[Congressional Record Volume 162, Number 21 (Thursday, February 4, 2016)]
[Senate]
[Pages S666-S667]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
GENERIC DRUG USER FEE AMENDMENTS: ACCELERATING PATIENT ACCESS TO
GENERIC DRUGS
Mr. ALEXANDER. Mr. President, I ask unanimous consent to have printed
in the Record a copy of my remarks to the Senate Committee on Health,
Education, Labor, and Pensions.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Generic Drug User Fee Amendments: Accelerating Patient Access to
Generic Drugs
In December, the president signed into law the Every
Student Succeeds Act, a bill to fix No Child Left Behind and
proof that this committee can work together to tackle very
difficult issues.
But a law not properly implemented isn't worth the paper
it's written on, which is why I'm going to be working with
Senator Murray to set up a strong oversight process during
2016 to make sure the teachers, governors, chief state school
officers, parents and students who counted on us to fix that
law see that it's implemented properly.
We're here today for a similar purpose: to conduct
oversight of the 2012 Food and Drug Administration (FDA)
Safety and Innovation Act--specifically the law's Generic
Drug User Fee Amendments, which are fees negotiated between
the FDA and generic drug makers to give the agency additional
resources intended to speed the review of generic drugs.
This is Congress' first oversight hearing since these
agreements were passed in 2012, and it comes at a critical
time for patients: Despite the FDA receiving nearly $1
billion in user fees since 2012 as a result of these user fee
agreements, performance is not living up to Congress' or
patients' expectations, as the number of generic drugs
approved per year remains about the same.
The user fee agreements are due to be reauthorized next
year, and discussions between the FDA and industry are
already underway--making now the appropriate time for us to
better understand whether or not these 2012 agreements are
working to give Americans better access to generic drugs.
The generic drug program, established by the Hatch-Waxman
Amendments over 30 years ago, has had great success
increasing competition and lowering drug prices.
The program was created to make it easier for generic drugs
to enter the market.
Let me quickly explain how this works: Once a drug is
approved by the FDA, for example, Lipitor--which is widely
used to help lower cholesterol--no other manufacturer can
make that drug for a period of time. When that period of time
expires, a manufacturer may make a copy of that drug--and we
call that a generic drug.
That generic copy must also have FDA approval.
This generic approval process doesn't include full clinical
trials, which often are long and expensive, contributing to
higher prices for brand drugs.
As a result, more generic drugs in the market creates
competition and lowers prices for consumers.
And today, 88 percent of prescription drugs purchased in
the United States are generic drugs.
However, in 2012, 26 years after the law first passed, it
became clear the generic drug approval program needed an
overhaul.
More generic drugs were coming from overseas. Generic drug
companies in China and India were inspected much less
frequently than American companies, putting American
[[Page S667]]
companies at a disadvantage and, more importantly, putting
patients at risk.
There was a backlog of 4,700 applications waiting to be
reviewed, and the median approval time to get review of a
generic drug was 30 months, far surpassing the 180-day
timeframe for review as laid out in the Hatch-Waxman
amendments in 1984.
Additionally, in 2012, many generic sterile injectable
drugs were in shortage, causing doctors and hospitals to
scramble to ensure patients were getting the best treatment
possible.
To address these problems, Congress passed the first
Generic Drug User Fee Amendments (often referred to by its
acronym GDUFA or as congressional staff and industry insiders
call it--``Ga-DOO-Fa'') as part of the FDA Safety and
Innovation Act.
This built on the success of similar agreements that
Congress had previously passed between drug and device
manufacturers and their regulators in the FDA.
This user fee agreement was the first agreement between the
generic industry and the FDA on how to improve the review
process for generic drugs.
With the enactment of these amendments, Congress
anticipated:
One: that generic drug facilities abroad would be brought
up to the same standards as facilities in the United States;
and
Two: that American patients would benefit from faster
approval of generic drugs. These two actions would bring more
competition to the market and lower the price of drugs for
consumers.
But there are concerns about the implementation of this
program.
Some progress has been made on the backlog of applications
for generic drugs--some progress, but certainly not enough.
In 2012 there was a backlog of 4,700 pending applications and
that has now dropped to just over 3,500 applications pending
approval, according to the Generic Pharmaceutical
Association.
The HHS Inspector General has reported that the FDA is
improving its inspections abroad, one of the important goals
of the user fee agreements.
But, the troubling news is that it is taking longer for the
FDA to get drugs through the approval process, and according
to a survey of generic drug makers, the median approval times
have slowed from 30 to 48 months.
According to one estimate, once there are six or more
generic competitors, a drug costs about 10 percent of the
brand price--so, these slower approval times mean less
competition and higher costs for consumers.
This slowdown in approval time is despite the fact that the
FDA has received nearly $1 billion in user fees since this
law was passed--that's funding that is on top of the money
that Congress annually provides to the FDA through the
appropriations bill.
That's about $300 million a year, or 20 percent of the
total amount that the FDA spent researching, inspecting, and
reviewing all drugs--generic and brand name alike--in fiscal
year 2015.
I understand that the FDA has met most of the goals laid
out in the agreement for industry user fees for regulatory
actions, hiring staff, and increasing inspections.
But I look forward to hearing whether these metrics are the
most appropriate, given I continue to hear that generic drug
approval is too slow from manufacturers and patients.
While industry provides funding according to the agreement,
the American taxpayer, through the Congressional
appropriations process, provided over 40 percent for the
generic drug review program in fiscal year 2014, according to
the FDA's financial report.
But the data points that matter to American people are
generic drug approval times and the number of approvals,
which to them mean increased market competition, a reduction
in drug shortages, and more, lower-cost drugs available for
patients.
Another issue we're hearing a lot about is drug pricing--
and here are some points to consider:
One: While the cost of drugs is a legitimate concern for
many Americans--it's part of an even larger problem of rising
health care costs.
Just this week, the Congressional Budget Office (CBO)
announced in its annual ``Budget and Economic Outlook'' that
for the first time, federal spending for the major health
care programs (Medicare, Medicaid, SCHIP, Obamacare)
represents the largest fraction--more than 60 percent--of the
projected growth in mandatory spending in 2016. CBO notes
that this spending is partially driven by the increase in per
capita health care costs.
Two: While we work to lower the cost of drugs, we need to
invest in and incentivize the development of life-saving
therapies.
Congress last year added $2 billion in the appropriations
process, bringing NIH's total budget in FY2016 up to around
$32 billion--but this is still less than what's spent in the
private sector.
Members of the Pharmaceutical Manufacturers of America, who
only represent a portion of the market, spent over $50
billion in FY2014 alone coming up with new cures and
treatments.
The clinical trials required to prove that medicine is safe
cost hundreds of millions of dollars, even for the ninety
percent of drugs that fail. In addition, the regulatory
approval process is lengthy, which also adds costs.
As a result of this effort, biotech and drug companies big
and small have done remarkable things to help patients with
diseases like HIV, Cystic Fibrosis, and cancer live longer,
healthier lives--a critical development we do not want to
interrupt.
Third: To best restrain the growth of drug prices we must
encourage investment in life-saving therapies, avoid
unnecessary regulatory burdens that slow down development and
drive up costs, and ensure the marketplace remains
competitive.
For the past year, this committee--in a bipartisan way--has
been looking at ways to reduce unnecessary regulatory burden
so we can get safe, innovative, life-saving therapies into
patients' medicine cabinets more quickly.
At the same time, Sens. Collins and McCaskill, leaders of
the Aging Committee, have been examining what improvements
may be necessary to ensure that the FDA expedites
applications for generic drugs to keep the marketplace
competitive, which will help keep drug prices down, and I
look forward to working with them on that effort.
The generic drug industry really is a remarkable story.
Over the last 30 years--generic drugs have gone from a very
small fraction of the marketplace to 88 percent. It's hard to
imagine what the prescription drug market would look like
today without generic drugs.
I look forward to hearing from our witness today to learn
more about where Congress can help make improvements to the
regulatory process and ensure that the FDA has the tools it
needs to create a generic drug review system that functions
as Congress intended and as American patients and taxpayers
deserve.
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