
the budget issues, they haven't.
    One of the practical things I would recommend is 
considering sort of training this next workforce to do exactly 
what you're saying, to teach scientists to think at that 
interface versus doing pure fundamental basic science. We need 
both. Just like we need chemists and chemical engineers, we 
need molecular scientists and we need applied molecular 
scientists.
    Senator Burr. We're in a new area, aren't we?
    Mr. Sullenger. Absolutely.
    Senator Burr. Mr. Borisy, in your testimony, you note that 
medical device and diagnostic venture capital investment was 
down 27 percent from its peak in 2008 of $3.6 billion, and that 
in 2014, first-time investments in medical device companies 
fell to the lowest number of companies since 1995. What do you 
believe to be the largest contributing factor to that decline?
    Mr. Borisy. It's a very real decline. Actually, in our own 
funds, we've made several device investments in our first fund, 
and we're now down to one single investment that we're making 
out of our current fund. It's a double jeopardy of an unclear 
regulatory hurdle, which has been lengthening, coupled with an 
unclear reimbursement hurdle.
    In both medical devices and diagnostics, after the product 
is approved, it conventionally takes 2 to 5 years of hashing 
out and debate both with Medicare and private payers to secure 
reimbursement. If you increase the regulatory requirements, 
which is what has happened over the past decade in devices, but 
you have unclarity in how it's going to get paid for, then the 
math just doesn't work, and then the investments can't flow.
    Senator Burr. Mr. Chairman, if I could just ask one more 
question, and it's a hypothetical question for Dr. Sullenger.
    Should the FDA be able to regulate anything that I take 
from my body, don't alter, and reintroduce into my body?
    Mr. Sullenger. That's a good question. I don't know that--I 
haven't thought exactly about that. But one of the programs we 
look at is bone marrow and cord blood transplant for patients. 
And, essentially, it's doing those types of procedures.
    We take cord blood at Duke from babies and then re-implant 
it to them after they're born, and there is a regulatory 
requirement for that. It's less than if we've manipulated or 
changed those cells, but there's definitely some regulatory 
requirements. I could seek advice from the people doing that at 
Duke, but I'm not an expert in it.
    Senator Burr. I'd just pose to all of you as we talk about 
this different path forward, this different world, that we're 
going to be faced with decisions that don't look like the 
decisions today. They're not black and they're not white. I 
could make a tremendous case today that why should the FDA 
regulate what I take from my body and put back in my body, and 
I think that the body is the greatest source of cures in the 
future. It's just understanding what it is you use and where 
you use it.
    I thank the Chairman.
    The Chairman. Thank you, Senator Burr.
    Senator Bennet.

                      Statement of Senator Bennet

    Senator Bennet. Thank you, Mr. Chairman.
    Mr. Borisy, just picking up a little bit on Senator Burr's 
previous question, a number of years ago, he and I and Senator 
Hatch, I think, all heard that venture capital--or from our 
bioscience communities that venture capital was no longer 
investing in the United States in this area. It was going to 
Europe and it was going to Asia. And they came and said, ``Is 
there something you can do to help us with that?'' And that 
became breakthrough therapies.
    I think your testimony today, and the rest of the 
witnesses' testimony, is that it's actually been a pretty big 
success. I wonder if you could talk about, in very practical 
terms, how that has helped your ability to invest here in the 
United States.
    And, Mr. Mussallem, I'll come to you to talk about your 
ideas for the breakthrough therapy technology designation and 
what that might look like.
    Mr. Borisy, I'll start with you. You described it as 
productive interaction with the agency--is what you said around 
breakthrough.
    Mr. Borisy. In creating a new medical product and a new 
drug, it's this long path and more than a billion dollars to 
create it. As a venture capital firm--and we are one of the 
larger venture capital firms, and we put more money into a 
typical investment than most--we might invest $30 million or 
$40 million or $50 million into a company. That's only a small 
piece along that billion dollar journey.
    Getting to a point of clinical proof of concept, where you 
clearly know that you've done something important for a 
patient, that often is going to cost on the order of $200 
million to $250 million. So when we create a company and invest 
in a company, we're looking to understand the path of what 
partners might join us on that, whether those are larger 
companies or whether those are public markets.
    Part of what they want to know is: Will we have clarity 
that you really have done something that's important? Because 
one of the great things of the overall ecosystem here in 
America is that if you have shown something in patients, that 
it really is doing something that people believe is important, 
they'll value that very highly, and that makes this whole set 
of equations in this ecosystem work.
    Having breakthrough therapy, having accelerated approval, 
having those tools so that in the areas where they apply, you 
know that with those initial clinical studies and the results 
you get, if the science and medicine is good, if the results 
are worthy of it, then everybody in the ecosystem values what 
has been created.
    That makes it possible that those really early stage 
investments, when we're investing for things just coming out of 
academia and doing that initial work, can be done, because we 
don't have to go all the way--the 10 to 15 years to approval. 
We can fund it for the 5 years, 6 years to that clinical proof 
of concept, and so the equation is solved. On medical devices, 
those equations aren't solving right now, because everything is 
too unclear.
    Senator Bennet. Mr. Mussallem.
    Mr. Mussallem. Yes. Mr. Borisy makes great points. Thanks, 
Senator. You're onto an important theme. We can take some of 
the lessons that have been learned on the drug side for 
breakthrough therapies and apply it to the medical technology 
and device side.
    Today, we don't have that sort of pathway. I would suggest 
that an expedited pathway for truly important medical 
technologies that are really transformative and breakthrough 
should be adopted, and that could make a difference.
    You could get bogged down if you try to move every medical 
device through that sort of a system. But for the ones that are 
most important, there's a big positive that's associated with 
that that can make for the kind of policy success that we've 
seen on the drug side.
    Senator Bennet. Somebody testified--it may have been you, 
Mr. Borisy--that the breakthrough sort of--that the message 
from Congress had been heard by the FDA, not just at the top, 
but all the way through the agency. Can you talk a little bit 
more about that, too, as we think about cultural change?
    Mr. Borisy. That's a very important point, because when 
FDASIA was being passed that authorized the breakthrough 
therapy designation, a lot of the arguments or discussion going 
on at the time said: Why does this need to happen? The agency 
already has these authorities.
    Yet we can see that having had that in an act of Congress, 
in FDASIA, establishing the breakthrough therapy really has had 
a dramatic effect. That goes directly into what I do in new 
company creation.
    When we think about different areas, when we're just 
talking about a breakthrough therapy for medical devices, I 
know a lot of thought has been going into anti-bacterial--to 
bacterial resistance and also can go into other areas, as has 
been mentioned, diabetes, obesity, depression, Alzheimer's, 
places where you can say can we create clearly understood 
patient populations, precision medicine, the right drug for the 
right patient.
    If we can get clear pathways so it's limited populations, 
where one can understand and deploy the successful lessons of 
breakthrough therapy, then that act of Congress really had a 
tremendous effect across the agency.
    Senator Bennet. Thank you to the panel. I'm out of time.
    Mr. Chairman, thank you very much for holding this hearing. 
I hope in the coming weeks, as we work together to figure out 
what the next generation is, that we'll have the chance to work 
together on it. It's very exciting.
    Thank you.
    The Chairman. Thank you, Senator Bennet.
    Senator Franken.

                      Statement of Senator Franken

    Senator Franken. Thank you, Mr. Chairman.
    Mr. Mussallem, you mentioned in your testimony here the 
Medical Device Innovation Consortium, which kind of started 
with the LifeScience Alley in Minnesota, working with the FDA. 
When Commissioner Hamburg was here, I asked her how public-
private partnerships like the MDIC help to improve relations 
between regulators and the industry. In your written testimony, 
you mentioned that Edwards Lifesciences has seen positive 
improvement in its dealings with the FDA.
    How can we expand the MDIC model to continue to foster the 
strong positive relationships between industry and regulators? 
And can you describe how it has improved thus far?
    Mr. Mussallem. Thank you, Senator. You're onto something. I 
may not be an expert here in the statutory limitations in terms 
of conversations between regulators and companies, but through 
this public-private partnership, we have a chance to have 
intimate conversations about regulatory science and how to do 
it better and how to have an open and honest dialog about 
what's working and what could be better. I think that the 
agency and the industry finds this kind of dialog really 
refreshing, and there's learning that comes from that.
    One of the things most tangible for me is we're working now 
on a tool to be able to incorporate the patient's voice somehow 
into the regulatory process, because that's been missing in the 
past. That's one that comes to life very specifically when you 
work on these breakthrough technologies, in particular.
    Senator Franken. When I first came to the Senate and 
started studying these kinds of issues, I saw the different 
culture between the regulators, of course, and the industry, 
and this public-private partnership--and this is the first of 
its kind--seems to be very helpful.
    Mr. Coukell, in your testimony, you discuss several ways to 
improve clinical trial efficiency, and one of them is by 
streamlining the institutional review board, the IRB process. 
My understanding is that under current law, if a medical device 
company is testing a device in multiple locations, they need to 
get IRB approval in each location where they're conducting the 
trial.
    You suggested that this process could be centralized in a 
single national IRB in order to improve efficiencies. Could you 
elaborate on that?
    Mr. Coukell. Yes, sir. One of many steps that takes time 
when building a clinical trial is going to the institutional 
review board to review the trial from a perspective of patient 
safety. As you say, for medical devices, now the law requires 
that that be done locally. There are examples in other 
therapeutic areas of using a single centralized board, and that 
is one thing that could speed up the process of standing up a 
new trial, if that prohibition on centralizing was removed.
    Senator Franken. Thank you. You also talked about the role 
that disease and device registries can play in making data 
collection more efficient. Mr. Mussallem testified that his 
company used a registry, a large data base of patient 
information, as a key part of getting one of his products 
approved for a new use. You talked about a trial in Sweden 
where researchers were able to leverage an existing 
cardiovascular disease registry to study a lot of patients for 
a fraction of what it would cost in the United States.
    What are the barriers to expanding the use of registries in 
the medical device approval process?
    Mr. Coukell. There are several. One is getting the data 
into the database. Right now, for a lot of these registries, it 
requires somebody to hand enter it. In some cases, it's taking 
more time to enter the data in the registry than it is to 
actually carry out the procedure. So if we were better at 
pulling that from the electronic health record, or at least 
some of the data from the electronic health record, it would 
reduce the cost of operating the registry.
    We also have to recognize that right now, we're building 
them one at a time, and we're doing it in a costly way. We need 
a sustainable funding model that will let us operate them at a 
lower cost.
    Senator Franken. Thank you. I was going to ask Mr. 
Mussallem about his opinion on registries, but----
    Mr. Mussallem. Just quickly, it's a very powerful tool. It 
can really work. Allan said it well. We need not to overreach 
for this--try and find really the data elements you really 
need, and if you can automatically populate it so you don't 
make this another big administrative burden for hospitals.
    Our case was a perfect one. It actually takes twice or 
three times as long to fill out the registry as it does to do 
the case, and that's not helpful. But there are best examples 
that can be applied, and this can really be powerful, because 
by being able to collect vast amounts of information on all the 
patients that are being treated, you can make some very 
informed decisions on efficacy and safety, for that matter.
    Senator Franken. Thank you.
    Thank you, Mr. Chairman. We probably should do a hearing 
sometime on electronic medical records. Oh, we just did. I'm 
sorry.
    The Chairman. We'll do some more. Actually, we're going to 
focus more on electronic medical records. Based on that hearing 
we had, there's a lot of interest on both sides, and I talked 
with the acting director of CMS, who is interested in taking 
some steps. That's probably an area that we might work on and 
see if we can get a result.
    Senator Warren.

                      Statement of Senator Warren

    Senator Warren. Thank you, Mr. Chairman.
    Every single Member of Congress I've spoken with says that 
they support NIH and they support more medical research. But 
medical research takes money, and Congress has done absolutely 
nothing to actually get more money into the agency. In fact, 
for over 10 years, Congress has been choking off vital funding 
for medical research and has reduced the buying power of the 
National Institutes of Health by nearly 25 percent.
    All of you work in different parts of the American system 
of medical innovation. Can you tell me in just a few words how 
gutting NIH funding over the last decade has affected your 
sector?
    Mr. Borisy, could I start with you?
    Mr. Borisy. Yes. Our historical investment in NIH has been 
absolutely the basis of our life sciences ecosystem and all the 
innovation that we have here in this country and is absolutely 
essential for the future.
    The diminishing of resources that we're facing now--I see 
it in two ways that it's affecting. One is going to be long 
term. There's obviously great breakthroughs in science and 
medicine that have been happening from the investments that 
we've made over the past decades. Those are still good right 
now.
    But those aren't going to be there in 10 or 20 years. It's 
a long-term cost to one of the most dynamic sectors of our 
economy and also that does so many things for patients.
    A second thing, which I will admit in the short term is 
beneficial, but is not good for the ecosystem in the long 
term--when I'm looking to hire people now, I'm able to hire 
people that would have been getting--would have been the new 
stars, the rising stars, the people that would be getting the 
junior faculty positions. I'm also able to hire people out of 
the more senior faculty positions. The best talent that used to 
be going into academia, I am now able to hire into the 
companies that we're creating.
    This is good in the short term for the companies. It's not 
good in the long term, because these people, in the past, would 
have gone on to amazing academic efforts, which would have 
spawned many, many companies, many, many innovations. So you're 
seeing that it's a direct effect.
    Senator Warren. Thank you. This is very powerful, but I'm 
also going to have to ask you to be short if you can.
    Mr. Sullenger, could you just add something from your 
field?
    Mr. Sullenger. Yes. From being on the academic side, it's 
been crippling, to be blunt. I would echo several of the things 
that my colleagues are saying. Not only are we losing people 
from the academic sector to the private sector, but we're 
losing them to other countries. Now we're having a loss of our 
best and brightest, who are leaving the United States to go to 
Asia because they're investing more. It's been crippling, to be 
sure.
    Senator Warren. Thank you.
    Mr. Mussallem, could you add something?
    Mr. Mussallem. Yes. I believe NIH funding is a critical 
element, and it really has a great return on investment. That 
early investment in research answers some key questions that 
then causes the private sector, like us, to jump in and move 
products to patients, so there's a return on investment. When 
you get that early research right and you answer some tough 
questions, then you encourage others to follow.
    Senator Warren. A critical part of the pipeline.
    Mr. Coukell.
    Mr. Coukell. In antibiotic development, which is a 
particular focus for us, we have a 30-year drought of new 
drugs, and we have some basic upstream science questions that 
really need to be answered if we're going to jumpstart the 
pipeline. There are questions that companies aren't in a 
position anymore to address.
    Senator Warren. I want to thank all of you. The House 
Republican budget and the Senate Republican budget were both 
released last week, and both say that they support medical 
research funding. But what the Republican budgets actually do 
is lower the budget caps that are already crushing our research 
agencies, making it likely that agencies like NIH would see 
cuts, not increases, under these plans.
    Chairman Upton, who is leading the push in the House for 
FDA reform, says he cares about research, too, and says that 
the NIH needs more funding. But his draft bill, called 21st 
Century Cures, doesn't provide a single new dollar from 
Congress for NIH, not one dollar. Talk is cheap.
    Earlier this year, I introduced a proposal to try to fix 
this problem. The Medical Innovation Act would boost the NIH 
budget by about 20 percent, and it achieves that increase 
without raising taxes, without gutting vital programs, and 
without adding to the deficit. More than 30 nonpolitical 
doctor, patient, and scientific organizations, like the 
American College of Surgeons, the National Women's Health 
Network, and the Dana-Farber Cancer Institute, have supported 
it.
    There's no reason that every Republican, Democrat, and 
Independent in Congress shouldn't be able to support it. If 
people don't like this idea, then they should bring other 
solutions to the table. But let's be clear. It doesn't matter 
what Republicans say about supporting innovation if their 
budgets actually cut support for NIH. It doesn't matter that 
House Republicans put the word, cure, in the name of a bill if 
the bill doesn't put one new dollar from Congress into NIH to 
help fund those cures.
    Something needs to change. Families are losing loved ones 
to incurable and untreatable diseases while we do nothing. It 
is time for Congress to stop talking about increasing medical 
research funding and actually do something about it. People are 
counting on us.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Warren.
    I want to thank the witnesses. Several Senators said as 
they left how--as Senator Mikulski said--content-rich the 
testimony has been. I want to thank Senator Murray for working 
together with me to do this.
    I'll ask Senator Murray if she has any further comments to 
make, and then we'll conclude the hearing.
    Senator Murray. Thank you very much, Mr. Chairman, and I am 
very worried about sequestration and budget cuts and the impact 
on our ability to make sure our families have the cures that 
they are really counting on. We've seen a lot of advances in 
medical innovation that have improved the health of families 
and helped our economy. So it really is critical that we meet 
these challenges that have been outlined today by this 
excellent panel, and I really appreciate your input.
    Mr. Chairman, I look forward to working with you on finding 
bipartisan ways to continue the success we've had in the past 
to advance medical innovation.
    The Chairman. Thank you, Senator Murray.
    These things occur to me listening to what was said today. 
Reimbursement is something we need to focus on. The acting head 
of CMS mentioned, I believe, that the cost of reimbursing for 
hepatitis C grew from a few hundred million last year to $6 
billion, a great success, a cure. But that's a lot of money.
    Another company told me that while they're losing hundreds 
of millions of dollars a year, they're producing a new 
breakthrough therapy that will cure a dreaded disease. Its 
annual cost is going to be a few hundred thousand dollars. 
These are things we want to do. But we have a lot of tough 
choices coming up as we think about reimbursement in the 
future.
    It was important to hear that attention from Congress 
matters. The point that the FDA--the breakthrough authorities 
that it needed were already in the law, but the fact that the 
new law came in seemed to put an emphasis on it. That's useful 
to us.
    It's important, too, in terms of the funding, on the point 
of increasing funding for NIH, there is widespread--well, I'll 
just speak for myself. I think we should do that.
    It would be poor management not to pay attention to the 
National Academies saying that of the $24 billion we spend in 
extramural research, mostly at research universities every 
year, 42 percent of it goes for administrative costs. If we can 
get that down to 32 percent, that's $2 billion or $3 billion 
more. That's real money that we're already appropriating, and I 
hope we can work together to also do that while we're talking 
about increasing the total amount.
    Then it's inescapable that if we're looking at our budget, 
the side of the budget that has to do with military spending, 
cancer research, NIH, is about level funding over the next 10 
years, more or less. The side that has to do with mandatory 
entitlement spending goes up 86 percent over the next 10 years. 
Yet Democrats and Republicans are wary of doing anything about 
this.
    I've said many times the fact is unless we do something 
about this, we'll never be able to do anything about this. It's 
going to squeeze out the money that would go for all the things 
we're talking about today. That's a spirited discussion that we 
can continue to have.
    But I would ask, finally, that each of you, after you 
leave, if you reflect on anything that you'd like to say to us 
in terms of specific steps you'd like for the Congress to take, 
I hope you would do that.
    I have a little ritual I have to go through at the end 
here, and it's written on this piece of paper.
    The hearing record will remain open for 10 days. Members 
may submit additional information and questions for the record 
within that time if they would like.
    The next hearing on medical innovation is tentatively 
scheduled for April 28th.
    Thank you for being here. The committee will stand 
adjourned.
    [Additional Material follows.]

                          ADDITIONAL MATERIAL

                    Duke University Medical Center,
                                            April 28, 2015.

Hon. Lamar Alexander, Chairman,
Committee on Health, Education, Labor, and Pensions,
U.S. Senate,
Washington, DC 20510.

    Dear Chairman Alexander: As director of the Duke Translational 
Research Institute and professor of surgery at Duke University Medical 
Center, I am pleased to submit additional feedback following the March 
24, 2015 hearing entitled, ``Continuing America's Leadership: Advancing 
Research and Development for Patients.'' I appreciated the opportunity 
to participate, and we are grateful for your leadership in exploring 
thoughtful and meaningful reform of the National Institutes of Health 
(NIH) and the Food and Drug Administration (FDA).
    I have attached additional information in support of my written and 
verbal testimony in response to the additional queries made by various 
committee members. We look forward to continuing to work with the 
committee as it continues examining the time and cost currently 
involved with the drug and medical device discovery and development 
process, and how to better align public policies to support medical 
innovation.
    If you have any questions or need additional information, please 
feel free to contact me at [email protected] or (919) 684-6375 
or Catherine Liao in the Duke Medicine Office of Government Relations 
at (919) 416-8913 or [email protected].
            Sincerely,
                                    Bruce Sullenger, Ph.D.,
                                Joseph and Dorothy Beard Professor,
                   Director, Duke Translational Research Institute,
                                             Department of Surgery,
                                    Duke University Medical Center.
                                 ______
                                 
     Response to Questions of Senator Alexander, Senator Isakson, 
   Senator Collins, and Senator Whitehouse by Bruce Sullenger, Ph.D.
    Since many of the queries involve challenges between the academic 
and private sectors and difficulties with translating medical 
innovations from the laboratory to the community, I have discussed 
these questions with Dr. David Robinson, Professor of Finance in Duke's 
Fuqua School of Business and Research Director for the Duke Center for 
Entrepreneurship and Innovation (https://www.fuqua.duke.edu/
faculty_research/faculty_directory/robinson/). The responses below 
incorporate some of Dr. Robinson's thoughts and recommendations.
                           senator alexander
    Question 1. What barriers are there to academic medical centers 
collaborating with other private entities, such as drug and device 
companies?
    Answer 1. We believe that the main impediments preventing academic 
centers from collaborating more effectively with private entities are 
the rules in place inside the university, especially as they pertain to 
conflict of interest and licensing policies. As I mentioned in my 
introductory remarks, currently the NIH requires academic institutions 
to disclose and mitigate conflicts of interest between faculty and 
private entities. Because the safest way to mitigate such conflicts is 
to limit such interactions, often policies are established at risk 
adverse, academic institutions that serve as barriers that faculty must 
overcome if they want to interact with the private sector. Thus I would 
recommend that the NIH work with Congress to clarify and simply what is 
allowed or even encouraged with regard to such interactions.
    University licensing policies can also be a barrier for such 
collaborations. To the extent that University Offices of Licensing and 
Ventures favor early licensing revenues over long-term business value 
creation, they inhibit the creation of new businesses formed around 
technologies. To the extent that strategic alliance funding is an 
important source of capital for such firms, this in turn inhibits 
collaboration between academic medical centers and other private 
entities.

    Question 2. We do not want to waste time this year, and want to 
focus on the areas that have the greatest impact on improving our 
biomedical research enterprise. What are the two or three things that, 
if done right, would help you accomplish your goals?
    Answer 2. In addition to addressing the challenge associated with 
conflict of interest described above, I would reiterate three tractable 
issues I mentioned in my statement as well as add a fourth that I 
believe the HELP Senate Committee should focus upon with the NIH, FDA, 
academic community and private sector:

    1. To train and expand a biomedical research workforce that is 
ready to utilize and act upon the genomic and informatics revolution;
    2. To rebalance and right-size support for all phases of biomedical 
research as we transition from gathering intelligence on health and 
disease (basic research) to rationally using the large amounts of 
information to combat disease (translational and clinical research);
    3. To reduce the administrative and compliance burdens placed upon 
investigators and academic institutions to reduce costs and improve 
productivity; and
    4. To reduce regulatory uncertainty to release the brakes on 
private sector investment in biomedical research. Whether FDA 
regulatory waiting times are long or short is secondary in some sense 
to whether they are predictable. Anything that increases the 
predictability of regulatory oversight would be a welcome change. 
Another important dimension to the problem is reimbursement, so more 
clarity around the reimbursement process would also stimulate the 
development process.

    Question 3. In our last hearing, Dr. Hamburg said that the FDA had 
a record number of new drug approvals last year, touted the success of 
the Breakthrough therapies program, and told us that FDA's review times 
for drugs is fastest in the world.
    From her statement:

          ``This past calendar year, FDA approved 51 novel drugs and 
        biologics, the most in almost 20 years. Today, FDA's average 
        drug review times are consistently faster than other advanced 
        regulatory agencies around the world, providing Americans 
        earlier access to new, innovative drugs than patients in any 
        other country. In achieving these outcomes, FDA has maintained 
        its commitment to high standards to protect the public health, 
        while also exercising regulatory flexibility in order to help 
        promote medical product development. This flexibility, along 
        with FDA's work to collaborate with industry, has helped reduce 
        product development and review times. As a result, Americans 
        are seeing more products being approved, and in many cases, 
        they have access earlier than patients anywhere else in the 
        world.''

    Could each of you briefly discuss your thoughts on what she said, 
FDA's performance, and where Congress could be helpful?
    Answer 3. Please see previous answer on regulatory uncertainty and 
the need to reduce it to increase investment in the medical innovation 
sector.

    Question 4. Could you each talk about how the role of the patient 
has changed with new technology, and what policy changes need to be 
made to use this new excitement and involvement of patients to move 
technologies from discovery through development more quickly?
    Answer 4. As I discussed in my testimony, the information age and 
the age of precision medicine are now upon us. Laboratory developed 
tests that predict patient outcome based upon personalized Omics 
information will revolutionize how care is delivered and developed in 
this United States in the coming years. Thus the patient and his/her 
personal information and individual needs will become increasingly 
central to medical care as we move the next generation of medical 
innovations to the public. This new direction poses a lot of challenges 
for the way we think about oversight. Also, as big data becomes a 
bigger part of medical care, there are a number of regulatory issues 
that are raised because computers analyzing datasets are increasingly 
part of the medical supply chain. This has typically not been something 
under the purview of the FDA. The Congress together with the FDA need 
to develop policies that will facilitate the proper use of such 
information so that it delivers precise medicines to patients as safely 
and rapidly as possible as well as informs the next round of discovery 
science and innovation to accelerate the invention and development of 
future breakthrough medicines and therapies.
                            senator isakson
    Question 1. I understand that some medical device companies have 
had challenges with the inconsistency and lack of predictability of the 
FDA inspection process. Can you clarify if and how this can impact 
innovation?
    Answer 1. As indicated above, regulatory uncertainty is perhaps the 
single biggest impediment to moving innovation to the public. To give 
some numbers from Dr. Robinson: suppose an investor successfully 
commercializes one out of every five investments, and suppose they need 
to earn a 15 percent return on average, including the failed 
investments, in order to continue to raise new funds. If they expect to 
invest 5 years before exiting, they need to earn 10x their initial 
investment in the successful investment in order to generate a 15 
percent return on average. If the holding period of the investment goes 
from 5 years to 8 years, then they have to earn 15 times their 
investment instead of 10 times their investment in order to earn 15 
percent on average. Thus, uncertainty over the time it will take to 
take products to market completely undermines the economics of 
investing in biomedical innovation.

    Question 2. A number of stakeholders, including public health 
groups, infectious disease doctors, venture capital, and antibiotic 
developers to support the PATH Act, legislation sponsored by Senator 
Hatch and Senator Bennet. This bill would require FDA to create a new, 
limited population approval pathway for antibiotics to treat serious 
and life-threatening infections for which there are few or no other 
treatments. The bill would allow FDA to approve these drugs on the 
basis of smaller amounts of data than it uses to approve other 
antibiotics. Can you explain how FDA can use this pathway to get drugs 
to patients who really need them without lowering the approval 
standards?
    Answer 2. Unfortunately this is out of our area of expertise. 
However strategies that accelerate FDA approval without lowering 
standards would clearly encourage investment and accelerate development 
of therapeutics across a wide range of life threatening diseases.
                            senator collins
    Question. Dr. Sullenger, I am always struck by statistics such as 
the one you mention in your testimony, that ``with a 20 percent decline 
in the purchasing power of the NIH budget over the past decade,'' it 
has become increasingly challenging to create a path to move medical 
innovations from bench-side findings into bedside interventions for 
patients. As the Chairman of the Special Committee on Aging, I know the 
annual cost of caring for Alzheimer's patients is $226 billion, yet we 
are spending less than three tenths of 1 percent of that amount--less 
than $600 million a year--on research.
    Would you expand on your comments about the importance of training 
and expanding the next generation of the Nation's biomedical research 
workforce--including whether you see a correlation between reductions 
in NIH funding and talented young researchers being discouraged from 
the field of biomedical research or leaving the country to conduct 
their research?
    Answer. Senator Collins, the statistics that you cite regarding 
cost for caring for Alzheimer's patients versus spending on Alzheimer's 
research is remarkable and unfortunate. I have heard similar statistics 
for the cost of treating stroke patients and the amount spent on stroke 
research and it is always disheartening to researchers like me who 
spend their lives trying to understand the causes of disease in an 
attempt to create novel therapies to reduce suffering and improve 
health. Our current approach to managing the costs of Alzheimer's, 
stroke and other diseases is analogous to having a patient hemorrhage 
and giving them multiple blood transfusions, which he/she will in turn 
bleed out, rather than researching the cause of problem and stopping 
the bleeding. As a biomedical scientist, it is difficult for me to 
understand this approach to healthcare economics as I naturally focus 
upon the root cause of problems to try to address them. If you and 
Congress can refocus resources on the cause of disease, I believe that 
it is the surest way to cost effectively address the medical needs of 
and improve the lives of our Nation's citizens.
    Regarding your question about how the 20+ percent reduction in NIH 
purchasing power has impacted the next generation of the Nation's 
biomedical workforce, I would say that I see the negative effects of 
this almost daily. I have had trainees leave the United States to work 
in Korea, India and Germany in the last few years and several others 
that are interested in moving to these countries or others that are 
investing heavily in biomedical research. Most other trainees, who want 
to stay in the United States, now prefer to leave academia and work in 
the private sector if possible because they believe that the current 
NIH funding environment will not allow them to have a career in 
academic biomedical science. This situation is a dramatic change from 
only a few years ago when the best and brightest biomedical trainees 
all wanted to work in the United States. In addition, I would say that 
institutions such as mine are also moving parts of their research 
programs to other countries. Duke University recently started a Medical 
School in Singapore (https://www.duke-nus.edu.sg) and very recently 
opened a new campus in China (http://dku.edu.cn). Many other 
universities are doing the same as they try to position themselves for 
a changing world where Asian countries invest heavily in the pursuit of 
biomedical knowledge while the United States curtails such investment.
                           senator whitehouse
    Question. We've heard several stakeholders express support for 
integrating patient perspectives in the drug development and review 
process. As you know, FDA held 20 public meetings to consider different 
disease areas as part of its Patient-Focused Drug Development program. 
What next steps would you like to see FDA take in its Patient-Focused 
Drug Development program? Do you have specific recommendations on how 
FDA could better integrate patient perspectives in the development and 
review processes?
    Answer. Please see response to Chairman Alexander's question 4 
above.
                                 ______
                                 
                          Edwards Lifesciences LLC,
                                          Irvine, CA 92614,
                                                    April 29, 2015.
Hon. Lamar Alexander, Chairman,
Committee on Health, Education, Labor, and Pensions,
U.S. Senate,
428 Dirksen Senate Office Building,
Washington, DC 20510.

    Dear Chairman Alexander: Thank you for the opportunity to testify 
before the Senate Committee on Health, Education, Labor, and Pensions 
on March 24, 2015 at the hearing entitled ``Continuing America's 
Leadership: Advancing Research and Development for Patients.''
    Attached are my responses to the committee's additional questions 
for the record. Please contact me if there is any further followup. 
Thank you, again, for the opportunity to participate in this important 
initiative focused on addressing the challenges in getting cutting edge 
innovations to patients.
            Sincerely,
                                      Michael A. Mussallem,
                              Chairman and Chief Executive Officer.
                                 ______
                                 
     Response to Questions of Senator Alexander, Senator Isakson, 
     Senator Collns and Senator Whitehouse by Michael A. Mussallem
                           senator alexander
    Question 1. There are more than 6,500 medical device companies in 
the United States, of which 80 percent of the companies have 50 or 
fewer employees. Has FDA improved the quality and frequency of its 
communications in the past 2 years that supports the range of 
innovative medical device companies?
    Answer 1. Yes. Our experience over the past 2 years has improved, 
as FDA has worked with industry to improve the quality and frequency of 
its communications to support all innovative medical device companies--
including those considered ``small.''
    The ability to have frequent, quality discussions with FDA 
leadership and reviewers--followed by actionable results by both FDA 
and industry--will continue to improve the regulatory environment for 
all stakeholders and allow innovative technologies to quickly reach the 
patients that need them most. Below are examples of programs and 
organizational efforts that are helping the agency continue to improve 
its communication with companies.

     Dr. Shuren and his team at FDA have outlined strategic 
priorities to strengthen the clinical trial enterprise, FDA included as 
part of its 2014-15 Strategic Priorities a focus on providing excellent 
customer service, which leverages the use of a standardized survey tool 
in emails and on the Center's website.
     Thanks to the Food and Drug Administration Safety and 
Innovation Act (FDASIA), FDA has the resources to improve review and 
approval performance metrics--including the number, quality and timing 
of interactions with companies. These metrics are tied to dramatic 
increases in manufacturer user fees, and we are just beginning to see 
positive trends in performance.
     A program was established focusing on improving quality 
and performance, which included corrective and preventive action (CAPA) 
processes. The industry has reported that reviewers have reached out 
directly to companies requesting honest and constructive feedback with 
regard to FDA performance.
     CDRH has supported the U.S. Submission Advancement 
Program, an initiative established through the small company division 
of our trade association, the Advanced Medical Technology Association 
(AdvaMed) used to gauge industry and FDA performance as it relates 
specifically to small companies.
     Through several meetings between small company executives 
and CDRH leadership in 2014, FDA provided useful feedback on common 
mistakes observed in sponsor submissions, which is facilitating the 
development of a best practices document that includes an outline of 
the most frequent mistakes observed by the agency.
     CDRH holds an annual Regulatory Education for Industry 
(REdI) collaborative conference for small businesses with CDER, 
allowing such companies the ability to network, engage with FDA 
experts, and learn more about FDA's regulatory requirements for drugs 
and medical devices, free of charge.
     CDRH has also established the Experiential Learning 
Program (ELP), which provides a formal training mechanism for premarket 
review staff to visit research, clinical, manufacturing, and health 
care facilities to observe firsthand how medical devices are designed, 
developed, and utilized.
     CDRH's Office of Communication and Education reorganized 
in 2014. This reorganization allowed for the Division to focus more 
heavily on educating all CDRH stakeholders by providing understandable, 
accessible, science-based regulatory information.
     CDRH has also provided reviewers and leadership the 
opportunity to engage directly with companies in informal industry 
settings upon request. Roundtables including participants from industry 
and CDRH have been organized as ``assimilation exercises'' to encourage 
productive conversations around what the agency and industry are doing 
well--and also areas for improvement.

    Question 2. Your company has experience using postmarket registries 
to help get your innovative product to market. Could you talk about 
that experience, what worked, what has not worked, and what role you 
think better data after approval can have in helping new, innovative 
technologies get to patients faster?
    Answer 2. Edwards Lifesciences supports appropriate data collection 
for TAVR patients. We generated a substantial amount of clinical 
evidence to support the safety, efficacy, necessity and reasonableness 
of the Edwards SAPIEN transcatheter aortic heart valve, including a 
large, complex, randomized and controlled clinical trial in the United 
States. Extensive study of this valve--including an unprecedented four 
New England Journal of Medicine papers--has demonstrated the ``triple 
win'': a substantial and sustainable clinical benefit, extraordinary 
quality-of-life improvement, and cost effectiveness in inoperable 
patients. In fact, the SAPIEN valves are the most studied heart valve 
in history, with more than 300 peer-reviewed, published articles on 
clinical outcomes associated with the valves. There are also more than 
120 cost-effectiveness and quality of life articles related to 
transcatheter aortic valve replacement (TAVR). Subsequent indications 
and different access routes (used when a direct percutaneous approach 
is not possible) for SAPIEN were studied in registries, and we 
conducted a second large trial in the United States--PARTNER II--for 
SAPIEN XT, a much improved and lower profile device that was approved 
by FDA in June 2014. Accompanying these large randomized trials have 
been cost effectiveness and quality of life studies supporting the 
value of the SAPIEN family.
    Edwards provides significant support for the TVT Registry. 
Following FDA approval and the Medicare National Coverage Decision 
(NCD) that provided reimbursement for TAVR through Coverage with 
Evidence Development (CED), the Society of Thoracic Surgeons (STS) and 
the American College of Cardiology (ACC) created the TVT Registry, 
which is designed to monitor and benchmark patient safety and real-
world outcomes related to the TAVR procedure.
    The TVT Registry has proven to be useful. Our experience with the 
TVT registry underscores that well-executed registries are a useful 
postmarket tool. The data from the TVT Registry for transcatheter 
aortic valve replacement procedures was used by FDA in 2013 to help 
expand the indications for use of our SAPIEN technology, allowing 
access to a broader patient population. Through close collaboration 
between FDA and CMS, when new patient populations are approved, they 
are immediately covered by Medicare. This collaboration takes vision 
and commitment by both FDA and CMS, and they should be commended for 
their work. We think that these novel approaches reflect agency views 
that take promotion of public health as seriously as they take patient 
protection, which as consumers of the system, we should all welcome.
    The burden and cost of complying with registry requirements is not 
insignificant. For example, the patient data registry form for the TVT 
Registry for TAVR procedures is 8 pages long and consists of more than 
300 separate fields, requiring special staffing, and dedicated 
personnel, and hours of work to complete this exhaustive form. Many 
physicians have told us that it takes longer to fill out the TVT 
Registry form than it does to perform the TAVR procedure. In addition 
to the significant financial commitment manufacturers must make to 
support the development and ongoing operations of registries, hospitals 
are charged ongoing fees to participate.

    Question 3. In 2014, FDA proposed a new voluntary expedited access 
program intended to speed development and approval of devices that 
treat or diagnose a life-threatening or debilitating disease and 
fulfill an unmet medical need. How will this program help you? What 
additional tools does FDA need to help keep up with the range of new 
science?
    Answer 3. FDA's proposed Expedited Access Program is very 
promising. While we are still evaluating how FDA's recently released 
final guidance on its Expedited Access Program (EAP) could be 
implemented for products in development, we are encouraged and commend 
the agency for its efforts to explore supplementary review pathways to 
provide more timely patient access to new technologies for life-
threatening or irreversibly debilitating diseases that address an unmet 
medical need.
    We look forward to working with Congress, FDA, CMS and other 
stakeholders on ways to implement this proposal and others designed to 
expedite patient access to safe and effective medical technologies. As 
part of its Innovation Agenda, AdvaMed has proposed a new breakthrough 
pathway, which builds upon FDA's EAP and would provide for transitional 
Medicare and Medicaid coverage for products designated and approved by 
FDA as ``breakthrough.''

    Question 4. We do not want to waste time this year, and want to 
focus on the areas that have the greatest impact on improving our 
biomedical research enterprise? What are the two or three things that, 
if done right, would help you accomplish your goals?
    Answer 4. FDA's vision to improve the regulatory process is 
commendable, and we believe it must be accelerated. There are a number 
of regulatory reforms, included in the AdvaMed Innovation Agenda, which 
would lead to greater efficiency and consistency in the FDA medical 
device review process.
    To encourage innovation, we need to address issues throughout the 
entire ecosystem. A true innovation agenda must address both FDA and 
CMS, and we urge this committee and the Senate Finance Committee to 
consult with each other as you move forward to find ways to promote 
innovation.
    The breakthrough pathway is one of the most important proposals in 
the innovation agenda; it spans the jurisdiction of both committees and 
can only be enacted effectively through a cooperative effort.

    Question 5. In our last hearing, Dr. Hamburg said that the FDA had 
a record number of new drug approvals last year, touted the success of 
the Breakthrough therapies program, and told us that FDA's review times 
for drugs is fastest in the world.
    From her statement:

          ``This past calendar year, FDA approved 51 novel drugs and 
        biologics, the most in almost 20 years. Today, FDA's average 
        drug review times are consistently faster than other advanced 
        regulatory agencies around the world, providing Americans 
        earlier access to new, innovative drugs than patients in any 
        other country. In achieving these outcomes, FDA has maintained 
        its commitment to high standards to protect the public health, 
        while also exercising regulatory flexibility in order to help 
        promote medical product development. This flexibility, along 
        with FDA's work to collaborate with industry, has helped reduce 
        product development and review times. As a result, Americans 
        are seeing more products being approved, and in many cases, 
        they have access earlier than patients anywhere else in the 
        world.''

    Could each of you briefly discuss your thoughts on what she said, 
FDA's performance, and where Congress could be helpful?
    Answer 5. While I cannot speak to the drug review process and 
performance, on the device side, FDA is pursuing initiatives to improve 
the regulatory processes to help patients access innovative therapies. 
Thanks to the Food and Drug Administration Safety and Innovation Act 
(FDASIA), FDA has agreed to improved review and approval performance 
metrics tied to dramatic increases in manufacturer user fees, and we 
are just beginning to see positive trends in performance. However, it 
remains the case that companies' experiences with the FDA device review 
process are largely reviewer-dependent.

    Question 6. Could you each talk about how the role of the patient 
has changed with new technology, and what policy changes need to be 
made to use this new excitement and involvement of patients to move 
technologies from discovery through development more quickly?
    Answer 6. FDA has pursued a number of relatively new initiatives 
which we hope will improve patient involvement as they get put into 
practice. Edwards Lifesciences and our trade association, AdvaMed, 
support efforts to improve patient involvement in the product 
development and review process. We believe patients have an important 
role in making benefit-risk determinations when it comes to their care. 
Both FDA and industry need to work to ensure that these initiatives are 
implemented in a way that maximizes patient access to safe and 
effective technologies.
    FDA has engaged in a commendable effort to involve patients and 
incorporate their perspectives into the regulatory process. 
Specifically, FDA has issued two guidance documents intended to address 
patient perspective of benefit and risk.\1\ These documents address how 
patient-centered outcomes can and should be included in clinical trials 
of certain devices and how FDA should incorporate these endpoints in 
their review of the supporting evidence for a device. Further, FDA and 
the Medical Device Innovation Consortium are also working on models to 
quantify the patient perspective, and when during the product lifecycle 
such input should be sought/provided.
---------------------------------------------------------------------------
    \1\ ``Benefit-Risk Factors to Consider When Determining Substantial 
Equivalence in Premarket Notifications [510(k)] with Different 
Technological Characteristics Draft, July 2014]'' and ``Guidance for 
Industry and Food and Drug Administration Staff--Factors to Consider 
When Making Benefit-Risk Determinations in Medical Device Premarket 
Approvals and De Novo Classifications'' [Final, March 2012].
---------------------------------------------------------------------------
    In addition, pursuant to the Food and Drug Administration Safety 
and Innovation Act (FDASIA), FDA seeks to solicit patients' as well as 
other stakeholders' (e.g., surgeons, other health care professionals, 
and caregivers) perspectives and participation throughout the total 
product life cycle (TPLC) of medical devices, including regulatory 
decisionmaking. It is important to recognize that each patient has a 
unique benefit-risk perspective based on their own particular 
situation, and that patients are heterogeneous even within a single 
disorder (i.e., there is no ``representative patient'').
    There exists some concern that adding an additional regulatory 
requirement to an already cumbersome process could negatively impact 
patient access to new technologies. In some cases, there are devices/
therapies that do not lend themselves to patient input at all phases of 
the TPLC (e.g., devices with no patient interface). Surgical devices, 
for example, are designed to aid the surgeon in the safe use and/or 
application of the device for the benefit of the patient. Therefore, 
patient input on device design and clinical trials should not be an 
absolute requirement for medical device manufacturers. We believe that 
it is appropriate and necessary in some cases for patient 
``surrogates,'' such as physicians, surgeons, or other health care 
providers, to provide input, especially at the early stages of device 
design/development.
                            senator isakson
    Question 1. I understand that some medical device companies have 
had challenges with the inconsistency and lack of predictability of the 
FDA inspection process. Can you clarify if and how this can impact 
innovation?
    Answer 1. Inconsistency and lack of transparency and predictability 
of the FDA inspection process can have a substantial impact on 
innovation and the timing of device development and approval. This is 
an important issue to our industry and we encourage the committee to 
examine the process and what improvements could be made to the 
inspection process.
    Specifically, there is inconsistency in investigators' knowledge 
and interpretation of the Quality System Regulation (including the 
interpretation of risk) and inspection protocols, both domestic and 
abroad, and also among field offices domestically. These problems 
hamper the ability to assure ongoing and mutual understanding between 
FDA and industry of what is required by regulation, which is essential 
to achieving high rates of compliance, ultimately leading to the 
quicker approval of safer and higher quality medical devices.
    FDA's efforts to improve its regulatory management processes and 
structure through the recommendations coming from its Program Alignment 
Group are an important step in the right direction. It would be 
worthwhile for Congress to spend time assessing how to best move this 
process forward.
    As noted above, these challenges with the inspection process are of 
great interest to the industry and in an effort to help identify and 
address the issues, AdvaMed has established a working group focused on 
the issue of inspections and create opportunities to collaborate with 
FDA and Congress to improve the consistency, predictability, and 
transparency of the inspection process.

    Question 2. A number of stakeholders, including public health 
groups, infectious disease doctors, venture capital, and antibiotic 
developers to support the PATH Act, legislation sponsored by Senator 
Hatch and Senator Bennet. This bill would require FDA to create a new, 
limited population approval pathway for antibiotics to treat serious 
and life-threatening infections for which there are few or no other 
treatments. The bill would allow FDA to approve these drugs on the 
basis of smaller amounts of data than it uses to approve other 
antibiotics. Can you explain how FDA can use this pathway to get drugs 
to patients who really need them without lowering the approval 
standards?
    Answer 2. As a medical device company, we do not have a perspective 
on the drug approval pathway.
                            senator collins
    Question. Mr. Borisy and Mr. Mussallem, you both mentioned in your 
written testimonies the need to strengthen and integrate patient 
perspectives. The patient perspective in the drug development and 
review process is something I am hearing more about from individuals 
and families who are suffering from devastating diseases.
    Particularly in areas of serious unmet medical need, how does the 
patient voice and understanding the benefits and risks to a patient 
help ensure that medical innovations are helping to meet patients' 
needs?
    Answer. FDA has pursued a number of relatively new initiatives 
which we hope will improve patient involvement as they get put into 
practice. Edwards Lifesciences and our trade association, AdvaMed, 
support efforts to improve patient involvement in the product 
development and review process. We believe patients have an important 
role in making benefit-risk determinations when it comes to their care. 
Both FDA and industry need to work to ensure that these initiatives are 
implemented in a way that maximizes patient access to safe and 
effective technologies.
    FDA has engaged in a commendable effort to involve patients and 
incorporate their perspectives into the regulatory process. 
Specifically, FDA has issued two guidance documents intended to address 
patient perspective of benefit and risk.\2\ These documents address how 
patient-centered outcomes can and should be included in clinical trials 
of certain devices and how FDA should incorporate these endpoints in 
their review of the supporting evidence for a device. Further, FDA and 
the Medical Device Innovation Consortium are also working on models to 
quantify the patient perspective, and when during the product lifecycle 
such input should be sought/provided.
---------------------------------------------------------------------------
    \2\ Ibid.
---------------------------------------------------------------------------
    In addition, pursuant to the Food and Drug Administration Safety 
and Innovation Act (FDASIA), FDA seeks to solicit patients' as well as 
other stakeholders' (e.g., surgeons, other health care professionals, 
and caregivers) perspectives and participation throughout the total 
product life cycle (TPLC) of medical devices, including regulatory 
decisionmaking. It is important to recognize that each patient has a 
unique benefit-risk perspective based on their own particular 
situation, and that patients are heterogeneous even within a single 
disorder (i.e., there is no ``representative patient'').
    There exists some concern that adding an additional regulatory 
requirement to an already cumbersome process could negatively impact 
patient access to new technologies. In some cases, there are devices/
therapies that do not lend themselves to patient input at all phases of 
the TPLC (e.g., devices with no patient interface). Surgical devices, 
for example, are designed to aid the surgeon in the safe use and/or 
application of the device for the benefit of the patient. Therefore, 
patient input on device design and clinical trials should not be an 
absolute requirement for medical device manufacturers. We believe that 
it is appropriate and necessary in some cases for patient 
``surrogates,'' such as physicians, surgeons, or other health care 
providers, to provide input, especially at the early stages of device 
design/development.
                           senator whitehouse
    Question. We've heard several stakeholders express support for 
integrating patient perspectives in the drug development and review 
process. As you know, FDA held 20 public meetings to consider different 
disease areas as part of its Patient-Focused Drug Development program. 
What next steps would you like to see FDA take in its Patient-Focused 
Drug Development program? Do you have specific recommendations on how 
FDA could better integrate patient perspectives in the development and 
review processes?
    Answer. While the Patient-Focused Drug Development program is 
limited to drugs, there are a number of activities that FDA's device 
center is undertaking, with support of the medical device industry, to 
incorporate the patient perspective.
    FDA has pursued a number of relatively new initiatives which we 
hope will improve patient involvement as they get put into practice. 
Edwards Lifesciences and our trade association, AdvaMed, support 
efforts to improve patient involvement in the product development and 
review process. We believe patients have an important role in making 
benefit-risk determinations when it comes to their care. Both FDA and 
industry need to work to ensure that these initiatives are implemented 
in a way that maximizes patient access to safe and effective 
technologies.
    FDA has engaged in a commendable effort to involve patients and 
incorporate their perspectives into the regulatory process. 
Specifically, FDA has issued two guidance documents intended to address 
patient perspective of benefit and risk.\3\ These documents address how 
patient-centered outcomes can and should be included in clinical trials 
of certain devices and how FDA should incorporate these endpoints in 
their review of the supporting evidence for a device. Further, FDA and 
the Medical Device Innovation Consortium are also working on models to 
quantify the patient perspective, and when during the product lifecycle 
such input should be sought/provided.
---------------------------------------------------------------------------
    \3\ Ibid.
---------------------------------------------------------------------------
     Response to Questions of Senator Alexander, Senator Isakson, 
                and Senator Whitehouse by Allan Coukell
                           senator alexander
    Question 1. You mention in your testimony that the cost of doing 
clinical trials in the United States is greater than that in other 
countries in a few specific cases. Could you expand on what we could do 
to make trials here more efficient?
    Answer 1. The rising cost of medical product innovation is a 
serious concern with multiple underlying causes, including expenses 
associated with clinical trials. The data researchers collect through 
robust trials are critical for regulators, payors, clinicians, and 
patients to make decisions about which products are right for which 
patient. A 2013 survey found that phase III clinical trial costs rose 
by 86 to 88 percent over 3 years--from $25,000 to $40,000 per patient. 
While Pew has not conducted a comprehensive analysis on the cost of 
clinical trials, we have identified some strategies--including those 
used abroad--to reduce the costs of clinical trials.
    Clinical trial experts have proposed other approaches that can 
reduce study costs and facilitate innovation. For example, the 
Institute of Medicine convened experts who proposed several solutions 
to reduce trial costs, including the development of ``large, simple 
trials,'' where study investigators would enroll many patients but only 
examine a small number of variables.
    One source of cost in any trial is the number of data elements that 
are collected. Another approach to reducing trial costs involves 
``large, simple trials.'' \1\ Such trials have the potential to reduce 
costs by simplifying eligibility criteria and reducing the number of 
outcomes tracked. No statutory or regulatory barrier precludes adoption 
of such trial designs. Rather, a participant in an IOM workshop 
described the barrier as ``risk aversion . . . ''

          ``Researchers may believe that it is better to collect 100 
        unnecessary variables than to miss one important one. 
        Additionally, Granger explained, regulatory departments and 
        contract research organizations have a substantial financial 
        stake in maintaining the status quo, as their business models 
        and margins are created by the complexity inherent to current 
        trial designs. Last, the lack of international harmonization 
        among trial designs can force the use of the most complicated 
        common denominator.'' \1\

    One approach to large simple trials is the registry-based trial. 
Registries are large data bases that contain detailed clinical 
information on patients with similar medical conditions. Researchers in 
Sweden used a registry to conduct a large cardiovascular trial at a 
fraction of the per-patient costs. The TASTE trial enrolled more than 
7,000 patients, and allowed investigators to keep track of every 
patient throughout the course of the research at a total cost of $50 
per patient, or only $300,000 for the entire trial. Conducting a 
traditional study of this size in the United States would cost tens of 
millions of dollars, if not more.
    Pew, together with the Blue Cross Blue Shield Association and the 
Medical Device Epidemiology Network, convened experts from the medical 
device industry, the registry community and government to consider how 
to achieve the full potential of registries in a financially 
sustainable way. Several barriers exist to fully achieving the promise 
of registries. Despite the dramatic uptake of electronic health 
information sources, these systems cannot easily transmit data among 
one another. This lack of interoperability, for example, hinders the 
ability of registries to extract clinical and outcomes data from EHRs. 
Instead, registries must build customized solutions to extract 
information from the EHR systems at each facility, or require providers 
to manually enter the information. Additionally, many registries have 
sought clarity on when their studies are considered research, rather 
than quality improvement efforts. This confusion has slowed their use 
by hospitals and their ability to make a meaningful contribution.
    While the use of registries can supplement existing efforts to 
reduce costs, they are not appropriate for all products or studies. 
Other strategies to help address trial costs include facilitating 
faster trial initiation through, for example, greater use of central 
institutional review boards (IRBs) instead of multiple local reviews. 
For medical devices in particular, trials are currently required by 
statute to obtain IRB review at each facility participating in a 
study.\2\ Removing this requirement could help streamline the approval 
of these trials.
    The growth in trial size is driven in part by the effect size of 
the drug. When a drug's effect can only be discerned by studying it in 
thousands of patients, the clinical trials required for approval will 
necessarily be large. A treatment that worked in 100 percent of 
patients, by contrast, would require an extremely small clinical trial. 
As Scannell et al. note,

          ``everything else being equal, clinical trial size should be 
        inversely proportional to the square of the effect size. If the 
        effect size halves, the trial has to recruit four times as many 
        patients to have the same statistical power.'' \3\

    Personalized, or precision, medicine has the potential to identify 
sub-populations of patients with specific genetic profiles who are more 
likely to respond to a particular therapy. This has the potential to 
reduce trial size if the response rate is high (as with any drug). 
However, it is important to note that if the response rate is low and 
seen only in a specific sub-population, the usual challenges of 
clinical trial design and recruitment will be further exacerbated.
    Innovative trial designs and novel partnerships have the potential 
to more efficiently recruit and stratify patients by genetic profile. 
The FDA has encouraged the development of such trials. For example, the 
recently developed Lung-MAP trial has the potential to improve 
efficiency by allowing simultaneous and sequential comparisons of 
multiple drugs (from multiple companies) and stratification of patients 
by genotype.\4\ Such a trial still involves a 1:1 randomization of 
patients that does not change in response to data analysis, and is 
therefore not of Bayesian or adaptive design.
    While adaptive trials may under some circumstances improve trial 
efficiency, it is important to note that--contrary to widely held 
perceptions--such trials do not reduce the number of participants 
required to achieve adequate power (and can, under certain 
circumstances, increase it).

    Question 2. Pew conducted surveys on how to define and improve 
predictability with the regulatory process. What did those surveys find 
would be most helpful in reducing the uncertainty of medical product 
development?
    Answer 2. Through a series of activities, Pew sought to better 
define what is perceived as unpredictability in FDA's regulatory review 
process and to identify concrete steps that the FDA and sponsors could 
take to improve predictability. Pew staff reviewed relevant peer-
reviewed journal articles and other publicly available documents, 
interviewed more than two dozen individuals, including representatives 
from small and large drug and device companies, former FDA officials, 
consultants, venture capitalists, and patient advocacy groups and held 
a 1-day public workshop attended by leaders from the FDA, the drug and 
medical device industry, the venture capital community and other 
stakeholders. We also fielded a survey of senior drug, biotechnology 
and device company executives (randomly selected from a master list 
that was compiled to be as comprehensive as possible), assessing their 
perceptions and experiences concerning the predictability of FDA's 
regulatory review.
    Of the 210 drug and device industry professionals polled, about 70 
percent said the FDA makes the appropriate decision on new medical 
products ``most or all of the time'' and 66 percent said FDA staff's 
qualifications are ``excellent or good.'' About 62 percent of the 
respondents said FDA's data requirements are necessary in ``all or more 
cases,'' with only 2 percent saying the requirements were necessary in 
``very few cases.''
    Almost all of the survey respondents--98 percent--agreed on the 
importance of predictability in the FDA review process. Eighty-one 
percent said it was ``extremely important'' and another 17 percent said 
it was ``fairly important'' for the FDA review process for new medical 
products to be predicable.
    When probed further, most respondents to the survey as well as 
workshop participants expressed concerns regarding the agency's 
predictability. Thirty-eight percent of industry respondents said, 
based on their personal experiences, that the FDA's regulatory review 
process is ``completely or fairly'' predictable (48 percent among 
biotechnology and pharmaceutical professionals). Only 26 percent of 
medical device professionals said the same, which reflected an 
overarching pattern of greater dissatisfaction within that industry. 
(Pew did not explore this discrepancy in its quantitative research, but 
some participants in the January 2013 conference attributed the 
difference to the greater diversity of medical devices compared to 
pharmaceutical products and the subsequent breadth of approaches to 
testing their safety and efficacy, as well as staffing issues within 
CDRH, which the division acknowledged.)
    Sixty-eight percent said that such unpredictability discouraged the 
development of new products. Again, a higher proportion of medical 
device professionals--84 percent--believed that the FDA's review 
process discouraged innovation.
    Industry professionals were divided on the degree to which they 
believed the system needs to be fixed. Nearly half (49 percent) believe 
the agency's product review systems need a ``complete or major 
overhaul.'' The same number said the systems worked ``fine as-is'' or 
needed only ``minor modifications.''
    One clear theme emerged from the Pew conference and related 
activities: Regulatory predictability is a broad and subjective term 
used to describe a variety of issues. Therefore, attempts to solve 
``regulatory predictability'' are less likely to succeed because the 
problem itself is not defined precisely enough. Rather than relying on 
this broad diagnosis, stakeholders would be better served to articulate 
specific issues regarding, for example, communications, staff 
experience, or data accessibility. Those identified during the course 
of our research include:

     Establishing clear data requirements;
     Inconsistency among FDA reviewers and review divisions;
     Issues related to the publication of guidances;
     Data integration and accessibility; and
     Sponsor inexperience with regulatory review.
Establishing Clear Data Requirements
    Sponsors assert that there is often a lack of clarity or explicit 
rationale regarding the type and quantity of additional safety and 
efficacy data that FDA staff requests. Specifically, several sponsors 
asserted that such requests are manifestations of an inherent and 
unwarranted ``risk-aversion'' on the part of FDA staff. As they submit 
documents to the agency, FDA staff will request additional information 
to address possible concerns with a product or learn more about how a 
drug will affect patients. Sponsors contend that many of these data 
requests would negligibly affect FDA's decisions but are burdensome and 
expensive. Similarly, they assert that some data requests are too 
academic and not germane to the safety and efficacy of a product.
    Current and former FDA officials contend that the FDA must maintain 
some measure of flexibility when evaluating sponsors' applications. 
Over the course of a product's lifecycle new information may become 
available--from the scientific literature, from its regulatory 
counterparts in other jurisdictions, among other places--that compels 
the FDA to look at a sponsor's application in a new light. Moreover, in 
the course of reviewing applications from other sponsors on a similar 
product, and through post-marketing surveillance monitoring, FDA 
reviewers identify potential safety and efficacy issues with a product 
class and uses that information to make additional data requests of 
sponsors. Because specific reference to other sponsor's applications is 
prohibited by commercial confidentiality laws, FDA staff cannot always 
be specific about the reasons underlying a particular data request, 
leading to sponsor perceptions of FDA capriciousness or arbitrariness.
    To achieve greater predictability, our conference found 
substantial--though not universal--support for the suggestion that the 
FDA should release all documents--such as Complete Response Letters--
that would provide information on why the agency requested additional 
information. That information will help all companies understand the 
data sought for certain diseases and about classes of medical products.
    We also found strong support for investments in regulatory science 
so that the agency can develop tools, standards, and approaches to 
product reviews that can provide some consistent guidance for sponsors 
even as science itself advances.
    Some sponsors expressed concerns that the FDA did not order Risk 
Evaluation Mitigation Strategies (REMS)--which implement controls to 
help prevent the harmful effects of new medicines--until very late in 
product review. Discussing REMS late in product reviews delays drug 
approvals as the sponsor and FDA reach an agreement on the post-market 
safety program. Earlier REMS planning would streamline approvals, 
though it must be noted that at least some of the time, REMS 
development will be in response to risk information obtained in phase 
III trials--data the FDA does not have an opportunity to review until 
the full application is submitted.
    As part of the new review model for new molecular entities and 
original biologics license application, the FDA will begin discussing 
REMS and other risk-related issues much earlier in product reviews and 
even during meetings before the formal submission of an application. 
The FDA has also formalized several mid-cycle communications--including 
both in-person meetings and letters from the agency--to provide more 
interactions between reviewers and drug sponsors for the agency to 
provide feedback.
    CDRH has created a new Innovation Pathway, where device sponsors 
and reviewers interact throughout product development to address any 
potential FDA concerns before manufacturers formally submit a product 
for review.
Inconsistency Among Reviewers and Between Review Divisions
    Ensuring the safety, effectiveness, and quality of human drugs for 
these products is a complicated regulatory task, requiring FDA's 
consideration of a multitude of complex factors. FDA's regulatory 
decisionmaking process takes into consideration not only the data 
submitted for a particular marketing application, but also a broad set 
of additional factors, including similar products in a class, clinical 
context for the proposed product (such as the nature and severity of 
the disease or condition that the proposed product is intended to treat 
or prevent and the benefits and risks of other available therapies for 
that disease or condition) and any risk management tools that might be 
necessary to ensure that the benefits of the proposed product outweigh 
its risks.
    The complexity described above is sufficient to drive some degree 
of inconsistency in regulatory decisionmaking among reviewers and 
review divisions. A drug with apparent cardiotoxicity might require 
investigations that a pharmacologically similar product without that 
safety signal did not. The risk tolerance for uncertainty for an 
antibiotic to treat a multidrug resistant infection might be different 
than for a drug intended as a first-line treatment. However, there are 
a host of other internal and external variables that also drive this 
inconsistency, including: the number of regulatory filings (workload); 
division staff levels; frequency of Advisory Committee meetings; 
requests for REMS or other post-marketing commitments; and the variable 
quality of the sponsors' applications.
    In addition to these differences between review divisions, 
differences among reviewers may feed sponsor perceptions of 
inconsistency. Judgments about balancing risks and benefits are 
inherently value judgments, and such differences among reviewers are, 
to a certain degree, inevitable. The FDA should not necessarily 
eliminate such differences, but instead should put in place processes 
and tools that make these differences transparent and subject to 
discussion--at higher levels within the agency, with sponsors, and, 
where appropriate, with the public.
    Most of the survey respondents attributed these challenges 
primarily to staffing shortages. Sixty percent said FDA did not have 
sufficient scientists and reviewers to conduct timely product reviews. 
In fact, respondents who were satisfied with FDA processes were more 
likely to say that FDA was insufficiently staffed.
    More tractable may be inconsistencies among reviewers that are 
attributable--at least in part--to a lack of training. Not all 
reviewers are well-versed on agency policies and guidances. Therefore, 
one participant suggested, reviewers occasionally provide inconsistent 
advice to sponsors--such as whether an adaptive trial design is 
viable--that may not reflect guidance or direction from FDA leadership.
    Most respondents (54 percent) suggested that investing in human 
resources, such as training staff, would be a ``very effective'' 
strategy for improving FDA's review process. An additional 26 percent 
said it would be ``fairly effective,'' making it the most popular 
proposal offered in the survey.
    As required by Congress, the FDA has sought to make the rationales 
for reviewer judgments more transparent through the implementation of a 
structured risk-benefit framework for NDAs and BLAs. Through this 
framework, reviewers will explain product risks along with whether the 
drug treats an unmet need or provides major advancements to patient 
care. Including this framework earlier in product development could 
improve FDA decisionmaking. Stakeholders expect this new framework to 
serve as a communications tool to explain FDA decisions as well as to 
provide a quick summation of a review to help cross-agency consistency 
on what review decisions were made. FDA's device center has also issued 
a guidance document outlining its benefit-risk framework. To evaluate 
benefits, FDA examines the clinical improvements, magnitude of 
benefits, probability of the patient experiencing the benefit and the 
duration of the effect. For safety, FDA evaluates the serious and non-
serious adverse effects and procedure-related complications (such as 
the probability and duration of harmful events or the risk of false 
results from diagnostics).
    The FDA has contracted independent third parties to examine its 
review processes and communications with sponsors. The reviews should 
identify areas where the FDA is inconsistent and not following good 
review practices.
    When meeting with the FDA about adaptive trial designs or other 
issues that are not typical for a standard drug application, sponsors 
should request the attendance and input of senior FDA leadership. Such 
input could provide needed reassurance to reviewers and assuage their 
concerns with a product review.
    The FDA should provide additional and ongoing training for product 
reviewers, with a focus on developing and implementing guidances.
Issues Related to the Publication of Guidances
    Guidance documents are nonbinding recommendations that represent 
the FDA's current thinking on a particular subject. They are written 
for multiple audiences, including sponsors, investigators, 
Institutional Review Boards (IRBs) and FDA staff. Guidances fall into 
three broad categories: (1) those related to topics that inform product 
development, such as study design, use of novel technologies, 
statistical considerations, and labeling and promotion, (2) those 
related to procedures and processes such as meetings, timelines, 
submission requirements, and (3) those related to inspections and 
enforcement. In our research, concern focused largely on the first type 
of guidance documents. FDA staff, sponsors and other stakeholders all 
share the view that the timely publication of relevant guidances--in 
either draft or final form--are important for making the regulatory 
review process more predictable and transparent. According to the 
survey, 90 percent of respondents said written guidances related to 
FDA's procedures and processes were extremely or fairly helpful. 
Similarly, 73 percent said FDA's written guidances related to 
scientific topics that inform product development were extremely or 
fairly helpful. But others were skeptical about the value of additional 
guidances, noting that the most challenging questions are often product 
specific.
    We identified several key challenges related to guidances. Among 
them, the FDA lacks the staffing capacity necessary to both write 
guidances and also keep pace with product reviews. Because these 
reviews must meet legislatively mandated deadlines, the FDA prioritizes 
them, occasionally at the expense of guidance development. A senior FDA 
official noted that the FDA staff viewed as the most capable of writing 
guidance documents (regulatory experience, scientific expertise, 
writing skill) are frequently the highly skilled reviewers. As a 
result, there is reluctance to explicitly curtail their product review 
duties in order to devote time to guidance writing.
Data Integration and Accessibility
    Drug development--from earliest discovery through post-marketing--
is a complex enterprise that generates reams of preclinical and 
clinical data. For data to be marshaled as evidence requires approaches 
and tools that systematically facilitate: (1) data integration and (2) 
data accessibility. With regard to integration, there is a need for 
standardized data submissions to be the norm, not the exception. Such 
standards allow for data--clinical and nonclinical--from numerous 
applications to be pulled into datasets for comparative or meta-
analyses. These analyses would likely improve predictability by 
enabling meaningful comparisons of similar products.
    FDA has also heretofore lacked the capacity to make historical 
application data readily and routinely available to its reviewers. 
Rather, some--but by no means all--reviewers try to track down 
applications of similar products in the archives, or they rely ad hoc 
on the reviewers of those products (assuming these individuals are 
available). Moreover, time pressure created by user fee agreements 
disincentivizes efforts to access this historical data.
    The lack of data integration and inaccessibility, combined with the 
time pressures of review work, means that reviewers may spend the bulk 
of their time reorganizing the data attached to a particular new 
application and simply rerunning the analyses submitted by sponsors. 
While this is a critical first-order task, it forces reviewers to focus 
almost exclusively on the application in front of them, without regard 
for the agency's regulatory experience with like products. By treating 
each new application in a vacuum, there are lost opportunities to 
foster the organizational learning needed to improve consistency and 
predictability.
    CDER has recently increased its support for standardized study data 
submissions using CDISC standards, and will continue to do so in the 
future. CDER's Office of Translational Sciences has recently launched a 
Computational Sciences Center (CSC), whose mission is to improve the 
effectiveness of reviewers' evaluation and analysis of nonclinical and 
clinical study data. CSC views data integration and accessibility as 
core values, and is currently looking for approaches and tools that can 
help put these values into the day-to-day practice of drug development 
and regulatory review, both at the FDA and in industry.
Sponsor Inexperience With the FDA
    Inexperience submitting products for FDA review leads to sponsors 
maintaining inaccurate expectations about data requirements and agency 
processes, ultimately resulting in perceptions of unpredictability when 
those expectations are not met. Small companies are especially 
susceptible to this problem. A study by Booz Allen Hamilton found that 
large companies obtain approval on their original submission 58 percent 
of the time, whereas that is true for only 41 percent of small company 
submissions.\5\ More recently, a PriceWaterhouseCoopers survey found 
that large companies were more likely to avail themselves of 
interactions with the FDA; smaller companies were more likely to rely 
on guidance.\6\
    Sponsors that have not previously submitted products to the FDA for 
review may lack an accurate understanding of the data requirements and 
agency processes. Moreover, many small companies fail to hire 
experienced consultants and regulatory experts to assist with product 
submissions. Without this help, companies may submit inadequate or 
noncompliant submissions to the FDA.

    Question 3. We do not want to waste time this year, and want to 
focus on the areas that have the greatest impact on improving our 
biomedical research enterprise? What are the two or three things that, 
if done right, would help you accomplish your goals?
    Answer 3. We urge the committee to consider S. 185, the Promise for 
Antibiotics and Therapeutics for Health (PATH) Act, introduced by 
Senator Hatch and Senator Bennet. This legislation, which has the 
support of industry stakeholders, key professional societies, public 
health groups, and military and veterans' groups, would direct FDA to 
establish a new regulatory pathway for antibiotics to treat serious and 
life-threatening infections for which there are few or no other 
treatment options. This legislation is ripe for consideration given the 
growing public health crisis posed by antibiotic resistance and the 
consensus that this pathway could make a difference by encouraging the 
development of antibiotics to meet serious unmet medical needs. An op 
ed has been written by Drs. Patty Wright and William Schaffner, both 
infectious diseases specialists at Vanderbilt University, in support of 
this legislation.

    Question 4. In our last hearing, Dr. Hamburg said that the FDA had 
a record number of new drug approvals last year, touted the success of 
the Breakthrough therapies program, and told us that FDA's review times 
for drugs is fastest in the world.
    From her statement:

          ``This past calendar year, FDA approved 51 novel drugs and 
        biologics, the most in almost 20 years. Today, FDA's average 
        drug review times are consistently faster than other advanced 
        regulatory agencies around the world, providing Americans 
        earlier access to new, innovative drugs than patients in any 
        other country. In achieving these outcomes, FDA has maintained 
        its commitment to high standards to protect the public health, 
        while also exercising regulatory flexibility in order to help 
        promote medical product development. This flexibility, along 
        with FDA's work to collaborate with industry, has helped reduce 
        product development and review times. As a result, Americans 
        are seeing more products being approved, and in many cases, 
        they have access earlier than patients anywhere else in the 
        world.''

    Could each of you briefly discuss your thoughts on what she said, 
FDA's performance, and where Congress could be helpful?
    Answer 4. Perhaps the most commonly cited measure of FDA 
performance is drug approval time. Recent studies have demonstrated 
that FDA approves drugs more quickly than regulators in Europe and 
Canada.\7\ \8\ Moreover, median time to approval today is substantially 
lower than prior to the implementation of PDUFA goals.\9\ Over recent 
decades, the overall success rate for New Drug Applications (NDAs) has 
been relatively consistent (averaging 79 percent from 1993-2012), but 
the share of drugs approved at the first action date has increased 
markedly (45 percent over 20 years, but 77 percent in 2011-12).\10\ To 
a large extent that is a function of the quality of the 
applications.\5\ FDA has some capacity to influence submission quality 
through its communication with industry, either during individual 
meetings or through guidance documents. According to a recent 
PriceWaterHouseCoopers survey of industry executives, 78 percent 
responded that FDA has improved the quality and frequency of its 
communications with industry over the last 2 years, and 76 percent 
responded that the agency provided ``actionable feedback.'' \6\
    Other measures provide insights on additional aspects of agency 
operations, such as presentations to societies, consortia, industry and 
government organizations (around 100 per month for the center for 
drugs).\11\ Of particular interest may be issuance of FDA guidance 
documents, which serve to communicate the agency's current thinking on 
specific topics. The center for drugs, for example, issued 51 draft 
guidances in 2014, but only 13 final guidances.\12\ Earlier years 
follow a similar pattern. The reasons for this discrepancy are unclear. 
It may be that the agency seeks a wide range of input during 
development of a draft guidance, which then serves as an effective tool 
for communicating with stakeholders. Alternatively, it may be that the 
process for administrative clearance deters the agency from finalizing 
guidances. Congress could evaluate the balance between finalizing 
guidances and the potential opportunity cost of fewer new draft 
guidances on other topics, and potentially identify administrative 
simplifications that would facilitate finalization. A similar 
investigation of the time required to develop and finalize a formal FDA 
rule (often several years) might lead to solutions that would support 
greater overall efficiency.
    The FDA exhibits substantial flexibility in requirements for 
evidence to support drug or device approval. For example, an analysis 
by the National Organization for Rare Disorders found that of 135 drug 
approvals for non-cancer rare disease, 45 met traditional data 
requirements, 32 reflected ``administrative flexibility'' based on a 
previously documented FDA system, and 58 reflected flexibility applied 
on a case-by-case basis.\13\ Another recent analysis of all drug 
approvals (funded by Pew) found that while FDA generally relied on 
randomized clinical trials to approve therapeutics, over one-third of 
approvals were based on a single efficacy trial.\8\ This same analysis 
also showed that FDA used flexibility with regards to which outcomes 
these trials had to measure.
    Several existing mechanisms provide flexibility for the data 
collected. The accelerated approval pathway for drugs, which Congress 
codified into law in 2012, allows FDA approval based on surrogate--
rather than clinical--endpoints, with the goal of enabling more 
efficient premarket studies. In 2014, FDA approved 20 percent of novel 
new drugs through this pathway.\14\
    Similarly, for devices that treat or diagnose conditions affecting 
fewer than 4,000 patients per year, FDA can also grant a humanitarian 
device exemption, which allows the marketing of a product that is 
considered safe and is expected to provide benefits, even if less 
evidence on effectiveness is available. The FDA's proposed expedited 
access pre-market approval (EAP) process would also support the 
marketing of new medical devices based on surrogate endpoints, shorter 
clinical trials or other adaptive designs. The success of this policy, 
though, relies on the efficient collection of data--both pre- and post-
market. Congress should explore codifying this program in statute, and 
should address some gaps in FDA's authority to accelerate patient 
access to new medical devices while still collecting sufficient 
information throughout a product's entire life cycle. In particular, 
Congress should assess the agency's ability to promptly remove the 
approval of devices that ultimately were not found to be safe and 
effective.
    These programs provide FDA with significant latitude to tailor the 
data collected by sponsors and the agency's review process to reflect 
the severity of the disease and availability of alternative treatments, 
not to mention each product's risks and benefits. Not all products are 
appropriate for inclusion in one of these mechanisms, and FDA should 
only apply some of the pathways--particularly those that result in less 
than definitive proof of clinical efficacy--to products that are 
expected to significantly advance care for patients with serious, unmet 
medical needs.

    Question 5. Could you each talk about how the role of the patient 
has changed with new technology, and what policy changes need to be 
made to use this new excitement and involvement of patients to move 
technologies from discovery through development more quickly?
    Answer 5. This is not an area in which Pew has comments.
                            senator isakson
    Question 1. I understand that some medical device companies have 
had challenges with the inconsistency and lack of predictability of the 
FDA inspection process. Can you clarify if and how this can impact 
innovation?
    Answer 1. We refer the Senator to our response to Chairman 
Alexander, above.

    Question 2. A number of stakeholders, including public health 
groups, infectious disease doctors, venture capital, and antibiotic 
developers to support the PATH Act, legislation sponsored by Senator 
Hatch and Senator Bennet. This bill would require FDA to create a new, 
limited population approval pathway for antibiotics to treat serious 
and life-threatening infections for which there are few or no other 
treatments. The bill would allow FDA to approve these drugs on the 
basis of smaller amounts of data than it uses to approve other 
antibiotics. Can you explain how FDA can use this pathway to get drugs 
to patients who really need them without lowering the approval 
standards?
    Answer 2. Antibiotic resistance remains a serious patient safety, 
public health, and national security concern. As a 2014 report by the 
President's Council of Advisors on Science and Technology (PCAST) 
noted, the development of antibiotic resistance is occurring at an 
alarming rate and far outpacing the development of new antibiotics. As 
a result, increasing numbers of patients are contracting serious and 
even deadly infections that are difficult and sometimes impossible to 
treat, resulting in longer hospital stays, complications of other 
medical treatments such as surgery or chemotherapy, and even deaths. 
Patients with weakened immune systems, such as those with HIV/AIDS, 
preterm infants, cancer patients, transplant patients, the elderly, or 
patients treated in intensive care units are at heightened risk, but 
even healthy young people are contracting and dying from serious, 
antibiotic resistant infections.
    Antibiotic development has dwindled, with many pharmaceutical 
companies leaving this market. One key reason has been the lack of a 
clear, feasible regulatory pathway for Food and Drug Administration 
(FDA) approval of a new antibiotic for some of the most serious 
infections caused by multidrug-resistant (MDR) pathogens. It is often 
not feasible to develop antibiotics for some of the most serious 
infections using traditional, large clinical trials due to the limited 
numbers of patients in whom these infections currently occur. PCAST 
explicitly recommended the creation of a new limited population pathway 
for antibiotics to treat a serious or life-threatening infection in 
order to meet an unmet medical need. This is exactly what the PATH Act 
would do.
    Importantly, any drug approved under this new pathway must still 
meet the Food and Drug Administration's (FDA) standards of evidence for 
safety and effectiveness for the indicated limited population. Further, 
the PATH Act contains several important provisions to help guide the 
appropriate use of antibiotics approved under this new pathway. 
Appropriate use is critical to deliver optimal patient care while 
limiting the likelihood of antibiotic resistance developing to these 
new antibiotics.
                           senator whitehouse
    Question. We've heard several stakeholders express support for 
integrating patient perspectives in the drug development and review 
process. As you know, FDA held 20 public meetings to consider different 
disease areas as part of its Patient-Focused Drug Development program. 
What next steps would you like to see FDA take in its Patient-Focused 
Drug Development program? Do you have specific recommendations on how 
FDA could better integrate patient perspectives in the development and 
review processes?
    Answer. We do not have a specific recommendation.
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    [Whereupon, at 11:26 a.m., the hearing was adjourned.]

                                   [all]