    [Senate Hearing 117-394]
    [From the U.S. Government Publishing Office]

                                                        S. Hrg. 117-394

                       FDA USER FEE AGREEMENTS: ADVANCING
                        MEDICAL PRODUCT REGULATION AND
                     INNOVATION FOR THE BENEFIT OF PATIENTS

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

                                    HEARING

                                     OF THE

                        COMMITTEE ON HEALTH, EDUCATION,
                              LABOR, AND PENSIONS

                              UNITED STATES SENATE

                        ONE HUNDRED SEVENTEENTH CONGRESS

                                 SECOND SESSION

                                       ON

                EXAMINING FOOD AND DRUG ADMINISTRATION USER FEE AGREE-
                  MENTS, FOCUSING ON ADVANCING MEDICAL PRODUCT REGULATION
                  AND INNOVATION FOR THE BENEFIT OF PATIENTS

                                   __________

                                 APRIL 5, 2022

                                   __________

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

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

            Available via the World Wide Web: http://www.govinfo.gov

                                  __________

                        U.S. GOVERNMENT PUBLISHING OFFICE
    48-905 PDF                  WASHINGTON : 2023

    -----------------------------------------------------------------------------------

              COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS

                        PATTY MURRAY, Washington, Chair
    BERNIE SANDERS (I), Vermont          RICHARD BURR, North Carolina,
    ROBERT P. CASEY, JR., Pennsylvania       Ranking Member
    TAMMY BALDWIN, Wisconsin             RAND PAUL, M.D., Kentucky
    CHRISTOPHER S. MURPHY, Connecticut   SUSAN M. COLLINS, Maine
    TIM KAINE, Virginia                  BILL CASSIDY, M.D., Louisiana
    MAGGIE HASSAN, New Hampshire         LISA MURKOWSKI, Alaska
    TINA SMITH, Minnesota                MIKE BRAUN, Indiana
    JACKY ROSEN, Nevada                  ROGER MARSHALL, M.D., Kansas
    BEN RAY LUJAN, New Mexico            TIM SCOTT, South Carolina
    JOHN HICKENLOOPER, Colorado          MITT ROMNEY, Utah
                                         TOMMY TUBERVILLE, Alabama
                                         JERRY MORAN, Kansas

                         Evan T. Schatz, Staff Director
                   David P. Cleary, Republican Staff Director
                      John Righter, Deputy Staff Director

                               C O N T E N T S

                                  ----------

                                   STATEMENTS

                             TUESDAY, APRIL 5, 2022

                                                                       Page

                               Committee Members

    Murray, Hon. Patty, Chair, Committee on Health, Education, Labor,
      and Pensions, Opening statement................................     1
    Burr, Hon. Richard, Ranking Member, a U.S. Senator from the State
      of North Carolina, Opening statement...........................     3

                                   Witnesses

    Richardson, Liz, Director, Health Care Products Project, The Pew
      Charitable Trusts, Washington, DC..............................     6
        Prepared statement...........................................     8
        Summary statement............................................    11
    Esham, Cartier, Ph.D., Chief Scientific Officer and Executive
      Vice President of Emerging Companies, Biotechnology Innovation
      Organization, Washington, DC...................................    12
        Prepared statement...........................................    13
        Summary statement............................................    23
    Gaugh, David, Senior Vice President, Sciences and Regulatory
      Affairs, Association for Accessible Medicines, Alexandria, VA..    24
        Prepared statement...........................................    25
        Summary statement............................................    32
    Leahey, Mark, President and Chief Executive Officer, Medical
      Device Manufacturers Association, Washington, DC...............    33
        Prepared statement...........................................    34
        Summary statement............................................    36

                              ADDITIONAL MATERIAL

    Statements, articles, publications, letters, etc.
    Burr, Hon. Richard:
        Letters to and from the FDA..................................    59
        Count of In-Person Medical Product Inspections by Month-FY17
          to FY21 (to date)..........................................   128
    Smith, Hon. Tina:
        Biosimilars Forum Letter.....................................   130
    Braun, Hon. Mike:
        Letter Requesting a Patient Focused User Fee Hearing.........   131

                             QUESTIONS AND ANSWERS

    Response by Cartier Esham to questions of:
        Senator Braun................................................   132
        Senator Romney...............................................   133
    Response by David Gaugh to questions of:
        Senator Kaine................................................   134
        Senator Romney...............................................   135
    Response by David Leahey to questions of:
        Senator Burr.................................................   136

                       FDA USER FEE AGREEMENTS: ADVANCING
                         MEDICAL PRODUCT REGULATION AND
                     INNOVATION FOR THE BENEFIT OF PATIENTS

                                  ----------

                             Tuesday, April 5, 2022

                                           U.S. Senate,
           Committee on Health, Education, Labor, and Pensions,
                                                        Washington, DC.
        The Committee met, pursuant to notice, at 10:02 a.m., in
    room 106, Dirksen Senate Office Building, Hon. Patty Murray,
    Chair of the Committee, presiding.
        Present: Senators Murray [presiding], Casey, Baldwin,
    Murphy, Kaine, Hassan, Smith, Rosen, Hickenlooper, Burr,
    Collins, Cassidy, Braun, Marshall, and Scott.

                      OPENING STATEMENT OF SENATOR MURRAY

        The Chair. Good morning. The Committee will come to order.
    The Senate Health, Education, Labor, and Pensions Committee
    will come to order. And today we are having the first of two
    hearings on reauthorizing four Food and Drug Administration
    user fee programs. I will have an opening statement followed by
    Ranking Member Burr. We will then introduce our witnesses.
        After they give their testimony, Senators will each have 5
    minutes for a round of questions. Again, while we are unable
    yet to have the hearing fully opened to the public or media for
    in-person attendance, live video is available on our Committee
    website at help.senate.gov. And if you are in need of
    accommodations, including closed captioning, you can reach out
    to the Committee or the Office of Congressional Accessibility
    Services.
        Every day, families in Washington State and across the
    country count on the Food and Drug Administration to keep them
    safe more times than they even realize. Whether we are getting
    a meal or a prescription or an ultrasound, or almost anything
    in between, we have the FDA to thank for reviewing the data,
    inspecting the supply chain, holding companies accountable, and
    taking unsafe products off the market.
        It is no small task ensuring the safety of nearly 80
    percent of our Nation's food supply, inspecting thousands of
    food, drug, and device manufacturing sites each year, and of
    course, quickly and carefully reviewing the data on new and
    potentially lifesaving medical products. As we have seen
    throughout this pandemic, this work is incredibly important,
    which is why it is also important we reauthorize the user fee
    programs, which ensure as FDA gets new drugs or devices to
    consider for approval.
        As it gets more potentially lifesaving work to do, it also
    gets more resources to support that work. Congress has
    regularly reauthorized the user fee programs in a bipartisan
    way, and I am glad to be working with Senator Burr and our
    colleagues on the Committee to get this done once again in a
    timely manner. Because it should be unthinkable that after 2
    years when FDA's work has been more important than ever, we
    would fail to get this done and force the agency to send pink
    slips.
        Just as it should be unthinkable that we would fail to
    learn the lessons of this pandemic, including lessons for FDA,
    like how we can get tests to families sooner, or how we can
    avoid political interferences like we saw during the Trump
    administration, including the reckless push for unproven
    treatments like hydroxychloroquine, or how we can improve
    transparency and communication to prevent some of the confusion
    and frustration we have seen around the timelines for booster
    shots and vaccines for younger children.
        Beyond pandemic response, it is clear we can't simply
    settle for business as usual, because when you look at issues
    like the exorbitant cost of prescription drugs, the lack of
    diversity in clinical trials, the scourge of opioids and
    especially fentanyl, the lack of oversight for dietary
    supplements and cosmetics, and how long it took to get
    contaminated baby formula off the market, it is clear to me and
    to people back in Washington State that business as usual is
    not good enough.
        We have to make sure the approval process works for
    families, not just pharmaceutical companies' bottom lines. That
    means better steps to ensure drugs work for everyone, such as
    increased diversity in clinical trials and pediatric drug
    research. It means ensuring the accelerated approval pathway
    benefits patients. And it absolutely means lower costs, because
    even a miracle cure is no help if it is too expensive for
    people who need it.
        We need to fight skyrocketing health care costs with every
    tool in our arsenal from stopping pharmaceutical companies who
    game the FDA system to block competition and keep cheaper drugs
    off the shelves, to bringing down barriers that block cheaper
    generics and biosimilars from getting to market, to finally
    making good on legislation Congress passed to let hearing aids
    to be sold over-the-counter and at lower cost for millions of
    people.
        I worked with many of my colleagues on this Committee to
    pass that into law a half a decade ago, and I am incredibly
    frustrated FDA has not been focused on helping so many
    Americans. There is just no good reason we are still waiting
    for FDA to implement that step and save millions of people
    thousands of dollars. We also need to do more to protect
    families from dangerous products that have gone for too long
    with too little scrutiny.
        When it comes to cosmetics, products people put on their
    face, rub into their skin, and more, we have discovered known
    carcinogens like asbestos and formaldehyde in baby powder,
    children's makeup kits, and hair products. And when it comes to
    dietary supplements, people across the country who are looking
    to make healthy choices are faced with a shelf full of products
    that make health claims but lack rigorous oversight.
        Yet FDA does not have the authority to collect basic
    information about those products or even to know what is on the
    market. That makes no sense. People in Washington State and
    across the country buy, use, and entrust their health to these
    items every day. They deserve to know these products are safe,
    vetted, and subject to the same type of careful FDA oversight
    people rely on when it comes to food, drugs, and medical
    devices. So I hope we will make progress on all of those issues
    and more as we rework--as we work to reauthorize the user fee
    programs.
        All of us on this Committee are grateful for the tireless
    work of FDA scientists during this pandemic to review and
    authorize safe and effective tests, treatments, and of course,
    vaccines for COVID-19. And we are grateful for the constant
    work they do to ensure the safety of our food supply, provide
    people with the information they need to make healthy choices,
    and uphold the gold standard of safety and effectiveness for
    drugs and medical devices. But the FDA does not run on
    gratitude.
        I look forward to today's conversation on the user fee
    programs, and to working with my colleagues on bipartisan
    legislation that supports and strengthens FDA's ongoing work by
    reauthorizing these programs and taking additional steps to
    lower drug costs, increase diversity in clinical trials, ensure
    the safety of cosmetics and dietary supplements, and more.
        With that, I will turn it over to Ranking Member Burr for
    his opening remarks.

                       OPENING STATEMENT OF SENATOR BURR

        Senator Burr. Thank you, Madam Chair. And welcome to our
    witnesses here today. I look forward to our discussion. Every 5
    years, this Committee is charged with evaluating FDA's user fee
    programs and the agency's performance in meeting its existing
    commitments. At their core, these programs are about bringing
    new hope to Americans.
        The faster, more predictable, and more accountable the
    programs are, the more patients stand to benefit from
    lifesaving, innovative drugs and devices. When FDA does not
    live up to its commitments, patients are the ones that suffer.
    I have served in Congress since 1995, so I have been here for
    all but the first user fee process.
        Each time, I have gradually added provisions to improve
    FDA's accountability to the commitments that FDA makes. Every 5
    years, industry agrees to provide more funding under the duress
    of negotiating with the regulator. So it is Congress's job to
    make sure that those negotiations were not a hostage situation,
    and that these arrangements are a good deal for patients and
    the industry that brings that hope.
        The user fee programs are intended to supplement FDA's
    congressionally appropriated resources to speed the review of
    medical products and get treatments to patients as quickly as
    possible. The user fee agreements negotiated between FDA and
    industry partners lay out the process for bringing new products
    to market that will treat, prevent, and cure disease. In 1992,
    under the first Prescription Drug User Fee Agreement or PDUFA,
    the drug application fee was about $100,000.
        Today, the drug application fee is $1.3 million. The
    medical device user fee agreements were first signed into law
    in 2002. In 2007, a 510(k) submission was just over $4,000.
    Today, this application costs more than $12,700. When Members
    of Congress complain about the cost of prescription drugs or
    medical devices, we should evaluate all aspects of the
    pipeline, including the cost of development and regulatory
    review, to make sure costly and burdensome regulations are not
    part of the cost problem.
        The enormous growth in the oldest of the user fee programs
    underscores my longstanding concerns. In 1993, FDA collected
    just over $35 million in annual fees from the Prescription Drug
    User Fee Program. Today, FDA collects over $1 billion in PDUFA
    user fees annually. Even accounting for inflation, that is an
    increase of more than 1,500 percent since the start of the
    program.
        Yet FDA continues to request more and more resources from
    industry, even when they don't meet agreed upon performance
    goals. For example, in Fiscal Year 2019 and 2020, FDA missed 12
    out of the 14 goals related to scheduled meetings, delaying
    needed conversations for innovators to move forward with their
    products. As part of the proposed new prescription drug program
    commitments, FDA is requesting an additional $324 million over
    the 5-year cycle. Let me say that again, $324 million.
        The proposed agreement includes $111 million for hiring an
    additional 352 people. That is 122 more new hires than the
    agency committed to in the last cycle. In fact, across all four
    programs, FDA is committing to more than 880 new hires when the
    agency has more than 700 vacancies outstanding. Let me say that
    again. In fact, across all four programs, FDA is committing to
    more than 884 new hires when the agency has more than 700
    vacancies outstanding today.
        Generic and biosimilar drugs are our best tool at driving
    down the cost of prescription drugs and should be a top
    priority of the agency. The biosimilar agreement should help
    boost the number of biosimilars in the market, including
    biosimilars in insulin production. FDA, again, has struggled to
    meet some important program goals.
        During Fiscal Year 2020, FDA missed its goal to review 90
    percent of biosimilar applications within 10 months, only
    reviewing 50 percent within that time, and missed 7 out of 15
    goals related to product development meetings. Under the
    proposed biosimilar agreement, FDA is requesting an additional
    $5 million over the 5-year cycle and 15 new hires.
        The generic drug program collects more than $494 million in
    annual fees and supports more than 2,100 staff positions. Under
    the proposed generic drug agreement, FDA is requesting
    additional funding of more than $40 million and 128 new hires.
    While FDA appears to be on track to meet the majority of its
    commitments under the current generic agreement, its
    performance has been impacted by COVID-19 in terms of delayed
    facility inspections.
        As of last August, these inspections challenges had delayed
    more than 29 generic drug applications, with many more
    applications likely delayed since then. Turning our attention
    to the medical device agreement, I have watched this very
    carefully and I am concerned. This Committee only recently
    received the draft medical device commitment letter.
        The final medical device arrangements were due by law to
    Congress by January 15th. By the time we receive these final
    agreements, the device commitment letter was more than 3 months
    late. Under this proposal, FDA is requesting up to $1.9 billion
    over the 5-year cycle, nearly $1 billion increase.
        This proposed increase is roughly doubling fee collections.
    Yet again, the FDA did not meet deliverables under this user
    fee program. The FDA missed goals for 510(k) reviews, resulting
    in longer review times, failed to explain its reasoning to
    sponsors each time it sent a deficiency letter about their
    product, and it failed to issue an important digital health
    guidance on time. Let me remind my colleagues, these are not
    optional actions.
        These were requirements, requirements under the last deal
    for categories of submissions. For the first 2 years, review
    times for premarket approval applications would hold steady at
    290 calendar days, and in the last 3 years, review times would
    reduce to 285 calendar days. Wow.
        However, FDA is significantly walking back its current
    commitment to reviewing 510(k) submissions within 180 days.
    Instead, FDA is proposing longer review times of 108 days. FDA
    Safety and Innovation Act, which we passed in 2012, requires
    FDA to review 95 percent of these applications within 90 days.
    This agreement almost doubles the user fees and includes longer
    review times for some categories of products.
        Pay more, get less is not exactly a selling point. MDUFA V
    also includes a new pilot program called TAP. This aimed to
    initiate early and frequent engagement between FDA and sponsors
    of innovative devices. I might say, something already
    negotiated in the agreement. As the author of the breakthrough
    device pathway, I still can't figure out whether this new
    program will offer anything different from FDA's current
    activities for breakthrough devices.
        The new pilot program is set to grow over the 5-year cycle,
    without clear accountability, metrics, or deliverables to help
    measure the success of the program. No metrics. The pilot has
    the ability to grow to 325 devices, which would cost at least
    $477,000 per device. Congress deserves a full accounting of how
    FDA plans to spend these resources and operate this new
    nebulous program.
        I will tell you right now, Congress is going to require
    accountability in the new program. With each reauthorization,
    FDA receives huge increases in resources despite not fulfilling
    or delivering what has previously been promised. And with a
    declining percentage of congressional appropriations for the
    overall program, FDA is increasingly removing itself from
    Congress's reach.
        My colleagues should be concerned with this. I question
    whether the agreements both passed and proposed reflect a good
    deal for patients they are designed to serve. In 2017, during
    the user fee hearings in this Committee, I asked each industry
    representative testifying about the importance of the user fee
    agreements and whether they would support a mechanism to hold
    FDA more accountable.
        The response was clear, FDA should be held accountable to
    its commitments. I look forward to hearing from each of you and
    about why you have agreed to these commitments, and how they
    would accelerate innovation and lifesaving products for the
    American people. I thank the Chair.
        The Chair. Thank you, Senator Burr. I would like to ask
    unanimous consent to introduce into the record a statement from
    the National Organization for Rare Disorders.
        Senator Burr. Madam Chair, I would also like to ask
    unanimous consent to enter into the record letters that I sent
    to then Acting Commissioner Woodcock, requesting information
    about the user fee programs and the negotiations for these
    proposed new agreements, and the responses I received from the
    FDA. One of these letters I sent to the FDA in November last
    year, and I am still awaiting a response. I hope to receive
    that response soon.
        The Chair. So ordered on both.

        [The information referred to by Senator Murray was not
    submitted:]

        [The information referred by Senator Burr can be found on
    page 59 in Additional Material:]
        The Chair. With that, I want to welcome all of our
    witnesses today. Thank you for joining us. Our first witness
    will be Liz Richardson, who is the Director of the Health Care
    Products Project at the Pew Charitable Trusts. Ms. Richardson,
    thank you for sharing your time and expertise with us today.
        I look forward to your testimony. Our next witness is Dr.
    Cartier Esham, the Chief Scientific Officer and Executive Vice
    President of Emerging Companies at the Biotechnology Innovation
    Organization. Thank you for joining us today, Dr. Esham. We
    look forward to your testimony. I am also pleased to welcome
    David Gaugh, who is the Senior Vice President for Sciences and
    Regulatory Affairs at the Association for Accessible Medicines.
        Mr. Gaugh, I appreciate your being here today to share your
    perspectives. Finally, we have Mark Leahey, President and Chief
    Executive Officer of the Medical Device Manufacturers
    Association. Mr. Leahey, thank you for taking the time to be
    with all of us today. Ms. Richardson, you may begin your
    opening statement.

      STATEMENT OF LIZ RICHARDSON, DIRECTOR, HEALTH CARE PRODUCTS
           PROJECT, THE PEW CHARITABLE TRUSTS, WASHINGTON, DC

        Ms. Richardson. Chair Murray, Ranking Member Burr, and
    Members of this Committee, thank you for the opportunity to
    testify today about how the reauthorization of the FDA user fee
    agreements can support patients and public health. The Pew
    Charitable Trust is a global non-governmental organization that
    seeks to improve public policy, invigorate civic life, and
    inform the public.
        We believe that evidence based policies and investments can
    both spur the development of new drugs and medical devices and
    ensure effective oversight of these products. Today, I would
    like to focus my remarks on the role that the user fee
    agreements can play in promoting innovation and supporting a
    broad range of public health priorities, ultimately leading to
    improvements in patient care and outcomes.
        Since 1992, user fees have provided FDA with significant
    and sustained resources that have allowed the agency to both
    facilitate the development of urgently needed medical products
    and to review those products quickly so they can get to the
    patients who need them.
        This issue is particularly important to Pew's Antibiotic
    Resistance Project, which is working to advance policies that
    would spur the creation of new antimicrobial products and
    establish stewardship programs that would ensure these products
    are prescribed only when necessary. Since 2014, FDA has
    approved 14 antibiotics, three of which represent a novel drug
    class or novel mechanism of action.
        These advances are critical as the world faces a dangerous
    shortage of antimicrobial products to address both current and
    future patient needs. In 2002, Congress also established a user
    fee program for medical devices. The fees that FDA collects
    under these agreements provide the agency with resources to
    review applications and deliver a more efficient oversight
    process, one that can adapt to a rapidly evolving device market
    where emerging technologies like AI enabled digital health
    tools and 3D printing are posing challenges to traditional FDA
    oversight.
        Pew is currently conducting research to inform how the
    agency can better facilitate ongoing innovation while still
    providing adequate public health safeguards for these rapidly
    changing products. But no matter how the agency decides to
    adapt its regulatory approaches, it needs adequate resources to
    fund its core activities, and this includes user fees.
        A second key aspect of the user fee agreement process is
    how each successive reauthorization has provided an opportunity
    to advance other priorities that can advance patient health.
    For example, in its 2012 PDUFA Reauthorization Bill, Congress
    acknowledged the vital need for new antibiotics by enacting the
    GAIN Act as part of that package.
        The GAIN Act represented an important first step in
    launching innovator companies devoted to antimicrobial research
    and development, but more work is needed to ensure that these
    companies can earn a fair return on investment and continue to
    innovate. But to that end, the PASTEUR Act proposes a unique,
    only pay for success pull incentive that will strengthen U.S.
    preparedness for future pandemics.
        We urge Congress to include that measure in its current
    PDUFA reauthorization. Pew also believes that reforming
    oversight for diagnostic tests, an issue currently addressed in
    bipartisan legislation known as the VALID Act, is of critical
    importance. As the COVID-19 pandemic has shown, the Nation's
    public health depends on rapid access to accurate and reliable
    tests that can diagnose disease or identify past infection. But
    faulty diagnostic tests can compromise both patient care and
    the Nation's response to infectious diseases.
        Current gaps in oversight have allowed tests that are
    developed and used within the same laboratories, called lab
    developed tests, to come to market without FDA approval, even
    if those tests are otherwise high risk. Pew believes strongly
    that tests should be regulated according to their risk to
    patients if they are inaccurate, not according to where they
    are developed and used.
        By including VALID as part of the MDUFA reauthorization
    package, Congress can strengthen and update FDA's oversight of
    these critical products to make it more flexible and more risk-
    based.
        Finally, I want to note that while review times are
    important insofar as they speed patient access to potentially
    important products, it is critical to remember that true
    innovation is not just about getting products to market faster,
    it is about developing products that are safer and more
    effective than what is already available.
        While user fees are important to the efficient function of
    FDA, they cannot and should not be a substitute for adequate
    appropriations. User fees do not cover all of FDA's essential
    functions, such as conducting most post-market oversight
    activities or regulating non-drug products, including the large
    and ever-growing market of dietary supplements. FDA needs
    resources beyond user fees to sustain these core activities.
        Because FDA is a public health agency that works to promote
    the health of all Americans, the agency should receive public
    funds and be accountable to the public, not just to the
    industries that it regulates. That being said, I want to
    conclude by underscoring again the importance of user fees to
    the basic functioning of the FDA.
        Given the critical role that the agency plays in protecting
    and promoting public health, we urge Congress to reauthorize
    these agreements and ensure adequate funding for FDA to carry
    out its mission. Thank you for your time and I look forward to
    answering any questions.

        [The prepared statement of Ms. Richardson follows:]
                      prepared statement of liz richardson
        Chair Murray, Ranking Member Burr, and Members of this Committee,
    thank you for the opportunity to testify about the proposed FDA user
    fee agreements and how legislation reauthorizing these agreements can
    support patients and public health.

        Established in 1948, The Pew Charitable Trusts is a global
    nongovernmental organization that seeks to improve public policy,
    inform the public, and invigorate civic life. Through research and
    analysis, Pew's projects work to improve Americans' health and well-
    being. We believe that evidence-based policies and investments can help
    expand access to life-saving treatments, spur the development of
    innovative drugs and medical devices, and provide effective oversight
    of the benefits and risks associated with these products.

        Today, I would like to talk about how the user fee agreements can
    promote innovation and help to ensure the safety and effectiveness of
    medical products, ultimately leading to improvements in health.
    The User fee Agreements Promote Innovation of Drugs and Medical Devices
        Since 1992, user fees paid by the drug and device industry have
    provided FDA with significant and sustained resources that allow the
    agency to facilitate the development of urgently needed medical
    products, and to review those products quickly.

        This issue is particularly important to Pew's antibiotic resistance
    project, which is working to advance policies that would spur the
    creation of new antibiotics and establish stewardship programs to
    ensure that antibiotics are prescribed only when necessary in human
    health care settings. Since 2014, FDA has approved 14 antibiotics \1\--
    three of which represent a novel drug class or mechanism of action--to
    treat a variety of life-threatening bacterial infections, including
    community-acquired pneumonia and certain abdominal infections. These
    advances are critical as the world faces a dangerous shortage of
    antibiotics to address current and future patient needs.
    ---------------------------------------------------------------------------
        \1\  K. Talkington. ``Analysis Shows Continued Deficiencies in
    Antibiotic Development since 2014'', The Pew Charitable Trusts, last
    modified March 9, 2021, https://www.pewtrusts.org/en/research-and-
    analysis/data-visualizations/2019/five-year-analysis-shows-continued-
    deficiencies-in-antibiotic-development.

        Overall, the user fee programs have substantially sped up the
    review of new drug applications. In the decade after the first user fee
    agreement was passed, the median review time fell by half, from nearly
    28 months to less than 14 months. Review times for drugs given priority
    status have also fallen significantly. Indeed, a standard review today
    is faster than a priority review a decade ago (around 10 months). \2\
    ---------------------------------------------------------------------------
        \2\  https://www.fda.gov/media/102796/
    download'msclkid=381a13f5b03e11ec9429b69ceba87906.

        In 2002, Congress also established a user fee program for medical
    devices. The fees FDA collects under these agreements provide the
    agency with additional resources to review applications and better
    facilitate the introduction of a wide variety of new medical
    technologies. Under the proposed agreement, the total fees collected
    are expected to reach at least $1.78 billion, \3\ and if certain
    specified goals are met, the agency could collect up to $1.9 billion by
    2027, up from about $1 billion in fees authorized under the previous
    reauthorization. \4\ These funds help FDA deliver a more efficient and
    comprehensive oversight process that is better resourced to protect
    consumer safety and adapt to a rapidly evolving device market, where
    emerging technologies are posing challenges to traditional FDA
    oversight.
    ---------------------------------------------------------------------------
        \3\  U.S. Food and Drug Administration, ``FDA Statement on Medical
    Device User Fee Amendments (MDUFA),'' news release, March 22, 2022,
    https://www.fda.gov/news-events/press-announcements/fda-statement-
    medical-device-user-fee-amendments-mdufa.
        \4\  FIND.
    ---------------------------------------------------------------------------
        Today, for example, health care organizations use AI-enabled
    digital health tools for a growing range of clinical, administrative,
    and research purposes. FDA has approved or cleared nearly 350 AI-
    enabled devices for a broad range of applications. \5\ Nearly 140 of
    these approvals or clearances have been granted since the start of
    2020, \6\ and the pace of submissions that include an AI component is
    only expected to grow over the next 5 years. These tools offer unique
    opportunities to improve patient care and health outcomes, but the
    volume of applications and the pace at which these products evolve pose
    unique challenges to FDA's traditional approach to oversight. These
    products will not only need to be reviewed to ensure they are safe and
    effective at the time of approval, they also need to be adequately
    monitored over time to ensure that they continue to be safe and
    effective in the real world, and when used on diverse patient
    populations. FDA must have sufficient resources--both through robust
    user fee programs and annual appropriations--as well as the internal
    expertise and commitment to develop regulatory policies that can
    facilitate ongoing innovation while still providing adequate public
    health safeguards for these rapidly changing products.
    ---------------------------------------------------------------------------
        \5\  https://www.fda.gov/medical-devices/software-medical-device-
    samd/artificial-intelligence-and-machine-learning-aiml-enabled-medical-
    devices.
        \6\  Ibid.

        Similarly, 3D printing is increasingly being used at the point of
    care to manufacture a range of products, including anatomical models
    used to guide surgery planning and medical devices like surgical
    cutting guides. This technology allows for the decentralized
    manufacturing of highly customized products--which could 1 day include
    implants, pharmaceuticals, and even biological products--that are
    manufactured directly within health care facilities. However, 3D-
    printed devices--like any medical product--also carry risks, and
    existing laws, regulations, and guidance meant to ensure the safety of
    devices and drugs do not clearly map to this emerging technology. FDA
    needs the resources to be able to adapt its regulatory approach to meet
    the demands of the changing field and regulate the increasing number of
    sites that utilize the technology in order to ensure that medical
    products printed at the point of care are safe and effective.
        The User fee Process can Support a Broad Range of Public Health
                                   Priorities
        Though the matter of FDA funding is central to the user fee
    negotiation process, each successive reauthorization of those
    agreements has provided an opportunity for Congress to pass additional
    reforms that advance public health. For example, past reauthorizations
    led to the establishment of the Sentinel Initiative, provided important
    incentives for the development of new antimicrobial drug products,
    strengthened FDA's ability to require postmarket trials or labeling
    changes in response to safety signals, and facilitated efforts to
    better incorporate the patient perspective within the agency's
    decision-making process, among many other consequential changes. \7\ We
    urge Congress to consider other worthy opportunities to improve public
    health during the current reauthorization.
    ---------------------------------------------------------------------------
        \7\  A. Mitchell et al. ``The Prescription Drug User Fee Act'',
    Medical Care, Volume 60--Issue 4: 287-293, April 2022, https://
    journals.lww.com/lwwmedicalcare/Citation/2022/04000/The-Prescription-
    Drug-User-Fee-Act-Much-More-Than.4.aspx.

        In particular, the issue of diagnostic test oversight, currently
    addressed in bipartisan legislation known as the Verifying Accurate
    Leading-edge IVCT Development (VALID) Act, is of critical importance.
    As the COVID-19 pandemic has shown, the Nation's public health depends
    on rapid access to accurate and reliable tests that can diagnose
    disease or identify past infection. But faulty diagnostic tests can
    compromise both patient care and the Nation's response to infectious
    ---------------------------------------------------------------------------
    diseases.

        Current gaps in oversight have allowed tests that are developed and
    used within the same laboratories, called lab-developed tests, to come
    to market without FDA approval, even if those tests are otherwise high-
    risk. Once used to test for rare diseases for which commercially
    manufactured diagnostics were unavailable, these tests have now become
    widespread and increasingly complex. However, because there is no
    central registration or reporting requirements for these tests, the
    exact size of the market is unknown, leaving countless people exposed
    to potential harm from unreliable or misleading results.

        As Committee Members discussed at a recent hearing, the current
    MDUFA reauthorization is an appropriate vehicle for the VALID Act. By
    including VALID in the user fees legislation, Congress can strengthen
    and update current medical device regulations and enable FDA to adopt a
    risk-based approach to diagnostics oversight that balances safety and
    innovation.

        Congress also acknowledged in its 2012 PDUFA reauthorization bill
    the importance of addressing the growing public health threat of
    antibiotic-resistant superbugs and the vital need for new antibiotics
    by enacting the Generating Antibiotic Incentives Now (GAIN) Act as part
    of that package. The GAIN Act represented an important first step that
    supported the launch of small biotechnology innovator companies devoted
    to antimicrobial research and development.

        But on this front, more work is needed. A robust, market-based
    subscription model is necessary to ensure that these companies can earn
    a fair return-on-investment and continue to innovate. The
    sustainability of the antibiotic drug pipeline is absolutely
    foundational to modern medicine. To that end, the Pioneering
    Antimicrobial Subscriptions to End Upsurging Resistance (PASTEUR) Act
    proposes a unique, `only pay for success' pull incentive that will
    substantially strengthen U.S. preparedness for future pandemics. We
    urge Congress to include that measure in its current PDUFA
    reauthorization.
           The User fee Process is no Substitute for Adequate Funding
        Review times are important insofar as they speed patients' access
    to potentially important products. The user fee agreements make review
    times a performance metric. However, it is critical to remember that
    true innovation is not just about getting products to market faster; it
    is about developing products that are safer or more effective than
    existing drugs and devices. While more challenging to measure than
    review times, protecting and promoting health is the ultimate goal of
    the FDA.

        As important as user fees are to the efficient function of FDA,
    they cannot be a substitute for adequate appropriations. User fee
    agreements do not cover a broad range of essential health functions,
    such as enforcing good manufacturing practices, conducting most post-
    market safety activities, and regulating non-drug products, including
    food and the large and ever-growing market of dietary supplements. FDA
    needs sufficient additional resources beyond user fees to sustain these
    critical activities.

        Furthermore, FDA is a public health agency that works to promote
    the health of all Americans. Because of the public interest in a well-
    performing FDA, the agency should receive public funds and be
    accountable to the public, not just to the industries it regulates.
                                   Conclusion
        In conclusion, I want to emphasize the importance of user fees to
    the basic functioning of the FDA. We urge Congress to ensure that FDA
    has continued, sustained funding to carry out its important public
    health mission.

        Thank you for your time and I look forward to answering any
    questions.
                                     ______

                     [summary statement of liz richardson]
        The Pew Charitable Trusts believes that evidence-based policies and
    investments can both spur the development of new drugs and medical
    devices, and ensure effective oversight of these products. Since 1992,
    user fees have provided FDA with significant and sustained resources
    that have allowed the agency both to facilitate the development of
    urgently needed medical products, and to review those products quickly.

        This issue is particularly important to Pew's antibiotic resistance
    project, which is working to advance policies that would spur the
    creation of new antimicrobial products and establish stewardship
    programs that would ensure these products are prescribed only when
    necessary. Since 2014, FDA has approved 14 antibiotics, three of which
    represent a novel drug class or new mechanism of action. These advances
    are critical, as the world faces a dangerous shortage of antimicrobial
    products to address both current and future patient needs.

        In 2002, Congress also established a user fee program for medical
    devices. The fees that FDA collects under these agreements provide the
    agency with resources to review applications and deliver a more
    efficient oversight process, one that can adapt to a rapidly evolving
    device market, where emerging technologies like AI-enabled digital
    health tools and 3D printing are posing challenges to traditional FDA
    oversight.

        A second key aspect of the user fee agreement process is how each
    successive reauthorization has provided an opportunity to advance other
    public health priorities. For example, in its 2012 reauthorization of
    user fees, Congress acknowledged the vital need for new antibiotics by
    enacting the GAIN Act as part of that package. The GAIN Act represented
    an important first step, but more work is needed to ensure that drug
    developers can earn a fair return-on-investment and continue to
    innovate. To that end, the PASTEUR Act proposes a unique, `only pay for
    success' pull incentive that will strengthen U.S. preparedness for
    future pandemics. Pew urges Congress to include that measure in its
    current user fee reauthorization.

        Similarly, Pew also believes that reforming oversight for in vitro
    diagnostic tests, an issue currently addressed in bipartisan
    legislation known as the VALID Act, is of critical importance. The
    Nation's public health depends on rapid access to accurate and reliable
    diagnostic tests. But current gaps in oversight have allowed tests that
    are developed and used within the same laboratories, called lab-
    developed tests, to come to market without FDA approval, even if those
    tests are otherwise high-risk. Pew believes strongly that tests should
    be regulated according to their risk, not where they are developed and
    used. By including VALID as part of the MDUFA reauthorization package,
    Congress can strengthen and update FDA oversight of these critical
    products to make it more flexible and risk-based.

        Finally, while user fees are important to the efficient function of
    FDA, they cannot be a substitute for adequate appropriations. User fees
    do not cover all of FDA's essential functions, such as conducting most
    post-market safety activities, or regulating non-drug products,
    including food and the large and ever-growing market of dietary
    supplements. FDA needs resources beyond user fees to sustain these core
    activities. And because FDA is a public health agency that works to
    promote the health of all Americans, the agency should receive public
    funds and be accountable to the public, not just to the industries it
    regulates.
                                     ______

        The Chair. Ms. Richardson, thank you for your testimony. I
    am going to turn it over to Dr. Esham for testimony next. And
    then I am going to turn the Committee over to Senator Burr. I
    will go vote. There are two votes that are being called and I
    will be back shortly. Thank you, Senator Burr.
        Dr. Esham.

    STATEMENT OF CARTIER ESHAM, PH.D., CHIEF SCIENTIFIC OFFICER AND
     EXECUTIVE VICE PRESIDENT OF EMERGING COMPANIES, BIOTECHNOLOGY
                INNOVATION ORGANIZATION, WASHINGTON, DC

        Dr. Esham. Thank you. Good morning, Chair Murray, Ranking
    Member Burr, Members of the Committee. My name is Cartier
    Esham, and I am the Chief Scientific Officer at the
    Biotechnology Innovation Organization, or BIO. BIO is the
    world's largest trade association, representing biotech
    companies, academic institutions, and related organizations
    across the United States and in more than 30 other nations.
        While our membership includes most of the large
    pharmaceutical companies, the majority of our members are
    small, pre-revenue companies working on cutting edge biomedical
    innovations. We appreciate the opportunity to speak with you
    today, and we are committed to and working toward modernizing
    the clinical development paradigm to one that is more
    efficient, more patient centric, more inclusive, and best able
    to provide timely availability of next generation medicines
    that will improve the lives of patients and their families.
        We do urge timely reauthorization of the prescription drug
    and biosimilar user fee agreements as they are vital to
    advancing these goals and to ensuring the FDA is able to
    effectively carry out its vital mission to protect and promote
    the public health.
        Congress has built a strong foundation over many years with
    the enactment of previous user fee agreements and other key
    laws that have collectively worked to ensure effective and
    timely reviews, improve drug and biologic safety monitoring,
    enable the agency to keep pace with medical and scientific
    process, and provided the support necessary to ensure that
    advanced medicines are provided to patients as quickly and
    safely as possible.
        The PDUFA and MDUFA User Fee Agreements will build on these
    efforts and foster next generation scientific medical advances
    that will benefit patients. For example, the PDUFA VII
    agreement aligns meeting opportunities with the needs of
    complex and innovative clinical development programs that will
    support productive scientific dialog and foster early
    identification, and better enable timely resolution of those
    issues when possible.
        This includes the advancement of best practices--best
    meeting practices, as it is a shared responsibility between the
    biopharmaceutical industry and the FDA to ensure productive and
    effective meetings. The commitments in PDUFA will work to
    continue to advance the systematic integration of patient
    centric perspectives into drug development and review, building
    on efforts that began in earnest under the PDUFA V agreement.
        They will provide the resources, capacity, and expertise
    needed for CBER to manage the exciting and vastly growing
    pipeline of cell and gene therapies. They will provide
    resources to improve safety monitoring and ensure the FDA is
    able to meet the demands and opportunities of the data and
    digital age.
        Advance evidence collection and analysis approaches--
    analytical approaches that are more patient centric, more
    informative about health outcomes for all patients. They will
    provide resources and drive actions that will work better to
    enable the use of advanced manufacturing technologies and
    ensure that processes relating to the safe manufacturing of
    complex medicines is done in a manner that does not unduly
    delay availability of these medicines.
        The PDUFA commitments will also include provisions that
    will further strengthen the accelerated approval pathway and
    the orphan drug designation processes, both of which have been
    foundational in enabling the timely availability of medicines
    for patients suffering from devastating and life threatening
    diseases.
        These include provisions that will advance regulatory
    understandings about what is necessary to support the
    utilization of a surrogate endpoint as a basis for approval and
    approve processes to ensure timely or post-market requirement
    assessments are made and better enable effective study designs,
    as well as improve the ability to engage with the FDA post-
    approval to resolve study challenges when they arise and better
    support timely determinations of continued scientific validity.
        Like PDUFA, BsUFA agreement also works to ensure timely and
    productive scientific dialog, and advances regulatory science
    in key areas, including supporting the more efficient and
    better understood processes for the approval of interchangeable
    biosimilars. And they both work to ensure that FDA is best
    able--better able to recruit and retain world-class personnel
    and effectively manage resources.
        Before I close, I would like to take this opportunity to
    convey BIO's commitment to improving clinical trial diversity.
    In addition to important commitments in the PDUFA VII
    agreement, BIO has provided Members of this Committee with
    proposals we believe are essential to advancing regulatory
    understandings that will drive change and support a clinical
    development ecosystem that is more inclusive and representative
    of the patients we serve.
        Thank you again, and we look forward to working with you on
    these reauthorizations and toward advancing a new clinical
    development paradigm that is more expansive, more inclusive,
    more patient centric, and better enables the timely delivery of
    safe and effective next generation medicines that will improve
    the lives of patients and their families. Thank you.

        [The prepared statement of Dr. Esham follows:]
                      prepared statement of cartier esham
                                  Introduction
        Good morning, Chair Murray, Ranking Member Burr, and Members of the
    Committee. My name is Cartier Esham, and I am the Chief Scientific
    Officer at the Biotechnology Innovation Organization, or BIO. BIO
    appreciates the opportunity to speak with you today about key
    priorities we believe will improve regulatory oversight and
    transparency, as well as enable biopharmaceutical companies to
    modernize the clinical development paradigm to one that is more
    patient-centric, efficient, and inclusive. Congress has built a strong
    foundation over many years that has served to expedite patients' access
    to safe and effective therapies, and helped innovators develop next-
    generation medicines that have improved the lives of patients and their
    families. We look forward to working with this Committee to continue to
    building on these efforts and urge that the Committee proceed with the
    timely reauthorization of the Prescription Drug User Fee Act and
    Biosimilar User Fee Act to ensure FDA can continue to meet its mission
    to protect and promote public health.

        BIO is the world's largest trade association representing
    biotechnology companies, academic institutions, state biotechnology
    centers, and related organizations across the United States and more
    than 30 other nations. While our membership includes most of the large,
    international biopharmaceutical companies, the majority of our members
    are small biotechnology companies working on cutting-edge biomedical
    innovations. These companies are pre-revenue and take enormous risks
    every day to develop the next generation of biomedical breakthroughs
    for the millions of patients suffering from diseases for which there
    are no effective cures or treatments today. BIO is proud of their
    innovative spirit and dedication to improving the lives of patients and
    their families.

        Since the initial enactment of the Prescription Drug User Fee Act
    (PDUFA) in 1992, user fees have played a key role in ensuring that
    effective and efficient regulatory processes keep pace with the
    continual advancement of scientific and medical innovation. As a
    result, more innovative treatments and therapies are first approved in
    the United States, providing our citizens with faster access to
    innovative medicines. Additionally, the PDUFA program ensures that FDA
    has the resources, capabilities, and processes in place to establish a
    clear and direct pathway from initial scientific discovery to
    widespread availability of cutting-edge medicines. This benefits not
    only regulators, patients, and the biopharmaceutical industry, but also
    the entrepreneurial community that makes significant investments in
    high-risk, early stage, innovative medicine development. Today, it can
    take anywhere from 10 to 15 years at an average cost of approximately
    $1 billion or more to advance a single drug or biological product from
    a promising idea to an approved product that benefits patients. \1\,
    \2\ A well-run and comprehensible pathway to approval is critical to
    maintaining U.S. leadership in investment, development, and
    availability of next-generation medicines.
    ---------------------------------------------------------------------------
        \1\  Olivier J. Wouters, Ph.D; Martin McKee, MD, DSc; Jeroen
    Luyten, Ph.D. Estimated Research and Development Investment Needed to
    Bring a New Medicine to Market JAMA. 2020, 323(9).
        \2\  Joseph A. DiMasi; Henry G. Grabowskibi; Ronald W. Hansen.
    Innovation in the pharmaceutical industry: New estimates of R&D costs.
    2016. Journal of Health Economics. 2016, Vol. 47.

        The Prescription Drug and Biosimilar User Fee Acts (PDUFA and
    BsUFA) have collectively worked to ensure effective and timely reviews,
    improve drug and biologics safety monitoring, enable the Agency to keep
    pace with medical and scientific advancements, allow for earlier and
    more frequent FDA-sponsor engagement to identify and resolve drug and
    biologic development challenges, and provide the support necessary to
    ensure that advanced medicines are available to patients as efficiently
    and safely as possible. These user fee programs, which are reauthorized
    by Congress every 5 years, provide FDA with the authority to collect
    fees from companies that produce certain human drugs, biologics,
    medical devices, and generics. These user fees, in addition to the
    resources provided through direct appropriations from Congress, have
    ensured that FDA is a global leader in regulatory advancement and
    oversight. Last year, 76 percent of novel drugs approved by FDA's
    Center for Drug Evaluation and Research (CDER) were approved in the
    U.S. before any other country. \3\
    ---------------------------------------------------------------------------
        \3\  https://www.fda.gov/media/155227/download.
    ---------------------------------------------------------------------------
        User fee programs are not fee-for-service programs, and fees paid
    by a company for a medical product application are not tied to the
    review of that particular application. Instead, these fees support a
    wide range of regulatory programs and ensure FDA has the resources,
    capabilities, and processes in place to maintain clear regulatory
    pathways and keep pace with medical and scientific innovation. The
    PDUFA and BsUFA agreements currently under consideration continue to
    advance those goals and activities and include additional commitments
    that will strengthen review fundamentals, enhance accountability and
    transparency, ensure stable growth of successful existing regulatory
    programs, and foster innovative scientific advancements.

        Highlighting a few key topics that are most important to BIO, our
    member companies, and, most importantly, the patients we serve, we
    would like to emphasize the importance of promoting effective
    scientific dialog between FDA and sponsors of medical product
    development programs, enabling the utilization of regulatory tools that
    are more effective and support broader and more meaningful
    understandings of clinical outcomes for all patients, the incorporation
    of patient perspectives in clinical trials and post-approval data
    collection, and the necessity to provide the resources and capacity
    needed to meet the demands and opportunities of the digital age. The
    COVID-19 pandemic has shown us that decentralized clinical trials,
    digital health technology tools, and other innovations utilized during
    the pandemic have the potential to improve how we develop medicines
    that meet the needs of patients and greatly reduce the burden on
    clinical trial participants, especially for those who belong to
    historically underserved populations and for those who suffer from rare
    diseases, where clinical trial populations are small and geographically
    dispersed. We urge an on-time reauthorization of FDA's user fee
    programs to allow the enactment of the PDUFA VII and BsUFA III
    Commitment Letters that will continue to advance meaningful integration
    of the patient voice and experience into drug and biosimilar biological
    product development and review processes, build upon important lessons
    learned from the pandemic, and pave a path forward to a clinical
    development paradigm that is more effective, more informative, and more
    inclusive.
                          Overall Goals for PDUFA VII
        Each user-fee Commitment Letter has continued to build upon the
    efforts of previous agreements. The following testimony will describe
    the content and benefit of critical provisions addressed in seven
    primary themes included in the PDUVA VII Commitment Letter:

            1. Strengthen scientific dialog and advance innovation

            2. Support the next wave of advanced biological therapeutics

            3. Enhance patient-centric drug development, review, and
            protections

            4. Modernize regulatory evidence generation and drug
            development tools

            5. Enhance innovation in manufacturing and product quality
            reviews

            6. Advance digital technologies and information technology (IT)
            infrastructure

            7. Enhance FDA hiring, retention, and financial management
              Strengthen Scientific Dialog and Advance Innovation
        A goal of PDUFA VII most critical to advancing innovation involves
    enhancing and strengthening scientific dialog between sponsors of
    applications and FDA. To that end, FDA, for the first time, will
    provide consistent timelines for Initial Targeted Engagement for
    Regulatory Advice on CBER Products (INTERACT) meetings and expand the
    scope of these meetings to include products regulated by the Center for
    Drug Evaluation and Research (CDER). INTERACT meetings have been
    critical for sponsors of innovative biological products who face unique
    challenges that could otherwise delay entry into clinical development.
    FDA will also establish a new Type D meeting that enables FDA and
    sponsors to engage in more rapid and focused conversations about
    innovative approaches or unique challenges that will allow for earlier
    resolution of discrete issues. The Commitment Letter also formalizes a
    process where sponsors can submit clarifying questions to FDA following
    a meeting to ensure alignment on expectations and requirements. We
    collectively recognized that establishing and following best practices
    for productive meetings is a shared responsibility between
    biopharmaceutical companies and FDA.

        There are at least 7,000 known rare diseases collectively impacting
    over 25 million Americans with new rare diseases identified each year.
    Because rare diseases have limited or no treatment options and lack
    well-established regulatory precedents, the development and review of
    these medicines introduces additional challenges that must be overcome
    to deliver new therapies to patients who need them. Key among these
    challenges is reaching agreement with regulators about determining the
    appropriate efficacy endpoints to support approval of innovative
    medicines for rare diseases. The current mechanisms for companies with
    rare disease treatments in their pipeline to collaborate with FDA has
    not consistently provided avenues for much needed discussions about
    these unique issues, which can cause delays in the development and
    availability of medicines to these patients who often lack options. The
    Rare Disease Endpoint Advancement (RDEA) pilot program in PDUFA VII
    will provide avenues for focused engagement opportunities that will
    serve to advance and share learnings and enable more efficient drug
    development and review process for all rare disease medicines.

        The Commitment Letter will establish a Split Real Time Application
    Review (STAR) pilot program for certain applications that are intended
    to treat a serious condition with an unmet need. The pilot builds on
    the concepts that have proven successful for FDA's Real Time Oncology
    Review (RTOR) program and expands them to other disease areas to enable
    more timely reviews and availability of these medicines to vulnerable
    patient populations. The STAR pilot will improve both the stakeholders
    and industry's workload management by allowing sponsors of applications
    to submit their applications in two parts rather than one, allowing for
    earlier review of key components such as proposed labeling, clinical
    protocols, and topline efficacy and safety results prior to the final
    application submission.

        Biopharmaceutical companies and FDA recognize the importance of
    post-marketing requirements (PMRs) to ensure timely availability of
    information on the safety and efficacy of certain therapies to patients
    when further post-approval studies are warranted. PDUFA VII includes
    commitments to ensure necessary PMRs are identified and communicated
    earlier in the review process and enable the development and
    implementation of more thoughtful study designs. This will better
    ensure that these PMRs are completed on time and avoids delays in
    confirmatory trials. PDUFA VII will also establish stronger processes
    for the continued evaluation of PMRs post-approval to ensure
    requirements are being met, issues can be resolved, and the studies
    remain scientifically valid.
           Support the Next Wave of Advanced Biological Therapeutics
        Advancing the new wave of biological therapies is a top priority
    for BIO member companies. A 2020 analysis by BIO found that there were
    231 gene therapy products under development compared to only 93
    products in 2015, a trend that is expected to continue in the coming
    years. To ensure that new and innovative cell and gene therapy products
    are developed and available to patients in a timely manner, the
    Commitment Letter will provide FDA with the resources and capacity
    needed to address the growing workload of the Cell and Gene Therapy
    Program. This will enable FDA to maintain the level of highly trained
    and experienced Cell and Gene Therapy staff needed to address CBER's
    workload caused by increased regulatory submission volume as projected
    over the next 5 years as well as keep pace with scientific and
    technological advancements. As part of the commitment, FDA will
    facilitate a better understanding of patient perspectives on gene
    therapy products, including cell-mediated gene therapy, and provide
    greater clarity on expedited pathways for regenerative medicines. FDA
    will streamline and harmonize processes, procedures, and interactions
    by enhancing, improving, and issuing guidance describing best practices
    for communication related to aspects of Cell and Gene Therapy product
    development, including the use of novel trial designs.
       Enhance Patient-Centric Drug Development, Review, and Protections
        One of the most important goals of PDUFA VII involves continuing to
    advance the systematic integration of patient perspective data into
    drug development and review processes. This work began in earnest under
    PDUFA V with the establishment of the Voice of the Patient Program that
    supported public meetings where patients provided insights about their
    conditions and how they themselves evaluated benefits, risks, and
    needs. PDUFA VI advanced this work by holding a series of public
    meetings and publishing guidance that provided information about how to
    determine the most important impacts to patients, how to measure
    disease impact, and how to incorporate Clinical Outcome Assessments
    (COAs) into clinical development and review processes.

        During PDUFA VII, FDA will continue this critical work by
    continuing to strengthen capacity and knowledge through the expansion
    of training opportunities for FDA staff and ability to better engage
    external methodological experts. FDA will seek public input on
    methodologies and approaches for the submission of high-quality patient
    perspective data designed to inform benefit-risk assessments and
    inclusion of information in the label. PDUFA VII will provide
    supplementary support to FDA's development of a publicly available
    virtual catalog of Standard Core Sets of COAs and related endpoints
    that will help make possible the broader utilization of patient
    perspective data in clinical product development. FDA will also seek
    public input on which diseases areas have the greatest need for
    Standard COA development. Additionally, FDA will work to increase
    shared understandings about how patient preference studies can inform
    meaningful benefit-risk assessments in therapeutic areas, which is of
    very high value to the patient community.
      Modernize Regulatory Evidence Generation and Drug Development Tools
        Advancing innovative, patient centric drug development tools, and
    modernizing the regulatory evidence generation paradigm is a top
    priority for BIO member companies. Advancements in science and
    technology offer real opportunities to reduce patient burden, improve
    ability to recruit and conduct effective clinical trials and provide
    more informative analyses of benefit and risk pre and post approval.
    PDUFA VII will continue to build on several key initiatives that were
    launched under PDUFA VI. Under this Commitment Letter, FDA will advance
    the use of real-world evidence (RWE) to support approval of labeling
    claims, approval of new indications and to satisfy post approval study
    requirements. The agreement establishes an Advance RWE pilot program
    that will provide shared learnings with the public and inform the
    publication of guidance increasing broad knowledge about how and when
    RWE can be utilized in future applications.

        Complex innovative trial designs can be more efficient, improve
    patient outcomes, and produce high-quality information faster compared
    to traditional trial designs. PDUFA VII will continue both the Complex
    Innovative Trial Design and Model-Informed Drug Development (MIDD)
    pilot programs which enable the utilization of these tools and
    approaches more broadly. Additionally, the Agreement will enhance the
    drug development tool (DDT) qualification pathway for biomarkers by
    retaining and enhancing staff capacity and piloting processes that
    enhance the review of biomarker qualification submissions. High quality
    biomarkers can accelerate and enable drug development in areas of unmet
    need, improve clinical trial feasibility and efficiency thus continued
    improvement of the qualification pathway is beneficial to regulators,
    the research and development community, and patient communities.

        To enhance FDA's drug safety system, PDUFA VII provides resources
    and processes that will enable the adoption of new scientific
    approaches designed to improve the utility of existing tools for the
    detection, evaluation, prevention, and mitigation of adverse events.
    PDUFA VII will modernize and improve Risk Evaluation and Mitigation
    Strategies (REMS) approaches and processes through new guidance
    documents and timelines for feedback to companies on REMS
    methodologies. Newly allocated resources will expand and optimize FDA's
    electronic safety data base (the Sentinel program) including supporting
    the integration of Sentinel and BEST (Biologics Effectiveness and
    Safety) systems, and FDA will advance knowledge about how Sentinel data
    can be used for regulatory purposes (e.g., PMRs, PMCs and labeling) and
    how real-world evidence (RWE) may be used for evaluating the
    effectiveness of medicines. Collectively, these improvements and
    advancements in FDA's drug safety system will improve patient
    protections and utilization of this vast data resource to gain deeper
    insights about the benefits and risks of medicines for all patients.
        Enhance Innovation in Manufacturing and Product Quality Reviews
        One of the critical needs for PDUFA VII was to advance innovation
    in manufacturing and inspection review processes and improve the
    ability to get medicines to patients in a timely manner. A rate-
    limiting step for the past several years has been discussions and
    resolution of chemical manufacturing and control (CMC) issues,
    especially for innovative biologic therapies and treatments. FDA will
    improve the timeliness and effectiveness of CMC communications through
    training and updating CDER and CBER guidance designed to enable more
    consistent review of high-quality information requests from sponsors.
    FDA will also engage a third party to assess, seek public comment, and
    provide recommendations about how these processes can be optimized to
    support modernization of CMC-related processes.

        To address the outsized hindrance of timely availability of
    innovative treatments for serious and life-threatening diseases
    undergoing expedited reviews due to CMC issues, FDA will publish new
    internal documents to better align CMC communications and processes to
    meet the desired timelines for approval decisions more consistently.
    The FDA will also establish a CMC Development and Readiness Pilot
    (CDRP) in both CDER and CBER to provide additional opportunities for
    engagement between FDA and sponsors that will help companies meet
    critical CMC milestones. Learnings from this pilot and an associated
    public workshop will inform a strategy document describing the Agency's
    plans to revise processes and information about submission strategies
    to accelerate CMC development.

        Over the past several years there have been significant scientific
    advancements about how to effectively and efficiently manufacture high-
    quality complex medicines. PDUFA VII will work to identify and remove
    current barriers to the utilization and adoption of advanced
    manufacturing technologies. FDA will conduct a workshop where best
    practices, case studies, and regulatory strategies will be shared and
    discussed, including how to assess innovative technologies across
    platform products and sites. We are pleased that this Committee
    included a focus on manufacturing in the PREVENT Pandemics Act, and BIO
    supports the pathways for reviews of technologies established under
    Sections 506 and 518 of that bill which will enhance these PDUFA goals
    and facilitate the adoption of advanced manufacturing.

        During the COVID-19 pandemic, regulators, biopharmaceutical
    companies, and other key stakeholders from around the world held
    discussions about how best to ensure the continued availability of
    medicines and meet the needs of providing COVID vaccines and treatments
    to all in need. Among the results of those discussions were the
    increased utilization, when appropriate, of alternative tools such as
    use of information shared by trusted foreign regulatory partners and
    record requests for assessing manufacturing facilities. PDUFA VII will
    continue the advancement of those lessons learned by issuing draft
    guidance about when and how these types of alternative approaches may
    be utilized beyond the pandemic.
         Advance Digital Technologies and Information Technology (IT)
                                 Infrastructure
        It is of vital importance that support be provided to FDA to
    increase its capacity and ability to meet the demands and opportunities
    of the data and digital age. Increasing utilization of cloud
    technologies is necessary for FDA to meet the growing needs, demands,
    and advantages of modern-day development and review of innovative
    medicines. Today's medical product applications have large and/or
    complex data sets that require high-quality repository and analytical
    capabilities. PDUFA VII activities and resources, collectively, will
    enable FDA to make the necessary changes to meet these needs. These
    advancements will serve to improve the quality of applications
    submitted to FDA and improve our ability to better understand the
    benefits and risks of medicines to all patients before and after they
    are approved.

        First, FDA will continue to meaningfully advance its Data and
    Technology Modernization Strategy to improve both FDA's enterprise
    needs and to advance key PDUFA objectives such as completing transition
    to a cloud-based system. FDA also committed to regular engagement with
    the biopharmaceutical industry to provide progress updates, share
    learnings, and discuss challenges in meeting PDUFA VII goals and
    advancing objectives outlined in the Data and Technology Modernization
    Strategy.

        Second, FDA will launch a series of demonstration projects in
    collaboration with external partners to improve the core capabilities
    necessary for reviewing data captured via digital technology tools. We
    expect continued growth in the utilization of digital technologies as
    they offer the ability to reduce burdens on patients in clinical
    trials, better assess clinical outcomes for all patients, and more
    efficiently collect high-quality data and evidence to support approvals
    and inform life-cycle management of medicines. Findings and planned
    next steps from these demonstration projects will be shared with
    biopharmaceutical companies and made available to the public on FDA's
    website.

        Third, critical IT modernization and capacity needs for the review
    of Biologic License Agreements will be provided to CBER to meet the
    demands of current and future applications that are projected to
    increase significantly over the next 5 years. In coordination with the
    Data Technology Modernization Strategy described above, CBER will
    develop a specific multi-year modernization roadmap to chart specific
    steps necessary for CBER to meet current and projected needs necessary
    to continue to successfully carryout its mission.
            Enhance FDA Hiring, Retention, and Financial Management
        PDUFA VII continues to build upon the resource management and
    fiscal accountability provisions included in PDUFA VI. For example, the
    time reporting system initiated under the previous Agreement will be
    optimized to allow for time and associated costs to be reported and
    examined on a more continual basis. Additionally, to strengthen fiscal
    and staff resource management, accountability, and transparency, PDUFA
    VII will continue to mature the resource capacity planning system that
    includes a publication of an updated implementation plan describing how
    resource capacity planning and time reporting will be improved and
    implemented over the coming 5-year PDUFA cycle. A third-party
    assessment of the capacity planning system will be conducted and inform
    the 5-year fiscal planning activities. Recommendations and findings of
    this assessment will be included in the annual financial reports.
    Additionally, FDA will maintain a stronger operating reserve to ensure
    they are better able to mitigate against disruptions to funding
    resources and continue to carry out mission critical activities.

        Ensuring FDA can recruit and retain world-class personnel is the
    bedrock for maintaining U.S. regulatory leadership around the world.
    PDUFA VII continues to provide resources and tools to better enable FDA
    to attract and retain leading medical and scientific professionals.
    Specifically, PDUFA VII provides FDA with resources to conduct a third-
    party assessment of hiring and retention to identify challenges and
    provide recommendations for the Agency. These recommendations will be
    made available to the public where FDA will also share its plans to
    address issues raised.
                              BSUFA III Highlights
        The Biosimilar User Fee Agreement (BsUFA) contains several
    commitments that have the same goals and objectives as those included
    in PDUFA VII, including: maintaining and improving performance goals
    for the effective and timely review of biosimilars, improving
    scientific dialog and meeting best practices, modernizing IT
    capabilities, advancing utilization of RWE to assess safety and support
    regulatory decision-making, and strengthening the ability to recruit
    and retain world-class personnel. Below I will highlight a few key
    beneficial provisions included in the BsUFA III Commitment Letter most
    important to our member companies and the patients we serve.
                         Improving Scientific Dialogue
        Ensuring timely scientific dialog throughout the review process is
    a top priority for BIO member companies. BsUFA will improve the ability
    to engage in timely and focused discussions through the creation of new
    and improved meeting opportunities. Specifically, FDA will now provide
    a new meeting structure that enables FDA and sponsors of applications
    to engage in focused conversations on a narrow set of issues. BsUFA III
    also reforms the biosimilar initial advisory (BIA) \4\ advisory meeting
    process to better manage FDA workload and ensure productive discussions
    about whether licensure of a biosimilar is feasible, and if so, plans
    and expectations for the development of that biosimilar.
    ---------------------------------------------------------------------------
        \4\  A BIA meeting is an initial assessment limited to a general
    discussion regarding whether licensure under section 351(k) of the PHS
    Act may be feasible for a particular product, and if so, general advice
    on the expected content of the development program.
    ---------------------------------------------------------------------------
       Improving Review Processes of Biosimilar Supplemental Applications
        The BsUFA III agreement will bring more predictability and
    efficiency to the review of supplements. Specifically, there will be
    timelines and goals established for 6 different types of supplement
    categories. These commitments will increase efficiency, consistency,
    and predictability of biosimilar supplemental applications and provide
    patients with timelier access to these medicines.
      Advancing the Development and Review of Interchangeable Biosimilars
        BsUFA III will continue to support more efficient and better
    understood processes for the approval of interchangeable biosimilars.
    FDA will hold a scientific workshop to discuss shared learnings and
    remaining challenges to the development of interchangeable biosimilars
    that will help FDA determine what additional steps need be taken to
    support the development and availability of these medicines (e.g.,
    additional guidance or research). Following the workshop, FDA will
    publish a strategy document describing the specific actions FDA will
    implement to facilitate development of interchangeable biosimilars.

        To advance regulatory science in this field, FDA will pilot a
    regulatory science program that is designed to advance the development
    of interchangeable products and improve the efficiency of their
    development. Specifically, this pilot program will work to improve
    knowledge about how data (including RWE) can be utilized to meet safety
    standards for determining interchangeability and what methodologies can
    be utilized to assess the potential impact of differences between
    proposed interchangeable biosimilars and their reference products. The
    findings and shared learnings from this pilot program will greatly
    advance the development, review, and availability of interchangeable
    biosimilar medicines.
         Interchangeable Biosimilar Labeling and Manufacturing Guidance
        Under BsUFA III, FDA will publish guidance that will serve to
    improve communication of important biosimilar labeling information to
    patients and their caregivers and better facilitate resolution of
    manufacturing issues. Specifically, FDA will publish a guidance on
    labeling for interchangeable biosimilars, a guidance on promotional
    labeling and advertising considerations for interchangeable biosimilar
    products, and a guidance on what information is needed to support post-
    approval manufacturing changes to approved biosimilar and
    interchangeable biosimilar products. Collectively, these will serve to
    provide a greater understanding of what is required for efficient
    review and approval of changes to labels and manufacturing processes.
    Priorities for Advancing Medical Product Regulation and Innovation for
                            the Benefit of Patients
        BIO strongly supports the objectives and activities outlined in the
    PDUFA VII and BsUFA III commitment letters. These commitments, in
    addition to other key pieces of legislation and initiatives from
    Congress and the pharmaceutical industry, will facilitate innovation
    that benefits all patients served by our member companies. The
    testimony below outlines additional priorities that we believe will
    support this objective.
      Building a New Clinical Development Paradigm: More Inclusive, More
     Patient Centric and More Informative About Clinical Outcomes for All
                                    Patients
        BIO is committed to enhancing clinical trial diversity, and we
    included this commitment as part of our BIOEquality Agenda launched in
    2020. The COVID-19 pandemic highlighted the urgent need to remove
    barriers and advance solutions that enable clinical trials to be more
    representative of the patients being treated. Scientific advancements
    are providing opportunities to establish clinical development and post-
    approval data collection approaches that can improve our understanding
    of clinical outcomes for all patients. The PDUFA VII Commitment letter
    will provide resources, capacity, and the development of guidance that
    will significantly advance regulatory certainty and promote the
    acceptance of real-world data/evidence (RWD/RWE) and digital health
    tools (DHTs) like remote monitoring devices, cell phones, and smart
    watches that are essential in more broadly enabling the utilization of
    decentralized or non-traditional clinical trial locations.

        BIO stands ready to work with Congress, the Administration, and
    stakeholders to create a more expansive, inclusive, and sustainable
    clinical development ecosystem. We need to modernize the regulatory
    system to accept innovative tools and approaches that enable increased
    participation in clinical trials from underrepresented communities and
    the ability to collect data that improve our understanding of clinical
    outcomes for all patients. In addition to important legislation
    addressing these issues that will be discussed today, BIO has provided
    this Committee with legislative proposals we believe are essential to
    removing barriers and establishing a regulatory framework that is more
    inclusive and representative of the patients we serve.

        The lack of reliable data sources capturing U.S. demographics is a
    challenge that must be resolved. Incomplete or outright missing
    demographic data for many disease areas leads to poorly or inaccurately
    informed enrollment targets and action plans during drug development.
    While FDA regulations require sponsors to present a summary of safety
    and effectiveness data by demographic subgroups within their trials, it
    is difficult to compare this data to epidemiological data to understand
    whether enrollment targets are representative of the disease
    population. Sponsors also lack certainty regarding innovative clinical
    trial designs that could improve trial diversity. Traditional clinical
    trial designs are typically geographically centralized around academic
    medical centers and associated with significant burden for patients,
    such as multiple mandatory visits to the clinic. This creates
    significant challenges when recruiting individuals who are
    geographically dispersed, unable to travel, or unable to take leave
    from work. By contrast, modern trial designs that embrace innovative
    tools and methods, like digital health technologies, decentralized
    clinical trials, and RWD/RWE, have demonstrated success in facilitating
    trials and driving diverse enrollment throughout the COVID-19 pandemic,
    \5\ but companies currently lack a regulatory framework to fully
    leverage such techniques and tools.
    ---------------------------------------------------------------------------
        \5\  https://jamanetwork.com/journals/jamanetworkopen/fullarticle/
    2789002.
    ---------------------------------------------------------------------------
        We need to re-examine and update approaches to and criteria for the
    establishment of inclusion and exclusion criteria and advance
    approaches to data collection for approved medicines that enhance our
    understanding of benefits and risks for all patients and enable that
    information to be more transparent and available to patients and their
    care givers. Our proposal requires public meetings with comment periods
    and the publication of guidance on each of these topics that together
    will work to remove present-day barriers and establish a regulatory
    framework that promotes inclusive and representative clinical
    development and review processes.

        To help build a more expansive, inclusive, and sustainable clinical
    trial network infrastructure, BIO also recommends that HHS conducts a
    series of public roundtable discussions that converge stakeholders from
    FDA, NIH, CDC, community organizations, industry, and clinical research
    organizations (CROs) to discuss, develop, and implement recommendations
    that will serve to create a more expansive and inclusive clinical
    development infrastructure. Roundtable discussion topics could include
    establishing a publicly available data base of well-indexed active
    clinical trialists, establishing clinical trialist training programs
    and mentoring networks for investigators/trialists serving
    underrepresented communities, and establishing a publicly available
    data base of community engagement organizations supported by NIH. HHS
    should also establish new or leverage existing programs for a federally
    funded clinical trial investigator fellowship pilot program for women,
    members of the LGBTQIA+ community, and racial and ethnic minorities to
    help increase participation of underrepresented populations in clinical
    trials.

        To promote diversity and inclusion for workforce development in the
    STEM community, BIO also recommends requirements for FDA and NIH to
    improve transparency around hiring, retention, and promotion practices
    within their organizational leadership and scientific workforces.
    Requirements should outline clear objectives for staff and leadership
    diversification and include a regular reporting cadence to Congress on
    metrics related to progress on these objectives. Such provisions would
    work synergistically with human resources (HR) authorities established
    by the 21st Century Cures Act of 2016 that enable FDA to build and
    maintain a talented workforce that keeps pace with rapid scientific and
    technical advancements in the biopharmaceutical industry. These H.R.
    authorities grant FDA increased flexibility to streamline the hiring
    process for recruits with specific scientific, technical, and
    professional occupations. They also established a new pay authority
    enabling FDA to compete with the private sector and academia when
    recruiting and retaining highly qualified candidates for these key
    positions. Together, these activities would strengthen the Federal
    public health workforce in terms of talent, expertise, and diversity.

        We acknowledge that removing regulatory barriers and enhancing and
    developing data sources and infrastructure will not address all
    existing barriers to inclusive clinical trial participation, including
    language and health literacy disparities and historical mistrust of
    certain clinical research tactics and ethics. We have established a
    website, The Power of Participation (www.ctpop.org), for patients,
    designed to help assess and locate clinical trial opportunities and
    identify patient and community organizations they may find helpful. We
    remain committed to working with stakeholders across the public health
    spectrum to provide meaningful educational materials for all patients.
     Accelerated Approval Brings Life Changing Treatments to Patients who
                               Urgently Need Them
        BIO continues to strongly support the Accelerated Approval Pathway
    (AAP) for reviewing safe and effective therapies that address critical
    unmet patient needs in serious and life-threatening disease states.
    This pathway has proven to be very effective in addressing some of the
    most pressing public health needs and has been foundational to
    extending and saving countless lives since its enactment. As of June
    2021, 269 new drugs or biologics to treat serious or life-threatening
    diseases or conditions with high unmet medical needs have been approved
    through this pathway, extending, and in certain cases, saving patients'
    lives by providing novel therapies earlier than would have been
    possible using the traditional pathway. \6\ Medicines approved through
    this pathway meet FDA's well-established approval standard of safety
    and effectiveness. The AAP is essential to providing timely access to
    treatments where there is an unmet need and for patients who lack
    therapeutic options.
    ---------------------------------------------------------------------------
        \6\  https://www.fda.gov/drugs/nda-and-bla-approvals/accelerated-
    approvals.

        Since the AAP was established in 1992, \7\ the pathway has led to
    the approval of treatments that have significantly improved the care of
    patients suffering from many different diseases, including rare
    cancers, Human Immunodeficiency Virus (HIV), bacterial infections,
    multiple sclerosis, sickle cell disease, and other serious and life-
    threatening conditions. The AAP encourages scientific and medical
    advancement by allowing the use of surrogate or intermediate clinical
    endpoints that are reasonably likely to predict clinical benefit to
    support approval. Prior to the establishment of the AAP, patients with
    HIV recognized the need for a new pathway as the development of
    treatments using traditional endpoints of disease progression and death
    were prohibitory to providing access to much needed treatments for
    patients suffering from this deadly disease. The AAP enabled the
    approval of the first HIV/AIDS treatment based on the use of surrogate
    endpoints (viral load and CDR count) which served to prolong and save
    the lives of millions of patients. The PDUFA VII agreement includes
    commitments that will strengthen the AAP, such as advancing surrogate
    endpoint development through the RDEA Pilot Program and providing
    avenues for earlier and more timely discussions on the design of post-
    market requirements to avoid delays in confirmatory trials. (PMRs),
    which are critical to confirming the clinical benefits of products
    receiving accelerated approval. \8\ The Commitment Letter will also
    serve to advance regulatory understandings about when and how RWE may
    be used to support PMRs that may significantly improve the ability to
    complete PMRs in a more effective and efficient manner, modernizing the
    conduct of confirmatory trials required by the AAP.
    ---------------------------------------------------------------------------
        \7\  In 1992, and partially codified in 1997, FDA instituted the
    Accelerated Approval regulations (21 CFR 314 Subpart H and 601 Subpart
    E) to formalize the process for approving drugs to treat serious
    conditions that filled an unmet medical need based on a study of
    surrogate endpoints.
        \8\  Sponsors planning to use surrogate endpoints as primary
    efficacy endpoints also gained an opportunity to consult with FDA
    earlier in the drug development process through Type C Surrogate
    Endpoint meetings established during PDUFA VI.

        Patients have consistently voiced their support for the use of AAP
    over the last 30 years. We have all seen how this pathway has led to
    more timely access to treatments that improve, extend, and save lives
    and has been foundational to continued advancements in the treatment of
    serious and life-threatening diseases. BIO looks forward to working
    with the Committee to ensure that the Accelerated Approval Pathway is
    working efficiently, effectively, and as intended.
                                Closing Comments
        BIO member companies are committed to advancing innovation on
    behalf of all patients, especially in areas of unmet medical need. Our
    members constantly adapt to keep pace with technological and scientific
    advancements that create opportunities to develop new therapies for
    patients without any other options. The regulatory framework
    established and refined over multiple reauthorization cycles by
    Congress, including Members of this Committee, enables our member
    companies to collaborate with the academic, advocacy, and patient
    communities to develop innovative solutions to health challenges that
    have historically left patients with little to no hope.

        In 2021 alone, FDA approved 60 new therapeutic products between
    CDER and CBER, including treatments to prevent and mitigate the impact
    of COVID-19. 27 of these new drugs were first-in-class, up from 21
    first-in-class approvals in the previous year. There were 26 approvals
    for rare disease treatments that received orphan drug designations.
    \9\, \10\ FDA staff adapted to unforeseen challenges to fulfill their
    mission to protect and promote public health, and industry continues to
    adapt as well. In addition to efforts from regulators, these life-
    changing and life-saving approvals would not have been possible without
    unwavering commitment by our member companies to create innovative
    treatments and ensure that they reach the patients who urgently need
    them. The biopharmaceutical industry supports and shares FDA's mission
    to protect and promote public health by ensuring access to safe and
    effective drugs and biological products for patients, and this shared
    commitment enabled continued progress toward this mission despite
    unprecedented obstacles posed by the pandemic. This reauthorization is
    an opportunity to build on lessons learned from responding to the
    COVID-19 public health emergency and incorporate these innovations into
    the regulatory paradigm.
    ---------------------------------------------------------------------------
        \9\  https://www.fda.gov/media/155227/download.
        \10\  https://www.raps.org/news-and-articles/news-articles/2022/1/
    fda-approved-more-first-in-class-drugs-more-with-a#:-:text-
    Other%20drugs%20approved%20by%20CDER,treatment%20options%20for%20rare%20
    diseases.

        Companies continue to invest in and develop advanced manufacturing
    technologies that offer the promise of increased capacity and
    efficiency to help expedite production, enhance product quality, and
    address shortages of essential medications. Innovation in new drug and
    biologic development has been robustly incentivized by the modern drug/
    biologic regulatory framework at FDA, and BIO continues to work with
    Members of Congress to tackle unprecedented technical and regulatory
    challenges like those associated with investment in advanced
    manufacturing technologies and tools to modernize medical product
    ---------------------------------------------------------------------------
    development and distribution.

        Drug development for patient populations with unique needs, such as
    the pediatric community, remains a priority for BIO and our members,
    and we celebrate the many successes that benefit our youngest patients
    stemming from these efforts. Today, we have numerous therapies with
    pediatric indications, including for neonates, that are making a
    measurable difference for these patients and their families. We have
    seen advancements across a range of conditions, including recent drug
    approvals in sickle cell, cystic fibrosis, pediatric rheumatologic
    conditions, and even Ebola, and we are optimistic about the
    breakthroughs to come. BIO is committed to building on this progress by
    delivering more innovative medicines to pediatric patients.

        PDUFA VII and BsUFA III include provisions to enhance drug
    development with the goal of advancing novel therapies for patients,
    including in disease areas with an unmet medical need and which have
    proven to be more challenging areas for developing therapies, like rare
    diseases and pediatrics. Leveraging advances in science, enhancing the
    application of drug development tools, and modernizing clinical trials
    are critical to continuing to improve the drug development paradigm and
    regulatory processes for these medicines so we can better serve these
    patients and their families.

        These commitments will build on the numerous provisions Congress
    has enacted over the years to help foster the development of promising
    therapies for children, including the Best Pharmaceuticals for Children
    Act (BPCA) and the Pediatric Research Equity Act (PREA). The most
    recent PDUFA reauthorization bill (The FDA Reauthorization Act of 2017)
    included new requirements for pediatric studies of certain cancer drugs
    that FDA is in the process of implementing. The initial impact of that
    legislation is beginning to work through the development cycle and BIO
    and its member companies will continue to work with FDA to ensure
    effective implementation of these programs.

        The Orphan Drug Act (ODA) is a critical tool used to incentivize
    the expensive and heavily uncertain investment necessary to bring
    therapeutics for rare and orphan diseases to market. It is difficult to
    identify a more successful and consequential regulatory incentive than
    the ODA. Before it passed, there were merely a handful of treatments
    for rare disease patients. Today, we have hundreds of life changing
    treatments for these patients with countless more in the pipeline. We
    celebrate scientific progress that has led to innovative medical
    product development alongside patients, parents, and caregivers who
    have new treatment options, and sometimes even cures, that were
    previously unthinkable. While there is now immense hope for even the
    rarest diseases, many more are still waiting. There are thousands of
    identified rare diseases afflicting patients across the globe, many of
    which still have no alternative or meaningful treatments on the market.
    Given the tremendous risk, capital, and time it takes to discover and
    develop such medicines, the rare disease development paradigm should be
    handled with the utmost care and with significant consideration for
    potentiality of unintended consequences.

        BIO strongly supports timely enactment of the PDUFA VII and BsUFA
    III Commitment Letters. The resources provided will serve to maintain
    FDA's global leadership and enable the Agency to keep pace with the
    medical and scientific advances of today and tomorrow. We look forward
    to working with Congress to advance proposals that support a new
    clinical development paradigm that is more expansive, inclusive, and
    patient-centric and continues to incentivize the development and timely
    delivery of next-generation medicines that save and improve the lives
    of patients and their families.
                                     ______

                      [summary statement of cartier esham]
        My name is Cartier Esham, and I am the Chief Scientific Officer at
    the Biotechnology Innovation Organization, or BIO. BIO appreciates the
    opportunity to speak with you today about key priorities we believe
    will improve regulatory oversight and transparency and enable
    biopharmaceutical companies to modernize the clinical development
    paradigm to one that is more patient-centric, efficient, and inclusive.
    We look forward to working with this Committee to build on the strong
    foundation forged by Congress over many years that has expedited
    patients' access to safe and effective therapies and helped innovators
    develop next-generation medicines that have improved the lives of
    patients and their families. We urge that the Committee proceed with
    the timely reauthorization of the Prescription Drug User Fee Act
    (PDUFA) and Biosimilar User Fee Act (BsUFA) to ensure FDA can continue
    to meet its mission to protect and promote public health.

        We emphasize the importance of promoting effective scientific
    dialog between the FDA and sponsors of medical product development
    programs, enabling the utilization of regulatory tools that are more
    effective and support broader and more meaningful understandings of
    clinical outcomes for all patients, the incorporation of patient
    perspectives in clinical trials and post-approval data collection, and
    the necessity to provide the resources and capacity needed to meet the
    demands and opportunities of the digital age and the next wave of
    advanced biologic therapies. The COVID-19 pandemic has shown us that
    decentralized clinical trials, digital health technology tools,
    utilization of real-world data and evidence, and other innovations have
    the potential to improve how we develop innovative medicines.
    Incorporating these lessons learned into the regulatory framework
    enables the biopharmaceutical industry to better meet the needs of
    patients, improve care, and greatly reduce burden on clinical trial
    participants, especially those who belong to historically
    underrepresented populations and those who suffer from rare diseases,
    where clinical trial populations are small and geographically
    dispersed.

        BIO is committed to enhancing clinical trial diversity, and we
    included this commitment as part of our BIOEquality Agenda launched in
    2020. We stand ready to work with Congress, the Administration, and all
    stakeholders to create a more expansive, inclusive, and sustainable
    clinical development ecosystem. In addition to important legislation
    addressing these issues that will be discussed today, BIO has provided
    this Committee with legislative proposals we believe are essential to
    removing barriers and establishing a regulatory framework that is more
    inclusive and representative of the patients we serve by building
    reliable demographic and epidemiological data, modernizing inclusion/
    exclusion criteria, utilizing clinical trial modernization efforts as a
    tool to improve diversity, formalizing scientific workforce
    diversification, and other key actions.

        Further, we strongly support the Accelerated Approval Pathway (AAP)
    for reviewing safe and effective therapies that address critical unmet
    patient needs in serious and life-threatening disease states. The AAP
    has proven essential in addressing some of our most pressing public
    health needs and has been foundational to extending and saving
    countless lives since its enactment. We emphasize the role it plays in
    providing timely access to treatments when there is an unmet medical
    need and patients lack therapeutic options.

        We urge an on-time reauthorization of FDA's user fee programs to
    allow the enactment of the PDUFA VII and BsUFA III Commitment Letters
    that will continue to advance meaningful integration of the patient
    voice and experience into drug and biosimilar biological product
    development and review processes, build upon important lessons learned
    from the pandemic, and pave a path forward to a clinical development
    paradigm that is more efficient, more effective, more informative, and
    more representative of the patients we serve.
                                     ______

        Senator Burr. Cartier, thank you. David, the floor is
    yours.

     STATEMENT OF DAVID GAUGH, SENIOR VICE PRESIDENT, SCIENCES AND
       REGULATORY AFFAIRS, ASSOCIATION FOR ACCESSIBLE MEDICINES,
                             ALEXANDRIA, VA

        Mr. Gaugh. Chair Murray, Ranking Member Burr, and Members
    of the Committee, thank you for the opportunity to testify
    about the critical role of GDUFA and BsUFA, and which they hold
    in increasing patient access to more affordable generic and
    biosimilar medicines. My name is David Gaugh, Senior Vice
    President for Sciences and Regulatory Affairs at the
    Association for Accessible Medicines.
        I am a licensed pharmacist with many years of experience
    with a generic and biosimilar industries. I represent the
    industry in the initial development and in both subsequent
    renewals of generic and biosimilar user fee agreements. AAM's
    biosimilar council strongly support congressional
    reauthorization of GDUFA and BsUFA as negotiated and without
    changes.
        Timely approval of the FDA user fee agreements ensure
    patients will continue to benefit from new, more affordable
    generic and biosimilar medicines. Over the last 10 years, GDUFA
    and BsUFA significantly increased the resources available to
    FDA for the review of applications. The benefits of this is
    clear.
        A record number of generic drugs were approved in 2017,
    2018, and 2019, and a total of 34 biosimilars have been
    licensed to date. A direct result of this increased competition
    is lower prescription drug costs for the American patients.
    Since 2012, patients in the U.S. health care system have saved
    more than $2 trillion, including $469 billion from new generics
    and more than $12 billion from biosimilars.
        GDUFA III and BsUFA III build upon the successes of the
    last decade. The user fee agreements incorporate lessons
    learned, include enhancements to ensure the timely review of
    applications, and will provide FDA with sufficient resources
    over the next 5 years. GDUFA III and BsUFA III are the
    culmination of months of negotiations, have been subject to
    public review and comment, and represent a careful balance
    between stakeholders.
        My written statement details many improvements negotiated
    in GDUFA III and BsUFA III but let me highlight a couple.
    First, complex generics are generic versions of brand name
    drugs that have complex active ingredients or drug device
    combinations, for example. These drugs are more difficult to
    develop due to the part--due in part to the lack of FDA product
    specific guidance.
        GDUFA III includes commitments to facilitate the
    development and publication of product specific guidance for
    complex generics. These commitments will increase transparency
    and developers' understanding of FDA's expectations to allow
    for a more predictable review process. Inspections.
        Generic and biosimilar developers support FDA's inspection
    program. One of the original purposes of GDUFA was to provide
    resources for FDA to conduct risk based facility inspections.
    GDUFA III enhances the efficiencies of the inspection process
    by helping ensure re-inspections occur within a specified
    timeframe. In addition, under BsUFA III, FDA commits to
    increasing guidance on its use of alternative tools to request
    records for documentation.
        BLA supplements. Biosimilar developers can submit
    supplements to modify an approved BLA. For example, updating
    labeling with new study information or changes to indications.
        Under pursue BsURA III, FDA commits to accelerating
    supplemental reviews for safety labeling, for extrapolation,
    for label carve in, carve out, and also for new data.
    Interchangeability. As of March 2022, FDA has licensed two
    interchangeable biosimilars. BsUFA III will help manufacturers
    to develop more interchangeable biosimilars through the newly
    negotiated regulatory science demonstration projects.
        These demonstration projects will also evaluate mechanisms
    to streamline overall biosimilar development. In closing, we
    strongly support the timely reauthorization of GDUFA and BsUFA.
        We look forward to working with Members of both parties to
    accomplish this goal. Thank you for the opportunity to testify,
    and I look forward to answering any questions you might have.

        [The prepared statement of Mr. Gaugh follows:]
                       prepared statement of david gaugh
        Chair Murray, Ranking Member Burr and Members of the Committee:
        Thank you for holding today's hearing on the reauthorization of the
    Food and Drug Administration's (FDA) user fee programs and for the
    opportunity to testify about the critical role the Generic Drug User
    Fee Amendments (GDUFA) and the Biosimilar User Fee Act (BsUFA) hold in
    increasing patient access to more affordable generic and biosimilar
    medicines. My name is David Gaugh, Senior Vice President for Sciences
    and Regulatory Affairs at the Association for Accessible Medicines
    (AAM). I am a licensed pharmacist with more than two decades of
    experience working in and around the generic and biosimilar medicines
    industry, and I represented the industry in the initial development and
    in both subsequent renewals of the generic and biosimilars user fee
    agreements.

        AAM and its Biosimilars Council are the Nation's leading trade
    association for the manufacturers and distributors of FDA-approved
    generic and biosimilar prescription medicines. Today, generic and
    biosimilar medicines comprise 90 percent of prescriptions in the United
    States at only 18 percent of total drug spending. \1\ AAM's members
    provide more than 52,000 jobs at nearly 150 facilities and manufacture
    more than 60 billion doses of generic medicines in the United States
    every year. \2\ Our core mission is to improve lives by advancing
    timely access to high-quality, more affordable safe and effective
    generic and biosimilar medicines.
    ---------------------------------------------------------------------------
        \1\  AAM, ``The U.S. Generic & Biosimilar Medicines Savings
    Report,'' October 2021 (link).
        \2\  ``A Blueprint for Enhancing the Security of the U.S.
    Pharmaceutical Supply Chain,'' October 2021 (link).

        In today's testimony, I will highlight the success of the FDA's
    generic and biosimilars programs in significantly increasing patient
    access to lower-cost medicines and, in turn, dramatically lowering the
    cost of prescription drugs for America's patients and our health care
    system over the last 10 years; outline the improvements made to the
    public-private partnership embodied in GDUFA III and BsUFA III; and
    discuss how congressional approval of the FDA user fee programs for the
    next 5 years (FY2023-2027) will benefit patients and increase their
    ---------------------------------------------------------------------------
    access to more affordable treatments.

        AAM and its Biosimilars Council strongly support congressional
    reauthorization of GDUFA and BsUFA as negotiated and without changes.
    Timely approval of the FDA user fee agreements ensures patients will
    continue to benefit from new, more affordable generic and biosimilar
    medicines. The GDUFA III and BsUFA III commitment letters were
    carefully negotiated to balance program enhancements and resource
    requirements provided to FDA. The agreements include a year-over-year
    capacity planning adjuster (CPA) that allows FDA to automatically add
    additional full-time equivalent (FTE) resources when increased workload
    criteria exceed expectations. Therefore, AAM would have concerns about
    adding policies into the reauthorization package that require
    additional FTEs to implement if the package does not also include
    corresponding appropriations. Adding such policies would increase
    industry's year-over-year costs beyond what was negotiated and agreed
    to with FDA.
                          GDUFA and BsUFA at 10 Years
        Ten years ago, Congress created the FDA's user fee programs for
    generic and biosimilar medicines when it enacted GDUFA and BsUFA as
    part of the FDA Safety and Innovation Act of 2012. For generic drugs,
    the number of applications submitted to the FDA had increased
    substantially since enactment of the Hatch-Waxman Act. Prior to GDUFA,
    FDA's review of abbreviated new drug applications (ANDA) was often slow
    and unpredictable. For biosimilar medicines, FDA's licensure pathway
    for these new treatments had been created in 2010 as part of the
    Biologics Price Competition and Innovation Act (BPCIA). With passage of
    the first GDUFA and BsUFA iterations in 2012, Congress helped ensure
    FDA would have sufficient resources to carry out its mission.

        Congressional authorization of the FDA's generic and biosimilars
    user fee programs in 2012 and reauthorization in 2017 substantially
    increased the resources available to the Agency to review applications.
    More than $4 billion in supplemental user fees from generic and
    biosimilars developers was and will be provided as a result. \3\
    ---------------------------------------------------------------------------
        \3\  AAM Analysis of FDA's fiscal year 2014--fiscal year 2020 GDUFA
    and BsUFA Financial Reports and Five-Year Financial Plans (2021
    Update). FDA's reports are available at https://www.fda.gov/about-fda/
    user-fee-reports/user-fee-financial-reports.

    [GRAPHIC] [TIFF OMITTED] T8905.002

        .epsWith the additional resources, FDA was able to increase
    efficiencies and approval of generic drugs increased significantly,
    with full and tentative approvals exceeding 1,000 in fiscal years 2017,
    2018 and 2019. The median number of ANDA approvals has increased over
    time as a result of GDUFA I and GDUFA II. \4\ The partnership between
    FDA and the generic industry has enhanced the overall stability and
    predictability of the GDUFA program and accelerated the timely review
    of ANDAs, increasing access to quality affordable generic medicines.
    ---------------------------------------------------------------------------
        \4\  AAM Analysis of the FDA Office of Generic Drug Annual Reports
    (2015-2020) and Activities Report of the Generic Drug Program (FY13-
    FY15, fiscal year 2021). FDA's reports are available at https://
    www.fda.gov/drugs/generic-drugs/annual-reports.

    [GRAPHIC] [TIFF OMITTED] T8905.001

        .epsFollowing the creation of the biosimilars pathway and
    subsequent development of the biosimilars program, FDA licensed the
    first biosimilar in 2015 and has now licensed 34 biosimilars in the
    U.S. \5\ Biosimilar medicines are safe, effective and more affordable
    treatments for patients and, with 21 products launched and available to
    patients, biosimilars are already delivering on their promise of lower
    costs and expanded patient access to care.
    ---------------------------------------------------------------------------
        \5\  Biosimilars Council, ``FDA Biosimilars Approvals,'' March 2022
    (link).

    [GRAPHIC] [TIFF OMITTED] T8905.003

        .epsWith FDA approval, the introduction of new generic and
    biosimilar medicines leads to competition in the pharmaceutical
    market--and the result is a significant reduction in the cost of
    prescription drugs for patients. Experience shows drug prices decline
    rapidly when generics enter the market. \6\ According to FDA, prices
    fall as generics enter the market--by an average of 39 percent when
    there is only one generic and by nearly 80 percent when four or more
    generics enter the market. \7\ Evidence with biosimilar medicines is
    similar with an average cost savings of nearly 50 percent. \8\
    Importantly, biosimilar competition also results in lower brand
    biologic costs--by more than 25 percent on average. \9\
    ---------------------------------------------------------------------------
        \6\  IMS Institute for Healthcare Informatics, ``Price Declines
    after Branded Medicines Lose Exclusivity in the U.S.,'' January 2016
    (link).
        \7\  FDA, ``New Evidence Linking Greater Competition and Lower
    Generic Drug Prices,'' December 2019 (link).
        \8\  AAM Analysis of Average Sales Price Files, January 2022.
        \9\  Ibid.
    ---------------------------------------------------------------------------
        Over the last 10 years, generics and biosimilars provided more than
    $2 trillion in savings--including $469 billion from new generics and
    more than $12 billion from biosimilars--to patients and the U.S. health
    care system. \10\ In addition to the cost savings provided, patient
    access to life-saving treatments is broadened as the price of medicine
    falls. A recent analysis of Medicare Part D from the Congressional
    Budget Office noted ``the number of standardized prescriptions
    dispensed for generic drugs more than doubled from 2009 through 2018.''
    \11\
    ---------------------------------------------------------------------------
        \10\  Ibid., AAM Generic & Biosimilar Savings Report.
        \11\  CBO, ``Prescription Drugs: Spending, Use, and Prices,''
    January 2022 (link).

    [GRAPHIC] [TIFF OMITTED] T8905.004

        .epsGDUFA and BsUFA aim to put FDA's generic and biosimilar drug
    programs on firm financial footing by enabling FDA to assess user fees
    to fund critical and measurable enhancements and, in turn, bringing
    greater predictability and timeliness to the review of applications. As
    a direct outcome, the generic and biosimilars drug programs have
    increased patient access to safe, effective and affordable quality
    medicines.
                             GDUFA III Enhancements
        FDA plays a critically important role in making lower-cost, high-
    quality generic medicines available to patients. FDA reviews ANDAs
    submitted by generic drug manufacturers (ANDA sponsors). To receive FDA
    approval, data submitted in an ANDA must generally demonstrate that the
    generic drug is bioequivalent to the Reference Listed Drug (RLD), more
    commonly known as the innovator or brand product.

        The GDUFA commitment letter specifies various fees the FDA sets and
    can collect from manufacturers, such as ANDA applications, Drug Master
    Files (DMF), and facility and program fees. \12\ The fees paid by the
    generic drug industry aid FDA's ability to meet agreed-upon performance
    goals and commitments, such as timely reviews and other regulatory
    activities. FDA also provides annual reports to Congress on its
    performance. \13\ The increases in transparency and communication are
    important to FDA's ability to meet the commitments, which enhance the
    overall stability and predictability of the GUDFA program.
    ---------------------------------------------------------------------------
        \12\  AAM, ``The Generic Drug User Fee Amendments (GDUFA III),''
    October 2021 (link); FDA, ``GDUFA Reauthorization Performance Goals and
    Program Enhancements Fiscal Years 2023-2027,'' October 2021 (link).
        \13\  FDA, GDUFA Performance Reports, fiscal year 2015--fiscal year
    2020 (link).

        The negotiated GDUFA III performance goals will further strengthen
    and build upon the progress made and lessons learned from GDUFA I and
    GDUFA II. Let me take a moment to highlight five areas--advancing
    approvals, complex generics, inspections, suitability petitions and
    sustainability--where we believe the FDA's generic drug program will be
    enhanced with congressional ratification of GDUFA III.
                              Advancing Approvals
        GDUFA III includes important performance goals that will maintain
    FDA's rigorous ANDA review standards, building upon and improving the
    review process to increase timely patient access to high-quality,
    lower-cost generic medicines. For example, the newly negotiated
    provision known as ``imminent action'' will allow the FDA to extend a
    goal date by up to 60 days if, in FDA's judgment, an approval or
    tentative approval of the application is imminent. This commitment will
    mitigate the need to add additional review cycles unnecessarily and
    delay approvals over minor, easily resolvable issues.

                                Complex Generics
        Complex generics are generic versions of brand-name drugs that have
    complex active ingredients, routes of administration, drug-device
    combinations or formulations. These drugs are more difficult to develop
    due in part to the lack of FDA product-specific guidance. Congress and
    FDA helped spur competition for complex products by including
    provisions in the previous user fee authorizations to increase product-
    specific guidance publication and meetings with FDA during the product
    development phase. GDUFA III builds on this success through performance
    goals to facilitate the development and publication of product-specific
    guidances for complex generic products--increasing transparency and
    understanding of FDA's expectations to allow for a more predictable
    review process.
                                  Inspections
        Generic and biosimilar developers support FDA's inspections
    program. One of the original purposes of GDUFA was to provide resources
    for FDA to conduct facility inspections. Under the inspections process,
    FDA typically inspects a facility and identifies deficiencies. The
    facility has a specified timeframe to address and correct the
    identified deficiencies and subsequently request a reinspection from
    FDA. In some cases, extended time passes from when a facility performs
    the corrective actions to resolve the deficiencies and the time period
    when FDA can reinspect. Delays in reinspection lead to significant
    delays in the review process. GDUFA III enhances the efficiencies of
    the inspection process by helping ensure reinspection occurs within a
    specified timeframe.
                             Suitability Petitions
        Suitability petitions are required to be submitted to FDA when a
    generic drug manufacturer intends to seek approval of an ANDA for a
    drug that differs from the reference brand product in terms of the
    active ingredient (for a combination product), route of administration,
    strength and/or dosage form. Current law requires FDA to grant or deny
    suitability petitions within 90 days from petition submission. That
    deadline, however, is rarely met. This results in delays to generic
    market entry. GDUFA III includes performance goals and resources to
    facilitate the FDA's ability to conduct a timely review of suitability
    petitions. These new resources will help FDA meet these goals,
    including conducting completeness assessments within 21 days from
    petition submission and using agreed upon metrics to prioritize
    petition reviews.
                          Sustainability of Resources
        Under GDUFA II, FDA committed to developing a Resource Capacity
    Planning (RCP) capability to optimize resources and better anticipate
    future resource needs. GDUFA III provides an additional tool to further
    enhance the utility of the RCP to allow FDA to better forecast resource
    needs via the Capacity Planning Adjustment (CPA). The CPA will help
    promote sustainability for both FDA and industry by allowing FDA to
    increase full-time employee needs as workload increases. In turn, the
    CPA will provide predictability for generic developers through a 3
    percent cap to prevent significant fluctuation in fees and minimize the
    financial barriers for smaller generic manufacturers.
                             BsUFA III Enhancements

        Similar to FDA's generic drug program, FDA helps ensure that
    America's patients can gain access to high-quality, more affordable
    biological products in the form of biosimilars. FDA reviews abbreviated
    biologics license applications (BLA) submitted by biosimilar
    developers. In order for a biosimilar to be licensed, data submitted in
    a BLA must demonstrate the biosimilar drug product is ``highly
    similar'' to the brand-name reference biologic and there are no
    clinically meaningful differences in safety, purity or potency.

        BsUFA allowed FDA to assess and collect fees from developers and
    manufacturers that submit BLAs for FDA's review. The negotiated
    commitments enhance and improve the review process to facilitate timely
    access to biosimilar medicines and ensures the Agency has the necessary
    resources to fulfill the agreed upon commitments. FDA also provides
    annual reports to Congress on its performance. \14\
    ---------------------------------------------------------------------------
        \14\  FDA, BsUFA Performance Reports, fiscal year 2013--fiscal year
    2020 (link).

        The negotiated BsUFA III performance goals will further strengthen
    and build upon the progress made and lessons learned from BsUFA I and
    BsUFA II. \15\ Let me highlight several enhancements to FDA's
    biosimilars program: supplement reviews, meeting management, regulatory
    science and interchangeability, inspections, use of carryover funds and
    IT modernization. I will briefly describe each.
    ---------------------------------------------------------------------------
        \15\  AAM, ``Key Elements of BsUFA III,'' September 2021 (link);
    FDA, ``Biosimilar Biological Product Reauthorization Performance Goals
    and Procedures Fiscal Years 2023 Through 2027,'' September 2021 (link).
    ---------------------------------------------------------------------------
                                BLA Supplements
        Biosimilar developers can submit supplements to modify an approved
    BLA, for example, updating labeling with new safety information or
    changes to indications. Under BsUFA III, FDA commits to accelerating
    supplement reviews for safety labels, extrapolation, label carve-in and
    carve-outs and new pharmacokinetic data.
                               Meeting Management
        Biosimilar developers participate in meetings with FDA to gain
    insight into the agency's expectations and perspectives on different
    issues. These meetings help facilitate a predictable and efficient
    review process. BsUFA III includes commitments to: add a new type of
    meeting to get feedback on focused questions; make meetings more
    efficient; help provide FDA with sufficient information in advance of
    meetings; and obtain rapid clarification of meeting minutes.
                   Regulatory Science and Interchangeability
        As of March 2022, FDA has licensed two interchangeable biosimilars.
    In order to achieve the interchangeable designation, a biosimilar must
    produce the same clinical result as the brand-name biologic. With the
    interchangeable designation and subject to state law, a pharmacist may
    dispense an interchangeable biosimilar when a brand-name biologic is
    prescribed without intervention from the provider. BsUFA III will help
    manufacturers to develop more interchangeable biosimilars through the
    new Regulatory Science Program's demonstration project. These
    demonstration projects will also evaluate mechanisms to streamline
    overall biosimilars development. Findings from the demonstration
    projects will inform a comprehensive strategy to advance
    interchangeability and the development of future guidance documents.
                               Remote Inspections
        FDA uses alternate tools to conduct inspections and supplement its
    ability to assess manufacturing facilities remotely. Due to the COVID-
    19 pandemic, FDA used these alternate tools to request records and
    documentation from its regulatory partners. Under BsUFA III, FDA
    commits to issuing guidance on the use of alternative inspection tools.
                             Use of Carryover Funds
        Any remaining user fees collected by FDA but not yet spent are
    carried over to the next year. Under BsUFA III, FDA commits to reducing
    the carryover balance from 39 weeks to 21 weeks over a 3-year period.
                                IT Modernization
        FDA continues to modernize the Agency's IT capabilities. BsUFA III
    will further FDA's efforts. For example, FDA will modernize and move
    the Electronic Submissions Gateway to the cloud to help improve
    transparency and communication.
                  COVID-19 and FDA's Use of Remote Inspections
        Given congressional interest about lessons learned from the COVID-
    19 pandemic and this Committee's leadership in driving forward
    solutions to prepare the country for future public health emergencies,
    I do want to take a moment to share the experience of AAM's members in
    regard to FDA inspections over the last 2 years. Manufacturing facility
    inspections are an essential part of evaluating applications to market
    all FDA-approved pharmaceuticals, including brand-name, generic, and
    biosimilar medicines. When FDA does not conduct inspections in a timely
    manner, approvals and patient access to new treatments, as well as more
    affordable options, can be delayed.

        During the last 2 years, there have been significant disruptions to
    the inspections program. In March 2020, FDA announced that it was
    suspending domestic and foreign inspections due to the COVID-19
    pandemic. The Agency focused only on ``mission-critical'' inspections,
    a narrow category that does not include inspections tied to most drug
    applications. As the pandemic subsided in mid-2021, FDA attempted to
    resume all domestic inspections. However, with the rise of the Omicron
    variant in December 2021, FDA reverted to performing only mission-
    critical inspections and did not resume a normal domestic inspection
    schedule until February 2022.

        These inspection disruptions have had a significant effect on our
    members' ability to obtain timely approval of more affordable generics
    and biosimilars. By FDA's account, as of the end of fiscal year 2021--
    the most recent data available to AAM at the time of this hearing--52
    human drug application decisions remain ``delayed solely due to a
    pending inspection or facility assessment.'' \16\ The tally of 52
    likely underestimates the extent of the delays, as it excludes
    applications that might have had a minor issue unrelated to an
    inability to inspect. Inspections for biosimilar applicants are also
    impacted, including biosimilars for brand-name biologics like Humira.
    \17\ Prompt inspection of such facilities is urgently needed.
    ---------------------------------------------------------------------------
        \16\  FDA, ``An Update to the Resiliency Roadmap for FDA
    Inspectional Oversight,'' November 2021 (link).
        \17\  Center for Biosimilars, ``FDA Delays Review of Alvotech's
    AVT02 Adalimumab Biosimilar Candidate,'' September 2021 (link).

        Under existing authorities FDA has several alternatives to
    physically inspecting facilities, including: (1) obtaining inspection
    records remotely; (2) requesting information and records from
    applicants, facilities, and other inspected entities; (3) conducting
    remote interactive evaluations (real-time video interactions with
    facilities that cover the same ground as inspections); and (4) relying
    on inspections conducted by trusted foreign regulatory authorities
    under the Mutual Recognition Agreements (MRA). FDA, however,
    infrequently uses these alternatives. For example, FDA informed AAM
    that, as of December 2021, it had conducted only five remote
    ---------------------------------------------------------------------------
    interactive evaluations.

        AAM recognizes the important role inspections play in FDA's ability
    to assess the overall quality of applications. Our members also share
    the Agency's concerns about public health and preventing the spread of
    COVID-19 among FDA and manufacturing facility employees. The
    interruptions caused by COVID-19, however, delayed and denied patients
    prompt access to new therapies and generic and biosimilar choices that
    would lower drug costs. If new COVID-19 variants emerge, or if there is
    a future pandemic, FDA's inspections could be paused again.

        AAM believes FDA should expand the use of remote interactive
    evaluations and use them more frequently in place of a physical
    inspection, in addition to using alternative tools in place of an in-
    person inspection to verify corrective actions for a site that had
    received a warning letter. Specifically, we recommend requiring FDA to
    evaluate alternatives when an in-person inspection is not possible.
    Should FDA determine that an alternative to an in-person inspection
    cannot be used, the Agency should be required to inform the applicant
    which alternatives were considered and the reasons why an in-person
    inspection was deemed necessary. We believe this additional
    transparency and accountability will encourage FDA to perform its
    critical mission without delay, while preserving the Agency's
    discretion and judgment to require in-person inspections when
    necessary.
                                   Conclusion
        Patient access to generic and biosimilar medicines has never been
    more critical. Over the last 10 years, GDUFA and BsUFA significantly
    increased the resources available to FDA for review of generic and
    biosimilars applications. The benefit of this partnership between FDA
    and industry is clear: record levels of generic drugs were approved in
    2017-2019, and more than 30 biosimilar medicines were licensed. The end
    result is lower prescription drug costs for America's patients. Since
    the establishment of FDA's generic and biosimilars programs in 2012,
    patients and the U.S. health care system have saved more than $2
    trillion--including $469 billion from new generics and more than $12
    billion from biosimilars. Congressional passage of GDUFA and BsUFA,
    along with their reauthorization in 2017, made this possible.

        GDUFA III and BsUFA III build on this success. The user fee
    agreements incorporate lessons learned, include enhancements to ensure
    the timely review of applications and provide FDA with sufficient
    resources over the next 5 years (FY23-27). GDUFA III and BsUFA III are
    the culmination of months of negotiations, have been subject to public
    review and comment, and represent a careful balance between
    stakeholders. AAM and its Biosimilars Council strongly support
    congressional reauthorization of GDUFA and BsUFA as negotiated and
    without changes. Timely approval of the FDA user fee agreements ensures
    patients will continue to benefit from new, high-quality and more
    affordable generic and biosimilar medicines. We look forward to working
    with Members of both parties to accomplish this goal.

        Thank you again for the opportunity to testify on this important
    issue. I look forward to answering your questions.
                                     ______

                       [summary statement of david gaugh]
        The Association for Accessible Medicines (AAM) and its Biosimilars
    Council, represented by David Gaugh, Senior Vice President of Sciences
    and Regulatory Affairs, will provide testimony on the importance of
    timely reauthorization of GDUFA and BsUFA to continued patient access
    to high quality, more affordable generic and biosimilar medicines. Mr.
    Gaugh's testimony highlights the success of FDA's generic and
    biosimilar programs in significantly increasing patient access to
    lower-cost medicines and, in turn, dramatically lowering the cost of
    prescription drugs for patients over the last 10 years. Since 2012,
    more than $4 billion in funding has been provided under GDUFA (70
    percent) and BsUFA (60 percent) to help ensure FDA has sufficient
    resources to review and approve applications. As a result, FDA approval
    of generic drugs increased significantly with full and tentative
    approvals exceeding 1,000 in fiscal years 2017, 2018 and 2019. The
    first biosimilar was approved in 2015 and now 34 biosimilars are
    approved in the U.S. These approvals increased competition from
    generics and biosimilars and led to significant savings to patients and
    the health care system--more than $2 trillion in savings over the last
    10 years. The GDUFA III and BsUFA III agreements includes enhancements
    with the goal of: advancing approvals; ensuring timely inspections;
    improving review of complex generics; streamlining suitability
    petitions; providing for BLA supplement reviews; addressing
    interchangeability; and ensuring the efficient of resources.
                                     ______

        Senator Burr. David, thank you very much. Mark, the floor
    is yours.

        STATEMENT OF MARK LEAHEY, PRESIDENT AND CHIEF EXECUTIVE
    OFFICER, MEDICAL DEVICE MANUFACTURERS ASSOCIATION, WASHINGTON,
                                   DC

        Mr. Leahey. Thank you, Ranking Member Burr. Thanks again to
    Chair Murray and Members of the Committee for the invitation to
    testify today. My name is Mark Leahey, and I am the President
    and CEO of the Medical Device Manufacturers Association, a
    national trade association representing hundreds of medical
    technology companies.
        MDMA was founded in 1992 to be the voice of the innovative
    and entrepreneurial sector of our industry. According to the
    Department of Commerce, 98 percent of medical technology
    companies have fewer than 500 employees and 80 percent have
    fewer than 50 employees.
        These small companies drive the majority of innovation in
    med-tech. Our industry is dedicated to one mission, to
    alleviate human suffering and improve patient care. Perhaps no
    recent example is more profound than what innovators have done
    since the outset of the COVID-19 pandemic.
        In addition to the extraordinary efforts of our industry
    and health care professionals, I would also like to take a
    moment to acknowledge the dedicated professionals at FDA who
    are 24-7 on COVID and non-COVID medical technologies to improve
    patient care during the pandemic, their efforts ensure that
    patients have timely access to safe and effective products. The
    MDUFA V draft agreement that we are discussing today and the
    historic increase in user fee funding that it contains
    demonstrates our commitment to provide additional capacity and
    expertise to further advance FDA's mission.
        MDUFA V provides over $2 million in investible funding to
    FDA. As a point of reference, MDUFA I totaled approximately
    $150 million. While each MDUFA typically provides the resources
    to fund approximately 200 new hires, under MDUFA V, FDA will be
    able to hire at a minimum 273 FTEs and up to 387 new FTEs.
        This represents a historic increase in both overall funds
    and people, and it is our expectation that this will be the
    last major investment needed for the MDUFA program, and that
    moving forward, any necessary increases will be much more
    modest and targeted. MDUFA V also establishes more transparency
    around the use of funds, including ensuring that annual hiring
    targets are met.
        FDA will also conduct an H.R. assessment during MDUFA V to
    identify how many MDUFA funded vacancies exist. Beyond the
    financial and accountability provisions that MDUFA V contains,
    performance goals associated with De Novos and PMA Total Time
    to Decision also improve over the course of the agreement.
        One goal that was elusive under MDUFA IV was the total--
    510(k) total time to decision goal in Fiscal Year 2022 of 108
    days. COVID did impact FDA capacity, including the ability to
    meet certain B MDUFA IV goals.
        Under MDUFA V, the 510(k) total time to decision goal will
    improve each year, hopefully achieving 108 days by Fiscal Year
    2026. Also for the first time the agreement incorporates add on
    payments that will provide the agency up to $150 million in
    additional funding above the baseline in the final year of the
    agreement if FDA meets modest but important performance goals
    in the first 2 years of the agreement.
        The United States medical technology ecosystem is the envy
    of the world, and this is in no small part due to FDA's gold
    standard of reviewing the safety and efficacy of medical
    devices. The billions of dollars in user fees provided by
    industry under this agreement will enable FDA to hire hundreds
    of new reviewers and scientific experts, strengthening the
    agency's ability to maintain its strong track record.
        This agreement also makes additional investments to enhance
    device safety. This includes increased funding to better
    incorporate the patient perspective in the product evaluation
    process, as well as funding to improve the use of real world
    evidence.
        The agreement also contains resources to pilot the Total
    Product Lifecycle Advisory Program, also known as TAP, a top
    priority for FDA during these negotiations. Medical
    technologies that serve patients with unmet needs unfortunately
    can take longer to navigate the regulatory process.
        This is often due to the complexity and novel approach that
    breakthrough devices encompass. Innovators participating in the
    Safer Technologies Program, or STeP, will also be eligible for
    the TAP pilot. TAP is designed to allow FDA and sponsors to
    share early feedback to improve the process.
        Based upon the data and independent assessment of the
    pilot, industry and FDA will determine whether to continue,
    expand, or terminate the TAP pilot during the MDUFA V
    negotiations--VI negotiations, excuse me. In conclusion, this
    is a historic investment in the FDA and will be critical over
    the coming years to meet the goals and milestones within the
    user fee agreement to help ensure that the United States
    remains the global leader in medical technology development.
        It is also critical that Congress continues its vital
    oversight role and provides the necessary appropriations to FDA
    to achieve its mission. MDMA and our members remain committed
    to working closely with you to reach our shared goal of
    providing safe and effective medical technologies to patients
    and providers in a timely manner.
        Thank you once again, Chair Murray, Ranking Member Burr,
    and Members of the Committee, for the opportunity to testify,
    and I welcome your questions.

        [The prepared statement of Mr. Leahey follows:]
                       prepared statement of mark leahey
        Thank you Chair Murray, Ranking Member Burr and Members of the
    Committee for this opportunity to testify today. My name is Mark Leahey
    and I am the President and CEO of the Medical Device Manufacturers
    Association (``MDMA''), a national trade association representing
    hundreds of medical technology companies. MDMA was founded in 1992 to
    be the voice of the innovative and entrepreneurial sector of our
    industry. While the industry is broadly represented throughout the
    United States, one of the unique components of this vibrant part of
    America's innovation ecosystem is that the majority of companies are
    small businesses. According to data from the Department of Commerce,
    over 98 percent of med tech companies have fewer than 500 employees,
    and more than 80 percent have less than 50 employees, yet they are the
    major source of innovation and America's competitive advantage in
    medical technology. Our industry is dedicated to one mission: to
    alleviate human suffering and improve patient care.

        Our industry has a proud tradition of answering the needs of
    patients and providers, and perhaps no example is more profound than
    what innovators have done since the outset of the COVID-19 pandemic.
    Whether it was respiratory technologies, diagnostics, advanced patient
    monitoring, or personal protective equipment, the medical technology
    industry worked tirelessly to help the United States and the entire
    world to confront this challenge, and they continue to do so today. In
    addition to the extraordinary efforts of this industry and health care
    professionals, I would also like to take a moment to acknowledge the
    dedicated professionals at the FDA who worked 24/7 on COVID and non-
    COVID medical technologies to improve patient care during the pandemic.
    Their efforts ensured that patients had timely access to safe and
    effective medical technologies.
                         MDUFA V--A Historic Investment
        The MDUFA V draft agreement that we are discussing today, and the
    historic increase in user fee funding that it contains, demonstrates
    our commitment to provide additional capacity and expertise to further
    advance FDA's mission.

        MDUFA V provides over $2B in investable funding to FDA. As a point
    of reference, MDUFA I totaled approximately $150M over the 5-years of
    the program. While each MDUFA typically provides funding for an
    additional 200 new hires, under MDUFA V, FDA will be able to hire a
    minimum of 273 FTEs and up to 387 new FTEs to support the MDUFA
    program. This represents a historic increase in both overall funds and
    people, and it is our hope and expectation that this will be the last
    major investment needed for the MDUFA program and that moving forward,
    any necessary increases will be much more modest and targeted.

        With these significant investments, MDUFA V also establishes more
    transparency around the use of the funds, including ensuring that
    annual hiring targets are met. FDA will also conduct a H.R. assessment
    during MDUFA V to identify how many MDUFA funded vacancies exist.
    Currently, CDRH is only able to track MDUFA IV and later FTEs. Public
    reports in 2016 indicated MDUFA funded vacancies exceeded 25 percent,
    and innovators want to ensure that the additional capacity we are
    funding through user fees is realized in the new additional hires and
    backfilling any vacancies that arise.

        Beyond the financial accountability and transparency provisions
    that MDUFA V contains, performance goals associated with De Novos and
    PMA Total Time to Decision (TTD) also improve over the course of the
    agreement. One goal that was elusive under MDUFA IV was the 510(k)
    Total Time to Decision Goal in fiscal year 2022 of 108 days. As was
    mentioned earlier, COVID did impact FDA capacity, including the ability
    to meet certain MDUFA IV goals. Under MDUFA V, the 510(k) TTD goal will
    ramp down each year, hopefully achieving 108 days by fiscal year 2026.
    Also, for the first time, the agreement incorporates add on payments
    that will provide the agency up to $115 million in additional funding
    above the baseline in the final years of the agreement if FDA meets
    modest but important performance goals in the first 2 years of the
    agreement.
                        Maintaining FDA's Gold Standard
        The United States medical technology ecosystem is the envy of the
    world, and this is in no small part due to the FDA's gold standard of
    reviewing the safety and efficacy of medical devices. The billions of
    dollars in user-fees provided by industry under this agreement will
    enable FDA to hire hundreds of new reviewers and scientific experts
    strengthening the agency's ability to maintain its strong track record.
    The agreement also makes targeted investments to enhance device safety.
    This includes increased funding for patient perspective and engagement
    in the product evaluation process to better incorporate their
    experiences, as well as new funding to improve the use of real-world
    evidence in the review process.

        The agreement contains resources to start a pilot for the ``Total
    Product Lifecycle Advisory Program,'' also known as ``TAP.'' Medical
    technologies that serve patients with unmet needs unfortunately can
    take longer to navigate the regulatory process, despite the fact that
    these patient populations often have no other alternatives. This is
    often due to the complexity and novel approach that breakthrough
    devices encompass. Beyond breakthroughs, TAP will support devices
    developed to significantly improve the safety of currently available
    devices and diagnostics under the Safer Technologies Program (STeP).
    FDA was very vocal during negotiations about the importance of piloting
    the TAP concept. TAP is designed to allow FDA and innovators to share
    early feedback to improve this process. Based upon the data and
    assessment of the TAP pilot, industry and FDA will determine whether to
    continue, expand or terminate the TAP pilot during MDUFA VI
    negotiations.
                                   Conclusion
        As we all know, America's medical technology ecosystem was not
    built overnight. It took decades of work between countless
    stakeholders, including Congress, the FDA, innovators, physicians,
    patient groups and more to design the regulatory pathways that has
    resulted in the gold standard of safety and efficacy. At the same time,
    we all recognize that this is a delicate balance to ensure that the
    right policies are in place to support innovation, and to spur the next
    generation of cures, therapies and diagnostics that so many patients
    are relying on. As I noted, this is a historic investment in the FDA,
    and it will be critical over the coming years to meet the goals and
    milestones within this user fee agreement to help ensure that the
    United States remains the global leader in medical technology
    development. It is also critical that Congress continues its vital
    oversight role, and providing the necessary resources and investments
    to FDA for it to achieve its mission. MDMA and our members remain
    committed to working closely with you to reach our shared goal of
    providing safe and effective medical technologies to patients and
    providers in a timely manner. Thank you once again Chairwoman Murray
    and Ranking Member Burr for your passionate leadership on this
    important work, and I look forward to answering any questions that the
    Committee Members might have.
                                     ______

                       [summary statement of mark leahey]
        I am the President and CEO of the Medical Device Manufacturers
    Association (``MDMA''), a national trade association representing
    hundreds of medical technology companies. MDMA was founded in 1992 to
    be the voice of the innovative and entrepreneurial sector of our
    industry, including the small companies who make up the majority of the
    industry and drive medical innovation.

        The device industry's singular mission--to alleviate human
    suffering and improve patient care--has been on display since the
    outset of the COVID-19 pandemic. Whether it was respiratory
    technologies, diagnostics, advanced patient monitoring, or personal
    protective equipment, medical technology innovators worked tirelessly--
    partnering with the dedicated professionals at the FDA--to help the
    U.S. and the world confront the pandemic.

        MDUFA V_A Historic Investment--The MDUFA V draft agreement provides
    $2B in user fees enabling the FDA to hire a minimum of 273 FTEs and up
    to 387 new FTEs to support the MDUFA program. By comparison, MDUFA I
    totaled approximately $150M and subsequent MDUFA's typically provided
    funding for 200 new hires. It's our expectation that this will be the
    last major investment needed for the MDUFA program and that moving
    forward any necessary increases will be much more targeted.

        MDUFA V also includes provisions to help ensure that annual hiring
    targets are met. Currently, CDRH is only able to track MDUFA IV and
    later FTEs. Public reports in 2016 indicated MDUFA industry-funded
    vacancies exceeded 25 percent, and it's essential that FDA hits the new
    hiring targets and backfills any vacancies.

        Beyond the financial accountability and transparency provisions in
    MDUFA, performance goals associated with De Novos and PMA Total Time to
    Decision (TTD) also improve over the course of the agreement. One goal
    that was elusive under MDUFA IV was the 510(k) Total Time to Decision
    Goal in fiscal year 2022 of 108 days. COVID did impact FDA's ability to
    meet certain MDUFA IV goals. Under MDUFA V, the 510(k) TTD goal will
    ramp down each year, hopefully achieving108 days by fiscal year 2026.
    Also, for the first time, the agreement incorporates add on payments
    that will provide the agency up to $115 million in funding above the
    baseline in the final years of the agreement if FDA meets modest
    performance goals in the first 2 years of the agreement.

        Maintaining FDA's Gold Standard--The United States medical
    technology ecosystem is the envy of the world, and this is in no small
    part due to the FDA's gold standard of reviewing the safety and
    efficacy of medical devices. The billions of dollars in user-fees
    provided by industry under this agreement will enable FDA to hire
    hundreds of new reviewers and scientific experts, strengthening the
    agency's ability to maintain their strong track record. The agreement
    makes targeted investments to enhance device safety including increased
    funding for patient perspective and engagement in the product
    evaluation process, as well as new funding to improve the use of real-
    world evidence in the review process.

        The agreement contains resources to start a pilot for the ``Total
    Product Lifecycle Advisory Program,'' also known as ``TAP.'' Medical
    technologies that serve patients with unmet needs unfortunately can
    take longer to navigate the regulatory process, despite the fact that
    these patient populations often have no other alternatives. Beyond
    breakthroughs, TAP will support devices developed to significantly
    improve the safety of currently available devices and diagnostics under
    the Safer Technologies Program (STeP).

        Conclusion--It took decades of work between countless stakeholders,
    including Congress, the FDA, innovators, physicians, patient groups and
    more to design the regulatory pathways that has resulted in the gold
    standard of safety and efficacy. At the same time, we all recognize
    that this is a delicate balance to ensure that the right policies are
    in place to support innovation, and to spur the next generation of
    cures, therapies and diagnostics that so many patients are relying on.
    It is also critical that Congress continues its vital oversight role,
    and provides the necessary resources and investments to FDA for it to
    achieve its mission.
                                     ______

        The Chair. Thank you very much. And thank you to all of our
    witnesses, and we do apologize having a vote, Members in and
    out, but we do have your written testimony and appreciate,
    again, all of you being here. We will now begin a round of 5-
    minute questions. I ask my colleagues to keep track of your
    clocks always and stay within the 5-minutes. Prescription drug
    prices in the United States continue to skyrocket. In 2020, our
    Nation spent over $535 billion on pharmaceuticals.
        That number is rising. That is really outrageous. We have
    too many Americans who we know are choosing between paying
    their rent or mortgage and getting a lifesaving medicine.
    According to the Urban Institute, in 2018, nearly 13 million
    adults delayed getting or did not get needed medications
    because of the high cost, and Congress just really has to
    address this.
        Families really need us to take some bold steps to get this
    problem under control like giving Medicare new power to
    negotiate and force drug companies to bring down prices and
    stopping the games pharmaceutical companies play to keep their
    prices high, for example, creating a tangle of patents that
    block competition.
        I want you all to know I remain committed to working with
    all of my colleagues in Congress, on both sides of the aisle,
    to bring down prices and make sure prescription medication and
    lifesaving treatments are not just available, but accessible
    and affordable. Now, while FDA does not regulate drug prices,
    it does have a role in increasing access to lower cost generics
    and biosimilars, which can increase competition and drive down
    prices.
        But for that to work, we have to build off the steps we
    took in the Lower Health Care Costs Act by doing more to stop
    pharmaceutical companies from gaming the system with sham
    petitions, exclusivity, parking, and other tactics that block
    cheaper generic drugs, and increase transparency and
    information sharing that can help bring more affordable
    generics and biosimilars to the market.
        Mr. Gaugh, how do the generics and biosimilar user fee
    programs help increase competition and expand patient access to
    critical drugs without sacrificing safety, efficacy, or
    quality?
        Mr. Gaugh. Thank you for the question. Yes, we have spent a
    significant amount of time in GDUFA III to get enhancements
    that we felt we had left on the table, if you will, in GDUFA
    II. So in that prospect, we have a 10 month time point within
    which the FDA is going to take an action on a product. We found
    that in that 10 month time point, at a certain point in time,
    we can get toward the end and run out of time, which means we
    get a complete response letter for that product.
        In GDUFA III, we put forward an imminent action capability.
    So when the FDA knows that the product is about to be approved
    or could be approved with just a short period of time, they can
    take the imminent action route, which gives an additional 60
    days for review. And while it is now a 12 month clock, it is
    also a first cycle approval.
        If it went into a second cycle approval, that would be
    months down the road. So it would be at least 6 to 9 to 12
    months delay. And this will help get access to the American
    public more quickly.
        The Chair. What barriers exist for generic applicants in
    demonstrating their products have the same ingredients as more
    expensive brand name drugs, and how do we address those
    barriers?
        Mr. Gaugh. Well, there is one area that we refer to is Q1,
    Q2. And in Q1, Q2, that is a qualitative and quantitative
    analysis of the product. So we know what the active ingredient
    is when we are reverse engineering the product, if you will.
    What we don't know is the inactive ingredients or the
    concentrations of those inactive ingredients.
        Prior to 2017, when we had those issues come up, we would
    submit a control correspondence to the FDA, they would tell us
    what that product is, the inactive ingredient, and then we
    would look at ranges of what the concentration were and the FDA
    would say, usually high or low.
        After 2017, that was changed. They no longer will tell us
    what the product is, nor give us a plus minus on the
    concentration. And when we put a control correspondence in to
    ask those questions, we can only have three products in that
    control correspondence.
        If we don't guess right on the first time, it goes back for
    the next, and the next, and the next. So it is more of a
    guessing game and that delays even longer.
        The Chair. Okay, thank you. Dr. Esham, we have seen
    pharmaceutical companies abuse the citizen petition process to
    delay cheaper drugs from competitors. In fact, the FTC and FDA
    have both called out that behavior, with FDA arguing that those
    shenanigans present obstacles to the availability of follow on
    drugs. Isn't it right that the citizen petition process should
    not be used to reduce choice for consumers?
        Dr. Esham. Let me just start by saying that we do believe
    that the citizen petition process is an important mechanism not
    only for the public to express its views to the FDA, but also
    for the FDA to hear stakeholder perspectives on scientific,
    technical, and regulatory topics. We do understand that our
    colleagues at FDA have expressed concerns about situations
    where a company might try to use this process to block generics
    or follow-on biologics from entering the market.
        We also understand that they do conduct their own research.
    And while process requirement is associated with the 505(q),
    petitions have the potential to add some burdens to the generic
    drug review process. Citizen petitions have really delayed
    specific generic drug approvals.
        That being said, if this is an issue that the Committee
    would like to explore, we stand committed to working with you
    and other stakeholders.
        The Chair. Okay. Appreciate that.
        Senator Cassidy.
        Senator Cassidy. Ms. Richardson, and Mr. Gaugh, I will
    probably hit you afterwards. Some go to the doctor, eye doctor,
    he gives me a prescription for something which is four times a
    day, eye drop for the pain, and it cost me like $50 bucks.
    Except they can't find it. The only thing I find is something
    which is taken twice daily.
        Same active ingredient, which cost me $400. Now that
    clearly is not innovation. It is not a once monthly depo shot
    to prevent pregnancy or once daily shot for HIV. It is
    something which allows them to remove the generic so that
    instead of paying $50 bucks, the patient is now paying $400.
        How do we differentiate true innovation from faux
    innovation, which frankly works to the detriment of the
    consumer?
        Ms. Richardson. Thank you very much for the question,
    Senator. I have to confess that the question of measuring
    innovation is not something that Pew has done any research on
    or is currently focused on, although certainly as a patient and
    as a consumer, it is on my mind all the time. Every time I go
    to the doctor----
        Senator Cassidy. Let me go to Mr. Gaugh. Mr. Gaugh, how do
    we measure innovation? It is something because I am a big
    believer that innovation needs to be rewarded and that we need
    to have that profit motive for people to innovate. But I am
    also recognizing that it is gamed at times so that, I call it
    faux innovation, is merely gaming the patient. How would you
    respond?
        Mr. Gaugh. Thank you, Senator Cassidy. So you bring up a
    great point, and we have always believed and felt that the
    generic and biosimilar industry does promote innovation and
    moves the innovator companies to better products, different
    products. But there is still some gaming that goes on to your
    point.
        Whether it is a single daily dose or it used to be three
    times a day goes to a single. That is not necessarily an
    innovation, but it is really hard to judge how you stop that
    gaming, if you will.
        Senator Cassidy. Okay. Ms. Esham--Dr. Esham, I am sorry.
    Clearly, we want to bring drugs to market more quickly, and
    there is this discussion of using the accelerated approval with
    this reliance upon post-market data. Now, tell me, just kind of
    from your perspective, what various sources of post-market data
    could be used to evaluate whether something is a true innovator
    value and improves patient outcomes to make sure that whatever
    we are using it for is bringing value to the patient.
        Dr. Esham. Certainly. I would say that when we entered into
    the PDUFA agreements, we did recognize the need for improving
    how we design, have conversations pre-approval about post-
    market requirements associated with--that are always required
    with accelerated approval, and improving processes post-
    approval to ensure that we are able to address challenges as
    they arise and not just let them hang there and, not know a
    path forward.
        The processes improvements in the commitment letter we do
    think will be helpful. In addition, I think more specifically,
    probably to your question, is advancing the ability to utilize
    patient registries, real world evidence that we do believe have
    the potential to offer more efficiencies and realistic pathways
    toward completing those requirements.
        Senator Cassidy. These are patient registries that you are
    establishing, or will this be borrowed from some master
    registry of EHRs, etcetera?
        Dr. Esham. I don't think it is an either, or, but happy to
    meet with you and your staff and discuss in more detail if that
    would be helpful.
        Senator Cassidy. Okay. Mr. Leahey, I am concerned--the
    cybersecurity. Now, there is a lot of stuff, a lot of medical
    devices that are going to be increasingly cyber, correct?
        Mr. Leahey. Yes.
        Senator Cassidy. Senator Baldwin and I have a bill called
    the Patch Act, which requires a premarket demonstration of
    cybersecurity measures and post-market updates for any issue
    discovered. Can you tell me a little bit of how the
    manufacturers are thinking about cybersecurity in the context
    of hospital networks or individuals who may be affected?
        Mr. Leahey. Thank you, Dr. Cassidy. As you noted, devices
    are becoming more interoperable each day. And MDMA as part of
    the HCC. It is a private, public partnership with HHS, FDA,
    hospitals, insurers working to address these issues.
    Fortunately, we haven't seen any issues directly related to
    compromising the devices themselves.
        But as you noted with the ransomware and other issues,
    these have certainly become challenges. So in 2019, the HHSC
    published the Medical Cybersecurity Joint Security Plan to
    provide device makers with a playbook on how to develop best in
    class cyber management.
        But clearly, much more work needs to be done, and we look
    forward to working with you and your colleagues to making sure
    that again, as technologies evolve, we make sure that the
    hospital system, the patients are ultimately protected within
    these cyber threats.
        Senator Cassidy. Thank you. I yield.
        The Chair. Senator Kaine.
        Senator Kaine. Thank you, Chair Murray. And thanks to our
    witnesses. Five years ago, when Congress last addressed user
    fee reauthorization, I asked Dr. Woodcock of the FDA a question
    on the availability of biosimilar drugs. This is something that
    Senator Collins and I have done some work on, together with the
    Biologic Patent Transparency Act.
        Dr. Woodcock told me then that biosimilars were being
    analyzed and improved at that time, and that would set a
    standard for future biosimilars to come to market. She also
    shared that as of that time, 2017, the FDA had approved four
    biosimilars. I don't think they were yet on the market. They
    had 13 pending applications and that there were 64 biosimilars
    in development.
        Mr. Gaugh, in your testimony, you stated there are now 34
    biosimilars approved by the FDA, 21 of which are on the market
    and available to patients, many others in development. Could
    you talk about how the advancements over the last 5 years have
    brought more biosimilars to market, have increased the number
    of available biosimilars to address the rising costs of
    prescription drugs, and how patients have benefited from the
    growth in this industry?
        Mr. Gaugh. Thank you, Senator Kaine. Yes, your points are
    exactly right. So we started the biosimilar program in
    basically 2012, when legislation was put in place in 2010, but
    the guidance first came out in 2012 with the FDA, that gave us
    the pathway for biosimilars.
        Since that time, we have approved 34--or the FDA has
    approved 34, as you just noted, and 21 on the market. But there
    has been a significant cost savings to the patients for that.
    So in the biosimilar realm, it is a cost savings of roughly 50
    percent. Also, something that you don't see on the generic side
    is that the innovator price has come down about 25 percent on
    those products.
        Having that access has provided cost savings for the
    patients. You noted 64 program development back in 2017. There
    is now 97 that we know of that are in development. So it is
    continuing to grow and expand, and BsUFA III is addressing
    several of the enhancements, if you will, from BsUFA II to
    BsUFA III that will improve that through meetings, through
    supplement review process and being more timely, and some
    things about inspections.
        Senator Kaine. Excellent. Thank you. Dr. Esham, I have a
    question for you about treatment for rare diseases. It is clear
    that sponsor companies that want to address treatments for
    these diseases face a number of challenges, particularly the
    limited number of patients with these types of conditions.
    However, it is not a limited number of people who suffer from
    rare disease conditions.
        There are about 7,000 known rare diseases, and they
    collectively affect over 25 million Americans. You also state
    in your written testimony that the current mechanisms for
    companies with rare disease treatments and their pipeline to
    collaborate with FDA have not consistently provided avenues for
    such needed discussions.
        Could you talk a little bit about the provisions of PDUFA
    VII that would allow for better collaboration between the FDA
    and sponsor companies in the rare disease treatment area?
        Dr. Esham. Yes. First, thank you for that question. And
    again, I think we are all very excited about the progress we
    have made, but there is just much more work to be done here in
    this--in terms of providing treatments for rare diseases. I
    think there are a number of provisions that collectively we
    believe will work to improve regulatory clarity and
    understanding for rare diseases.
        That includes the Rare Disease Endpoint Advancement Pilot
    Program, which is really designed to pilot engagements with
    sponsors to increase our understanding about what is needed to
    develop and support utilization of an endpoint for the basis of
    approval for rare diseases.
        Those learnings will be shared across industry, academics,
    researchers, and the entire research and development ecosystem.
    There are also provisions that I think will be particularly
    important for rare diseases, and that is the ability to have
    focused meetings on complex and unique challenges, both at
    preclinical as well as during development that I think will
    be--offer a chance to really address those unique challenges.
        As well as some of the provisions designed to ensure that
    there is a better utilization of innovative clinical trial
    designs. And that is just to name a few. I don't want to run
    out of my time, but collectively again, we did try to work to
    make sure that there was the ability to engage at the right
    time and have those discussions in advanced innovation for
    these treatments.
        Senator Kaine. Thank you. Mr. Gaugh, I am going to submit a
    question for the record about interchangeable biosimilars that
    I would direct to you, but I will put that in for the record.
    Chair Murray, I yield back.
        The Chair. Thank you.
        Senator Collins.
        Senator Collins. Thank you, Madam Chair. Before I turn to
    my questions, let me thank the Chair and the vice Chair for
    their hard work on this issue and to express the hope that a
    bill that Senator Feinstein and I have worked on for some time,
    that has to do with personal care products, can also be
    considered.
        Chair Murray brought that up in her opening statements, so
    I just wanted to mention it. Dr. Esham accelerated approval is
    a critical regulatory pathway that provides timely review of
    treatments for patients with serious and life threatening
    conditions for which there is an unmet need.
        Sponsors must meet, as I understand it, the same
    substantial evidence standard as traditional approval, but they
    can rely on a surrogate endpoint that predicts a clinical
    benefit rather than measuring that clinical benefit directly.
    Obviously, clinical outcomes can take significantly more time
    to manifest. And an example is that tumor size is often used as
    a surrogate in oncology.
        It can be measured much earlier than mortality and is
    reasonably likely to predict an effect on that devastating
    clinical outcome. Understanding that science does not move at
    the same pace across all disease areas, why hasn't this pathway
    been used to the same degree in fields like neurology or for
    rare diseases?
        Dr. Esham. I really appreciate this question, and you are
    correct. We know that historically over 60 percent of
    accelerate approvals to date have been for oncology
    indications, and that is wonderful. There are multiple factors
    as to why this has been the case, including the maturity of an
    investment in oncology basic research.
        There has also been incredible collaborations between
    doctors, academics, patient organizations, the pharmaceutical
    industry, and the regulatory leaders that have resulted in the
    identification of surrogate endpoints and other informative
    biomarkers and subsequent validations.
        Again, we can't underscore--I can't undervalue the
    leadership that is really important in this, both within the
    industry research and the regulatory agency. And we have long
    advocated for broader utilization of this pathway across more
    therapeutic areas. We do think that it would be helpful for the
    FDA to hold disease specific or disease or therapeutic area
    specific meetings or promote that multi-stakeholder dialog on
    appropriate biomarkers and clinical endpoints.
        It is our hope that the Rare Disease Pilot Program that I
    have referred to earlier will also advance our learnings about
    how to approach--it is not just looking at an individual
    endpoint, it is thinking of the how, what is needed, how do you
    think about developing evidence, and how will that evidence be
    evaluated, that we think will hopefully drive more innovation
    and utilization of this pathway to, as you say, provide more
    timely access to these medicines that are--just really
    devastating.
        Senator Collins. You have mentioned the Rare Disease Pilot
    Program, and I want to follow-up on that issue with you as
    well. More than half of the 400 million people in the world who
    are affected by rare diseases are children, and about one-third
    of those children will sadly die before the age of five.
        Drug development is hamstrung by the fact that we simply do
    not have well characterized the endpoints for most rare
    diseases. The PDUFA agreement establishes the Rare Disease
    Endpoint Advancement Pilot Program, which would enable FDA and
    industry to collaborate to develop more meaningful, consistent,
    and relevant endpoints for clinical diseases.
        I am thinking of diseases like Duchenne muscular dystrophy,
    for example. It is difficult to precisely measure progression
    of the neurological and neuromuscular effects associated with
    many of these diseases, and thus it can be difficult to
    determine a treatment's impact.
        This pilot program that you referred to is limited to a few
    select applicants, but how can we share the lessons learned
    through this pilot to ensure that other rare disease drug
    applications can build on its findings?
        Dr. Esham. Very important point to raise. And I will note
    that when we worked with the FDA to develop this pilot program,
    it was modeled after what we view as a successful pilot program
    for complex innovative clinical trials and modeled for drug
    development that used the same model of having only a limited
    number of applications that went through the pilot program, but
    that the learnings if you go through that program, the FDA has
    the ability to share those learnings to the entire stakeholder
    community.
        It was very specifically modeled after that. We have seen
    that be successful and create opportunities for learnings
    across the academic, medical research, and biopharmaceutical
    industry.
        It is our expectation that the minimum of the three public
    workshops will serve that. But we do expect more engagement and
    more shared learnings in other venues of scientific dialog that
    occur on a normal basis.
        Senator Collins. Thank you.
        The Chair. Senator Hassan.
        Senator Hassan. Well, thank you, Madam Chair. And I want to
    thank you and the Ranking Member for holding this hearing, and
    I want to thank all of our witnesses for being here today. Dr.
    Gaugh, let me start with a question to you. While Americans
    struggle to afford lifesaving drugs, brand name manufacturers
    continued to increase prices.
        Generic competition can help drive down drug prices now. So
    how do new generic drugs affect brand name prices? And how much
    do generic drugs save consumers each year?
        Mr. Gaugh. Thank you for the question. So significant
    savings is brought forth by the generics. If you look at the
    numbers, over the last 10 years, we have saved $2 trillion, and
    $469 billion of that was in new generics that came to market.
        It is a significant improvement in the increase for the
    patients. We find that when one generic drug is approved, the
    price comes down about 50 percent--the generic price comes down
    50 percent, excuse me, not the brand. And with four or more, it
    is more like 80 to 85 percent. So it is a significant increase
    in savings to the American patient and U.S. health care
    systems.
        Senator Hassan. Thank you. Also another question to you,
    Mr. Gaugh. For some medications with serious safety concerns,
    FDA requires manufacturers to set up risk evaluation and
    mitigation strategies, otherwise known as REMS programs. REMS
    helps to minimize the risk associated with these medications
    and make them safer for the public and for patients.
        For example, a REMS program may require prescribing
    clinicians to receive training on the risks of a drug and to
    perform monthly lab tests. Even though REMS programs are meant
    to protect patient safety, some brand name manufacturers have
    patented these programs to prevent generic competitors from
    entering the market.
        Mr. Gaugh, how have brand-name manufacturers use REMS
    patents to delay the launch of generic drugs? And how have
    these delays affected drug prices?
        Mr. Gaugh. Thank you. Thank you for the additional
    question. So REMS is a very important program. As you
    mentioned, it is about safety for patients, and it is a very
    restricted program in its set up. I would almost make it akin
    to new drug IRBs when they are doing the study process, so it
    has to be patient specific, signed off, and given.
        REMS has really had two problems with, the first one was we
    as the generics, as we reverse engineer, need the product that
    we are reverse engineering to make that. The CREATES Act help
    solve that because we were being blocked from even getting the
    drug. We weren't a patient. We couldn't sign up for it. We
    wouldn't get it. So that has now been changed.
        But what is new is what you just brought up, and that is
    the patenting of the REMS programs. And so if the REMS program
    is actually patented, then I, as a generic company, can't get
    on that REMS structure to be able to bring my product to
    market. So it is a further delay of not months, but years.
        Senator Hassan. And it is using the notion of patient
    safety to delay the development of additional drugs that could
    bring down the cost.
        Mr. Gaugh. Absolutely.
        Senator Hassan. Yes. Okay, last question for you, sir.
    There is a long history of brand name manufacturers playing
    games with the law to delay and block the launch of generic
    drugs. As a result, patients pay more at the pharmacy counter
    with some rationing life medications because they can't afford
    them.
        I would expect that every single Senator on this Committee
    has heard stories from their constituents about their decisions
    to ration their drugs and the impact that has on their health.
    Mr. Gaugh, how are brand name manufacturers manipulating the
    system to limit generic competition?
        Mr. Gaugh. We just talked about two of those methods. And
    Dr. Cassidy brought up the point about some quasi-innovation,
    if you will, moving a product from twice a day to one today,
    for example. And that in and of itself is not necessarily
    innovation. It is an improvement.
        But in that particular case, the physicians and the
    pharmacists can overturn that by having the patient go ahead
    and take the twice daily at the lesser price than once daily at
    the higher price point level.
        Senator Hassan. Thank you. I yield my time.
        The Chair. Senator Burr.
        Senator Burr. Thank you, Madam Chair. Cartier, again,
    welcome. More than 278 therapies have been approved under the
    accelerated approval pathway over the 30 year history, saving
    and improving thousands of lives.
        This pathway has been the subject of recent scrutiny. But
    it is a successful and important tool for the FDA to bring game
    changing innovation to patients faster. What promise does the
    accelerated approval pathway provide for companies investing in
    novel treatments and particularly treatments for rare diseases?
        Dr. Esham. Thank you, Senator. The role of this program
    played in improving care for patients suffering from serious
    and life threatening diseases when their needs are not being
    met or where precedents are little or do not exist, or are not
    well known, cannot be overstated. And we have seen this be very
    successful in driving innovation and investment in oncology and
    infectious diseases.
        It is our hope that we expand utilization of this pathway
    across more therapeutic areas, including for rare diseases. It
    is critical for continued innovation--continued investment and
    innovation in these disease areas that are complex and where
    there are little or evolving precedents, which is the case in
    many rare diseases.
        It is also foundational to advancing scientific
    understandings that allow us to continue to innovate and
    continue to improve care for these complex and devastating
    diseases. And so if it did not exist or it is not able to
    function as intended, the path forward for timely access to
    improved care for these devastating diseases will be limited
    and delayed.
        Senator Burr. May I ask you, how could we ensure the
    accelerated approval pathway is used to create new
    breakthroughs in more fields like neurology?
        Dr. Esham. Great question. And there are provisions in the
    PDUFA VII commitment that we think will strengthen the pathway,
    such as the ability to engage with the FDA early to discuss
    what is needed to support the use of a novel surrogate
    endpoint. And as we have discussed previously, there is also
    the rare disease endpoint pilot program, which should lead to
    broader understandings about how to approach and develop
    support for the utilization of a surrogate endpoint to support
    approval.
        There are also process provisions--process improvements to
    try to improve what the approach will be to accomplish post-
    approval requirements. Which again, in neurology, that is an
    assessment that you make before you endeavor into a clinical
    development program.
        The more that we can improve those processes, enable
    utilization of things like real world evidence to enable them
    to be more realistically completed and in a more efficient
    timeline, will also be quite helpful, I think, in driving more
    investment and research and utilizing the accelerate approval
    more broadly.
        Last, just one quick thing, can't underestimate the
    importance of multi-stakeholder engagement with regulators to
    really identify new surrogates and advance their utilization.
        Senator Burr. Thank you. Mark, FDA is proposing longer
    review times for 510(k) devices. FDA committed to review
    510(k)'s within 108 days in Fiscal Year 2022, and I understand
    that FDA is not currently meeting that goal. What does it mean
    for a small company when FDA misses these goals, and what does
    it mean to patients?
        Mr. Leahey. Obviously meeting goals are critical to timely
    patient access and to small companies, the predictability. The
    small companies don't have a number of products to subsidize
    delays, so it is critically important. COVID was certainly an
    impact, but we need FDA to get back on track and meeting that
    shared outcome goal of 108 days as quickly as possible.
        Senator Burr. Why did FDA agree, and why did the industry
    agree to longer review times of 128 days on 510(k)'s and
    provide the agency with so much more money?
        Mr. Leahey. There is no doubt this is a significant
    increase in funding. And as I said in my opening testimony,
    this doubling of fees is certainly not sustainable. As MDMA is
    representing small companies, it is of great concern.
        But we do recognize the challenges that FDA went through
    during COVID, and this investment is obviously put forward to
    get them back on track, and there are additional accountability
    measures to make sure that these metrics are met going forward.
        Senator Burr. Just so I and my colleagues understand
    better, I went through a litany in my opening statements of the
    deficiencies in what FDA committed to and what they missed. And
    they missed resoundingly in things like meeting with
    applicants, explanations and deficiencies letters. Is this
    really a difficult thing, or is this just a choice by FDA to
    stiff somebody on meeting them, even though there is a
    requirement to do it?
        Mr. Leahey. I can just say from our Members' perspective,
    the quality of the journey is so much more important than the
    time. If you have high quality inputs and timely interaction,
    you get there.
        Obviously, it has been disappointing that simply providing
    the rationale for a deficiency is something that we have to
    bake into a commitment. And it is not just part of the basic
    offering. But we are where we are, and we hope that we have a
    productive and effective meeting for V.
        Senator Burr. I thank all of you. Thank you, Madam Chair.
        The Chair. Senator Smith.
        Senator Smith. Thank you, Madam Chair and Ranking Member
    Burr, and I really appreciate this Committee and all of your
    testimony. Madam Chair, I would like to request unanimous
    consent to submit into the record a letter from the biosimilars
    forum expressing support for the biosimilar user fee agreement
    and urging additional action to address the impact of the
    pandemic on approvals of low cost biosimilar products like
    biosimilar insulin.
        The Chair. Without objection.

        [The information referred to can be found on page 130 of
    Additional Material:]
        Senator Smith. Thank you. I think we all agree that these
    FDA user fee agreements are critical for supporting the FDA's
    work, and I want to just note that I worked with Senator
    Cassidy to move forward legislation to streamline the process
    for bringing biosimilar products to the market.
        I want to thank Senator Hassan for her questions about how
    that streamline process and bringing biosimilars, bringing
    generic drugs to market helps to contribute to our goals of
    lowering costs for Americans, which is very much on the minds
    of my constituents. Mr. Gaugh, I want to ask you about
    something specific to the therapeutic equivalence ratings.
        According to the FDA, complex generic products, I mean,
    there are so called because they have complex active
    ingredients, routes of administration, drug device
    combinations, or formulations. So in short, these drugs are
    more difficult for generic manufacturers to develop. Examples
    might include inhalers, or topical ointments.
        These complex generic products face regulatory challenges
    compared to other generics. It is harder for them to be
    assigned a therapeutic equivalence or TE rating from the FDA.
    In fact, it can take years to get a rating if they ever get a
    rating at all.
        This TE rating is important because it lets
    pharmaceuticals--pharmacists, excuse me, automatically
    substitute a lower cost generic product for a brand name
    product at the pharmacy counter so patients can get cheaper
    medicines.
        Mr. Gaugh, could you please describe for us why it is
    harder for certain complex generic manufacturers to receive
    this TE rating, what medicines are impacted by this issue, and
    what we can do to make this process more efficient?
        Mr. Gaugh. Thank you for the question. And there are
    different categories of generics, including and most often
    complex generics that have to use a 505(b)(2) pathway for
    approval. So it is not the normal generic pathway, if you will.
    That approval pathway does not give 100 percent therapeutic
    equivalence.
        The FDA does not grant 100 percent therapeutic equivalence
    when the product is approved. Therefore, we have to go back to
    the FDA, as you mentioned, through a citizen's petition process
    to get the FDA to grant that. That can take years for that to
    happen. And to your point, if it is not granted, it is not
    therapeutically equivalent and therefore the pharmacist cannot
    automatically substitute it.
        That is an area that we hope to work with Congress on, with
    this Committee on to get that changed and get the citizens
    petitions moving in a more quick process.
        Senator Smith. And is the solution to that to get those
    citizens petitions moving more quickly? Is that what you see?
        Mr. Gaugh. Well, there is also some other rule, regulation
    processes that the FDA can put in place for that as well.
        Senator Smith. Thank you. So I am working with Senator
    Cassidy on legislation that would require the FDA to provide a
    TE rating at the request of an applicant on a much quicker
    timetable. And I look forward to working with the Chair and
    Ranking Member as we move forward with these user agreements.
        Ms. Richardson, I have a question for you. I appreciate how
    your written testimony highlights that these user fee
    agreements are important for streamlining the review of medical
    products. But the FDA's role is not just about bringing
    products to market faster.
        As you note, the FDA is a public health agency that works
    to promote health of all Americans. So could you just expand
    upon the recommendations that you have made that the FDA should
    be receiving public funds and be accountable to the public
    through these user free processes?
        Ms. Richardson. Thank you very much for that question,
    Senator. As I noted in my remarks and really just want to
    reemphasize, user fees are essential to the functioning of the
    FDA, but they are dedicated to specific functions like
    expedited review.
        That is very useful, but it is limited because there are so
    many other areas that FDA's mission--of FDA's mission that
    don't enjoy that kind of support. They don't cover food, they
    don't cover supplement oversight, they don't cover a lot of the
    agency's post-market oversight activities like inspections.
        Appropriations really are essential to fully support FDA's
    public health mission in the years ahead. So thank you again
    for the question. I welcome the opportunity to underscore how
    important it is to ensure adequate appropriations for the
    agency.
        Senator Smith. Thank you. And do you have any specific
    recommendations for how we should improve the use of free
    agreement process to better engage Americans in that process?
        Ms. Richardson. That is not an area that Pew works on,
    although I do know there have been suggestions about increasing
    transparency, right. I know that there were some issues with
    posting of meeting minutes, things like that. So I am sure that
    there are some solutions that FDA would be more than happy to
    consider, but I don't have any more specific recommendations.
        Senator Smith. Thank you very much. Thank you, Madam Chair.
        The Chair. Thank you.
        Senator Marshall.
        Senator Marshall. Thank you, Madam Chair. If I could have a
    moment of privilege first and just start by congratulating my
    University of Kansas Jayhawks on their fourth national
    championship, and I would be remiss for not congratulating my
    friends from North Carolina on a great game, one of the
    greatest games in NCAA history, and just Kansas so much as a
    special connection to North Carolina, going back to Dean Smith
    being a player for KU in the early 1960's. So congratulations
    to our amateur sports and my Jayhawks. Thank you.
        Madam Chair, I want to start off by talking about the
    importance of innovation. I have always said that innovation
    would do more to drive the cost of health care down than any
    legislation that we can write. And I was so excited when
    biosimilars came on the market and I thought that competition
    would drive the cost of insulin down.
        Unfortunately, brand name manufacturers have found out ways
    to prevent this competition, these new biosimilars to come to
    market. And it is so frustrating. We have a saying back in
    Kansas that pigs get fat and hogs get slaughtered. And my point
    is that these middlemen and big pharma is getting hogwash. That
    they are--they can't have it both ways. You can't want
    protection from price fixes or price costs, but you can't--but
    you don't allow innovation.
        You can't allow it to work both ways. And my first question
    is going to be for Mr. Gaugh. Right now, we are seeing with
    these brand name manufacturers using inactive ingredients now
    to keep biosimilars to come to market. And I think of Humira
    using the size of a needle to keep something from coming to
    market.
        I would ask both sides of the aisle, the staff to start
    looking into if we get rid of the rebates, that is what is
    going to solve this problem. If we get rid of the middlemen
    rebates, that is what is going to drive the price of insulin
    down. And if we put a price fixed at $35, a price cap, all that
    is going to do is drive up the cost of health care for
    everybody else in the plan.
        It is just basically given the middleman a license to
    charge whatever they want to, even though the person that is
    getting the insulin is going to be capped with an out-of-pocket
    expense. It is going to drive the cost of prescriptions up for
    everybody else in the plan. So I am all about promoting
    competition.
        Mr. Gaugh, what--in the review of this reauthorization,
    what can we do to make it better for patients to have faster
    access to generics and biosimilars without compromising
    innovation?
        Mr. Gaugh. Thank you for the question. And so we did build
    in several enhancements in both GDUFA and BsUFA to help move
    that along more quickly. I talked earlier about the imminent
    approval in the GDUFA realm.
        In the BsUFA realm, in the biosimilars--which we now have
    two interchangeable insulins that are in or one insulin that is
    in the market, so that is out there for competition and
    hopefully that will help bring----
        Senator Marshall. Have we done everything we can, or do we
    need to do more?
        Mr. Gaugh. There is always more that we can do. Absolutely,
    yes. So we built that in with meeting management and supplement
    reviews.
        Senator Marshall. Thank you. Dr. Esham, my next question
    for you. It takes 10 years and $1 billion to get a new product
    to market and often maybe a 1 or 2 percent chance it ever
    actually reaches the market. The reauthorization process of
    these new drugs, authorizing these new medications, we talk
    about that process, but I want to back up in the research going
    on here. So often we are using animal models, which are like
    night and day to the real world when it comes to human biology.
        What we see in the animals, consequently, typically, not
    uncommonly, doesn't apply to humans. There is something now
    called where we can use human cells with bioprinting.
        For instance, if we know a medication that is going to be
    metabolized through the liver, we would test it with human
    liver cells. Do you see any way that we can start implementing
    that technology in helping the process of approval for new
    medications?
        Dr. Esham. Thank you, Senator. And first, let me say again,
    congratulations. As a University of Kentucky fan, I really hope
    that I believe that at some point. I will get there. But to
    your point, in all seriousness, we actually have a very active
    group of scientists in what we call our bio-safe working group
    that has been publishing papers on advancing non-human primate
    ability to use utilize alternative tools to primates for
    preclinical work.
        We certainly see a lot of innovation in this space that you
    have mentioned, and we would be happy to bring our scientists
    to meet with you and discuss in detail their potential. But the
    bottom line is, yes, we do think we can continue to innovate
    here and be much more--less dependent on primates----
        Senator Marshall. Speed up the process and hopefully make
    it safer. Both.
        Dr. Esham. Yes----
        Senator Marshall. That is a win, win.
        Dr. Esham [continuing]. However they have--the goal is to
    fail earlier or fail better and then advance most
    optimistically.
        Senator Marshall. Quickly to Mr. Leahy. I am a big fan of
    using real world evidence. And how does the FDA currently
    lack--does the FDA currently lacks the expertise and
    infrastructure to interpret real world data? And what can we do
    to make that situation better?
        Mr. Leahey. Well, absolutely. This is critically important
    to leverage that, as you noted, information out there in the
    world to help accelerate additional patient access. Under MDUFA
    IV, we invested tens of millions of dollars to help build the
    real world evidence capacity in a private public, partnership.
        We are continuing that investment in MDUFA V to help both
    private, public partnerships enhance their capabilities and
    also make sure that FDA have the personnel to take that
    information and leverage that for the purposes of application.
        Senator Marshall. Thank you so much, Madam Chair. I yield
    back.
        The Chair. Thank you. I will turn it over to Senator Casey.
    I am going to go vote and I will be back.
        Senator Casey. Chair Murray, thanks very much. I have a
    question for Dr. Esham and Ms. Richardson. Doctor, I want to
    start with you. Patients with rare diseases and conditions
    often face their diagnosis with either a limited or no
    treatment options.
        I was glad to see PDUFA VII, the commitment letter, have
    dedicated pages to advancing the development of drugs for rare
    diseases, including a commitment for FDA's rare disease team
    staff to be more closely involved in training, outreach, and
    application review. With their expertise, what--I should say,
    while their expertise is very valuable, I am not--I am sure you
    will agree that they are the voice and the unique experience of
    patients with rare diseases must be heard within FDA.
        In your written testimony, you discuss the Rare Disease
    Endpoint Advancement Pilot Program in PDUFA VII. I know Senator
    Collins made reference to this on. Page five of your testimony,
    you say, and I am quoting, ``key among these challenges is
    reaching agreement with regulators about determining the
    appropriate efficacy endpoints to support approval of
    innovative medicines for rare diseases.''
        How can we ensure that firsthand knowledge and expertise of
    this small group of patients, for whom the drugs are ultimately
    intended, are considered in developing endpoints that are
    meaningful for these patients?
        Dr. Esham. Thank you for that question, and it is quite
    important. And, when--back in PDUFA V, when we, the commitment
    sort of started that voice of the patient meetings, I think
    that is where we learned really what mattered to patients, and
    more importantly, learned that we were often wrong about how to
    interpret their needs.
        In addition to that pilot program, when you think about
    what is needed to support, what evidence is needed to support
    the utilization of surrogate endpoint, it is our hope that
    there will be--that the utilization of patient perspective data
    will be incorporated into that assessment, either for the
    assessment--the evaluation of the benefit, risk evaluation or
    as support as an endpoint.
        Again, it is our hope, desire, and we will certainly be
    advocating for inclusion of those perspectives into the
    learnings of that pilot program.
        Senator Casey. Thanks, doctor. Ms. Richardson, I want to
    thank you for raising the issue of antimicrobial resistance.
    The Committee has taken steps in previous user fees
    reauthorizations to encourage the development of new
    antimicrobial drugs to mitigate the serious impact of
    antimicrobial resistance.
        In 2012, we had the GAIN Act, for example. Yet the
    realities here, the financial realities of developing these new
    agents remain very challenging. And investment, as well as
    research, as well as drug development are not keeping pace with
    the need.
        I know that the Pew Charitable Trust has been an important
    partner in a proposal that I have been working on with Senator
    Cassidy, the Disarm Act, which would use reimbursement tools
    through CMS to help stabilize the market for novel
    antimicrobial agents. Can you talk about why these multiple
    approaches are necessary?
        Ms. Richardson. Yes, Senator, and thank you for that
    question. I absolutely agree with you that antimicrobial
    resistance is a public health crisis, and no single solution is
    going to fix the problem. We need creative ideas that can
    realign current market incentives to encourage drug developers
    to stay in this business, right.
        Large companies are exiting the market. Small companies are
    going bankrupt. It is just a tough business model. And so we
    need to provide new types of incentives to antibiotic drug
    developers so that this absolutely crucial antibiotics pipeline
    doesn't dry up completely. So your legislation, the DISARM Act,
    is certainly part of that solution, as well as the PASTEUR Act,
    which is authored by Senators Bennet and Young.
        We support both DISARM and PASTEUR, and we believe the
    solution to the broken antibiotic pipeline, it will require
    multiple creative solutions on both the legislative and the
    regulatory fronts.
        We hope Congress will remain open to considering additional
    options like DISARM, and we support the PASTEUR Act as an
    immediate opportunity for policymakers to make progress in
    fixing the market.
        The PASTEUR Act has an innovative only pay for success
    subscription approach that will stimulate the antibiotic drug
    pipeline and help ensure that patients will have access to
    these lifesaving drugs when they need them. Thank you, again,
    for that question.
        Senator Casey. Thank you. Thanks very much, Mr. Chairman.
        Senator Burr. Senator Murphy.
        Senator Murphy. Thank you very much, Mr. Chairman. Thank
    you all for your testimony. I have been in and out of the
    hearing today, but I look forward to reviewing the record. I
    wanted to talk a little bit about the issue of mental health
    drug discovery. And I will maybe sort of ask this question to
    you, Dr. Esham, but others I am glad to hear from.
        It is interesting, when you look at some of the data about
    recent drug discovery, it just doesn't seem that the
    development of new drugs in the mental health space is keeping
    up with the need.
        I was taking a look at recent records from the FDA on novel
    drug approvals from 2015 to 2022, and there is about 333
    approvals during that 8 year time span. And let me just sort of
    give a--my best attempt at an apples to apples comparison. Of
    those 333, 90 were cancer drugs.
        About 40 percent of Americans over the course of their
    lifetime will be diagnosed with cancer. And so I am glad that
    there were 90. But 46 percent of Americans at some point over
    their life will have a diagnosable mental illness. And yet of
    those 333 drugs, only 12 of them were mental health drugs.
        You hear this pretty routinely from the medical community
    that we just aren't keeping pace with the need when it comes to
    drug discovery in the mental illness space. So let me just sort
    of ask the sort of broad question here, how do we get your
    members, how do we get the private sector more interested in
    developing novel pharmaceuticals for mental health conditions?
    What are the barriers and are there public policies you would
    recommend to this Committee?
        Dr. Esham. Thank you for that question. I think it is fair
    to state that none of us are--believe that we are anywhere near
    the level of innovation in mental health, providing innovative
    treatments for those suffering from mental health, anywhere
    near where we want to be.
        There are--I will point you and your staff, your office and
    your staff to some reports that we did over the course of
    years, kind of looking at the challenges of highly prevalent
    chronic diseases. And we did one specifically in 2018 on
    depression, sort of as an example on the mental health space,
    to try to understand what was going on and sort of what looks
    like an inverse investment in public health need trend lines.
        I think that there are some challenges in understanding the
    underlying causes of these diseases. There are challenges in
    developing and implementing clinical--effective clinical trial
    designs. And there are also challenges on the access coverage
    side. And so, it is a, unfortunately in the space I think it is
    all of the above more often than not.
        But we would be happy to bring in some scientists and
    researchers from our companies working in this space to really
    kind of dove into the details here. But I think that clearly
    some pretty collaborative multi-stakeholder dialog is really
    needed here.
        Senator Murphy. Well, I will be glad to do that. And I will
    just note for the Committee, one part of your answer, you
    referenced an uncertainty about reimbursement, which is true
    generally in the mental health space.
        We have been working very hard on this Committee over the
    years to make sure that there is parity between reimbursement
    for mental health and for physical health. I am interested to
    know whether that exists on the drug reimbursement side. I
    doubt it is as dire as it is on the sort of in-person treatment
    side, but I look forward to follow-up with you on that. Mr.
    Leahey, I wanted to ask you a question with my remaining time
    about the state of clinical trials and clinical research.
        I heard Senator Murray references in her opening
    statements. But there, as you know, is a concern that trials
    and research often don't represent the democratic diversity of
    the populations that are going to ultimately benefit from these
    drugs and devices.
        We have seen how COVID clearly had a disproportionate
    impact on racial ethnic minorities, and it has, I think,
    spurred a conversation about how we make sure that there is
    broader representation in those that are part of these trials.
        Is that a question one that you are grappling with, that
    your members are grappling with? Why is it important that, and
    do you think it is important that we make sure that there is
    broad demographic representation amongst the populations who
    are part of the research and the trial process?
        Mr. Leahey. Thanks, Senator, for that question. And
    absolutely, MDMA and our member companies support diversity in
    clinical trials and agree that the trial enrollment should
    accurately reflect the intended patient population. And we look
    forward to working with Congress and FDA to ensure that
    proposals are thoughtfully structured to achieve this
    objective.
        Senator Murphy. Just why is it important?
        Mr. Leahey. Ultimately, it is because it is about the
    patient. We want to make sure that these drugs, devices all are
    tested in populations and age demographics, racial dynamics to
    ensure that, again, they meet the mark of having the safety and
    effectiveness for those who are intended to help.
        Senator Murphy. Right. Thank you. Thank you, Mr. Chairman.
        Senator Burr. Thank you, Senator.
        Senator Braun.
        Senator Braun. Thank you. The FDA user fee program was
    established to provide a predictable and accountable regulatory
    framework that supports expedited FDA review and approval of
    safe and effective treatments for patients. The user fee
    process has given lip service to the patient's voice in the
    conversation.
        PDUFA commitment letter includes a number of provisions to
    address unmet medical needs and advance rare disease endpoint
    development. The purpose of today's hearing is to discuss
    advancing medical product regulation and innovation for the
    benefit of the patient.
        There should be a witness here, I think, that would be from
    the patient's perspective. There is not. There should also be a
    representative from the rare disease community, which I have
    wrestled with since I have been here on for families that have
    issues, where the diagnosis is bleak, and time is the most
    important thing. They are not represented, either.
        In fact, there is not one hearing scheduled for this that
    brings in that patient voice. I would like to submit to the
    record a letter I sent to the HELP Committee yesterday
    requesting a patient focused user fee hearing.
        Senator Burr. Without objection.

        [The information referred to can be found on page 131 in
    Additional Material:]
        Senator Braun. In general, the Members of this Committee
    are given 5 minutes to talk about whatever they want to. Today,
    I had planned to show a video. There is really nothing in the
    rules that says I can't do that. We use video aids often here.
    But it hasn't been done before. A lot of things I have tried to
    do over 3 years I have been here is to fix the things that
    haven't been done before to give the patient, to give the
    constituent a better outcome.
        In this case, it is Ala, a happy go lucky girl who dreams
    of 1 day becoming a scientist. Without the necessary FDA
    reforms, timely access to promising therapies, that is not
    going to happen. Won't be able to achieve that goal. Her
    parents share a similar grief knowing that they won't see their
    daughter graduate from college or walk down the aisle. The
    average survival time for this particular ailment is only a
    year.
        Imagine from the patient, the family, are they interested
    in the cumbersome process that we always want to keep as a gold
    standard, but that doesn't necessarily mean you don't change it
    to adapt, keeping those standards in place to the
    particularities of this and many other ailments. The video
    highlighted the patient perspective and the need for the FDA to
    reform its process there.
        As a U.S. Senator, I have been proud since I have been here
    to represent Main Street, to represent the voice that is not
    heard, to represent the patient and the family that wonders
    why. No rules have prevented it, yet we couldn't show it today.
        I think it is kind of sad when you have got a hearing and
    that all kinds of different ways to make your point are
    generally available, and here, maybe because of the poignancy
    and the fact that it is coming from the patient who drives this
    process, maybe that is too much for us to bear when we keep
    giving it lip service and do nothing about it.
        I have had the Promising Pathways Act out there, sponsored
    by many on this Committee, and it is just saying one thing,
    give some hope to these families that there is more than just
    what we have been doing for decades, which is a process we call
    the gold standard, but yet it lets so many individuals feel
    that they are not having their voice heard. I think as elected
    officials, we got to always point out something that we would
    rather see change in the process.
        That is what I am doing here today. I think the Committee
    should have allowed it, but when that doesn't happen, you go to
    plan B. You can find that video on my Senate account, my
    Twitter profile at Senator Braun, and you will find that video
    is worth a thousand words, if not more, of what we will hear
    today, because it speaks to the frustration that people across
    the country feel when it comes to this particular issue. Thank
    you for listening.
        Senator Burr. Thank you, Senator Braun. And before I move
    on, let me just say this Committee and many committees in
    Congress have held specific hearings over the years with rare
    disease individuals. That is not out of the ordinary.
        One of the reasons that Pew is here, Pew represents the
    patients, the folks that don't have the opportunity to be here,
    the multiple categories. It is not one, it is hundreds of
    thousands of individuals.
        We are grateful for Pew's participation in this. It is my
    hope that we will be able to satisfy your needs--I am not
    speaking for the Chair, but I will leave that up to her,
    because I think there is value to that.
        But there is much more value outside of the user fee
    agreements. This is a small part of the access that they don't
    have today that they need in the future. And the No. 1 thing is
    innovating at what today's pace will allow us to do so that we
    would begin to bring those breakthroughs. So I thank you.
        Senator Rosen.
        Senator Rosen. Well, thank you, Chair Burr, Ranking Member
    Burr, and of course, Chair Murray. Thank you all for being
    here, for the important work you do and participating today. I
    want to move on to something, of course, that is in everybody's
    thought every day is cybersecurity and getting hacked.
        We have medical devices and I want to address medical
    device cyber security because cyber-attacks really remain a
    major threat to the health care sector, particularly as bad
    actors like Russia are beginning to target or threatening to
    target our domestic industries.
        That is why I recently introduced bipartisan legislation
    with Senator Cassidy that improves collaboration among agencies
    to improve cybersecurity in the health care sector, sharing
    that threat information, and providing cybersecurity training
    to medical professionals. It is really important.
        But however, as we work to increase the cybersecurity of
    our hospitals, our health care systems as a whole, we must also
    ensure there aren't cybersecurity gaps with our medical
    devices, our pacemakers, for example. As more and more medical
    devices become connected to networks, they are accessible
    online, they become more vulnerable to cyber-attacks. It
    impacts patient safety. It impacts their health, and the
    vulnerability of the entire health system to which the devices
    connect.
        Mr. Leahey, the current FDA guidance for the medical device
    cybersecurity is from 2018. It is in the process of being
    updated. Can you speak about the importance of timely Federal
    cybersecurity guidance, how nimble we have to be as technology
    just continues to outpace our ability to protect it?
        Mr. Leahey. Absolutely. Thank you, Senator, for that
    question. And cyber is a top priority for our members. As we
    spoke with Dr. Cassidy earlier and you noted the
    interoperability of these technologies, how they interface with
    other technologies with hospital systems is of paramount
    importance.
        I think that, fortunately, thus far there haven't been any
    devices that have been compromised that impact patients'
    safety. But as you noted, the ransomware, the security threats
    and how that impacts hospitals on the system is very important.
        We have actually been active members of the HCC, the
    private public, partnership with FDA, HHS, hospital systems,
    insurers, innovators all together, sharing information in real
    time because this is something that is ever evolving. And in
    2019, the HHSC published the MedTech Cybersecurity Joint
    Security Plan to provide device makers a playbook. As you
    noted, there is a guidance being updated.
        This is something that we have to have real time
    conversations with all the stakeholders so that we are ahead of
    the curve. And we are committed to doing that and working with
    you and other Members of the Congress to ensure that we have
    the proper protocols in place.
        Senator Rosen. Thank you. I just introduced a bill for HHS
    and DHS to work with hospital systems just for what you are
    speaking about, ransomware, cyber-attacks, and really
    considering them critical infrastructure. But I would like to
    build a little bit upon what Senator Murphy was talking about,
    next clinical trial diversity, and more specifically, gender
    diversity, how it relates to women.
        Because, Ms. Richardson, in 2015, FDA released a women's
    health research roadmap as a strategy for science and
    innovation to improve the health of women. And so among the
    topics included are improving clinical trial design and
    evaluating differences between men and women, how they respond
    to drugs and medical technologies.
        Again, we are talking about roadmaps, we are talking about
    being nimble. Is it time for the FDA to update this roadmap so
    that women are included more broadly? And what actions do you
    recommend the FDA take to improve this?
        Ms. Richardson. Yes. Thank you so much for that question,
    Senator. As I noted in my testimony, one of the benefits of the
    user fee renegotiation process is that it provides FDA with an
    opportunity to think really clearly and concretely about where
    it wants to focus attention over the next 5 years.
        Not just on reducing review timelines or meeting
    procedures, but where it really wants to focus its policies.
    And I think, of course, that could involve a renewal of the
    women's health roadmap, which I believe was housed within the
    Office of Women's Health. One of the core focus areas of the
    roadmap was to support studies to advance the understanding of
    how sex differences affect the safety and effectiveness of
    emerging technologies like AI enabled devices and 3D printing.
        That has been a real area of focus for Pew and our research
    lately. I know that office has funded some important research
    in that area. But I think that in addition to additional
    research funding, it would be helpful for the agency to focus
    on how that research gets translated into policy at the level
    of the centers, which is where the rubber meets the road policy
    wise. That is where it really happens.
        CDRH, for example, recently announced strategic priorities
    that would focus on over the next 3 years, and health equity
    was a core focus area. As a part of their process, I think it
    will be important for them to focus on women's health in
    addition to other populations that may be underrepresented in
    clinical trials or in real world datasets, which includes not
    just women, of course, but also minority populations.
        Thank you very much for that question.
        Senator Rosen. Thank you. Mr. Chairman, I see I am out of
    time, but I would have asked Dr. Esham about health equity and
    how the use of telemedicine, satellite sites, health centers,
    rural health clinics, we can improve diversity in clinical
    trials for urban and rural, for women and people of color. All
    of that really matters. Will ask for your response----
        Dr. Esham. Will be happy to engage with you in detail
    following the hearing. Thank you.
        The Chair. Thank you very much. And I was out of the room
    for the discussion before, but I really do understand the
    desire to bring in the voices of patients. And both Ranking
    Member Burr and I are very focused on keeping patients at the
    center of this conversation. I actually think every Member of
    this Committee believes what is best for patients and their
    families absolutely needs to be at the center of any discussion
    on medical advancements and innovation.
        Like everybody, I have heard from patients across my state
    who are forced to choose between paying for medicines or paying
    for rent. I am sure we have all heard those. And it really is
    imperative that patient's voice be heard at every step of
    medical product development, from new research to pricing, user
    fee reauthorization, and I hope we can all work together to
    make sure that as this process goes forward, we can ensure that
    their voices are heard.
        With that, I will turn it over to Senator Baldwin for her
    questions.
        Senator Baldwin. Thank you, Madam Chair. As Chair of the
    Appropriations subcommittee that provides funding for the Food
    and Drug Administration, I am well aware of the resource
    constraints that the agency is under. We recently worked on a
    bipartisan basis to increase FDA funding for Fiscal Year 2022,
    including for food safety activities, medical product safety,
    infrastructure and cross-cutting initiatives.
        Still, I know that with current budget constraints, the
    increase will not be enough. Ms. Richardson, can you describe
    some of the agency's obstacles when it comes to critical
    operations and hiring necessary additional staff?
        Ms. Richardson. Yes, happy to. I will say that this is not
    an area that Pew has spent a lot of time focused on. And when
    it comes to hiring, I do know that, as I think Senator Burr
    pointed out, the agency has a lot of open positions.
        They have a lot of trouble hiring. I do know that one
    proposal that FDA has supported in the past and continues to
    support is direct hiring authority Pew doesn't take a position
    on that, but I think it is certainly worth considering,
    personally.
        Senator Baldwin. Thank you. Over the past week, NPR has
    been sharing stories of individuals diagnosed with cancer
    attributed to asbestos exposure. One possible source of that
    exposure is baby powder, which is a personal care product
    regulated by the FDA. The stories of these cancer patients are
    harrowing, but they also point to the fact that when it comes
    to personal care products, as widespread as make-up, deodorant,
    and lotion, we have really failed to protect consumers. Mr.
    Leahey, how many employees does FDA have assigned to work on
    medical devices?
        Mr. Leahey. That is a question we asked during the
    negotiations. I know in the Congressional report, the 2021
    Financial Report to Congress, I think there are about 1,800 or
    so FTEs related to the device review process. I think there are
    a few hundred more--hundreds more, but that is about 1,800 I
    would say.
        Senator Baldwin. Okay. Mr. Gaugh, how about the number for
    generics and biosimilars?
        Mr. Gaugh. There are about 1,600 for generic and
    biosimilars that are paid for by the user fee dollars. 1,550
    for the generic side and about 50 for the biosimilar side.
        Senator Baldwin. Dr. Esham, how many FDA employees work on
    drugs and biologics?
        Dr. Esham. When--at the end of December 2021, I believe the
    CDER had around over 5,300 employees and CBER had around 1,200,
    a little over 1,200 employees. I would say the majority of
    those, probably in some way, work on the review of drugs and
    biologics.
        Senator Baldwin. Thank you. In contrast, the FDA has only
    30 full time employees that work on personal care products, 30.
    And I don't believe that is acceptable. FDA needs more
    resources and more authorities to ensure that personal care
    products are safe, and cosmetics reforms--reform needs to be a
    part of this package. I yield back.
        The Chair. Thank you very much. That concludes our hearing
    today, and I want to thank all of our colleagues for their very
    thoughtful questions. I want to thank all of our witnesses, Dr.
    Esham, Mr. Gaugh, Mr. Leahey, and Ms. Richardson for sharing
    your time and your expertise.
        I am looking forward to continuing our work to reauthorize
    the FDA's user fee programs in the coming weeks to ensure the
    agency has the resources to support its vital work. With that,
    the Committee stands adjourned.

                              ADDITIONAL MATERIAL

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

                                     Biosimilars Forum,
                                          Washington, DC 20006,
                                                         April 4, 2022.
    Hon. Patty Murray, Chair,
    Hon. Richard Burr, Ranking Member,
    U.S. Senate Committee on Health, Education, Labor, and Pensions,
    428 Dirksen Senate Office Building,
    Washington, DC 20510.

        Re: FDA User Fee Agreements: Advancing Medical Product
    Regulation and Innovation for the Benefit of Patients.

        Dear Chair Murray and Ranking Member Burr and Members of
    the Committee:

        On behalf of the Forum members, I would like to thank you
    for considering this letter in advance of the hearing ``FDA
    User Fee Agreements: Advancing Medical Product Regulation and
    Innovation for the Benefit of Patients.''

        The Biosimilars Forum is the non-profit trade association
    representing the companies with the most significant U.S.
    biosimilars development portfolios, including: Biogen,
    Boehringer Ingelheim, Coherus BioSciences, Organon Inc., Pfizer
    Inc., Samsung Bioepis, Sandoz, Teva, and Viatris. This letter
    represents the views of our members, all of whom manufacture or
    market biosimilar products in the US as well as other parts of
    the world.

        Biosimilars have the potential to provide very significant
    health care savings in the U.S. Without robust competition,
    innovator biologics will continue to represent approximately 40
    percent of total prescription drug spending while they
    represent only 4 percent of the medicines prescribed to
    patients. Biosimilars provide competition to allow Americans
    access to lower-cost biologic alternatives, and their timely
    licensure and launch is vital to ensuring patient access to
    lower cost biologic medicines.

        The Biosimilars Forum is supportive of the negotiated BsUFA
    III agreement, and we believe it represents important progress
    in facilitating timely access to safe and effective biosimilar
    medicines for patients. We are pleased the commitment letter
    codifies review timelines for labeling supplements, provides
    meeting management enhancements, and promotes best practices of
    communication between FDA and sponsors.

        The Forum is particularly pleased that the BsUFA III
    program will include a regulatory science program that can help
    bring more biosimilars to market faster. Since the BPCIA was
    enacted over a decade ago, there have been many advances in the
    science of developing biological drugs. The regulatory science
    program will provide FDA and industry the ability to
    incorporate the latest scientific innovations into biosimilar
    development and regulation.

        Although we are very satisfied with the progress
    represented in the BsUFA III commitment letter, we want to
    stress that the pandemic has impacted biosimilars and patient
    access disproportionately hard for almost 2 years. COVID-19 has
    stalled onsite inspections for biosimilars delaying their
    approvals.

        While biosimilar inspections have been delayed over the
    past 2 years, on-time actions for the GDUFA and PDUFA programs
    have averaged over 90 percent; and the BsUFA program, plunged
    to 75 percent during Quarter 4 of fiscal year 2020, and further
    dropped to 67 percent during Quarter 1 of fiscal year 2021 and
    it remains at 67 percent today. In addition, per the Agency's
    May 2021 Roadmap for FDA Inspection Oversight, biosimilar
    inspections are not, considered to be ``mission critical'' and
    thus are not prioritized. This has the ultimate outcome of
    slowing timely approvals of biosimilars. We would like to ask
    the FDA for clarity to sponsors and the public as to the
    estimated timelines the FDA believes it will take to address
    the backlog in inspections and reviews and why biosimilars are
    not prioritized or treated equitably.

        For the BsUFA III Commitment Letter to be a success the
    inspection backlog for biosimilars must be addressed and remote
    inspections be implemented consistently across all programs,
    biosimilars cannot remain a low priority for the Agency.

        The Forum is encouraged by FDA's commitment to hire and
    retain sufficient numbers and types of technical and scientific
    experts to efficiently conduct reviews and applauds the
    agency's efforts to improve its use of data and technology.
    Industry understands FDA staff works on numerous types of
    applications, a small cadre of focused Biosimilar staff could
    help expedite the assessment and inspection process for
    Biosimilars. We will work with the FDA to determine how can we
    allocate reviewers specifically for BsUFA goals.

        As we head into BsUFA III we look forward to working with
    the Agency to implement the commitment letter to the mutual
    benefit of biosimilar sponsors and FDA. We are committed to
    developing a robust biosimilar industry in the US, and to help
    the BsUFA program further develop over the next 5 years. We are
    at a critical inflection point for the biosimilars industry and
    we believe that enhancing the process for biosimilar
    development, review and educating the public of the importance
    of biosimilars is critically important to sustaining and
    cementing the biosimilar pathway for years to come, but as you
    all know, more needs to be done outside of BSUFA to help us all
    achieve our goal of lowering the costs of medicines and
    improving patient access to biosimilars.

        To conclude, thank you for the opportunity to provide this
    letter. The Forum strongly supports efforts to advance the
    FDA's biosimilars program. We need to see the FDA prioritize
    biosimilar inspections and continue their work to streamline
    the development of biosimilars as well as advance the guidances
    we need. Policies that support timely approval of biosimilars
    will ensure that patients have more access to high quality,
    safe, effective, and affordable biological therapies.

                Sincerely,
                                               Juliana M. Reed,
                                                    Executive Director.
                                    ------

                                    Senator Mike Braun,
                                          Washington, DC 20510,
                                                         April 4, 2022.
    Hon. Patty Murray, Chair,
    Hon. Richard Burr, Ranking Member,
    U.S. Senate Committee on Health, Education, Labor, and Pensions,
    428 Dirksen Senate Office Building,
    Washington, DC 20510.

        Dear Chair Murray and Ranking Member Burr:

        As Senate hearings begin tomorrow on the U.S. Food and Drug
    Administration (FDA) user fee renewal, I write to urge you to have a
    patient-focused hearing that allows the rare disease community to
    testify at Senate Health, Education, Labor, and Pensions (HELP)
    Committee. Simply put, the user fee renewal process will not be
    successful if it ignores the end users of the medicines in the hearing
    process, or rubberstamps a proposal without patient input.

        The overarching mission of the FDA user fee program is to provide a
    predictable and accountable regulatory framework that supports
    expedited FDA review and approval of pharmaceuticals and medical
    devices, ensuring Americans receive access to safe and effective
    products. Recognizing the importance of incorporating patient voices in
    the review and approval of medical products, the FDA, medical
    industries, and Congress have taken steps to encourage patient-focused
    drug and device development. Integrating patient perspectives with drug
    development is especially important for patients with rare, lesser
    known, progressive, and serious diseases and conditions, as well as for
    diseases with unmet clinical. It is therefore critical that the FDA
    user fee program incorporate patient experiences and perspectives,
    especially patients with rare diseases and unmet needs.

        In September 1992, Congress passed the Prescription Drug User Fee
    Act into law, authorizing the FDA to collect fees from pharmaceutical
    companies to review their product applications for approval. Since its
    enactment, Congress has reauthorized the user fee program every 5
    years, and is responsible for reauthorizing the program for the sixth
    time in September 2022. Over the last 30 years, the user fee program
    has expanded to include medical devices, generic drugs, and
    biosimilars. Importantly, the user fee program reauthorization process
    has evolved into an opportunity for Congress to direct FDA and medical
    industries to implement new policies for the benefit of patients,
    including 21st Century tools and techniques to address rare disease
    drug development.

        While the FDA, medical industries, and Congress have made great
    improvements to include patients and patient perspectives in the user
    fee program, there is still more to be done to ensure that patients
    with rare diseases receive representation and consideration for the
    September 2022 user fee reauthorization. For example, during the 2012
    and 2017 user fee reauthorization process, the Senate HELP Committee
    invited a witness to provide the patient perspective and testimony, in
    addition to witnesses from the pharmaceutical and medical device trade
    associations, at user fee reauthorization hearings. I commend the
    Committee for its efforts to ensure patient representation in user fee
    reauthorization discussions and hearings. However, I am concerned about
    the lack of representation of patients with rare diseases at upcoming
    HELP hearings, especially given the considerable number of provisions
    related to rare disease drug and device development included in FDA and
    industry's final user fee agreements for 2022.

        In general, rare and lesser known diseases present a unique set of
    challenges, particularly for drug and device development, clinical
    trial design, and patient access to therapies, that are not commonly
    experienced during traditional product development. For example,
    clinical trials for rare disease drugs often struggle to recruit and
    maintain a patient sample size large enough to generalize the data, as
    well as lack biomarkers and endpoints to adequately demonstrate
    efficacy. Despite increased efforts to address these issues and
    expedite approval of rare disease treatments, more than 90 percent of
    rare diseases have no treatment. \1\ Unfortunately, the current
    regulatory framework for rare disease product development has failed to
    support efficient development, review, and approval of treatments for
    rare diseases, further preventing patients from access to therapies.
    ---------------------------------------------------------------------------
        \1\  Nord, ``New Report Finds Medical Treatments for Rare Diseases
    Account for Only 11 percent of U.S. Drug Spending; Nearly 80 percent of
    Orphan Drug Products Treat Rare Diseases Exclusively,'' Mar. 4, 2021,
    https://rarediseases.org/new-report-finds-medical-treatments-for-rare-
    diseases-account-for-only 11-of-us-drug-spending-nearly-80-of-orphan-
    products-treat-rare-diseases-exclusively/#:-
    :text=Approximately%207%2C000%20known%20rare%20diseases,rare%20diseases%
    20 have%20no%20treatment.

        The FDA user fee program and reauthorization has helped modernize
    FDA regulatory requirements, establish new approval pathways, and
    improve the Agency and development process in tandem with medical and
    technological advancements to ensure expedited approval of products
    that benefit patients across the United States and globally. The FDA
    and industry fmal agreements reflect a shift in FDA and industry
    priorities to encourage and advance rare disease product development
    and accessibility. As a result, it is imperative that Senate ensures
    the rare disease community is represented by a witness in the on-going
    user fee reauthorization discussions held in the Senate HELP Committee
    to ensure the translational success of new policies incorporated into
    ---------------------------------------------------------------------------
    the final user fee agreement.

        For these reasons, I request that the Senate HELP Committee provide
    a full patient representative hearing from the rare and life
    threatening disease community in order to advance medical product
    regulation and innovation for the benefit of patients, including those
    diagnosed with rare diseases. I appreciate your attention to this
    request, and my staff and I are willing to help you both organize this
    hearing.

                Sincerely,
                                            Senator Mike Braun.
                                     ______

                            Questions for the Record

    Response by Cartier Esham to Questions From Senator Braun, and Senator
                                     Romney

                                 senator braun
        The PDUFA commitment letter stresses the importance of new programs
    to allow earlier patient access to therapies that address unmet medical
    needs and advance rare disease endpoint development.

        Question 1. What challenges exist in FDA's current framework for
    rare disease drug development? Does the PDUFA agreement go far enough
    to provide the necessary regulatory flexibilities to address these
    challenges?

        Answer 1. Due to the smaller than average patient populations
    affected by rare diseases, study recruitment, retention, and other
    factors that can inhibit adequate endpoint measurement, thus limiting
    drug development in these spaces. BIO supports the PDUFA VII Rare
    Disease Endpoint Advancement (RDEA) Pilot Program and its goal to
    advance and facilitate the development and timely approval of drugs and
    biologics for rare diseases, including rare diseases in children. The
    RDEA pilot is modeled after the Complex Innovative Trial and Model
    Informed Drug Development programs initiated under PDUFA VI, which
    provide foundational experience for a potentially successful rare
    disease pilot.

        The RDEA Pilot's aim to accept a proposal for a development program
    for a common disease that includes innovative or novel endpoint
    elements can allow for new rare disease treatments that utilize the
    most cutting-edge and patient-centric study designs to reach the right
    patients.

        Given the FDA Pilot's small allotment of a maximum three
    participating sponsors per year, we look forward to engaging with the
    Agency regarding the best ways to glean useful and broadly applicable
    data to inform our members, and most importantly, yield faster and
    better results for our rare disease patient community.

        Overall, we are optimistic that the RDEA pilot can provide
    learnings to the biotech and greater R&D community regarding surrogate
    endpoint use in rare disease drug development.
                                 senator romney
        U.S.-China Competition--FDA approval of a new drug or device does
    not grant the U.S. exclusive access to that drug or device. Companies
    aren't prohibited from also applying for approval in other countries,
    where regulatory bodies may move comparatively faster to approve new
    products.

        Question 1. Aside from the consumer health benefits, how does
    timely FDA approval promote American interests?

        Answer 1. BIO agrees that the timely approval of safe and effective
    medical products by FDA can mean the difference between death,
    disability, relief, or potentially a cure for American patients with
    urgent medical needs who lack other treatment options. We agree that
    beyond consumer health benefits, timely FDA approval promotes American
    interests in areas outside of patient outcomes.

        FDA approval is often considered the ``gold standard'' globally
    with respect to regulatory authority and rigor due to stringent safety
    and efficacy standards. This reputation of regulatory excellence and
    consistency has policy implications; for example, the US engages in
    Mutual Recognition Agreements (MRAs) with almost 30 other countries,
    allowing for a degree of reciprocity and data sharing between trusted
    health authorities if FDA deems those authorities capable of conducting
    inspections that meet US standards. In 2021 alone, almost half (27/60)
    of FDA's new drug approvals in the Center for Drug Evaluation and
    Research (CDER) and the Center for Biologics Evaluation and Research
    (CBER) were first-in-class. That same year, 76 percent of novel drugs
    approved were approved in the US before any other country. \1\, \2\
    Approval by FDA can indicate likelihood for approval by other health
    authorities. For example, a study indicated that FDA and the European
    Medicines Agency (EMA) had 91-98 percent concordance in decisions on
    marketing approvals between 2014 and 2016. \3\ Approval in multiple
    markets translates into more revenue for US-based sponsors, increasing
    their ability to conduct research and development on new innovative
    treatments to help more patients.
    ---------------------------------------------------------------------------
        \1\  https://www.fda.gov/media/155227/download.
        \2\  https://www.raps.org/news-and-articles/news-articles/2022/1/
    fda-approved-more-first-in-class-drugs-more-with-
    a#::text=Other%20drugs%20approved%20by%20CDER,treatment%20options.
        \3\  Kashoki, M., Hanaizi, Z., Yordanova, S., Vesely, R., Bouygues,
    C., Llinares, J. and Kweder, S.L. (2020), A Comparison of EMA and FDA
    Decisions for New Drug Marketing Applications 2014-2016: Concordance,
    Discordance, and Why. Clin. Pharmacol. Ther., 107: 195-202. https://
    doi.org/10.1002/cpt.1565.

        In addition to economic and financial benefits, timely FDA approval
    yields earlier availability of US-generated real-world evidence and
    real-world data (RWE/RWD). As soon as patients have access to new
    treatments, American academic institutions, health systems, software/
    technology companies, and other stakeholders can begin to harness and
    apply clinical outcome data generated by the use of these novel
    products. In addition to supporting regulatory submissions and
    decision-making, increased availability of RWE/RWD improves health
    equity for Americans. Such data enable the utilization of decentralized
    and non-traditional clinical trial locations, allowing for increased
    diversity in clinical trials that can improve our understanding of
    ---------------------------------------------------------------------------
    clinical outcomes for all American patients.

        Question 2. How does timely approval affect the rate and
    willingness of U.S.-based firms to invest in research and development?

        Answer 2. Bringing a drug to market in the US is associated with
    significant time, effort, resource expenditure, and risk for American
    companies. It can take anywhere from 10 to 15 years at an average cost
    of approximately $1 billion or more to advance a single drug or
    biological product from a promising idea to an approved product that
    benefits patients. \4\, \5\ Timely review and approval helps mitigate
    risks and opportunity costs associated with regulatory submissions for
    American firms.
    ---------------------------------------------------------------------------
        \4\  Olivier J. Wouters, Ph.D; Martin McKee, MD, DSc; Jeroen
    Luyten, Ph.D. Estimated Research and Development Investment Needed to
    Bring a New Medicine to Market JAMA. 2020, 323(9).
        \5\  Joseph A. DiMasi; Henry G. Grabowskibi; Ronald W. Hansen.
    Innovation in the pharmaceutical industry: New estimates of R&D costs.
    2016. Journal of Health Economics. 2016, Vol. 47.

        Every day that an approval is delayed translates into unrealized
    revenue for the sponsor of an application. Small companies with limited
    research and development budgets, or even new companies that are pre-
    revenue, are disproportionately impacted by such delays. These firms
    might only have the resources, staff, and facilities to manage a single
    product in their pipeline at a given time. Delayed approval results not
    only in financial impact but can also chill innovation efforts due
    solely to resource constraints. As approval timelines shorten, US-based
    firms are more likely and more able to invest in biopharmaceutical
    ---------------------------------------------------------------------------
    research and development.

        Question 3. How does U.S.-based research and development investment
    in medical products (drugs and devices) compare to Chinese-based
    investment?

        Answer 3. The biopharmaceutical industry is one of the largest
    economic sectors domestically and globally. A recent study indicated
    that total US medical and health research and development reached
    $245.1 billion in 2020. Specifically, US private industry accounts for
    66 percent of these investment dollars at $161.8 billion. \6\ During
    that same year, Chinese pharmaceutical research and development reached
    $187 billion. \7\
    ---------------------------------------------------------------------------
        \6\  U.S. Investments in Medical and Health Research and
    Development 2016-2020. Research! America. (n.d.). Retrieved April 29,
    2022, from https://issuu.com/researchamerica.
        \7\  Zhang, W. (2022, January 27). China: Pharmaceutical R&D
    spending 2023. Statista. Retrieved April 29, 2022, from https://
    www.statista.com/statistics/1202091/china-pharmaceutical-randd-
    spending/.

        According to census data from datacommons.org, American and Chinese
    populations in 2020 were 329.5 million and 1.402 billion, respectively.
    Using private industry spending data, we can estimate per capita
    research and development spending at $49.1 in the US and $62.1 in
    China.
                                     ______

     Response by David Gaugh to Questions From Senator Kaine, and Senator
                                     Romney

                                 senator kaine
        Mr. Gaugh, in your testimony you shared that as of March 2022, the
    FDA has licensed two interchangeable biosimilar products. We know that
    interchangeable biosimilars must produce the same clinical result as
    the brand-name biologic and that a pharmacist may dispense an
    interchangeable biosimilar when a brand-name biologic is prescribed
    without intervention from a provider. As you shared in the hearing, the
    development of biosimilars, and interchangeable biosimilars, has worked
    to reduce the price that patients pay at the drug counter. We also know
    this is a relatively new space and that we are still learning more
    about the best science and oversight in the development of these
    products.

        Question 1. Mr. Gaugh, which provisions of the BsUFA III agreement
    will help manufactures quickly develop additional interchangeable
    biosimilar products?

        Answer 1. Following enactment of the BPCIA in 2010, the first
    biosimilar was licensed by FDA in 2015. Today, a total of 35
    biosimilars including two interchangeable biosimilars--are now licensed
    in the United States. Biosimilar medicines are safe, effective and more
    affordable treatment options for patients than their brand-name
    counterparts. Biosimilars are already delivering on their promise of
    lower costs and expanded patient access to care with average prices of
    nearly 50 percent less than their reference biologics at time of the
    biosimilar's launch. Biosimilars represent much needed competition to
    the specialty medicines that now account for more than 55 percent of
    all drug spending.

        The interchangeable designation permits a pharmacist to dispense,
    subject to state law, an interchangeable biosimilar when a brand-name
    biologic is prescribed without intervention from the provider. It
    requires a biosimilar developer to demonstrate the same clinical result
    for its medicine as the brand-name biologic. It is important to note
    that the interchangeable designation is unique to the Unites States and
    is not an indication of superior quality.

        As part of the industry's negotiations with FDA, enhancements were
    made to help facilitate more timely patient access to interchangeable
    biosimilars. BsUFA III will help manufacturers to develop more
    interchangeable biosimilars through the new Regulatory Science
    Program's demonstration project. These demonstration projects will also
    evaluate mechanisms to streamline overall biosimilars development. In
    our view, the findings from these demonstration projects will inform a
    comprehensive strategy to advance interchangeability and the
    development of future guidance documents.

        We appreciate your interest and attention to the important role
    biosimilar medicines--and, in particular, interchangeable biosimilars--
    can play in lowering prescription drug costs. We would welcome the
    opportunity to further discuss how Congress could take steps to reduce
    the clinical burden on biosimilars and interchangeable manufacturers to
    ensure more timely patient access to low-cost medicines.
                                 senator romney
        U.S.-China Competition--FDA approval of a new drug or device does
    not grant the U.S. exclusive access to that drug or device. Companies
    aren't prohibited from also applying for approval in other countries,
    where regulatory bodies may move comparatively faster to approve new
    products.
        Question 1. Aside from the consumer health benefits, how does
    timely FDA approval promote American interests?
        Answer 1. In addition to the consumer health benefits, timely FDA
    approval of generic and biosimilar medicines benefits America's
    interests through increased market-based competition and lower health
    care costs. Experience shows drug prices decline rapidly when generics
    enter the market. According to FDA, prices fall as generics enter the
    market--by an average of 39 percent when there is only one generic and
    by nearly 80 percent when four or more generics enter the market.
    Evidence with biosimilar medicines is similar with an average cost
    savings of nearly 50 percent. Importantly, biosimilar competition also
    results in lower brand biologic prices--by more than 25 percent on
    average for brands with biosimilar competition.
        Over the last 10 years, generics and biosimilars provided more than
    $2 trillion in savings--including $469 billion from new generics and
    more than $12 billion from biosimilars--to patients and the U.S. health
    care system. In addition to the cost savings provided, patient access
    to life-saving treatments is broadened as the price of medicine falls.
    A recent analysis of Medicare Part D from the Congressional Budget
    Office noted ``the number of standardized prescriptions dispensed for
    generic drugs more than doubled from 2009 through 2018.'' And
    biosimilars have already resulted in more than 10 million additional
    patient days of treatment.
        GDUFA III and BsUFA III, as negotiated, will further these
    interests. Both GDUFA and BsUFA aim to put FDA's generic and biosimilar
    drug programs on firm financial footing by enabling FDA to assess user
    fees to fund critical and measurable enhancements and, in turn,
    bringing greater predictability and timeliness to the review of
    applications. As a direct outcome, the generic and biosimilars drug
    programs increase patient access to safe, effective and more affordable
    quality medicines.
        Question 2. How does timely approval affect the rate and
    willingness of U.S.-based firms to invest in research and development?
        Answer 2. Timely approval of generic and biosimilar medicines by
    FDA increases the likelihood generic and biosimilar developers will
    invest in bringing more affordable medicines to market going forward.
    AAM's member companies invest significant resources in building and
    operating U.S.-based facilities and in bringing generic and biosimilar
    medicines through FDA's approval process to market. Manufacturing sites
    can cost as much as $1 billion to build in the U.S. In addition, the
    development and approval of biosimilar medicines, for example, require
    8-10 years at a cost of $100 to $250 million.
        GDUFA III and BsUFA III ensure FDA has sufficient resources for
    review of generic and biosimilars applications, while building on the
    success and incorporating lessons learned over the last 10 years. As
    described in more detail in my written statement, GDUFA III and BsUFA
    III include a number of enhancements to ensure the timely review of
    applications over the next 5 years (FY23-27). Timely approval of the
    FDA user fee agreements ensures America's patients will continue to
    benefit.
        Question 3. How does U.S.-based research and development investment
    in medical products (drugs and devices) compare to Chinese-based
    investment?
        Answer 3. We do not have any data on how U.S.-based investment in
    the research and development of generic and biosimilar medicines
    compares to Chinese-based investment.
                                     ______

            Response by David Leahey to Questions From Senator Burr

                                  senator burr
        Question 1. Aside from the consumer health benefits, how does
    timely FDA approval promote American interests?

        Answer 1. There is broad bipartisan agreement on the importance of
    American patients gaining first access to American medical
    technologies, a goal shared by innovators, FDA and most importantly,
    patients. In addition to the health benefits, a timely and efficient
    FDA review of medical technologies strengthens the entire medical
    device ecosystem. Physicians, surgeons and all healthcare professionals
    are able to work collaboratively with innovators to improve existing
    technologies, as well as develop the next generation of cures,
    therapies and diagnostics here in the United States. Unnecessary
    regulatory delays also drive capital to markets outside the United
    States and weaken our Nation's global leadership in device innovation.
    It's in our collective public health, economic and national security
    interests that the U.S. remains the most attractive country in the
    world for medical device development and manufacturing.

        Question 2. How does timely approval affect the rate and
    willingness of U.S.-based firms to invest in research and development?

        Answer 2. FDA has made significant progress since 2009. At that
    time, FDA's performance slipped and as a result venture investments
    fled the device markets. Thankfully, Congress intervened and passed key
    reforms to improve FDA's review programs. FDA, to their credit, has
    made improvements since then, and our expectation is that the $2B in
    new resources provided under the MDUFA V agreement--a doubling of fees
    from the current MDUFA--will build on this progress. Still, the harsh
    reality remains that every dollar spent on research and development
    carries risk, and many ventures fail. Ongoing improvements in
    transparency, consistency and accountability at FDA will help ensure
    that research and development investments in new medical technologies
    continue.

        Question 3. How does U.S.-based research and development investment
    in medical products (drugs and devices) compare to Chinese-based
    investment?

        Answer 3. While there has always been shifts in venture capital
    investments and others who support the medical technology ecosystem,
    there has been an alarming trend of the majority of investments being
    made in later stage companies. This is certainly necessary and
    beneficial to patient care, but it is critical that investments are
    also being made in early stage companies and startups. Reports show
    that there are ongoing increases in these types of investments in China
    with direct support from the Chinese government. In fact, the People's
    Republic of China identified medical technologies as a critical sector
    of investment as part of their Made in China 2025 industrial policy to
    grow indigenous industries. Keeping the Chinese market open to U.S.
    exports is critical to U.S. manufacturers, but improvements to the
    regulation and reimbursement of medical technologies in the United
    States will protect our Nation's leadership position in this vibrant
    industry.

        Question 4. How confident are device manufacturers these
    adjustments will incentivize the FDA to meet its own commitment's?

        Answer 4. The milestones and commitments contained in the MDUFA V
    draft agreement are designed to help ensure that the investments being
    made by industry will strengthen patient care and innovation. As the
    agency works to maintain its gold standard of providing safe and
    effective medical technologies to the public, we are confident that the
    structure of the agreement before Congress will achieve our shared goal
    of protecting the United States' leadership position in medical
    technology innovation. Ongoing congressional oversight will also play a
    central role to ensure that these important goals are met.

        Question 5. How confident are device manufacturers that the FDA's
    methods for measuring and reporting on hiring goals will provide both
    accurate and reliable data?

        Answer 5. During the MDUFA V negotiations, it was concerning to
    learn that FDA was unable to identify how many MDUFA I-IV funded
    positions were vacant. FDA did implement a tracking system for MDUFA IV
    hires and has committed to an independent assessment during MDUFA V to
    better assess workforce tracking and management. Given the significance
    increase in funding under MDUFA V, it is a reasonable expectation that
    FDA will do more to ensure timely hiring for new positions and existing
    vacancies during MDUFA V and beyond. The results of the independent
    assessment, coupled with FDA's annual financial report to Congress,
    should provide more transparency into these workforce issues and any
    gaps that need to be filled.
                                     ______

        [Whereupon, at 11:49 a.m., the hearing was adjourned.]

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