[Senate Hearing 115-255]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 115-255

   FDA USER FEE AGREEMENTS: IMPROVING MEDICAL PRODUCT REGULATION AND 
                    INNOVATION FOR PATIENTS, PART I

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

                                HEARING

                                 OF THE

                    COMMITTEE ON HEALTH, EDUCATION,
                          LABOR, AND PENSIONS

                          UNITED STATES SENATE

                     ONE HUNDRED FIFTEENTH CONGRESS

                             FIRST SESSION

                                   ON

   EXAMINING FDA USER FEE AGREEMENTS, FOCUSING ON IMPROVING MEDICAL 
         PRODUCT REGULATION AND INNOVATION FOR PATIENTS, PART I

                               __________

                             MARCH 21, 2017

                               __________

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                                Pensions
                                
                                
                                
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          COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS

                  LAMAR ALEXANDER, Tennessee, Chairman

MICHAEL B. ENZI, Wyoming		PATTY MURRAY, Washington
RICHARD BURR, North Carolina		BERNARD SANDERS (I), Vermont
JOHNNY ISAKSON, Georgia			ROBERT P. CASEY, JR., Pennsylvania
RAND PAUL, Kentucky			AL FRANKEN, Minnesota
SUSAN M. COLLINS, Maine			MICHAEL F. BENNET, Colorado
BILL CASSIDY, M.D., Louisiana		SHELDON WHITEHOUSE, Rhode Island
TODD YOUNG, Indiana			TAMMY BALDWIN, Wisconsin
ORRIN G. HATCH, Utah			CHRISTOPHER S. MURPHY, Connecticut
PAT ROBERTS, Kansas			ELIZABETH WARREN, Massachusetts
LISA MURKOWSKI, Alaska			TIM KAINE, Virginia
TIM SCOTT, South Carolina		MAGGIE HASSAN, New Hampshire
                     
                                     
               David P. Cleary, Republican Staff Director

         Lindsey Ward Seidman, Republican Deputy Staff Director

                  Evan Schatz, Minority Staff Director

              John Righter, Minority Deputy Staff Director


                                  (ii)

                            C O N T E N T S

                               __________

                               STATEMENTS

                        TUESDAY, MARCH 21, 2017

                                                                   Page

                           Committee Members

Alexander, Hon. Lamar, Chairman, Committee on Health, Education, 
  Labor, and Pensions, opening statement.........................     1
Murray, Hon. Patty, a U.S. Senator from the State of Washington, 
  opening statement..............................................     4
Burr, Hon. Richard, a U.S. Senator from the State of North 
  Carolina.......................................................    45
Collins, Hon. Susan M., a U.S. Senator from the State of Maine...    49
Bennet, Hon. Michael F., a U.S. Senator from the State of 
  Colorado.......................................................    51
Young, Hon. Todd, a U.S. Senator from the State of Indiana.......    53
Murphy, Hon. Christopher, a U.S. Senator from the State of 
  Connecticut....................................................    54
Roberts, Hon. Pat, a U.S. Senator from the State of Kansas.......    56
Warren, Hon. Elizabeth, a U.S. Senator from the State of 
  Massachusetts..................................................    57
Hassan, Hon. Maggie, a U.S. Senator from the State of New 
  Hampshire......................................................    61
Cassidy, Hon. Bill, a U.S. Senator from the State of Louisiana...    63
Whitehouse, Hon. Sheldon, a U.S. Senator from the State of Rhode 
  Island.........................................................    64
Scott, Hon. Tim, a U.S. Senator from the State of South Carolina.    66
Kaine, Hon. Tim, a U.S. Senator from the State of Virginia.......    68
Franken, Hon. Al, a U.S. Senator from the State of Minnsota......    71

                               Witnesses

Woodcock, Janet, M.D., Director, Center for Drug Evaluation and 
  Research, Food and Drug Administration, Silver Spring, MD......     6
    Prepared statement...........................................     8
Marks, Peter, M.D., Ph.D., Director, Center for Biologics 
  Evaluation and Research, Food and Drug Administration, Silver 
  Spring, MD.....................................................    42
Shuren, Jeffrey E., M.D., J.D., Director, Center for Devices and 
  Radiological Health, Food and Drug Administration, Silver 
  Spring, MD.....................................................    44

                                 (iii)

  

 
   FDA USER FEE AGREEMENTS: IMPROVING MEDICAL PRODUCT REGULATION AND 
                    INNOVATION FOR PATIENTS, PART I

                              ----------                              


                        TUESDAY, MARCH 21, 2017

                                       U.S. Senate,
       Committee on Health, Education, Labor, and Pensions,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:05 a.m. in 
room SD-430, Dirksen Senate Office Building, Hon. Lamar 
Alexander, chairman of the committee, presiding.
    Present: Senators Alexander, Burr, Collins, Cassidy, Young, 
Roberts, Scott, Murray, Franken, Bennet, Whitehouse, Murphy, 
Warren, Kaine, and Hassan.

                 Opening Statement of Senator Alexander

    The Chairman. Good morning. The Senate committee on Health, 
Education, Labor, and Pensions will please come to order.
    We are holding a hearing today on Food and Drug 
Administration User Fee Agreements: Improving Medical Product 
Regulation and Innovation for Patients, Part I.
    Senator Murray and I will each have an opening statement 
and then we will introduce our panel of witnesses. After our 
witness testimony, Senators will have 5 minutes of questions.
    The subject today is the Food and Drug Administration's 
Medical Device and Drug User Fees. It seems like a long time 
ago--but it really was not very long ago--that Congress passed 
the 21st Century Cures Act. Ninety-four Senators voted for it. 
President Obama and Vice President Biden were strongly in 
support of it, so was Speaker Ryan. Mitch McConnell called it 
the most important piece of legislation in the last Congress.
    That came through this committee, and I thank the members 
of the committee, especially, for resolving our differences of 
opinions and making it possible for us to reach consensus.
    That bill was about moving medical products, drugs, and 
devices more rapidly in a safe way through the investment and 
the regulatory process, and into the hands of patients and 
doctors' offices.
    Today, we are talking about really implementing that great 
goal, one that shows so much promise for virtually every 
American. We are here to talk about how we continue to fund the 
Food and Drug Administration, which is the agency responsible 
for making sure the promising research supported by the 21st 
Century Cures Act actually reaches patients.
    We will hear from witnesses from the agency itself to tell 
us how the User Fee Agreements will improve the agency's 
abilities to regulate medical products and promote innovation.
    We will hear from patients, device manufacturers, and brand 
and generic drug manufacturers in a second hearing, which is 
tentatively scheduled for April 4.
    I want to thank the witnesses for taking the time to 
testify today. We respect the great amount of expertise and 
service that you have given to our country. I want to thank 
you, also, for moving so quickly to implement the 21st Century 
Act. I noticed especially that the provision involving 
regenerative medicine was published within about a month after 
President Obama signed the law.
    The first medical product User Fee Agreement was enacted in 
1992. The FDA worked with the drug manufacturers to hammer out 
an agreement that the agency would collect user fees from drug 
manufacturers in exchange for more timely, predictable reviews. 
The agreement was a success. It decreased review times and 
increased patient access to medicines.
    Before September 30 of this year, four different User Fee 
Agreements need to be reauthorized. The Prescription Drug User 
Fee is the first one. It is common around here to call it 
PDUFA. I am not going to do that. I just cannot stand PDUFA, 
and MDUFA, and GDUFA, and the other UFA.
    [Laughter.]
    I am going to call them, if you do not mind, the 
Prescription Drug User Fee, which accounted for over 70 percent 
of the brand drug review in 2015.
    The second one is the Medical Device User Fee, which 
accounted for 35 percent of the medical device review budget in 
2015.
    The Generic Drug User Fee accounted for 70 percent of 
generic drug review budget.
    The Biosimilar User Fee accounted for 7 percent of the 
biosimilar review budget.
    A lot of the money for the FDA comes from these agreements 
with manufacturers of prescription drugs and devices.
    The authority for the FDA to collect user fees for medical 
product review will expire on September 30 of this year, 6 
months from now.
    This is probably the most important part of what I have to 
say this morning.
    If we do not move quickly to authorize these Agreements, 
the FDA will be forced to begin sending layoff notices to more 
than 5,000 employees to notify them they may lose their jobs in 
60 days. That is what they have to do by law.
    A delay in reauthorizing these Agreements would delay the 
review of drugs and devices submitted after April 1, only a few 
days away.
    For example, if we do not pass these reauthorizations into 
law before the current Agreements expire, an FDA reviewer, who 
gets started reviewing a cancer drug submitted to the agency in 
April, would be laid off on October 1 before the reviewer is 
able to finish his or her work.
    The sooner we reauthorize the Agreements, the better, to 
give patients, reviewers, and companies certainty.
    In addition to harming patients and families that rely on 
medical innovation, a delay in reauthorizing the User Fees 
would threaten biomedical industry jobs and America's global 
leadership in biomedical innovation.
    I am hopeful that this committee, and this Congress, can 
work in a bipartisan manner to reauthorize the User Fees before 
the August recess. Congress must pass legislation reauthorizing 
and updating the fees to support the recommendations contained 
in what are called ``commitment letters'' sent to Congress in 
January.
    These commitment letters are part of the Agreements between 
the FDA and the industry to establish the agency's commitments, 
such as timelines for application review or to put out 
guidances in exchange for the fees that Congress authorizes.
    The letters were transmitted to Congress in January of this 
year. Today's hearing is not the first time Members of 
Congress, or the public, is hearing about the recommendations 
for reauthorization.
    In Congress, while we were working on the 21st Century 
Cures, after it was signed into law, the HELP committee had 15 
bipartisan hearings throughout that time--before it was signed 
into law and after it was signed into law, the 21st Century 
Cures some of which were in conjunction with the Energy and 
Commerce Committee in the House of Representatives--so that we 
could hear from the FDA and industry about the reauthorization. 
The first of those briefings was back in late 2015.
    Outside of Congress, the FDA posted meeting minutes after 
every negotiation and held public meetings to hear feedback. 
The content of the commitment letters and the changes to the 
fee authorizations should not be new or a surprise for any 
member of this committee.
    After the April 4 hearing, I hope to move to markup the 
legislation in committee as soon as possible. This is the first 
time the User Fees have sunset in the first year of a new 
administration, so we are starting hearings a little later this 
year than we did in 2012.
    In order to get this done on time, any additional policies 
that Senators may want to attach need to be broadly bipartisan, 
related to human medical products, and noncontroversial in 
order to avoid slowing the package down.
    There are many improvements in the commitment letters and 
fee structures in these reauthorizations to be excited about.
    The Prescription Drug and Medical Device reauthorizations 
included many provisions that build on the work of 21st Century 
Cures such as involving patients in the drug and medical device 
development. A dedicated staff to assist in the development and 
review of rare disease drugs, improved timelines, increased 
guidance for drug and device combination products, and 
modernizing the clinical trial process.
    There are structural reforms. Each Agreement contains 
reporting measures built both by the FDA and by independent 
third parties so we can see how the changes are working.
    The FDA is going to work to implement full-time reporting 
by 2022, so Congress, patients, and medical product 
manufacturers will have a better picture about how resources 
are being used at the FDA and understand what is needed to do 
what we ask.
    The Biosimilar and Generic Drug User Fees Agreement 
includes additional staff and resources to approve more 
biosimilars and more generic drugs, which provide more 
competition and lower drug costs.
    These are just a few of the highlights of the 
reauthorization and commitment letters. It is a good Agreement 
for patients, and I look forward to working with Senator Murray 
and all the members of the committee to get it done 
expeditiously.
    Senator Murray.

                  Opening Statement of Senator Murray

    Senator Murray. Thank you very much, Chairman Alexander.
    Thank you to all of our colleagues and our witnesses for 
joining us today.
    Mr. Chairman, before I start, I want to talk about the 
letter that every Democrat on this committee signed and sent to 
you this past Friday requesting that our hearing on User Fees 
be delayed in order to make time for an urgently needed 
discussion of Trump Care.
    To be frank, the hearing that we are having today seems 
inappropriate for the moment that we are in. House Republicans' 
Trump Care bill could be on the House floor in a matter of 
several days.
    This is legislation that will take tens of millions of 
people off of coverage, cause premiums to spike, target seniors 
with higher healthcare costs just because of their age, end 
Medicaid as we know it, and make coverage too expensive for 
millions of rural and older Americans, and cutoff access to 
critical health services at Planned Parenthood. And I could go 
on.
    Trump Care will cause all this harm and more, while giving 
the wealthiest one-tenth of 1 percent of Americans a nearly 
$200,000 tax cut, and give insurance company executives a 
massive tax break as well.
    Senator McConnell has indicated that Trump Care could 
change significantly in the Senate if it passes the House. But 
instead of giving Senators time to review and evaluate a 
possibly very different bill, he has indicated it will go 
straight to the floor for a vote.
    We are talking about legislation that will have a profound 
and profoundly negative impact on the lives, well-being, and 
financial security of people across the country. People who, I 
might add, are truly terrified about the uncertain path 
forward.
    The idea that our committee, the Health Committee, would 
not have a single hearing to discuss and debate it is 
completely appalling, and leaves me very concerned that our 
bipartisan tradition on the HELP Committee is continuing to 
give way to extraordinary partisanship from Republican leaders 
in the Trump administration.
    I really hope that we see a reversal of this pattern, and I 
hope it begins with a HELP Committee hearing on the impact of 
this legislation, especially given that I know Democrats are 
not the only ones with grave concerns about the many ways that 
Trump Care could hurt women, and families, and seniors 
nationwide.
    I hope the Republicans do the right thing, step back from 
the precipice, and work with us to strengthen our healthcare 
system, not destroy it. It would be truly unfortunate if this 
intense partisanship from Republicans in the healthcare arena 
were to impact Congress' ability to work together on shared 
priorities, like reauthorizing the User Fee Agreements this 
year.
    The already finalized User Fee Agreements for drugs, 
generics, biosimilars, and medical devices reflect thorough 
negotiations. They will help support the growth and maturation 
of the FDA to an agency ready for 21st century technology and 
the movements toward precision medicine, and build on the 
bipartisan policies passed in the 21st Century Cures Act last 
year.
    Especially in light of a very tight fiscal reality, these 
Agreements are an important tool to help make sure that the FDA 
can uphold its gold standard of approval while evaluating new 
drugs and devices efficiently.
    I oppose efforts by the Trump administration to take 
unprecedented actions to alter these Agreements or to undermine 
the important public health work of the agency. I am also 
concerned that the Administration is hampering the FDA by 
depriving it of key staff, blocking it of key staff, and 
blocking its ability to issue the guidance and regulations 
needed to foster innovation.
    Moving forward with the Agreements as already finalized is 
absolutely necessary if Congress wants to advance safe, 
effective, and innovative medical products for patients and 
families across the country. Without these Agreements, the 
agency will be crippled.
    Another key concern for me--and one that I know is a huge 
burden for families in my State and nationwide--is the 
astronomically high price of prescription drugs. To be clear, 
the FDA's approval processes and standards are not direct 
causes of high drug prices. But everyone in this room knows we 
are facing a dire situation when it comes to the rising costs 
of drugs.
    Our broken system results in patients and families across 
the country being unable to afford the drugs and treatments 
they need. And this is a situation that does demand action from 
this committee.
    I know our Members on both sides of the aisle have ideas 
about ways to reduce the burden of drug costs and I am 
committed to working with all colleagues on both sides of the 
aisle on this issue.
    Chairman Alexander, I do want to reiterate my sincere 
disappointment and really shock that there is so much at stake 
for patients and families in the bill working its way through 
the House now and here, apparently, to the Senate very quickly. 
That that kind of bill could be jammed through the Senate in a 
matter of days and this committee having no formal opportunity 
to discuss it is really concerning.
    We all should know, Trump Care is causing millions of 
people fear and worry, and while there is every reason for 
Republicans to want to avoid talking about its disastrous 
consequences, that is no excuse for trying to make it an 
elephant in the room.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Murray.
    We have this opportunity to talk about the Food and Drug 
Administration User Fees. We have the experts from the agency 
here to do that today and April 4, tentatively scheduled, we 
will have patient safety groups and manufacturers here to talk. 
So I hope we can take full advantage of the time.
    We have a vote scheduled for noon. I will be glad to come 
back if Senators have more questions of the FDA representatives 
or something they would like to say.
    Each witness will have up to 5 minutes to give his or her 
testimony. I am pleased to welcome our three witnesses to 
today's hearing.
    First, thank you for taking time to be here.
    The first witness is Dr. Janet Woodcock. We know her well. 
She is Director of the Center for Drug Evaluation and Research 
at the FDA, which performs the critical task of ensuring safe 
and effective drugs are available to improve the health of 
people in the United States.
    She has been at the FDA for 30 years, and been the Center 
Director since Congress reauthorized the Prescription Drug User 
Fee Agreements and first authorized the Biosimilar and Generic 
Drug Agreements in 2012.
    We will then hear from Dr. Peter Marks, Director of the 
Center for Biologics Evaluation and Research at the FDA. He 
joined the Center as Deputy Center Director in 2012 and became 
Center Director in 2016. The Center for Biologics Evaluation 
and Research is responsible for ensuring the safety and 
effectiveness of biological products including vaccines, and 
cellular and gene therapies.
    I look forward to hearing how the User Fee funds will help 
the Center keep up with rapidly advancing science and promote 
certainty for sponsors.
    Third to testify will be Dr. Jeffrey Shuren. He is Director 
of the Center for Devices and Radiological Health, which is 
responsible for ensuring the safety, effectiveness, and quality 
of medical devices and fostering device innovation. He has been 
Director since January 2010.
    Welcome, again, to this panel of experts.
    Dr. Woodcock, we will start with you.

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

    Dr. Woodcock. Thank you, Mr. Chairman, members of the 
committee.
    I am glad to be here to discuss three Drug User Fee 
programs that are due for reauthorization in fiscal year 2018.
    The first one, the Prescription Drug User Fee Act program 
supports innovation. That is basically what that one is about. 
PDUFA has resulted in fast and predictable review of innovative 
therapies for Americans.
    U.S. patients are first in the world to get innovative 
therapies in over two-thirds of the cases. Compared to the 
entire rest of the world, they are first.
    New therapies often are for rare, fatal, untreatable 
diseases, orphan conditions, cancers, degenerative neurologic 
diseases. These are important therapies that the PDUFA program 
helps get to the market in many cases.
    In some cases recently, with the advance of science, we 
have actually been able to get cures onto the market. For 
example, the hepatitis C drugs are curing that infection, that 
chronic infection that was resulting in so many transplants in 
chronically ill people.
    Programmatic improvements that are envisioned in the next 
PDUFA program include more support for a breakthrough therapy 
program. This was enacted by Congress around 5 years ago, and 
has been extremely successful in getting those breakthrough 
game-changing drugs to patients in as quick a manner as 
possible. This Agreement would provide more support for that 
program.
    Advancing the use of surrogate endpoints; surrogate 
endpoints are used to speed market access when the actual 
clinical outcomes might take a very long time.
    Accelerating drug development tools; this is something that 
this committee paid a great deal of attention to in the 21st 
Century Cures, the biomarkers, and so forth. The new PDUFA 
agreement would provide additional support for that as well as 
complex trial designs.
    Also, there is additional support in renovation for our 
review of combination products. These are becoming more and 
more common. We have auto-injectors. We have drugs and devices 
that are used together in different ways, and we need to make 
sure those reviews are predictable, that they are streamlined, 
and we can get those innovative products to patients as soon as 
possible.
    And finally, there are provisions for supporting our 
evaluation of real world evidence; another type of evidence 
that was discussed in the Cures legislation.
    The second User Fee program is the Generic Drug User Fee 
program. This would be the second version of this program. 
GDUFA, instead of supporting innovation, it supports 
affordability of drugs by introducing generic competition. 
Almost 90 percent of prescriptions that are dispensed in the 
United States today are generic drugs. This program over the 
years has been extremely successful.
    It is estimated that over a decade, it has saved U.S. 
consumers about $1.5 trillion by being able to purchase 
affordable generics instead of expensive brand drugs.
    The first Generic Drug User Fee program had quite a few 
problems because there was a huge backlog. The success of the 
program had really overwhelmed our ability to review all these 
generic drugs. But we also had a non-automated paper-based 
review process, and thousands and thousands of generic drugs to 
review.
    GDUFA I, met or exceeded all its submission review goals. 
All those thousands of drugs have been taken up into the review 
process and are in process or on the market. In fact, about 
one-quarter of all currently approved generic drugs have been 
approved in the last 4 years.
    We approved in 2016 alone, the highest number of generic 
drugs ever approved in a year; 835 generics approved or 
tentatively approved. Of all of those generics we approved, 405 
of those during the program were first generics, so the first 
competitor to come onto the market for a brand drug; a very 
important landmark.
    GDUFA II, the second program, builds on the first. It 
provides for a faster review of priority applications. Those 
would be applications that lack that competition and they would 
be reviewed within 8 months.
    There is also for the complex generics--those that are not 
simple tablets, but may have an auto-injector or a device 
associated with them, or they may be a very complicated 
molecule or dosage form--it provides for a preprogram where 
they can come in and talk to us. We can help them with their 
development. This is what we do for innovator drugs. There is 
also going to be more communication and improved facility 
assessments.
    The third program is the Biosimilars User Fee Act, and this 
is again different. The Biosimilars Act, with the help of 
Congress and your legislation, is establishing a new industry, 
the biosimilars industry. It will provide competition for those 
biological drugs, most of which are very expensive.
    We have already approved four biosimilar products, which 
provide competition to very widely used biologic drugs and 
there are numerous applications that we are reviewing in-house. 
There are actually 64 biosimilar products in development 
programs. So we hope to grow this program in the next User Fee 
program.
    These have all benefited patients, the medical community, 
and the public.
    I would really be happy to answer any questions you might 
have.
    [The combined prepared statement of Dr. Woodcock, Dr. Marks 
and Dr. Shuren follows:]
    Prepared Statement of Janet Woodcock, M.D., Peter Marks, M.D., 
                     and Jeffrey Shuren, M.D., J.D.
                              introduction
    Mr. Chairman and members of the committee: We are the directors of 
the Center for Drug Evaluation and Research (CDER), Center for 
Biologics Evaluation and Research (CBER), and Center for Devices and 
Radiological Health (CDRH) at the U.S. Food and Drug Administration 
(FDA or the Agency), which is part of the Department of Health and 
Human Services (HHS). Thank you for the opportunity to be here today to 
discuss the reauthorization of the Prescription Drug User Fee Act 
(PDUFA VI), the reauthorization of the Medical Device User Fee Act 
(MDUFA IV), the first reauthorization of the Generic Drug User Fee 
Amendments (GDUFA II), and the first reauthorization of the Biosimilar 
User Fee Act (BsUFA II). The User Fee programs help FDA to fulfill its 
mission of protecting the public health, while improving the 
predictability of review processes and accelerating innovation in the 
industry. Since the inception of these programs, FDA has dramatically 
reduced the review time for new products, without compromising the 
Agency's high standards for demonstration of safety, efficacy, and 
quality of new drugs or devices prior to approval.
    The reauthorization proposals for PDUFA, MDUFA, GDUFA, and BSUFA 
that are described below were submitted to Congress in January, under 
the previous Administration and reflect a different approach to the 
Federal Budget. The Blueprint Budget supports many of the goals of the 
reauthorization proposals but proposes a different way of financing 
these goals. The Administration looks forward to working with Congress, 
with industry input, to develop reauthorization proposals that speed 
the development and approval of vital medical products that are safe 
and effective.
                                 pdufa
    The timely review of the safety and effectiveness of new drug 
applications (NDAs) and biologics license applications (BLAs) is 
central to FDA's mission to protect and promote the public health--and 
PDUFA is essential to these efforts.
    Before PDUFA's enactment in 1992, Americans' access to innovative, 
new medicines lagged behind other countries. FDA's pre-market review 
process was understaffed, unpredictable, and slow. The Agency lacked 
sufficient staff to perform timely reviews or develop procedures and 
standards to assure a more rigorous, consistent, and predictable 
process.
    To tackle these challenges, Congress passed PDUFA, which authorized 
FDA to collect industry user fees to hire additional staff and upgrade 
its information technology systems. In return, it committed the Agency 
to speed the application review process for new drugs without 
compromising its high standards for new drug safety, efficacy, and 
quality.
Speeding Americans' Access to Safe and Effective New Therapies
    PDUFA has revolutionized the United States' drug approval process. 
It reversed the lag in drug approvals that prompted its creation, 
providing Americans with more rapid access to safe and effective new 
drugs and biologics.
    As shown in Figure 1, today, almost two-thirds of new active 
substances approved in the world market are launched first in the 
United States. To put this figure in perspective, that is more than 
triple the rate approved first in the United States in the first year 
of PDUFA.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

    The 5-year reauthorization cycles for PDUFA have supported 
continuous program innovation, evaluation, and improvement. The 
enhancements to the process of human drug review originally focused on 
the FDA pre-market review of NDAs and BLAs. Through successive PDUFA 
reauthorizations, program enhancements have evolved and expanded to 
include extensive communication and consultation between drug sponsors 
and FDA throughout drug development. This has enabled better 
incorporation of advances in regulatory science applied to drug 
development and regulatory oversight. The continued modernization of 
drug review under PDUFA has also strengthened and enabled innovation in 
approaches to post-market safety. Most recently, the program has been 
enhanced by increasing patient focus and modernizing supporting 
informatics.
    These enhancements have contributed to the United States becoming a 
global leader in drug innovation and Americans are typically the first 
to benefit from safe and effective new medicines. PDUFA, with its 
reauthorization cycles, has resulted in a scientifically and 
financially strong program with transparent stakeholder engagement as a 
routine way of doing business.
    Throughout this program evolution, FDA has continued to review 
large volumes of sponsor submissions and deliver predictably high 
levels of performance against PDUFA goal commitments for timely 
regulatory review and development phase consultation, as shown in 
Figure 2.
---------------------------------------------------------------------------
    \1\ NME = New Molecular Entity: NDA = New Drug Application; BLA = 
Biologic Licensing Application; CBE = Changes-Being-Effected.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

Increasing the Timeliness and Efficiency of Premarket Review
    A key element of the success of the PDUFA program is ongoing 
development-phase consultation provided to drug sponsors by FDA, 
helping to minimize unnecessary or suboptimal development steps, and 
getting important new drugs to patients more rapidly and efficiently. 
FDA's capacity to provide sponsors, including small first-time 
innovators, with timely advice enabled by PDUFA funding, has 
contributed to the strong drug development pipeline in the United 
States today. This is reflected in the increased numbers of drug 
development programs underway in companies, and the corresponding 
growth in company requests for development phase meetings with FDA, as 
shown in Figure 3.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

    The volume of formal meetings requested by drug sponsors has 
steadily grown over the course of PDUFA. Early and frequent 
communication between sponsors and FDA serves to improve the efficiency 
of drug development. Indeed, it is one of the cornerstones of the 
Breakthrough Therapy program. FDA-sponsor meetings help sponsors 
navigate key milestones during drug development, support the assembly 
and submission of sponsors' marketing applications, and enable sponsors 
to clarify requirements for complete application submissions and 
potentially avoid the need for an additional review cycle.
    The improvement in the quality of drug development programs and the 
submitted applications, supported by these PDUFA-enabled consultations 
between FDA and drug sponsors, is but one explanation for the observed 
trend toward higher first cycle approvals of applications for novel 
drugs (referred to as new molecular entity (NME) NDAs and BLAs), as 
shown in Figure 4.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

    Development-phase consultations can be particularly helpful in 
support of the most innovative drug programs. Of the NME NDAs and BLAs 
that FDA approved in calendar year (CY) 2016, over one-third were 
indicated for rare diseases. In addition, over one-third (36 percent) 
of the drugs approved by the Center for Drug Evaluation and Research 
were first in their drug class and over 80 percent (86 percent) were 
approved first in the United States.
    While a standard review is typically completed in 10 months, FDA 
expedites review for priority drugs to be completed within 6 months. 
Priority drugs are generally targeted at severe illnesses with few or 
no available therapeutic options. They typically receive greater 
assistance from FDA reviewers throughout the development process, 
including providing advice in the design and implementation of the 
clinical trials necessary to demonstrate product safety and 
effectiveness.
    In 2016, over 60 percent of NME NDAs and new BLAs approved by FDA 
benefited from one or more of FDA's expedited programs.
Expanded Access to Investigational Products
    While the best means of providing access to useful medical 
treatments for all Americans is to approve drugs demonstrated to be 
safe and effective as quickly as possible, FDA also recognizes 
circumstances in which there may be value to patients and physicians in 
having access to products prior to marketing approval. In some cases 
where an individual has a serious or life-threatening disease and lacks 
a satisfactory therapy, that individual may believe that a promising 
but not yet fully evaluated treatment is his or her best choice.
    FDA allows for access to investigational products through clinical 
trials and the Agency's Expanded Access program. Clinical trials 
collect the necessary clinical information needed for FDA review and, 
if appropriate, approval, of investigational drugs, thereby making the 
drug widely available to patients. However, there are times when an 
individual cannot enroll in a clinical trial. In these cases, the 
patient may be able to gain access to an investigational therapy 
through the Expanded Access program.
    In order for an individual patient to qualify for the Expanded 
Access program, several criteria must be met, including that the 
patient must have a serious or life-threatening disease or condition 
and no comparable or satisfactory alternative therapy. The patient's 
physician then approaches the pharmaceutical company to ask for its 
agreement that it will provide the drug being sought. The company has 
the right to approve or disapprove the physician's request. If the 
company agrees to the physician's request, the physician can then apply 
to FDA for authorization to proceed. Should they do so, they are highly 
likely to be allowed to proceed with the expanded access use. FDA has 
authorized more than 99 percent of the requests received in fiscal 
years 2010-15. Emergency requests are usually granted immediately over 
the phone and non-emergencies are processed in a median of 4 days.
    Access to investigational products requires the active cooperation 
of the treating physician, industry and FDA in order to be successful. 
In particular, the company developing the investigational product must 
be willing to provide it--FDA cannot force a company to manufacture a 
product or to make a product available. Companies might have their own 
reasons to turn down requests for their investigational products, 
including their desire to maintain their clinical development program 
or simply because they have not produced enough of the product.
    For over 20 years, FDA has been committed to ensuring that this 
program works well for patients and has recently made significant 
improvements to its functioning and efficiency.
Breakthrough Therapy Designation
    The Breakthrough Therapy (BT) program, authorized by the FDA Safety 
and Innovation Act (FDASIA), has further enhanced the engagement of FDA 
and sponsors during drug development. This program, which is for new 
drugs to treat serious and life-threatening diseases with unmet medical 
need, calls for intensive FDA-sponsor consultation during development, 
when preliminary clinical evidence indicates that the drug may 
demonstrate substantial improvement over available therapies on one or 
more clinically significant endpoints.
    Given the known benefits of development-phase consultation with 
FDA, the BT designation has been much sought after by sponsors. As of 
November 30, 2016, FDA had received 492 requests for BT designation and 
had granted 165 requests. Figure 5 shows the trend of increasing 
numbers of development programs.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

    Although oncology, hematology and antiviral products account for 
the largest share of BT designation requests in CDER, it should be 
noted that BT requests and the granted designations and ongoing 
programs span the entire spectrum of disease areas as shown in Figure 
6a, reflecting granted designations as of November 30, 2016. In CBER, 
most of the BT designation requests and granted designations are for 
gene therapies, vaccines and immunotherapies as shown in Figure 6b.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

PDUFA V
    We are currently in the final year of the PDUFA V program. Over the 
years since the start of PDUFA I in 1992, the complexity of scientific 
and clinical issues in the study of new drugs has grown, including use 
of genetic targeting, biomarkers, novel trial designs, plans and 
programs to ensure effective post-market risk management. These 
approaches and issues were less common or nonexistent at the start of 
PDUFA. In addition, predictability and increased communication with FDA 
during drug development and application review emerged as a top 
priority for drug sponsors.
    PDUFA V sought to achieve a better balance between the desire for 
increased communication with sponsors and the need to ensure adequate 
review time for the most complex and innovative products reviewed by 
FDA. This resulted in a cornerstone of the PDUFA V agreement, a new 
program for NME NDAs and BLA reviews that is designed to promote 
greater transparency and improve communication between the FDA review 
team and the applicant. We anticipated that the increased 
communications before application submissions and at key points within 
the first review cycle would ensure that FDA had access to all of the 
information that might inform and enable a first-cycle approval for 
those applications that could be approved, avoiding unnecessary 
additional cycles of review. This would enable faster access to new 
drugs for the patients who need them and would help reduce avoidable 
costs for drug sponsors.
    A key measure of program success is the percentage of applications 
approved in a single, first review cycle. Figure 7 illustrates the 
success of the PDUFA V NME Program in achieving its first cycle review 
goals for both standard and priority reviews. The figure presents the 
share of first-cycle approvals for priority and standard NDAs and BLAs 
filed. First cycle approvals for NME NDAs and new BLAs have been 
significantly higher under the new PDUFA V review program.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

    Other PDUFA V enhancements include improved communications during 
drug development, strengthening the rare disease program, exploring new 
methods for regulatory science, and implementation of structured 
benefit-risk assessment. PDUFA V also provided for additional drug 
safety enhancements focused on standardizing the design of Risk 
Evaluation and Management Systems (REMS) and using the Sentinel 
Initiative, FDA's active surveillance systems for post-market safety 
(see PDUFA IV), to evaluate drug safety issues. This has prepared the 
way for expanded reliance on the data from Sentinel.
Patient-Focused Drug Development
    As part of the PDUFA V benefit-risk assessment initiative, FDA and 
industry recognized that patients are uniquely positioned to inform 
aspects of FDA's benefit-risk assessment, particularly the 
understanding of the disease and its severity and the adequacy of 
existing treatment options. Therefore, FDA committed to hold at least 
20 public meetings over the 5-year period, with each meeting focused on 
obtaining direct patient input in a specific disease area. This 
initiative, referred to as ``patient-focused drug development,'' has 
since been described as potentially transformational in advancing the 
role of the patient in drug development and decisionmaking. Although 
initially committing to conduct 20 meetings, FDA is on track to conduct 
24 meetings each in different disease areas. The goal of the meeting is 
to hear from patients and their caregivers about the impact of their 
disease on their lives, and for FDA to hear more about what treatment 
benefits would be most meaningful to patients, and what treatment 
burdens are most important to consider. Following each meeting FDA 
develops a Voice of the Patient report to capture what was heard in the 
meetings (and comments from patients received in the docket); these 
documents serve as a valuable reference for FDA reviewers in subsequent 
drug reviews and related decisionmaking.
    Patient-focused drug development has provided key learnings for FDA 
that are being carried forward and integrated into our methods and 
approaches to development and decisionmaking. We recognize that 
patients with chronic serious disease are experts on what it is like to 
live with their condition, and we have learned that they want to be as 
active as possible in the work to develop and evaluate new treatments. 
In the past, patients' ``chief complaints'' were often not factored 
explicitly into drug development plans (as endpoints and measures of 
drug benefit planned in trials), and this is an area of needed 
attention going forward. Although the PDUFA V patient-focused drug 
development initiative was intended as a pilot to elicit broader 
patient input, a key question for the agency was how to best buildupon 
this pilot to advance the science and processes for effective 
incorporation of the patient's voice in drug development and 
decisionmaking.
    In preparing for PDUFA VI reauthorization discussions, FDA has 
worked to build on the successes and learnings of PDUFA V and pursue 
new areas of opportunity for innovation in the enhancement of 
regulatory decision tools and new potential sources of evidence to 
inform drug development and review.
PDUFA VI Reauthorization Process
    Congress directed the Agency to reach out to all stakeholders to 
solicit thoughts and insights on PDUFA reauthorization and changes to 
PDUFA performance goals. FDA held an initial public meeting on July 15, 
2015, which included presentations by FDA and representatives of 
different stakeholder groups, including patient advocates, consumer 
groups, regulated industry, health professionals, and academic 
researchers. A transcript and webcast recording are available on FDA's 
website at https://www.fda.gov/ForIndustry/UserFees/
PrescriptionDrugUserFee/ucm446608.htm.
    Based on comments to a public docket, and the Agency's own internal 
analyses of program challenge areas, FDA developed a set of potential 
proposed enhancements for PDUFA VI and began negotiations with 
industry. Parallel discussions with public stakeholders were held 
monthly from September 2015--February 2016 to update participants on 
ongoing negotiations and solicit thoughts. Meeting minutes were posted 
on FDA's website and are available at https://www.fda.gov/ForIndustry/
UserFees/PrescriptionDrugUserFee/ucm446608.htm.
    A final public meeting was held on August 15, 2016, to discuss the 
PDUFA VI agreement and engage with interested parties on proposed 
recommendations. A summary of the agreement and a draft of the 
Commitment Letter were provided a month in advance of this discussion. 
Final PDUFA VI recommendations were transmitted to Congress in December 
2016.
PDUFA VI Overview
    Building on the success of previous agreements, PDUFA VI continues 
to support early and meaningful communication between FDA and drug 
sponsors to deliver safe and effective medications to Americans more 
quickly, and, expands on such communications by providing resources for 
the popular, highly successful, and resource-intensive Breakthrough 
Therapy program and streamlining review of products combining a drug or 
biologic with a device. It enhances drug development tools including 
biomarker qualification and provides resources to increase our 
understanding of how ``real-world evidence'' can be generated and used 
appropriately in regulatory decisionmaking. The agreement also enables 
us to leverage the use of real-world health data by enhancing the 
capabilities of FDA's Sentinel System.
    Many of these core provisions are explained in greater detail 
below.
Capturing the Patient Voice in Drug Development
    Central to PDUFA VI, and its largest single investment component, 
are plans to elevate patient voices in developing new drugs to treat 
their diseases. The agreement shares the committee's goals reflected in 
the 21st Century Cures Act (``Cures'')--and the highest priority of our 
stakeholders--to leverage essential patient input and insights to fight 
disease.
    We are building on the success of PDUFA V which established the 
Patient-Focused Drug Development (PFDD) program to obtain valuable 
patient perspectives. Areas of focus were carefully chosen based on a 
public process soliciting patient and stakeholder input. Under PDUFA 
VI, we look forward to engaging in a transparent, multi-stakeholder 
approach that will lead to development of the methods and approaches to 
ensure patients not only become active participants but informants to 
industry drug development and agency review. The performance 
commitments and matching resources to sufficiently staff this critical 
new work are intended to bridge from patient-focused drug development 
meetings to fit-for-purpose tools to collect meaningful patient input, 
including capturing information on the natural progression of disease.
    To help identify sound and rigorous methods to capture science-
based, disease-specific patient input, FDA has committed to enhance its 
staff capacity, hold a series of four public workshops, and develop 
four key guidance documents on needed methods and approaches. The 
Agency will also publish on its website a repository of publicly 
available tools as a resource for stakeholders and ongoing efforts.
    We are gratified by the enthusiastic response within the patient 
community to PFDD, and look forward to working with the broader 
community to advance the science of patient input--and deliver new and 
better treatment options.
Building a Solid Foundation for Breakthrough Therapies
    The Breakthrough Therapy program, authorized by FDASIA, has become 
one of the most popular components of the human drug review program 
with requests and designations far exceeding expectations.
    The increase in promising new drugs to treat serious and life-
threatening diseases with unmet medical need is, of course, a very good 
thing for both patients and public health. But the growth of the BT 
program has strained limited available review staff resources. A 
hallmark of the BT program is intensive Agency interaction with 
sponsors during the development process on complex products with 
transformative potential. This ``all hands on deck'' approach provides 
a sponsor of a designated breakthrough product with guidance from the 
Agency on efficient drug development beginning as early as the Phase I 
period, an organizational commitment to involve senior managers, and 
eligibility for rolling review. Many of the BT designations granted so 
far have been for rare disease indications.
    The PDUFA VI agreement provides dedicated funding to ensure the 
sustained success of the BT program. Additional resources will enable 
FDA to increase review staff and to supplement resources for clinical 
pharmacology, statistics, and product quality. This renewed commitment 
will enable the Agency to continue to work closely with sponsors to 
ensure expedited development and review of breakthrough therapies for 
serious or life-threatening diseases.
Advancing Biomarker Development
    FDA and industry share the goals of Cures to accelerate development 
of reliable biomarkers to advance important new therapies. Biomarkers 
are currently used throughout the drug development process, including 
as surrogate endpoints to support earlier evidence for regulatory 
decisionmaking when evidence from a clinical endpoint could take much 
longer or require many more patients to be studied.
    FDA commonly uses surrogate endpoints in accelerated approvals 
where confirmatory evidence is required to verify the expected clinical 
benefit after marketing begins. Surrogate endpoints have been the basis 
for 60 percent of rare-disease approvals. Once a surrogate endpoint is 
well-established to predict clinical benefit, surrogate endpoints can 
be used to support traditional approvals as well. For example, FDA 
regularly relies on a surrogate endpoint for approval of new therapies 
for diabetes (the HbA1C test, a measurement of hemoglobin with attached 
sugar in the blood that reflects the extent and persistence of elevated 
blood sugar) greatly expanding patient treatment options.
    The PDUFA VI proposed enhancements include some of the same 
activities specified in Cures. PDUFA VI addressed the opportunity for 
application of biomarkers in two different areas, one involving 
proprietary use of a biomarker as a surrogate endpoint in a specific 
drug development program, and the other involving the more public 
process of biomarker qualification as a drug development tool.
    FDA recognizes that early consultation can be important to an 
efficient development program when a sponsor intends to use a biomarker 
as a new surrogate endpoint that has never been used as the primary 
basis for product approval in the proposed context of use. The PDUFA VI 
commitments therefore provide for early consultation with the sponsor 
to enable the FDA review team to consult with senior management to 
evaluate the sponsor's proposal before providing advice to the sponsor 
on a critical aspect of their development program. This will enable FDA 
to discuss the feasibility of the surrogate as a primary endpoint, any 
knowledge gaps, and how these gaps should be addressed before the 
surrogate endpoint could be used as the primary basis for approval.
    PDUFA VI also provides enhancements for the more public drug 
development tool qualification pathway for biomarkers. The biomarker 
qualification program was established to support FDA's work with 
external partners to develop biomarkers that aid in the drug 
development process. To facilitate the enhancement of the drug 
development tools qualification pathway for biomarkers in PDUFA VI, FDA 
proposes to convene a public meeting to discuss taxonomy and a 
framework with standards for biomarkers used in drug development, to 
develop guidance on biomarker taxonomy, contexts of uses, and general 
evidentiary standards for biomarker qualification, and to maintain a 
public website to communicate a list of biomarker qualification 
submissions in the qualification process.
    Meaningful progress in developing additional biomarkers for public 
qualification requires collaboration among a wide range of 
stakeholders. FDA will continue to work with the National Institutes of 
Health, the Biomarkers Consortium, the Critical Path Institute and 
others to advance biomarker development.
Streamlining Combination Product Review
    More streamlined oversight of combination products is another FDA 
and industry priority reflected in PDUFA VI. Under the proposed 
enhancements FDA will pursue improvements in inter-center and intra-
center combination product review coordination and transparency for 
PDUFA products that are combination products regulated by CDER and CBER 
(PDUFA combination products). FDA proposes to enhance staff capacity 
and capability across the relevant medical product centers and the 
Office of Combination Products to more efficiently, effectively, and 
consistently review combination products. FDA also proposes to 
streamline the process for combination product review and to improve 
the Agency's ability to track combination product review workload, 
including a third party assessment of current practices for combination 
drug product review.
    Our goal, consistent with Cures, is to enhance the overall 
efficiency, consistency, and predictability of combination product 
review without imposing new administrative burdens.
    Under PDUFA VI enhancements FDA will also establish new performance 
goals and submission procedures for the review of human factors 
protocols for PDUFA combination products. These goals will be to 
provide the sponsor with written comments on these protocols within 60 
days of receipt. The goals to provide written comments within 60 days 
will begin at the 50 percent level in fiscal year 2019, and increase to 
90 percent by fiscal year 2021.
Advancing the Use of Complex Innovative Trial Designs and Model 
        Informed Drug Development
    FDA routinely works closely with industry to facilitate innovative 
approaches to drug development that maintain our high standards for 
drug safety and efficacy. PDUFA VI promises to encourage future efforts 
by advancing Model-Informed Drug Development (MIDD) and the use of 
complex innovative and adaptive clinical trial designs.
    The development and application of exposure-based, biological, and 
statistical models derived from preclinical and clinical data sources 
can be used to inform regulatory decisionmaking, for example, in 
determining patient selection in clinical trials, individualized dosing 
for specific populations, or the need for post-marketing studies. To 
facilitate the development and application of these approaches during 
PDUFA VI, FDA proposes to convene a series of workshops to identify 
best practices for MIDD, to conduct a pilot program, to develop 
guidance on MIDD, and to update policies and procedures, as 
appropriate, to incorporate guidelines for the evaluation of MIDD 
approaches.
    To facilitate the advancement and use of complex adaptive, 
Bayesian, and other novel clinical trial designs during PDUFA VI, FDA 
proposes to convene a public workshop on complex innovative trial 
designs, publish guidance on complex innovative trial designs, to 
conduct a pilot program, and to update policies and procedures as 
appropriate to incorporate guidelines on evaluating complex innovative 
trial designs.
Utilizing Real-World Observational Data
    It has been said that medical care and biomedical research are in 
the midst of a data revolution, and networked systems, electronic 
health records, electronic insurance claims databases, social media, 
patient registries, and other new sources may comprise an immense new 
set of sources for data about health and healthcare. In addition, these 
``real-world'' sources can provide data about patients in the setting 
of their environments--whether at home or at work--and in the social 
context of their lives. There is little doubt that the new sources of 
data now becoming increasingly available to researchers, clinicians, 
and patients hold enormous potential for improving the quality, safety, 
and efficiency of medical care. More work is needed to understand both 
the promise and pitfalls of far-reaching technological changes, 
including the multiple dimensions of quality and fitness for purpose 
for appropriate use of such data in regulatory decisionmaking.
    FDA recognizes the potential value of utilizing ``real-world'' 
evidence in evaluating not only the safety of medications but also 
their effectiveness. To better understand how real-world evidence can 
be generated and used appropriately in product evaluation, FDA proposes 
to conduct one or more public workshops, as well as other appropriate 
activities (e.g., pilot studies or methodology development projects). 
Considering the available input, FDA will then publish draft guidance 
on how real-world evidence can contribute to the assessment of safety 
and effectiveness in regulatory submissions.
    Under PDUFA VI, FDA also proposes to pursue a more well-established 
use of real-world evidence to support post market drug safety 
surveillance utilizing Sentinel. FDA's Sentinel Initiative is a long-
term program designed to build and implement a national electronic 
system for monitoring the safety of FDA-approved medical products. FDA 
recently transitioned from the Mini-Sentinel pilot to the Sentinel 
System, but full utilization of the Sentinel System remains a work in 
progress. Continued development and integration of the Sentinel System 
is needed to realize the system's full value to the postmarketing 
safety review process.
    To help realize the full value of the Sentinel System during PDUFA 
VI, FDA proposes to continue to expand the systems' data sources and 
core capabilities, to systematically integrate Sentinel into 
postmarketing review activities, to enhance communication practices 
with sponsors and the public regarding general methodologies for 
Sentinel queries, and to conduct an analysis of the impact of Sentinel 
expansion and integration for regulatory purposes.
Hiring and Retaining Highly Qualified Experts
    To speed and improve development of safe and effective new 
therapies for patients requires that FDA hire and retain sufficient 
numbers and types of technical and scientific experts to efficiently 
conduct reviews of human drug applications. In order to strengthen this 
core function during PDUFA VI, FDA proposes to commit to completing 
implementation of: a modernized position management system; corporate 
recruiting practices; augmenting capacity with contractor support; 
establishing a dedicated scientific recruiting function; setting metric 
goals for human drug review staff hiring; and conducting a 
comprehensive independent assessment of hiring and retention system 
performance. We want to thank you again for providing vital new hiring 
authority in Cures. Cures will greatly improve FDA's ability to hire 
and retain scientific experts in more complex and specialized areas and 
meet our growing responsibilities.
    The hiring commitments proposed in PDUFA VI will complement Cures 
by supplementing the expertise and resources the Agency needs to 
perform its vital prescription drug mission.
Enhancing Management of User Fee Resources
    FDA is committed to enhancing management of PDUFA resources and 
ensuring PDUFA user fee resources are administered, allocated, and 
reported in an efficient and transparent manner. In PDUFA VI, the 
Agency proposes to establish a resource capacity planning function to 
improve its ability to analyze current resource needs and project 
future resource needs, modernize its time reporting approach, conduct 
an evaluation of PDUFA program resource management, and publish a 5-
year PDUFA financial plan with annual updates.
    In addition, under PDUFA VI, FDA proposes to enhance the program 
fee structure and related mechanisms, to achieve increased 
predictability, stability, and efficiency. The current overall PDUFA 
fee structure and the fee setting process were established in 1992. 
Both FDA and industry recognize that updating some elements of the fee 
structure and the fee setting process will enhance administrative 
efficiency and the predictability and stability of fee amounts and 
revenues and improve FDA's ability to engage in long-term financial 
planning. FDA proposes to shift a greater proportion of the target 
revenue allocation to more predictable fee-paying types (20 percent to 
applications; 80 percent to Program fees), and make other modifications 
to improve efficiency and stability including discontinuation of the 
establishment and supplement fees, modifying the annual fee billing 
date to minimize the need for multiple billing cycles, and other 
technical changes.
    We are incredibly proud of the progress FDA has made to speed 
medical products to patients through the PDUFA program, and look 
forward to working with Congress and industry to significantly further 
progress.
                                 mdufa
    Enacted by Congress in 2002, MDUFA is a user fee program through 
which medical device companies pay fees to FDA when they submit a 
request for marketing authorization or register their establishments 
with FDA. The program includes commitments between the U.S.-medical 
device industry and FDA to improve the predictability, transparency, 
and consistency of regulatory processes, which are intended to reduce 
the time for FDA to make a decision about whether to authorize 
marketing of a device.
    MDUFA has been reauthorized every 5 years since Congress created 
the program. As the program has evolved, FDA and industry have 
successfully negotiated agreements to improve patient access to medical 
devices and streamline regulatory processes.
    During the 2012 MDUFA III testimony, many of you may recall that 
the program was in a much different place:\2\
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    \2\ See Appendix A: ``U.S. Food and Drug Administration, Center for 
Devices and Radiological Health: Progress in Achieving Our Vision of 
Patients First.''

     In fiscal year 2009, it took an average of 427 days to 
reach a decision on a pre-market approval application (PMA), the 
submission type required for the highest risk devices.
     In fiscal year 2010, it took an average of 150 days to 
reach a decision on a pre-market notification submission (also known as 
a 510(k)), the submission type required for low- to moderate-risk 
devices.

    Thanks to the investment provided by industry, and direction 
provided by Congress, we have made substantial progress toward reducing 
decision times. As of 2015:

     It took an average of just 276 days to reach a decision on 
a PMA, a 35 percent decrease in 6 years; and
     It took an average of just 133 days to reach a decision on 
a 510(k), an 11 percent decrease in 5 years.

    Further, we went beyond our MDUFA III commitments to reduce the 
median time to approve an Investigational Device Exemption (IDE) study 
to just 30 days in fiscal year 2015, down from 442 days in fiscal year 
2011--a 93 percent decrease in 4 years. This improvement has allowed 
companies to begin their clinical trials earlier so they can begin 
collecting data to support a decision on their submission requesting 
marketing authorization. In addition, we reduced the average time to 
reach a decision on a De Novo classification request, the submission 
type typically used by novel low- or moderate-risk devices, to 259 days 
in fiscal year 2014, down from 770 days in fiscal year 2009--a 66 
percent decrease in 5 years.
    Changes we have made at CDRH to our culture, policies, and 
processes--in addition to user fee funding and changes to Federal law--
have resulted in an improved medical device pipeline and innovative 
technologies being introduced in the United States earlier than in the 
past. For example, since 2009, the number of innovative devices we have 
approved has almost quadrupled. In 2016, we approved 91 innovative 
devices--the highest of any year since the user fee program began in 
2003. In 2015, we approved the second highest number of innovative 
devices.
    An example of an innovative technology that FDA approved first in 
the world is the ``artificial pancreas,'' something many members of 
this committee supported. Working interactively with the device 
manufacturer from the earliest stages of development to assist in 
making this technology available as quickly as possible, FDA approved 
the first device in the world that is intended to automatically monitor 
glucose levels around the clock and automatically provide appropriate 
insulin doses.
    While we have made progress in many areas, we also recognize that 
more work remains and there are additional opportunities for 
improvements. We look forward to working with industry and Congress to 
ensure there are sufficient user fees resources as we strive to make 
these improvements. MDUFA IV agreement includes a new quality 
management program that will enhance consistency and predictability in 
pre-market review processes.
    MDUFA IV agreement would also allow FDA to move forward in some 
critical and strategic areas such as strengthening our partnerships 
with patients.\3\ Strengthening patient input will allow us to promote 
more patient-centric clinical trials, advance benefit-risk assessments 
that are informed by patient perspectives, and foster earlier access to 
new devices.
---------------------------------------------------------------------------
    \3\ See Appendix B: ``Center for Devices and Radiological Health 
(CDRH): 2016-2017 Strategic Priorities--2016 Accomplishments.''
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    Another critical area supported by the MDUFA IV agreement is the 
development of the National Evaluation System for health Technology, or 
NEST.\4\ The NEST is system-owned and -operated by multiple 
stakeholders that will use real-world data collected as part of routine 
clinical care. A robust NEST will enable manufacturers to harness real-
world evidence that could enable them to drive down the time and cost 
of bringing a new device to market, expand the indications for already 
approved devices, and meet postmarket reporting requirements. The NEST 
will also enable faster identification of safety issues, reducing harm 
to patients and liability for companies.
---------------------------------------------------------------------------
    \4\ See Appendix B: ``Center for Devices and Radiological Health 
(CDRH): 2016-2017 Strategic Priorities--2016 Accomplishments.''
---------------------------------------------------------------------------
    The MDUFA IV agreement, which was supported by a broad array of 
stakeholders during the public review of the draft agreement, will 
expedite the availability of innovative new products, and its 
enhancements will continue to increase the efficiency of FDA's 
programs. Improvements in total time to decision, transparency, 
consistency, and predictability will benefit industry, healthcare 
providers, and, most importantly, patients.
                                 gdufa
    The remarkable success of the GDUFA program demonstrates how FDA, 
industry and other stakeholders can work together to achieve tremendous 
results. GDUFA has expanded access to affordable generic medicines. 
About 25 percent of all generic drugs that FDA has ever approved were 
approved in the past 4 years. At the same time, GDUFA helps assure the 
quality of generic drugs. Patient confidence that generic drugs will 
work the same as brand products, and can be freely substituted, is the 
foundation for trillions of dollars in savings that generics produce 
for the healthcare system.
    Historically, the generic drug program has been a great success. 
The generic drug industry has grown from modest beginnings into a major 
force in healthcare. According to the QuintilesIMS Institute, generic 
drugs now account for 89 percent of prescriptions dispensed in the 
United States, and saved the U.S. healthcare system $1.46 trillion from 
2005 to 2015.
    This success brought new challenges. Over the last several decades, 
the generic industry, the number of generic drug applications, and the 
number of foreign facilities making generic drugs grew substantially. 
As a result, FDA's generic drug program became increasingly under-
resourced. Its staffing did not keep pace with the growth of the 
industry.
    Solution: GDUFA. After much negotiation, FDA and the generic drug 
industry, in consultation with other stakeholders, developed a proposal 
for a generic drug user fee program and submitted it to Congress. 
Congress enacted it (GDUFA I) as part of the Food and Drug 
Administration Safety and Innovation Act of 2012 (FDASIA).
    Under GDUFA I, industry agreed to pay approximately $300 million in 
fees each year of the 5-year program. In exchange, FDA committed to 
performance goals, including a commitment to complete reviews in a 
predictable timeframe.
GDUFA Achievements
    Met or Exceeded All Submission Review Goals to Date. FDA met or 
exceeded all GDUFA review goals to date, including goals for original 
Abbreviated New Drug Applications (ANDAs), ANDA amendments, Prior 
Approval Supplements (PAS), and controlled correspondence.
    Record Increase in Approvals. In fiscal year 2016, FDA approved or 
tentatively approved 835 ANDAs. This was the most approvals ever in 1 
year. Our previous high was 619.
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    Expanded Consumer Access to Quality, Affordable Generic Medicines. 
As noted previously, approximately 25 percent of all currently approved 
generic drugs were approved over the past 4 years.
    Prioritization and Approval of ``First Generics.'' FDA expedites 
the review of potential ``first generic'' ANDAs because they can open 
the market to generic competition for the first time. Most ``first 
generic'' ANDAs cannot lawfully be filed until a specific date, either 
4 or 5 years after the innovator drug was approved. On this date, FDA 
often receives a bolus of ANDAs, from many different applicants. 
Beginning October 2014, in accordance with GDUFA I, these ANDAs 
received goal dates. We worked hard to review ANDAs for first generics 
even faster, expediting their review like an express line at the 
supermarket. For example, last year we had timely approvals of nine 
generic versions of Crestor, a cholesterol drug with approximately $5 
billion in annual sales. Significant first generic approvals for 2016, 
and the indications (abbreviated) for which these products were 
approved, are listed in the following text box.
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    Increase in First Cycle Approvals. Prior to GDUFA, ANDAs were 
approved in one review cycle less than 1 percent of the time. Now, 
approximately 9 percent of ANDAs are approved in the first review 
cycle.
    Expanded Communications. To facilitate generic drug approval, in CY 
2016 the Agency sent product developers approximately 1,800 
communications and ANDA applicants approximately 6,600 communications. 
The Agency also issued 158 product-specific guidances, identifying 
methodologies for developing drugs and generating evidence needed to 
support generic approval. These guidances help companies develop ANDAs 
that will meet FDA's regulatory expectations. Over 1,500 product-
specific guidances are currently available as resources for prospective 
applicants.
    Risk-Based Inspection Parity. Before 2012, the law required us to 
inspect domestic facilities at a 2-year interval, but was silent on 
frequency for foreign facilities, regardless of their relative risk. 
Since 2012, FDASIA directed us to target inspections globally on the 
basis of risk. Many ANDAs rely on third-party facilities to manufacture 
active pharmaceutical ingredients or perform other roles in product 
development, and many of these facilities are located outside of the 
United States. Thanks to GDUFA, we have achieved the goal of risk-based 
inspection parity for foreign and domestic facilities.
How did FDA achieve these results?
    Deep, foundational restructuring. We achieved these results by 
building a modern generic drug program to comply with our commitments 
in GDUFA I. This involved major reorganizations. We reorganized the 
Office of Generic Drugs and elevated it to ``Super-Office'' status, on 
par with the Office of New Drugs. We established a new Office of 
Pharmaceutical Quality to integrate the quality components of ANDA 
review. FDA's Office of Regulatory Affairs also made significant 
inspection program enhancements. In addition, we re-engineered our 
business processes, developed an integrated informatics platform to 
support the review process, and hired and trained over 1,000 new 
employees.
Current Challenges
    We do have some ongoing challenges. The first challenge relates to 
submission completeness. Historically, it has taken on average about 
four review cycles to approve an ANDA as a result of deficiencies by 
generic drug sponsors in submitting complete applications.
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    This has resulted in the submission of numerous amendments to 
applications by the companies to correct deficiencies in the original 
ANDAs, and comprises a huge amount of re-work for FDA and industry 
alike. Currently, about 1,800 applications are back with industry 
awaiting resubmission to correct deficiencies in the original 
application. More work by both FDA and industry will be necessary to 
have the filings be ``right the first time.''
    Improvement may take some time. In the first few years of the 
Prescription Drug User Fee Act (PDUFA) program, the first cycle 
approval rate for new drugs was as low as 23 percent. Now it is about 
80 percent on average. Achieving this was the result of many years of 
cooperative work by the Agency and industry in establishing standards 
and meeting these expectations.
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    The second challenge relates to the volume of applications. We 
received many more applications than expected. As the GDUFA I 
Commitment Letter stated, GDUFA I review goals and planning were based 
on the assumption that FDA would receive approximately 750 ANDAs per 
year. We budgeted and planned with this projection in mind. However, in 
fiscal years 2012, 2013 and 2014, we received over 1,000 ANDAs--nearly 
1,000--and nearly 1,500 applications, respectively. As discussed below, 
GDUFA II would have a program size commensurate with the Agency's 
overall ANDA workload.
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    Third, several factors can delay timely consumer access to less 
expensive generic medicines. These factors include:

     inappropriate use of statutory requirements regarding 
single-shared system Risk Evaluation and Mitigation Strategies (REMS) 
to delay generics entry to the market;
     delaying or denying generic companies' access to 
reference-listed drug products, thereby preventing the companies from 
conducting studies required for approval; and
     misuse of FDA's citizen petition process as a means to 
block generic approvals.
Reauthorization
    Faster review of priority ANDAs. GDUFA II would establish faster 
review of priority submissions. Priority review would be available for 
submissions that FDA considers to be public health priorities pursuant 
to CDER's Manual of Policies and Procedures (MAPP) 5240.3 Rev. 2, 
Prioritization of the Review of Original ANDAs, Amendments and 
Supplements, as revised (the CDER Prioritization MAPP). In the final 
year of GDUFA I, all ANDAs receive a review goal of 10 months. In GDUFA 
II, standard ANDAs would continue to be reviewed within 10 months of 
submission, but priority ANDAs would be reviewed within 8 months of 
submission. To help ensure the more aggressive 8-month timeline can be 
met, for each priority review, the applicant would have to submit a 
pre-submission facility correspondence (PFC) listing all of the 
facilities that will require FDA inspection at least 2 months prior to 
the date of ANDA submission.
    FDA and the generic drug industry agreed to an 8-month priority 
review goal for two main reasons. First, it is the shortest time 
feasible given the global nature of generic drug manufacturing. In most 
cases, before the ANDA can be approved, FDA needs to inspect one or 
more manufacturing facilities to confirm that the drug will meet 
quality standards. Many ANDA applicants rely on multiple overseas 
manufacturing facilities, and conducting inspections of facilities in 
foreign countries requires additional time for FDA inspectors to obtain 
State Department approval and country-specific visas, and to meet other 
travel-related requirements. By providing FDA with information about 
the manufacturing facilities in advance of the ANDA submission, the PFC 
would give the Agency critical lead time to determine whether facility 
inspections will be needed, and when they are, to initiate travel 
planning.
    Second, 8 months is enough time for FDA to communicate--and 
applicants to correct--application deficiencies, so a priority ANDA can 
be approved in the current review cycle, not a later review cycle. A 
goal date set at fewer than 8 months would wind down work just when it 
is gaining momentum. Applicants would not have time to make corrections 
and thus get their ANDAs approved. To resolve outstanding issues, an 
additional cycle of review would be necessary. Approval would be 
delayed for at least 6 to 10 more months, depending on how quickly the 
applicant could develop an amendment and the GDUFA II review goal for 
the specific type of amendment submitted.
    Pre-ANDA Program Enhancements. To reduce the number of cycles to 
approval, particularly for complex products, GDUFA II would establish a 
pre-ANDA program. It would clarify regulatory expectations for 
prospective applicants early in product development and help applicants 
develop more complete submissions, thus promoting a more efficient and 
effective review process.
    The GDUFA II pre-ANDA program would establish three types of 
meetings for complex products. In a product development meeting, FDA 
would provide targeted advice concerning an ongoing ANDA development 
program. Pre-submission meetings would give applicants an opportunity 
to discuss and explain the content and format of an ANDA before it is 
submitted. Mid-review-cycle meetings would occur post-submission, after 
the last key review discipline has communicated deficiencies, and would 
enable applicants to discuss current concerns and next steps. FDA 
intends to issue a guidance concerning the pre-ANDA program, setting 
forth meeting policies and procedures. In addition, the Agency intends 
to establish metric goals for product development and pre-submission 
meetings.
    For products that are not complex, GDUFA II would direct the Agency 
to establish metric goals for FDA to issue product-specific guidance. 
Product-specific guidance identifies the methodology for developing 
generic drugs and generating evidence needed to support generic 
approval. They help companies develop ANDAs that will meet FDA's 
regulatory expectations. In addition, the pre-ANDA program would 
enhance controlled correspondence, regulatory science, the Inactive 
Ingredient Data base, and Safety Determination Letters.
    ANDA Review Program Enhancements. GDUFA II would further refine and 
modernize the ANDA review process from start to finish.
    The GDUFA II ANDA review program would start with submission of an 
ANDA. When an ANDA is submitted, FDA first determines whether an ANDA 
is sufficiently complete to permit a substantive review. If it is 
sufficiently complete, then FDA ``receives'' it within the meaning of 
the statute. FDA would aspire to make these receipt determinations 
within consistent deadlines. The Agency also would increase receipt-
related communications in an attempt to fix applications and resolve 
certain receipt disputes within consistent timelines.
    When the ANDA has been received and is under review, pursuant to 
GDUFA II, FDA would communicate review deficiencies beginning at about 
the mid-point of the review. Then, communications would continue on a 
rolling basis. In GDUFA I, many deficiencies were communicated at the 
very end of the review, in the form of a Complete Response Letter, too 
late for the applicant to fix them. This produced additional cycles of 
review, and delayed approval. By contrast, GDUFA II would use ``real 
time'' communications to give applicants more opportunities to correct 
deficiencies in the current review cycle.
    To support product launches and business planning that can improve 
access to generics, Regulatory Project Managers (RPMs) would provide 
review status updates and certain other types of notifications. The 
Agency would also establish new technical procedures to facilitate 
approval of tentatively approved ANDAs on the earliest lawful approval 
date.
    When deficiencies in an ANDA prevent FDA from approving it, FDA 
issues a Complete Response Letter (CRL) itemizing deficiencies that 
must be corrected for the ANDA to be approved. GDUFA II would establish 
post-CRL teleconferences to allow applicants to seek clarification 
concerning deficiencies identified in CRLs. This would help applicants 
meet FDA's expectations when an ANDA is re-submitted for additional 
review. There would be metric goals for such teleconferences, and for 
formal dispute resolutions.
    Finally, in GDUFA I, different cohorts and tiers of submissions 
received very different goals. The scheme was challenging for FDA to 
operationalize and administer. In addition, there was a significant gap 
between the negotiated commitments and stakeholder expectations. We 
appreciate that this has been an understandable area of concern for all 
of us. In GDUFA II, all ANDAs and ANDA amendments would fall within a 
single, consolidated review goals scheme. This would simplify and 
streamline GDUFA operations, and better align commitments with 
expectations.
    Drug Master File (DMF) Review Program Enhancements. DMFs are 
submissions that provide FDA with confidential information about 
facilities, processes, or articles used to manufacture, process, 
package, or store drugs. They support approval of ANDAs and are often 
submitted by API manufacturers that sell to ANDA sponsors. The 
commitment letter that accompanies GDUFA II contains five significant 
DMF review program enhancements.
    Facility Assessment Enhancements. As previously mentioned, FDASIA 
eliminated longstanding minimum inspection frequency requirements and, 
instead, directed FDA to inspect drug facilities globally on the basis 
of risk. The transition to this new paradigm has been commercially 
disruptive for industry, which over time had developed expectations and 
business processes based on the old model. To mitigate export-related 
challenges identified by U.S.-based active pharmaceutical ingredient 
(API) manufacturers, GDUFA II would require FDA to issue guidance and 
conduct outreach to foreign regulators on the risk-based selection 
model and take steps to support exports. To mitigate ANDA sponsor 
concerns, FDA would enhance the speed and transparency of 
communications concerning facility assessment, and generally update and 
seek feedback from industry. In addition, to enhance transparency 
concerning GDUFA facilities and sites, FDA would update its existing, 
publicly available facility compliance status database.
    Accountability and Reporting Enhancements. In GDUFA II, enhanced 
infrastructure and analytics would increase transparency and 
accountability and strengthen program management and resource use. FDA 
would develop internal capacity to enable improved productivity and 
performance through regular assessment of progress toward GDUFA II 
goals and transparent, efficient administration, allocation and 
reporting of user fee resources. In addition, an independent third 
party would evaluate the program.
    FDA would expand GDUFA program reporting on a monthly, quarterly 
and annual basis. Robust performance reporting would enable Congress, 
industry and other stakeholders to gauge the generic drug program's 
performance.
    Program Size Commensurate with Overall ANDA Workload. ANDAs are the 
primary workload driver of the generic drug program. In GDUFA I, the 
number of submissions received substantially exceeded projections. In 
order to maintain productivity and implement proposed GDUFA II 
improvements, FDA and the generic drug industry agreed that user fees 
should total $493.6 million annually, adjusted for inflation.
    Modification of User Fee Structure. For program stability, user fee 
collections must be predictable. Application volume can fluctuate from 
year to year, but there is a relatively stable universe of generic drug 
facilities and ANDA sponsors. To maintain a predictable fee base and 
better align responsibility with program costs and fee-paying ability, 
FDA and industry propose to shift the burden more toward annual program 
fees. Firms that sponsor one or more approved ANDAs would pay an annual 
fee. In addition, Finished Dosage Form (FDF) and API facilities would 
continue to pay annual fees as they did in GDUFA I.
    In GDUFA I, ANDA sponsors making changes to an already approved 
ANDA through a Prior Approval Supplement (PAS) were required to pay a 
PAS application fee. The volume of PASs is unpredictable. Collecting 
the fees was resource intensive. The new ANDA program fee is meant to 
be an investment in the program, and includes the cost of reviewing PAS 
submissions. For these reasons, FDA and industry propose to eliminate 
the PAS fee.
    Small Business Considerations. GDUFA II takes small business 
considerations into account. First, no facility or ANDA sponsor would 
be charged an annual fee until an ANDA in which it is listed is 
approved. This eliminates a situation that occurred in GDUFA I, where a 
company could be charged an annual fee, sometimes for several years in 
a row, even though no ANDA linked to the facility had been approved 
yet. Second, the annual program fee would have three tiers--small, 
medium and large--based on the number of approved ANDAs owned by the 
firm and its affiliates. Third, Contract Manufacturing Organizations 
(CMOs are hired by ANDA sponsors to manufacture their generic drugs) 
would pay one-third the annual facility fee paid by ANDA holders.
    In summary, FDA and the regulated industry, in consultation with 
other stakeholders, spent nearly a year developing the proposed GDUFA 
II agreement. It contains numerous, major reforms to address the main 
challenge facing the generic drug review program--namely, multiple 
review cycles. It is very inefficient for FDA and applicants alike to 
cycle through an ANDA over and over again. GDUFA II's pre-ANDA program, 
ANDA review program enhancements, and priority review program will 
increase the odds of first cycle approval, reduce the number of cycles 
to approval, and expand consumer access to quality, less expensive 
generic medicines. While we have made significant progress in our 
generic drug review, GDUFA II will support the agency in improving 
consumers' timely access to generic medicines.
                                 bsufa
    FDA is supportive of and fully engaged with the development and 
approval of biosimilar and interchangeable products. Many of our most 
important drugs are biological products. Biological products are used 
to treat patients who have serious and life-threatening medical 
conditions including rheumatoid arthritis, diabetes, and cancer. It is 
important for the public health of the U.S. population to have access 
to safe, effective, and affordable biological products. Biosimilars can 
provide more treatment options for patients, and possibly lower 
treatment costs, enabling greater access for more patients.
    To earn and sustain both physicians' and patients' confidence in 
biosimilar and interchangeable products, FDA is applying a 
scientifically rigorous review process and approval standard. 
Healthcare providers and patients have consistently emphasized that 
FDA's approval of biosimilars should provide assurance that biosimilars 
will have the same clinical performance as the originator, or reference 
product. FDA is committed to providing this assurance, and recognizes 
its importance to the uptake and acceptance of these products, and the 
future success of the biosimilars program.
Biologics Price Competition and Innovation Act (BPCI Act) and 
        Biosimilar User Fee Act (BsUFA): Important Additions to FDA 
        Statutory Authority
    BPCI Act. The Biologics Price Competition and Innovation (BPCI) Act 
established a new abbreviated approval pathway for biological products 
shown to be ``biosimilar to'' or ``interchangeable with'' an FDA-
licensed biological product. With this abbreviated approval pathway, an 
applicant can get a biosimilar approved by demonstrating, among other 
things, that it is highly similar to a reference biological product 
already licensed by FDA. Biological products are made from living 
organisms and usually consist of large, complex molecules that cannot 
be easily copied, in contrast to ``small molecule'' drugs that 
generally are produced through chemical processes and can be replicated 
as ``generic'' drugs. Unlike generic drugs, biosimilars must be highly 
similar to, not the same as, the reference product to which they are 
compared. While biosimilars may have certain allowable differences from 
the reference product, the applicant must demonstrate that there are no 
clinically meaningful differences between the biosimilar and its 
reference product in terms of safety, purity and potency.
    The abbreviated approval pathway permits a biosimilar application 
to rely, in part, on FDA's previous determination that the reference 
product is safe and effective, saving the applicant time and resources 
and thereby encouraging price competition and lowering healthcare 
costs. The ongoing and future impact of this relatively new law is 
significant. FDA's biosimilars program has sparked the development of a 
new segment of the biotechnology industry in the United States. The 
growth of this new market segment should expand opportunities for 
technical innovation, job growth, and patient access to treatment.
    BsUFA I. The Biosimilar User Fee Act (BsUFA) was enacted as part of 
the FDA Safety and Innovation Act (FDASIA) (Public Law No. 112-144, 
enacted on July 9, 2012). The first Biosimilar User Fee Agreement 
(BsUFA I) between the Agency and industry allowed FDA to begin 
development of the infrastructure needed to support this new program 
and devote additional resources to support the abbreviated development 
process leading to the approval of safe and effective biosimilar 
products for patients.
    One of the first steps in the development and review process for a 
biosimilar is for an applicant to join FDA's Biosimilar Product 
Development (BPD) Program. The BPD Program was created as a part of 
BsUFA I to provide a mechanism and structure for applicants to engage 
with FDA during the development of a biosimilar. As of February 2017, 
64 programs were enrolled in the BPD Program and CDER has received 
meeting requests to discuss the development of biosimilars for 23 
different reference products.
    In engaging with sponsors regarding biosimilar development, CDER 
holds development-phase meetings and provides written advice for 
ongoing development programs. These meetings include a Biosimilar 
Initial Advisory meeting where there is an initial discussion on 
whether licensure would be feasible for a particular product; and BPD 
meeting Types 1-4 where applicants can receive advice at different 
stages of product development. The meeting that is in highest demand 
and often requires significant review effort on behalf of FDA is the 
BPD Type 2 meeting where FDA conducts a substantive review of summary 
data and an applicant receives advice on specific issues. For 
additional details on the BsUFA BPD meeting types, please see Appendix 
C.
    As shown in Figure 12, the total number of meetings scheduled has 
increased each year since the beginning of BsUFA I. Additionally, in 
order to provide ongoing support for BPD programs, FDA has provided 
written advice to sponsors in instances where meeting requests were 
denied or canceled due to incomplete or premature requests.
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    The BPD meetings have provided valuable advice to biosimilar 
sponsors in the development of their products and associated biosimilar 
marketing applications. Since program inception and as of February 
2017, nine companies have publicly announced submission of 13 
applications for proposed biosimilar products to FDA.
    FDA approved the first biosimilar in the United States, Zarxio 
(filgrastim-sndz), a biosimilar to Neupogen, on March 6, 2015. In 2016, 
FDA approved three additional biosimilars: Inflectra (infliximab-dyyb), 
a biosimilar to Remicade; Erelzi (etanercept-szzs), a biosimilar to 
Enbrel; and Amjevita (adalimumab-atto), a biosimilar to Humira.
Challenges
    While we have made significant progress in creating and 
implementing this fairly new program, there is more work to do and, as 
with any new initiative, there are challenges that we need to address. 
These challenges in BSUFA I provide context for the discussions we had 
with industry during the BSUFA II negotiations. The ability to hire the 
right staff is critical to ensure the timely review of new biosimilars. 
While it's true that FDA has been somewhat limited in its capacity to 
recruit and retain the critical scientific, technical, and professional 
talent needed to address the complex and often novel scientific and 
legal issues involved in biosimilar review, we are committed to making 
meaningful and measureable progress.
    The lack of additional staffing to handle the increased workload 
for biosimilar review also has impacted review performance. For 
example, in fiscal year 2015, FDA was able to schedule only 50 percent 
of Initial Advisory meetings within the 90-day meeting goal, only 67 
percent of Type 1 meetings within the 30-day meeting goal, only 49 
percent of Type 2 meetings within the 75-day meeting goal, and zero 
Type 4 meetings within the 60-day meeting goal. FDA's performance 
during fiscal year 2016 was an improvement from fiscal year 2015; 
however, FDA still faced challenges and was unable to meet some of the 
applicable performance goals. Despite the BsUFA I performance 
challenges, industry indicated that in BsUFA II, they would like to see 
more meetings and faster turnaround of Agency advice.
BsUFA II
    FDASIA directed FDA to develop recommendations for BsUFA II for 
fiscal years 2018 through 2022. To develop these recommendations, FDA 
consulted with industry and public stakeholders, including scientific 
and academic experts, health care professionals, and patient and 
consumer advocates, as directed by Congress. In addition to meetings 
with industry organizations, FDA held two public meetings on December 
18, 2015, and October 20, 2016, to obtain input from public 
stakeholders.
    As discussed below, BsUFA II incorporates lessons learned from 
implementation of BsUFA I and provides a roadmap to successfully 
overcome some of the unexpected challenges encountered with BsUFA I.
    Proposed Fees. At the time BsUFA I was authorized, the size and 
costs of the program were uncertain. As such, it was agreed that user 
fees for BsUFA I should be based off the fees established under the 
PDUFA program. As part of the recommendations for BsUFA II, FDA and 
industry agreed to establish an independent fee structure based on 
BsUFA program costs to generate a total of $45 million in revenue for 
fiscal year 2018. FDA and industry representatives also propose that 
FDA can adjust this amount to reflect updated workload and cost 
estimates for fiscal year 2018 when FDA publishes the Federal Register 
(FR) notice establishing fee revenue and fees for fiscal year 2018. The 
adjustment cannot increase the target revenue more than $9 million, and 
FDA must describe the methodology used to calculate the adjustment in 
the FR.
    FDA's recommendations for the BsUFA II user fee structure include 
additional changes to enhance the predictability of BsUFA funding 
levels and sponsor invoices, minimize inefficiency by simplifying the 
administration of the program, and improve FDA's ability to manage 
program resources and engage in effective long-term planning. These 
changes include the removal of the supplement fee and establishment 
fee, while retaining the initial, annual, and reactivation biosimilar 
biological product development (BPD) fees. Under the recommendations, 
the product fee is renamed the BsUFA Program fee and includes a new 
provision that sponsors shall not be assessed more than five BsUFA 
Program fees for a fiscal year per application. These changes are 
consistent with changes proposed for the fee structure under PDUFA VI.
    Under BsUFA II, FDA also would establish a capacity planning 
adjustment as well as an operating reserve adjustment. The capacity 
planning adjustment, once operational (expected in fiscal year 2021), 
would establish a mechanism to adjust the annual fee revenue target 
based on analytically demonstrated sustained changes in BsUFA workload. 
The operating reserve adjustment would provide the ability to further 
adjust up or down the annual fee revenue to ensure the program is 
adequately resourced to sustain operations, while also preventing the 
accrual of unnecessarily large carryover balances. Under BsUFA II, the 
$20 million (adjusted for inflation) spending trigger would be 
considered to be met in any fiscal year if the costs funded by budget 
authority are not more than 15 percent below the inflation adjusted 
amount for that year. This flexibility, similar to the spending trigger 
provisions in PDUFA and GDUFA, will enhance FDA's level of certainty 
that it can allocate and spend the required amount of non-user fee 
funds for a given fiscal year and thereby spend user fee funds in that 
fiscal year.
    Proposed Performance Goals. The BsUFA II commitment letter 
establishes an application review model similar to ``the Program'' 
established under PDUFA V for new molecular entity new drug 
applications and original biological licensing applications. This new 
model is intended to promote the efficiency and effectiveness of the 
first cycle review process and minimize the number of review cycles 
necessary for approval. The parameters of the Program will include the 
following: (1) pre-submission meeting, (2) original application 
submission, (3) Day 74 Letter, (4) review performance goals (10-month 
user fee clock starts at 60-day filing date), (5) mid-cycle 
communication, (6) late-cycle and advisory committee meetings, (7) 
inspections, and (8) assessment of the Program.
    The additional 2-month review clock time (10 month plus 60 days, 
noted above) is intended to provide FDA more time to complete 
additional late cycle activities added as part of the new review model 
(e.g., late-cycle meeting) and address other late cycle review work, 
such as application deficiencies, Advisory Committee advice, and 
inspection issues to improve the efficiency of the first review cycle.
    Under the BsUFA II commitment letter, Biosimilar Initial Advisory 
meetings will occur within 75 calendar days, instead of 90 days agreed 
to in BsUFA I, from receipt of the meeting request and meeting package. 
This type of meeting will be limited to a general discussion on whether 
a proposed product could be developed as a biosimilar and to provide 
high-level overarching advice on the expected content of the 
development program. To provide necessary time for FDA discussions and 
to develop comprehensive responses, BPD Type 2 Meetings will occur 
within 90 calendar days, instead of 75 days as in BsUFA I, from receipt 
of the meeting request and meeting package. There will be phased-in 
performance goals for meeting these deadlines of 80 percent in fiscal 
years 2018 and 2019 and 90 percent in fiscal years 2020 through 2022. 
In addition, the Agency will send preliminary responses to the 
sponsor's questions contained in the background package no later than 5 
calendar days before the face-to-face, video conference or 
teleconference meeting date for BPD Type 2 and Type 3 meetings.
    Proposed Guidance Development. While the BPCI Act states that there 
is no requirement for FDA to issue guidance before reviewing or taking 
an action on a biosimilar application, industry has indicated to FDA 
that guidances are an important product development tool. As part of 
its work to implement the BPCI Act, FDA has finalized six guidances and 
issued four draft guidances. The six guidances that are final are:

    1. Scientific Considerations in Demonstrating Biosimilarity to a 
Reference Product (finalized on April 28, 2015).
    2. Quality Considerations in Demonstrating Biosimilarity of a 
Therapeutic Protein Product to a Reference Product (finalized on April 
28, 2015).
    3. Biosimilars: Questions and Answers Regarding Implementation of 
the Biologics Price Competition and Innovation Act of 2009 (finalized 
on April 28, 2015).
    4. Formal Meetings Between the FDA and Biosimilar Biological 
Product Sponsors or Applicants (finalized on November 17, 2015).
    5. Clinical Pharmacology Data to Support a Demonstration of 
Biosimilarity to a Reference Product (finalized on December 28, 2016).
    6. Nonproprietary Naming of Biological Products (finalized on 
January 12, 2017).

    Under the BsUFA II commitment letter, FDA has committed to 
publishing a revised draft guidance on Formal Meetings Between the FDA 
and Biosimilar Biological Product Sponsors or Applicants no later than 
September 30, 2018, and updating the draft guidance on Best Practices 
for Communication Between IND Sponsors and FDA During Drug Development 
by December 31, 2018.
    Additionally, under the BsUFA II commitment letter FDA has 
committed to publishing draft or final guidance describing the 
following:

     Considerations in Demonstrating Interchangeability with a 
Reference Product (draft on or before December 31, 2017, and revised or 
final guidance 24 months after close of the public comment period)
     Statistical Approaches to Evaluate Analytical Similarity 
(draft on or before December 31, 2017, and revised or final guidance 18 
months after close of the public comment period)
     Processes and Further Considerations Related to Post-
Approval Manufacturing Changes for Biosimilar Biological Products 
(draft on or before March 31, 2019, and revised or final guidance 18 
months after the close of the public comment period)
     Clinical Pharmacology Data to Support a Demonstration of 
Biosimilarity to a Reference Product (draft guidance published in May 
2014, revised or final guidance will be published on or before May 31, 
2019)
     Nonproprietary Naming of Biological Products (draft 
guidance published in August 2015, revised or final guidance will be 
published on or before May 31, 2019)
     Labeling for Biosimilar Biological Products (draft 
guidance published March 2016, and revised or final guidance on or 
before May 31, 2019).

    FDA has already published or finalized three of these guidances 
ahead of schedule: the draft Considerations in Demonstrating 
Interchangeability with a Reference Product and final guidance on 
Clinical Pharmacology Data to Support a Demonstration of Biosimilarity 
to a Reference Product and Nonproprietary Naming of Biological 
Products.
    As with all review programs within FDA, the ability to hire and 
retain qualified staff is critical to ensure the availability of new 
safe and effective drugs and biologics. Congress included much-needed 
new hiring authorities in the recently enacted Cures bill. FDA looks 
forward to applying these new authorities to further improve our 
biosimilars program. Several FDA goals in the BsUFA II commitment 
letter support this process: FDA will strengthen staff capacity; 
modernize the hiring system and infrastructure; augment human resources 
capacity through the use of dedicated expert contractors; establish a 
dedicated function for the recruitment and retention of scientific 
staffing; set clear goals for hiring; and conduct a comprehensive and 
continuous assessment of hiring and retention practices. These 
enhancements will allow us to meet our performance goals which in turn 
will help us save the applicant time and resources and ultimately 
encourage price competition.
The Path Forward
    BsUFA I provided critically needed funding for FDA to implement the 
beginning of a successful biosimilars program. We look forward to 
working with Congress and industry as we continue to strengthen this 
program and make improvements where needed. This relatively new pathway 
for biosimilar and interchangeable products has the potential to offer 
a significant contribution to the public health of many Americans by 
increasing access to more affordable biologics. At FDA, we are working 
hard to ensure this positive impact can be realized. We are optimistic 
and energized about the future of biosimilars.
    Human drug user fees have revolutionized the drug review process in 
the United States since they were adopted 20 years ago for prescription 
drug products, allowing FDA to speed the application review process 
without compromising the Agency's high standards. User fees offer a 
strong example of what can be achieved when FDA, industry and other 
stakeholders work together on the same goal. User fees provide a 
critical way to ensure that FDA has the resources needed to conduct 
reviews in a timely fashion.
                               conclusion
    The FDA user fee agreements have revolutionized the drug and device 
review process in the United States since they were adopted, allowing 
FDA to speed the application review process without compromising the 
Agency's high standards. User fees offer a strong example of what can 
be achieved when FDA, industry, and other stakeholders work together 
toward the same goal. User fees provide a critical way to ensure that 
FDA has the resources needed to conduct reviews in a timely fashion. 
While we have made demonstrable progress in partnering to bring medical 
products to market in as timely a manner as possible, we know that more 
work remains to be done to further enhance and optimize our processes. 
The reauthorization of PDUFA, MDUFA, GDUFA, and BsUFA will allow FDA to 
buildupon the demonstrated success of these programs, and in so doing, 
further benefit patients and affirm our Nation's standing as a global 
leader in biomedical innovation.
                               Appendix A
 U.S. Food and Drug Administration Center for Devices and Radiological 
       Health: Progress in Achieving Our Vision of Patients First
    In the early part of this decade, industry argued that FDA 
regulation hindered innovation and contributed to the growing number of 
device companies seeking marketing authorization for their devices 
abroad before introducing them in the United States, and the increasing 
gap between when a device is approved in another country and when it is 
approved in the United States. This reality, its adverse impact on 
patients, plus CDRH's own awareness of our declining performance over 
almost a decade, led CDRH to implement new programmatic changes. These 
changes, along with increased user fee funding and changes in Federal 
law have helped us strengthen our performance and better address the 
rapidly evolving field of medical device innovation. To guide us in our 
mission to improve the health and quality of life of patients, in 2012 
we adopted a new vision\5\ to reflect this change in mindset, that: 
Patients in the United States have access to high-quality, safe and 
effective medical devices of public health importance first in the 
world.
---------------------------------------------------------------------------
    \5\ CDRH Mission, Vision and Shared Values.
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                         doing business better
    Since late 2009, CDRH has continuously improved the way we do 
business through a series of culture, policy and process changes. This 
can be seen through our commitment to providing excellent customer 
service, new patient-centered paradigms, and our strong performance 
across a range of objective measures, including the time it takes to 
review several types of medical device submissions. These improvements 
are reflected by the nearly four-fold increase in the annual number of 
novel medical device approvals.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]


    Fast Facts: CDRH oversees approximately 175,000 medical devices on 
the U.S. market, more than 18,000 medical device manufacturers, and 
more than 25,000 medical device facilities worldwide. Each year we 
receive some 22,000 pre-market submissions (includes supplements and 
amendments) and more than 1.4 million reports on medical device adverse 
events and malfunctions.

    Time. Time, with its cost implications, plays a critical role in an 
innovator's decision as to whether and when to bring a new technology 
to the United States. What good is a new technology if patients do not 
have timely access to it? How helpful is a new technology that doesn't 
benefit patients or poses unacceptable risks? By reducing the time of 
every regulatory stage of the total product life cycle, including the 
review of medical device submissions, while still assuring robust but 
appropriate (least burdensome) evidence generation and high-quality 
decisionmaking, we help patients get access to safe and effective 
medical technologies and foster innovation. After steadily worsening 
performance from 2002 to 2010 on a variety of measures, including pre-
market review times, CDRH has reduced the decision time on all key pre-
market submission types.
    PMA. While pre-market approval applications (PMAs) only account for 
approximately 1 percent of all pre-market medical device submissions, 
they represent medical devices with the highest risk to patients (Class 
III devices) and, therefore, require more data and a more rigorous 
review by CDRH. In 2009, it took an average of 427 total days to reach 
a decision on a PMA. By 2015, we had reduced the total decision time by 
35 percent.
    510(k). Named after its section number in Federal law, this 
category represents the bulk of pre-market submissions for medical 
devices. Manufacturers submit 510(k)'s to CDRH for devices with low to 
moderate risk to patients (Class II), and our review standard is based 
on substantial equivalence (whether a device is at least as safe and 
effective as a device already on the market). In 2010, it took an 
average of 150 total days to reach a decision on a 510(k). By 2015, we 
had reduced the total decision time by 11 percent.
    De Novo. De novo classification is a pathway that enables 
manufacturers of certain low- to moderate-risk novel devices for which 
there are no similar marketed devices to come to market, instead of 
having to submit a PMA. In 2009, it took an average of 770 total days 
to reach a de novo decision. By 2014, we had reduced the total decision 
time by 66 percent.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

    IDE. Manufacturers submit Investigational Device Exemptions (IDEs) 
for certain devices they want to study via a clinical trial. CDRH 
reviews an IDE submission before a manufacturer can begin to collect 
clinical data that may be necessary for future approval. CDRH slashed 
median review times for IDE full approvals by more than a year between 
2011 and 2015.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

                        doing business different
    Since 2009, CDRH has been evaluating all of our programs to address 
concerns from patients, industry, health care providers, our own staff, 
and other customers about issues including review times, backlogs, and 
our expertise in increasingly complex technology. We have sought to 
address these concerns by changing our culture to put patients first 
and recognizing that advancing innovation and assuring patient safety 
are not mutually exclusive, revising or eliminating old policies, and 
developing new policies and approaches with an eye on meeting 
measurable objectives. Increased medical device user fees have 
supported these efforts so that we are better positioned to respond to 
the needs of patients.

     Clinical Trials. In addition to dramatically improved 
performance\6\ in reviewing IDEs, CDRH has encouraged the use of 
innovative methodologies and study designs in clinical trials. We 
recognize that manufacturers need CDRH input early and often so that 
the ultimate device review process moves as quickly and smoothly as 
possible. In 2013, CDRH issued final guidance for manufacturers on 
early feasibility studies to encourage conducting these studies in the 
United States. Innovators tend to market their technologies sooner in 
countries where they elect to conduct their early clinical studies. 
Since 2013, the number of early feasibility studies approved has more 
than doubled--from 17 in fiscal year 2013 to 40 in fiscal year 2016.
---------------------------------------------------------------------------
    \6\ CDRH Clinical Trial Enterprise Targets and Performance.
---------------------------------------------------------------------------
    CDRH encourages the use of innovative clinical trial designs and 
statistical methods such as adaptive clinical trials\7\ and Bayesian 
statistics\8\ because, where appropriate to use, they can reduce the 
time and cost of a clinical study. In recent years, many devices have 
come to market based on the results of clinical trials using adaptive 
trial designs. For the period from 2007 to May 2013, CDRH received 201 
submissions that were adaptive.
---------------------------------------------------------------------------
    \7\ Guidance Document: Adaptive Designs for Medical Device Clinical 
Studies Issued July 27, 2016.
    \8\ Guidance for the Use of Bayesian Statistics in Medical Device 
Clinical Trials.
---------------------------------------------------------------------------
    CDRH continues to develop computational models that can, in some 
instances, supplement or replace data from clinical investigations, 
such as the Virtual Family (VF)\9\--a set of highly detailed, 
anatomically correct, computational whole-body models, designed to 
mimic humans of both sexes at various stages of growth. Since 2007, 
more than 160 submissions have included Virtual Family research.
---------------------------------------------------------------------------
    \9\ Virtual Family.
---------------------------------------------------------------------------
     Flexible, Risk-Based Regulatory Approaches. CDRH continues 
to adapt our oversight policies to emerging new technologies. In a 
manner consistent with our statutory mission, we now approach a medical 
technology by first asking whether active CDRH oversight will be value-
added. If not, we take a less active regulatory approach. If it would, 
we focus on assuring timely patient access to technologies that will 
benefit patients by considering the device's innovation cycles and 
evidence generation needs.
    For example, widespread adoption and use of digital health 
technologies is creating new and innovative ways to improve health and 
health care delivery. In one of the biggest de-regulatory actions for 
CDRH in decades, to foster greater innovation in the digital health 
space while promoting public health, we have exercised our enforcement 
discretion to cease subjecting certain lower risk medical devices (such 
as apps for patient care management and medication reminders) to 
medical device requirements.
    Additionally, balancing data needs between what's collected before 
the device comes on the market (premarket) and what's collected after 
it is on the market (postmarket) reflects our approach to best assure 
timely patient access to safe and effective devices.
    In 2015, CDRH completed a retrospective review\10\ of the benefit-
risk profile of all types of high-risk devices to determine if we could 
reduce pre-market data collection requirements for at least some 
devices. As a result, for 30 percent of high-risk medical devices, CDRH 
determined, based on the current body of evidence and experience, we 
could consider some devices candidates for down-classification, 
eliminate some data requirements or shift some pre-market data 
requirements to the postmarket setting. In 2016, CDRH reached out to 
stakeholders for input on the results of the retrospective reviews, in 
order to determine next steps.

    \10\ CDRH Strategic Priorities and Updates.
---------------------------------------------------------------------------
     Patient-Centered Benefit-Risk. For the past 5 years, CDRH 
has encouraged the use of a more flexible, patient-centric, and 
transparent benefit-risk framework to evaluate medical devices, 
starting with a 2012 guidance on the factors to consider when making 
benefit-risk determinations in support of device pre-market approval 
decisions, which includes patient perspectives on potential benefits 
and risks. We are focusing more on what matters to patients.
    In 2016 and 2017, CDRH expanded this approach by revising the 2012 
guidance to include additional patient-centric factors,\11\ and issuing 
two additional benefit-risk guidance documents: one which outlines the 
principal factors CDRH considers when making benefit-risk 
determinations during the pre-market review process for IDEs\12\, and 
one which outlines factors to consider when determining whether and 
what postmarket actions\13\ we may take to address a problem, such as a 
recall, based on the benefits and risks of that action to patients.
---------------------------------------------------------------------------
    \11\ Guidance Document: Factors to Consider When Making Benefit-
Risk Determinations in Medical Device Premarket Approval and DeNova 
Classification (August. 24, 2016).
    \12\ Guidance Document: Factors to Consider When Making Benefit-
Risk Determinations in Medical Device Investigational Device 
Exemptions.
    \13\ Guidance Document: Factors to Consider When Making Benefit-
Risk Determinations in Medical Device Product Availability, Compliance, 
and Enforcement Decisions.
---------------------------------------------------------------------------
     Patients as Partners. CDRH had traditionally determined 
whether the benefits of a device outweighed its risks based on the 
tradeoffs we thought were acceptable. However, patients who live with a 
disease or condition often have their own perspectives on what benefits 
and risks related to medical devices they are willing to accept. CDRH 
collaborates with patient scientists and other experts outside the FDA 
to help us advance the scientific field of assessing patient 
preferences and incorporate the patient perspective into our benefit-
risk assessments and decisionmaking.
    For example, in 2014, CDRH funded a collaborative study on patient 
preferences that led to changes in our review paradigm for obesity 
devices, and used the results to inform our decision to approve the 
first medical device for treating obesity since 2007. Better 
understanding of patient preferences can also help rejuvenate 
development pipelines; since then, CDRH has approved or granted 
marketing applications for five more medical devices that address 
obesity or weight loss.
    In 2016, CDRH issued a final guidance that outlined patient 
preference information (PPI)\14\ that CDRH may use in decisionmaking. 
Since then manufacturers have begun to submit--and we have approved--
IDEs with patient preference studies.
---------------------------------------------------------------------------
    \14\ Guidance Document: Patient Preference Information--Voluntary 
Submission, Review in Premarket Approval Applications, Humanitarian 
Device Exemption Applications, and De Novo Requests, and Inclusion in 
Decision Summaries and Device Labeling.
---------------------------------------------------------------------------
    CDRH's efforts to incorporate the voice of patients in our 
decisionmaking also are reflected in medical device clinical studies, 
which have been increasingly assessing what matters most to patients. 
Between 2009 and 2014, the number of premarket submissions that 
included clinical studies with patient reported outcomes (PROs) 
increased by more than 500 percent and half of IDE pivotal clinical 
studies now include PROs.
    In 2015, CDRH established the first FDA advisory committee focused 
on the interests and needs of patients, and recruited potential new 
members in 2016. The Patient Engagement Advisory Committee\15\ will 
hold its first meeting in 2017.
---------------------------------------------------------------------------
    \15\ The Patient Engagement Advisory Committee.
---------------------------------------------------------------------------
     National Evaluation System for Health Technology (NEST). 
Despite rigorous premarket evaluation, we cannot fully understand how 
well a medical device works until it is used day-to-day by patients, 
caregivers, and clinicians. Premarket clinical trials provide 
critically important information but we don't understand the long-term 
benefit-risk profile until it is used in routine clinical practice. 
Currently our Nation is limited in its ability to make widespread use 
of real-world evidence (RWE) to best inform all members of the medical 
device ecosystem.
    CDRH intends for NEST to increase the quality and use of real-world 
data (RWD) collected as part of routine clinical care, which should 
also help reduce the time and cost of evidence generation. Ongoing 
implementation of the Unique Device Identification (UDI) system also 
will enable NEST to perform enhanced analyses of devices on the market, 
providing a clear and standard way to identify devices in electronic 
medical records.
    CDRH is already relying on RWE to approve new devices, expand the 
indications for already marketed devices, and reduce the time and cost 
for device makers to meet their postmarket study requirements. In 2016, 
CDRH documented access to more than 28 million electronic patient 
records (from national and international clinical registries, claims 
data, and electronic health records) that included device 
identification and awarded $3 million to the Medical Device Innovation 
Consortium to establish the NEST Coordinating Center.
     Streamlining the Pathway from FDA Approval to Payer 
Coverage. Timely access to innovative medical technologies has been 
identified as a significant issue in the delivery of high quality 
health care. Manufacturers of innovative medical products have said 
that after undergoing the FDA approval process the availability of 
their products to consumers is often slow because, in order to obtain 
coverage and payment from third-party payers, the manufacturers must go 
through a second review process by such payers. Therefore, CDRH 
established the Payer Communication Task Force (PCTF) to facilitate 
communication between device manufacturers and payers to shorten the 
time between FDA approval or clearance and coverage decisions. By 
communicating earlier, manufacturers may design their pivotal clinical 
trials to produce both the data required for regulatory approval or 
clearance, and positive coverage determinations.
    To support these efforts, CDRH and the Centers for Medicare & 
Medicaid Services (CMS) began to pilot an approach in 2011 called 
Parallel Review that would give eligible device makers the voluntary 
option for CMS to start their national coverage determination process 
while the device is under review by CDRH. This process serves the 
public interest by reducing the time between FDA marketing approval or 
clearance decisions and CMS national coverage determinations. In 2016, 
CDRH and CMS established Parallel Review as a permanent program. Last 
year, CDRH also established an additional opportunity for device 
manufacturers to invite CMS, private payers, or health technology 
assessment groups (HTAs) to join FDA pre-submission meetings to provide 
early feedback on clinical trial design.
                           evidence of impact
    Our investments are starting to pay off. For example, in 2016, CDRH 
approved 91 novel medical devices--the highest number since the advent 
of the user fee program in 2003. This followed the second highest 
number from 2015, and continued a 7-year trend that has resulted in a 
marked increase in the annual number of novel device approvals since 
2009. These novel technologies, which can help improve the quality of 
life of patients, especially those that require day-to-day maintenance 
and ongoing attention, are yielding promising results. In addition, 
several of these devices are reaching U.S. patients much earlier than 
they would have in previous years.

     ``Artificial Pancreas'' Approximately 5 percent of 
diabetics have Type 1 diabetes, also known as juvenile-onset diabetes. 
People with type 1 diabetes have to constantly monitor their glucose 
levels throughout the day and have insulin therapy through injection 
with a syringe, an insulin pen, or an insulin pump, to avoid becoming 
hyperglycemic (high glucose levels). Working interactively with the 
sponsor from the earliest stages of development to assist in making 
this technology available as quickly as possible while assuring it is 
safe and effective, CDRH, in 2016, approved the first automated insulin 
delivery (AID) device in the world that is intended to automatically 
monitor glucose (sugar) and provide appropriate basal insulin doses--
what some have called a first-generation ``artificial pancreas.''\16\
---------------------------------------------------------------------------
    \16\ The Artificial Pancreas Device System.
---------------------------------------------------------------------------
     Transcatheter Aortic Valve Replacement (TAVR) Therapy. 
About 80,000 surgical aortic valve replacements (SAVR) are performed in 
the United States annually. One-third of these patients are at 
intermediate surgical risk for death or complications. An aortic valve 
replacement that can be inserted through the blood vessels or, in some 
cases, through the tip of the heart by a catheter, rather than through 
open surgery, could avoid the risks of surgery and provide an 
alternative effective treatment to patients who are in the 
``intermediate surgical risk'' category.
    In 2011, CDRH approved the first TAVR device in the United States 
for patients who are not surgical candidates for SAVR, more than 4 
years after the device entered the European Union (EU) market. When, in 
2016, CDRH approved the expanded indication\17\ for use for a TAVR 
device in patients at intermediate surgical risk for death or 
complications, the positive impact of CDRH initiatives was evident. The 
gap between EU and U.S. approval for the expanded indication for use 
was reduced from over 4 years to only 18 days. U.S. Medicare coverage 
is also a factor in patients' access to devices. For TAVR devices, 
access to real-world evidence--what NEST hopes to expand--proved to be 
a valuable asset. The U.S. Medicare program immediately covered TAVR 
devices due to the ongoing collection of real-world evidence on these 
devices in a national registry--there was no delay between U.S. 
approval and access to this technology. As a result, more than 25,000 
additional patients each year are now eligible for this life-saving 
procedure.
---------------------------------------------------------------------------
    \17\ Press Release: FDA approves expanded indication for two 
transcatheter heart valves for patients at intermediate risk for death 
or complications associated with open-heart surgery--Aug. 2016.
---------------------------------------------------------------------------
     Diagnostics for National Emergencies. Accurate detection 
and diagnostics are critical to addressing national public health 
threats. For example, in 2016, CDRH authorized the use of 14 diagnostic 
tests for Zika\18\ virus under our Emergency Use Authorization (EUA) 
authority--12 tests to diagnose active infection and 2 tests to assess 
whether individuals who may have recently been exposed to Zika were 
actually infected. This rapid action provided timely patient access to 
Zika tests before the summer of 2016, when officials detected the virus 
in the United States. Since 2009, CDRH has granted 50 EUAs, 
reauthorized 19 EUAs, and granted 30 amendments for tests to help meet 
the country's needs during a national public health emergency, such as 
outbreaks from Zika, Ebola, and H1N1.
---------------------------------------------------------------------------
    \18\ Zika Virus Response Updates from FDA.
---------------------------------------------------------------------------
Appendix B. Center for Devices and Radiological Health (CDRH)--2016-17 
               Strategic Priorities--2016 Accomplishments
       establish a national evaluation system for medical devices
    To successfully harness real-world evidence (``evidence from 
clinical experience'') in an efficient manner, the United States must 
develop the necessary infrastructure--a National Evaluation System for 
health Technology (NEST).

   Goal: Increase Access to Real-World Evidence to Support Regulatory
                             Decisionmaking
------------------------------------------------------------------------
                2016 Target                            Results
------------------------------------------------------------------------
25 Million. by December 31, 2016, gain      28.6 Million. Gained access
 access to 25 million electronic patient     to more than 28 million
 records (from national and international    electronic patient records
 clinical registries, claims data, and       (from national and
 EHRs) with device identification.           international clinical
                                             registries, claims data,
                                             and EHRs) with device
                                             identification using a
                                             variety of mechanisms, such
                                             as cooperative agreements
                                             and access through
                                             regulatory process.
------------------------------------------------------------------------


     Goal: Increase Access the Use of Real-World Evidence to Support
                        Regulatory Decisionmaking
------------------------------------------------------------------------
                2016 Target                            Results
------------------------------------------------------------------------
40 percent. By December 31, 2016, increase  85 percent. The number of
 by 40 percent the number of pre-market      pre-market and post-market
 and post-market regulatory decisions that   regulatory decisions that
 leverage real-world evidence. (compared     used real-world evidence
 to fiscal year 2015 baseline).              increased by 85 percent in
                                             2016. (compared to fiscal
                                             year 2015 baseline).
------------------------------------------------------------------------

Supporting Actions
    In 2016, CDRH took a number of actions to achieve the goals and 
targets established for this priority:

     Establish the National Evaluation System for health 
Technology (NEST).
    In Progress: A multi-stakeholder Planning Board and the Medical 
Device Registry Task Force issued a series of reports that outlined an 
organizational structure and infrastructure for the NEST Coordinating 
Center (February 2015,\19\ April 2016,\20\ September 2016,\21\ August 
2015,\22\. In 2016, FDA awarded $3 million to the Medical Device 
Innovation Consortium (MDIC) to establish the Coordinating Center, and 
$1 million to other organizations to continue projects that generate 
real-world evidence on device performance.
---------------------------------------------------------------------------
    \19\ Recommendations for a National Medical Device Evaluation 
System.
    \20\ The National Evaluation System for health Technology: 
Priorities for Effective Early Implementation; Planning Board Report.
    \21\ The National Evaluation System for health Technology: 
Priorities for Effective Early Implementation; Planning Board Report.
    \22\ Recommendations for a National Medical Device Evaluation 
System.
---------------------------------------------------------------------------
     Develop a framework for the incorporation of real-world 
evidence into regulatory decisionmaking.
    In Progress: Issued draft guidance\23\ to describe how real-world 
evidence may be used to support pre- and post-market regulatory 
decisions. Final guidance is planned for 2017.
---------------------------------------------------------------------------
    \23\ Guidance Document: Use of Real-World Evidence to Support 
Regulatory Decisionmaking for Medical Devices.
---------------------------------------------------------------------------
                         partner with patients
    We believe that if CDRH is to successfully achieve a mission and 
vision in the service of patients, we must interact with patients as 
partners and work together to advance the development and evaluation of 
innovative devices, and monitor the performance of marketed devices.

Goal: Promote a Culture of Meaningful Patient Engagement by Facilitating
                     CDRH Interaction Pwith Patients
------------------------------------------------------------------------
                2016 Target                            Results
------------------------------------------------------------------------
10 Organizations. By December 31, 2016,     34 Organizations. CDRH staff
 establish one or more new mechanisms for    participated in 21 patient
 CDRH employees to obtain patient input on   interaction opportunities,
 key pre- and post-market issues facing      involving 34 patient
 CDRH and foster participation of 10         organizations.
 patient groups.
50 percent. By December 31, 2016, 50        68 percent. More than 68
 percent of CDRH employees will interact     percent of CDRH interacted
 with patients as part of their job duties.  with patients in 2016. When
                                             asked, 99 percent of staff
                                             who interacted with
                                             patients described their
                                             interaction as meaningful
                                             and 89 percent as relevant
                                             to their jobs.
------------------------------------------------------------------------


 Goal: Increase Use and Transparency of Patient Input as Evidence in Our
                             Decisionmaking
------------------------------------------------------------------------
                2016 Target                            Results
------------------------------------------------------------------------
50 percent. By September 30, 2016, 50       65 percent. In fiscal year
 percent of PMA, de novo and HDE decisions   2016, 65 percent of PMA, de
 will include a public summary of            novo, and HDE decisions
 available and relevant patient              included a public summary
 perspective data considered.                of available patient
                                             perspective data.
By September 30, 2017*, increase the        65 percent. PRO and 4 PPI.
 number of patient perspective studies       Increased by 65 percent the
 (e.g., evaluating patient reported          number of approved IDEs
 outcomes (PRO) or patient preference        (pivotal studies only) with
 information (PPI)) used in support of pre-  patient reported outcomes
 market and post-market regulatory           (PRO). Increased to four
 decisions. (Compared to fiscal year 2015    (from none) the number of
 baseline).                                  patient perspective studies
                                             conducted by sponsors in
                                             support of pre- and post-
                                             market regulatory
                                             decisions.
------------------------------------------------------------------------
* 2017 Target.

Supporting Actions
    In 2016, CDRH took a number of actions to achieve the goals and 
targets established for this priority:

     Patient Engagement Advisory Committee. Convene the Patient 
Engagement Advisory Committee to discuss high priority topics regarding 
patient input in the total product lifecycle.
    In Progress: CDRH chartered and began to recruit members for FDA's 
new Patient Engagement Advisory Committee (PEAC). PEAC members will be 
selected and announced in 2017.
     Education and Training. Develop education and training for 
CDRH staff and industry on the development and use of the science of 
measuring and communicating patient input throughout the total product 
lifecycle.
    In Progress: CDRH trained more than 80 staff members on patient-
reported outcomes (PRO) and patient-preference information (PPI), to 
advance staff understanding and CDRH review capacity in these areas.
       promote a culture of quality and organizational excellence
    A manufacturer's ability to design and make high-quality, safe and 
effective devices and CDRH's ability to provide the necessary oversight 
to assure devices on the market are high-quality, safe and effective 
will increase as manufacturers and CDRH embrace a culture of quality 
and excellence throughout our respective organizations.

 Goal: Strengthen FDA's Culture of Quality within the Center for Devices
                         and Radiological Health
------------------------------------------------------------------------
                2016 Target                            Results
------------------------------------------------------------------------
10 percent. By September 30, 2016,          300 percent. In fiscal year
 increase by 10 percent the number of CDRH   2016, CDRH tripled the
 staff with quality and process              number of staff with
 improvement credentials to improve          quality credentials by
 organizational excellence. (compared to     providing onsite quality
 fiscal year 2015 baseline).                 training and certification
                                             examinations.
------------------------------------------------------------------------


  Goal: Strengthen Product and Manufacturing Quality within the Medical
                            Device Ecosystem
------------------------------------------------------------------------
                2016 Target                            Results
------------------------------------------------------------------------
By September 30, 2016, develop metrics,     Partnered with MDIC to
 successful industry practices, standards,   develop metrics and best
 and tools that manufacturers can use to     practices to assess quality
 evaluate product and manufacturing          system performance, and
 quality beyond compliance with regulatory   analytical tools to assess
 requirements.                               device quality by hospital
                                             value analysis committees.
By December 31, 2016, pilot voluntary use   Partnered with MDIC and
 of product and manufacturing quality        Capability Maturity Model
 metrics and evaluation tools.               Integration (CMMI)
                                             Institute on a proof-of-
                                             concept and pilot with
                                             three device manufacturers,
                                             to evaluate use of the CMMI
                                             appraisal process as a
                                             foundation for a future
                                             third-party program.
------------------------------------------------------------------------

Supporting Actions
    In 2016, CDRH took a number of actions to achieve the goals and 
targets established for this priority:

     Quality Management Framework. Resources permitting, 
continue to implement the CDRH Quality Management Framework.
    In Progress: CDRH completed development of its document control 
system (DCS). DCS will ensure that current and approved quality program 
and key processes documentation--standard operating procedures, work 
instructions, forms, templates and process maps--is available to staff.
     Education and Training. Develop education and training for 
CDRH staff to facilitate adoption of practices characteristic of a 
culture of quality and organizational excellence.
    In Progress: CDRH became an American Society for Quality (ASQ) 
enterprise member--enabling every employee at FDA to take advantage of 
ASQ's vast collection of learning resources. CDRH also offered onsite 
quality training to 150 staff. More than 90 percent of those who 
participated in the training earned ASQ quality certifications 
(Certified Quality Auditor and Certified Quality Improvement 
Associate).
     Case for Quality. As part of the Case for Quality, 
collaborate with members of the medical device ecosystem to identify, 
develop, and pilot metrics, successful practices, standards, and 
evaluation tools that will be specific to the medical device industry 
and focus on assuring product and manufacturing quality.
    In Progress: In partnership with MDIC, CDRH collected input from 
stakeholders through six Case for Quality Forums; developed metrics and 
best practices designed to assess quality system performance using pre-
production, production and post-
production data; and led development of a product quality dashboard to 
assist 
hospital-value analysis committees in identifying high quality devices.
     Voluntary Program. Identify external partnerships and 
mechanisms to support a sustainable, voluntary third-party program that 
will utilize quality metrics, practices, standards, and evaluation 
tools to assess and promote medical device product and manufacturing 
quality within industry beyond compliance with regulatory requirements.
    In Progress: Continuing partnership with MDIC, CMMI Institute and 
other stakeholders, to expand application of maturity appraisal 
process; with the goal of developing the framework for a voluntary 
program in 2017.
                    Appendix C. BsUFA Meeting Types
    The BsUFA program established five meeting types specific to 
biosimilar development programs:

     A Biosimilar Initial Advisory meeting is an initial 
assessment limited to a general discussion regarding whether licensure 
under section 351(k) of the Public Health Service (PHS) Act may be 
feasible for a particular product.
     A BPD Type 1 meeting is a meeting that is necessary for an 
otherwise stalled BPD program to proceed. Examples of a BPD Type 1 
meeting include discussion of: a clinical hold, a special protocol 
assessment, an important safety issue, dispute resolution, and/or a 
Complete Response.
     A BPD Type 2 meeting is a meeting to discuss a specific 
issue (e.g., proposed study design or endpoints) or questions where FDA 
will provide targeted advice regarding an ongoing BPD program. This 
meeting type includes substantive review of summary data, but does not 
include review of full study reports.
     A BPD Type 3 meeting is an in-depth data review and advice 
meeting regarding an ongoing BPD program. This meeting type includes 
substantive review of full study reports, FDA advice regarding the 
similarity between the proposed biosimilar biological product and the 
reference product, and FDA advice regarding the need for additional 
studies, including design and analysis. This meeting has no counterpart 
in the Prescription Drug User Fee Act (PDUFA) program and is unique to 
BsUFA to support an evaluation of residual uncertainty regarding the 
demonstration of biosimilarity and to support the concept of stepwise 
evidence development.
     A BPD Type 4 meeting is a meeting to discuss the format 
and content of a biosimilar biological product application or 
supplement to be submitted under section 351(k) of the PHS Act.

    The Chairman. Thank you, Dr. Woodcock.
    Dr. Marks.

  STATEMENT OF PETER MARKS, M.D., Ph.D., DIRECTOR, CENTER FOR 
       BIOLOGICS EVALUATION AND RESEARCH, FOOD AND DRUG 
               ADMINISTRATION, SILVER SPRING, MD

    Dr. Marks. Mr. Chairman and members of the committee. Thank 
you for the opportunity to provide this testimony today on the 
reauthorization of FDA's User Fee Acts.
    At the Center for Biologics Evaluation and Research, we 
have regulatory responsibility for many complex biologics 
including vaccines, allergenic products, blood and blood 
derivatives, and cellular tissue and gene therapies.
    As part of this responsibility, in addition to biologics, 
we also regulate medical devices used to prepare blood and 
tissue products, and blood and tissue screening tests to 
prevent infectious disease transmission.
    The unique products that we regulate range from vaccines, 
which are administered routinely to almost all Americans to 
protect the public health, to gene and cellular therapies that 
are on the cutting edge of science and show promise for the 
treatment of seriously ill patients including those with rare 
disorders.
    These User Fees play an important role in supporting our 
review of many of these critical products, promoting 
innovation, and speeding the availability of medical products 
to those who need them.
    Though we regulate a wide variety of products, a common 
theme that runs through all of our complex biologics is that 
their safety and efficacy are intimately intertwined with the 
quality of their manufacturing processes. Indeed, some of the 
products that we oversee involve the most complicated and 
advanced technologies in pharmaceutical manufacturing.
    Just one illustration of this is the pneumococcal conjugate 
vaccine, which involves 14 different fermentation processes and 
39 chemical reactions for production.
    Indeed, vaccines represent one of the most important public 
health measures widely implemented during the 20th century that 
resulted in a significant decrease in morbidity and mortality 
in both children and adults. Vaccines are still every bit as 
important in the 21st century for maintaining public health.
    The correlation of the introduction of infective 
vaccination campaigns in the United States with the elimination 
of polio virus is incontrovertible and there are similar data 
for other infectious diseases.
    Our Center plays a key role in ensuring the safety, 
effectiveness, and availability of our Nation's vaccines. For 
example, in collaboration with other Federal partners, the 
Center plays an integral role in national and global 
preparedness for seasonal and pandemic influenza.
    In addition to licensing vaccines, we are involved across 
the vaccine development process from influenza virus strain 
selection, to preparation of crucial reagents in our 
laboratories for distribution to manufacturers, to monitoring 
large databases like the Sentinel System to ensure the post-
marketing safety of the vaccines that we approve.
    CBER also regulates some of the most highly innovative 
biologic products that have the potential to transform medical 
care. These include gene therapies and genetically modified 
cellular therapy such as chimeric antigen receptor T cells.
    Although there is not yet an approved gene therapy, such 
therapies very much appear to be on the horizon. In fact, the 
Center currently has 560 active investigation new drug 
applications involving gene therapy while having received 82 
applications in 2016 alone.
    Given the thousands of rare diseases without effective or 
optimal therapies available, it is relevant to note that more 
than two-thirds of these applications address such rare 
diseases, which include both inherited conditions and acquired 
diseases such as certain cancers.
    Toward the objective of further expediting the development 
and approval of important cellular and tissue-based therapies 
addressing unmet medical needs and serious and life-threatening 
conditions, the Center is very actively working to implement 
the Regenerative Medicine provisions of the 21st Century Cures 
Act that Congress recently enacted.
    We are now receiving requests for Regenerative Medicine 
Advanced Therapy, or RMAT, designation and our Center looks 
forward to working with sponsors of these products along with 
other stakeholders in order to help facilitate the availability 
of those new therapies to patients.
    Because of the broad scope of the products that we 
regulate, which even include a few generic drugs, our Center is 
supported in part by all four of the existing Medical Product 
User Fees. User Fees fund approximately 44 percent of the full 
time equivalents at the Center. The agreements that have been 
reached and the resources that they have provided the Center, 
along with the rest of the agency, have resulted in reduced 
time to regulatory actions.
    For example, during the past 5 years, we have met or 
exceeded the performance goals regarding product reviews for 
both the Prescription Drug and Medical Device User Fee 
Agreements of 2012. A number of our performance measures have 
improved significantly.
    In addition, User Fees have helped make it possible for us 
to fully implement recent initiatives that facilitate product 
development, such as the Breakthrough Therapy designation that 
was enacted by Congress in 2012. In this regard, as of January 
31, 2017 our Center has received 93 breakthrough designation 
requests and we granted 27 of those requests.
    The support from User Fees is a critical factor in 
providing us with the resources for the accomplishment of our 
Center's mission to protect and promote the public health by 
expediting the development and approval of important and 
innovative medical products.
    We greatly appreciate your efforts toward ensuring the 
seamless continuation of the User Fee Agreements that have 
helped facilitate the availability of such products for the 
benefit of the health of the people of our Nation.
    Thank you once again for the opportunity to provide this 
testimony.
    I look forward to answering any questions that you might 
have.
    The Chairman. Thank you, Dr. Marks.
    Dr. Shuren. Welcome.

 STATEMENT OF JEFFREY E. SHUREN, M.D., J.D., DIRECTOR, CENTER 
      FOR DEVICES AND RADIOLOGICAL HEALTH, FOOD AND DRUG 
               ADMINISTRATION, SILVER SPRING, MD

    Dr. Shuren. Thank you, Chairman Alexander, Ranking Member 
Murray, members of the committee.
    Thank you for the opportunity to have me here today to 
discuss the reauthorization of the Medical Device User Fee 
Amendment or MDUFA.
    When I was last here testifying about MDUFA, I am sure many 
of you may recall that the program was in a much different 
place. Since then, much has changed for the better, but we have 
more work to do.
    Between 2010 and 2016, we reduced the average total time to 
reach a decision on the 510(k)--the submission type required 
for low to moderate risk devices--by 11 percent.
    Between 2009 and last year, we reduced the average total 
time to reach a decision on the PMA--the submission type 
required for the highest risk devices--by almost 150 days, a 35 
percent decrease.
    We went beyond our MDUFA III commitments. For example, we 
reduced the median time to approve a clinical trial submission 
from 442 days in 2011 to just 30 days in 2015 and 2016, a 93 
percent decrease.
    Changes we have made at the Center for Devices and 
Radiological Health, or CDRH, to our culture, policies, and 
processes, the investment provided by industry through User Fee 
funding, and the direction provided by Congress through changes 
to Federal law have resulted in an improved medical device 
pipeline and innovative technologies being introduced into the 
United States earlier than in the past.
    In fact, the number of novel devices we have approved has 
almost quadrupled from 24 in 2009 to 91 in 2016, the highest 
since the advent of the Medical Device User Fee program in 
2003.
    In fact last year, we approved the first artificial 
pancreas working interactively with the device manufacturer 
from the early stages in development.
    FDA approved the first device in the world that is intended 
to automatically monitor glucose levels around the clock and 
automatically provide appropriate insulin doses. Overall, 
working with the manufacturer, we helped bring this technology 
to market 3 years earlier than the company had originally 
planned.
    MDUFA IV could continue the trajectory of more timely 
patient access to novel technologies, supporting CDRH's vision 
that patients in the United States have access to high quality, 
safe, and effective medical devices of public health importance 
first in the world.
    The MDUFA IV proposal submitted to Congress in January 
includes programmatic enhancements, such as a new quality 
management program that will improve consistency, efficiency, 
predictability, and the application of the least burdensome 
approach in our premarket review program and decisionmaking.
    The proposal would also allow the FDA to move forward in 
some critical and strategic areas, such as strengthening our 
partnerships with patients, allowing us to promote more 
patient-centric clinical trials, advanced benefit risk 
assessments that are informed by patient perspectives, and 
foster earlier patient access to new devices.
    Another critical area is the development of the National 
Evaluation System for health, with a small ``h,'' Technology or 
NEST. The NEST is a nongovernment system that will be operated 
by stakeholders of the medical device ecosystem including 
patients, providers, and the medical device industry. That 
would facilitate the use of real world data collected as part 
of routine clinical care, such as from electronic health 
records and registries consistent with the goals of 21st 
Century Cures.
    A robust NEST will enable manufacturers to harness real 
world evidence that could enable them to drive down the time 
and cost to bring a new device to market, expanding indications 
for already approved devices, meeting post-market reporting 
requirements, and obtaining payer coverage and reimbursement.
    The NEST will also enable faster identification of safety 
issues, reducing harm to patients and liability for companies.
    In conclusion, reauthorization of the Medical Device User 
Fee program could expedite the availability of innovative new 
products, create jobs, protect patients, and provide the 
enhancements that will continue to increase the efficiency of 
FDA's programs.
    Improvements in total time to decision, transparency, 
consistency, predictability, efficiency, and assuring the least 
burdensome approach will benefit industry, healthcare 
providers, and most importantly, patients.
    Thank you for the opportunity to testify today and I look 
forward to your questions.
    The Chairman. Thank you, Dr. Shuren.
    We will now have a 5-minute round of questions. I am going 
to defer my questions, and we will start with Senator Burr, and 
go to Senator Murray.

                       Statement of Senator Burr

    Senator Burr. Thank you, Mr. Chairman. Thank you for 
holding this hearing.
    I welcome our agency folks from the FDA. Let me ask all of 
you, if I can; just a yes or no answer.
    Would you be opposed to a modification in the Agreement 
that would return a percentage of the User Fee money to any 
manufacturer for those portions of the Agreement you did not 
live up to? Yes or no.
    Dr. Woodcock.
    Dr. Woodcock. Yes.
    Senator Burr. Yes?
    Dr. Woodcock. Yes.
    Senator Burr. Dr. Marks.
    Dr. Marks. Yes.
    Senator Burr. Dr. Shuren.
    Dr. Shuren. Yes.
    Senator Burr. OK. Listen, as a part of the 2012 PDUFA, the 
FDA promised to hire an additional 129 employees to review 
applications and to conduct other critical tasks to improve the 
performance of the agency.
    For the 2013 through 2017 cycle, the agency has only hired 
86 percent of the total number of new, full-time paid for by 
the industry. So the FDA has not been able to hire all the 
employees agreed to under the PDUFA agreement.
    Does the agency plan to return those dollars?
    Dr. Woodcock. No.
    Senator Burr. Do you feel that living up to the agreement 
that you made with the industry is important?
    Dr. Woodcock. Absolutely.
    Senator Burr. Has the FDA ever diverted User Fee money to 
construct buildings versus to hiring employees as was part of 
the agreement?
    Dr. Woodcock. To my knowledge, the agency has only spent 
money on the User Fee Agreements for the things that are 
allowable under there. Certainly, rent and overhead costs are 
one of the allowable costs.
    Senator Burr. The White Oaks Facility did not take User Fee 
money for construction?
    Dr. Woodcock. I do not know the answer to that. We can get 
back to you.
    Senator Burr. I would love for you to. I think that User 
Fees, dollars toward rental payments totaled $59.54 in 2015, 
that is GAO. Let me say, 27.1 of that was devoted to staff and 
it went toward rent.
    Listen, this is really important. I believe all the 
statistics as you have told me. I have heard them for 23 years 
from the FDA.
    Let me ask this, has what you agreed to in the User Fee 
Agreements differed greatly from the 1997 statutory 
requirements that you had?
    Dr. Woodcock. For drugs, there has been significant 
difference in the amount of advice we give.
    Since the first User Fee program, which set timeframes for 
conducting the premarket review, much of the attention has been 
paid to providing advice to industry in meetings during drug 
development and developing standards. Because the most 
important thing for the drug industry, at least, is 
predictability; so what is needed to get it onto the market? 
What standards have to be met?
    Senator Burr. I believe we negotiated that in the last 
Agreement.
    In 2015, FDA did not meet five of the meeting management 
goals established under the User Fee Agreement. A critical 
piece of the review process is the communication between the 
agency and the sponsor of the drugs, biologics, or devices.
    Regular correspondent progress updates, meetings between 
the two parties create greater predictability and certainty 
throughout the process. The agency promised to schedule 80 
percent of certain meetings within 75 days. That is over 2 
months allowing for a meeting to be set up.
    The agency scheduled only 49 percent of these meetings. You 
came up short of what the goal was in PDUFA, yet there is in 
this Agreement no penalty that the FDA pays.
    If you do not meet the FTE's that you agreed to in the 
agreement, there is no penalty that the FDA meets.
    If money is diverted over to rent versus to processing 
applications, there is no penalty that is met.
    Ninety-two percent of priority applications are approved in 
the first review cycle at the FDA and now, this is great news. 
However, that is not the case for standard applications moving 
through the agency. The percentage of standard applications 
approved in the first review cycle is 60 percent.
    What is the reason?
    Dr. Woodcock. The reason, generally, is that more questions 
arise. Standard applications do not provide an additional 
health benefit to the public. They are usually another option. 
The burden on them to be at least as good as what is out there 
is somewhat higher than something that is curing something.
    Senator Burr. Could that be part of 51 percent that did not 
get a regularly scheduled meeting?
    Dr. Woodcock. That I cannot comment on.
    Senator Burr. Let me just ask you, my time is running out.
    Dr. Woodcock. I would like to, if I may, explain that rent 
is an allowable part of the User Fee Agreements, as I said 
earlier.
    Senator Burr. Well, I just want my colleagues to be fully 
aware of what User Fees go to. They do not necessarily go to 
put reviewers in front of applications to make decisions that 
live within the timeframes that you agreed to.
    Since we are new to Generic User Fees, how has the backlog 
changed on generics in this first User Fee period?
    Dr. Woodcock. Prior to enactment of the first Generic User 
Fee program, there was a very large number of applications, 
thousands, sitting at the FDA that had not been picked up and 
looked at.
    Typically before that program started, they would go 
through a minimum of four cycles of review before they got out 
onto the market and done, which meant some of them went through 
11 cycles of review.
    We have reviewed virtually all of those applications. They 
have been reviewed and many of them--there are 1,800 current 
applications sitting back with the manufacturers waiting for 
them to decide whether to resubmit them or move on.
    We have 2,300 applications in process at the FDA, under 
review, with goal dates. So they have a predictable path that 
they will follow.
    I cannot tell you at the end of their review that every one 
will get approved. Why? Some of them have manufacturing 
facilities that are unacceptable and we cannot approve generics 
where the parties have, perhaps, made up data or other things. 
So there may be blocks. We will send them a complete response 
saying, ``You have to fix this problem.''
    However, everything is under goal right now and it is a 
predictable process for the industry. Not as fast as they would 
like it to be, or we would like it to be, because we had to get 
through that huge bolus, which I compared to like a python 
trying to, or a snake, trying to swallow a giant donkey or 
something like that. It was an amazing amount of work that we 
had to get done, but it is in process.
    Senator Burr. We need to move on.
    The Chairman. Thank you, Senator Burr.
    Senator Murray.
    Senator Murray. Thank you, Mr. Chairman.
    Before I ask my questions, I do have to say again, I am 
deeply concerned that we have a major healthcare bill moving 
through Congress that has not had a hearing.
    As a reminder, during consideration of the Affordable Care 
Act, this HELP committee held 47 bipartisan meetings on that 
issue including 14 bipartisan roundtables, 13 bipartisan 
hearings, and 20 bipartisan walk-throughs.
    It is really concerning to me that given all of the harm 
and chaos and everything that goes along with Trump Care, there 
are no plans in this committee to talk about this legislation 
as it moves through. I have a lot of constituents, like I am 
sure many of us do, coming up to us with really personal 
stories. They are very fearful and I just think it is critical 
that this committee have a hearing to talk about the impact of 
this legislation.
    I hope our colleagues think about why they do not want to 
have a hearing and hope they agree to allow us to have some 
closer scrutiny of this. I think it is extremely critical and I 
am going to stay focused on it.
    On this subject, Dr. Woodcock, let me talk with you first.
    Polls show that the high price of prescription drugs is one 
of America's top health concerns. We know when costs are too 
high, patients sometimes forego their necessary treatments.
    However, the FDA is not permitted, of course, to set drug 
prices. I am hopeful that our Republican colleagues will work 
with me and other Democrats on this side of the aisle. CMS is 
currently prohibited from negotiating the price of drugs under 
Medicare Part D. I would love to work on reviewing that, seeing 
if we can change that.
    The FDA can help promote a robust, competitive marketplace 
that makes treatments more affordable for patients by 
continuing to advance generic and biosimilar drugs.
    Dr. Woodcock, can you tell us the key ways the generic and 
biosimilar agreements will help to get those products to market 
for consumers?
    Dr. Woodcock. In the generic space, it is very important 
that they not only have a predictable process, we also need to 
shorten the cycle numbers.
    Having four cycles as happened in the past is an 
inefficient process for both the industry and the FDA. It 
wastes resources. We would like to move to where we have 
finally moved in the Prescription Drug User Fee program where 
the majority of approvals are after one review cycle. That is 
No. 1; a predictable, prompt path to the market.
    Other parts of the Agreement include us continuing 
research. There are parts of the innovator, the brand drugs, 
certain types of products that really have very little generic 
competition. That is because you cannot do traditional bio-
equivalents testing on them. For example, topical drugs and 
drugs with other routes of administration other than oral.
    We have been doing research on these and have begun to 
develop methods whereby instead of doing large clinical trials 
to get a generic on the market, which is, of course, 
counterintuitive that we can use other methods to show they are 
just the same as the innovator.
    Similarly in the biosimilar world, the advanced methodology 
that we have is helping us compare the drugs before they go 
into any clinical testing in the biosimilar world, and this is 
what is allowing biosimilar development.
    These activities are really helping enhance competition.
    Senator Murray. According to the FDA's own data, there are 
over 2,300 applications for generic drugs in some stage of the 
review process at the FDA.
    How many of those 2,300 applications are for products that 
would offer competition to a brand name drug for the first time 
or products that could bring competition to an uncompetitive 
market; the kinds of products that could actually bring new 
competition to some of the high-priced drugs?
    Dr. Woodcock. My understanding is there are six waiting, 
but they have to wait, offer experience, and so forth. Six 
first generics and there are nine where they are a sole source, 
where there is only one other. Is that correct, Keith? Yes, 
that is correct.
    Senator Murray. That is not very many.
    Dr. Woodcock. That does not address the entire problem.
    I must stress that the second Generic Drug User Fee program 
has many features that is intended to move these along as much 
as possible. We have a preprogram, as I said, for complex 
generics, which is an area where there is difficulty getting 
generics on the market, where we give advice and more 
handholding on how to get through the process for these more 
complicated products.
    We also have, right now, a prioritization program where 
first generics and sole source products can be expedited in 
their review.
    Senator Murray. Well, I appreciate it. It is not very many.
    Dr. Woodcock. No.
    Senator Murray. I think it is pretty clear that this 
agreement will make some important improvements to the generic 
drug approval process, which I support. But it alone is not 
going to solve the drug crisis. We are going to have to work 
outside of this to make that happen.
    Thank you.
    The Chairman. Thank you, Senator Murray.
    Senator Collins.

                      Statement of Senator Collins

    Senator Collins. Thank you, Mr. Chairman.
    First, let me thank you for holding this hearing. We are 
facing the expiration date of September 30 for four laws that 
authorize these extraordinarily important fee programs that 
have helped to improve the healthcare, and the availability of 
medications and devices for the American people. I am glad that 
you are moving ahead and not jeopardizing these programs.
    Speaking of which, Dr. Shuren, I was delighted to hear you 
talk about the artificial pancreas. I chaired and founded the 
Diabetes Caucus in the Senate back in 1998. We have tripled 
funding for research, which has helped.
    The collaboration that you talked about that has allowed 
the artificial pancreas to come to market 3 years earlier, I 
believe you said, than otherwise would be the case is going to 
make such a tremendous difference in the lives of so many 
children who have Type 1 diabetes.
    I remember holding a hearing on the promise of an 
artificial pancreas 10 years ago, and it was really wonderful 
to learn of this development last year, and to see it coming to 
market.
    I understand, however, that the initial access is going to 
be limited to older children and adults with Type 1 diabetes.
    Can you update me on what is going on as far as clinical 
trials to allow younger children access to this potentially 
life altering technology?
    Dr. Shuren. I appreciate, by the way, all your support in 
the diabetes community for all these many years.
    So yes, the device will be available for patients, really, 
14 and older, but additional data is being collected in terms 
of younger children. The reason is because they are more 
active; their lifestyle is different. We just have to make sure 
that that technology, that they are able to use it given how 
they eat, how they play. But it is our hope that that will move 
forward very quickly as well.
    Senator Collins. Thank you. That is great news.
    Dr. Woodcock, as you are well aware, the Senate Aging 
Committee, which I chair, spent a whole year looking at the 
explosion in prices of off-patent drugs for which there was no 
generic equivalent.
    One of the issues that we identified were the restricted 
distribution programs that were intended to prevent side 
effects, or they were high-risk drugs that patients were going 
to be using. So they were intended to be pro-consumer.
    What we found is that these systems could be abused to 
delay generic entry into the marketplace. And the abuses are 
serious. By one estimate in 2014, such abuses resulted in 
increased costs to consumers of $5.4 billion per year.
    We have talked before about the REMS system that has been 
used by some drug companies to prevent potential generic 
competitors from getting access to the drugs, so that they can 
conduct the bioequivalent studies that you require.
    What can be done to ensure that these restricted 
distribution programs, which were enacted with the best of 
intentions, are not abused and are a source of delay for 
generics coming to the marketplace?
    Dr. Woodcock. These are a source of delay in two ways.
    No. 1, as you said, companies are refusing to give drugs to 
the generic companies so they can perform the bioequivalent 
studies.
    We have done a program to try and counter that. We review 
the protocols of the generic company, the clinical bio-
equivalents protocol, and then we send a letter to the 
innovator company saying, ``We find this acceptable. There are 
no problems.'' But we cannot force brand companies to give a 
drug to generic companies.
    We do talk to the FTC. We send them information when this 
happens, and we have actually sent about 150 different settings 
about drugs over to them regarding this.
    REMS are also a source when there is a restricted 
distribution system and Congress had said in the original FDA 
Amendments Act that there had to be a single shared system 
unless there were good reasons not to, which means the 
innovator would have to have a shared system of distribution 
with its competitors.
    This has delayed availability of generics a very long time, 
in some cases, and that is something we cannot do too much 
about. That is a standing law on the books. It says there 
should be a single shared system.
    In some cases, we have had to go to separate systems that 
talk to each other so that the generics actually can come onto 
the market.
    Senator Collins. So, would you like to see a change in the 
law in that area?
    Dr. Woodcock. Well, I cannot comment on that, but I would 
say that that is a problem that we are seeing.
    Senator Collins. Thank you, Mr. Chairman. I hope when we 
get to the markup stage, that the bill that Senator Claire 
McCaskill and I introduced as a result of the investigation we 
did in the Aging Committee will be part of our consideration.
    The Chairman. Thank you, Senator Collins.
    Senator Bennet.

                      Statement of Senator Bennet

    Senator Bennet. Thank you, Mr. Chairman.
    I am grateful for you holding this hearing.
    I want to also join Senator Murray and just urge my 
colleagues to find a way to have a bipartisan discussion as 
this healthcare bill comes forward.
    I did 2 days of town meetings last week all over Colorado 
in Democratic and Republican areas. There are a lot of people, 
as everybody on this panel knows, who are dissatisfied with our 
healthcare system right now as it is, and they are worried that 
the Congress is about to make it even worse than it is.
    Sign me up. We had 13 hearings here. We had a 7-day markup 
in the Finance Committee. We had, I think, 25 days on the bill 
in the Senate, and I remember some people saying it was being 
rushed through even with that kind of approach. I hope we can 
work to improve something as it comes through.
    Second, I would like to thank Senator Collins for her 
leadership on diabetes and also recognize the good work that 
Dr. Shuren and his team have done.
    I had Commissioner Califf out to Denver to visit the 
Barbara Davis Center and to meet a number of young people there 
who are just so excited about the potential of this artificial 
pancreas to change their lives. And there is more work, 
obviously, to be done there.
    It is just a reminder that the work you do, and the work we 
do, can actually improve people's lives and that people are 
watching. And not withstanding the politics around here, they 
would like their government to actually be responsive to them. 
I want to thank you also for the progress that you have made in 
terms of the speeding up of approvals of medical devices.
    You mentioned, Dr. Woodcock, the Breakthrough Therapies 
legislation that Senators Burr, and Hatch, and I wrote a number 
of years later. We now have seen that about 50 drugs have been 
approved as a result of that legislation. Treatments such as 
Kalydeco for cystic fibrosis have made a dramatic difference in 
the lives of Coloradoans who are fighting a life or death 
disease.
    I would love to hear you talk a little bit more about why 
you think that has been a success? What we have learned from 
that that we are going to be able to apply in other parts of 
the agency, if others would like to be responsive?
    A question also is that when we look at the Breakthrough 
Therapies, only one has been approved for use in a neurological 
disease, specifically Parkinson's and I wonder whether you 
could address Coloradoans who are suffering from ALS, 
Alzheimer's, and other neurological diseases? How we can better 
support efforts to identify and speed up the approval of 
promising new therapies for neurological?
    Maybe we will start with Dr. Woodcock and then if anybody 
else wants to respond.
    Dr. Woodcock. Well, the Breakthrough Therapy program has 
put focused attention on potentially game-changing drugs. And 
we have been lucky that there are more of them now, probably 
because of the advance of science.
    When we get that preliminary clinical data--as you said in 
the statute that shows that promise to be a game changer--we 
focus management attention on that development program, make 
sure it is as streamlined as possible, and we really help the 
sponsors get over the finish line for those drugs. That is 
really a very important intervention that has led to this.
    As far as neurologic diseases, we did recently approve a 
very high-tech product called Nusinersen for spinal muscular 
atrophy, a fatal disease of children and a debilitating disease 
of young people. That was approved to slow down the disease and 
it is actually an antisense oligonucleotide.
    Senator Bennet. Hold on. Let me write that down.
    Dr. Woodcock. Yes, it probably takes more than 5 minutes to 
explain, but it is a very high-tech intervention that actually 
turns on a gene and helps produce the protein that is missing 
and is needed.
    We are starting to see that, but neurologic diseases are 
behind cancer and other diseases. We do not know as much about 
them.
    As I said many years ago to someone on this committee, that 
if we had put a war on neurologic diseases at the same time we 
declared a war on cancer, we probably would not be having this 
conversation. But our scientific understanding of neurologic 
diseases has lagged. But the good news is we have a robust 
pipeline now.
    Senator Bennet. Is there anybody else who would like to?
    Dr. Marks.
    Dr. Marks. I would just quickly add that I think that for 
our products too, we are starting to see products for 
neurologic diseases start to come into our Center. The 
Breakthrough designation is something that, with the enhanced 
communication, hopefully as those products come down the 
pipeline, we will help bring those forward more quickly to 
patients.
    Senator Bennet. Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Bennet.
    Senator Young.

                       Statement of Senator Young

    Senator Young. Thank you, Mr. Chairman, for holding this 
important hearing.
    I want to thank the Ranking Member for her support of this 
hearing as well, and thank our panelists.
    Regenerative medicine has been invoked a number of times 
here. I think it is really exciting the possibilities in that 
area and I thank you for your work there. It provides hope to 
those whose family members die on account of a lack of 
sufficient supply of organs being available in this country.
    I just want to publicly announce my interest in this issue. 
There is no organized constituency, to my knowledge, of family 
members of people awaiting organ donations in this country. We 
have, I think to put it mildly, a suboptimal system, and I am 
looking for opportunities to make improvements there.
    Turning to User Fees, the pharmaceutical and medical device 
industries are very important to the State of Indiana, not just 
on account of the jobs that they lead to, but we are proud of 
the innovations in the area.
    The 21st Century Cures Act and the Prescription Drug User 
Fee Act VI--the technical agreement--directs the FDA to explore 
uses of real world evidence that are now possible. We can pull 
a raft of evidence out of clinical trials and analyze that to 
assist our regulatory decisionmaking. We directed that that be 
done in furtherance of safety and effectiveness.
    How will the FDA approach the exploration of this new area 
of regulatory science? And does the FDA have some plans to 
learn from the experiences of other sectors, say, the health 
insurance sector, various hospital systems, and their use of 
real world evidence with regards to reliance on real world 
evidence?
    Dr. Woodcock. Well, certainly we have harnessed the health 
insurance industry data. Our Sentinel System has about 193 
million patient experiences and different patients from claims 
data from health insurance. That links to what happened to 
them, what their diagnosis was, what condition they were 
hospitalized for.
    We have used that many times. That is now part of our 
routine safety, surveillance, and assessment of signals that we 
get on safety. We can go into those data, and do analyses, and 
bolster the evidence, whether there is a real safety problem or 
whether it was simply something that was a false signal.
    Senator Young. So you are looking at claims data in those 
data packages FDA receives.
    Any other sort of data sets from registries?
    Dr. Woodcock. Absolutely. We are interested in data in any 
possible form we can get it. We do work with, say, PCORnet. 
They have set up a network that includes the electronic health 
record, and we are very interested in integrating that into 
Sentinel. We do this work with the Center for Biologics.
    That will take some more work, but we are working on that 
integration, and getting all the standards together, and so 
forth. We want to incorporate registries. I know devices, maybe 
Jeff, you ought to talk about that more.
    Dr. Shuren. Yes. We are already using device registries, 
and we have been involved in helping to set up over two dozen 
device registries.
    In the past 6 years, we have been engaged in over 50 
projects related to real world evidence. We are currently 
relying on it to approve new devices. Last year, we approved a 
balloon catheter based upon registry data.
    We are expanding labeling indications based on it. In fact, 
in one case for a heart valve, the company was going to do a 
clinical trial. We saw the data was good enough in registry. We 
called the company and said, ``Do not do the study. Send us a 
request. We are going to approve the indication.''
    We are using it for post-market studies. We are finding 
nesting clinical trials in a registry is reducing costs by 
about 40 to 60 percent.
    Senator Young. Fantastic. Moving to MDUFA, or the Medical 
Device User Fee Act IV. That Agreement includes new 
requirements for User Fee revenue to support the National 
Evaluation for health Technology to develop a coordinating 
center with expertise in the use of real world evidence to 
support premarket activities. A number of pilot projects are to 
be created.
    Could you very briefly discuss how these are going to work 
and how they might allow patients to benefit from new safe and 
effective technologies more quickly?
    Dr. Shuren. Well, first off, this is not a Government 
system, so we have already provided initial seed funding to the 
Medical Device Innovation Consortium, a public-private 
partnership, to serve as the coordinating center.
    They are in the midst of hiring an executive director and 
setting up a governing committee that has representatives from 
the device ecosystem. So patients will also have a voice in 
that entity.
    As part of the pilots, they are going to be looking at 
return on investment for use of real world evidence in 
approving products, expanding labeling indications, and using 
it for malfunction summaries.
    Also as part of it, they will start laying out the rules of 
the road, infrastructure and methodologies, to make greater 
use. The whole goal here is drive down the time and cost, and 
increase the value of use of real world data.
    Today, there are a lot of challenges in using the data. It 
may be of poor quality or incomplete. The other is, it is only 
available for certain devices. We want to make that available 
more systematically across the device industry.
    Senator Young. Thank you.
    The Chairman. Thanks, Senator Young.
    Senator Murphy.

                      Statement of Senator Murphy

    Senator Murphy. Thank you, Mr. Chairman.
    I just think it is outrageous that we are holding this 
hearing today instead of talking about what is actually 
happening in this building right now; an effort to rewrite the 
rules that concern one-sixth of this country's economy.
    An effort to jam down the throats of the House and the 
Senate the repeal of the Affordable Care Act, the most massive 
change in American healthcare in our entire lifetime. We are 
not talking about it in the Health Committee. We are the Health 
Committee. We are charged with overseeing the American 
healthcare system. And we are acting as if this is not 
happening.
    IPDUFA, MDUFA, I understand they are important, but I am 
just going to tell you, the people that are sitting in this 
audience today, they are not representing uninsured Americans. 
They are representing the industry by and large. They are 
representing the million and billion dollar companies that have 
a lot at stake in this legislation.
    We are the Health Committee and I do not know what the 
relevance of sitting on this committee is if we have nothing to 
do or say about a piece of legislation that is going to 
dramatically alter the landscape of American healthcare for our 
constituents.
    We have heard about what the Health Committee has done in 
the past, and so, I will not regurgitate those numbers, but I 
watched those hearings. I was proud to watch those hearings.
    In the Health Committee, there were 300 amendments that 
were considered in developing the ACA. There were 160 
Republican amendments that were accepted as part of that 
legislation. Republicans did not vote for it in the end, but 
this committee had the chance to weigh in. The American people 
got to see over the course of a year an actual debate play out.
    And though Republicans eviscerated Democrats for ramming 
that bill through, let us be honest about why we are not having 
a hearing here today. It is because my Republican colleagues 
did not learn a lesson of a bill being rammed through the 
process. They actually think that process took too long.
    The reason that this bill is being jammed through on an 
extraordinary timeframe is because the lesson they learned from 
the ACA is that there was too much debate, and so they want 
less so that nobody can see what is in this bill.
    I get that we can make your job easier and speed more 
transformational drugs to market, but if you do not have 
insurance to afford these drugs, then nothing we do here in the 
reform of these User Fee Agreements matters.
    Twenty-four million people are about to lose their 
healthcare. That is the entire population of Alaska, Delaware, 
Hawaii, Idaho, Kansas, Maine, Montana, Nebraska, Nevada, New 
Hampshire, New Mexico, North Dakota, Rhode Island, South 
Dakota, Vermont, West Virginia, and Wyoming.
    This is not a minor adjustment of the number of people who 
have access to the drugs that we are talking about here today. 
This is a humanitarian catastrophe that is about to happen, and 
we are pretending like the debate does not exist.
    I asked to be on this committee because I wanted to be at 
the center of the most important debates about the future of 
the American healthcare system. But it is possible that next 
week in the U.S. Senate, we are going to be asked in a handful 
of hours to vote up or down on a bill that is going to 
dramatically change the reality of healthcare for consumers all 
across this country. Driving rates up for millions of people, 
especially older Americans, taking healthcare away for millions 
of Americans, passing on enormous tax breaks to the drug 
industries that we are talking about here today to healthcare 
insurance companies. This committee will have nothing to say 
about it.
    I do not have any questions for the witnesses.
    The Chairman. Senator Roberts.

                      Statement of Senator Roberts

    Senator Roberts. Well, thank you, Mr. Chairman.
    Back to the subject at hand.
    Thanks to the panel. I am pleased to see the increased 
reporting, more timelines, stronger commitments to patient 
engagement, and independent third-party reviews.
    With the combined 30 percent increase for fees proposed for 
next year, as Senator Burr so aptly described, that is over 100 
percent for the biosimilars alone. I hope you are all prepared 
for the increased workload which will be required to turn this 
investment into increased and improved treatment options for 
the patients.
    We certainly, here on the committee, do not want to slow 
down approvals as these are important therapies to get on the 
market. We have heard a lot of frustration and confusion with 
how to proceed in their absence.
    I appreciate that in the commitment letter that you gave 
us, there are specific timelines laid out on the 
interchangeability. Your agreement states that the FDA will 
publish draft guidance by the end of this year, and finalize 
within 24 months after the close of the comment period. That 
puts us into 2020. That is 10 years after the biosimilars 
pathway became law. That is a long time, even for Senators.
    Dr. Marks and Dr. Woodcock, why is this taking so long? 
Either one.
    Dr. Marks. Well, I can start and I can let Dr. Woodcock 
continue.
    In part, it was necessary to develop--the guidance took 
time to develop in order to develop the science behind this. 
There were issues with developing the science of determining 
that things were bioequivalent. There were issues in 
determining what constitutes the scientific criteria that 
things would be interchangeable.
    Taking into account stakeholders' comments on these, and 
so, it did take some time to get things, but I think we are 
committed to moving ahead very expeditiously toward trying to 
get out our required guidance and to continue to move ahead 
with this important program.
    Senator Roberts. Not an easy task, I know.
    Please, doctor.
    Dr. Woodcock. We would expect to finalize the guidance 
ahead of schedule. That is what I would expect.
    Senator Roberts. Thank goodness.
    Dr. Woodcock. I would expect that there is going to be, 
there is a great deal of controversy on this, obviously, 
because it is a point of great financial import to both 
innovators and the biosimilars.
    The patients are very interested in this. All professional 
groups are interested in this. So there is a great deal of 
commentary on what the standards should be.
    We are committed to getting this done as quickly as 
possible and it should not, it will not impede the availability 
of biosimilars on the market. It is simply switching at the 
pharmacy that is the interchangeability piece.
    Senator Roberts. In 2015, only 9 percent of generic drug 
applications were approved in the first cycle review.
    Dr. Woodcock, before the Energy and Commerce committee, you 
stated that you think that this number is either 20 or 25 
percent of the new agreement. You would consider that a 
success.
    In the commitment letter, I see the pre-application program 
for complex products as a good step to improve early 
communication for companies with the agency and approve on 
review success. But that is only for complex products.
    Can you share any other efforts within this agreement that 
would be beneficial for noncomplex products to receive the 
first cycle review approvals?
    Dr. Woodcock. Certainly, we recognize that even more 
communication than we have instantiated in the first generic 
drug review program will be necessary to bring up that first 
cycle approval rate. And it is in our best interests, as well 
as the interests of the companies and the public, to get these 
on the market as quickly as possible.
    We have put in place more communications at every step of 
the way, including if people do not get a first approval, there 
can be a conversation about what was wrong, what needs to be 
fixed, and so on. We hope this will improve first cycle 
performance faster than we did in PDUFA.
    Senator Roberts. Mr. Chairman, I would like to acknowledge 
your aversion to acronyms. And I would like to acknowledge your 
penchant for country and western music. I would like to 
acknowledge the considerable fervor that has been shown on the 
minority side. I do not know if this is the best I can do. I 
will work with you later.
    ``We met in PDUFA,
    But she was very aloofa.
    But our bios were similar,
    So we got married in GDUFA.''
    [Laughter.]
    What do you think?
    The Chairman. I think we should go onto Senator Warren.
    [Laughter.]
    As much as I respect your country music.
    Senator Roberts. I think that is probably a very good idea.
    The Chairman. Thank you, Senator Roberts.
    Senator Warren.

                      Statement of Senator Warren

    Senator Warren. Thank you, Mr. Chairman.
    You have called us here today to discuss the FDA User Fees 
program, and it is vitally important, and I am going to work 
hard to make sure that this makes it through Congress.
    I join my democratic colleagues and--I am just going to be 
blunt about this--I have no idea why we are having this 
healthcare hearing today, 48 hours before the House Republicans 
try to ram through a bill that is going to rip health insurance 
away from 24 million people, raise insurance premiums for 
seniors by $12,000 a year, and eviscerate the Medicaid program 
to the tune of $880 billion. There is no indication that the 
Senate will hold a hearing on this bill. Not now, not ever.
    If Republicans want to gut our healthcare system, they 
should have the decency to talk openly about it, not jam 
through a bill that will devastate the entire country's 
healthcare system with zero debate.
    We have three distinguished witnesses here from the Food 
and Drug Administration. None of this is their fault. I do have 
some questions I want to ask them, so I am going to do that. 
But they are among the thousands who work hard at the FDA to 
get innovative treatments to patients, while also protecting us 
from dangerous drugs, from deadly devices, and from poisoned 
foods.
    Dr. Woodcock, on his third day in office, President Trump 
announced a governmentwide freeze on hiring. Does a hiring 
freeze help or hurt the FDA's ability to do these jobs?
    Dr. Woodcock. We are actively working through the issues of 
hiring with the Administration. We were able to move forward on 
certain select positions within the User Fee programs and to 
hire to meet also the needs of the Cures Act.
    Senator Warren. That was not the question I asked.
    The question I am asking you is: does a hiring freeze make 
it easier or harder for you to do the things you are supposed 
to do? Protect us from dangerous drugs, from deadly devices, 
and from poisoned food.
    Dr. Woodcock. Clearly, the FDA needs adequate staff in 
order to conduct its public health mission.
    Senator Warren. All right. That is the whole point of these 
User Fees is that it is supposed to add positions to do drug 
and device review, not plug holes that are created by a hiring 
freeze.
    Let us be honest. We have to say there is no way that a 
hiring freeze is going to help the FDA do its job.
    The President's budget also proposed to, quote, and I will 
read it here, ``Replace the need for new budget authority at 
the FDA with an increase in medical product user fees.'' As I 
read this, I think this is just a fancy way of saying that 
Congress should cut the guaranteed funding going to the FDA.
    Dr. Woodcock, if Congress cuts funding going to the FDA, 
does that make it harder or easier for the FDA to do its job?
    Dr. Woodcock. I am not position to discuss budgetary 
matters at this time.
    Senator Warren. Well, I get that you are not here to 
describe the budget, but I am asking you a question. If the 
President wants to cut money going from Congress to the FDA, is 
that a good idea or a bad idea from the point of view of the 
FDA doing its job?
    Dr. Woodcock. Again, I am not able to comment.
    Senator Warren. Well, look. I really do not get what the 
plan is here. I certainly hope that we are not going to blow up 
our User Fee negotiations and risk an FDA shutdown because the 
President does not think that the Government needs the Food and 
Drug Administration.
    I am not seeing much evidence that this Administration 
actually wants the FDA to work. If they did, they could start 
by reversing the hiring freeze and backing off this announced 
reckless plan to undermine FDA funding.
    Let us be clear, if the Republican bill to gut American 
healthcare becomes law, all the miracle cures and speedy FDA 
approvals in the world will not matter to the tens of millions 
of Americans who will not be able to afford them when they get 
sick.
    On behalf of the thousands of people in Massachusetts and 
millions of people around this country who are terrified about 
that, Mr. Chairman, I look forward to having a Senate hearing 
where we can discuss those issues.
    Thank you.
    The Chairman. Thank you, Senator Warren.
    I will take my 5 minutes now, if that is all right with 
Senator Cassidy and Senator Scott.
    Senator Scott. We serve at your pleasure, Sir.
    The Chairman. No, you do not really.
    Senator Scott. I concede your right.
    The Chairman. I appreciate your courtesy.
    We scheduled this hearing on March 3 because of what would 
happen if we do not do our job here. I am going to ask you a 
question in just a moment of what the consequences would be to 
patients all over the country if by July 27 we do not decide 
what we think about these Agreements and you have to fire 5,000 
people. What the consequences will be to the enormous advances 
that we laid in place for the 21st Century Act. I will ask you 
that in just a minute.
    As far as the FDA hiring freeze, I can answer that 
question. That is a problem. That needs to be lifted as soon as 
it can be because one of the major advances of the 21st Century 
Cures Act was to give the FDA new authority to hire the people 
it needed and pay them what needed to be paid to them so they 
could approve the drugs that we complain are not getting 
through the investment and regulatory process and into doctors' 
offices.
    I can give my opinion on that and that is my goal. I hope 
the Administration will quickly recognize the importance of 
that.
    Insofar as the amendments to the Affordable Care Act, 
without dwelling on that, because I want to spend the time here 
on this important Act, I think we can do two things at once in 
the U.S. Senate.
    It is true there. We proceeded on two tracks when we passed 
the Affordable Care Act. One was the part that required 60 
votes. There were plenty of hearings there.
    One was the reconciliation track. There were almost none 
there. In fact, there was no train that ran through the 
Congress faster than the Obamacare reconciliation bill. It went 
through in 8 days. Budget to the floor, budget to the floor in 
the Senate, and then back to the House, and out to the 
President.
    There has already been much more deliberations on the 
current amendments than there were on that reconciliation in 
2010.
    On the part that requires 60 votes, which is the only way 
we will get lasting, durable changes to our healthcare system, 
there will have to be a lot of hearings. We had one a month ago 
in what I consider the real humanitarian crisis, which are the 
231,000 Tennesseans who will have zero healthcare options in 
2018 if Congress does not act to fix the problems of what is a 
collapsing, failing individual market caused by the Affordable 
Care Act.
    We proceeded on two tracks in 2009 and 2010. We are 
proceeding on two tracks today. The track on reconciliation 
actually has more deliberations than the one did in 2010.
    Let me ask my question. What would be the impact if 
Congress does not act by the end of July, 60 days before the 
expiration of the current Agreements? What would be the impact 
on the Food and Drug Administration if we fail to do that? I 
will ask each of you that question.
    Dr. Woodcock. We would have to follow the Government rules 
for preparing to let go a large number of people, as you said, 
across the User Fee programs because we would have to prepare 
to issue notices of reduction in force if those User Fee 
programs were not reauthorized, and we would not be getting the 
money.
    There are carryover balances that are carried within each 
of the programs that allow for an orderly shutdown.
    But I think your question is more what would the impact be?
    The Chairman. Yes. What would the effect be on patients, 
and on new drugs, and on lifesaving devices?
    Dr. Woodcock. Peter, do you want to start?
    Dr. Marks. We have literally hundreds of investigational 
new drug applications that are a part of User Fee programs. The 
ability to hold meetings in a timely manner, the ability to 
make sure those approvals happen in a timely manner to get 
products to patients with medical need would be adversely 
impacted severely.
    The Chairman. Dr. Shuren.
    Dr. Shuren. We would lose about one-third of our people. 
And it is not just that reviews will take longer, but the 
industry, which now is starting to bring their innovative 
technologies to the United States early, sometimes first, as 
you heard with the artificial pancreas. They are going 
elsewhere. I am already hearing from companies if the United 
States does not work out right, it is not just Europe, it is 
now China and elsewhere.
    The Chairman. I am not exaggerating when I say that if we 
do not act, if the President does not sign the bill by July 27, 
I believe it is, then you have to take these steps.
    Is that correct?
    Dr. Woodcock. We must initiate them. Yes, we must do the 
reduction in force that would start at the time.
    The Chairman. So you send letters to employees saying, 
``You are going to be laid off in 60 days.''
    Is that right?
    Dr. Woodcock. We would begin a process to do that, and we 
have to identify the people. There is an elaborate system of 
how you figure out who is what. But everyone would know this is 
going on.
    The Chairman. An application for a cancer therapy or cure 
that might be before reviewers might be delayed?
    Dr. Woodcock. Yes. We know right now, we have patients 
living sort of hand to mouth, young people with brain tumors or 
other cancers who are waiting for the next effective therapy to 
come along as they develop resistance to current.
    I heard from a Senate staffer, ex-staffer about this who 
has lived a long time, been able to work because there have 
been successive approvals of drugs for his cancer that have 
kept him alive. And this would be repeated over and over.
    Most concerning in the biologics area for the 
pharmaceuticals, the gene therapies, the cellular therapies, 
the very innovative treatments require oversight in the 
investigational phase because any slip up there can last for 10 
years and set the entire field back.
    The Chairman. Thank you very much.
    Senator Hassan.

                      Statement of Senator Hassan

    Senator Hassan. Well, thank you, Mr. Chairman and Ranking 
Member Murray.
    And thanks to the witnesses for being here today as well.
    I will join my colleagues on the minority side of the table 
here just to reiterate that while I think it is extremely 
important that we consider the User Fee Agreements--and I 
appreciate the chance to speak with all of you today--like many 
of my colleagues, I am troubled that the committee has not 
been, and is not addressing, the issue that I hear most about 
from Granite Staters right now.
    I just came back from several days at home and wherever I 
go, people want to understand what the implications of Trump 
Care are for them. I hear from constituents all the time who, 
because of the Affordable Care Ace for the first time, got 
access to lifesaving treatment.
    While what you all are doing and what we are talking about 
here today is very important, without that underpinning of 
insurance coverage for many of my constituents, this is a 
little bit of an irrelevant conversation.
    I hope that we will have a chance to convene hearings to 
the Chairman's point that the U.S. Senate can do two things at 
once. We could convene some hearings on Trump Care before we 
have to vote on it, and I hope very much that we will do that. 
Not only so we can make informed decisions, but so that all 
Americans can be part of an open and transparent process 
because the Trump Care bill, as it now stands, will hurt my 
constituents. It will hurt our country.
    As the committee in this body with jurisdiction over many 
things in the Trump Care bill, that is the topic that I think 
we should be focused on today.
    With that being said, I do want to ask you all about a 
couple of things and I will start, Dr. Woodcock, with you.
    Too many Granite Staters, and people across our country, 
are struggling with an opioid addiction and it is an epidemic 
in my State. It killed approximately 500 people in the little 
State of New Hampshire last year.
    I commend the FDA for putting out its Opioid Action Plan 
last year, but I want to be very clear that there is still much 
more work that the FDA needs to do on this issue, and that it 
continue to play a role in confronting and beating this 
epidemic.
    For example, there are several FDA-approved opioids with 
so-called ``abuse deterrent formulations'' on the market. And 
the User Fees that we are talking about today help pay for 
review of these products.
    The FDA acknowledges ``abuse deterrent'' does not mean 
``abuse proof,'' and has acknowledged that these products can 
still be easily abused by just swallowing a whole bunch of the 
abuse deterrent drugs, for example.
    Dr. Woodcock, is it appropriate to call these opioids abuse 
deterrent if they can still be easily abused?
    Dr. Woodcock. They cannot be abused as easily in certain 
ways by snorting or by injecting, which are preferred by many 
addicts because they give you an immediate high.
    Senator Hassan. Right.
    Dr. Woodcock. All right? What we are trying to do is move 
up the scale and get more and more effective abuse-deterrent 
technologies in place. These are Version 1.0. We acknowledge 
that. They are still undergoing their evaluation to see, in 
fact, how effective they are.
    Senator Hassan. Just so I can understand. They are just as 
addictive, though.
    Dr. Woodcock. They are opioids, and so what we are trying 
to do in addition to introducing more treatments for opioid 
abuse is to introduce pain treatments that do not have these 
liabilities. And we have approved a number of drugs for 
specific conditions that now people are, like the neurologists, 
are moving away from opioids for peripheral neuropathy, for 
example.
    Senator Hassan. Right. And I understand that, and that was 
actually going to be--so thank you for anticipating one of my 
questions. I am very glad you are doing that because I have 
been talking with my constituents about this, both as Governor 
and now as Senator for some time, and I think that is very 
welcome news.
    I do want to get back to one issue, though, which is the 
use of the term ``abuse deterrent'' because experts have done 
surveys now that show that 46 percent of primary care providers 
think that abuse deterrent products are less addictive than 
other opioids.
    In light of this safeness conception, do you think calling 
these products ``abuse deterrent'' is misleading or causing 
providers to think that these products are less addictive?
    Dr. Woodcock. It certainly seems as if more education is 
needed, and that is something that we are working on very hard. 
We are considering extending our educational program. Over 
100,000 I think, practitioners of various kinds in healthcare 
have been educated under our current program. But we would like 
to extend that.
    Much of the abuse, though, of opioids is not these high 
potency extended release, but is actually the kind of drug you 
get after you go for an in-and-out procedure, or you have your 
tooth extracted. And the question is, do you really need 60 
tablets with three refills?
    Senator Hassan. Right.
    Dr. Woodcock. The healthcare system is actually awash and 
actually people's medicine cabinets are full of these products 
that are not the high tech products. They are the simple 
opioids. They are just as addictive.
    Senator Hassan. Right. My time has passed, but I think to 
that point, I would look forward to working with all of you on 
the FDA taking a greater educational role.
    Because one of the issues we have had with providers, 
especially with licensing boards, is pushing them to change 
their proscribing guidelines. So that somebody getting wisdom 
teeth extracted are leaving with only 1 or 2 days' worth of 
prescriptions rather than a month or two.
    I would look forward to continuing to work with all of you 
on that.
    Thank you.
    The Chairman. Thank you, Senator Hassan.
    Senator Cassidy.

                      Statement of Senator Cassidy

    Senator Cassidy. Thank you all for the good work that you 
do. As a physician, I am very aware of the good work that you 
do, so thank you.
    Dr. Woodcock, you mentioned that the GDUFA II includes 
preapproval meetings, but it seems, at least I am told, the 
process still lacks clear guidance on what tests a complex 
generic has to pass.
    Also pre-NDA meetings are limited to applicants who have 
already started investment and can meet the several 
requirements. Rankly, this throttles out a small business, the 
guy in his garage and the gal coming together seem a little bit 
iced out by that, if you will. Only the bigger firm that 
already has the pockets can address this.
    I guess how does this make the process more transparent or 
competitive? Thoughts?
    Dr. Woodcock. Well, first of all, we are trying to commit 
to having within several years of the brand product being 
approved, having guidance out there that is basically a recipe 
for how to develop the generic. For the vast number of 
generics, that would be enough; that sort of cookbook.
    For the complex ones, we do not know either, or completely, 
how to make a copy. We do have small business assistance, which 
is a separate program outside of what we are doing in the pre-
generic area. That might be an appropriate venue for somebody 
who is just getting started and really does not know the ropes 
at all. So that opportunity is also available.
    Senator Cassidy. Because it does seem as if that is a 
little bit of a hold up like Mylan and Advair, et cetera, in 
terms of coming up with a generic. How would you pass FDA 
muster?
    Is there a way to actually give guidance without being 
prescriptive because there is going to be somebody that may 
have a better idea? Do you see what I am saying with that?
    Dr. Woodcock. No guidance, actually, is prescriptive; 
people are very confused about this.
    Our draft guidance is not binding on us or on the 
applicant, and neither is our final guidance. And so if 
somebody comes up with a better way, we are happy to entertain 
that.
    The guidance is simply for those who are not clear what we 
are thinking to make them clear about what we think would be an 
acceptable way. But there are other ways that are certainly 
acceptable. I agree with you. So they are not prescriptive.
    Senator Cassidy. OK. Also, we have spoken in the past about 
post-marketing surveillance. GAO just recently issued a report, 
or I should say last year, that the FDA,

          ``Lacks reliable, readily accessible data on track 
        safety issues and post-market studies needed to meet 
        certain post-market safety reporting responsibilities, 
        and to conduct systemic oversight.''

    Any response to that? Clearly and the reason I raise this, 
of course, personalized medicine will increasingly--if we are 
going to get it out the door, as we have spoken before--require 
maybe we get it out the door, but there is a tension as to the 
safety.
    If the data systems are inadequate, how will we meet that 
tension?
    Dr. Woodcock. Well, they were talking about our tracking 
system, so we can roll up all this and make reports. I think we 
are pretty satisfied that our actual oversight of safety since 
the Amendments Act has been really strengthened. It is very 
robust.
    In October 1, 2017, I hope we will enact a workflow 
management system for new drugs. We still do not have that. We 
do not have an I.T. system for the new drug review process.
    We will be implementing that and over time, we will put 
these track safety issues--tracking them, tracking other safety 
issues and so forth. All will be put into this I.T. system that 
we will be implementing, hopefully, in October 1 of this year. 
That will then address the GAO concern.
    It was really about our I.T. systems and the fact that--
which is true, I think, across much of Government--that they 
are not up to what you would find in the private sector.
    Senator Cassidy. Dr. Shuren, the FDA also has a similar 
system, the NEST system, we have spoken of.
    Will it be part of this October 1 rollout or do you feel 
like you already can do adequate reporting?
    Dr. Shuren. This is a differing system separate from what 
came out on the drug report. But we do think that NEST is going 
to provide complementary tools to what we have today.
    Today most of our reporting is passive. It requires a 
person that is going to have to identify if there is a problem 
and then take the time to report it in.
    NEST is going to allow us to move more toward an active 
surveillance system where we can go through larger datasets 
with analytical tools to try to find if there are associations 
between the use of a device and particular safety problems.
    Senator Cassidy. OK. Thank you. Yield back.
    The Chairman. Thanks, Senator Cassidy.
    Senator Whitehouse.

                    Statement of Senator Whitehouse

    Senator Whitehouse. Thank you, Chairman.
    I guess, Mr. Chairman, we are going to find out this week 
whether the so-called Trump Care bill can get through the House 
of Representatives and come over to the Senate.
    If it does, I would like to recommend that we follow the 
model that you led, that I thought was extremely successful on 
the Elementary and Secondary Education bill where we had 
hearings, and we worked together under your and Ranking Member 
Murray's leadership. We put together a really significant piece 
of legislation that has now passed into law.
    Sometimes when we get together, the stuff we can agree on, 
we can agree on because it is so much of a ``nothing burger''. 
This, actually, was a very consequential piece of legislation 
that we were able to agree on, and I can even remember your 
reaction the day that we voted it out of committee unanimously. 
I think we have a good model in this committee for treating 
major legislation in a responsible way.
    I would note that when we did the Affordable Care Act, this 
committee was also very, very active. I was appointed to it on 
a temporary basis at that point so that we could fill out a 
seat where we had a vacancy. I participated in weeks of 
hearings in this very committee on the Affordable Care Act. My 
recollection is that we considered, and even adopted, more than 
100 amendments, many of them bipartisan. In fact, I suspect 
almost all of them were bipartisan in order to be adopted.
    This committee was active, and had an active and vibrant 
role in considering the Affordable Care Act.
    This thing is coming out of the House at us. It looks like 
it is a complete mess. It has never had a proper hearing other 
than a kind of ``Midnight Spectacular'' that the House, I 
guess, developed just for this particular bill to jam it 
through.
    At least speaking for Rhode Island, we are now calculating 
if that mess were to pass into law, we would lose $30 million 
in Medicaid. We would put people, 70,000 Rhode Islanders who 
are on the Medicaid expansion, at risk. We have 30,000 Rhode 
Islanders who are in the individual market as a result of the 
Affordable Care Act. Ninety percent of them are enjoying tax 
credits that come from it. It is supporting their ability to 
afford healthcare.
    One of our insurers, Neighborhood Health Plan, has dropped 
its premiums. It is the low income serving insurer in Rhode 
Island. In fact, they tried to drop their premiums even more 
and our Insurance Regulator said, ``No, no, no. You can drop 
them a little, but let us not go too far now.'' There may even 
be more premium reductions coming.
    Our exchange is working. The idea that this wreck of a 
piece of legislation is going to be fired like a torpedo at my 
State without my committee even having a chance to consider it 
is pretty objectionable when you consider how well we did with 
the SSA and how active this committee was with respect to the 
Affordable Care Act.
    I hope, frankly, I hope this thing dies over in the House 
and gets the proper end that it deserves. But if it does come 
over here, I would really encourage the Chairman and the 
Ranking Member to find a way to have meaningful hearings on it.
    To the witnesses, my recollection from our previous 
conversations was that when I spoke to the Drug and the Device 
sides individually, both of you said that we would be better 
off with a third track. Neither side was willing to propose a 
third track, but you did urge that we try to come up with a 
third track. At least, that was my recollection of the State of 
play.
    We could not get that organized. In the 21st Century Cures 
Act, instead, we asked for improved coordination between the 
two tracks.
    Can you tell me (A), how is improved coordination working? 
And (B), if we could, would you still like us to develop a 
third track? Is improved coordination Plan B, and should we 
still be considering a proper, thought through, well-developed 
third track for drug-
device combinations?
    Dr. Woodcock. Go ahead.
    Dr. Shuren. I do think coordination across the agency has 
improved. The agency has created a Combination Product Policy 
Council. It has now been changing processes, putting policies 
in place to have much more coordinated activities.
    For example, the agency has already modified how we consult 
various centers, and we have timeframes that we have piloted, 
and where we will have that fully stood up as a program fairly 
soon. The early data on it is showing that it is helping.
    In terms of your question about should we explore still 
another pathway? Right now, our biggest focus is on 
implementing 21st Century Cures and seeing what comes out of 
that. We are always open to other ideas to make the programs 
work better, and always happy to discuss other ideas.
    The Chairman. Thank you, Senator. You took most of your 
time on another subject, but that will be fine, if that is what 
you want to do.
    Dr. Woodcock. I agree with Dr. Shuren. Yes, I agree with 
that.
    The Chairman. Go ahead.
    Senator Whitehouse. No, it will take too long. That is all 
I needed to hear.
    The Chairman. Give him an answer. He deserves it. Is that a 
sufficient answer?
    Senator Whitehouse. Sufficient to me, as long as there is 
not pressure for us to develop a third way right now, that they 
would rather work through this first. I think that is our 
understanding.
    The Chairman. Actually, if I might just add, that is of 
interest to a great many of us on this committee. Being able to 
let you work through the best ways to do it, before we jump to 
a different pathway might be the more practical approach. I 
appreciate the Senator's questions.
    Senator Scott.

                       Statement of Senator Scott

    Senator Scott. Thank you, Mr. Chairman.
    Thank you all on the panel for your dedication and your 
commitment to the welfare and the health of America and 
American citizens. Appreciate that.
    Dr. Woodcock, the PDUFA VI goals letter encourages the 
adoption of a new drug discovery tools under the mid-provision. 
This is important as I feel all too often the private sector 
and researchers are innovating, but the Federal Government is 
often behind on recognizing the value and impact of these 
tools. In short, we are missing some opportunities.
    A good example of an innovative tool in this space is 
tissue bioprinting, which began at Clemson University in South 
Carolina, of course, my home State. It is now being used by the 
pharmaceutical industry, researchers, and the NIH.
    The goals letter does not distinguish between ready to go 
technologies, those that hold immediate promise and are already 
being used, versus those technologies that are not yet quite 
available.
    How will the FDA differentiate and prioritize its selection 
of technologies that help make drug development shorter and 
less costly? And will you make efforts to understand tools that 
are being used already when deciding which tools you should 
consider?
    Dr. Woodcock. Certainly. What we are contemplating is that 
people will approach us with the tools that they would like to 
get qualified for regulatory use.
    Typically, though, academia has one sort of standard for 
tools. We do not just publish papers on the tools. We have to 
make decisions about human life. And that is a little bit 
higher standard of rigor often.
    If we are going to depend on a tool to make decisions about 
what is going to happen, say, to somebody's kidney or maybe 
their brain, its performance has to be pretty well-understood. 
That is what our qualification process is about.
    To answer your question, we expect people will approach us 
with qualification proposals. That is happening now. We have a 
program going on, and so we will give them advice. That is what 
was contemplated in this program. We will give them advice 
about what they need to do to get up to the standard that would 
be needed to make decisions about human life based on that 
tool.
    Senator Scott. I think your answer, in many ways, 
reinforces the necessity of using those tools that are already 
in the market or ready to go to market as opposed to those that 
are still in the development stage, actually.
    These 3-D tissue models also promise to have a big impact 
on drug safety and cost, which is what you were just 
discussing.
    Given that it often takes more than a decade and billions 
to research and develop a new drug, we should make sure that we 
are encouraging the use of any tools available that can help 
sponsors identify potential toxicity issues early in the 
clinical trials process. This not only improves drug safety, 
but saves money as billions are lost every year in the last 
stage clinical trial failures.
    How do you plan to give product developers confidence that 
you will accept the data being generated from these new tools?
    Dr. Woodcock. That is what the qualification process is 
about. In fact, right now, the C-Path Institute has a big 
safety consortium, and they have tools before us just as you 
said. Better safety tools to look at drugs earlier and 
determine whether there is a safety signal. Some of those have 
been qualified already for animal use and they are in the human 
process right now.
    Safety tools are about the most important, as you said. We 
are also working with NIH and others to develop that evidence 
standards to say, ``How much do you need to know to rely on 
this, to keep somebody's kidneys safe or their heart safe, that 
you make decisions on that?''
    That along with the process that we have set in place will 
enable people to have a clear path of how they develop these 
tools into something that can be used for regulatory purposes.
    Senator Scott. Thank you. Final question, Mr. Chairman.
    The pioneering work of Clemson researchers in the field of 
tissue bioprinting and the promise of that technology in the 
drug development and review process is a great example of the 
benefits of promoting a strong classroom to lab, STEM education 
pipeline.
    I am aware of the FDA's practice of collaborating with 
academic institutions to create a CERSI in order to enhance the 
regulatory workforce and promote innovation and regulatory 
science.
    Just this year, I believe, the FDA invested about $6.7 
million in the creation of a CERSI with Yale and the Mayo 
Clinic.
    My question is, can you comment on the value of the CERSI 
program in evaluating the safety and effectiveness of the 
products the FDA regulates? And given the level of investment 
in these Centers, how does the FDA plan to ensure 
accountability from this program?
    Dr. Marks. The CERSI programs have been a wonderful way for 
our scientists to interact with other investigators. I think 
they have helped to develop the evidence needed to look at 
safety in various ways. I think they continue to blossom.
    Just so you know, the CERSI's are not the only ways that 
our investigators are involved with academic institutions. We 
have many collaborations that are done as part of cooperative 
research and development agreements across all of the Centers 
that help us to have a critical interaction that keeps us at 
the forefront of the science that we need to know in order to 
speed the development of products.
    Senator Scott. Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Scott.
    Senator Kaine.

                       Statement of Senator Kaine

    Senator Kaine. Thank you, Mr. Chair and thanks to the 
witnesses.
    Mr. Chair, I echo the comments made by folks on our side 
about the timeliness. This hearing is very important. This 
topic is very important. But I would say there is kind of an 
elephant in the committee room, which is, there is a matter of 
both importance, but desperate urgency before Congress, which 
is the House's consideration this week of the bill to repeal 
Obamacare and propose a particular version of a replacement.
    We are hearing that we may be asked to vote on that 
promptly here without, possibly without committee consideration 
on the floor.
    When the Affordable Care Act was pending before this body, 
I was not in the Senate, but I understand the HELP committee 
held 13 hearings to really dig-in to the good, the bad, and the 
ugly of what we should do.
    Mr. Chair, you did a good job. I was really impressed with 
the hearing that you called on the individual market, which is 
a challenging area that we ought to be working together to 
solve. That hearing was held before there was a plan on the 
table, so we were not able to talk about whether this plan 
addressed it.
    There were four witnesses who were here that day at that 
hearing and I asked them all the same question. They had all 
had thoughts about how to fix the individual market. And I 
said, ``Would it be a disaster for the individual market if we 
repealed the Affordable Care Act?'' They all said, ``yes''. And 
then I said, ``But we do need to fix it.'' They all said, 
``yes''.
    And I said, ``OK. If we are going to fix it, should we fix 
it fast, careless, and secret? Or, should we fix it slowly, 
deliberately, and transparently?'' They laughed at my question 
because it was so obvious the answer was, of course, slow, 
deliberate and transparent.
    The notion of taking an action on a bill that might cause 
24 million people to lose health insurance, and that is the 
combined population, the combined population of about 16 States 
does not do credit to a body that is often called the world's 
greatest deliberative body.
    I once heard Senator Franken say, though, sometimes the 
world's greatest deliberative body spends more time 
deliberating on whether it should be Senate bean soup or tomato 
soup in the Senate dining room than on matters of great 
importance.
    Senator Franken. My version was much funnier.
    [Laughter.]
    Senator Kaine. Yes, well, as evidenced that I did not get a 
laugh.
    Anyway, this is something that if there is to be a world's 
greatest deliberative body, could there be anything more 
important to deliberate on than people's health?
    On the issue before us, the President's budget submission 
last week proposed a cut of the NIH budget to the tune of $6 
billion. Often drugs that are developed through the FDA process 
have been significantly assisted or sort of started with the 
assistance of NIH funding.
    Am I correct about that?
    Dr. Woodcock. Generally what happens is NIH researchers who 
get grants lay the foundation, the scientific foundation, 
understanding the pathways, or the pathophysiology. And then 
drugs are separately developed against that.
    Senator Kaine. The title of this hearing deals with 
innovation, improving medical product regulation and 
innovation.
    Would a budget cut of that size to the NIH hurt the 
innovation that is one of the subjects of this hearing?
    Dr. Marks. Unfortunately, we cannot speak to the budgetary 
implications of that.
    Senator Kaine. Well, boy, that is going to have me do a 
followup question because you guys are here for expertise.
    Do you have no opinion about whether there is a connection 
between NIH funding and medical innovation?
    Dr. Marks. I can say that clearly there is a connection 
between NIH funding and medical innovation, and that 
innovations from the NIH have supported the development of 
important products that have benefited the lives of people in 
the country.
    Senator Kaine. So, as a general matter, reductions in NIH 
funding would have the effect of reducing innovation as a 
general matter?
    Dr. Marks. I would have to leave you to surmise that.
    Senator Kaine. Do you not have an opinion on that question?
    Dr. Marks. I am sorry. I cannot speak to it.
    Senator Kaine. Do you any of you have opinions on that 
question, whether the reduction of funding to the NIH as a 
general matter will reduce innovation?
    [No response.]
    Do I assume that none of you have opinions on that question 
as professionals?
    Dr. Woodcock. We are just not in a position to discuss it.
    Senator Kaine. Let me ask a second question, a second 
topic. Drug pricing is a serious concern for everybody here and 
drug pricing of biologics is one of the matters that we are 
very concerned about. They are innovative, but they can be 
expensive too.
    Of the 595 drugs paid for by Medicare Part B in 2015, only 
eight biologics accounted for 40 percent of the total Part B 
spending.
    Talk to us about moving forward within the FDA on 
biosimilars, regulatory guidance for biosimilars so that we can 
potentially see, through the development of those products, a 
reduction in drug pricing.
    Dr. Woodcock. The Biosimilar User Fee program that is part 
of the subject of today's discussion, of today's hearing, 
supports our approval of new biosimilars in setting the 
standards for those coming on the market.
    They, of course, are more complex molecules than what is 
approved under the generics program. And they have required an 
entire set of scientific principles be developed, which we have 
done. That has stimulated, really, a new industry to come forth 
and develop products.
    We have approved four biosimilars. We have about 13 
applications before us, and there are 64 development programs 
where people are working to show their biosimilar work to 
various innovator drugs.
    This is a rising industry. We recognize that it will take a 
number of competitors to each brand product to substantially 
bring the price down, if that is similar to the generic market.
    Senator Kaine. Thank you. Mr. Chair, if I could just----
    The Chairman. We have a vote at noon and we have one more 
Senator who has to speak.
    Senator Kaine. I am just troubled by the witnesses' 
unwillingness to offer professional opinions. They are M.D.'s 
and Ph.D.'s and I am new to the committee, but I am on the SASC 
committee and our military witnesses all the time give us their 
professional opinion, even when it differs from the 
Administration. We never ask them about what they communicate 
to the Administration. That would not be fair.
    We do call professional witnesses before a committee with a 
thought that they will give us their best expertise. I find it 
impossible to believe that the individuals do not have an 
opinion on the question of whether the funding of research has 
a connection to medical innovation. And whether the cutting of 
research funding would, as a general matter, reduce innovation.
    The Chairman. Yes, in defense of the witnesses--both this 
Administration and in the last one--the military officers have 
a different role and give different answers.
    The nonmilitary officers always are in a tough spot when 
presented with questions like that because they have been 
instructed by the Office of Management and Budget not to answer 
the question. Maybe it should be different, but that has been 
the tradition throughout both of the last, well, all the 
administrations I know.
    Senator Franken.

                      Statement of Senator Franken

    Senator Franken. The answer is yes, reduction in NIH 
funding would have a reduction in innovation. And I am an 
expert. I am not.
    By the way, the joke is that sometimes the Senate is not 
even the most deliberative body in the Senate. Sometimes it is 
the Senate dining room when it has to decide whether turnips 
will be part of the winter vegetable medley. That was the 
original joke, and it is not real funny, but I wanted to 
deconstruct what a joke is, but we can do that at some other 
time and this is why we need more research at the National 
Institute of Comedy.
    The hearing today is on the User Fee Agreements that 
industry and the FDA forged to support the agency's operations 
and approve performance accountability. This is really 
important. That is very important and we should work on a 
bipartisan basis, as this committee often does. I thank both 
the Chair and the Ranking Member for that.
    Frankly, I came in--I walked in. I had been at the Supreme 
Court, the Gorsuch hearings. So I am sorry I got in here so 
late.
    I think what the Senator from Virginia was talking about 
was that we really should be talking about ACA and about 
healthcare reform. I am surprised that we are not doing that. I 
thought that we had a very good hearing.
    I agree with the Senator that we had a good hearing on that 
and I thought the Chairman was absolutely right. That what we 
should be looking at is the exchanges. I think that is what we 
should be doing over here right now because we are in the 
middle of this really seismic debate and battle. What I see in 
the House that is being passed again, or being taken up in a 
way that is not the way, I believe, the health bill should be 
is what we should be talking about.
    This past weekend, I was in Minnesota and I did roundtables 
in Perham, MN at their hospital. Did a roundtable in Moorhead, 
MN at the nursing home and my goodness, people are very scared 
by what they are seeing and these are uniform. People were 
crying at this. And so, so concerned and this is what we really 
should be talking about, I think, right now, as important as 
this issue is.
    I want to thank Dr. Woodcock, who has testified for us and 
Dr. Shuren especially. I want to tell you what a big difference 
you have had in your role, in terms of the medical device 
industry, they tell me uniformly that you have been a wonderful 
partner.
    Before, when I got here in 2009, the cultures were so 
different and that you have worked so hard to help bridge that. 
So thank you for that.
    I really do, I just hope you are hearing me, Mr. Chairman, 
that I think that we should be looking at those exchanges and 
how to fix those. I think that is the first thing that we 
really need to be doing. I am afraid that there is a bit of 
trying to cause destruction by the way this is being taken up 
now in the House and by the President.
    I want to talk a little bit about, since we are here, 
postmarket surveillance. I spent a minute on the theory of 
humor, so I am sorry. I will try and make this quick.
    One of the reasons the FDA launched NEST was to enhance 
FDA's post-market surveillance activity. One early report 
issued by the FDA explained that the purpose of NEST was to 
enable,

          ``Active surveillance in near real-time using 
        routinely collected electronic health information, 
        quickly identify poorly performing devices, and 
        facilitate the development of new devices and new uses 
        of existing devices.''

    While I am encouraged that the most recent MDUFA agreement 
funds NEST, the funding is restricted to activities that just 
promote premarket approval.
    My understanding is that this User Fee funding would 
complement work FDA has underway already to advance NEST's 
post-market surveillance capabilities.
    Is that true and can you provide me specific examples of 
what you are doing currently to promote more active postmarket 
surveillance through NEST?
    Dr. Shuren. The answer is yes. And just to clarify, the 
commitment letter for MDUFA talks about use of real-world 
evidence in NEST. And because it is under MDUFA, the activities 
that we would commit to, or the NEST coordinating center 
commits to, has to be within the scope of MDUFA, which is 
predominantly premarket review.
    However, the NEST coordinating center beyond that is also 
focused at activities that go more toward traditional 
postmarket surveillance.
    What we have been doing already is trying to leverage real 
world data sources, for starters, for conducting some of our 
required postmarket studies.
    One of the challenges we face today is once we approve a 
device, patients do not want to sign up in clinical trials. But 
if we are already collecting that data as a part of routine 
clinical care, and we can make good use of it to understand the 
true benefit and risk profile of the device, that is a win for 
everybody. We can do it at lower cost, and we can finally get 
the answers we have been trying to get for years, and we are 
starting to do that.
    Senator Franken. Because I just cannot emphasize enough how 
important, I think, postmarket surveillance is in terms of 
people's safety and the efficacy of these devices.
    Thank you, Mr. Chairman, for your indulgence.
    The Chairman. Thank you, Senator Franken.
    There are 10 minutes left before the close of the vote.
    Senator Murray, do you have closing comments?
    Senator Murray. I would just say this, and I will submit my 
questions to the record.
    Again, I just have to emphasize how concerned I am that a 
major piece of legislation is being jammed through in the 
House. It is going to come to the Senate, reportedly next week 
with changes, again, before the Senate considers it or sees it, 
rushed through in a few days and a few amendments. And we have 
had no hearings in the Health Committee.
    I, like all of my colleagues, am hearing from so many 
people who are deeply concerned and frightened. This is a bill 
that, I understand, impacts 20 percent of our economy, 
healthcare. We should be having a hearing about the impacts of 
that, whether it is Medicaid, taking away the Medicaid 
expansion, or changes to that program. How is this going to 
work?
    I heard from Linda on Bainbridge Island. She spent 15 years 
without direct healthcare coverage. Now has it. It is 
affordable, and she has had cancer; so a preexisting condition, 
critical to her.
    Monica from Seattle, increased cancer risk, could not 
afford preventive care. She needs that. Without coverage, she 
said she would just not be here.
    Kim from Tacoma, her daughter and husband both have 
preexisting conditions, as do many Americans. They want to know 
what this bill will do to them.
    I am deeply concerned that this Health Committee has not 
had a hearing and does not propose to have a hearing on 
legislation that impacts virtually every American.
    The Chairman. Thank you, Senator Murray.
    Senator Warren. Mr. Chairman.
    The Chairman. Senator.
    Senator Warren. Mr. Chairman, I also have another, I just 
have another question about a bipartisan bill that is being 
introduced today while we have FDA witnesses in front of us.
    The Chairman. Sure. Please, go ahead.
    Senator Warren. Would you like me to do it now?
    The Chairman. Why do you not do it now?
    Senator Warren. I will try to do it, and I will try to do 
it without being funny, so we do not have to laugh. OK. Thank 
you.
    Forty-eight million Americans, 48 million, have some level 
of hearing loss and this includes half of all people in their 
70s. If hearing loss seems like a boring problem, I want you to 
think about what it means to be unable to participate in a 
meaningful conversation with another person, unable to talk on 
the telephone, or to hear a television or a radio.
    People with hearing loss are more likely to experience 
social isolation. They are more likely to experience 
depression. They are more likely to experience dementia. They 
are even more likely to fall, which is the leading cause of 
death for people over the age of 65.
    The good news is that many cases of hearing loss can be 
corrected. Technology is advancing at an incredible speed. 
Hearing aids are smaller. They are more effective than ever.
    Dr. Shuren, do you know how many of those 48 million people 
with hearing loss actually use hearing aids?
    Dr. Shuren. It is about 20 percent.
    Senator Warren. About 20 percent. Johns Hopkins researchers 
think it is actually about 14 percent, even smaller, but 
somewhere in that range.
    The vast majority of people with hearing loss are literally 
suffering in silence. And there are a lot of reasons for this.
    Do you know, Dr. Shuren, what it costs to get a hearing 
aid?
    Dr. Shuren. About $2,000.
    Senator Warren. For each aid, that is exactly right. Out-
of-pocket costs, it is not covered by Medicare, and most people 
need two of those. So that is $4,000 to kind of get you in the 
door on this.
    Earlier this month, Senator Grassley and I wrote an op ed 
in the ``Journal of the American Medical Association'' about 
this problem. And this morning, Senator Grassley and I 
introduced bipartisan legislation with Senators Hassan and 
Isakson that would help reduce the cost by directing the FDA to 
create a category of over the counter hearing aids.
    Dr. Shuren, last December, the FDA announced, and I am 
going to quote it,

          ``A commitment to consider creating a category of 
        over the counter hearing aids that could deliver new, 
        innovative, and lower cost products to millions of 
        customers.''

    Can you walk us through quickly why over the counter 
hearing aids could improve both access and affordability to 
hearing technology for Americans with hearing loss?
    Dr. Shuren. If we make it over the counter now, patients 
would not have to go through a healthcare practitioner. They 
could get it, let us say, from a pharmacy. Of course, as we 
reduce the costs of technology to come to market, and we have 
greater competition, we will see prices go down.
    Senator Warren. That is good to hear. Better access, lower 
prices.
    It is good that the FDA is thinking about this. I am really 
glad to hear this. The legislation that Senator Grassley, 
Senator Isakson, Senator Hassan, and I have put together would 
help make sure that it actually happens. That these devices, 
when they are made available directly to consumers, that it is 
done in a safe and effective manner.
    This is my last question. Can you just say something about 
the kinds of concerns you would want to be sure are addressed 
in order to make sure that this is done in a safe manner for 
people with hearing loss?
    Dr. Shuren. Well, we would want to make sure that patients 
understand how to use hearing aids, that we have good labeling 
to explain the circumstances under which they should contact 
their healthcare professional. We might also look at 
performance characteristics; should there be any output limits?
    Senator Warren. Right. I appreciate that.
    We really do need to do this right. I know there are plenty 
of cases where over the counter hearing aids will not be 
appropriate. That is fine. But right now, there are millions of 
Americans whose lives could be made so much better if they had 
access to low-cost hearing aids.
    This is a place where we could loosen up outdated 
regulation and with a few consumer protections put in place, we 
could actually let the market work to help bring better 
products to people at lower costs.
    Thank you very much.
    The Chairman. Thank you, Senator Warren. Thank you for the 
legislation.
    I want to thank the witnesses for coming and thank you for 
the work you do.
    I think you can see from the attention on both sides of the 
aisle, how much we appreciate your willingness to move ahead 
with implementing the 21st Century Cures Act. Almost everybody 
on this committee, really almost everybody in the Senate, 
played some part in that because we saw the dramatic prospect 
of what would happen with the artificial pancreas for persons 
with diabetes, or a cure for HIV AIDS, or a way to identify 
Alzheimer's before symptoms showed; all of these Dr. Collins 
predicted before our committee, our Appropriations Committee, 
would likely see in the next decade.
    Our goal is to try to move those lifesaving cures and 
devices more rapidly into patients' hands and into doctors' 
offices. We want to do what we can to create an environment 
where you are able to do that.
    We mentioned the hiring freeze. I understand from staff 
that the Administration is already working with FDA to try to 
relieve the effect of that. I would encourage that and I will 
continue to encourage the Administration to be selective about 
a hiring freeze.
    I understand about hiring freezes. When I was Governor, I 
put one on when I first came in. But the FDA, Dr. Califf told 
us that the single most important priority for him and the 21st 
Century Cures bill was the ability to hire experts to do the 
reviewing and to be able to pay them what it took to keep them 
so they did not go work for the drug companies, or some 
university, or somewhere else. So we want to make sure that we 
do that.
    I wanted to ask, quickly, Dr. Marks. You mentioned 
regenerative medicine and I noticed how quickly you moved on 
that.
    Do you think that the fact that your accelerated pathway is 
now available for regenerative medicine therapies or cures will 
bring a number of these therapies and cures into the FDA for 
more rapid approval and give people more confidence in the 
safety of those therapies and cures?
    Dr. Marks.
    Dr. Marks. Thank you.
    We are already receiving requests for the Regenerative 
Medicine Advanced Therapy designation. And we very much look 
forward to working with sponsors.
    Normally, we cannot talk about unapproved applications. I 
can tell you that there is a sponsor who issued a press release 
yesterday that FDA had granted a Regenerative Medicine Advanced 
Therapy designation.
    I think we have tried to move quickly on this and we look 
forward to continuing to move forward. We are thankful for the 
legislation that was passed that has provided this pathway.
    The Chairman. Dr. Shuren, Senator Whitehouse mentioned the 
combination device-drug. I think we actually came to a pretty 
good way to move forward with that, which is to give you the 
opportunity to use your good judgment to talk across lines and 
see what you can do within your existing authority. And then if 
we need to do more, which we may very well need to do, you 
could let us know that.
    On guidance, Dr. Woodcock, I would make this observation. I 
think you said correctly that guidance, not only does not bind 
you, it does not bind anyone else. It is just guidance. But 
different parts of the Government have not been as clear as you 
have been.
    I had a witness before me from the Department of Education 
on title IX who said that she expected all of the universities 
to follow her guidances as if it were the law. Well, of course, 
that was not even the Obama administration's policy, and when I 
talked to the Office of Management and Budget about that, they 
said, ``We are doing our best to make it clear that guidance is 
not a regulation, it is not a law.''
    Maybe the FDA could explain that more clearly. That 
guidances are to be helpful, to answer questions, and if you 
have, the way you said it here, if you have a better idea, we 
welcome the better idea. Because I think a great many people 
are risk averse. They do not want to do anything that might 
delay things a year or two.
    Is there something else that you might be able to do to 
make it clear what guidance is and what it is not?
    Dr. Woodcock. Possibly. In the very front of every guidance 
document, it has a disclaimer and it says it is binding on 
neither party.
    Maybe we could go further and really say in English, 
because this was bureaucratese, ``If you have a better idea, 
come talk to us.''
    The Chairman. Yes, it might be that simple, just to put a 
headline on it. Say, ``If you have a better idea, but in the 
meantime, here are some suggestions.'' Because that is what 
guidance really is supposed to be.
    I appreciate my colleagues' concern about the Affordable 
Care Act and the amendments that are going through it.
    The decision to hold this hearing was a bipartisan 
decision, and I am glad we held it. We are going to have 
another one in early April despite the fact that we have to 
confirm a Labor Secretary, and we have to consider the 
Affordable Care Act, and have a lot of other things to do, 
because it is hard to think of anything much more important 
than moving lifesaving drugs through the FDA and into medicine 
cabinets, and doctors' offices, and patients to save their 
lives.
    That was the decision of this Congress, and President 
Obama, and Vice President Biden, and Speaker Ryan, and Senator 
McConnell last year, and it is still our opinions today.
    I would make only this observation about the process of 
amending the Affordable Care Act, which I made earlier. There 
are two tracks to that and there were in 2009 and 2010. I was 
here.
    The track that took 60 votes had lots of hearings, lots of 
discussion, lots of amendments. And the track that takes 60 
votes now will have hearings, amendments, and we will see what 
comes out because only bipartisan solutions are durable.
    The track in 2010 that went through the reconciliation 
process went like a freight train through Congress. I have 
never seen anything move more rapidly. It took 8 days, Budget 
to House, Budget to Senate, back to the House, and onto the 
President. And that includes the weekend.
    It is a little bit of selective memory here in terms of 
what is too fast when you are going through a reconciliation 
process. Actually, I believe the House of Representatives has 
done a very good job of discussing their legislation in public 
and before the Energy and Commerce Committee, before the Ways 
and Means Committee, before the Budget Committee, the Rules 
Committee, and it will be on the House floor.
    Then when it comes, if it is passed in the House, we will 
see what happens in the Senate. If it goes to the floor, under 
the reconciliation process, there will be ample opportunity for 
amendment on the floor.
    I thank the witnesses for coming.
    The hearing record will remain open for 10 days. Members 
may submit additional information for the record within that 
time.
    The HELP Committee will meet again tomorrow, March 22 at 9 
a.m. to hear from Alex Acosta, nominee for Secretary of Labor.
    Thank you for being here today.
    The committee will stand adjourned.
    [Whereupon, at 12:22 p.m., the hearing was adjourned.]

                                
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