[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]









           EXAMINING FDA'S PRESCRIPTION DRUG USER FEE PROGRAM

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

                                HEARING

                               BEFORE THE

                         SUBCOMMITTEE ON HEALTH

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED FIFTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 22, 2017

                               __________

                           Serial No. 115-18







[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]











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                    COMMITTEE ON ENERGY AND COMMERCE

                          GREG WALDEN, Oregon
                                 Chairman
JOE BARTON, Texas                    FRANK PALLONE, Jr., New Jersey
  Vice Chairman                        Ranking Member
FRED UPTON, Michigan                 BOBBY L. RUSH, Illinois
JOHN SHIMKUS, Illinois               ANNA G. ESHOO, California
TIM MURPHY, Pennsylvania             ELIOT L. ENGEL, New York
MICHAEL C. BURGESS, Texas            GENE GREEN, Texas
MARSHA BLACKBURN, Tennessee          DIANA DeGETTE, Colorado
STEVE SCALISE, Louisiana             MICHAEL F. DOYLE, Pennsylvania
ROBERT E. LATTA, Ohio                JANICE D. SCHAKOWSKY, Illinois
CATHY McMORRIS RODGERS, Washington   G.K. BUTTERFIELD, North Carolina
GREGG HARPER, Mississippi            DORIS O. MATSUI, California
LEONARD LANCE, New Jersey            KATHY CASTOR, Florida
BRETT GUTHRIE, Kentucky              JOHN P. SARBANES, Maryland
PETE OLSON, Texas                    JERRY McNERNEY, California
DAVID B. McKINLEY, West Virginia     PETER WELCH, Vermont
ADAM KINZINGER, Illinois             BEN RAY LUJAN, New Mexico
H. MORGAN GRIFFITH, Virginia         PAUL TONKO, New York
GUS M. BILIRAKIS, Florida            YVETTE D. CLARKE, New York
BILL JOHNSON, Ohio                   DAVID LOEBSACK, Iowa
BILLY LONG, Missouri                 KURT SCHRADER, Oregon
LARRY BUCSHON, Indiana               JOSEPH P. KENNEDY, III, 
BILL FLORES, Texas                       Massachusetts
SUSAN W. BROOKS, Indiana             TONY CARDENAS, California
MARKWAYNE MULLIN, Oklahoma           RAUL RUIZ, California
RICHARD HUDSON, North Carolina       SCOTT H. PETERS, California
CHRIS COLLINS, New York              DEBBIE DINGELL, Michigan
KEVIN CRAMER, North Dakota
TIM WALBERG, Michigan
MIMI WALTERS, California
RYAN A. COSTELLO, Pennsylvania
EARL L. ``BUDDY'' CARTER, Georgia
                         Subcommittee on Health


                       MICHAEL C. BURGESS, Texas
                                 Chairman
BRETT GUTHRIE, Kentucky              GENE GREEN, Texas
  Vice Chairman                        Ranking Member
JOE BARTON, Texas                    ELIOT L. ENGEL, New York
FRED UPTON, Michigan                 JANICE D. SCHAKOWSKY, Illinois
JOHN SHIMKUS, Illinois               G.K. BUTTERFIELD, North Carolina
TIM MURPHY, Pennsylvania             DORIS O. MATSUI, California
MARSHA BLACKBURN, Tennessee          KATHY CASTOR, Florida
CATHY McMORRIS RODGERS, Washington   JOHN P. SARBANES, Maryland
LEONARD LANCE, New Jersey            BEN RAY LUJAN, New Mexico
H. MORGAN GRIFFITH, Virginia         KURT SCHRADER, Oregon
GUS M. BILIRAKIS, Florida            JOSEPH P. KENNEDY, III, 
BILLY LONG, Missouri                     Massachusetts
LARRY BUCSHON, Indiana               TONY CARDENAS, California
SUSAN W. BROOKS, Indiana             ANNA G. ESHOO, California
MARKWAYNE MULLIN, Oklahoma           DIANA DeGETTE, Colorado
RICHARD HUDSON, North Carolina       FRANK PALLONE, Jr., New Jersey (ex 
CHRIS COLLINS, New York                  officio)
EARL L. ``BUDDY'' CARTER, Georgia
GREG WALDEN, Oregon (ex officio)























  
                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Michael C. Burgess, a Representative in Congress from the 
  State of Texas, opening statement..............................     1
    Prepared statement...........................................     3
Hon. Gene Green, a Representative in Congress from the State of 
  Texas, opening statement.......................................     4
Hon. Frank Pallone, Jr., a Representative in Congress from the 
  State of New Jersey, prepared statement........................   100

                               Witnesses

Janet Woodcock, M.D., Center for Drug Evaluation and Research, 
  Food and Drug Administration...................................     5
    Prepared statement...........................................     8
Jeff Allen, PH.D., President and CEO, Friends of Cancer Research.    54
    Prepared statement...........................................    56
Kay Holcombe, Senior Vice President of Science Policy, 
  Biotechnology Industry Organization............................    71
    Prepared statement...........................................    73
Anne Pritchett, PH.D., Vice President of Policy and Research, 
  Pharmaceutical Research and Manufacturers of America...........    84
    Prepared statement...........................................    86

                           Submitted Material

Statement of Rare Disease Legislative Advocates, submitted by Mr. 
  Guthrie........................................................   101
Statement of the Epilepsy Foundation, submitted by Mr. Guthrie...   102
Statement of NVCA, submitted by Mr. Guthrie......................   104
Joint statement of the National Organization for Rare Disorders 
  and Friends of Cancer Research, submitted by Mr. Guthrie.......   106

 
           EXAMINING FDA'S PRESCRIPTION DRUG USER FEE PROGRAM

                              ----------                              


                       WEDNESDAY, MARCH 22, 2017

                  House of Representatives,
                            Subcommittee on Health,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:15 a.m., in 
room 2322 Rayburn House Office Building, Hon. Michael Burgess 
(chairman of the subcommittee) presiding.
    Present: Representatives Burgess, Guthrie, Upton, 
Blackburn, Griffith, Bilirakis, Long, Bucshon, Brooks, Hudson, 
Carter, Green, Engel, Butterfield, Matsui, Sarbanes, Schrader, 
Kennedy, Cardenas, and Eshoo.
    Staff present: Adam Fromm, Director of Outreach and 
Coalitions; Jay Gulshen, Legislative Clerk, Health; Carly 
McWilliams, Professional Staff Member, Health; Alex Miller, 
Video Production Aide and Press Assistant; Jennifer Sherman, 
Press Secretary; Danielle Steele, Policy Coordinator, Health; 
and John Stone, Senior Counsel, Health; Jeff Carroll, Minority 
Staff Director; Samantha Satchell, Minority Policy Analyst; 
Kimberlee Trzeciak, Minority Health Policy Advisor; and C. J. 
Young, Minority Press Secretary.

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

    Mr. Burgess. I ask everyone to take their seats. The 
subcommittee will come to order, and I will recognize myself 
for an opening statement for 5 minutes.
    Today's hearing marks the Health Subcommittee's second 
opportunity to consider the reauthorization of several key FDA 
user fee programs. The Prescription Drug User Fee Act 
authorized the Food and Drug Administration to collect user 
fees from industry to support the approval of new drugs and 
biologics, and is a top priority for this committee.
    This was first authorized in 1992, and while there is 
always room for improvement, the Prescription Drug User Fee 
Agreement has been a success bringing safe and effective new 
products to patients in a timelier manner. Every 5 years since, 
pursuant to a process set forth in statute, Congress has 
reauthorized the program after reviewing the recommendations 
from the Food and Drug Administration, industry, patient 
groups, and other stakeholders.
    The committee has been reviewing the Prescription Drug User 
Fee Agreement since December when it was transmitted to 
Congress and publicly posted. As I stated in our hearing on the 
generic and biosimilar programs earlier this month, Chairman 
Walden and I are committed to shepherding the user fee 
legislation through committee following regular order and 
getting it to the House floor with ample time to spare.
    Reauthorization of the user fee agreements every 5 years 
provides an opportunity, an opportunity to examine, an 
opportunity to improve upon the state of discovery, 
development, and delivery of medical therapies in America. For 
instance, in 2012, the reauthorization of the user fees in the 
Food and Drug Administration's Safety and Innovation Act 
established the Breakthrough Therapy Designation. This program 
expedites the review and approval of promising new drugs that 
show early evidence of efficacy in serious, life-threatening 
diseases with an unmet clinical need.
    Under this program, over 165 products have been granted 
breakthrough designation which means more treatments, which 
means more cures, are being prioritized for patients suffering 
from some of the most debilitating conditions. I am pleased 
that the user fee agreements considering now will continue to 
build upon the success of the Breakthrough Therapy program.
    A unique factor in the negotiations of these user fee 
agreements was its overlap with the development of the 21st 
Century Cures Act, a bill enacted in December of last year 
after a multi-Congress effort led by Representative Fred Upton 
and Representative Diane DeGette. Over the course of the 113th 
and 114th Congresses, members of this subcommittee worked to 
uncover opportunities to strengthen and opportunities to 
streamline the process by which cures are discovered and then 
made available to patients. The resulting law touches each step 
of the process through which new treatments come to the 
bedside.
    I am encouraged to see in our witness's testimony that the 
Prescription Drug User Fee Agreement VI will dedicate resources 
to complement the implementation of the many priorities, the 
many priorities of the 21st Century Cures bill. In particular, 
I like the fact that the FDA will formalize a structure to 
incorporate patient input and patient experience into the 
benefit-risk assessment of products that are actually under 
development. This is a good thing. Patients have the most at 
stake and they deserve to be heard.
    I am also encouraged that the Food and Drug Administration 
will dedicate resources to modernize clinical trials and 
evidence development including the utilization of real-world 
evidence in investment in biomarkers. Real-world evidence has 
the potential to increase sufficiency and foster robust data 
collection and analysis. Advancing development of biomarkers 
has significant promise to accelerate regulatory decision 
making and expedite the pace of clinical trials without 
sacrificing standards for efficacy and safety.
    Other provisions incorporated into the proposal for PDUFA 
VI--OK, you made me say it--PDUFA VI. I was trying to just call 
it the user fee agreements--reflects the top priorities of this 
committee in the 21st Century Cures Act. Again I want to 
reiterate my commitment to ensuring that this reauthorization 
stays on track. We all know there are a lot of competing 
influences this year, but this year will mark the fifth renewal 
by Congress, and it is widely agreed that the prescription drug 
user fee agreements will provide for the timely review of new 
drug and new biologic license applications. Again I want to 
underscore that is a good thing.
    I thank all of our witnesses for being here, particularly 
Dr. Woodcock. Thank you, and welcome again back to our humble 
little subcommittee for one more hearing. I look forward to 
hearing from each of you and more about the agreement that is 
before us today, and I will yield back the balance of my time.
    The chair now recognizes the gentleman from Texas, the 
ranking member of the subcommittee, Gene Green, 5 minutes for 
an opening statement, please.
    [The statement of Mr. Burgess follows:]

             Prepared statement of Hon. Michael C. Burgess

    The Subcommittee will come to order.
    The Chair will recognize himself for an opening statement.
    Today's hearing marks the Health Subcommittee's second 
opportunity to consider the reauthorization of several key FDA 
user fee programs. The Prescription Drug User Fee Act (PDUFA) 
authorized FDA to collect user fees from industry to support 
the approval of new drugs and biologics, and is a top priority 
for this Committee. It was first authorized in 1992 and, while 
there is always room for improvement, PDUFA has been a 
remarkable success, bringing safe and effective new drug 
products to patients in a more timely manner. Every 5 years 
since, pursuant to a process set forth in statute, Congress has 
reauthorized the program after reviewing recommendations from 
FDA, industry, patient groups, and other stakeholders.
    The Committee has been reviewing the PDUFA VI agreement 
since December, when it was transmitted to Congress and 
publicly posted. As I stated at our hearing on the generic and 
biosimilar user fee programs earlier this month, Chairman 
Walden and I are committed to shepherding the user fee 
legislation through Committee, following regular order, and 
getting it to the House floor with ample time to spare.
    Reauthorization of the user fee agreements every 5 years 
provides an opportunity to examine and improve upon the state 
of discovery, development, and delivery of medical therapies in 
America. For instance, the 2012 reauthorization of PDUFA in the 
Food and Drug Administration Safety and Innovation Act, 
commonly known as FDASIA, established the Breakthrough Therapy 
Designation. This program expedites the review and approval of 
promising new drugs that show early evidence of efficacy in 
serious, life-threatening diseases with unmet clinical need. 
Under this program over 165 products have been granted 
breakthrough designation, which means more treatments and cures 
are being prioritized for patients suffering from some of the 
most despairing conditions. I am pleased that PDUFA VI will 
continue to build upon the success of the breakthrough therapy 
program.
    A unique factor in the negotiation of PDUFA VI, was its 
overlap with development of the 21st Century Cures Act, a bill 
enacted last year after a multi-year initiative led by 
Representative Upton and Representative DeGette. Over the 
course of the 113th and 114th Congresses, members of this 
subcommittee worked to uncover opportunities to strengthen and 
streamline the process by which cures are discovered and made 
available to patients. The resulting law touches each step of 
the process through which new treatments and cures come to 
market. I am encouraged to see in our witnesses' testimonies 
that PDUFA VI will dedicate resources to complement the 
implementation of many of the priorities in 21st Century Cures.
    In particular, I am pleased to see that FDA will formalize 
a structure to incorporate patient input and experience into 
the benefit-risk assessment of products in development. 
Patients have the most at stake, and they deserve to be heard. 
I am also encouraged to see that FDA will dedicate resources to 
modernize clinical trials and evidence development, including 
the utilization of real-world evidence and investment in 
biomarkers. Real-world evidence has the potential to increase 
efficiency and foster robust data collection and analysis. 
Advancing development of biomarkers has incredible promise to 
accelerate regulatory decision-making and to expedite the pace 
of clinical trials without sacrificing standards for efficacy 
and safety.
    Numerous other provisions incorporated in the proposal for 
PDUFA VI reflects the top priorities of this Committee in the 
21st Century Cures Act, and I want to reiterate my commitment 
to ensuring this reauthorization stays on track. This year will 
mark the fifth renewal by Congress, and it is widely agreed 
that PDUFA VI will provide for the timely review of new drug 
and biologic license applications. I thank our witnesses for 
being here today and I look forward to hearing more from each 
of you about the agreement before us today.

   OPENING STATEMENT OF HON. GENE GREEN, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF TEXAS

    Mr. Green. Thank you, Mr. Chairman. I thank all our 
witnesses, both Dr. Woodcock, welcome back again, and our 
second panel for being here this morning. Today we are 
examining the sixth Prescription Drug User Fee Agreement, PDUFA 
VI. I think it is fair to say that we all support a strong FDA 
that is responsive to the needs of the patient community and 
the innovations of scientific research and healthcare delivery.
    I am pleased that Congress is moving judicially through the 
process of reauthorizing the user fee programs and honoring 
their negotiations that have led to the agreements, and PDUFA 
is the most mature of the user fee programs having first been 
enacted in 1992. Sometimes our committee seems like we are a 
little mature.
    The law lays out a detailed process for reauthorization 
that requires FDA to negotiate with industry to develop 
recommendations and that the agency solicit public input and 
hold public hearings and consult with Congress and patients and 
consumer advocates and other relevant parties. The 
recommendations that are a result of this process must also be 
available publicly for a period for public comment, and 
ultimately are required by statute to be transmitted to 
Congress.
    I was disappointed to see the line in the administration's 
testimony that they do not stand behind these agreements and 
hinted towards reopening the painstakingly negotiated products. 
As we know, we are here today as the result of months of work 
between FDA and stakeholders to examine the program, figure out 
what is working and what can work better, and come to an 
agreement on how the program should be for the next 5 years 
through a public, drawn-out process.
    This process is a long one and the statutory deadline for 
reauthorization is coming up quickly. Congress has never 
flirted with neglecting its obligation to reauthorize in a 
timely and responsible manner. I sincerely hope that this holds 
true for the sixth reauthorization of PDUFA. Along with the 
other user fee programs, it must be reauthorized so FDA can do 
its work and patients maintain access to new therapies without 
a major disruption in the medical product ecosystem.
    PDUFA was first enacted as a way to reduce the time it took 
FDA to review new drugs and biologics and improve access to 
medical treatments more quickly. Over the years, the user fees 
provided under PDUFA have allowed the FDA to hire additional 
staff and improve the efficiency and predictability of the 
review process.
    Prior to the first PDUFA, the median time for FDA for 
approval of standard applications was 28 months. Today, the 
median time for approval for standard applications has been 
reduced to 12 months, and first-cycle approval rates are at 95 
percent. The U.S. remains the gold standard for drug approval 
and evaluation of safety and efficiency.
    The commitment letter for PDUFA VI includes a number of 
performance goals meant to help the agency with recruiting and 
retaining the scientific and professional staff needed to keep 
pace with the science. For the first time, PDUFA VI also 
includes specified agency hiring goals. This builds on the 
hiring provisions in the 21st Century Cures that will help the 
agency to compete with the private sector in terms of 
competitive salary, and gives the agency the authority to hire 
scientific and technical staff needed to support medical 
project review.
    There have been some that have criticized FDA for being a 
barrier to the access to innovative new drugs. This is 
inaccurate. Contrary to the description by the President and 
others who want to roll back patient safety measures, the FDA's 
approval process is not slow and burdensome. Today, more than 
two-thirds of novel drugs are approved first by the FDA rather 
than anywhere else in the world.
    It is clear that PDUFA has been successful in meeting the 
goal of improving efficiency of the drug review process at FDA 
and ensuring patients have access to novel therapies. The 
policies and goals included in the agreements reflect what 
these stakeholders value and will help ensure advancements and 
improvements within the FDA and ultimately health care more 
broadly.
    I want to thank the agency and the stakeholders for their 
leadership on this agreement that will continue the trajectory 
of patient-centered innovation at the FDA. 21st Century Cures 
did a great job to advance such reforms and help get new cures 
from the lab table to the bedside. I look forward to hearing 
from the FDA and other witnesses on how this agreement will 
build on these successes and continue to advance the modern, 
efficient FDA and a healthy pipeline of medical breakthroughs. 
And I yield back my time.
    Mr. Guthrie [presiding]. The gentleman yields back his 
time.
    Mr. Green. Do we have any other opening statements? No, OK.
    Mr. Guthrie. We have none on our side. OK, we will turn to 
the witnesses. We want to thank all of our witnesses for being 
here today and taking the time to testify before the 
subcommittee. And each witness will have an opportunity to give 
an opening statement followed by a round of questions from 
members.
    And we have two panels of witnesses today, and we will 
begin with our first witness, Dr. Janet Woodcock, Center for 
Drug Evaluation and Research, Food and Drug Administration. We 
appreciate you being here. And, Dr. Woodcock, you are now 
recognized for 5 minutes to give an opening statement.

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

    Dr. Woodcock. Thank you, and thanks to the members of the 
subcommittee for inviting me to testify at this important 
hearing. We are talking here about a program that has been 
going on for 25 years, the prescription drug user fee program. 
And as result, as we have already heard, over that time U.S. 
patients have gone from being one of the last in the world to 
obtain access to new drugs to in most cases being the first 
patients in the world who can get access to innovative new 
therapies, all at the same time maintaining the standards that 
FDA has for safety and effectiveness of these therapies.
    At the same time, we have moved from multiple cycle 
scenario to predominantly first-cycle approval for these drugs, 
meaning that the industry and FDA have enough communication, 
the standards are clear enough, they are able to submit a 
complete application that can be reviewed and approved without 
further delay. And this is a great time efficiency and resource 
efficiency for industry for the FDA and for the medical 
community alike.
    Also, this program has allowed us to accommodate the 
advances in medical science that have occurred recently over 
the last several decades. Congress and the U.S. investment in 
NIH and in biomedical research has caused tremendous growth in 
scientific understanding. Now we are really contemplating, we 
have approved drugs for example that are antisense 
oligonucleotides that act directly on people's DNA. We are 
looking at multiple applications for gene therapies although 
none have been approved yet. We are looking at multiple 
cellular therapies that are under development.
    And so this promise that you have been hearing about 
science is really coming about and we have approved cures for 
various conditions such as hepatitis C, which has long been a 
scourge of people.
    So the next programmatic proposals, the enhancements for 
the sixth iteration of this, try to build on the 
accomplishments that we already have. And as has already been 
said, the first one is really aligned with the Cures 
legislation that was passed and that is enhancing the ability 
to capture patient voice in drug development. Not just on 
benefit-risks, but patients want to tell us what we should 
study, what matters to them. What do they want ameliorated 
about their disease? What is most important? How should we 
study it?
    They want to know, they want to tell us how trials should 
be designed that work for patients. People always wonder why 
there is so many dropouts in the trials, missing data. Well, 
because we designed the trials in a way that patients couldn't 
participate. So the patient voice is critical, and then at the 
end of the day how much risk are people willing to trade off in 
uncertainty for the benefits, the potential benefits of any 
given therapy. And this will require a rigorous process to 
generate and develop all these data and bring the patients in, 
in a rigorous way. It is envisioned in Cures and laid out in 
Cures, and the programmatic enhancements of PDUFA VI would 
bolster our ability to do that in a timely manner.
    Also, there is support for the Breakthrough Therapy 
Program. Now what I will say about that is that is probably the 
first program that has really shortened drug development. As we 
have all said, drug review isn't the problem. It occurs now in 
a timely manner, predictable manner, based on PDUFA. But drug 
development is still a very gnarly problem. It takes too long 
and it costs too much, right, and there are many failures.
    Breakthrough has been the first program as actually drug 
development time has been shortened, and you have heard that 
before this committee from a number of witnesses, taking 
several years off of drug development in the overall time it 
takes to get those drugs. Part of it is the quality of the 
compounds, the molecules that are developed under and given 
breakthrough, but also part of it is the support that FDA is 
willing to give. And so the new program would give additional 
resources.
    There is also, as was envisioned in Cures, support for 
biomarker qualification also for the better use of surrogate 
endpoints, an advancement of clinical trial design, something 
dear to my heart and I would be happy to talk to you about; 
advances in the use of real world evidence, which is also a 
Cures theme; better communication with industry to make sure 
that we are always on the same page and we move things along; 
and then administrative improvements including oversight of 
some of the administrative processes, reports, and financial 
oversight, to make sure the management and planning of the 
program is as good as it can be.
    So I believe this captures in the programmatic proposals 
many of the modern themes that need to now address improvements 
in drug development and drug approval, and I would be happy to 
answer any questions.
    [The prepared statement of Dr. Woodcock follows:]
    
    
    
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    

    
    
    
  
    
    Mr. Guthrie. Thank you. I want to thank you for your 
testimony. We will now move to the first Q&A portion of the 
hearing, and I will begin the questioning and recognize myself 
for 5 minutes.
    So Dr. Woodcock, as part of 21st Century Cures, this 
committee included provisions that set up FDA Intercenter 
Institutes of Excellence in major disease areas to improve 
coordination across the agency. FDA has since established the 
Oncology Center of Excellence. Can you provide us with an 
update on how things are going so far and if there is anything 
we can do to help ensure smooth and timely implementation?
    Dr. Woodcock. Yes. The Oncology Center of Excellence is 
considered a joint venture by the three medical products 
centers, Center for Biologics, Center for Devices and 
Radiological Health, and Center for Drugs. And so we put this 
together jointly, it resides up in the office right above us. 
Dr. Richard Pazdur is the director of that office.
    And the procedures that we are running, they will review 
the clinical oncology, the medical oncology portion of any 
product that comes in with a medical oncology indication to any 
of the three centers. So they will do the medical part of that 
review, and Rick will direct it, but it will include 
oncologists from Drugs and Biologics as appropriate to that 
particular cancer area.
    So we have worked out the procedures and so forth and we 
expect those applications then will go before the Oncologic 
Drugs Advisory Committee and be heard. And then the Center, 
whichever Center has the product, will complete the rest of the 
product review which is about the quality of the product and 
the control of that quality, and then we will actually approve 
the application using the clinical recommendations from the 
Oncology Center of Excellence.
    And the Center also will be the outfacing, outward facing 
group that will interact with the medical oncology and patient 
community.
    Mr. Guthrie. OK, thank you. I want to yield time to my good 
friend from Virginia, Mr. Griffith.
    Mr. Griffith. Thank you very much. I appreciate that. Dr. 
Woodcock, prior to the FDA's encouraging the development of 
abuse deterrent opioids, manufacturers should be incorporating 
these technologies into their products and testing whether they 
deter various routes of potential abuse, intranasal, 
intravenous, et cetera. If they do, manufacturers need to be 
able to include this data in their product labeling and 
communicate this useful information to healthcare providers.
    I understand a recent exclusivity determination by FDA 
calls into question whether multiple manufacturers in the same 
product class could make such claims even if their data 
justifies it and even if they are using different technologies. 
Is that accurate?
    Dr. Woodcock. It is likely accurate. I think like many of 
the laws governing exclusivity that Congress passed long ago, 
they certainly didn't foresee some of the situations. And we 
struggle all the time with trying to figure out how to apply 
exclusivity fairly and justly to everyone and yet not 
disadvantage public health goals that we may have.
    Mr. Griffith. And so you would agree it probably would 
discourage a manufacturer if they can't go forward and discuss 
that; a company or a manufacturer might not invest as much if 
they think that somebody has beaten them to the punch by a few 
months. And so what you are recommending, if I understood your 
previous answer is, is that we probably should take a look at 
it and change the law?
    Dr. Woodcock. Well, I can't go that far because of course 
that is your purview.
    Mr. Griffith. Yes, ma'am. Thank you.
    Dr. Woodcock. But I do believe that times have changed.
    Mr. Griffith. Yes, ma'am. I appreciate that. Speaking of 
product manufacturers being able to share useful scientific 
data and information about their products with doctors, I 
understand that some previous leaders at the Department of 
Health and Human Services would not allow FDA to work with 
Congress to clarify in a responsible and constitutionally sound 
manner how manufacturers can communicate truthful and non-
misleading off-label information.
    Now as you and I were just discussing, I prefer that 
Congress work with you all to make the rules as opposed to 
leaving it to the courts to decipher. Will you commit to 
working with us to set up some clear rules of the road so folks 
know what they can communicate and what they can't?
    Dr. Woodcock. Certainly. We will work with the 
administration, through the administration with you on this 
issue.
    Mr. Griffith. All right, I appreciate that very much.
    With that Mr. Chairman, I appreciate the time and I yield 
back.
    Mr. Guthrie. I yield back my time and I recognize Mr. Green 
for 5 minutes to ask questions.
    Mr. Green. Thank you, Mr. Chairman. And thank you, Dr. 
Woodcock, again for being here this morning. As I mentioned in 
my opening statement, I was disappointed to see the line in the 
administration's testimony that they do not stand behind these 
agreements and hinted toward a reopening of painstakingly 
negotiated products. Can you explain to the committee what 
would happen should Congress fail to reauthorize PDUFA and the 
other user fees before the statutory deadline in September?
    Dr. Woodcock. If there is not a reauthorization, we must 
initiate our reduction in force process where we would prepare 
to let go of for the Center for Drugs is maybe 70 percent of 
the staff working on the process of review in new human drugs. 
And we do have carryover balance within the user fee agreements 
that we are supposed to hold some money back. In case the 
program terminates we can, over several months, have an orderly 
process to let go of the staff. And that we would have to start 
thinking about that in July because there are complicated 
personnel rules that have to do with who has to be notified 
first and so forth.
    Mr. Green. OK, thank you. There seems to be a 
misunderstanding about the drug development process. We hear 
often that new therapies take about 10 years to develop and 
some seem to think that means the application languishes at the 
agency for a decade. In fact, the FDA review is the final step 
in the development process and more efficient than ever.
    Can you explain to this committee how PDUFA VI builds on 
the past successes of the program and helps the agency work 
with stakeholders to not be a bottleneck but a strong partner 
in getting these new treatments to patients in need?
    Dr. Woodcock. Certainly. Obviously we have prioritization 
programs for breakthrough drugs and for priority drugs where 
they are reviewed in shorter times. We have gotten some reviews 
out in 3 months, and a drug approved and on the market after 
the application is submitted where it is a breakthrough.
    So, but that doesn't mean that the development time is 
short. The development time still is quite long and the failure 
rate of drugs in development is still very high. Perhaps in 
some areas nine out of ten drugs that get into human testing 
fail during human testing at huge cost. So a lot of the efforts 
we are working on, I believe patient focused drug development, 
the innovative clinical trials, the surrogate endpoints, and 
biomarkers, all of which are encompassed in the proposed 
programmatic changes, will help with this drug development 
phase and making it as short as possible.
    As I said, the Breakthrough Therapy Program has actually 
worked and some of those development programs in the clinic 
have only been a couple years, so the time to patients has been 
shortened dramatically.
    Mr. Green. Can you explain to this committee how PDUFA VI 
builds on the successes of the program in the past and helps 
the agency work with stakeholders to not be a bottleneck but a 
strong partner in getting new treatments to the patients in 
need? Or that is my question. OK, let me get to the next one.
    Many provisions of the user fee agreements resemble ideas 
we advanced in Cures, things like biomarker qualification 
programs, incorporation of the patient perspective in decision 
making, and the advancement of innovative clinical trials are 
goals we have shared. I am concerned about the impact that the 
administration's proposed hiring freeze would have on FDA, and 
could it be made hard to advance these shared goals?
    User fees under PDUFA also assist the FDA in hiring and 
retaining staff necessary to support the activities associated 
with review of drug applications. The commitment letter for 
PDUFA VI includes a number of performance goals meant to help 
the agency with recruiting and retaining the scientific 
professional staff needed to keep pace with science. In fact, 
for the first time, PDUFA VI also includes specific agency 
hiring goals. This builds off the hiring provisions in the 21st 
Century Cures.
    Can you discuss further how the PDUFA VI will help the FDA 
to hire and train the scientific technical workforce needed to 
fulfill the goals agreed to in the commitment letter?
    Dr. Woodcock. Well, for really the first time, this 
programmatic proposal in PDUFA VI really focuses on some of the 
administrative processes and tries to set in place some 
oversight over hiring and so forth, and some new scientific 
recruitment staff and so forth that would enable us to hire 
scientists. As I said, the science has really come along, and 
so we are talking about really high-tech kind of treatments in 
humans, such as gene therapy in humans and so forth, and we 
need the scientific staff that are qualified to evaluate those 
and make sure they are safe as well as that they work.
    Mr. Green. Well, my time is almost up. And I know our goal 
is to make sure you have the resources to do it quicker and not 
lay in another level of bureaucracy to make it even longer. 
Thank you, Mr. Chairman.
    Mr. Guthrie. Thank you. The gentleman yields back. Mr. 
Upton is recognized for 5 minutes.
    Mr. Upton. Well, thank you, Dr. Woodcock. It is great to 
see you again, and I know all of us on both sides of the aisle 
here really appreciated your work and your input from the very 
beginning on getting 21st Century Cures ultimately to the 
President. And we knew that by expediting the approval of drugs 
and devices we were going to need require you all at the FDA to 
help us and to help chart that course for us and provide the 
right resources so that you would be able to do your job.
    And obviously PDUFA VI is very important, very important. 
And alarming of course to us, a good message to us is if we 
don't get it done by summer or show that we have made progress 
by July and August, certainly by September, that you would 
actually have to RIF 70 percent of the staff, is quite alarming 
and ought to serve as turning up the burner for us to get our 
job done, as we have in the past in a very strong bipartisan 
way, ultimately getting this bill to the President.
    A question for you, Diana DeGette and I sent a letter a 
couple weeks ago to OMB asking about the federal hiring freeze 
that the President announced as it relates to the 
implementation of 21st Century Cures. And of course as you know 
we came up with offsets, dollar for dollar matching to help 
with the half billion dollar increase that we gave for the FDA.
    Yesterday, it is my understanding that you told the Senate 
Health Committee--and I have to again compliment Lamar 
Alexander and the great work that they did over there. But 
yesterday you told the Health Committee that the White House 
did give the FDA permission to move forward with hiring on the 
select user fee positions needed to implement Cures. I don't 
know if that is a quote or not, but that is my understanding.
    Can you provide some more detail? We have not heard back. 
It is my understanding we have not heard back from our letter 
that we sent to the White House, but can you tell us more 
details about the type of hiring that is going to be needed to 
implement 21st Century Cures and what guidance you have been 
able to get from both OMB and the White House and which select 
user fee positions is the FDA hiring?
    Dr. Woodcock. Well, I am not in a position to discuss that 
particularly, I can talk about what programmatic needs there 
will be. Clearly, the patient focused drug development is going 
to need different kind of scientists than we have traditionally 
had. We have had laboratory scientists who are looking in test 
tubes and doctors who are--we are going to need social 
scientists and other folks who can actually talk to people and 
get rigorous evidence about what their needs and preferences 
are and who can work on instruments, say, patient reported 
outcome measures and so forth. So that is one category that we 
don't necessarily have enough of.
    In addition, on real-world evidence that is some different 
types of science that we will need to have people who can 
analyze that, big data, and so forth. And interesting, we have 
already had multiple outside parties approach us who are using 
real-world evidence in different ways and they want to 
collaborate with us and we are working with them, some of them 
in the Oncology Center of Excellence. So we will need data 
scientists of that sort.
    And Breakthrough Therapy, which I know isn't Cures, but 
will need basically people who in specific disease areas 
particularly rare diseases. We also commit to integrate rare 
disease expertise within the review teams where there are rare 
diseases. We are seeing more and more rare diseases being 
treated.
    So we have very focused needs in specific places for a 
specific kind of scientist, and I am sure that the Biologic 
Center with the rise in gene and cell therapy and that more or 
less explosion and also regenerative medicine, they are going 
to need specific types of scientific expertise.
    Mr. Upton. Great. Well, thanks again for your work and we 
look forward to continuing the process as we get this thing 
done too. I yield back. Thank you, Mr. Chairman.
    Mr. Guthrie. Thank you. The gentleman yields back and Mr. 
Schrader is recognized for 5 minutes.
    Mr. Schrader. Thank you very much, Mr. Chairman, and 
thanks, Ms. Woodcock, for being here again. Very impressive 
results; I don't know if it is appropriate, but the graphs that 
are in your written testimony, I think, are pretty dramatic and 
you should share those with us when you come in and give your 
testimony. It would be pretty interesting, I think, for 
everyone to see that with the work of the committee and follow-
through by FDA that the first drug approvals have dramatically 
increased and it is really pretty impressive. So make sure you 
show yourself to advantage when you become before us here.
    I appreciated these comments on the Breakthrough Therapy 
Program with regard particularly to new and innovative drugs 
with unmet needs. We are finding that in the generic area that 
once again there are unmet needs despite the fact there may 
have been a product and there is either a sole source or no 
source alternative. Any thought of how the breakthrough process 
you are currently using on the brand name side might translate 
into the generic sphere of development?
    Dr. Woodcock. Our analysis of the issues with generics is 
more that, you know, about ten percent of what we call 
reference drugs, the brand drugs, never get a generic filed to 
them. And so this seems to be a market phenomenon, competition 
is only attracted where people think they can make money by 
competing, and the small source products and so forth.
    Now in the generic drug user fee program, the second one 
that we are proposing, the programmatic enhancements include a 
program to help with complex generics. And those are ones that 
actually people might not try to enter the market because it is 
hard, where, say, you are using an autoinjector or you are 
using a very complex molecule and so it might be hard.
    So there, and we have agreed that we would set up a pre-
program similar to kind of like the prescription drug user fee 
where before they send in the application we have meetings with 
them and we give them advice and we help them develop their 
products, so by the time they get the application in the door 
it actually could be approvable.
    So that would help with those types of products, but the 
small----
    Mr. Schrader. I guess where I was going--and that is very 
good and I think that is outstanding and hopefully a benefit to 
a lot of the companies out there. But I was going, say we are 
able to encourage a manufacturer to come to market through a 
variety of different means. We have a bill, Gus Bilirakis and I 
are trying to find what is the appropriate way to get and 
incentivize folks to come to market; make it worth their while 
as you put it.
    But once they are there it would be nice if you used that 
breakthrough approach that has been so successful to also, you 
know, hasten things through. And I think to, and help us 
encourage them to come to market and be successful, if they 
knew that breakthrough approach was going to be applied that 
might incentivize things also.
    Dr. Woodcock. Well, we would be happy to work with you. In 
medicine we have a saying: First do no harm. And sometimes 
there are unintended consequences and I think it would be worth 
discussing, because there is such a commercial hit that the 
innovators take when they get a generic competition on the 
market that any provisions that they can sue us about or send 
us citizen petitions or obstruct a process cause delays, and I 
believe that needs to be taken into account as you think about 
incentivizing.
    Mr. Schrader. We are trying to do that. We have a REMS 
portion of our bill to try and make sure that it is being used 
appropriately for safety purposes and not block competition in 
the market. So we are trying to listen to you and your advice.
    Dr. Woodcock. We would be happy to work with you in this.
    Mr. Schrader. Second question on the biomarkers. I think 
that is a great idea because it takes as you said, many times 
it takes awhile to get these drugs to market and many of them 
do fail. And so a lot of the manufacturers want to have some 
idea if they are on the right track and you want to have some 
idea if they are on the right track, so early intervention and 
changing things would be appropriate.
    Taking a blood pressure measurement or whatever the 
appropriate biomarker is, how do you follow through on that as 
the medication goes through the market, or a product goes 
through the market, to make sure that number one that the 
biomarker does turn out to be an accurate reflection of what 
the drug's ultimate outcome is, and then, once the drug is on 
the market, how do you go back and reassess the biomarkers to 
make sure they are actually meaningful indicators for you and 
for the companies?
    Dr. Woodcock. We have a program known as Accelerated 
Approval. For some biomarkers such as blood pressure, their 
benefit is unequivocal and we don't need to keep proving over 
and over again that lowering blood pressure keeps you from 
getting strokes and so forth. We know that. But many other 
biomarkers are, quote, surrogate endpoints that we aren't a 
hundred percent sure that they are going to translate into 
benefit, and therefore we would give an accelerated approval it 
is called. That is kind of a misnomer, kind of misleading, but 
what that means is we are approving us based on the biomarker, 
but they have to do further studies. They are required to do 
further studies after approval to show that their drug actually 
causes clinical benefit.
    So you get on the market earlier, that is the accelerated 
part, but you still have to deliver that proof.
    Mr. Guthrie. Thanks. The gentleman's time has expired. I 
will recognize Mr. Lance for 5 minutes for questions.
    Mr. Lance. Thank you very much, Mr. Chairman. It is always 
good to see you, Doctor. I am encouraged to see that the Rare 
Diseases Program staff will be integrated into review teams for 
rare disease development programs to provide unique expertise. 
Could you please speak to the relationship between PDUFA and 
21st Century Cures as it relates to drug development tools such 
as real-world evidence, complex trial designs, and biomarkers, 
and the importance of getting the agreement to the President's 
desk by the end of July?
    Dr. Woodcock. Certainly. Well, what was negotiated in PDUFA 
VI bolsters certain aspects of Cures with additional resources, 
and also would have specific timelines put in place and 
agreements. Some of those are slightly different, but we can 
reconcile them all kind of defaulting to whatever the earliest 
thing we agreed to is, we would do it then, all right.
    Mr. Lance. Yes, Dr. Woodcock.
    Dr. Woodcock. So, for example, real-world evidence, their 
guidance and so forth we would put out. 21st Century Cures has 
a broader qualification process, so it includes patient 
reported outcomes, clinical outcome assessment, as well as 
biomarkers, whereas the PDUFA agreement is about biomarkers. 
However, we are going to put up the same process for 
everything, the Cures process, which puts in place timelines 
and obligations on both the submitters and the agency. So we 
will put that across the board.
    We expect, as you all know from our discussions, the 
biomarkers to be the most difficult part of this, and so the 
PDUFA gives, envisions more support for the biomarker 
qualification process.
    Mr. Lance. Thank you. Dr. Woodcock, 21st Century Cures 
included a provision on combination products and that provision 
directs the agency to improve coordination between the Device 
and Drug Centers. Considering both Centers are involved in this 
process, should there be some coordination between the 
agreements?
    Dr. Woodcock. Yes, and actually I believe there is. PDUFA 
VI provides some resources actually are envisioned for the 
Device Center, all right, to conduct these reviews. But I am 
pleased to say under the leadership of Dr. Rachel Sherman, who 
is deputy commissioner, we have made considerable progress 
already in combination products. We have put together a 
council, we have mapped the processes, we have improved the 
processes, we have developed standardized templates and so 
forth. So I think we have made a lot of progress already and 
that these efforts in Cures and in the user fee agreements will 
enhance that.
    Mr. Lance. Do both Centers receive part of the user fee for 
combination products?
    Dr. Woodcock. Yes.
    Mr. Lance. Is that the way it works?
    Dr. Woodcock. Yes.
    Mr. Lance. And as I understand it, the goal in fiscal year 
2019 is 50 percent, when the goal in fiscal year 2021 is 90 
percent; is that accurate?
    Dr. Woodcock. I believe so. That is how we typically 
structure these goals. If we haven't been keeping track the 
first year or so we try to find out what our baseline is. It 
may be 80 percent--we might hope so, OK--and then we ratchet it 
up after that.
    Mr. Lance. Thank you, Dr. Woodcock.
    And Mr. Chairman, I yield back 1 minute, 25 seconds.
    Mr. Guthrie. The gentleman yields back and Mr. Cardenas is 
recognized for 5 minutes for questions.
    Mr. Cardenas. OK. I will try to yield back a minute and 25 
seconds or more to keep up with the program here. Thank you 
very much, Mr. Chairman, for holding this hearing.
    Dr. Woodcock, what is the significance of September 2017 as 
far as your professional world goes?
    Dr. Woodcock. If these various user fee programs are not 
reauthorized at that time, we must initiate processes to let go 
of the staff and wind down the program. There is money in all 
these agreements to do that. There is some money held back.
    Mr. Cardenas. Yes, money held back to wind it down----
    Dr. Woodcock. That is all.
    Mr. Cardenas [continuing]. Which only expends over a few 
more months.
    Dr. Woodcock. That is correct.
    Mr. Cardenas. Are many of the people that would be let go, 
per se, if we legislatively failed to do our job here, would 
that--you are talking about jobs, people who are specialists, 
or what kind of jobs are they?
    Dr. Woodcock. Most of these are doctors and scientists. 
They are almost all at the Ph.D. or M.D. level. The physicians 
are generally some specialists, so we would have nephrologists 
or people who are specializing in medical imaging, and so hard 
to find people.
    Mr. Cardenas. Is it fair to say that getting so close to 
September 2017 creates kind of a little bit of nervousness 
amongst people who are trying to get their work done in such an 
environment?
    Dr. Woodcock. Well, what we would expect is the 
productivity would slow down as we approach the brink, 
tremendously. This has happened once before where we approached 
it and we lose staff. Our people are heavily recruited into 
other jobs and they aren't paid as we have all discussed, they 
aren't paid as much as private sector. And so I would expect we 
would start to lose people very early who would leave before 
they got their notice.
    Mr. Cardenas. So to that point, if and when this, it seems 
to have happened before, the ramping up, once there is a 
restoration after the fact, isn't the ramping up many times 
harder than it was in the ramping down?
    Dr. Woodcock. It is indeed. At least in the New Drugs 
Program where we need to hire physicians, the last time, and we 
didn't come to a reduction in force, we just came sort of close 
to that, it took more than a year for the New Drugs Program to 
recover its losses, and its recruitment rate was slowed down 
which it already is slow, because people have kind of lost 
faith in the viability of the program.
    Mr. Cardenas. And something such as a year of that 
revamping to just restore back to where it was, doesn't that 
cause a compounding effect potentially when it comes to the 
actual work being done going forward not only within the 
department but in the industry that happens to interact with 
you?
    Dr. Woodcock. Well, we would have to prioritize very 
carefully what work would be done. Public safety would come 
first, obviously, and we would probably not be able to give all 
the advice that we would like to give or that people would like 
to have from us.
    Mr. Cardenas. So the stress is--I am interpreting this 
conversation as there would be stress involved in many ways 
actually expands beyond the department if in fact we weren't 
able to timely, in a timely fashion get this restored.
    Dr. Woodcock. I believe that is very accurate.
    Mr. Cardenas. Do our job legislatively by the September '17 
deadline.
    Dr. Woodcock. Yes.
    Mr. Cardenas. OK. So briefly, Dr. Woodcock, when it comes 
to what we have done on 21st Century Cures, and your department 
is complicit in making sure that we do well with that. But at 
the same time, when it comes to biomarkers can you please 
discuss further how PDUFA VI will help with these efforts and 
what further biomarker development activities PDUFA VI will 
provide resources for?
    Dr. Woodcock. Certainly. Both 21st Century Cures and the 
program envisioned in PDUFA VI both envision more effort going 
to biomarkers. 21st Century Cures sets up a structured program 
for what we call regulatory qualification, and what that means 
is new biomarkers, a different sort, we would tell people, the 
public, you can use this biomarker to make this decision about 
patients.
    Now that can be a very heavy decision say if it is a safety 
biomarker. We are saying we are trusting human lives to the 
results of this biomarker. So there is a lot of scientific work 
that has to go in to make sure that biomarker is providing 
reliable information to make that decision.
    And so what we are going to do, or are instructed to do 
under Cures and also under this PDUFA VI, is develop the 
evidence standards, OK. How much evidence, so everybody 
understands what kind of evidence you need in order to rely 
upon a new biomarker, and also then evaluate new nominated 
biomarkers through the Cures process that was set up against 
those evidence standards. So we have to do both of these, so we 
need the kind of scientists who are able to do that sort of 
work.
    Mr. Guthrie. OK, thank you. The gentleman's time has 
expired.
    Mr. Cardenas. Thank you, Chairman.
    Mr. Guthrie. Thank you. I now recognize Mr. Long for 5 
minutes for questions.
    Mr. Long. Thank you, Mr. Chairman, and thank you, Dr. 
Woodcock, for being here today. I would like to spend my time 
with you discussing a very vulnerable population, one that I 
personally focused on helping. Every year, nearly 200,000 
newborns in the United States are admitted to neonatal 
intensive care units for treatment. Due to the numerous 
challenges and despite current pediatric incentives, the last 
new drug for this population was approved in 1999.
    Last year my colleague on this committee Ben Ray Lujan and 
I introduced the Promoting Life-Saving New Therapies for 
Neonates Act and are working to introduce the bill this year. 
Our bill would create a new incentive model by providing a 
narrowly targeted, transferable exclusivity voucher to drug 
sponsors who successfully develop products for neonates.
    Do you believe the current pediatric incentives have been 
successful in stimulating therapy development for newborns?
    Dr. Woodcock. No, not particularly, I do not.
    Mr. Long. Given the lack of development, can you identify 
the challenges that you see from a regulatory perspective at 
FDA as well as research and development challenges for the 
industry?
    Dr. Woodcock. Well, I believe that we have taken steps 
recently along with the American Academy of Pediatrics and 
others, and our new head of pediatrics at FDA is a 
neonatologist. And together with her and others we have put 
together a network of NICUs, because part of the issue is the 
NICUs did not standardize their treatment protocols and so 
everyone had a different treatment protocol. So if we were 
going to ask a developer, a drug developer, to develop a drug 
in NICUs, every NICU director would want a different protocol.
    So the first thing that had to be done was say what is the 
standard of care in the NICU, in the neonatal intensive care 
unit, and then you can say what are the biggest unmet medical 
needs for neonates, and then you can start talking about, OK, 
do we have a trial network or do we have some type of 
infrastructure that could actually evaluate a new therapy were 
it developed? And they are working on doing that 
internationally which is really good news. So I would be happy 
to update you on the progress on that.
    Mr. Long. This is a tough population to test drugs on.
    Dr. Woodcock. That is right.
    Mr. Long. Are there steps you believe we could take in the 
upcoming user fee process to help spur much needed development 
for this vulnerable patient population?
    Dr. Woodcock. I don't know in user fee process. My belief 
is, and I have talked to the American Academy of Pediatrics 
about this, that the heads of neonatal intensive care units 
need to get their program together, decide what the standard of 
care is, decide what the unmet medical needs are, develop trial 
structures so they could test new drugs, and if they make--if 
you build it they will come, in my opinion. If you make a 
pathway clear that developers could use, then I believe they 
will develop products for neonates, sick neonates. And I 
believe it is needed.
    Mr. Long. OK, thank you. And once again thank you for being 
here today taking your time to be with us.
    And Mr. Chairman, I yield back.
    Mr. Guthrie. The gentleman yields back. Ms. Matsui is 
recognized for 5 minutes for questions.
    Ms. Matsui. Thank you, Mr. Chairman.
    Thank you, Dr. Woodcock, for being here. It is wonderful to 
have you here. First of all, I want to mention that I am 
concerned with the President's budget proposal and how it might 
impact the work that this committee is doing to reauthorize 
these vital agreements that they have. And I don't think it 
would be wise to renegotiate the user fee agreements that FDA 
and the industry have worked so hard to reach, nor do I think 
it would be wise to impose drastic cuts to the agency's budget 
authority that would endanger the FDA's ability to collect 
these user fees. FDA performs many critical functions to keep 
our food and drugs safe and we cannot afford to compromise 
that.
    Now I am particularly concerned about both the development 
and the final price of drugs for patients with rare diseases. 
These populations are often neglected and left with little or 
no treatments or cures. I want to ensure that we take advantage 
of our robust research efforts in this country for these rare 
disease patients.
    I am pleased that there are many provisions in the 
negotiated PDUFA agreement that would make important advances 
for this rare disease community, particularly building on the 
effort to include the patient experience in drug development 
ensuring that staff at FDA who have expertise in rare disease 
are integrated across different centers.
    Dr. Woodcock, can you elaborate on the provisions in PDUFA 
that would help patients with rare diseases?
    Dr. Woodcock. Well, I believe the biggest help is actually 
going to be in the patient focused drug development. And why is 
that, because rare diseases often are so rare there are not any 
doctors who really know what happens to the people. And so what 
we are encouraging and we are seeing now is the patients are 
getting together and they are having their own patient focused 
drug development meetings.
    They are collecting, and we have given some grants out to 
help with this, they are collecting natural history on their 
disease so people actually know what happens to someone with 
the rare disease. Often it is very disparate. Not everyone with 
that rare disease has the exact same course, so then it is even 
harder to study them.
    So we are encouraging them to develop natural history so we 
can help with trial designs and then maybe even outcome 
measures, like what is the most burdensome part of the disease? 
What would they like ameliorated? So that then if a company 
comes along and wants to develop they have a pathway to 
develop. So that is all baked into these agreements in rigorous 
ways of collecting that information and helping patient groups 
so they can develop these things.
    But also of course there is an agreement to integrate rare 
disease staff into review teams so that there is more, it is 
not all about blood pressure meds and gigantic trials and heart 
disease, OK, it is about people who have the very rare diseases 
pose different problems in development.
    Ms. Matsui. Right. OK, can you talk more about the 
Breakthrough Therapy Program and what successes had it had and 
what additional resources help FDA with approval of innovative 
orphan therapies?
    Dr. Woodcock. Well, we were completely surprised after the 
Breakthrough provisions were passed that we got so many 
applications, all right, and so it has been extremely 
successful in getting designations. We are only supposed to 
designate drugs that preliminary data, their early data they 
develop in the clinic shows it may be a game changer in the 
disease. It may change the disease; it isn't proven yet.
    I can get back to you with the actual numbers, but we have 
designated hundreds of these to our surprise--we thought it 
would only be a handful--and we have approved many. And so this 
is great news for patients, because many times when we approve 
these they actually are a game changer for that disease.
    Ms. Matsui. OK. That is wonderful. You testified that 
surrogate endpoints have been the basis for 60 percent of rare 
disease approvals. Can you explain surrogate endpoints in 
laymen's terms and why they are important for rare disease 
approvals?
    Dr. Woodcock. Surrogate endpoints are something other than 
how a patient feels or functions or how long they live. So that 
is our gold standard for approval, it makes you feel better or 
makes you function better or it makes you live longer. But 
often diseases take a really long time, OK, to have their 
manifestations. And say for diseases where you are missing an 
enzyme--that is many rare diseases. So you are missing an 
enzyme and you start accumulating that substance inside your 
body instead of eliminating it.
    Ms. Matsui. Right.
    Dr. Woodcock. And we can give back these enzymes now, so 
sometimes we have accepted the fact that in vital organs that 
material goes away, all right. Well, that has to be really good 
news. It is not a hundred percent sure that doing that will 
reverse the symptoms of the disease, but it is pretty 
plausible, right? So often we give an accelerated approval like 
we were talking about saying, OK, we will get it on the market. 
All the patients can start taking this because is it removing 
this stuff from the body, but we want you to show with a 
registry or other that actually they are feeling better 
eventually, to make sure that is the truth.
    Ms. Matsui. OK. Thank you very much, and I have gone past 
my time and I yield back.
    Mr. Guthrie. Thank you. The time has expired, and we 
recognize Mr. Bilirakis for 5 minutes for questions.
    Mr. Bilirakis. Thank you so much. I appreciate it, Mr. 
Chairman. And thank you, Dr. Woodcock, for coming today again.
    Recently the FDA issued a request for comment on a proposed 
Office of Patient Affairs. Can you tell us what the goal of 
this office is, how it fits into the agency with its current 
patient related programs, and how this office would benefit 
patients?
    Dr. Woodcock. The thought is that many patients don't 
understand the structure of FDA. FDA has long been divided into 
Centers, and if you are kind of inside Washington, you know you 
call the Biologic Center and you call the Drug Center. But what 
do you do if you don't know even who to call, right. So the 
thought is for medical products, not for foods or whatever, but 
for medical products, if people have questions about medical 
products there ought to be a little bit of a front-facing, 
patient-facing unit that can help people figure out who to ask 
the question. And so that is, I think, a lot of the rationale 
behind it.
    Mr. Bilirakis. All right, thank you. Dr. Woodcock, in the 
21st Century Cures Act we were able to pass reform language to 
modernize the Office of Combination Products. As you know, 
combination products are products on the market that have 
elements of a medical device and a drug, like inhalers and 
insulin injectors. Many patients need and rely on combination 
products, as you know.
    While we worked on the 21st Century Cures, I asked FDA 
about innovation in the drug and device space as more and more 
innovative products may be combination products. At the time 
there were complaints from innovators about the slow and 
burdensome FDA process for approving combination products. One 
of your colleagues at FDA stated in an hearing, ``That is a 
place that does require probably further discussion and whether 
or not there are changes to be thought about to make that 
intersection work better than it currently does.''
    Can you update us on what the FDA is doing on the drug side 
to implement the Cures language for combination products and 
what was agreed to in the user fee agreement?
    Dr. Woodcock. Certainly. Well, what we are doing, the Cures 
product calls for work on this and the user fee program, the 
drug user fee program, actually provides resources for review 
of the device portion, OK, so that has been agreed to. But in 
advance of that we have set up a combination product council at 
the agency. We have mapped the different processes. We have 
revised them to make them more efficient. We are tracking them. 
We have standard forms and so forth, and I think everyone 
agrees that that is all going much better now.
    So even in advance of implementing these we have gotten 
sort of the basics down about how to do these reviews more 
effectively given that we agree with you, this is the future of 
products. But the PDUFA program proposes that more resources be 
given to the Device Center to conduct these reviews of drug 
related, drug-led combination products of which many of these 
are.
    Mr. Bilirakis. OK, very good. I yield back, Mr. Chairman. 
Thank you.
    Mr. Guthrie. The gentleman yields back, and Ms. Eshoo is 
recognized for 5 minutes for questions.
    Ms. Eshoo. Thank you, Mr. Chairman. Welcome, Dr. Woodcock.
    Dr. Woodcock. Thank you.
    Ms. Eshoo. It is always good to see you. Mr. Long is not 
here, but I wanted to say for the record that in FDASIA when we 
built that and passed it, I had language in that that required 
neonatologists being hired, and that was back in 2012. So I 
will talk to him later. I will be happy to work with him, but I 
think that that is important to set down for the record.
    The PDUFA was enacted in 1992. I was running for Congress 
when that was put into place. And at that time drug review 
times were lagging and the FDA simply really couldn't keep up 
with the flood of new drug applications. So through these user 
fees paid by applicants it has given the FDA the resources it 
needed to hire and support more staff very specifically to move 
the applications forward.
    I think the program overall has been successful at reducing 
review time backlogs, and even though the President criticized 
the FDA during his joint address to the Congress for, ``having 
a slow and burdensome approval process,'' I think the facts 
really dispute that claim. And we are always looking to improve 
it, but it has been instrumental in promoting the improvements 
we have seen over the past 25 years.
    Now I want to talk about two bills that I authored. I am 
very proud of them. One the BPCA, the Best Pharmaceuticals for 
Children Act; and the other, PREA, the Pediatric Research 
Equity Act. Both of these programs were permanently 
reauthorized in 2012, but I think today we need some 
improvements. We know that children are not just small adults; 
that drugs work differently in them than in adults and they 
have to be studied specifically for their use. That is why I 
authored both of these pieces of legislation. I think they have 
a track record of success, because more than 664 drug labels 
have been revised with important pediatric information as a 
result of the two bills.
    So my question to you, Dr. Woodcock, is what is the 
implication of the orphan drug exemption in PREA on children's 
health? Are there examples of orphan drugs that would have 
benefited from a pediatric study but were not studied as a 
result of the orphan drug exemption in PREA?
    Dr. Woodcock. I have to get back to you on specifics, are 
there any. In general, the orphan diseases, the rare diseases 
are sort of throughout life. Many of them start in childhood 
and so children are usually studied.
    So much of the pediatric drug development problems were the 
fact that drugs were studied for adult diseases and there would 
be a few children who had them, relatively speaking, and they 
weren't ever studied, right, and it was used off-label in them, 
but in many of the rare diseases that rare disease starts in 
childhood and continues through.
    But there may be some instances, and we can get back to you 
about where the rare disease predominates in adults. There are 
only a few children, and perhaps then the exemption means that 
those children may not be studied, but in talking to the rare 
disease and the orphan staff and the pediatric staff they don't 
believe this is a large problem.
     Ms. Eshoo. Well, orphan drugs are, as you know they are 
currently exempt from PREA's----
    Dr. Woodcock. Yes.
    Ms. Eshoo [continuing]. Pediatric study requirements and 
that is why I am asking about it. Before the BPCA and PREA, the 
vast majority of drugs, more than 80 percent used in children 
were used off-label and without data on their safety or 
efficacy, and today that number has been reduced to 
approximately 50 percent, but that is still a lot. That is 
still a lot.
    Why, if FDA has the authority to issue civil monetary 
penalties for other violations of the Food, Drug, and Cosmetic 
Act, including violations of post-marketing requirements, do 
you think that the FDA should be prohibited from using that 
authority to ensure compliance with PREA post-marketing 
requirements?
    Dr. Woodcock. That is a legal question and we would be 
happy to work with you and get back to you on that.
    Ms. Eshoo. But do you have any thoughts on it? You deal 
with legal all the time.
    Dr. Woodcock. I do.
    Ms. Eshoo. You live within a legal framework.
    Dr. Woodcock. That is correct. The civil money penalties 
provisions and those provisions are apparently rather difficult 
to operate and implement, but so I would prefer getting back to 
you with the agencies.
    Ms. Eshoo. Sure. That is fine. Thank you very much.
    Thank you, Mr. Chairman.
    Mr. Guthrie. Thank you. The lady yields back, and I now 
recognize Mrs. Blackburn for 5 minutes for asking questions.
    Mrs. Blackburn. Thank you, Mr. Chairman.
    Dr. Woodcock, you were so patient to come to us regularly, 
and we do appreciate it because we are so interested in making 
certain that things that are supposed to be done are tended to.
    As Chairman Upton mentioned, 21st Century Cures, the 
implementation there, of course the Children Count Act which I 
had had that component, that is something that we are going to 
watch very closely and so we do appreciate the updates. We know 
it takes a lot of time to come up here, but we are very 
appreciative. I just want to quickly look at the abuse 
deterrent opioids and the components that are there. March 
2016, you did the draft guidance. When is there going to be the 
final guidance on that? What is the expectation?
    And then I want to know, I know we have touched around the 
edges on this, but talk a little bit about the actions that can 
and should be taken from you all to advance the abuse deterrent 
opioids and to get these into the marketplace, just a little 
bit there. And that is really my only two questions.
    Dr. Woodcock. Certainly. Well, as far as the guidance, it 
is very difficult ever to give a firm date certain when a final 
is going to come out.
    Mrs. Blackburn. Just an expectation or timeline.
    Dr. Woodcock. Well, let me just assure you that we are 
putting great effort into this, because really what we need to 
do, we think, is incentivize innovator development of various 
abuse deterrent formulations. The current ones, as we have 
already discussed, are kind of version 1.0 and surely we can do 
better, right. And so there has to be probably some incentives 
there.
    And then generics, we need a pathway so that the generics 
understand what they would have to do to show that they source 
exactly the same as the innovator, because uptake of these 
abuse deterrent formulations is lower because there are a lot 
of old opioids on the market that are very inexpensive that are 
not abuse deterrent.
    And that is often for health systems the preferred opioid 
to use to save money, so we need a progression of incentives 
and also a clear pathway. But the innovation needs to go from 
the innovators, the people who are out there trying to figure 
out better ways to deter abuse.
    Mrs. Blackburn. Right, but are we talking 6 months, a year? 
I mean, when do you think there will be a final decision----
    Dr. Woodcock. A final guidance for the generic?
    Mrs. Blackburn. Yes.
    Dr. Woodcock. I would hope within 6 months, I certainly 
would.
    Mrs. Blackburn. That is great. And then if you will speak 
just a little bit toward what further the FDA can do to spur 
the abuse deterrent opioids.
    Dr. Woodcock. Sure. There are many things we are trying to 
do, one of them though is trying to incentivize development of 
drugs, new drugs that don't have these abuse liabilities to 
treat pain, and we have approved a number of them. They are 
often for specific conditions.
    For example, we approved one for neuropathic pain and that 
is now being used by the neurologist, those drugs, instead of 
opioids because opioids aren't very good for neuropathic pain. 
So that cuts out one category of people who are getting these 
opioids.
    So we want to stimulate and we have been working on this 
for years with the outside world, scientific world, trying to 
stimulate the development of drugs that aren't opioids that 
don't have these abuse liabilities, because people are going to 
continue prescribing opioids for people in pain unless they 
have something else to offer. So also we have workshops and we 
work on abuse deterrent formulations to try and stimulate and 
work with innovators on new ways to deter abuse.
    Mr. Griffith. The gentlelady yields back. Mr. Butterfield 
is recognized for 5 minutes for questions.
    Mr. Butterfield. Thank you very much, Mr. Chairman.
    Let me just begin by thanking you and Dr. Woodcock, for 
coming back. You have been at that table many times and thank 
you so very much. Chairman Burgess, who is not here today, but 
I want to thank him for holding this hearing on the 
Prescription Drug User Fee Agreement reauthorization.
    Since I came to Congress some 12 years ago back in '04, 
Congress has come together under the leadership of both 
Democrats and Republicans to pass this important bipartisan 
legislation. Just last year we passed the 21st Century Cures 
Act that this committee drafted and passed unanimously to help 
boost the resources of the Food and Drug Administration and 
encourage the development of new treatments.
    For my constituents in North Carolina, developing new 
treatments can literally make the difference between life and 
death. Health outcomes for many in the communities that I 
represent are deeply concerning. Many of my constituents are 
African American citizens. By most measurable health 
statistics, outcomes for African Americans lag far behind. 
Supporting the reauthorization of PDUFA is important to finding 
new treatments to help reduce health disparities for my 
constituents and indeed Americans all across the country.
    Through additional resources made possible by PDUFA V, the 
FDA has been able to work with industry to make available new 
treatments for rare diseases through the Breakthrough Therapy 
Program. Through November of last year, FDA has granted, I am 
told, 165 breakthrough therapy requests. This includes 
treatment in many areas that disproportionately impact my 
constituents and African Americans throughout the country.
    Breakthrough designations have been granted for diseases 
like HIV and hepatitis C, and colorectal cancer, all of which 
impact minorities at high rates. PDUFA VI has the potential to 
make advancements in areas from breakthrough therapies and 
real-world evidence to clinical trials and biomarkers. The 
additional resources made possible through the proposed new fee 
structure can help FDA build the workforce needed to complete 
these new tasks.
    However, this administration's executive actions and 
proposed budget do not seem to understand the importance of 
FDA's mission to help patients and improve public health. The 
impact of a hiring freeze on the FDA implemented by the Trump 
administration is still unclear. Also the administration's 
budget proposal fails to understand the good-faith effort that 
has been put forth by the FDA and by industry and patient 
advocacy groups all working together. Now is the time to come 
together to support the FDA. Our constituents are counting on 
us, my colleagues, to work together in this space.
    Dr. Woodcock, I am excited by the innovations occurring in 
cancer drug development as cancer drugs are now being developed 
by molecular target. By identifying the drivers of the cancers, 
these new molecularly targeted drugs are achieving great new 
strides in treatment and providing greater health to cancer 
patients. These targeted drugs are often effective for many 
types of cancers.
    Question, are innovative new cancer treatments for adults 
also tested for children with the same targets as adult 
cancers?
    Dr. Woodcock. Not generally. The paradigm is changing and 
typically over time treatments for cancer as well as other 
disorders have been according to disease. So in cancer it is 
what we call histology, which basically means the organ that 
the cancer originated in. That is why we call it colon cancer 
or we call it whatever cancer, lung cancer, right.
    But these molecular alterations may go across diseases and 
it may be only a small subset of each of these cancers are 
driven by the same molecular alteration. That isn't something 
that has really been looked at very closely in children. It may 
be that there are rare mutations in children that are the 
similar as the mutation in adult for these molecular targeted 
therapies.
    Mr. Butterfield. OK. Also my colleague Representative 
McCaul of Texas and I introduced the RACE for Children Act, 
H.R. 1231, to promote the discovery of new cures for children 
with cancer. First, the RACE for Children Act would provide 
that a drug company will provide a pediatric study plan of a 
drug pursuant to the Pediatric Research Equity Act if the drug 
is, ``intended for the treatment of an adult cancer and is 
directed at a molecular target considered to be germane to the 
growth and progression of such pediatric cancer.''
    Do you believe this provision would create greater access 
to novel cancer drugs for pediatric cancer research?
    Dr. Woodcock. I am not able to comment on that at this 
time, but we would be happy to work with you on this.
    Mr. Butterfield. All right. We are deep into this and we 
would like all the help we can get. Secondly, the RACE for 
Children Act would end the--I am over, yes. I yield back.
    Mr. Guthrie. I yield back. Thank you for yielding back. I 
see no questions on the majority side. Mr. Sarbanes, you are 
recognized for 5 minutes for questions.
    Mr. Sarbanes. Thank you, Mr. Chairman.
    Thank you, Dr. Woodcock, for joining us. I have been here 
10 years, I think on four or five different committees. You are 
my all-time favorite witness. I just want you to know that. 
Because you are so professional in your presentations, so 
knowledgeable, and you play things straight, so I appreciate 
your being here.
    I am fascinated by this idea of including, incorporating 
real-world evidence in regulatory decision making. I mean the 
implications of it are kind of humorous because it suggests 
that up until now there hasn't been real-world evidence in the 
process, but I certainly understand what it is meant to convey.
    And I was wondering if you would just talk a little bit 
about that topic. And obviously the agency is going to have to 
come up with, and I know you are in the process of doing this, 
a kind of formal process for identifying what qualifies as 
real-world evidence and then how it gets gathered and then how 
it gets translated back to the agency, how much weight is given 
to it as part of the overall analysis that is done by the staff 
there at the FDA. So if you could maybe just talk about that a 
little bit more that would be helpful.
    Dr. Woodcock. Certainly. Well, FDA runs actually one of the 
largest real-world evidence gathering operations that is around 
in the health area, which is our Sentinel System, which is for 
drug safety and was mandated by Congress. And there we have 193 
million different people's claims data that we can access, all 
right, anonymously, and we use that for drug safety analysis.
    And the Congress told us that that should be used first 
rather than requiring companies perhaps to do specific 
observational studies. And recently, as we have 
institutionalized this system there are four programs where we 
are able to do something in Sentinel and not require additional 
outside studies, but that is safety.
    Now on the effectiveness side, obviously you would only 
collect real-world data if the drug were on the market, OK, 
because before a drug gets on the market data is collected into 
clinical trials, it is not just collected into doctor's 
offices. So that would be after a drug is marketed can we 
collect patient experience data to perhaps broaden the 
indication or add new indications or whatever.
    Mr. Sarbanes. Can you comment on how sort of off-label use 
relates to that?
    Dr. Woodcock. Well, it does relate to it, because often, 
for example, let's take these oncology drugs and these targeted 
drugs. So they target a specific target. We may approve it for 
a number of tumors, but then there may be somebody who comes in 
and they have a rare tumor or a tumor that this is an unusual 
type and they have that mutation. So the physician may treat 
them with the targeted agent and that would be considered off-
label use although it is completely rational, right.
    So what we are working with a large number of outside 
parties who are gathering this information up in different ways 
and then they want to collect that experience of the patients, 
those rare patients, and then perhaps if they responded and we 
can document that then maybe we can add that to the label and 
say if you have a rare patient like this come in they should be 
treated with this targeted therapy too. So that is an example.
    There also are registries, and some people consider those 
real-world evidence and some don't. But we are trying to put 
registries together, get that registry information, make sure 
it is----
    Mr. Sarbanes. Just on that point again intrigued me. What 
would make certain people consider a registry real-world 
evidence and other people not consider it real-world evidence?
    Dr. Woodcock. Yes. Well, some people are sort of purists 
and they consider real-world evidence only collected like in 
the course of ordinary medical care and of stock, OK. Other 
people consider it evidence that is collected during the course 
of treatment even if you add a few bells and whistles. So we 
really don't care. This is evidence outside of standard 
clinical trials, so let's figure out for all of it what can we 
do to gather more information about performance of drugs 
outside of your traditional clinical trial.
    Mr. Sarbanes. Would you imagine that at the end of this 
process adding this to your portfolio, if you want to call it 
that, that there would be maybe some kind of advisory council 
or group that the FDA would bring into the process of 
identifying real-world evidence? I mean, what kind of 
structures do you think we might see, or is it premature to----
    Dr. Woodcock. I think what you would see is a series of 
policy sort of guidances or pronouncements by the FDA as we are 
able to broaden our uses of and examples of how we have used 
it. And in some of those cases we may take it to a specific 
advisory committee, say we think we should add these, say, 
tumors to the label because here is the real-world experience 
and it looks like these people respond and they would never get 
in a clinical trial because they are rare or whatever.
    So that I think is the kind of accumulating information. We 
can't just have people sort of think great thoughts absent 
examples of what can be done.
    Mr. Sarbanes. Right, thanks very much. I yield back.
    Mr. Guthrie. Yes, thanks, time has expired. And seeing no 
other members here to ask questions--well, thank you, Dr. 
Woodcock, for being here. I concur it is always great to have 
you here and you always do a good job. I appreciate it.
    Dr. Woodcock. Thank you.
    Mr. Guthrie. We will now transition to our second panel.
    Thank you. We want to thank all of the witnesses for being 
here today and taking the time to testify before the 
subcommittee. As a reminder, each witness will have the 
opportunity to give an opening statement followed by a round of 
questions for members.
    Our second panel of witnesses includes Mr. Jeff Allen, 
President and CEO, Friends of Cancer Research; Ms. Kay 
Holcombe, Senior Vice President of Science Policy, 
Biotechnology Industry Organization; and Dr. Anne Pritchett, 
Vice President of Policy and Research, Pharmaceutical Research 
and Manufacturers of America.
    We appreciate you all being here, and we will begin the 
panel with Mr. Allen, and you are now recognized for 5 minutes 
for an opening statement.

 STATEMENTS OF JEFF ALLEN, PHD, PRESIDENT AND CEO, FRIENDS OF 
CANCER RESEARCH; KAY HOLCOMBE, SENIOR VICE PRESIDENT OF SCIENCE 
    POLICY, BIOTECHNOLOGY INDUSTRY ORGANIZATION; AND, ANNE 
    PRITCHETT, PHD, VICE PRESIDENT OF POLICY AND RESEARCH, 
      PHARMACEUTICAL RESEARCH AND MANUFACTURERS OF AMERICA

                    STATEMENT OF JEFF ALLEN

    Mr. Allen. Good morning, Vice Chairman Guthrie, Ranking 
Member Green, and members of the subcommittee. It is an honor 
to be here today to provide the perspective of Friends of 
Cancer Research. The current pace of scientific discovery 
represents an unparalleled opportunity to improve human health. 
The critical component to this is an FDA that is highly 
responsive to public health needs and able to evolve with 
cutting edge science.
    Prior to the initial user fee authorization in 1992, 
patients in other parts of the world were gaining access to new 
medicines more readily than Americans with only about ten 
percent of new treatments reaching U.S. patients first. Today 
that paradigm has been reversed. Funds through the PDUFA 
mechanism have allowed the FDA to make the review process more 
predictable, efficient, and accessible. In fact, our data 
indicates that for new cancer drugs approved by both the FDA 
and the European counterpart, 97 percent were available in the 
United States first. Furthermore, the FDA approved them on 
average nearly 6 months faster.
    This sixth authorization of the user fee agreement comes at 
a critical time for the agency and for patients. It will 
support numerous initiatives, a couple of which I would like to 
mention today. PDUFA VI advances the role of patients and their 
experiences. PDUFA V, in the 21st Century Cures Act, provided 
important steps to incorporate the patient perspective in drug 
development.
    The PDUFA VI agreement will further assist organizations, 
researchers, in collecting patient experience data, create 
channels for providing such data to the FDA, and it will help 
develop methods for analyzing it. PDUFA VI supports the 
Breakthrough Therapy Designation. This designation to expedite 
the development of highly promising new drugs has been rapidly 
implemented. To date, 170 designations have been granted 
leading to 79 approvals.
    Upon examining the pre-market development time of new 
cancer drugs, we found that it was over 2 years shorter for 
breakthrough designated drugs than for those without the 
designation. PDUFA VI will provide resources necessary for 
continued success. PDUFA VI promotes qualification and use of 
drug development tools that can help identify patients for 
which a drug is likely to work, offer early indicators of 
toxicity to help improve patient safety, and in some cases 
indicate that a drug will have long term benefit. The agreement 
will help create a process in which new tools can be accurately 
assessed and ensure their appropriate use.
    PDUFA VI enhances the use of real-world evidence. Once a 
drug reaches real-world populations there may be unanswered 
questions about its effects, particularly in patients not 
represented in clinical trials. The collection of real-world 
evidence allows for a greater understanding of drugs currently 
in use. By allocating user fee funding toward these programs, 
the FDA and other stakeholders will be able to identify 
limitations and explore different opportunities for the use of 
data collected from post-market experience.
    To that end, FDA approved labels should be a vitally 
important source of information to guide the safe and effective 
use of prescription drugs. However, in some instances, such as 
drugs that have gone off patent, labels may have become 
outdated and no longer reflect optimal use. This is illustrated 
by extensive discrepancies between FDA approved labels and 
widely accepted practice guidelines.
    The FDA could play a greater role in evaluating the 
relevant data to update the product label as appropriate and 
adjudicate between the uses backed by strong evidence and those 
backed by less persuasive information. This would establish a 
high standard for post-market evidence and make the product 
labels more useful. For the programs of this proposed user fee 
agreement to succeed, the full budget of the FDA must be robust 
and the capacity of which the agency can maintain and hire the 
best scientific minds must be unencumbered.
    Despite opportunities afforded by PDUFA VI, the passage of 
the 21st Century Cures Act, and the enormous contributions of 
this committee, I would be remiss to state that the FDA and the 
people who rely on it are optimally positioned at present. The 
proposed cuts to biomedical research will put the brakes on the 
engines of discovery and jeopardize the development of new 
medicines for patients. Holding the FDA budget authority at 
stagnant levels prevents progress on agency functions that are 
not covered by user fees.
    Among the challenges that have been exacerbated in the 
current environment is the implementation of the FDA Oncology 
Center for Excellence, an innovative approach and a new model 
for collaboration. The potential of a detrimental budget and 
the presence of the current hiring freeze put the OCE and so 
many other transformational opportunities at significant risk. 
For the people who currently depend on safe and effective 
medicines, for those who are holding strong for the 
breakthroughs to come, and for every future patient, there 
isn't time to waste. We urge Congress to swiftly pass the sixth 
reauthorization of PDUFA. Thank you.
    [The prepared statement of Jeff Allen follows:]
    
    
    
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    

    
    
    Mr. Guthrie. Thank you. Thank you for your testimony, and I 
now recognize Ms. Holcombe for 5 minutes for your opening 
statement.

                   STATEMENT OF KAY HOLCOMBE

    Ms. Holcombe. Mr. Vice Chairman, Ranking Member Green, and 
members of the subcommittee, Bio appreciates the opportunity to 
speak with you today about the sixth reauthorization of the 
Prescription Drug User Fee act. Let me begin by stating 
unequivocally that BIO strongly supports this PDUFA VI user fee 
agreement and its timely authorization.
    Nearly 25 years ago, completing action begun by this 
committee, Congress passed the first PDUFA after agreeing with 
FDA and the biopharmaceutical industry that providing 
additional staff funded by user fees would help FDA review 
applications more quickly. You were shown to be spectacularly 
right. Today in this final year of PDUFA V, FDA is the most 
efficient drug regulatory agency in the world. American 
patients are the beneficiaries.
    The success of PDUFA in bringing down the time of new drug 
review has led over the years to substantial expansion of the 
program in terms of the numbers and kinds of commitments FDA 
has made annually from increasing its efficiency in 
communicating with drug developers to enhancing its post-market 
surveillance and monitoring of drugs throughout their life 
cycles to applying best review practices across all review 
divisions to enhancing processes to review and approve 
therapies for rare diseases to executing systematic approaches 
to measuring the benefit-risk ratio of potential drugs and to 
seeking and incorporating patient perspectives in that 
assessment.
    What has worked relative to review of applications has also 
made a difference in drug development. In PDUFA VI that is 
taken to a new level. FDA formal review time is the mere tip of 
the iceberg of time patients wait for new drugs. Review 
timelines are significant not only because they are short, but 
also because they are predictable and predictability is 
critical for companies making investment decisions. It would be 
highly desirable if the same sort of efficiency and 
predictability were achieved throughout drug development.
    PDUFA VI builds on the proven premise that greater and more 
productive interaction between drug developers and FDA works. 
It leads to better outcomes and to more efficient development 
programs. A greater focus on drug development improvements in 
PDUFA VI is not at the sacrifice of what has been achieved for 
review times, 8 months for priority applications and 12 months 
for standard.
    The PDUFA VI goals, including expanding expertise in 
diverse statistical methods, piloting innovative clinical trial 
designs and computer modeling and simulation, use of biomarkers 
as surrogate endpoints, and more frequent and appropriate use 
of real-world evidence or big data will transform drug 
development. All of these goals which attempt to bring 21st 
century science to the fore in this agreement will augment, not 
completely replace, tried and true methods of data collection. 
In the end, these new approaches will add to the old to make 
drug development more efficient while not compromising the 
statutory gold standard of substantial evidence of safety and 
effectiveness.
    PDUFA VI also will take patient focused drug development to 
new levels. The message of these commitments is that the 
patient voice truly matters, in the beginning when early 
studies show a promising treatment and at the end when FDA is 
making its decision about a product's benefit and risk. PDUFA 
VI will bring the patient voice to the forefront, changing it 
from a voice with a compelling story to a voice that provides 
evidence, verifiable, valid evidence that is appropriate for 
the drug label.
    Finally, Mr. Chairman, I want to emphasize how crucial it 
is that FDA has the ability to hire and retain the people it 
needs to carry out its PDUFA goals and to do that without 
jeopardizing the other significant parts of its public health 
mission. PDUFA is a carefully negotiated agreement that takes 
account of input from all stakeholders including FDA, industry, 
patient and consumer groups, and others. The key questions on 
the table are what needs to be changed or enhanced and what is 
the actual verifiable cost of achieving those goals?
    The majority of costs paid by user fees are for personnel. 
This agreement is carefully crafted to ensure that FDA can 
bring those people on board who are needed to meet the goals, 
employees who costs are paid by user fees. In PDUFA VI, the 
annual hiring goals are included in the agreement. This allows 
the public a line of sight into whether goals may fall by the 
wayside as a result of an inability to hire.
    Mr. Guthrie. Thank you. You need to summarize or is that 
your conclusion?
    Ms. Holcombe. In conclusion, I want to reiterate BIO's 
strong support for this agreement. It satisfies our basic goals 
of financial transparency, long-term program viability, hiring 
and retention improvements to ensure stability and achieve the 
agreed-upon goals. The vision of PDUFA VI is the vision of 21st 
Century Cures. Put patient needs----
    Mr. Guthrie. Thank you.
    Ms. Holcombe [continuing]. For access to new medicines 
first.
    [The prepared statement of Kay Holcombe follows:]
    
    
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    Mr. Guthrie. Thank you very much. Now Dr. Pritchett, you 
are recognized for 5 minutes for opening statement.

                  STATEMENT OF ANNE PRITCHETT

    Ms. Pritchett. Good morning, Vice Chairman Guthrie, Ranking 
Member Green, and members of the subcommittee. I am please to 
appear before you to provide PhRMA's perspective on the timely 
reauthorization of PDUFA. PhRMA, as you know, represents the 
country's leading innovative biopharmaceutical research 
companies which are devoted to developing new medicines that 
enable patients to live longer, healthier, and more productive 
lives. We appreciate the opportunity to testify and share our 
views on PDUFA VI.
    For over 2 decades, PDUFA has helped to bring innovative 
medicines to patients by providing greater clarity and 
predictability in the science-based drug review process. Today, 
I just want to briefly share PhRMA's perspective on the PDUFA 
program and key elements of the PDUFA VI agreement.
    First, I just want to note that we view user fees as an 
important mechanism to support the critical work of the FDA and 
human drug review process, and note as a result of this program 
over 1,500 new drugs and biologics have been approved since 
1992. The number of new medicines being approved on their first 
review cycle is at a historic high, and as we heard earlier, 
the review times have dramatically dropped by more than half 
since the 1990s as a result of this agreement.
    As a result of PDUFA, the U.S. leads the world in the 
introduction of new medicines and is a global leader in 
biopharmaceutical R&D. I would note at a time when other 
countries are seeking to attract and grow their own 
biopharmaceutical presence due to its far-reaching economic 
impacts, it is more critical than ever that we ensure that the 
U.S. retains its competitive advantages which includes a 
science-based gold standard regulatory system in the FDA, one 
that facilitates the ability of our industry to harness the 
latest scientific and technological advances and to translate 
those into new treatments and cures for patients.
    I would note that PDUFA VI is a result of extensive 
negotiations between the FDA and the innovative 
biopharmaceutical industry and it really includes unprecedented 
input across all stakeholders. Patients and patient advocates 
in particular played an important role by providing input on 
potential PDUFA VI goals through formal stakeholder meetings 
with the agency as well as frequent interactions with industry, 
and that feedback is reflected in several of the provisions. I 
would note failure to reauthorize PDUFA in a timely manner 
would obviously negatively impact the FDA's ability to carry 
out its important role in fostering the introduction of new 
medicines to patients.
    And I want to briefly touch on some key elements of the 
agreement. First, obviously PDUFA VI facilitates science-based 
integration of the patient perspective into the development and 
regulatory review of innovative medicines. Over the course of 
PDUFA VI, FDA will be holding a number of workshops to gather 
stakeholder input to inform a range of guidances that are 
focused on how do we better incorporate the patient element 
into all stages of drug development and review.
    Second, PDUFA VI enhances the FDA's access to the tools, 
processes, and expertise necessary to ensure that the FDA is 
ready for the 21st century, the latest scientific advances in 
drug development and regulation. Specifically, as mentioned by 
other witnesses, there will be an increase in the FDA's 
capacity to qualify biomarkers. The agreement advances the use 
of real-world evidence building on 21st Century Cures 
facilitates the appropriate use of innovative clinical trial 
approaches.
    Third, PDUFA VI will accelerate the development and 
availability of new medicines to patients while providing the 
scientific and regulatory predictability that will foster a 
continued biopharmaceutical innovation. PDUFA VI not only 
builds upon the highly successful new molecular entity review 
program, which has led to shorter review times and an increase 
in first cycle reviews, but it builds upon it by incorporating 
additional metrics.
    Fourth, PDUFA ensures that the FDA will be able to hire and 
maintain a strong scientific medical and regulatory workforce 
to advance its public health mission. For the first time, PDUFA 
VI includes detailed hiring goals and includes dedicated 
resources for the recruitment and retention of a world-class 
scientific workforce. And I would note it also includes 
independent outside consultants to help facilitate the agency 
in developing a comprehensive hiring strategy.
    And finally, the agreement builds on key provisions of the 
21st Century Cures Act by further advancing real-world 
evidence, incorporating that into a structured benefit-risk 
framework, patient-focused drug development, biomarker 
qualification, as well as includes a number of improvements to 
combination product review.
    I want to conclude by saying PhRMA and its member companies 
we are committed to working closely with the FDA, your 
committee, Congress, and all stakeholders to ensure the 
continued success of PDUFA in bringing safe and effective 
innovative medicines forward to address unmet medical needs for 
all patients. We believe that moving all of the UFA's forward 
in a timely manner is important to supporting the FDA's mission 
of protecting public health and promoting innovation, as well 
as critical to supporting our shared goals of fostering 
continued competition and innovation. Thank you for the 
opportunity to testify today.
    [The prepared statement of Anne Pritchett follows:]
    
    
    
   
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 Mr. Guthrie. Thank you all for your testimony, and we will 
now move into the question and answer portion for our second 
panel. And I will begin the questioning and recognize myself 
for 5 minutes.
    First, I would like to request unanimous consent for 
entering the following statements in the record: the Rare 
Disease Legislative Advocates, the RDLA blog, PDUFA RDLA, 
Congress Begins Process of Reauthorizing Prescription Drug User 
Fee Act; a letter from the Epilepsy Foundation, letter; number 
three, National Venture Capital Association blog post on PDUFA; 
and four pieces I am asking to enter into the record, National 
Organization for Rare Diseases and Friends of Cancer Research 
joint statement on PDUFA.
    Mr. Green. No objection.
    Mr. Guthrie. No objection, so ordered.
    [The information appears at the conclusion of the hearing.]
    Mr. Guthrie. So Mr. Allen, actually Mr. Sarbanes was 
talking about this earlier with Dr. Woodcock, and where I kind 
of wanted to look at about labeling. And after a drug is 
approved, more and more information is often learned about it. 
This can include new uses, more tolerable doses, et cetera. And 
for cancer drugs, can you talk about the disparity between the 
information in products labeling and how the drug is actually 
being prescribed and administered by oncologists?
    Mr. Allen. Sure. So typically a manufacturer would, if they 
are pursuing an additional indication for a drug, would take it 
and submit it through the supplemental new drug application at 
the FDA for that information to be evaluated. But in some 
instances like I mentioned, when a drug is off patent or 
perhaps even for a particularly rare population where a 
clinical trial is difficult or infeasible, or in some cases 
because the drug has been on the market for so long may be 
unethical, the label oftentimes doesn't reflect the practice 
and the use of that drug over time.
    And what we found by comparing the FDA labels to practice 
guidelines that are constructed by medical oncologists is that 
the uses that are recommended by expert oncologists are usually 
far beyond that of what is contained in the FDA label. So the 
question is, should the product label have a role in the agency 
which we trust to evaluate medicines for them to get on the 
market, should they have a more active role in looking at 
potential label modifications further down the life cycle of 
the drug to ensure it is supported by the highest quality 
evidence.
    Mr. Guthrie. Do you think FDA needs to clarify when and how 
companies can provide such information?
    Mr. Allen. In terms of when it can be supplied to them?
    Mr. Guthrie. Yes.
    Mr. Allen. I think it could----
    Mr. Guthrie. When it needs to be.
    Mr. Allen. The agency certainly does in terms of safety, 
but the same mechanisms aren't in place with regards to 
alternative uses. So one could imagine that perhaps it is worth 
having a longer discussion about the ability for over a certain 
period of time perhaps after the patent expires that there be 
some process for review of post-market evidence in order to 
make sure that the way the drug is being used is supported by 
the highest quality of evidence, so the people who are 
prescribing and using it are able to tell the difference 
between what is high quality and what is just an anecdotal use.
    Mr. Guthrie. OK. And I had another question, but I think 
you did answer it that do you believe FDA should play a more 
active role in updating product labeling, and you answered that 
actually when you answered the first question.
    Mr. Allen. Yes. I think it is worth a longer conversation 
because obviously there are resource implications. But given 
the oncology anyway there are highly qualified professional 
guidelines that might help the FDA conduct post-market analyses 
when it is appropriate to review a growing body of evidence.
    Mr. Guthrie. Right. Yes, that is something that we just 
need to work to make sure we can clarify that because I think 
Dr. Woodcock was sharing similar to that when she was talking 
to Mr. Sarbanes about, some oncologists has a different tumor 
that this actually has effect for and works for and would be 
logical to use, but we need to make sure that it can be done 
through the process.
    So thanks for your testimony, and actually I will yield 
back my extra minute and I will yield to Mr. Green, 5 minutes 
for questions.
    Mr. Green. Thank you, Mr. Chairman.
    Ms. Holcombe, current statute outlines a detailed process 
for reauthorization of the PDUFA. The FDA is charged not only 
with negotiating with the industry to develop recommendations, 
but also to solicit public input and hold public hearings and 
consult periodically with Congress and patients and consumer 
groups, among others. The recommendations that are a result of 
this process must also be available publicly for the public 
comment and ultimately required by statute to be transmitted to 
Congress by January 15th of this year. The process that led to 
the ultimate transmission of FDA PDUFA VI recommendations 
kicked off nearly 2 years ago in July of '15.
    Ms. Holcombe, can you further discuss industry's role in 
the reauthorization of PDUFA and particularly the timeline for 
these activities?
    Ms. Holcombe. So as you point out, Mr. Green, this process 
began in July of 2015 with a public meeting at which all 
stakeholders were provided an opportunity to testify, and 
industry took advantage of that opportunity and presented our 
views about the importance of PDUFA in general and about some 
specific enhancements to the program that we would be seeking 
in our negotiations with FDA. Those negotiations kicked off 
approximately 2 months later and lasted then for over 12 
additional months and were intensively focused on the 
calculation of what could be done and how much it would cost to 
do each one of those things.
    And both FDA and industry put ideas on the table, and those 
ideas were frequently, if not every single time, informed by 
the input of other meetings that were going on simultaneously 
with patients in the other groups that you mentioned, so it was 
a very long process and I would say mathematically and 
statistically a very precise process.
    Mr. Green. Well, since this is our sixth time on it, 
hopefully we learn something every time.
    Ms. Holcombe. Well, we are getting faster.
    Mr. Green. OK. The statute requires that a recommendation 
be transmitted to Congress no later than July 15th of '17, a 
deadline they met. Does the statute allow the FDA to transmit 
recommendations for reauthorization at an alternative date?
    Ms. Holcombe. Not that I am aware of.
    Mr. Green. OK. PDUFA expires on September 30th of '17. What 
would be the impact for your member companies if Congress did 
not pass the reauthorization of PDUFA before the September 30th 
deadline?
    Ms. Holcombe. I think we would describe the implications as 
titanic in nature. FDA would be required, if this were not 
reauthorized, to reduce its force by probably in the Drug 
Center alone about 5,000-plus individuals, and those are the 
people who review our applications. But even more importantly 
than the review of applications, which as we have all said 
today is merely the tip of the iceberg of our process of drug 
development, it would absolutely disable any process that FDA 
has for talking to us during drug development about how to be 
more successful in our program.
    Mr. Green. Do you support and your industry support PDUFA 
VI recommendations as transmitted to Congress?
    Ms. Holcombe. Yes, we do.
    Mr. Green. OK. You note in your testimony that the drug 
development process, the most time-intensive part of bringing a 
drug to market, it is my understanding that on average it takes 
between 10 to 12 years to develop a drug. Recognizing this, we 
included in the 21st Century Cures a revision that would have 
FDA host a public workshop and issue guidance on innovative 
trials and designs and approaches.
    Would you please explain further how innovative trial 
designs may help your member companies in bringing treatments 
to market quicker and, in addition, would you discuss how PDUFA 
VI builds off of the Cures' effort to support the use of 
innovative drug trial designs?
    Ms. Holcombe. Yes. So as my testimony pointed out great 
minds think alike, and we in the industry as well as FDA itself 
agreed a hundred percent with you in your identification in 
21st Century Cures of the importance of thinking of different 
ways to do clinical trials than the traditional way of 
randomized controlled trials.
    Often clinical trials have to enroll many, many people and 
they take a long time. And as Dr. Woodcock pointed out, they 
often have high dropout rates. Patients can't stay in them, and 
these cause drugs to fail and at great expense to companies 
that are developing them. So innovative ways of thinking, 
creative ways of thinking could we do trials differently and 
therefore make them shorter and smaller but still come out with 
the substantial evidence of safety and effectiveness that we 
all need to have and the answer to that is yes, we can.
    Mr. Green. OK. Mr. Chairman, I know my time has expired. 
And Mr. Allen, I would like to submit some more questions to 
you, but obviously FDA is working with you on the off-label 
usage that practitioners learn, and we need to be able to learn 
what they are learning so we can actually make those 
pharmaceuticals available and go back through the FDA process 
as brief as we could do to make sure those cures are there. So 
thank you, Mr. Chairman.
    Mr. Guthrie. Thank you. Thank you. The gentleman's time has 
expired. Dr. Bucshon, you are recognized for 5 minutes for 
questions.
    Mr. Bucshon. Thank you, Mr. Chairman. First of all, I mean, 
I also want to go on the record saying I have concerns about 
the budget proposal as it relates to research, the NIH and 
above. I don't think that is a partisan issue.
    The question I have is as we transition to new models to 
approve medicines we have been talking about that whether that 
is changes in clinical trials or other things, how do you see 
the legal environment evolving to allow this to happen? I will 
start with Dr. Pritchett. Because, I mean all of us are 
realists. I was a medical doctor before, as you transition to a 
new way to approve a product there is going to be people out 
there that are looking to throw a wrench into the gears by 
saying it didn't prove what it was supposed to prove and that 
is why my particular client has been hurt. And so I mean there 
are legal ramifications of trying to do this also, any 
thoughts?
    Ms. Pritchett. So I think as I understand your question, as 
we think about looking at innovative, new approaches to 
clinical trials, collection of real-world evidence and how do 
we apply this to drug development and then how do we ensure 
that we are using them in a robust way so that we are reducing 
any potential concerns related to liability, ensuring that we 
aren't approving medications without appropriate evidence----
    Mr. Bucshon. Essentially that is the question, because that 
is one of the things that drives up costs of drug approvals. 
Everybody has to look at those issues, but a percentage of the 
drug costs are because of these type of issues. My question 
would be basically is, I mean, yes, what are our thoughts about 
that? Do we need, I mean obviously we are working on tort 
reform in other areas. Any thoughts on that process as it 
relates to the drug product development?
    Ms. Pritchett. So I am not prepared to discuss that today. 
We would be happy to come back and have further discussions 
with you. I would note that as we look at the PDUFA process, 
part of the engagement by FDA in providing very clear guidances 
to industry is to help avert any potential concerns from a 
liability perspective, et cetera, but I think this is an 
important topic that we would welcome to have further 
discussion.
    Mr. Bucshon. OK, because I could see that the FDA and 
others very quickly retract their thoughts on these things as 
soon as we have some big class action lawsuit against the FDA 
and everybody else.
    Ms. Pritchett. I think that is a very important issue that 
you are raising and we would greatly appreciate coming back and 
having further discussion on that topic. I appreciate you 
raising it.
    Mr. Bucshon. OK, great, any other comments from the other 
panelists?
    Ms. Holcombe. I think one of the important things to 
recognize about PDUFA VI is that in some respects takes account 
of this type of concern by initiating under PDUFA VI pilot 
programs, where the agency and the industry are going to work 
together to pilot these various trial designs or model-informed 
drug development approaches and determine whether in fact with 
input from outside stakeholders, whether these kinds of 
designs, this kind of way of developing drugs is going to 
produce the sort of good evidence, solid evidence that we need 
to make sure this product is safe and effective when it goes on 
the market.
    Mr. Bucshon. OK, anything else? Well, anyone, for all of 
you, can anyone give us a sense of how they envision the FDA 
utilizing the authorities in 21st Century Cures Act in PDUFA 
VI, that the provisions involving the use of real-world, so-
called real-world evidence to support their decision making how 
we would envision that being incorporated?
    Ms. Holcombe. Well, I think as Dr. Woodcock said, FDA 
already uses real-world evidence in the determination, making 
determinations about potential safety signals of marketed 
drugs. So the question is in PDUFA VI, is it possible to use 
real-world evidence, i.e., patient experience with drugs in the 
marketplace from medical records or from your Apple watch? Is 
it possible to harness those data, to validate those data, and 
to use those data to understand more about how the drug is 
working, and would those data be helpful then in making a 
decision about perhaps broadening an indication for a drug that 
is very narrowly indicated or adding an indication, which goes 
to the point that Dr. Allen was making about how the drug label 
can become out of date when medical practice is ahead of what 
was known at the time the drug was produced.
    Mr. Bucshon. OK. I will just make a quick comment. That is 
why other issues we are working on like interoperability of 
electronic medical records is going to be really key to this 
type of thing. I think everyone would agree to that and I yield 
back.
    Mr. Guthrie. The gentleman yields back. Seeing no questions 
from this side, Ms. Brooks from Indiana is recognized for 5 
minutes for purpose of asking questions.
    Mrs. Brooks. Thank you, Mr. Chairman.
    Dr. Pritchett, PDUFA VI creates a significantly revised fee 
structure which replaces current levies on manufacturing 
facilities and on products. Can you explain this revised fee 
structure and how is it beneficial for all parties?
    Ms. Pritchett. I would actually yield to Kay who was 
directly involved in the negotiations and I wasn't, who I think 
would be better.
    Mrs. Brooks. I wondered about that after one of her 
previous answers, but I was suggested to you. So Ms. Holcombe, 
would you like to share with us?
    Ms. Holcombe. The reason for looking at a different way of 
collecting fees was to try to make sure that we had a system 
that was administratively as simple as it could be so that it 
was not so costly or so burdensome on either the FDA and 
companies. So the way fees used to be collected was they were 
divided one third among manufacturing facility fees, product 
fees, and application fees. There were two things wrong with 
that, at least two.
    One thing was that it placed equal emphasis in terms of 
percentage of dollars collected on all three components, 
including the application fee which is the least predictable 
source of revenue. There is very little perfect ability to 
predict the number of applications that are going to come into 
FDA on an annual basis. They have a lot of experience so they 
can give you a range, but if you collect 50 instead of 60 that 
makes a huge difference in the total revenue that you are 
collecting. So could we reduce the dependence on the 
application fee and increase the dependence on other fees?
    The second thing that was wrong was the manufacturing 
facility fee, which is a nightmare to calculate mostly because 
drugs aren't just manufactured like I make mine in my facility 
and you make yours in your facility. Lots of people make drugs 
in the same facility, so figuring out whose was where when and 
how often and so forth. So could we offload that fee, could we 
calculate the rest of the fee based on number of products?
    And so we calculated what would that mean if we did certain 
percentages of collection from that new fee and certain 
percentage from the application fee? And we developed, or FDA 
actually developed, not I personally, a tool that companies 
could use and they could plug into this tool how much money 
they had paid in fees in previous years and how much they would 
pay under some new sort of split of the fees.
    Mrs. Brooks. What is the tool referred to by the FDA?
    Ms. Holcombe. We called it a widget, OK.
    Mrs. Brooks. OK.
    Ms. Holcombe. Yes, my terminology, sorry. It was a tool 
that allowed you to manipulate the percentage based on, so the 
total fee collection, let's say, is $800 million. If you 
collected ten percent from applications and 90 percent from 
products, what would that mean for each company? How much would 
they pay?
    So they would plug in their own numbers, like how many 
applications did they think they would be submitting next year 
and how many products do they have on the market? And they 
figured out, bingo, up came this number; this is how much you 
pay. Well, then they could change that from 10/90 to 20/80. How 
much would you pay based on your number of products on the 
market and the number of applications you anticipate 
submitting, how much would you pay?
    And using that tool, we figured out collectively with all 
of our companies that the ratio that had the least negative 
impact on the most companies was a 20 percent application fee, 
80 percent program fee collection. And although a small number 
of companies on a percentage basis, out of all the long list of 
companies that pay fees, did see that their fees would go up 
slightly, the vast majority of companies saw that their fees 
actually would go down.
    How could that even be, right, but it was. I mean, math, it 
is just a wonderful science.
    Mrs. Brooks. And if those fees go down what happens?
    Ms. Holcombe. The total amount of money collected is still 
the same because it is spread out across all fee payers.
    Mrs. Brooks. OK, thank you. I am sorry my time is up, but 
thank you for explaining it.
    Ms. Holcombe. I am sorry I don't know the math involved in 
it.
    Mrs. Brooks. I yield back. OK, thank you.
    Mr. Guthrie. Thank you, and the gentlelady yields back. Mr. 
Bilirakis is recognized for 5 minutes for questions.
    Mr. Bilirakis. Thank you. Thank you, Mr. Chairman. I 
appreciate it very much.
    Ms. Holcombe, back in the 2000s it was recognized that 
there was a lack of good information on the safety and efficacy 
of drugs for the pediatric population. Can you talk about some 
of the incentives that came about to encourage more pediatric 
clinical studies?
    Ms. Holcombe. So the Best Pharmaceuticals for Children Act 
combined with the Pediatric Research Equity Act have been a 
very successful way to get more drugs studied in pediatric 
populations so that information can go on the drug label and 
pediatricians know how to dose the drugs for children. The 
incentive that has caused that to be so successful was the 
addition to whatever regulatory exclusivity the company might 
have on its product for adults of 6 months for doing these 
pediatric studies.
    And we believe at BIO that incentives such as this one can 
be very effective in increasing the number of products that are 
developed in areas for which there is high unmet medical need 
but very difficult populations or areas of interest, such as, 
for example, intractable antibacterial resistant conditions. 
These are tough and there is just no good way of doing it. So 
incentives can be very effective and they have been for 
pediatric studies.
    Mr. Bilirakis. What about the rare disease space? Again 
there are about 500 approved rare disease drugs, but 7,000 rare 
diseases affecting approximately 30 million Americans. They are 
taking medication off-label, and I know the stories because I 
hear from my constituents on a regular basis. They take the 
drugs off-label not knowing if their drugs are safe and 
effective for their conditions or if it is proper dosage--that 
is so important--and fighting with their insurance companies on 
coverage of these medications.
    Does it make sense to incentivize development for a 
targeted population when there are clearly defined needs?
    Ms. Holcombe. Yes.
    Mr. Bilirakis. Thank you. Last month my colleague and I, 
G.K. Butterfield, introduced the OPEN Act for the second time. 
Much like the BPCA, it creates an incentive to run more 
clinical trials in the rare disease space where 95 percent of 
diseases have no FDA approval treatments. This would bring more 
approved drugs to these patients.
    The OPEN Act has the potential to result in hundreds of new 
drugs and treatments for individuals with rare diseases. Only 
150 rare disease patient groups, over 150 at last count, I 
think it is more than that support this bill. The OPEN Act was 
part of the House 21st Century Cures Act, and while it fell out 
at the 11th hour, unfortunately, I am going to continue to push 
for this legislation. It is a priority for me. Do you have any 
comments on that? And of course I welcome cosponsors for this 
legislation as well.
    Ms. Holcombe. So it is clear that without the Orphan Drug 
Act we would not have 500 treatments for rare diseases. It is 
also a tragedy that we don't have 7,500. And again we believe 
incentives can work. We don't have an official position on your 
proposal, but definitely it merits more evaluation.
    Mr. Bilirakis. All right. Well, thank you very much. I 
yield back, Mr. Chairman.
    Mr. Guthrie. Thank you. The gentleman yields back, and 
seeing no other members wishing to ask questions I would like 
to thank all of our witnesses for being here today.
    And pursuant to committee rules I remind members that they 
have 10 business days to submit additional questions for the 
record, and I ask the witnesses submit their response within 10 
business days upon receipt of those questions.
    Without objection, the subcommittee is adjourned.
    [Whereupon, at 12:18 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]

             Prepared statement of Hon. Frank Pallone, Jr.

    Thank you, Mr. Chairman. I appreciate the opportunity today 
to discuss the reauthorization of the Prescription Drug User 
Fee Act. PDUFA has been incredibly successful at bringing 
reviews of new drug applications down by more than half, and 
providing patient access to treatments more quickly, and often 
before any other country.
    PDUFA has also encouraged innovation by bringing stability 
and predictability to the review of new drug applications. FDA 
has been able to hire the review staff and scientific and 
technical experts needed to keep pace with science and increase 
the efficiency of the review process. However, more work needs 
to be done and I am encouraged by how PDUFA VI builds off of 
the successes of this user fee program.
    I am therefore disappointed to see what can only be 
referred to as a disclaimer in the testimony today from FDA. 
While it is true that the reauthorization proposals were 
negotiated under a previous Administration, the goals of the 
PDUFA program and the drug approval process remain the same--a 
fully resourced and staffed FDA, and an efficient and timely 
drug review process that is keeping pace with the scientific 
and regulatory advancements in this field. It is my hope that 
the Administration would understand how carefully crafted the 
current agreement is, and recognize that the reauthorization 
process started nearly two years ago.
    The agreement before us today is the result of many 
negotiations with industry and stakeholders, consultations with 
patients and consumers, and solicitation of public input. The 
resulting recommendations were transmitted to Congress in 
meeting the January 15, 2017 statutory deadline. Transmitting 
new recommendations at this point would go against this 
requirement, and run the very real risk of PDUFA not being 
reauthorized before the program expires on September 30, 
endangering the review of innovative new drug treatments and 
threatening the jobs of thousands of FDA employees.
    I intend to continue to work with my colleagues on the 
Committee and across the Capitol, as well as industry, to 
ensure that we do not let this happen. This is a strong 
agreement, and one that deserves our support.
    Thank you.
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