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REAUTHORIZATION OF THE MEDICAL DEVICE

USER FEE AND MODERNIZATION ACT

HEARING

BEFORE THE

SUBCOMMITTEE ON HEALTH

OF THE

COMMITTEE ON ENERGY AND

COMMERCE

HOUSE OF REPRESENTATIVES

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

MAY 16, 2007

Serial No. 110–47

(

Printed for the use of the Committee on Energy and Commerce

energycommerce.house.gov

COMMITTEE ON ENERGY AND COMMERCE

JOHN D. DINGELL, Michigan, Chairman

HENRY A. WAXMAN, California

EDWARD J. MARKEY, Massachusetts

RICK BOUCHER, Virginia

EDOLPHUS TOWNS, New York

FRANK PALLONE, JR., New Jersey

BART GORDON, Tennessee

BOBBY L. RUSH, Illinois

ANNA G. ESHOO, California

BART STUPAK, Michigan

ELIOT L. ENGEL, New York

ALBERT R. WYNN, Maryland

GENE GREEN, Texas

DIANA DEGETTE, Colorado

Vice Chairman

LOIS CAPPS, California

MIKE DOYLE, Pennsylvania

JANE HARMAN, California

TOM ALLEN, Maine

JAN SCHAKOWSKY, Illinois

HILDA L. SOLIS, California

CHARLES A. GONZALEZ, Texas

JAY INSLEE, Washington

TAMMY BALDWIN, Wisconsin

MIKE ROSS, Arkansas

DARLENE HOOLEY, Oregon

ANTHONY D. WEINER, New York

JIM MATHESON, Utah

G.K. BUTTERFIELD, North Carolina

CHARLIE MELANCON, Louisiana

JOHN BARROW, Georgia

BARON P. HILL, Indiana

JOE BARTON, Texas

Ranking Member

RALPH M. HALL, Texas

J. DENNIS HASTERT, Illinois

FRED UPTON, Michigan

CLIFF STEARNS, Florida

NATHAN DEAL, Georgia

ED WHITFIELD, Kentucky

BARBARA CUBIN, Wyoming

JOHN SHIMKUS, Illinois

HEATHER WILSON, New Mexico

JOHN B. SHADEGG, Arizona

CHARLES W. ‘‘CHIP’’ PICKERING,

Mississippi

VITO FOSSELLA, New York

STEVE BUYER, Indiana

GEORGE RADANOVICH, California

JOSEPH R. PITTS, Pennsylvania

MARY BONO, California

GREG WALDEN, Oregon

LEE TERRY, Nebraska

MIKE FERGUSON, New Jersey

MIKE ROGERS, Michigan

SUE WILKINS MYRICK, North Carolina

JOHN SULLIVAN, Oklahoma

TIM MURPHY, Pennsylvania

MICHAEL C. BURGESS, Texas

MARSHA BLACKBURN, Tennessee

PROFESSIONAL STAFF

DENNIS B. FITZGIBBONS, Chief of Staff

GREGG A. ROTHSCHILD, Chief Counsel

SHARON E. DAVIS, Chief Clerk

BUD ALBRIGHT, Minority Staff Director

(II)

(III)

SUBCOMMITTEE ON HEALTH

FRANK PALLONE, JR., New Jersey, Chairman

HENRY A. WAXMAN, California

EDOLPHUS TOWNS, New York

BART GORDON, Tennessee

ANNA G. ESHOO, California

GENE GREEN, Texas

Vice Chairman

DIANA DEGETTE, Colorado

LOIS CAPPS, California

TOM ALLEN, Maine

TAMMY BALDWIN, Wisconsin

ELIOT L. ENGEL, New York

JAN SCHAKOWSKY, Illinois

HILDA L. SOLIS, California

MIKE ROSS, Arkansas

DARLENE HOOLEY, Oregon

ANTHONY D. WEINER, New York

JIM MATHESON, Utah

JOHN D. DINGELL, Michigan (ex officio)

NATHAN DEAL, Georgia,

Ranking Member

RALPH M. HALL, Texas

BARBARA CUBIN, Wyoming

HEATHER WILSON, New Mexico

JOHN B. SHADEGG, Arizona

STEVE BUYER, Indiana

JOSEPH R. PITTS, Pennsylvania

MIKE FERGUSON, New Jersey

MIKE ROGERS, Michigan

SUE WILKINS MYRICK, North Carolina

JOHN SULLIVAN, Oklahoma

TIM MURPHY, Pennsylvania

MICHAEL C. BURGESS, Texas

MARSHA BLACKBURN, Tennessee

JOE BARTON, Texas (ex officio)

(V)

C O N T E N T S

Page

Hon. Frank Pallone, Jr., a Representative in Congress from the State of

New Jersey, opening statement .......................................................................... 1

Hon. Nathan Deal, a Representative in Congress from the State of Georgia,

opening statement ................................................................................................ 3

Hon. Henry A. Waxman, a Representative in Congress from the State of

California, opening statement ............................................................................. 3

Hon. Mike Ferguson, a Representative in Congress from the State of New

Jersey, opening statement ................................................................................... 4

Hon. Lois Capps, a Representative in Congress from the State of California,

opening statement ................................................................................................ 5

Hon. Joseph R. Pitts, a Representative in Congress from the State of Pennsylvania, opening statement .................................................................................... 5

Hon. Diana DeGette, a Representative in Congress from the State of Colorado, opening statement ...................................................................................... 7

Hon. Heather Wilson, a Representative in Congress from the State of New

Mexico, opening statement .................................................................................. 8

Hon. Darlene Hooley, a Representative in Congress from the State of Oregon,

opening statement ................................................................................................ 9

Hon. Marsha Blackburn, a Representative in Congress from the State of

Tennessee, opening statement ............................................................................ 10

Hon. Tim Murphy, a Representative in Congress from the State of Pennsylvania, opening statement .................................................................................... 11

Hon. Gene Green, a Representative in Congress from the State of Texas,

opening statement ................................................................................................ 11

Hon. John D. Dingell, a Representative in Congress from the State of Michigan, prepared statement ...................................................................................... 12

WITNESSES

Jeffrey Shuren, M.D., J.D., Assistant Commissioner for Policy, Food and

Drug Administration ............................................................................................ 14

Prepared statement .......................................................................................... 16

Accompanied by Daniel G. Schultz, M.D., Director, Center for Devices

and Radiological Health, Food and Drug Administration

Answers to submitted questions ...................................................................... 141

Paul Laviolette, chief operating officer, Boston Scientific Corporation ............... 50

Prepared statement .......................................................................................... 53

Diana Zuckerman, president, National Research Center for Women and Families ......................................................................................................................... 60

Prepared statement .......................................................................................... 63

Additional material .......................................................................................... 126

Kelvyn Cullimore, Jr., MDMA secretary, president and chief executive officer,

Dynatronics Corporation ..................................................................................... 68

Prepared statement .......................................................................................... 70

Steven A. Grossman, executive director, the FDA Alliance ................................. 79

Prepared statement .......................................................................................... 81

Diane E. Dorman, vice president, public policy, National Organization for

Rare Disorders ...................................................................................................... 88

Prepared statement .......................................................................................... 91

SUBMITTED MATERIAL

Premier Incorporated, submitted statement ......................................................... 117

Letter of May 7, 2007, from Members of Congress to Commissioner Andrew

C. Von Eschenbach .............................................................................................. 122

(1)

REAUTHORIZATION OF THE MEDICAL DEVICE

USER FEE AND MODERNIZATION ACT

WEDNESDAY, MAY 16, 2007

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON HEALTH, COMMITTEE ON ENERGY AND COMMERCE, Washington, DC.

The subcommittee met, pursuant to call, at 10:00 a.m., in room

2322 of the Rayburn House Office Building, Hon. Frank Pallone,

Jr. (chairman) presiding.

Members present: Representatives Pallone, Waxman, Eshoo,

Green, DeGette, Capps, Hooley, Matheson, Deal, Shadegg, Pitts,

Ferguson, Murphy, and Burgess.

Staff present: John Ford, Jack Mariho, Bobby York, Virgil Miller,

Melissa Sidman, Ryan Long, Nandan Kenkeremath, and Chad

Grant.

OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW JERSEY

Mr. PALLONE. We will call the meeting to order. Today we are

having a hearing on the reauthorization of the Medical Device User

Fee and Modernization Act and I will recognize myself for an opening statement. First of all, good morning and thank you for being

here today. I know we have two panels and you are the first one.

We will start out with opening statements, though, and then we

will go to the panel.

Recent innovations in medical devices have provided us with new

possibilities in treating illness and delivering healthcare services.

Today we are witnessing medical innovations that would have been

considered unthinkable just a few years ago but now are considered

commonplace. New breakthroughs in medical device technology

have empowered patients and providers to achieve better clinical

outcomes with less invasive procedures and shorter recovery times.

As the medical device industry continues to innovate, we, as policymakers, have a responsibility to ensure that the FDA has the financial and human resources necessary to provide for a timely review of the latest inventions in medical technology.

In an attempt to achieve this goal, Congress passed the Medical

Device User Fee and Modernization Act, or MDUFMA, of 2002,

which established for the first time a user fee program for medical

devices that was modeled after the Prescription Drug User Fee

Program, which we are also working to reauthorize this year. This

legislation was necessary due to inadequate resources at the FDA.

2

As applications began to pile up, it became clear that there was a

need to implement a new revenue stream to improve the time in

which new and innovative medical devices could be approved by

FDA, and that is as true today as it was 5 years ago.

While FDA has been meeting its performance goals under

MDUFMA I, the demand on FDA to ensure that devices are safe

and effective has grown significantly in the past few years and will

continue to do so. Innovations in the medical device industry that

will transform our healthcare system will continue to rapidly develop and will likely require even greater resources from the FDA.

But accordingly, it is important that this committee reauthorize

MDUFMA so that FDA can continue to fulfill its job of regulating

medical devices and safeguarding the public health.

I want to thank all of the people that worked hard to bring this

proposal together. Having had the chance to review it, though, I do

have some concerns. First and foremost, noticeably absent from the

proposals appears to be any provisions relating to post-market surveillance of medical devices. In MDUFMA I, there was an authorization for appropriations for post-market surveillance activities.

Even though these funds were never appropriated under the previous Republican-led Congresses, at least there was some recognition about the need to fund post-market surveillance activities.

There are no such provisions in the MDUFMA II proposal that I

am aware of.

This obviously raises some concerns for me. Most importantly, for

anyone who has been paying attention to the Prescription Drug

User Fee Act, PDUFA, which has been reauthorized a number of

times, that in the first few reauthorizations to that program, user

fees were mostly set aside to fund pre-market activities, largely ignoring any of the post-market responsibilities at FDA to ensure

that drugs are safe once they are already on the market. Under the

MDUFMA II proposal, I see a recurring pattern where, once again,

FDA and the industry have managed to agree on performance goals

for achieving expedited review of medical devices, but failed to address the post-market surveillance issues, which are equally as important, so we will have to take a long and hard look at this and

it may be necessary to ensure some of the user fees collected under

MDUFMA II are designated for post-market surveillance activities.

On another issue, I am also concerned about the reprocessing of

single-use devices, or SUDs. MDUFMA I attempted to address the

potential risk of infection and device malfunction that might arise

from the reprocessing of single-use devices. Over the past year I

have been following this issue closely, especially in my home State

of New Jersey, and I continue to be alarmed about the reprocessing

of SUDs and at a minimum believe that patients should be made

aware of when a single-use device that has been reprocessed is

being used on them during a procedure. As this problem persists,

I am worried that the MDUFMA II proposal does not focus on

SUDs at all, with the exception that SUD reprocessors pay the proposed annual establishment fee, and further regulation may be required.

In closing, I just want to say that I know, during the first

MDUFMA authorization, there was tremendous bipartisan support

within our committee to reach an agreement on behalf of patients,

3

providers and the industry. I hope that we can proceed in a similar

fashion as we move forward with reauthorizing this program, because the health and wellbeing of many of my friends, family and

constituents certainly depend upon it. And I would like to now recognize the ranking member, Mr. Deal.

OPENING STATEMENT OF HON. NATHAN DEAL, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF GEORGIA

Mr. DEAL. Thank you, Mr. Chairman. I will be brief. The Medical

Device User Fee Program was first enacted in 2002 to try to improve FDA’s device review capabilities to get safe and effective devices to patients more quickly. Like any new program, it has experienced its own challenges in achieving that goal, some of which

Congress has already had to address through legislation.

As we evaluate reauthorization for the first time, I know some

of the problems like funding adequacy and fee predictability have

helped to form changes in the reauthorization proposal before us.

Small businesses are a vital component of the medical device industry and I was pleased to see that the agreement reached between the FDA and industry sought to balance the diverse needs

of both small and large manufacturers.

I look forward to hearing the witnesses’ thoughts on some of the

successes and shortcomings of the program and I am sure their testimony will be helpful to our committee as we attempt to reauthorize the legislation. I yield back.

Mr. PALLONE. Thank you. Mr. Waxman.

OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA

Mr. WAXMAN. Thank you, Mr. Chairman. Medical devices are

certainly important and they are growing in importance and in

complexity. We need these devices for so many different purposes.

Contact lenses improve our vision, artificial joints help people walk,

and pacemakers keep many alive and well. With this growth in

medical devices, the challenges are growing as well for the Food

and Drug Administration and FDA needs adequate resources to

meet these challenges.

Under the 2007 negotiated package, the Device Center would receive an increase in user fees, but I am concerned, however, that

that is not nearly enough to make up for what has been years of

underfunding. I am worried that exchange for what is only a modest increase in user fees, FDA is now making a commitment to conduct even faster reviews of medical devices. If the effect of these

performance goals is to hinder FDA’s ability to conduct thorough

and complete reviews, it is the American public that will suffer

from an exposure to unsafe and ineffective devices. Now that is before the drug is approved. But we also need to be aware of the fact

that there must be a surveillance after the device—I said drug—

device has been approved, but we need to be aware of and to deal

with the post-marketing problems in this area, as we must in the

pharmaceutical area.

If FDA is seeking to speed up its review of device applications,

I think we need to examine whether there are adequate resources

4

to effectively monitor and oversee the safety of these devices once

they are on the market. The attention and resources directed at

conducted speedier reviews has apparently detracted from other responsibilities like inspections. More than 20,000 firms now produce

medical devices for the U.S. market and at the current rate, FDA

will inspect a device firm only about once every 10 years on average, this despite the fact that FDA is required by law to conduct

inspections once every 2 years.

I am also troubled by the proposed changes to FDA’s Third-Party

Inspection Program. Under this program companies can pay a fee

to get an inspection by an outside person accredited by FDA. To

date we have seen very poor results from this. FDA has spent $3

million implementing it and there have been a total of three inspections by these third parties and I am concerned that we are allowing outsiders to do what is essentially an FDA job. Yet the negotiated proposal contains provisions that would expand its use. Instead of putting resources into training outsider parties to conduct

inspections, we should be getting those desperately needed dollars

into FDA’s own inspection program.

We owe it to FDA and the American public to ensure FDA has

the resources and authority it needs to guarantee our medical devices are safe and effective, both before they go on the market and

throughout their lifecycle. I look forward to hearing from witnesses

on this subject and how we can accomplish these goals. I wish we

weren’t even asking for user fees. We ought to pony up the appropriations necessary because of the essential government purpose of

having an FDA. If user fees are going supplement those appropriations, we ought to make sure that there are enough appropriations

to go along with the user fees so FDA can do the job before it.

Thank you, Mr. Chairman.

Mr. PALLONE. Thank you, Mr. Waxman. Mr. Ferguson.

OPENING STATEMENT OF HON. MIKE FERGUSON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW JERSEY

Mr. FERGUSON. Thank you, Mr. Chairman, and thanks for holding this hearing and I know we have two distinguished panels of

witnesses today, so I too will be brief.

I was listening to Mr. Waxman talk about the different devices

and products that fall under this program and I am thinking to

myself, my dad has two artificial hips, my father-in-law has two artificial knees, I think I am a ticking time bomb, but I think every

one of us, if we haven’t in our life had an opportunity to use or benefit from one of these devices, we certainly will, probably, sometime

in the future and it really highlights how important the Medical

Device User Fee Program has become.

It has been successful. It has facilitated the approval and the

breakthrough for medical devices and allowing them to reach the

market and to benefit patients. It is essential that we reauthorize

this program soon, so that the FDA has the resources it needs to

ensure that the public and our constituents have access to safe and

effective medical devices. I certainly look forward to hearing from

our two panels of witnesses today and thank you, Mr. Chairman,

for holding this hearing and I yield back.

5

Mr. PALLONE. Thank you. Mrs. Capps.

OPENING STATEMENT OF HON. LOIS CAPPS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA

Mrs. CAPPS. Thank you, Chairman Pallone, for holding this hearing, and to our witnesses for your testimony. I have served in Congress 9 years now and even during this time, we have all seen such

an incredible jump in the number of medical devices being created

and put out on the market. Those of us who represent districts in

California note that our State has been a leader in this industry

and it is not going down, it is continuing to advance.

Clearly the spike in applications has created a drain on FDA and

thus, this Congress has enacted MDUFMA, but of course, the formulas were unpredictable and we had to come in and institute lastminute fixes to ensure predictable revenues for the Food and Drug

Administration. And I think this is really important to keep in

mind as we move to reauthorize MDUFMA, because it highlights

the need to place more weight on appropriated funding rather than

on user fees.

In my opinion, we have allowed PDUFA fees to control too great

a percentage of the Food and Drug Administration’s budget for

drug approval and I hope our colleagues will join me in ensuring

that we keep the user fees for device approval at a lower percentage so that we can better ensure integrity and avoid conflicts of interest. And speaking of conflicts of interest, I think we need to be

extremely careful in how we address the issue of third-party inspections. Anything we can do to address and enhance the safety

of devices is welcomed by all of us, but we need to make sure that

we ensure that safety inspections are conducted by truly independent actors. And not be those with the financial interest in having

the product out on the market. The consequences are way more expensive if we don’t do that. It is basic common sense.

Finally, I hope that we can discuss disparities in the medical device field. We have found that devices are being manufactured with

adult males in mind, even though women and children have a need

for them as well. Our committee is slated to discuss pediatric devices on another day, but I hope we can discuss the ways in which

we can utilize MDUFMA reauthorization process to encourage innovation in devices that suit the needs of women. So I hope, Mr.

Chairman, that you are going to be amenable to that and again,

thank you in advance to our witnesses and I look forward to the

discussions today and I yield back.

Mr. PALLONE. Thank you. Mr. Pitts.

OPENING STATEMENT OF HON. JOSEPH R. PITTS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF PENNSYLVANIA

Mr. PITTS. Thank you, Mr. Chairman, and thank you for convening this hearing today on MDUFMA reauthorization.

Before 2002, the government funded the approval process for

medical devices. It was really a mess. It significantly delayed FDA

approval of new lifesaving medical devices and prevented patients

from benefiting from new technologies, and to end this delay, as

was noted, Congress unanimously passed the MDUFMA act in

6

2002 and it overcame the obstacles at the FDA that prevented

timely approval of new lifesaving medical technologies without

compromising the safety of consumers, and created a stable funding base for FDA, combining industry-paid user fees and congressional appropriations and as a result, the device approval time has

been virtually cut in half.

And as we all know, unless Congress acts to reauthorize this successful program, it will sunset on October 1 of this year. And if we

do not reauthorize the program in a timely fashion, FDA may be

forced to issue a reduction-in-force notices to its employees. Federal

regulations mandate that FDA must issue these notices at least 60

days prior to the expiration of the current MDUFMA program and

this possibility could lead to a loss of highly qualified staff, staff

who could easily find more lucrative employment elsewhere.

So on the whole, I believe the agreement reached between FDA

and the industry is a good one and I would urge my colleagues to

work toward a speedy reauthorization. And I would like to thank

all of the witnesses who have come today. We look forward to your

testimony and I hope that we don’t find our self in the situation

that I have talked about, in the future, and I yield back the balance of time.

Mr. PALLONE. Thank you. The gentlewoman from California, Ms.

Eshoo.

OPENING STATEMENT OF HON. ANNA G. ESHOO, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA

Ms. ESHOO. Good morning, Mr. Chairman, and to our witnesses.

Thank you for holding this important hearing on reauthorizing

MDUFMA. As my colleagues know, I worked very hard with Mr.

Barton and Mr. Greenwood, our former colleague, to enact the first

authorization of MDUFMA 5 years ago and I think that it has been

a success. Reauthorizations are very important because it gives us

the opportunity to strengthen legislation, having the opportunity of

looking over our shoulders to see how the original legislation has

worked.

In the last 5 years, since the original authorization was passed,

user fees have substantially increased the financial resources that

FDA needs to review new products. FDA has been able to hire

more employees, upgrade its equipment and increase its personnel

expertise, which is very, very important in a complex area. In fact,

the American people depend on that. The establishment of a thirdparty inspection program has helped ensure that manufacturing

plants are inspected on a more regular basis by allowing FDA to

utilize outside accredited inspectors to conduct inspections and provide reports to FDA. That was a real point of contention when we

first authorized and it should be, because it is a very, very important determination to be made. So while I think that that was important and we did, I think, a pretty solid job in coming to consensus, I don’t think that it is entirely safe to say that the program

is perfect, but we have the opportunity to do that.

So with authorization, I think that we can improve, overall, the

operations at FDA. I think we need to take a careful look at the

length of time it takes for new devices to come to market, consider

7

ways that will expedite the approval process without compromising, of course, patient safety. I think we need to increase the industry’s participation in the Third-Party Inspection Program and also

improve the quality and the type of information FDA has access to

regarding medical devices that are manufactured and marketed in

our country.

Another area, Mr. Chairman, that I have a lot of concern about

is that of pediatric device safety and we know that because children are still in stages of development, that that presents a difficult challenge for companies developing and manufacturing devices to keep up with growing bones and organs. And children experience unique side effects that we don’t see in adult populations.

So I think Congress has made some progress in enacting and enforcing pediatric drug testing laws, which I have had my hand in,

but I think that we can do better with regard to devices. Mr. Markey and Mr. Rogers have offered legislation in this area and I hope

that we will address the pediatric device issue in our reauthorization of MDUFMA.

So in closing, I would like reiterate my support for this. I have

some ideas about how to make it stronger and better and I think

that all of the stakeholders in this have done an initial good job

of reaching some consensus and I look forward to working with everyone to not only reauthorize but be one of the real cheerleaders

after we finish with it in saying job well done. Thank you, Mr.

Chairman.

Mr. PALLONE. Thank you. I think most of you know, but I will

just mention it again, that next Tuesday we are going to have a

hearing on the pediatric bills that need to be reauthorized. That is

not to suggest that you can’t get into that today, but we are going

to have a separate hearing on the pediatric bills that need to be

reauthorized next Tuesday. Next is Mr. Burgess.

Mr. BURGESS. Thank you, Mr. Chairman. I will submit my statement for the record. I do want to thank the witnesses for participating in this with us this morning and I think it is going to be

lively and instructional and I look forward to their testimony. I

yield back.

Mr. PALLONE. Thank you. Ms. DeGette.

OPENING STATEMENT OF HON. DIANA DEGETTE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF COLORADO

Ms. DEGETTE. Thank you very much, Mr. Chairman, for holding

this hearing today. As the parent of a child who uses two medical

devices every day to manage her Type I diabetes, I am acutely

aware of how important they are to the health and wellbeing of

millions of Americans. It is important, therefore, that we provide

a stable source of funding to the FDA to assess the safety and efficacy of these devices before they can be marketed.

When the committee originally authorized MDUFMA in 2002, I

authored the language that was added to the bill requiring the Institute of Medicine to conduct a study to determine whether the

FDA system for post-market surveillance of medical devices provides adequate safeguards for their use in pediatric populations.

Mr. Chairman, I know we are talking about pediatrics next week.

8

I won’t be here because I have the honor of attending my elder

daughter’s high school graduation next week. So I just want to talk

for a minute about my views on pediatrics today.

The IOM study which was released in 2005 details a number of

important recommendations for further protection of children using

medical devices. Specifically, the report cited a number of recommendations for Congress, including requiring the FDA to establish a system for monitoring and publicly reporting the status of

post-market study commitments involving medical devices. Permitting the FDA to order post-market studies as a condition of clearance for the categories of devices, for which section 522 post-market surveillance studies are now allowed, and allowing the FDA to

extend those studies for those devices with expected high pediatric

use beyond the current 3-year limit. I look forward to hearing from

our witnesses today about how these recommendations are or

should be incorporated into the reauthorization of MDUFMA.

The report also highlighted several recommendations for the

FDA that would not require statutory authority. These recommendations include collaboration with the NIH and the Agency

for Healthcare Research and Quality to define a research agenda

and priorities for the evaluation of the short and long-term safety

and effectiveness of medical device use with growing and developing children; promoting the development and use of standards and

approaches for capturing and linking use in outcomes data for medical devices; collaborating with industry, healthcare professionals

and organizations and parent and patient advocates to improve adverse event reporting; overseeing the management of high-profile

medical device safety issues, similar to the independent Drug Safety Oversight Board within the FDA; and establishing a central

point of responsibility for pediatric issues, within the Center for

Devices and Radiological Health, to evaluate the adequacy of the

Center’s use of pediatric expertise and its attention to pediatric

issues in all aspects of its work.

Mr. Chairman, as we consider the reauthorization of MDUFMA,

I look forward to hearing from witnesses about whether the FDA

has adopted these recommendations and whether the MDUFMA

package negotiated by the administration reflects further necessary

changes. And with that, I yield back my time. Thank you.

Mr. PALLONE. Thank you. The gentlewoman from New Mexico,

Mrs. Wilson.

OPENING STATEMENT OF HON. HEATHER WILSON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW MEXICO

Mrs. WILSON. Thank you, Mr. Chairman. I appreciate your having this hearing today. The Medical Device User Fee Program is

really important and I think it is much less controversial than the

Prescription Drug User Fee Program that we had hearings on last

week, and I hope that we can very rapidly reauthorize this program to provide some stability for the folks who are work on this.

There are two companies in my district that rely upon this legislation in order to get rapid approval for the devices that they manufacture, Johnson & Johnson, which has Ethicon Endo-Surgery and

I have visited their plant where they package and sterilize surgical

9

products and medical devices, as well as, surprisingly for some

folks, Intel Corporation, because anything that has a computer chip

that is an implantable device has to get approval under MDUFMA.

My colleague from Denver has been one of the leaders on childhood diabetes in the Congress and that is particularly important in

New Mexico, where the epidemic of diabetes has a disproportionate

effect on the people that I represent and I represent a city with one

of the highest percentages of Native Americans in the country and

also a very high percentage of Hispanic citizens, and the increases

in diabetes that we are seeing is really overwhelming. So one of the

issues that I hope we will be looking at is whether there is priority

given to those devices that might have a disproportionate public

health effect. In other words, are there ways to make sure that

things like continuous glucose monitoring devices, and things that

have—is there a way to concentrate approvals or attention and resources on those devices that have a disproportionate effect on public health? And the answer to that may be no, but it is an issue

that I would like to see us at least discuss and address.

I join my colleagues in agreeing that these medical innovations

need to be kept moving forward and going through the pipeline so

that they are brought to the market and that they are safe and effective, people can have confidence in them and they get to people

who need them as quickly as possible. Thank you, Mr. Chairman.

Mr. PALLONE. Thank you. The gentlewoman from Oregon, Ms.

Hooley.

OPENING STATEMENT OF HON. DARLENE HOOLEY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF OREGON

Ms. HOOLEY. Thank you, Mr. Chairman. Although the first

iteration of Medical Device User Fee and Modernization Act,

MDUFMA, has encountered a number of challenges, the legislation

has shown results. The FDA, industry, and most importantly, consumers benefit from a faster approval process enabled by

MDUFMA’s increased revenues. Timely approval of medical devices

means that lifesaving devices get to patients more quickly. However, safety must be FDA’s No. 1 priority. Increased resources and

reauthorization of MDUFMA should enable the FDA to strengthen

its review process to get devices to market more quickly and safely.

More high-profile safety features have occurred on the drug side of

FDA’s review process than with devices. However, serious safety

concerns have also arisen in recent years with a number of devices.

We must ensure that FDA has the resources and authority to protect the public health. Investments and enhanced information technology, and hiring of more specialized experts enabled by

MDUFMA’s increased user fee, must be maximized to help better

protect consumers.

Although user fees have increased as a percentage of the Center

for Devices and Radiological Health budget, the proportion of user

fees to appropriated funds remain much lower for devices than for

drugs. It is critical to maintain that appropriate balance and I believe MDUFMA accomplishes that objective. MDUFMA’s reauthorization also takes important steps to stabilize user fee funding. Increased predictability in user fee revenues will be beneficial to both

10

the FDA and industry, because regulators and industry will better

be able to plan for their needs under the new fee structure.

Moreover, I am glad to see MDUFMA has recognized the vital

role small businesses play in our robust medical device industry.

According to the Government Accountability Office, small businesses account for approximately 20 percent of device applications

in 2006. Fee reduction for small medical device businesses will help

keep that important segment of the industry competitive. Finally,

like with PDUFA, it is important to pass MDUFMA in a timely

manner so FDA does not lose its best scientists. Thank you, Mr.

Chairman, and I yield back.

Mr. PALLONE. Thank you. Mrs. Blackburn.

OPENING STATEMENT OF HON. MARSHA BLACKBURN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF TENNESSEE

Mrs. BLACKBURN. Thank you, Mr. Chairman. Thank you for the

hearing and I want to apologize to you and to our witnesses. We

have an O&I Subcommittee hearing going on downstairs and I am

going to need to step back to that. But I am pleased, as are my

colleagues, to be talking about the reauthorization of MDUFMA.

I am amazed by the innovation that is taking place in this industry and I have seen it firsthand in my district, and many of the

medical technology companies in my district are, as Ms. Hooley

was saying, they are small business companies and it is imperative

and so very important to them that this process work as smoothly,

that we have an expedient process when they make their filings,

and that they receive timely answers. We have one Tennessee device company that created a state-of-the-art mobile medical device

training center, equipped with six surgical stations, highly advanced technology to train medical professionals on new orthopedic

devices and it is an amazing technology and quite frankly, I think

this is one of the most exciting areas of science and it is important

for us to act responsibly and to make certain that we move forward

with this legislation quickly.

I think that it is important for us to note that medical device research and development has more than doubled in terms of sales

in the past 15 years and investment is continuing to grow, and

what this tells me is that this is an area that consumers and our

constituents are looking to for options to improve their quality of

life and it is something that they are paying close attention to, so

it is imperative that we continue to provide incentives for this innovation. We have seen some major breakthroughs due to medical devices and we must support initiatives such as health information

technology, medical technology, will continue to transform our

health delivery systems and the care that is available to our constituents.

I appreciate that the device industry and the FDA have reached

an agreement on a reauthorization package. I am looking forward

to hearing more about that today. I think we all have a few little

questions that we would like to have answered and it is my hope

that we will move forward in an expedient manner. Thank you

again, Mr. Chairman, and I yield back.

Mr. PALLONE. Thank you. The gentleman from Arizona.

11

Mr. SHADEGG. Mr. Chairman, I want to thank you for holding

this hearing and I want to express my appreciation to our witnesses and with that, I will waive.

Mr. PALLONE. Thank you. The gentleman from Pennsylvania.

OPENING STATEMENT OF HON. TIM MURPHY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF PENNSYLVANIA

Mr. MURPHY. Thank you very much, Mr. Chairman, and I also

appreciate this hearing. I too have a simultaneous hearing and I

am going back and forth between these. But I wanted to thank you

for an ongoing hearing that continues to deal with issues of patient-centered healthcare and these aspects of dealing with medical

devices is quite important because it allows us to continue to focus

on the issues of patient quality, patient safety and patient choice.

Along these lines, my hope is that as we move forward on any

of these issues, that one of the aspects that we address has to do

with reprocessed and reused medical devices that are brought

under the regulation of the FDA. One of the concerns I have about

reusing medical devices is that these devices were designed for optimum performance and safety under intended conditions of use

and not necessarily the ease of cleaning or secondary use, which

can oftentimes make them extremely difficult to sterilize and I

worry sometimes that reusing medical devices can compromise

their safety, and push for some review of devices for which they

were never intended.

For example, a 2001 study of reuse of catheters found an increased risk of infection. Even after rigorous cleaning and sterilization, virus and bacteria were still present in the catheter, which,

of course, can be deadly to a patient. We have to be reminded that

some 90,000 lives are lost every year from infections in hospitals,

some 2 million people are infected in hospitals and healthcare centers every year, and some $50 billion is spent annually dealing

with, in many cases, preventable infections. I think patients have

a right to know and to choose whether or not a medical device was

designed for single use and has already been used in other patients

and if they are going to be exposed to unnecessary risks.

One of the reasons I have introduced a bill, H.R. 1174, the

Healthy Hospitals Act, would require all hospitals to publicly report their infection rates, which could easily apply to medical devices and in illness stemming from reuse of medical devices. So I

look forward to hearing from the FDA and our witnesses today,

specifically on how we can avoid unnecessary infections from medical devices, ways to incorporate patient safety and patient quality,

and to this committee’s efforts to ensure that new and existing

medical devices are both effective and safe. And with that, I yield

back my time.

Mr. PALLONE. Thank you. And I recognize our vice chairman, Mr.

Green.

OPENING STATEMENT OF HON. GENE GREEN, A

REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS

Mr. GREEN. Thank you, Mr. Chairman, for holding this hearing

on the reauthorization of Medical Device User Fee and Modernization. I apologize for being late, but we have an Oversight and InVerDate 11-SEP-98 15:19 Oct 06, 2008 Jkt 000000 PO 00000 Frm 00016 Fmt 6633 Sfmt 6633 Q:\DOCS\110-47 SCOM1 PsN: SCOM1
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vestigation Subcommittee hearing on British Petroleum downstairs

and since 15 people near my district were killed 2 years ago, we

have a real interest in that.

Congress first authorized FDA to collect user fees for the review

of medical devices in 2002. While we have enacted a couple of bills

to correct and stabilize the user fee for medical devices, we face our

first comprehensive reauthorization of these fees. For regulatory

purposes, medical devices are everything from the gloves that doctors wear when examining a patient, to heart valves implanted in

individuals for the rest of their lives. The wide variety of medical

devices regulated under the system necessitates that review and

approval of post-market surveillance be appropriate for the type of

device under regulation, all the while ensuring that we balance

safety with a desire to bring these lifesaving devices to market in

a timely manner.

In our first authorization, we sought to strike a balance by specifying that the FDA would utilize user fees for the pre-market reviews and inspection, the monitoring and research and evaluation

of post-market studies, among other things. By providing user fee

exceptions for small business, we attempted to facilitate their participation in the medical device industry. Likewise, the user fee exemptions for pediatric devices and humanitarian-use devices

sought to ensure that children and individuals with rare diseases

were able to benefit from the innovation within the device industry.

A perfect example is the FDA’s approval of the DeBakey VAD,

the name for renowned Houston surgeon, Dr. Michael DeBakey.

His device, which is a miniature valveless blood pump used in children, was approved in February 2004 under the humanitarian-use

exemption. The next month, a 6-year-old Houston girl was the first

pediatric patient in the world who received this device which helps

to improve blood flow for patients awaiting heart transplants. The

device that a Houston company manufactures is a lifesaving device.

Its first use was in Texas Children’s Hospital on a child from Houston. It gives me pride in the innovation in medical miracles taking

place in our community.

As we begin our work on reauthorization, we need to make sure

that the user fee system continues to spur that innovation, but we

also need to make sure that the pressure at the FDA to meet the

increased performance goals doesn’t create a culture of swift approval at the expense of safety. I would like to see an increased

focus on post-market surveillance and safety at the Center and I

look forward to hearing what resources we can provide to make

sure we appropriately strike that balance when we bring devices to

market and protecting the health of Americans. I look forward to

hearing our witnesses. And Mr. Chairman, I yield back my time.

Mr. PALLONE. Thank you. I think we completed the opening

statements of the Members. Any other statements for the record

will be accepted at this time.

[The prepared statement of Mr. Dingell follows:]

PREPARED STATEMENT OF HON. JOHN D. DINGELL, A REPRESENTATIVE IN CONGRESS

FROM THE STATE OF MICHIGAN

Mr. Chairman, thank you for holding this hearing today. We are here to discuss

the reauthorization of a very important piece of legislation, the Medical Device User

Fee and Modernization Act, also known as MDUFMA. Originally passed in 2002,

13

this program provides valuable resources to the Food and Drug Administration to

allow timely approval of safe and effective new medical devices. Additionally,

MDUFMA includes important provisions that address standards for the reuse of single-use devices; that allow third-party inspections; that provide incentives for the industry to study the application of their devices on children; and that include a number of additional regulatory reforms.

While MDUFMA has worked well, we have twice made adjustments to the program through the 2004 Medical Devices Technical Corrections Act and the Medical

Device User Fee Stabilization Act of 2005 to ensure its effectiveness and sustainability. Under current law, FDA’s authority to collect medical device user fees expires on October 1, 2007.

FDA’s proposal to reauthorize the medical device user fee program includes a variety of provisions that Congress will need to study. New fees would be established

to provide sustainability and a sense of predictability; fees paid by small businesses

would be further reduced; the third-party inspection program would be changed;

performance goals would be shifted; and new innovative diagnostic tests would be

developed.

In addition to these proposed device program changes, we must also discuss the

issue of device safety. According to the Wall Street Journal, an internal report by

FDA critiqued the agency’s practices to ensure the safety of medical devices, such

as defibrillators and pacemakers. The agency concluded that the monitoring system

at the Center for Devices and Radiological Health lacked quality information on approved devices. At the same time, the agency concluded that the volume of information received exceeded the center’s ability to consistently enter or review data in a

routine matter. While the medical device user fee program was created to improve

timeliness of device approvals, timeliness must not come at the cost of safety.

I understand that FDA is required to do much with limited resources. Because

it does not receive adequate resources from Congress, the user fee program continues to increase as a percentage of FDA’s resources. From fiscal year 2003 to 2008,

MDUFMA funding has increased at a much faster rate (220.1 percent) than FDA’s

program level device review budget (31.3 percent). As a result, FDA becomes increasingly more dependent on the very industry it was created to regulate.

We must ensure that adequate enforcement tools, resources, and processes are in

place to ensure that devices are safe and effective. When I supported the Medical

Device User Fee and Modernization Act in 2002, I envisioned this program providing a down payment on an increased level of post-market surveillance. The current

reauthorization provides us with a process to increase safety and compliance activity. FDA on its own has taken some steps to increase post-market safety, such as

its ‘‘Post-market Transformation Initiative.’’ We now have an opportunity to explore

other ways to enhance safety.

We recognize that we must act fairly quickly to prevent a possible exodus of qualified staff and other experienced medical officers at FDA whose positions are funded

by user fees. We ran into an unusual situation in 2005 when uncertainty as to

whether corrective legislation would be enacted before the October 1, 2005, appropriations ‘‘trigger’’ date, required FDA to impose a hiring freeze in its Center for

Devices and Radiological Health. In response to this problem, we passed the Medical

Device User Fee Stabilization Act of 2005.

I appreciate the importance of this hearing. I look forward to the testimony of witnesses and the input of our Members as we discuss the MDUFMA reauthorization.

Mr. PALLONE. We will turn to our witnesses and I see our first

panel is already seated, but welcome again. Let me introduce you

briefly here. First, we have Dr. Jeffrey Shuren, who is Assistant

Commissioner for Policy for the FDA, and he is accompanied by Dr.

Daniel Schultz, who is Director of the Center for Devices and Radiological Health at the FDA. Thanks again for being here. We have

5-minute opening statements. They become part of the record. And

if you want to, at the discretion of the committee, submit additional

statements or comments, you can still do that later. So I will begin

by recognizing Dr. Shuren.

14

STATEMENTS OF JEFFREY SHUREN, M.D., J.D., ASSISTANT

COMMISSIONER FOR POLICY, FOOD AND DRUG ADMINISTRATION; ACCOMPANIED BY DANIEL G. SCHULTZ, M.D., DIRECTOR, CENTER FOR DEVICES AND RADIOLOGICAL

HEALTH, FOOD AND DRUG ADMINISTRATION

Dr. SHUREN. Thank you, Mr. Chairman and members of the subcommittee. We are pleased to be here today to discuss the importance of reauthorizing the Medical Device User Fee and Modernization Act before it expires on October 1, 2007.

In 2002, Congress enacted MDUFMA to improve the timeliness

and predictability of device application review to help get safe and

effective medical devices to patients and practitioners more quickly.

Under MDUFMA, FDA receives user fees from industry, in addition to appropriated funds for the Medical Device Review Program,

and in return for these additional resources, FDA is expected to

meet performance goals that became more ambitious each year of

the legislation.

In August 2005, Congress amended MDUFMA to provide more

predictability for industry in the amount of user fees they pay by

statutorily locking in a fixed annual fee increase of 81⁄2 percent.

MDUFMA I was about growth, progressively increasing the size of

the Device Review Program through rapidly increasing funding

linked to progressively more aggressive performance goals. For

MDUFMA II, we are recommending changes to fine-tune the program, including funding to maintain a stable Device Review Program, while continuing to improve performance as a result of investments in a seasoned review staff and process efficiencies.

While my written testimony describes all of FDA’s legislative recommendations, I would like to highlight three areas for refinement.

First, for pre-market review performance, we are proposing to meet

more rigorous goals that build on the progress we made in the first

Medical Device User Fee Program. The result would be a shortened

decision time for several types of applications, including those for

the most innovative devices. In addition, we are proposing several

qualitative goals to continue to enhance the device review process

and to make it more transparent. For example, we are proposing

additional steps to facilitate the informal interactions with manufacturers, what we call interactive review, providing guidance on

the pathway to market for imaging devices that use contrast agents

or radiopharmaceuticals, making public more information about

our performance, and enhancing the review process for in vitro diagnostic tests, because they will play a critical role in personalized

medicine.

Second, to ensure financial stability for the review program, we

are recommending a reasoned increased in user fee revenues in the

first year, followed by annual increases of 81⁄2 percent for the 4

years thereafter. This will help ensure that we have adequate resources to maintain a stable device review program, while providing the predictability in the fees that industry pays for the duration of MDUFMA II.

We are also proposing two new fees that will generate about 50

percent of the total fee revenue, an annual establishment registration fee and an annual fee for filing period reports. The large number of device-making establishments that would pay a fee, an estiVerDate 11-SEP-98 15:19 Oct 06, 2008 Jkt 000000 PO 00000 Frm 00019 Fmt 6633 Sfmt 6633 Q:\DOCS\110-47 SCOM1 PsN: SCOM1
15

mated total of about 13,000, would stabilize our funding as well as

allow us to lower the application fees and provide a larger fee discount for small businesses. The fee proposed is modest, about

$1,700 in fiscal year 2008, but it would reduce the fiscal year 2008

standard fee for pre-market approval application, and that is those

for the highest risk devices, to 65 percent of the 2007 rate. And the

2008 for small businesses for pre-market approval application

would be reduced to 43 percent of the 2007 rate.

Third, we are recommending modest changes to the Third-Party

Inspection Program to encourage industry participation while

maintaining the strong safeguards against conflict of interest, because we are concerned about that as well.

FDA believes that reauthorization of the user fee legislation,

with the improvements I just outlined, will result in benefits to

public health. Continued improvement in device review times and

greater transparency of the review process will mean that patients

and practitioners will have access to safe and effective medical devices more quickly. Adequate and stable funding for FDA will provide FDA with the resources to maintain the cutting-edge expertise

necessary to provide timely review and ensure the safety of increasingly complex devices of tomorrow. Finally, a successful ThirdParty Inspection Program will enable FDA to better focus its

inspectional resources on higher risk devices.

We thank all of you for your commitment to the mission of FDA

and the continued success of our Medical Device Review Program

and we look forward to working with you on MDUFMA II legislation. We would be happy to answer any questions you may have.

[The prepared statement of Dr. Shuren follows:]

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Mr. PALLONE. Thank you, Dr. Shuren. I understand that Dr.

Schultz is here to accompany you and answer questions, maybe,

but not give an opening statement, so we will just move to questions and I will recognize myself. I only have 5 minutes and I want

to get in something about post-market surveillance and these single-use devices, so I may ask you to answer yes or no or get back

to me on some of these questions. I expressed concern that there

did not appear to be any post-market surveillance provisions included in the MDUFMA II proposal before the subcommittee. Yet,

in MDUFMA I, there was an authorization for appropriations for

post-market surveillance activities at the FDA. Was that correct?

Just yes or no.

Dr. SHUREN. Yes.

Mr. PALLONE. OK. And now that money, I understand, was never

appropriated, but can you tell me if the agency ever requested that

money in its submission to OMB during the past several years,

when the administration was developing its fiscal year budget proposals? Again, yes or no.

Dr. SHUREN. Not to my knowledge.

Mr. PALLONE. OK. And you can get back to me, if you can find

out more. Did the President ever include it in any of this year’s

budget proposals that he submitted, do you know?

Dr. SHUREN. Yes, fiscal year 2008, to my knowledge, had additional funding for device safety.

Mr. PALLONE. OK. Now, could you tell me—well, you said it was

appropriated. What types of activities did that funding go for?

Dr. SHUREN. Well, the scope in MDUFMA is actually very broad.

It encompasses a lot of post-market safety activities. It is very different from PDUFA, so we already had a broad scope. The second

thing that we have and which MDUFMA is very different from

PDUFA, from post-market safety, is that we have a trigger in place

for protecting the appropriations for the entire device program. So

the funding we get under MDUFMA goes for a lot of post-market

safety activities and in addition, we have a little bit more protection on appropriations that will go to the rest of the program,

which will cover the other remaining post-market safety activities.

Mr. PALLONE. OK. Now, as for the MDUFMA II proposal discussions, can you tell me whether the issue of post-market surveillance ever came up with industry representatives? Again, yes or no.

Dr. SHUREN. We did not go into any specific proposals for postmarket safety. Our sense was that if we can ensure adequate funding for the agency, we will be in a fairly good place for post-market

safety.

Mr. PALLONE. OK. And then finally on this issue, if the FDA and

the industry agreed that some funding should be authorized for

post-market surveillance in the first MDUFMA and to date, none

of these funds—well, you said, actually, we have had some funds.

So let me just ask you this. If Congress were to mandate that some

percentage of the user fees were earmarked for post-market surveillance issues instead of pre-market activities, like we do with

PDUFA, is that something you think that the administration would

support?

Dr. SHUREN. Well, I think that the user fees already are directed

at a lot of post-market safety activities. In addition, the funding we

36

have gotten to bring on board experts, those experts are used in

post-market safety activities, so now we have greater expertise in

a variety of fields. That is then integrated into post-market safety.

Mr. PALLONE. So then, you wouldn’t necessarily have a problem

if we actually said in the bill that a certain percentage of the user

fees would have to be for post-market?

Dr. SHUREN. Well, what we would prefer, the better thing for us

is that we have the funding and then we can apply it as we——

Mr. PALLONE. So you would rather have the discretion rather

than have——

Dr. SHUREN. And we think we have that already built into the

program.

Mr. PALLONE. OK. Let me get to the single-use devices. I know,

in the first MDUFMA authorization, this issue was dealt with

somewhat by requiring more data that validated the safety and the

efficacy of reprocessed devices, yet the reprocessing of single-use

devices still raises public health concerns for many of us, like Mr.

Murphy mentioned as well, specifically in regards to infection and

the malfunction of devices intended to be used only a single time.

Can you tell me what steps have been taken by FDA since

MDUFMA I was implemented to ensure the safety and efficacy of

single-use devices, and whether you view those steps as adequate

or would you support stronger regulation?

Dr. SHUREN. Well, first off, for single-use, reprocessing used medical devices, MDUFMA I, as you know, put in several provisions to

ensure the safety of those products. So many of those devices that

were exempt from submission of 510(k), they now have to submit

data to us. Those that had to submit a 510(k) are now having to

provide validation data regarding cleaning, sterility, functional performance. So we actually look at the fact of whether or not it is

being adequately cleaned and there isn’t bacteria present. We have

also now put on our MedWatch form a box that if the product was

actually a single-use device and it has been reprocessed, you think

there was a problem with it, you can actually flag that for the

agency. And we actually went back and we did a study. We looked

at those reports that received through our medical device report

regulation, through MedWatch, and from December 2005 to July

2006, we had about 434 reports in which people had said this was

a reprocessed device. It turns out, out of that, only 65 were, in fact,

reprocessed. In the other cases they were not reprocessed. And of

the 65——

Mr. PALLONE. Well, go ahead, you finish. I have to ask you something else, but go ahead.

Dr. SHUREN. Well, of the 65, when we looked at it, we didn’t see

that any of the adverse events that were associated with those

products were any different from the same things we were getting

reports on from the original use of the product. There was no difference.

Mr. PALLONE. All right, I just want to quickly. In the Medical

Device User Fee Stabilization Act of 2005, it implemented additional regulations that mandated that a reprocessed device include

a removable label that identifies the manufacturer. How is that

working?

37

Dr. SHUREN. What happens is you are supposed to actually either mark on the device itself, or on a detachable label, either the

name or some symbol for the company and for the device, so that,

when it is being reprocessed, people would actually know what that

device, in fact——

Mr. PALLONE. Now, would you support any additional regulation,

some kind of labeling or notification requirement that alerted patients to the fact that a reprocessed device would be used in a procedure on them? That is my last question.

Dr. SHUREN. At this point, we are not looking for additional

changes in the oversight of single-use reprocessed devices. If there

are any particular proposals or things you want to talk about, we

would be happy to discuss further.

Mr. PALLONE. All right. Thanks a lot. Mr. Deal.

Mr. DEAL. Your guidance documents that explain to device companies the requirements and expectations for product submission,

of course, as a key to reducing product development time and improving overall review processes, with the increased revenues that

you expect with this reauthorization, do you plan to improve the

rate at which you develop these guidance documents?

Dr. SHUREN. We will always try to, with the resources we have,

put out as many as we can. I think what we wind up doing is we

first identify where is there the greatest need for guidance and

where is, particularly for the guidances you were talking about

that may help in the development or the pre-market approval of

particular guidances, a lot it depends upon the state of the science.

So what you will see is a natural evolution where when we deal

with a very innovative device and we don’t know a lot about it, that

is kind of our first rights of passage. With time, as we gain more

experience and there is more science developed, that is when we

will invest it into that kind of a particular guidance. So much of

it depends upon where the needs are and the state of the science.

We are always looking based on the resources we have available

to invest in providing guidance, because we think it is not only

good for the development of the devices, we have an invested interest ourselves, because it actually makes our work easier, too.

Mr. DEAL. Part of the user fees, you have indicated, will be used

for further training of your employees. Obviously, I think we would

all recognize that would be an important ingredient of the overall

review process. What is your ability to retain employees? Once you

have gone through this processes, what is your retention rate within the agency?

Dr. SHUREN. Well, our turnover rate, I guess, flip it the other

way, our retention is about 92 percent. It depends which aspect of

the program you look at and that is data from maybe about a year

ago.

Mr. DEAL. That is pretty good.

Dr. SCHULTZ. And I think devices is actually higher.

Mr. DEAL. Mr. Pallone wants to know how that compares to Congress. I don’t think we will get into that one.

Dr. SHUREN. We can discuss it off line.

Mr. DEAL. One of the complaints that we have heard is that FDA

does not provide detailed explanation of how the user fees have actually been used in the process of reviewing the product. I am sure

38

you have heard the complaint. Do you intend to have more transparency in explaining where the fees have been used and how they

have actually speeded up the process of approving a product?

Dr. SHUREN. Yes. Actually one of the qualitative goals that we

are putting in our commitment letter actually goes to that kind of

transparency, where twice a year we will sit down with industry.

There will be other information that is made available to the public

that will talk about, from a qualitative standpoint, how in fact we

are investing the dollars that we are receiving.

Mr. DEAL. One of the criticisms that we have heard and probably

will hear again today is that FDA did not meet with enough interested consumer and patient groups when negotiating the

MDUFMA II agreement. Is that a fair criticism and what did you

do in order to reach out to these other communities?

Dr. SHUREN. Well, actually before we started, before we engaged

in the negotiation process, we had a public meeting to talk about

where we are and where we may be headed with MDUFMA and

sought public comment. I will say we got very little interest from

the public on that. We just held a public meeting back on April 30

and we have opened up a public docket for comments and we had

only about, I believe, eight organizations that came and wanted to

give oral testimony. Most of those were actually—seven of the eight

were fully supportive of the MDUFMA process. And right now we

are getting comments submitted to our docket and we have only

had a handful so far.

Mr. DEAL. Would you explain to us how the Office of Combination Products works and how there is coordination within the centers, and is it effective in terms of make sure there is not duplication or unnecessary red tape or delay with a product that is going

through this Office of Combination Products?

Dr. SHUREN. Do you want to talk to that?

Dr. SCHULTZ. Yes. I think the Office of Combination Products has

actually been one of the most important parts of MDUFMA and I

think that, in the past, when we saw combination products involving drugs and devices or devices and biologics, it was really sort of

looked upon as almost an overwhelming challenge to try to merge

the different legislative review processes that we have and cultures

that we have within the different centers. And while the Office of

Combination Products does not actually perform its own review,

what they do is something that is probably even more important.

What they do is they monitor the process and make sure that the

appropriate expertise from each of the individual centers is appropriately mobilized and focused to deal with the issues, the specific

issues related to combination products. And I think one of the really sort of bright examples of that has been the review of the drugeluting stents which, as you know, has been one of the real breakthroughs of the last few years, in terms of not only device technology but medical therapies. And obviously, we still have some

challenges that we are continuing to work out, but part of the reason we were able to accomplish what we did was due to the efforts

of the Office of Combination Products.

Mr. DEAL. Thank you.

Mr. PALLONE. Mr. Waxman.

39

Mr. WAXMAN. Thank you, Mr. Chairman. Dr. Shuren, there have

been some well-publicized cases of safety problems with medical devices, for example, a faulty cardiac defibrillator, contact lens solutions associated with fungal eye disease infections, the dangers

with cardiac stents. FDA’s own budget documents indicate 1,550

medical device recalls were conducted last year and over 76 of

those recalls involved dangerous or defective products that predictably could cause serious health problems or deaths, so we are talking about a serious matter. I want to focus on this question of user

fees and how they have had an impact, if at all, on FDA’s post-market safety of devices.

In 2002, when we adopted this user fee bill, we asked for a report so that we could take a look at how the law was impacting

and we asked for that report no later than January 10 of this year.

We wanted to look at several areas dealing with post-market safety; the impact of the user fee program on FDA’s ability to conduct

post-market surveillance of medical devices; the funding needed to

conduct adequate post-market surveillance of these devices, in compliance with post-market surveillance requirements like the study

commitments.

So this is an important document that we need. We expected to

have it so it would be useful in this reauthorization. January 10

was the deadline. Now it is May 16. We could spend the rest of the

hearing talking about your answers to these questions, but let me

ask you the question. When could we get this report? What is holding it up?

Dr. SHUREN. It is in final clearance right now.

Mr. WAXMAN. What does that mean, final clearance? FDA has

completed it or FDA is in the process of completing it?

Dr. SHUREN. FDA has completed it. It is now in final administration clearance.

Mr. WAXMAN. At the Office of Management and Budget, is that

right?

Dr. SHUREN. No.

Mr. WAXMAN. It is not? Where is it?

Dr. SHUREN. It is with Health and Human Services and it went

over there just a short time ago.

Mr. WAXMAN. I see. And who is holding it up?

Dr. SHUREN. I don’t think anyone is holding it up.

Mr. WAXMAN. The report is completed and it is just waiting for

the release?

Dr. SHUREN. Yes, but we also completed the report after the January time as well, so we are—FDA is a little late on the ball as

well.

Mr. WAXMAN. I see. Now it seems to me obvious. I hope we can

get this soon. Do you know when we could expect to get this report?

Dr. SHUREN. We are expecting to get it out soon.

Mr. WAXMAN. Well, I hope within the matter of a week or two,

because we are going to reauthorize this program in this subcommittee and we ought to have the benefit of a report that Congress asked for and mandated in the legislation.

Dr. SHUREN. And I will also go back and convey those sentiments

and push to have it put out.

40

Mr. WAXMAN. Please do. It is obvious that we need more resources for FDA’s inspection program. Since 2003, FDA’s own budget documents indicate that FDA was forced to reduce the number

of medical device field staff, primarily inspectors, from 482 to 413.

They are charged with conducting all types of inspections that FDA

conducts, both pre-market and post-market, and FDA is required

under the law to conduct these inspections every 2 years. How

many U.S. facilities are there? How many staff are available to

conduct post-market inspections of those domestic facilities?

Dr. SHUREN. Well, in terms of the inspections for domestic facilities, I know there has been a lot of talk about this, that you had

raised as well, the statutory requirement for the biennial GMP or

surveillance inspections. Domestically, there are about 5,500 facilities that would be subject to that statutory requirement. Those are

the manufacturers of class II/class III devices. In 2006, we conducted about 1299 such inspections. That is about 23 percent. So

right now, every 2 years we are probably covering just a little bit

under 50 percent.

Mr. WAXMAN. Does that mean that some of them are going as

long as 5 to 6 years before they are inspected?

Dr. SHUREN. Some of them are certainly going the 4 years. I

don’t know if any of them are going 5 to 6.

Mr. WAXMAN. And how many staff conduct foreign post-market

inspections and how many foreign facilities are there?

Dr. SHUREN. Foreign facilities that are of the similar type, the

class II/III, are about 4,500 facilities.

Mr. WAXMAN. I see my time is almost up and I have so many

other questions. Mr. Chairman, I would like to request that I submit questions and get the responses to those questions so we can

have them for the record.

Mr. PALLONE. Absolutely. And I would also ask, following up on

what Mr. Waxman said, we really need this report by the end of

next week, before the recess, in order for us to utilize it for the reauthorization. So we need to have it by next Friday if it is going

to be useful.

Dr. SHUREN. It is the first thing I will follow up on when I leave

here.

Mr. PALLONE. All right. Thank you. And thank you, Mr. Waxman. Mr. Ferguson.

Mr. FERGUSON. Thank you, Mr. Chairman. Just a courtesy

heads-up, Mr. Chairman, and to our witnesses. You can see Mr.

Shadegg is here today. He is a pretty high-energy guy to begin

with. He has two cups of coffee in front of him, so we all may be

in for it today. He was watching the debate last night, so you

should have had the coffee during the debate, John. I am using all

of my time. Thank you very much for being here. He is not laughing, either.

Dr. SHUREN. I am laughing on the inside.

Mr. FERGUSON. Not too many people are laughing when Mr.

Waxman finishes with them, either, so join the club. Let us take

a step back. Tell us where the U.S. stands in terms of approval of

medical devices, compared to other countries. I am trying to get at

what is the impact if we don’t reauthorize this program?

41

Dr. SCHULTZ. Well, I think the impact would be pretty severe.

We rely on MDUFMA for about 20 percent of our budget and a lot

of the expertise that we now have in the Center, and more specifically the expertise that we have hired over the last few years, has

been directly related to MDUFMA funding. And what that expertise is, a lot of the Members have made reference to the fact that

medical devices are becoming more complicated, the technology is

changing, our ability to keep up with that technology and to be

able to hire the appropriate expertise and to be able to utilize outside expertise through contracts and our fellowship program, all of

that is directly related to the funding that we have gotten from

MDUFMA; in addition, giving those people the tools that they need

in order to perform their jobs.

It is fine to have experts and it is fine to have appropriate expertise, but our IT infrastructure was woefully inadequate and becoming more woefully inadequate at the time when the first MDUFMA

was authorized, and we have really been able to turn that around

in the last 5 years and put systems into place that allow us to

track documents so we actually know where they are, we can deliver reports on our performance in ways that we used to have to

do by hand, and we have used those platforms.

One of the questions I think that has come up was how is

MDUFMA influencing our post-market? And one of the things that

we have really, really tried to do, consciously tried to do, is to make

sure that the expertise that we have, as well as the infrastructure

changes that we have made, can be adapted to use in a post-market as well as in the pre-market review process. So we certainly are

sensitive to the fact that we take a lifecycle approach to medical

device regulation and we need to do both.

Mr. FERGUSON. Now, we have been told that there has been kind

of a slow up-tick for the Third-Party Inspection Program. As you

had mentioned in your testimony, the Third-Party Inspection Program could help U.S. companies compete in the international markets by allowing a single inspection to satisfy both U.S. and foreign

requirements. Does the MDUFMA II agreement, will it improve

third-party inspection and how will it do that?

Dr. SHUREN. Well, our intent is that it would actually lead to

greater participation by manufacturers in the program and the way

we go about it is to make some very modest changes to sort of

streamline the process. Right now, if you want to use an accredited

person, this third party, you need to petition FDA and it is set up

that FDA is supposed to receive this petition, review it and approve

it. There is a default, that if we haven’t responded within 30 days,

it is supposed to be approved.

However, even manufacturers have felt that I really need to wait

on the FDA for that approval. We would like to make that easier,

because we have already reviewed these third parties. We know if

they are in good standing or not. They have gone through rigorous

training. So what we would replace that with is a notice that is

sent to the agency and that the manufacturer can go ahead and

use that accredited person, unless they have heard otherwise from

us in 30 days.

Mr. FERGUSON. So if more companies used the Third-Party Inspection Program for routine inspections, will that allow you to conVerDate 11-SEP-98 15:19 Oct 06, 2008 Jkt 000000 PO 00000 Frm 00046 Fmt 6633 Sfmt 6633 Q:\DOCS\110-47 SCOM1 PsN: SCOM1
42

centrate more of your inspection resources on areas that pose, perhaps, greater risk?

Dr. SHUREN. That is exactly right. We are using a risk-based approach to begin with and the third party will help us address those

companies where they may not be as big a concern and we can go

ahead and focus on other companies. It would essentially expand

our inspectional power.

Mr. FERGUSON. But just to be clear, a company could still be subject to a for-cause inspection even if it has participated in the

Third-Party Inspection Program?

Dr. SHUREN. That is correct and we believe that is an essential

piece to the Third-Party Inspection Program, that the agency retain

that ability to go in and do an inspection if it needs to.

Mr. FERGUSON. Thank you, Mr. Chairman.

Mr. PALLONE. Thank you. I just wanted to entertain a unanimous request from Mr. Doyle.

Mr. DOYLE. Thank you for this courtesy, Mr. Chairman, and

thanks for holding this important hearing on the reauthorization of

MDUFMA. I just want to ask for two quick things, first, to insert

a letter into the record of today’s hearing that was sent by myself,

Congressman Pete Sessions and two dozen other Representatives,

including some of my colleagues here on this committee, asking the

FDA to create a mandatory unique device identification system.

This is supported by the Advancing Patient Safety Coalition,

which is comprised of prominent hospital, physician, nursing, research, quality and patient advocacy organizations such as AARP,

the American Hospital Association, the American Nurses Association, the American Medical Association, National Rural Health Association, American Heart Association, American Association of Orthopedic Surgeons, and the Joint Commission. One of the members

of the coalition, Premier, Incorporated, has prepared written testimony on this issue and I ask unanimous consent that it be made

a part of the record of today’s hearing.

Mr. PALLONE. Any objection? So ordered.

Mr. PALLONE. Thank you.

Mr. DOYLE. Thank you, Mr. Chairman.

Mr. PALLONE. Thank you. Next is Mrs. Capps.

Mrs. CAPPS. Thank you. And again, thank you for your testimony, Dr. Shuren. And we all know that medical devices range

from simple tongue depressors to hip replacements. For more complicated devices like hip replacements, it is certainly true that one

size fits all isn’t going to work. I think this is particularly true for

women, who tend to be smaller and have different body proportions

than men. Now, it is my understanding that, within the FDA, class

II and class III clinical studies contain the medical devices with the

highest risk, such as hip replacements and heart defibrillators and

others. May I ask you what percentages of devices in these two

classes are tested in women?

Dr. SCHULTZ. I don’t think we have a specific number that we

can give you today, but we can certainly look at it.

Mrs. CAPPS. I would love to have an answer back, because my

underlying question is how you stratify and report data. I mean

how you choose your studies and do you give a balance of women

and men and children. Increasingly, we are seeing a wide range of

43

our population wanting to use and being appropriately prescribed

devices. And so I would like to have it, with permission of the

chairman. You don’t have any of that information with you, on how

you choose subjects to be tested randomly or what percentages are

different ethnic groups, different genders and so forth?

Dr. SCHULTZ. Let me try to answer that.

Mrs. CAPPS. Sure.

Dr. SCHULTZ. I think you have made reference to the fact that

we regulate a number of different types of medical devices.

Mrs. CAPPS. Exactly.

Dr. SCHULTZ. We do have a branch within our Office of Device

Evaluation that is specifically designated for the regulation of OBGYN devices and specifically for women’s health products. So we

certainly pay attention to the fact that there are products that are

specifically designed and need to be—OK. With regard to other devices, obviously there are certain devices that have use primarily

in men and those devices obviously would be tested. And then

there are the ones that are multi-use, whether they be adults or

children. We have tried to encourage more and more diversity in

terms of the types of populations that are being tested. Again, our

success and our ability to do that in part has rested on the size of

the studies and the ability to recruit subjects to some of these studies.

Mrs. CAPPS. Yes.

Dr. SCHULTZ. But it is certainly one of the things that we are becoming more and more focused on, recognizing exactly what you

said, that there have been problems with gender, with race, with

age and all of those things and we would like to get more diversity

into those studies.

Mrs. CAPPS. All right. I guess I would like a written report back

on how you do that. And to your last statement, you would like to

get more diversity. Maybe you will give a response about the ways

in which you intend to make sure that that happens, because it is

not going to happen automatically or voluntarily, necessarily. So I

think it is an area that really needs a concerted effort.

I do have one more question. As I understand it, device companies can pay a third party directly, Dr. Shuren, to inspect their

manufacturing process. The device company then chooses the thirdparty inspector. I want to make sure I am correct in saying this,

so I want to follow it through. Device companies can pay. They

agree to pay a third party directly to inspect their process. They

then choose, the device company itself chooses that third-party inspector and negotiates also the price that they are going to be paid

for the inspection. I know that some critics believe that this creates

an incentive for these third parties to please the device manufacturers if they want to stay in business.

I mean, it is hard for me not to think that that wouldn’t weigh

into this. So my question is, what is being done at the FDA to ensure that these inspectors are unbiased? I mean, what kind of controls do you have over them? And when conducting inspections,

how do you make sure that they are going to give this the highest

standard?

44

Dr. SHUREN. Well, first off, when the manufacturer—you are correct that the manufacturer will select, but they are selected from

a very limited list.

Mrs. CAPPS. Who gives them the list?

Dr. SHUREN. Actually, we provide the list. We are the ones who

accredit the individuals who can do the inspections and there are

two parts to it. First, it is the firm. We would approve the firm and

we go through a conflicts of interest check with that firm. The second is that——

Mrs. CAPPS. I don’t have a lot of time, but what comprises a conflict of interest?

Dr. SHUREN. We are actually looking for the relationship between

that organization and also we go to the individuals. So the next

part is we then accredit the individual inspector. You can’t say I

just want to use this firm. You actually have to use a particular

person who we have also done a check on, who we have done training on, classroom training, and then they actually go out and they

do inspections with it and then we have an audit program on top

of it and that is why I think you have seen we have invested a

large amount of money into the program because it also has the

training and it has got the checks.

Mrs. CAPPS. I am out of my time, but I can’t help but say this

is a pretty select group of people who would even be qualified to

be inspectors.

Dr. SHUREN. That is absolutely correct.

Mrs. CAPPS. I mean, this is really tough. I am really concerned

that specific provisions in MDUFMA II proposal might expand the

role of third-party inspectors and leave the door open, wider open

for conflicts of interest and I would hope, Mr. Chairman, that as

we consider this bill in committee, we consider potential—well, I

really want to understand who these players are and what their interest is and how the public is really going to be protected through

this process and I hope we will have an opportunity to address

some of these concerns. Thank you.

Mr. PALLONE. Thank you. And I will mention at the end that you

may get questions like you did from Mrs. Capps. You know, we

would like you to get back to us, obviously.

Dr. SHUREN. Of course.

Mr. PALLONE. Mr. Pitts.

Mr. PITTS. Thank you, Mr. Chairman, and I thank the witnesses

for your testimony. In the past, we have heard complaints that

FDA has not provided detailed information on what it costs to review an application, nor has FDA provided detailed information on

how it has used the revenues from user fees. How does the FDA

plan to increase the transparency of how it is spending user fee

revenues?

Dr. SHUREN. First off, we do provide information now. We do actually put out an annual report, our financial report that talks

about how, in fact, we spent the dollars. On top of that, in

MDUFMA II, as I mentioned, we have a qualitative goal where we

will, in fact, twice a year report from a qualitative standpoint

where we have actually used the dollars to make investments in

the program. So our goal in MDUFMA II is greater transparency,

on top of the information that we already put out there publicly.

45

Mr. PITTS. I understand that FDA has estimated the total revenues from fees to be collected each year and that the bill stipulates

the revenues from fees the agency is authorized to collect each

year. Could you please explain what happens if the agency’s collections are higher than that authorized by the legislation? Will there

be any fee reductions in future years? Would you explain how that

would work?

Dr. SHUREN. There is an offset provision that we are proposing

in this legislation, in which we would look at the revenues that we

have collected over the first 4 years. It is not the full 4 years. We

will estimate the last part. And if we have, in fact, it looks like we

have collected more than we were supposed to for those first 4

years, we would make an appropriate reduction in the fees for the

fifth year.

Mr. PITTS. OK. Guidance documents that explain to device companies the requirements and expectations for product submissions

is a key factor in reducing product development time and improving the overall review process. With the increased revenues expected under MDUFMA II, does the FDA plan to improve the rate

at which it develops guidance documents?

Dr. SHUREN. With the resources we have, we are always looking

to put out appropriate guidance documents and when it is appropriate to do so and we have the ability to do so, we, in fact, do so.

One of the things we are also putting into MDUFMA II, in one of

our goals, is that we are giving an additional opportunity up front

to provide some guidance to us as to the appropriate guidances in

which we should invest our time. So we will put out once a year,

here is a list of the guidances that we plan to work on over the

next year or so, get feedback from the public as to this is the right

set of guidances. Are there other ones we should work on? Are

there particular things we should take in account or look at when

we develop that guidance document, and feed that into the process

before we actually put pen to paper.

Mr. PITTS. I understand that FDA has agreed to establish a more

interactive review process so that FDA reviewers can communicate

in a timely way with the device manufacturers, speed up the review process. What steps will FDA take to ensure that all reviewers will embrace this interactive review process so that it really

does work?

Dr. SHUREN. Well, we are going to take two steps. First off, we

will be putting out a guidance that lays out the basic principles for

interactive review and that will come out in the next few months.

We are under a very short timeframe to try to have that out

around the time that MDUFMA II, in fact, would start. And the

second is that we have a good integration with our staff and our

management and we do a lot of training in terms of what are the

expectations for the review and what are the expectations for oversight of that review, and that will be part of the training that we

go into now for MDUFMA II. As we move over into this slightly

modified regime for MDUFMA II, we are going to actually have to

reprogram our systems and go through training with our staff as

to what are the new goals and what are the steps we will take to

achieve those goals and interactive review will be one of those components.

46

Mr. PITTS. Doctor?

Dr. SCHULTZ. And I think one of the key aspects is this legislation, as it has removed one of the impediments to interactive review. Interactive review has always been a key component of the

device review process and I think one of the lessons learned from

MDUFMA I was that when you impose specific cycle goals into the

review process which require things to be done at certain times,

that, in fact—and not unintentionally, but certainly did have a negative effect on our ability to have the kind of interactive review

process that, quite frankly, has been a hallmark of device review

for the last 30 years. So I think we are really getting back to our

roots in terms of being able to do this interactive review and I

think we will be able to do it even better than we did before.

Mr. PITTS. Thank you. My time is up. I yield back.

Mr. PALLONE. Thank you. Ms. Eshoo.

Ms. ESHOO. Thank you, Mr. Chairman. As I mentioned in my

opening statement, I have a real interest in the whole area of pediatric medical devices. On the second panel we are going to be hearing from patient advocates about the need for children to be granted access to these medical technologies. It is a very special area

and I think it is an area where we really need to give really solid

direction from Congress and of course Mr. Markey. And as I said,

Mr. Markey and Mr. Rogers have offered legislation in this area

and I am pleased to be a co-sponsor of it. I often hear from the parents and from physicians at Lucile Packard Children’s Hospital in

my district about the need for devices that are appropriate for use

in children.

We know that doctors have had to essentially jerry-rig devices to

use on children on the operating table just to make sure that the

device fits or works properly. So unfortunately, I don’t see anything

in your testimony and maybe it is because this is the reauthorization of MDUFMA, but I looked for it and there isn’t anything in

it emphasizing pediatric device safety. So can you tell me what, if

anything, FDA is doing in this area to enhance pediatric medical

device safety and obviously to incent innovation? And do you have

anything that you want to share with us of what direction, what

would be helpful to us as the subcommittee that is essentially setting the table in this area? Dr. Schultz?

Dr. SHUREN. First let me say you are quite right. We did not

come here today to talk about pediatrics specifically, or you won’t

see it in the legislation we are talking about, because we have tried

to focus on the four corners of MDUFMA here and leave what may

be any other proposals pertaining to pediatrics.

Ms. ESHOO. Do you want to comment on that today or should we

just wait?

Dr. SHUREN. We would certainly love to comment on things that

the agency is doing currently. Let me talk about one thing and I

will turn it to Dan.

Ms. ESHOO. I have another question, so keep it as concise as possible. Just give us a flavor of what you are doing.

Dr. SHUREN. Sure. We are actually doing a number of things in

the area of enhancing post-market safety for children. Right now

we have a program called MedSun, which is 350 satellite facilities,

healthcare facilities, that do enhance monitoring for adverse

47

events. We are creating a subgroup under there, pediatric facilities

that are focusing just on adverse events and problems that may

occur with the use of the devices.

Ms. ESHOO. Is Lucile Packard one of these 300 places? Did you

say 300?

Dr. SHUREN. Three hundred and fifty for the whole program. For

pediatrics, it is a smaller subset. We have 24 pediatric hospitals

right now signed up within our program.

Ms. ESHOO. Is Lucile Packard one of them?

Dr. SHUREN. I don’t know but we can check.

Ms. ESHOO. OK. Yes. I wasn’t aware of it, that is why I am asking.

Dr. SHUREN. Yes.

Ms. ESHOO. On the administration’s PDUFA proposal this year,

there is always—and I think you have heard this from Members

on both sides of the aisle, probably more from our side, but you still

heard this. There are tensions built into user fees and approval.

From the outside looking in, people tend to look at this and say

well, if a company is paying, then the agency is pressured to approve and where is the efficacy in this? Can you state for the

record where the firewalls are in this?

Dr. SHUREN. Well, first off, the dollars that are sent to the agency, they are arms length from the reviewers.

Ms. ESHOO. I think I know what the answer is, but I think it is

still important to raise, because there are creative tensions there.

Dr. SHUREN. The first thing, the dollars do not go—the reviewers

are kept out of that process completely. The dollars actually go to

the U.S. Bank in St. Louis and are kept separate, so they are not

aware of fees being paid or amounts or anything like that. The second thing is that when we design our business process, we actually

have focused it on meeting the goals but in a way that also ensures

that we are not changing our standards. MDUFMA is not about

changing the standards at FDA. It is merely enhancing the processes we have for review. One thing it has helped us do is to build

up an expertise that also feeds back into all the safety aspects that

we need to look at for devices. So in that respect, it has actually

been very helpful to us.

Ms. ESHOO. On the reuse issue, how many actual inspections has

FDA undertaken at these facilities? Is it robust?

Dr. SHUREN. To actually look at the facilities, we have been——

Ms. ESHOO. Not to look at, to inspect them.

Dr. SHUREN. Right, to inspect them. The answer is yes.

Ms. ESHOO. Because I think these reused devices, they terrify

me, I have to tell you, and I did legislation in this area. People that

are in the hospital don’t know whether it is a device that is being

reused and I think we need to drill down on this. I still think there

is some work to be done, Mr. Chairman.

Mr. PALLONE. Thank you. I have to warn everybody that, apparently, the votes are already on. There are two votes and we have

less than 10 minutes left, but our clock didn’t work. So we are

going to take a recess. You can wait for us to come back.

Ms. DEGETTE. Mr. Chairman?

Mr. PALLONE. Yes.

48

Ms. DEGETTE. I would like to ask unanimous consent before the

recess, because I am not sure if I can come back and I just wanted—and what I was planning to do was just ask these gentlemen

if they could submit a written response to the questions I asked in

my opening statement. The first one is the recommendations that

I listed, which my staff can provide to you, has the FDA adopted

any of those recommendations with respect to pediatric populations? And the second question is, what has the impact been of

those recommendations? Mr. Chairman, if we can just get written

responses to those questions, then I won’t have to ask this panel

any questions.

Mr. PALLONE. That is fine.

Ms. DEGETTE. Thank you.

Mr. PALLONE. Thank you.

Ms. DEGETTE. Thank you.

Mr. PALLONE. But we still want you to wait because we have Mr.

Shadegg and we may have others that come back about half an

hour or so. So the subcommittee is in recess.

[Recess]

Mr. PALLONE. We obviously had a lot more votes than we expected, which, of course, happens around here. And I think when

we left off, I was going to recognize Mr. Shadegg.

Mr. SHADEGG. Thank you, Mr. Chairman, and thank you for

being here and pardon our long delay. I want to direct a couple

questions to the Third Party Inspection Program. I would be correct in understanding that when companies use the Third Party Inspection Program, that produces both a savings in money and a

savings in time for your agency and for the process of getting a device approved, correct?

Dr. SHUREN. That is correct.

Mr. SHADEGG. And therefore it is an overall benefit to you and

to the process and to getting this equipment into the field to help

patients who need care, correct?

Dr. SHUREN. That is correct. The whole gist of setting up the

Third Party Inspection Program, I think, came out of a recognition

that the agency did not have enough resources to do all the routine

surveillance inspections and this was a way to sort of supplement

so that we could actually increase our inspectual power.

Mr. SHADEGG. As a follow-on to that, my assumption would be

that the more companies that use that process, the more you, as

an agency, are able to focus your resources on areas where you feel

there is a greater risk.

Dr. SHUREN. That is correct. That will allow us to actually better

direct our resources at the higher risk products.

Mr. SHADEGG. Dr. Schultz, would you like to expand on that?

Dr. SCHULTZ. No, I think you got it exactly right. That is the

plan, is that we could get more information. I mean, we are always

looking for more information. We like to be able to get into companies as frequently as we need to. Obviously, we haven’t been doing

that. If we can use the Third Party Program successfully and understanding that there are some concerns and that we need to be

cognizant of those concerns, but if we can get better information on

routine inspections, using the Third Party Program, and focus

49

where we really need to focus our efforts, we think that that is the

way to go.

Mr. SHADEGG. Thank you. It would be my observation that, at

least from what I have seen and additionally, I have heard that

you are handling the issue of conflict of interest fairly well and

that this is a process that is working and serving the consuming

public and patients who need care.

Dr. SHUREN. We agree and also, in MDUFMA II, we are not looking to make any changes to the conflict of interest. We are not looking to relax that, at all. We believe it is important to keep in that

high level protection that is already built into the law.

Mr. SHADEGG. Let me ask you a question about reprocessed devices. As I understood your testimony earlier, you are watching

complaints regarding reprocessed devices and at least, at this

point, and doing inspections of reprocessing facilities and at this

point, you do not see a disproportionate level of problems or infections or other concerns arising out of remanufactured devices as opposed to OEM devices, is that correct?

Dr. SHUREN. That is correct. And we also look at the facilities.

There was a question before in terms of our looking at facilities.

We will get the actual numbers, but we probably look at those facilities a lot more closely than we do for other device facilities more

generally.

Mr. SHADEGG. Dr. Schultz, would you comment on that?

Dr. SCHULTZ. I think I would echo what Jeff said, but with the

caveat that trying to tease some of this information out, especially

some of this post-market adverse event data; looking at infections,

looking at complications of complex procedures and trying to tease

out the part of it related to a particular device is very difficult. In

general, we have not seen any huge signals that say that there is

a big difference.

Mr. SHADEGG. To follow up on that, do you believe the agency

needs further authority to look at that issue to assure the consuming public that there are, in fact, no problems?

Dr. SCHULTZ. I am not sure that authority is going to give us better science. Sometimes the two do not necessarily go hand-in-hand.

I think we are constantly looking at ways to develop better methods of looking at data that will allow us to make some of these distinctions, so I don’t necessarily at this point see it as an authority

issue.

Mr. SHADEGG. Well, if you do see a need for greater authority,

please let us know. I think it is important to carefully watch that

area. There was a comment earlier about a large number of complaints that believed the devices were reprocessed and you testified

that only a fraction of them, in fact, were reprocessed devices. Is

there a specific requirement that patients be advised that a reprocessed device is being used?

Dr. SCHULTZ. No, there is no requirement under our law for that.

Mr. SHADEGG. And do you think that is something that would be

advisable?

Dr. SCHULTZ. It is something that we haven’t considered in the

past. It is something we can certainly think about and discuss with

you in the future.

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Mr. SHADEGG. Informed consumers, I mean, my view is if there

is an economic use to reprocessing, that is a good thing, but I will

also agree that informed consumers are an important part of a

marketplace and if you do not know something about a device that

is being used, perhaps that should be disclosed. Thank you, Mr.

Chairman. I yield back.

Mr. PALLONE. Thank you, and thank you very much for bearing

with us for the hour and a half or so. A half an hour that turned

into an hour and a half. I just wanted to mention, I think I may

have said before that Members may submit—some Members already asked questions that we would like you to get back to them.

You may get additional ones within the next 10 days or so. And

I know when Mr. Waxman talked about that report on the postmarket surveillance that I mentioned, we really would have to get

it by a week from Friday in order for it to be useful for us in our

reauthorization. Not this Friday, but the following. And then before

he left, Mr. Waxman mentioned that there is another outstanding

report in MDUFMA I where the FDA is supposed to report back

to us no later than January 10, 2007 on FDA’s experience with

third party reviews of 510(k)’s. Can I ask you, is that something

that is also in its final stages or——

Dr. SHUREN. Yes, and you will have that very soon, too.

Mr. PALLONE. Yes. I mean, that is the same thing, I mean, for

us, to be useful to us, we would need it by a week from Friday before the break. So with that, thank you very much. I appreciate

your being here. And we will move to the second panel. Thank you.

Dr. SHUREN. Thank you.

Mr. PALLONE. I am sorry. I would ask the second panel to come

forward. Welcome to all of you again. Let me introduce this panel.

First we have Mr. Paul LaViolette, who is chief operating officer

for Boston Scientific Corporation, and then we have Dr. Diana

Zuckerman, who is president of the National Research Center for

Women and Families here in DC.

And then third we have Mr. Kelvyn Cullimore, Jr., who is

MDMA secretary, president and CEO of Dynatronics Corporation,

Salt Lake City, Utah. I have to tell you that Mr. Matheson wanted

to introduce you, but he might have gotten caught up in all these

votes and everything, so I will introduce you for now. And then Mr.

Steven A. Grossman, who is executive director of the FDA Alliance

in Silver Spring. And last is Ms. Diane Dorman, who is vice president for public policy of the National Organization for Rare Disorders.

And again, we ask you to make 5 minute statements. If you want

to add additional material, at our discretion, you can do that. And

we will start with Mr. LaViolette.

STATEMENT OF PAUL LAVIOLETTE, CHIEF OPERATING

OFFICER, BOSTON SCIENTIFIC CORPORATION

Mr. LAVIOLETTE. Thank you, Chairman Pallone and Congressman Deal. I am Paul LaViolette, chief operating officer of Boston

Scientific and a major innovator in medical devices product area.

I am here today in my capacity as a member of the AdvaMed

Board of Directors and I am pleased to testify before the subcommittee today regarding the reauthorization of the Medical DeVerDate 11-SEP-98 15:19 Oct 06, 2008 Jkt 000000 PO 00000 Frm 00055 Fmt 6633 Sfmt 6633 Q:\DOCS\110-47 SCOM1 PsN: SCOM1
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vice User Fee and Modernization Act, obviously referred to as

MDUFMA II.

The medical technology industry thanks you for convening this

hearing about this important agreement. As a general matter, we

believe this legislation is good for patients and for public health.

It will facilitate the timely and effective review of new medical

technologies and bring them to patients as soon as those products

can be shown to meet FDA’s rigorous requirements. I am pleased

to report that FDA and industry support this agreement and look

forward to its timely consideration.

The legislation builds on experience gained from the implementation of the original medical device user fee program which was enacted, of course, in 2002. The user fee program for medical devices

has increased the availability of important new medical device

technologies for patients and physicians faster and more efficiently

than prior to the program’s enactment. We are very encouraged

that the Senate has recently passed, overwhelmingly, a MDUFMA

II bill that incorporates all the essential elements we agree to with

the FDA. We hope that you also see the value of the MDUFMA

agreement and work toward a swift resolution in the House of Representatives. I hope today’s hearing provides you with the necessary information to do just that.

Mr. Chairman, there are six key points about the MDUFMA

agreement that I would like to highlight today.

First, the legislation would provide FDA with stable and predictable funding for the device program through a combination of appropriations and user fees. In fact, under MDUFMA II, the user fee

collected over 5 years would increase approximately 90 percent

over those collected during the previous 5 years under MDUFMA

I. Importantly, the legislation continues a central provision of the

original MDUFMA legislation whereby Congress is committed to

providing FDA’s device program with an annual inflationary increase. The user fee that is paid by industry would be an additive

to the appropriated congressional base.

Under MDUFMA I, all of the FDA’s revenues from user fees

were derived from application fees. As a result, FDA’s revenue was

unpredictable and led to insufficient revenue in years in which

fewer applications were submitted. To address this fluctuation in

revenues, FDA and industry have agreed to a new fee structure

that combines existing application fees with new facility registration and annual report fees. These fees will ensure that FDA has

a more stable and predictable revenue stream.

The legislation contains significant improvements for small businesses, the lifeblood of so much innovation within our industry, by

providing further reductions in fees for small businesses, as compared to what larger companies would be required to pay.

Quantitative performance goals for FDA’s review of new medical

device applications were an important component of MDUFMA I

and we are pleased that FDA has agreed to continue performance

goals under MDUFMA II. The agency is committed to review each

application type within a specified time period. These performance

goals have improved the overall efficiency and predictability of the

review process that is essential to the industry. We are also

pleased that FDA has agreed to revamp and simplify the performVerDate 11-SEP-98 15:19 Oct 06, 2008 Jkt 000000 PO 00000 Frm 00056 Fmt 6633 Sfmt 6633 Q:\DOCS\110-47 SCOM1 PsN: SCOM1
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ance goal structure to focus on the time for final decision goals

rather than on intermediate cycle goals.

We are pleased that FDA has agreed to a number of qualitative

goals, as well. Most important, as has been testified to previously

today, is the agency’s commitment to an interactive review process.

The legislation would also make needed procedural adjustments to

the Third Party Inspection Program, which was authorized under

MDUFMA I. These procedural adjustments maintain the stringent

conflict of interest requirements for third party inspectors and the

stringent eligibility requirements for participating companies.

Last week, the Senate also passed legislation by Senator Dodd

designed to address the challenges facing pediatric medical device

development. As an industry, we support the goal of providing

greater access to safe and effective medical devices for children. We

look forward to working with Congressman Markey and Congressman Rogers on their bill, the Pediatric Medical Device Safety Improvement Act. We believe that creating incentives to encourage

pediatric device development is critically important.

However, it also important that legislation intended to encourage

pediatric device development does not create unintended consequences or adversely impact the availability of safe and effective

medical devices for the broader population. Unlike drugs, the kinds

of incentives that exist in the Best Pharmaceuticals for Children

Act are not currently available for the device industry. We thank

Congressman Markey and Rogers and Congresswoman Eshoo for

their leadership on pediatric issues and we look forward to working

with the committee on this important priority.

In conclusion, we believe the reauthorization of MDUFMA that

incorporates all the essential elements industry and the FDA have

agreed to, will enable FDA to further improve its performance, both

in quantitative and qualitative ways, while creating a stable and

predictable fee structure that benefits both FDA and the device industry. Most importantly, American patients will be the true beneficiaries. I want to thank both my industry colleagues and the FDA

staff who worked so diligently over the past year to reach this

point. Chairman Pallone, Mr. Deal and members of the subcommittee, I thank you for convening this hearing today and allowing me

to share our perspective. We look forward to working with the committee as you consider the MDUFMA legislation. Thank you.

[The prepared statement of Mr. LaViolette follows:]

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Mr. PALLONE. Thank you, but we have bad news. There are another two votes, and it appears that there is a pattern because the

minority is upset. I don’t know for good reason or not. So we will

be gone about another 20 minutes or so. Hopefully no longer than

that. Sorry. Committee is in recess.

[Recess]

Mr. PALLONE. OK, we will reconvene. And I think we listened to

Mr. LaViolette and now we have Dr. Zuckerman.

STATEMENT OF DIANA ZUCKERMAN, PRESIDENT, NATIONAL

RESEARCH CENTER FOR WOMEN AND FAMILIES

Ms. ZUCKERMAN. Thank you for inviting me to testify. MDUFMA

is one of the most important bills to come before Congress this year

and until today, it has received very little attention. So on behalf

of medical researchers, patients and consumers, thank you very

much for holding this hearing.

I am Dr. Diana Zuckerman, president of the National Research

Center for Women and Families, which is an independent think

tank that focuses on health and safety issues. Our center is an active member of the Patient and Consumer Coalition. I was trained

as an epidemiologist at Yale Medical School. I conducted research

at Harvard. I worked as congressional investigator on FDA issues

in this building and I am the author of several books and book

chapters, including a chapter in a new book on medical devices that

just came out.

All of us use medical devices and baby boomers are increasingly

relying on implanted medical devices, whether they are hips or

heart valves or wrinkle fillers. And the bad news is that most of

these medical devices have not been tested in clinical trials as part

of the FDA review process. At the Center for Devices and Radiological Health, most devices are approved under an expedited process called the 510(k) process. This process is intended for products

that are substantially equivalent to medical devices that are already on the market and sometimes that makes sense. For example, a device that has been modified very slightly to make it a little

bit better, but it is still made by the same manufacturer.

But even small changes can affect safety and can be dangerous.

So for example, when Bausch & Lomb added MoistureLoc to their

contact lens solution. The new product was approved through the

510(k) process. No clinical trials were required and no inspections

took place. The result was eye infections and blindness for some of

the people who used this product. I am sure we can agree that nobody should become blind from contact lens solution when there is

so many safe contact lens solutions available. And nobody should

die from a stent or a heart valve that wasn’t adequately tested.

I think FDA should always require clinical trials when potentially dangerous devices are modified. MDUFMA II should make

sure that the approval process protects consumers. The performance goals of MDUFMA II would drastically speed up this 510(k)

process. 90 percent of 510(k) reviews would have to be completed

within 90 days, 90 percent/90 days. This is not safe. The PMA device approval process, which is more similar to the drug approval

process, is also faster in MDUFMA II. 60 percent of PMA and PMA

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supplements would need to be completed in just 6 months. This is

considerably faster than what is expected of drugs.

So what would FDA get for speeding up the process? The user

fees for these new reviews would actually decrease. For example,

the user fee for a 510(k), which is already a bargain at about

$4,000 in 2007, is reduced 18 percent to $3,400 in 2008. And it is

my understanding that that is the maximum amount for a 510(k).

It is the amount that even a multi-billion dollar company would

pay for a 510(k).

FDA claims that the total user fees would increase, but that is

only because the workload increases as each of these reviews is actually reimbursed—not reimbursed, has a user fee at a lower rate.

So MDUFMA II is generous to medical device companies because

it reduces those costs and gives faster reviews. What are the benefits to the American public? Sometimes the public benefits from

faster reviews and innovations, but innovation is only good if a

product is better; not if it is merely new and different. An innovative contact lens solution that causes blindness obviously is not

progress.

Dr. Donald Ostergard, a nationally respected urologist, recently

gave a speech at a national conference explaining that FDA’s frequent use of 510(k) reviews and their failure to adequately test

medical devices hurts doctors and hurts patients. He said with no

data, doctors can only guess which products work and which ones

don’t. MDUFMA II has performance goals for speed, but it needs

performance goals for public health, as well.

Instead, the FDA is making the approval process for devices even

less cautious. So for example, in January of this year, the FDA

held a public meeting on a new device called NeuroStar, which

uses magnetic pulses to the brain to treat depression. The FDA

says that NeuroStar can be approved as substantially equivalent to

electroshock therapy, since both treat the same illness, which is depression, if the risk to benefit ratio is similar. So even though it

is a completely different device using a completely different mechanism of treatment, they are saying it would be substantially equivalent if the risk to benefit ratio is similar.

But how can the FDA or anybody else determine if the risk to

benefit ratio is similar if new devices don’t necessarily require clinical trials? If Congress does not stop this regulatory loophole, almost

any medical device can be eligible for the much less rigorous 510(k)

process. This will certainly help speed up the process, but at the

risk of flooding the market with medical devices that either don’t

work or are not safe.

MDUFMA II does not provide adequate user fees for the review

of direct-to-consumer advertising to analyze adverse reaction reports or to make sure that post-market studies prove that the products are safe. So although FDA has the flexibility of spending the

user fee money however they want, there is just not enough money

for all of the things that they would need to do.

I want to mention that direct-to-consumer ads for potentially

dangerous implanted devices, such as gastric LAP-BANDS, are featuring patients giving testimonials about how the product changed

their lives and these testimonials are allowed to be paid for by the

company in the form of free treatment.

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My final criticism is third party inspections. MDUFMA would

weaken the restrictions that limit third party inspections. That was

already mentioned by Congresswoman Capps and others and I just

wanted to reiterate that, that it is really important that something

be done about that.

And I also just wanted to say that I share the concerns that were

expressed by committee members about the reuse of single use devices and also to mention that one of the concerns about reuse of

devices is that although they are relying on adverse reaction reports, we know that the adverse reaction report system isn’t working very well and so therefore relying on that won’t give us the information we need about whether single use devices are harmful.

Overall, we are very disappointed in FDA’s proposed MDUFMA

II. Substantial improvements are needed to this legislation to restore America’s confidence in the FDA. With your leadership and

revisions to MDUFMA II, you can make sure that CDRH has the

resources, the regulatory responsibilities, the enforcement powers

and the performance goals needed to protect our families, your constituents and the American public. Thank you.

[The prepared statement of Ms. Zuckerman follows:]

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Mr. PALLONE. Thank you. Mr. Cullimore.

STATEMENT OF KELVYN CULLIMORE, JR., MDMA SECRETARY,

PRESIDENT AND CEO, DYNATRONICS CORPORATION

Mr. CULLIMORE. Thank you, Chairman Pallone and Ranking

Member Deal. Appreciate the opportunity to be here today and

make my testimony to talk a little bit about the reauthorization of

the Medical Device User Fee and Modernization Act.

My name is Kelvyn Cullimore, Jr. I am the president and CEO

of Dynatronics Corporation, a small publicly traded medical technology company headquartered in Cottonwood Heights, UT, just

outside of Salt Lake City. And we also have manufacturing operations in Chattanooga, Tennessee. Today I am here to testify on behalf of the Medical Device Manufacturers Association, a national

organization representing the innovative entrepreneurial sector of

the medical technology industry. MDMA’s mission is to ensure that

patients have access to the latest advancements in medical technology, many of which are developed by small research-driven medical device companies.

Before I discuss the specifics of the MDUFMA II proposal, I wish

to emphasize that ideally, FDA’s medical device pre-market review

system would be funded solely by congressional appropriations.

However, given growing budgetary constraints, that does seem unlikely. MDMA opposed device user fees for nearly a decade. However, we modified our position in 2002 when MDUFMA I incorporated specific protections for small companies.

It remains essential, however, that Congress continue to maintain its primary role in funding FDA. As mentioned, MDUFMA I

included important provisions that granted smaller companies fee

relief, including an initial PMA waiver and a two-tiered user fee

structure. These provisions have proven critical given the entrepreneurial nature of the medical device industry. Unlike the pharmaceutical industry, innovation in the medical device industry is

primarily driven by smaller companies working directly with doctors and engineers. Maintaining the safeguards for smaller companies under MDUFMA II is crucial to continuing this innovative environment.

The MDUFMA II proposal seeks to address a number of issues

that arose under MDUFMA I. For example, under MDUFMA I, fee

revenues were generated solely from application fees. As a result,

in just a few years, some fees spiked as much as 60 percent. These

types of increases cannot be sustained and MDMA was pleased

when Congress acted, under MDUFSA, to cap annual fees increases at 8.5 percent. These same annual caps exist under the

MDUFMA II proposal. MDMA views these caps as critical to the

stability of the program.

MDUFMA II will expand the types of user fees that FDA collects;

in addition to application fees established under MDUFMA I,

MDUFMA II would add new annual report and registration fees,

which would limit the fee variability encountered under MDUFMA

I and reduce application fees for all companies.

MDMA also supports the interactive review principle established

under MDUFMA II to improve communications and interaction between FDA and the industry. In light of continuing advancements

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in medical technologies, it is increasingly important for FDA reviewers and sponsors to engage in open and regular dialog. MDMA

believes that early and frequent communications with the agency

will prevent unnecessary delays in the completion of the review,

avoid surprises to FDA and the sponsor at the end of the review

process, minimize the number of review cycles and ensure timely

responses from the sponsors.

MDMA also supports efforts to simplify the MDUFMA performance goals to allow FDA to better manage the overall review process. FDA has stated that the current MDUFMA I cycle goals, created inefficiencies in the review process. Therefore FDA and industry have agreed, under MDUFMA II, to eliminate dozens of intermediate cycle goals. Instead, FDA would be measured on performance goals for overall time to final decision.

In addition to the user fee provisions, MDMA strongly supports

modifications to the Third Party Inspection Program and provisions

which encourage greater clarity on a variety of issues, including

the development of additional guidance documents. MDMA understands that there are other issues beyond MDUFMA II that this

committee will be considering in the coming weeks. Specifically, I

would like to express MDMA’s strong support for legislation that

provides incentives to manufacturers to develop pediatric medical

devices. However, MDMA wishes to emphasize that any legislation

must be carefully crafted to avoid creating unintended disincentives. MDMA looks forward to working with the committee and

other interested stakeholders to address these issues in a manner

that encourages the development of pediatric products.

In closing, I would like to thank the committee for your efforts

on behalf of the innovative entrepreneurial medical technology

companies and patients. Both stand to significantly benefit with

the reauthorization of MDUFMA II. I look forward to answering

any questions that you might have.

[The prepared statement of Mr. Cullimore follows:]

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Mr. PALLONE. Thank you. We have another wonderful vote, but

in the meantime I am going to try to keep going, so Mr. Grossman.

STATEMENT OF STEVEN A. GROSSMAN, EXECUTIVE

DIRECTOR, THE FDA ALLIANCE

Mr. GROSSMAN. Chairman Pallone, Representative Deal, thank

you for the opportunity to testify. I am Steven Grossman, the executive director of the FDA Alliance. We are a broad-based, nonpartisan coalition of consumers, patients, healthcare professionals

and industry. Since our founding a year ago, we have grown to

more than a hundred members, including seven former FDA commissioners.

Our core concern is that FDA is severely under-funded, relative

to the vast responsibilities given it by Congress and the justifiable

expectations of the American people. The FDA Alliance believes

that the hardworking FDA staff cannot keep up with the increasingly complex and growing workload without additional staff, improved information technology and increased support for training,

outreach and scientific standards.

Second, strengthening FDA must be a priority for this and subsequent Congresses. The funding shortfalls affect every aspect and

every part of the agency.

Third, FDA should be fully funded through appropriations augmented by user fees. User fees cannot be allowed to substitute for

sufficient levels of appropriated funds.

Since 2003, the FDA has lost about 20 percent of its buying

power and has nearly a thousand fewer employees supported by

appropriated dollars. There are consequences. It is harder to maintain our Nation’s economically valuable position as the gold standard for food, drug and device regulation. Also, it is difficult for FDA

to recruit and retain the best and the brightest when the resources

are inadequate.

FDA spends more than 83 percent of its budget to support its

workforce. It needs a 6 percent annual increase in appropriations

just to maintain current services. CDRH, actually, is even needier.

It needs about 7 percent. Yet annual appropriations to FDA never

include the full costs of the agency of pay and benefit increases or

rising non-pay costs.

FDA is the Nation’s premier consumer health and safety agency.

But in addition, it also is vital to the Nation’s economy. Innovative

companies need a cutting edge regulator to prepare the way for

breakthroughs in medical science and products that combine drugs

and devices. Companies are not helped when they are ahead of

FDA on the science. That doesn’t work and things slow down instead of speed up as they should.

FDA also must be strengthened to assess more sophisticated

products and to monitor the increasingly complex safety parameters in drugs, food, medical devices and veterinary products. Congress should make a long-term commitment to upgrade FDA’s appropriated funding. We recommend that Congress start providing

FDA with $2 billion in appropriated budget authority for fiscal year

2008, an increase of about $450 million over the current appropriation. This would restore the 2003 agency operating capability, plus

mandated programming. This is something of ‘‘Back to the Future.’’

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Things were actually better 5 years ago and the agency has clearly

lost ground.

Adding in user fee revenue would result in the total FDA budget of about $2.5 billion in fiscal year 2008. Of the proposed $450 million increase in appropriated funding, we recommend that the Centers for Medical Devices and Radiological Health and related field

activities receive an increase of $72 million in fiscal year 2008. This

would bring the Center from its current $230 million to $302 million, not including user fees.

Because devices are cutting edge science, CDRH needs these nonuser fee monies for additional staff to perform product reviews, assure pre- and post-market safety, and facilitate innovative technology coming to market. An updated, modernized IT system is

also essential to support the Center and its staff. Most of the praise

that committee members have given to CDRH, which is justified,

point at different activities and say MDUFMA did this and

MDUFMA did that. Most of those activities were funded by appropriations and many of the expectations you have for CDRH and for

medical devices in the future will not happen, user fees or no user

fees, without an increased appropriation. In closing, Congress appropriates $4.94 per American per year, excluding user fees, for the FDA. At our proposed level of $2 billion, we would be spending only $6.67 per American per year. For

reference purposes, the difference is about the same as a package

of 15 assorted Band-Aids. In closing, $2 billion in appropriated

funds, sustained and increased over four subsequent fiscal years,

will help FDA fulfill its mandate and be innovative in its approach

to regulation, oversight, inspections and monitoring. Thank you.

[The prepared statement of Mr. Grossman follows:]

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Mr. PALLONE. Thank you, Mr. Grossman.

We have 5 minutes, so if you use your whole 5 minutes, we won’t

be able to stay. Thanks.

STATEMENT OF DIANE E. DORMAN, VICE PRESIDENT FOR

PUBLIC POLICY, NATIONAL ORGANIZATION FOR RARE DISORDERS.

Ms. DORMAN. Mr. Chairman, Mr. Deal. Thank you for giving me

the opportunity to testify before you today regarding the reauthorization of MDUFMA II. I will also share my views on the pediatric

device bill, which is very important to NORD, that is sponsored by

Mr. Markey and Mr. Rogers.

I am Diane Dorman, vice president of public policy for the National Organization for Rare Disorders. Because most patients with

rare diseases have no or few treatments, our primary goal is to encourage research and development of new orphan drugs and biologics and humanitarian devices. I will speak only briefly about

MDUFMA reauthorization.

NORD believes that the FDA, in a perfect world, should be fully

funded through appropriations, but we recognize for now user fees

are inevitable and crucial to ensure that safe and effective products

reach the public as quickly as possible, therefore we do not oppose

the concept of user fees for medical devices. I testify before you

today to express NORD’s strong support of the Pediatric Medical

Device Safety Improvement Act. Children need medical devices

that are safe, effective and made just for them. Devices must take

into account the small size of children and accommodate their

growing and changing bodies and active lifestyles.

Yet doctors continue to be frustrated by the lack of modern medical devices for children because today’s devices are not made with

these considerations in mind and some vital life saving devices are

not made at all. Consequently, children are frequently denied access to the latest technologies that we have heard a lot about

today. They don’t have access to lifesaving devices, some that could

save their lives. Doctors are left with only one untenable option

and they are forced to jerry-rig existing devices in hopes of accommodating the needs of their young patients.

NORD supports all the provisions of H.R. 1494, including the

FDA’s ability to track the number and type of devices approved

specifically for children, as well as the destination of a contact

point or office within the NIH to help innovators. There are two

provisions that are of particular interest to me. First is the 6-year

demonstration grant provision supporting nonprofit consortium to

provide critically needed support to help innovators with pediatric

devises. Perhaps had this nonprofit consortium existed previously,

it would have not taken Dr. Robert Campbell 14 years to invent,

develop and then bring to market the Vertical Titanium Rib.

I would like to turn your attention to the screen. This is the titanium rib developed by Dr. Robert Campbell. He is a Professor of

Orthopaedics and also a pediatric surgeon at the University of

Texas Health Science Center in San Antonio. Next slide.

[Slide]

This is Devon prior to the surgery insertion of the titanium rib.

Next one, please.

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[Slide]

This is the surgery after.

Mr. PALLONE. Ms. Dorman, you know what I am going to do? I

am just going to take a recess because I only have 2 minutes, all

right?

Ms. ZUCKERMAN. OK.

Mr. PALLONE. And then we will come back and finish with your

statement and then we will take questions.

Ms. ZUCKERMAN. OK.

Mr. PALLONE. Thank you. Sorry to do that to you, but I don’t

think we have enough time.

Ms. ZUCKERMAN. It is all right.

Mr. PALLONE. We will stand in recess.

[Recess]

Mr. PALLONE. OK, Ms. Dorman, what happened to the titanium

rib? Wherever you left off.

Ms. ZUCKERMAN. Yes, I think I left off just showing these pictures. This is Devon, who was born without nine ribs and scoliosis.

He was not expected to live at all.

[Slide]

And the next picture is after surgery. And the next picture.

[Slide]

And this is today. He is playing baseball. It is an incredible device. That is it. Thank you.

I would also like to talk about the Humanitarian Device Exemption to allow companies to make profit on HDE approved humanitarian devices. The HDE pathway is a tool used to approve devices

intended to very small patient populations, which often include

children, and those with very rare conditions. It was originally

thought that the restriction on profit would force device manufacturers to conduct full clinical trials and seek pre-market approval

from the FDA. That scenario never played out. Instead, the restriction on profits proved to be a barrier to innovation, especially for

children.

Of the 39 humanitarian devices currently on the market, only

seven are specifically intended for the use in the pediatric population. By eliminating the cap for children, the likelihood that companies will manufacture pediatric devices will increase, especially

the small manufacturers, who are likely to embrace an affordable

pediatric device development pathway.

I would now like to address an issue not specific to H.R. 1494,

but of great importance to the rare disease community. FDA has

been very sensitive to the value of humanitarian devices and has

made clear that they are legally marketed products and not experimental. I have attached a page to my written testimony that illustrates the lengths the FDA has gone to to clearly establish that

HUDs are legally marketed. Nonetheless, insurers and government

programs often will not reimburse the use of humanitarian devices

because they view them as experimental. In effect, they ignore

FDA’s regulations on the status of these devices.

We believe that the situation could be improved if the current

FDA regulatory policy would be codified in statute. This would

make it more difficult for reimbursement to be denied by making

clear that FDA’s position is backed by Congress. NORD would welVerDate 11-SEP-98 15:19 Oct 06, 2008 Jkt 000000 PO 00000 Frm 00094 Fmt 6633 Sfmt 6633 Q:\DOCS\110-47 SCOM1 PsN: SCOM1
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come the opportunity to accomplish this by working with committee

staff and FDA to draft appropriate language to address this terrible problem.

I want to thank the committee for allowing me the opportunity

to share my views on the reauthorization of MDUFMA and most

importantly, the Pediatric Medical Device Safety Improvement Act.

Thank you.

[The prepared statement of Ms. Dorman follows:]

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Mr. PALLONE. Thank you. And now we will take some questions

and I will start with myself.

I was going to ask Mr. LaViolette, what is your view of the legal

status of the performance goals mutually agreed upon by FDA and

industry for the Medical Device Review Program? Specifically, do

you believe these goals are binding or does FDA reserve the right

to ignore or miss them?

Mr. LAVIOLETTE. The goals, as I understand it, are definitely not

binding. They are attached, if you will, to the legislation. They are

guidelines. They are intended to keep everyone focused on accountability and on process improvements, but they are absolutely not

binding.

Mr. PALLONE. OK. And then I wanted to ask Ms. Dorman, you

mentioned the need for additional incentives that would encourage

manufacturers to develop and manufacture devices for the pediatric

population. But specifically, what incentives not already in place

would foster the development of additional lifesaving pediatric devices?

Ms. DORMAN. The one that I talked to you about is removing the

cap on profits for humanitarian devices. I have spoken with FDA,

with all the stakeholders, including industry, and they feel that

this is a real roadblock when they are not able to make any type

of profit at all. And we feel as if taking that cap would provide,

hopefully, an incentive for companies, especially the smaller companies, to develop these devices for children.

Mr. PALLONE. And then Mr. Grossman, the President’s budget

for fiscal year 2008 requests for FDA’s Medical Device Program,

well, his budget request is $285 million. The FDA Alliance believes

the agency will need $302 million for the fiscal year 2008 Medical

Device Program. Why do you think there is such a discrepancy?

Mr. GROSSMAN. In general, the President’s budget request for

most of the agency is just barely above the level needed to continue

the same staff. We feel that that is inadequate for the demands

that are being placed on FDA and as I indicated, the fiscal year

2003 budget was better than the current one, so the agency has

gone backwards. We believe that the additional money is needed

for a variety of things; shorter application review times, more meetings and opportunities for interaction.

These are things you have heard. More guidance, development

standards, more participation in industry workshops, maintain and

expand combination products, international programs and most of

all, information technology is something that has to be invested

and you just can’t throw a couple of million at it each year and expect that you are going to get the databases that actually add

value.

Mr. PALLONE. OK. I was listening to Dr. Zuckerman’s statement

where she basically was very critical of the 510(k) process. She explained in some detail about why she thought it was kind of out

of control. I just wondered if anybody wanted to respond to that because it seemed kind of—I mean, I hadn’t heard it criticized so

drastically, not to take away. I am glad you are here to say what

you think is important. Did anybody else want to comment on what

she said in that respect? Go ahead.

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Mr. LAVIOLETTE. I will make at least one comment, which is that

first of all, the number of 510(k)’s is probably in the 4,000 per year

range in comparison to some limited hundreds of PMAs, so it is the

majority of devices that obviously the resource intensity, if we were

to apply the same standards to those, would swamp the system,

No. 1. Number 2, by definition, they are lower risk devices. That

is how they were categorized at the class 2 level to begin with. Despite their lower risk category, while many of them are not associated with clinical data, they are often associated with extensive

mechanical bench testing data, so they are very highly tested, just

not necessarily in randomized controlled trials. And despite that, at

any point the FDA has the right to impose a clinical data generation requirement on the device.

Mr. PALLONE. They can do it; they can impose——

Mr. LAVIOLETTE. They absolutely can, any time they choose, and

my company has clinical trials underway today on class 2 devices,

so clinical data can be generated any time, as needed.

Mr. PALLONE. Mr. Cullimore, did you want to say something?

Mr. CULLIMORE. We are very pleased with the goals that are

being set by the FDA under MDUFMA II, but I would point out

that even if we achieve the goals that are being set, they still fall

short of the statutory obligations under the original medical device

amendment. And so without commenting on the adequacy of the

original medical device amendment, I will just point out that the

goals that are being set here, the acceleration, as minimal as it

may seem, still does not return us to the statutory requirements

set under the original medical device amendment.

Mr. PALLONE. OK. Anybody else? All right.

Ms. ZUCKERMAN. Mr. Chairman.

Mr. PALLONE. Yes, you can respond again, if you want. I will let

you come back again.

Ms. ZUCKERMAN. I just wanted to mention that although the idea

of a 510(k) was for less—well, for devices that were less potentially

dangerous, it is not always clear what that would be and so contact

lens solution, I think the perfect example where we take it for

granted that contact lens solution is safe and who of us who uses

it, who ever worries about it? But because this particular contact

lens solution was changed, no clinical trials were done and no inspections were done, it ended up to have something in it that made

it easier for bacteria to grow and to harm vision.

Mr. PALLONE. Well, would you advocate reclassifying what comes

under 510(k) or I mean, it seemed like you were just saying scrap

it altogether.

Ms. ZUCKERMAN. Oh, I didn’t mean that, no.

Mr. PALLONE. Maybe I misunderstood.

Ms. ZUCKERMAN. No. I think there are plenty of devices that

could be approved under a 510(k), but they are supposed to be, at

least traditionally, they were substantially equivalent to something

else on the market. That used to mean for the same purpose and

a very similar device that had just been changed in some minor

way. But that definition of substantially equivalent has changed so

dramatically that now they are approving, sometimes, implanted

devices and sometimes completely new technologies, and the

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NeuroStar that I mentioned is a completely new technology, different from anything else.

Mr. PALLONE. Well, let me ask you this. Did you, either in your

oral or written testimony, come up with a new definition or some

way of redefining it? I mean, I tried to listen, but did you suggest

that?

Ms. ZUCKERMAN. No, the FDA has redefined it. It used to be substantially equivalent meant similar materials, same purpose. But

now it means similar purpose, which doesn’t necessarily mean the

same. It is like depression, which you are treating depression, but

there is a lot of different ways to treat it. Similar purpose and it

can be a completely different material, completely different technology, as long as the risks and benefits are similar, but that opens

up Pandora’s box, because you are not—assuming that this product

is similar to something else that has already been through some

kind of rigorous review.

You are just picking anything to try to figure out whether the

risks and benefits are similar and without clinical trials, you can’t

determine if the risks and benefits are similar. So although it is

correct that testing has been done, if the testing is not done on

human beings with a particular treatment need, you don’t necessarily know how it is going to affect them without those clinical

trials.

Mr. PALLONE. OK. Thank you. Mr. Deal.

Mr. DEAL. Mr. Grossman, I understand that your alliance obviously supports additional budget funding for FDA. What is your

take on the restructuring of the fee schedules? Are you satisfied

with that restructuring, even though it may minimize or reduce the

application fee, it makes up for it in other areas? Are you satisfied

with that arrangement?

Mr. GROSSMAN. Our position goes to the aggregate resources and

so we—I have 108 members. I would say we don’t have a position

on the specifics of whether it comes from facility fees or applications.

Mr. DEAL. OK. We heard the testimony of Ms. Dorman on the

humanitarian device exemption. I suppose, from the two industry

people, what is your position? I understand that the profit cap be

removed and also that—what was the second part of your recommendation?

Ms. DORMAN. Initially, it was somewhat different. It was regarding the reimbursement for humanitarian devices, so it is outside

the purview of this——

Mr. DEAL. And you were suggesting that the policy of FDA be

put into statute so that the question of whether or not it is approved rather than experimental is removed, that was part of your

suggestion?

Ms. DORMAN. That is correct.

Mr. DEAL. OK. What is the reaction of the two industry representatives to that?

Mr. LAVIOLETTE. Just speaking on our behalf, representing

AdvaMed and Boston Scientific, I would favor that. I think that is

a smart move. It is one small step. I think if we really want to encourage device development for pediatric applications, we have to

take many more steps. We support the Markey-Rogers initiative

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and it contains a number of efforts that begin to identify the needs

and I think one of the issues with pediatric applications is that the

needs are not clearly identified and then ultimately build some series of incentives to drive innovation in that direction. HDE is one

route, but not by any means the sole route. Devices are very different than drugs. We need, I think, a different set of mechanisms

to encourage innovation for pediatric patients.

Mr. CULLIMORE. Our position is not any different. We agree with

that. We do have some concerns about how the bill is being crafted

as far as language that has FDA, section 522 where FDA would

have the option of requiring post-market surveillance as a condition

of approval. We have concerns that that particular provision may

actually have a contrary effect to what is intended because if someone views that as a potential additional cost, it could inhibit the

interest in pursuing that course, so with that caveat, we also support this.

Mr. DEAL. Mr. Cullimore, while you are at the microphone, could

I get you to address the issue of trying to down-class devices that

may originally be classified in one area of classification, the process

of down-classifying those. What, if anything, needs to be addressed

in this legislation with regard to that?

Mr. CULLIMORE. I don’t know that this particular legislation is

the place for that, but the concept is not new. Back in the 1990s,

when FDA was facing a very large backlog of applications, probably

the worst in their history, one of the innovative approaches that

was taken was to significantly down-classify devices that required

applications and I think, like any business, you have to continue

to innovate. You have to reevaluate and if there are products that

can be down-classified, thus reducing the workload without jeopardizing the safety of products on the market, I would think that

should certainly be considered.

Mr. DEAL. OK. Mr. LaViolette.

Mr. LAVIOLETTE. I agree fully. I think the FDA Modernization

Act dealt with this. It is do-able within FDA auspices today. From

my perspective, it is something that happens quite infrequently

and should be done under careful review, but I am not sure that

it needs to be changed that dramatically.

Mr. DEAL. OK. I believe that is all I have, Mr. Chairman.

Mr. PALLONE. I see the gentleman from Massachusetts has entered the room, but he didn’t come alone. Would you like to tell us

who accompanied you here today?

Mr. MARKEY. I would like to introduce St. Anthony’s of Everett.

And I would like you to know that when I was in the CYO and I

played against St. Anthony’s of Everett, that the star of their team

scored 34 points against me and I think, as a result, was destined

for a scholarship in college and that is how I have been helping

kids from St. Anthony’s to advance themselves ever since I became

a defenseless opponent of them when I was a boy. So I wanted to

have them here with us.

Mr. PALLONE. I would like to know if they speak like people from

Medford?

Mr. MARKEY. Medford and Everett are arch rivals, actually.

Mr. PALLONE. The gentleman is recognized.

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Mr. MARKEY. Thank you. I appreciate it. First, I want to welcome

Mr. LaViolette, who is testifying on behalf of Boston Scientific,

which is headquartered in my district in Natick, Massachusetts.

And I would like to ask you to explain why it is important to increase access and encourage development of medical devices specifically for children and how you think the Markey-Rogers bill will

help to do that?

Mr. LAVIOLETTE. Thank you for that question and it is a pleasure to address the issue. First of all, my company, as an example,

makes 650 different families of medical technology and we are one

of the largest companies in the industry. We do not address pediatric needs that specifically and I think that is actually somewhat

of a shame. And we really do need to start with basic, a more basic

understanding of pediatric requirements.

We have to assess precisely what the differences are in the device field as compared to the drug field because, indeed, in drug development a slightly lower dose or a slightly extended patent protection might act as an appropriate incentive for development for

pediatric applications that is not sufficient in the device world. So

we need to start with an identification of the way to fill those gaps.

We need to integrate pediatric, the Academy of Pediatrics in that

process and then ultimately stimulate investment in this area. It

is a grossly underserved need. We support your legislation. We

think it is a very strong move in that direction.

Mr. MARKEY. Thank you, sir, very much. Ms. Dorman, I thank

you for your testimony, as well. Can you explain why the combination of incentives to industry for the development of devices specifically for kids and increased FDA authority that is in the legislation

that I have introduced with Mr. Rogers is so important?

Ms. DORMAN. I think it is terribly important because children are

not second class citizens. And this goes to the rare disease community with whom I have worked for, for many, many years, and they

feel disenfranchised. They are denied treatments. They must wait

years before they even are diagnosed, so this is kind of near and

dear to my heart, since I do have two grandchildren, myself, and

I would be loathe to think that if they became ill, there would not

be a device that would be available to my grandchildren.

Mr. MARKEY. So the Institute of Medicine has recommended that

Congress expand FDA’s authority to monitor devices for kids after

they are approved. Why is this expanded monitoring authority important?

Ms. DORMAN. I think it is very important because children grow,

they change, they are active. And without very close monitoring of

the devices after they have been inserted in the children, it could

pose a real danger to the children, so we do very wholeheartedly

agree with the IOM recommendation.

Mr. MARKEY. Thank you. And can you explain why, any of the

other witnesses, why it is important to increase access and encourage development of these medical devices? Do any of the others of

you wish to comment on that?

Ms. DORMAN. Mr. Markey, could I make one comment? Back in

1983, the nay sayers said why should we bother even passing an

orphan drug act? What good is it going to do if we don’t know what

the problem is? And today the Orphan Drug Act is considered probVerDate 11-SEP-98 15:19 Oct 06, 2008 Jkt 000000 PO 00000 Frm 00119 Fmt 6633 Sfmt 6633 Q:\DOCS\110-47 SCOM1 PsN: SCOM1
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ably one of the most important healthcare pieces of legislation in

the 20th century and I think that will probably most definitely

apply to this, as well, for children.

Mr. MARKEY. OK, great. Thank you. Any of the other witnesses?

Ms. ZUCKERMAN. I would like to add something. I just wanted to

say that of course what you have now is a situation where many

physicians are trying to modify devices so that they work with kids

and some are going to be more successful than others. If you have

a rigorous program that encourages the development of devices

that can be tested so you know which ones work best, that is just

going to be so much better, for all of the health professionals involved and obviously, for all of the children because you have some

kind of standards that you can compare to and you will have a

much better idea of what is going to work.

Mr. MARKEY. OK, great. Thank you. Yes, sir.

Mr. LAVIOLETTE. Just, if I may, one closing comment. From my

perspective, neither the typical device nor the typical regulatory

approval process for devices is really designed for children. Children’s needs are different and that relates both to the devices, but

also to the approval process and what we have here is a marketplace and the marketplace is not focused on kids’ needs because

they are very hard to identify and very difficult to justify, so we

really do need to encourage that development and I think your legislation heads very much in that right direction.

Mr. MARKEY. Thank you very much and Mr. Chairman, I thank

you.

Mr. PALLONE. Thank you. And thank you all. We just made it,

another vote, so we will conclude here. Thank you for bearing with

us, really. I know this coming in and out has been tough. Let me

just remind you that Members may submit additional questions

within the next 10 days for you to respond to, so within the next

10 days we will notify you, if that is the case. And other than

that——

Mr. GROSSMAN. Mr. Pallone?

Mr. PALLONE. Yes.

Mr. GROSSMAN. Could I take 10 seconds and clarify one thing

that I had said? The number you quoted me for the administration

request included user fees.

Mr. PALLONE. Right.

Mr. GROSSMAN. So that the comparable number that we are recommending is about $350 million. The $302 million, which would

be budget authority and I think it is approximately $48 million or

$49 million in user fees.

Mr. PALLONE. OK.

Mr. GROSSMAN. So there is a significant difference between the

two figures.

Mr. PALLONE. In response to the question I asked, you mean?

Right.

Mr. GROSSMAN. Right.

Mr. PALLONE. Right.

Mr. GROSSMAN. And the answer would still be the same, that we

need a lot more of a lot of things that the money would buy.

Mr. PALLONE. OK. All right. Thank you very much, really. We

appreciate it. This meeting is adjourned.

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[Whereupon, at 3:06 p.m., the subcommittee was adjourned.]

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