[Congressional Record (Bound Edition), Volume 162 (2016), Part 1]
[Senate]
[Pages 1390-1391]
[From the U.S. 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

[[Page 1391]]

     India were inspected much less frequently than American 
     companies, putting American 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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