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78–503CC 2002

REAUTHORIZATION OF THE PRESCRIPTION DRUG

USER FEE ACT

HEARING

BEFORE THE

SUBCOMMITTEE ON HEALTH

OF THE

COMMITTEE ON ENERGY AND

COMMERCE

HOUSE OF REPRESENTATIVES

ONE HUNDRED SEVENTH CONGRESS

SECOND SESSION

MARCH 6, 2002

Serial No. 107–93

Printed for the use of the Committee on Energy and Commerce

(

Available via the World Wide Web: http://www.access.gpo.gov/congress/house

COMMITTEE ON ENERGY AND COMMERCE

W.J. ‘‘BILLY’’ TAUZIN, Louisiana, Chairman

MICHAEL BILIRAKIS, Florida

JOE BARTON, Texas

FRED UPTON, Michigan

CLIFF STEARNS, Florida

PAUL E. GILLMOR, Ohio

JAMES C. GREENWOOD, Pennsylvania

CHRISTOPHER COX, California

NATHAN DEAL, Georgia

RICHARD BURR, North Carolina

ED WHITFIELD, Kentucky

GREG GANSKE, Iowa

CHARLIE NORWOOD, Georgia

BARBARA CUBIN, Wyoming

JOHN SHIMKUS, Illinois

HEATHER WILSON, New Mexico

JOHN B. SHADEGG, Arizona

CHARLES ‘‘CHIP’’ PICKERING, Mississippi

VITO FOSSELLA, New York

ROY BLUNT, Missouri

TOM DAVIS, Virginia

ED BRYANT, Tennessee

ROBERT L. EHRLICH, Jr., Maryland

STEVE BUYER, Indiana

GEORGE RADANOVICH, California

CHARLES F. BASS, New Hampshire

JOSEPH R. PITTS, Pennsylvania

MARY BONO, California

GREG WALDEN, Oregon

LEE TERRY, Nebraska

— — (Vacancy)

JOHN D. DINGELL, Michigan

HENRY A. WAXMAN, California

EDWARD J. MARKEY, Massachusetts

RALPH M. HALL, Texas

RICK BOUCHER, Virginia

EDOLPHUS TOWNS, New York

FRANK PALLONE, Jr., New Jersey

SHERROD BROWN, Ohio

BART GORDON, Tennessee

PETER DEUTSCH, Florida

BOBBY L. RUSH, Illinois

ANNA G. ESHOO, California

BART STUPAK, Michigan

ELIOT L. ENGEL, New York

TOM SAWYER, Ohio

ALBERT R. WYNN, Maryland

GENE GREEN, Texas

KAREN MCCARTHY, Missouri

TED STRICKLAND, Ohio

DIANA DEGETTE, Colorado

THOMAS M. BARRETT, Wisconsin

BILL LUTHER, Minnesota

LOIS CAPPS, California

MICHAEL F. DOYLE, Pennsylvania

CHRISTOPHER JOHN, Louisiana

JANE HARMAN, California

DAVID V. MARVENTANO, Staff Director

JAMES D. BARNETTE, General Counsel

REID P.F. STUNTZ, Minority Staff Director and Chief Counsel

SUBCOMMITTEE ON HEALTH

MICHAEL BILIRAKIS, Florida, Chairman

JOE BARTON, Texas

FRED UPTON, Michigan

JAMES C. GREENWOOD, Pennsylvania

NATHAN DEAL, Georgia

RICHARD BURR, North Carolina

ED WHITFIELD, Kentucky

GREG GANSKE, Iowa

CHARLIE NORWOOD, Georgia

Vice Chairman

BARBARA CUBIN, Wyoming

HEATHER WILSON, New Mexico

JOHN B. SHADEGG, Arizona

CHARLES ‘‘CHIP’’ PICKERING, Mississippi

ED BRYANT, Tennessee

ROBERT L. EHRLICH, Jr., Maryland

STEVE BUYER, Indiana

JOSEPH R. PITTS, Pennsylvania

W.J. ‘‘BILLY’’ TAUZIN, Louisiana

(Ex Officio)

SHERROD BROWN, Ohio

HENRY A. WAXMAN, California

TED STRICKLAND, Ohio

THOMAS M. BARRETT, Wisconsin

LOIS CAPPS, California

RALPH M. HALL, Texas

EDOLPHUS TOWNS, New York

FRANK PALLONE, Jr., New Jersey

PETER DEUTSCH, Florida

ANNA G. ESHOO, California

BART STUPAK, Michigan

ELIOT L. ENGEL, New York

ALBERT R. WYNN, Maryland

GENE GREEN, Texas

JOHN D. DINGELL, Michigan,

(Ex Officio)

(II)

2

C O N T E N T S

Page

Testimony of:

Crawford, Hon. Lester M., Deputy Commissioner, Food and Drug Administration; accompanied by Janet Woodcock, Director, Center for Drug

Evaluation and Research; and Catherine Zoon, Director, Biologics Evaluation and Research ..................................................................................... 30

Franson, Timothy R., Vice President of Clinical Research and Regulatory

Affairs, U.S. Eli Lilly Research Laboratories ............................................. 52

Pendergast, Mary K., Executive Vice President, Elan Corporation ............. 60

Wood, Alastair J.J., Assistant Vice Chancellor for Research, Vanderbilt

University School of Medicine ...................................................................... 57

Material submitted for the record by:

Food and Drug Administration, responses for the record ............................. 78

(III)

(1)

REAUTHORIZATION OF THE PRESCRIPTION

DRUG USER FEE ACT

WEDNESDAY, MARCH 6, 2002

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

The subcommittee met, pursuant to notice, at 10:09 a.m., in room

2322, Rayburn House Office Building, Hon. Michael Bilirakis

(chairman) presiding.

Members present: Representatives Bilirakis, Deal, Burr, Ganske,

Norwood, Bryant, Buyer, Pitts, Tauzin (ex officio), Brown, Waxman, Strickland, Barrett, Capps, Towns, Pallone, Eshoo, Stupak,

Wynn, Green, and Dingell (ex officio).

Staff present: Brent DelMonte, majority counsel; Steve Tilton,

health policy coordinator; Eugenia Edwards, legislative clerk; John

Ford, minority staff counsel; and David Nelson, economist.

Mr. BILIRAKIS. I call this hearing to order. Good morning. I

would like to thank all of our witnesses for being here today to discuss the reauthorization of the Prescription Drug User Fee Act,

which we fondly refer to as PDUFA, another one of those beautiful

acronyms that we come with up here.

I know that many of you have been working around the clock to

develop a set of recommendations for the Congress to consider in

our deliberations. I want you to know that we appreciate the work

you have put in so far, and would like to thank you in advance for

your cooperation with the committee and Congress as we move forward quickly and cleanly to reauthorize this important program.

PDUFA as we know was first enacted in 1992, and then reauthorized in 1997 as part of the Food and Drug Administration Modernization Act, FDAMA. It is completely fair to say that this program has been a tremendous success.

In 1992, when the program was created, innovative treatments

were taking far too long to reach patients. Since the creation of

PDUFA, patients have been able to access breakthrough therapies

more quickly and to improve their lives immeasurably.

In fact, many new drugs are available to American patients first.

PDUFA has been so successful because it is a partnership between

the agency, the industry, and patients.

The PDUFA statute allows the agency to collect fees that it inturn uses to ensure timely review of drug products.

I think it is important to state that this program was not created

to ensure approvals. I repeat, it was not created to ensure approvals. The FDA and Congress strongly believed that products should

2

only be approved by the agency when they proved to be safe and

effective.

The payment of user fees in no way guarantees approval of a

product. The fees are merely used to help the agency facilitate

timely reviews. Today the FDA can use the fees to hire more reviewers, build its information technology capacity, and for other administrative issues that facilitate the drug and biologic review

process.

The fees are not intended to replace the FDA’s appropriations

and therefore do not constitute a tax. Our subcommittee would like

to reauthorize PDUFA cleanly, and quickly, and I might add clearly.

This hearing will help us gain more insight into an important

component of PDUFA, which is the performance goals letter. The

performance goals letter represents agreements between the FDA,

industry, and Congress, and the letter outlines goals that the agency must meet, which help frame the basis to judge the user fee program success.

Congressional review of the goals letter is critical because we

must be certain that these extra PDUFA funds are used in the

most appropriate fashion. Some have asked why is it so important

to reauthorize PDUFA.

One reason that we need to move quickly and cleanly is that the

agency by law cannot collect user fees unless Congress reauthorizes

PDUFA. In effect, this means that the FDA would be forced to

eliminate a large portion of its work force.

This would have devastating consequences for the prospects of

continuing to ensure timely access to life saving products for patients. I know that none of us want to adversely effect patients’ ability to access new life saving products. I believe that it would

be more efficient for Congress to quickly enact the PDUFA reauthorization, and if we do so in as clean a manner as possible.

There are many issues that impact patient’s access to new drug

products. There is no question about that. Last week, we held a

hearing on the uninsured, and we are continuing to work on solutions for that problem. Obviously, another issue that is at the top

of my agenda, and this committee’s agenda, and the President’s

agenda, is prescription drug coverage for our Nation’s elderly.

I know that our committee will be working diligently to address

many of these issues. I assure you that we will. We already are.

However, I would argue that PDUFA reauthorization is separate

and apart from these issues. I think it is incumbent upon our committee to examine each of these issues thoroughly, and I am committed to doing so as soon as possible, and I have made a commitment to Mr. Brown in some of these areas.

I know that many members of other areas have concern with the

FDA, and again I believe that our committee will examine these

issues as needed. Reauthorizing PDUFA is vitally important to patients.

We sometimes fail to reauthorize in a timely fashion up here, but

they are certain types of programs that are appropriated money,

and they continue. NIH is in that category, and so many others.

PDUFA obviously as you know is in a different situation. We

have got to ensure quick, clean, reauthorization of it. Our actions

3

will guarantee patient’s continued access to innovative drugs, and

meet our country’s gold standards of safety and efficacy.

Again, I thank our witnesses for being here today, and I look forward to their testimony, and now I yield to Mr. Brown.

[The prepared statement of Hon. Michael Bilirakis follows:]

PREPARED STATEMENT OF HON. MICHAEL BILIRAKIS, CHAIRMAN, SUBCOMMITTEE ON

HEALTH

Good morning, I now call this hearing to order. I would like to thank all of our

witnesses for being here today to discuss reauthorization of the Prescription Drug

User Fee Act (PDUFA). I know that many of you have been working around the

clock to develop a set of recommendations for the Congress to consider in our deliberations. I appreciate the work you all have put in so far, and I would like to thank

you in advance for your cooperation with the Committee and Congress as we move

forward to quickly and cleanly reauthorize this important program.

PDUFA was first enacted in 1992 and then reauthorized in 1997 as part of the

Food and Drug Administration Modernization Act (FDAMA). It is completely fair to

say that this program has been a tremendous success. In 1992, when the program

was created innovative treatments were taking far too long to reach patients. Since

the creation of PDUFA, patients have been able to access breakthrough therapies

more quickly and improve their lives immeasurably. In fact, many new drugs are

available to American patients first.

PDUFA has been so successful because it is a partnership between the agency,

the industry and patients. The PDUFA statute allows the agency to collect fees that

it in turn uses to ensure timely review of drug products. I think it is important to

state that this program was not created to ensure approvals. The FDA and Congress

strongly believe that products should only be approved by the agency when they

prove to be safe and effective. The payment of user fees in no way guarantees approval of a product. The fees are merely used to help the agency facilitate timely

reviews. Today, FDA can use the fees to hire more reviewers, build its information

technology capacity, and for other administrative issues that facilitate the drug and

biologic review process. The fees are not intended to replace the FDA’s appropriations, and therefore do not constitute a tax.

Our Subcommittee would like to reauthorize PDUFA cleanly and quickly. This

hearing will help us gain more insight into an important component of PDUFA, the

performance goals letter. The performance goals letter represents agreements between the FDA, industry and Congress. The letter outlines goals that the agency

must meet, which help frame the basis to judge the user fee programs success. Congressional review of the goals letter is critical because we must be certain that these

extra PDUFA funds are used in the most appropriate fashion.

Some have asked why is it so important to reauthorize PDUFA? One reason that

we need to move quickly and cleanly is that the agency by law cannot collect user

fees unless Congress reauthorizes PDUFA. In effect, this means that the FDA would

be forced to eliminate a large portion of its workforce. This would have devastating

consequences for the prospects of continuing to ensure timely access to life saving

products for patients. I know that none of us want to adversely affect patients’’ ability to access new life saving products. I believe that it will be more efficient for Congress to quickly enact PDUFA reauthorization if we do so in as clean a manner as

possible.

There are many issues that impact patients’ access to new drug products. Last

week, we held a hearing on the uninsured and we are continuing to work on solutions to that problem. Obviously, another issue that is at the top of my agenda, the

Committee’s and the President’s is prescription drug coverage for our Nation’s elderly. I know that our Committee will be working diligently to address many of these

issues. However, I would argue that PDUFA reauthorization is separate and apart

from these issues. I think that it is incumbent upon our Committee to examine each

of these issues thoroughly, and I am committed to doing so as soon as possible. I

know that many Members have other areas of concern with the FDA. Again, I believe our Committee will examine these issues as needed.

Reauthorizing PDUFA is vitally important to patients. It is incumbent upon us

in Congress to ensure a quick, clean reauthorization of this legislation. Our actions

will guarantee patients continued access to innovative drugs that meet our country’s

gold standards of safety and efficacy. Again, I thank our witnesses for being here

today and look forward to their testimony.

4

Mr. BROWN. Thank you, Mr. Chairman. I want to raise two sets

of issues this morning, and I would be remiss if I did not raise both

sets of these issues. One set is specific to PDUFA.

We need to make sure that the legislation and related agreements strike the proper balance between speedier drug approvals

and drug safety, the main charge of the Food and Drug Administration safety.

We need to evaluate whether FDA is overreaching in its performance goals, and ensure that the agency is devoting sufficient resources to pre-and-post market safety activities. We also need to

make sure that this law strikes the proper balance between speedier drug approvals and drug efficacy.

We need to be sure that the drug companies are completing all

the clinical studies they commit to. Absent complete data and proper drug labeling, faster drug approvals could simply hasten improper use, or inappropriate substitution of new drugs for existing

ones. No one here wants that.

We need to make sure that the trigger mechanism in the bill

isn’t doing more harm than good. FDA’s Center for Drug Evaluation should not have to starve critical functions, like the review of

generic drug applications, and the review of direct to consumer advertising, and ongoing drug surveillance in order to meet the

PDUFA spending trigger.

The fact that the President’ budget happens to increase funding

for some of these functions is no guarantee that future budgets will

do the same. The other set of issues that I want to raise this morning is right before our eyes, yet we look past these issues when it

is time to hold hearings, and time to write legislation.

There are pressing concerns for consumers for businesses, for

other third-party payers in both the public and the private sector.

Yet, we never seem to get around to addressing them.

I am referring to prescription drug pricing and prescription drug

advertising, to prescription drug inflation. The three are related

with the peculiar synergism to them, and they are a lethal combination for a U.S. health care system.

Mr. Chairman, I don’t doubt the benefits of PDUFA. You and I

have always worked well together and I don’t doubt your interest

in seeing patients continuing to have timely access to new medications.

But what I can’t overlook are the drug issues that this Congress

and this committee do not address, the ones we appear to be afraid

to take on. With all due respect to this committee and this Congress, and especially its Republican leadership, jump when the

drug industry says jump, and whether it is pediatric exclusivity,

whether it is PDUFA, whether it is a whole host of issues.

It rushes to past registration when the drug industry wants us

to pass legislation. We don’t challenge drug industry pricing prices,

even though these companies charge Americans 2, and 3, and 4,

and in a few cases 10 times what they charge people in other

wealthy industrialized countries for the same prescription drugs

even though our taxes pay nearly half of the drug industry’s R&D

costs.

And even though the industry itself gets more tax breaks than

any other major industry. Yet, we on this committee, and we in

5

this Congress, Republican leadership, refuses to address the issue

of pricing.

The drug industry knows that not only do U.S. consumers pay

more than consumers in other countries for the same medicines, we

are also the only industrialized country that doesn’t guarantee access to health care.

This industry knows that 70 million Americans, many of them

seniors, have no coverage for drugs. The uninsured have the distinction of paying the highest prices in the world with no insurance

for their medicines.

We don’t take the pricing issue seriously, even though I bet that

every member on this committee, Republican and Democrat alike,

has spoken to seniors living on a social security check that increased 3.5 percent last year, but are paying for drugs that jumped

10 percent during that period, drugs that cost hundreds of dollars

per prescription.

I sponsor regular bus trips to Canada, and the seniors on those

trips are literally—save literally thousands of dollars in some cases

on their prescription medicines, money that can buy food, money

that can pay for heat, and other necessities.

We don’t talk about that in this institution. When the drug industry wants us to move quickly to ensure that FDA doesn’t hold

their products up from getting to the market, we move with lighting speed to do their bidding.

Spiraling prescription drug costs are what is preventing Congress from adding a drug benefit to Medicare. We had better not

talk about drug pricing or the impact of direct to consumer advertising on the Health Care Utilization Bill. Those topics seem to be

taboo.

The European Union doesn’t permit direct to consumer advertising, and Japan, Canada, Israel, don’t permit direct to consumer

advertising. Only one other country in the world, New Zealand, besides us, does allow it.

That is because direct to consumer advertising skews health care

costs toward the newest, the most expensive drugs, regardless of

whether these drugs are actually the best alternative for patients,

regardless of the impact on American’s health care bill.

The drug industry claims that it is doing consumers a favor. The

DTC advertising is a breakthrough in consumer education. In 2000,

last year, or 2 years ago, the drug industry advertised 1 percent

of the newly 10,000 prescription drugs available to consumers.

And 95 percent of all DTC advertising was spent on 50 drugs, .5

percent of the 10,000 drugs on the market. The drug industry

claims that its advertising is highly educational. DTC advertising

is more highly profitable than it is highly educational. But we don’t

talk about that here.

Mr. Chairman, I will continue to work with you on a bipartisan

basis on the Prescription Drug User Fee Act. I will work with you

to ensure that we bring the best possible bill to the floor.

But I hope that this committee and this Congress will not continue to limit our focus to those issues that the drug industry

wants us to consider. Our complacency already is taking far too

great a toll on our constituents. Thank you.

6

Mr. BILIRAKIS. I thank the gentleman. With all due respect, I

would suggest that probably the patients out there also would like

to see us streamline this process, and the Chair now would yield

to the chairman of the full committee, Mr. Tauzin.

Chairman TAUZIN. Thank you, Mr. Chairman. Let me commend

you for holding this hearing, and I look forward to working with

you and the rest of the subcommittee in ensuring that the Prescription Drug User Fee Act or PDUFA is reauthorized cleanly and

quickly.

I would further like to congratulate the FDA and the industry for

completing their negotiations on the performance side agreements

which must accompany this legislation. As you know that was a

predicate to our moving and I want to thank all of you for moving

as quickly as you did.

I look forward now to learning more about the substance of those

agreements. I think it is import to start by noting certain facts

which will guide the committee’s consideration of PDUFA.

The first is that the Act has worked extraordinarily well. Since

the Act was first passed in 1992, drug review times have decreased

dramatically, and the rate of drug withdrawal has remained constant.

Now, you can only conclude one thing from that. That means

that necessary drugs are reaching patients who need them much

more quickly without drugs being approved that have to be withdrawn at any greater rate than before.

That is a great success story. Not for drug companies, but for patients in America, who need these drugs to sustain their lives, and

prevent illness, or to protect against damaging ravages of those illnesses.

Now, half of all new drugs are first made available in the United

States; and 80 percent of all of the new drugs are available to

American patients within a year of the first approval.

In short, PDUFA is working, and it must be renewed, and if we

fail to renew it, we will have failed American patients across this

country.

Second, if the Act is not authorized by the end of this fiscal year,

there are no carryover balances which would allow the FDA to continue to pay the reviewers that are funded by PDUFA.

This means that these reviewers will have to be laid off if we do

not reauthorize this bill, and the layoffs could come in the middle

of this year. We know it. If we don’t complete our work on this bill

prior to August the FDA will begin the process of notifying employees that their positions may be eliminated.

I think this should not be allowed to occur as it would be harmful not only to the employees and their morale, and the work that

they do in reviewing drugs, but again to the patients of America

that would depend upon these reviews.

Last, the committee and Congress have a very aggressive health

agenda this year. We have promised the House leadership, and the

House, working together with Ways and Means, that we are going

to produce a Medicare Reform and Drug Benefit Act by late April

to early June.

If we are going to get that work done, we have to complete this

work on PDUFA very quickly. And because of these factors, I beVerDate 11-MAY-2000 13:57 Jun 26, 2002 Jkt 080092 PO 00000 Frm 00010 Fmt 6633 Sfmt 6602 W:\DISC\78503 pfrm09 PsN: 78503
7

lieve it is essential that the committee produced a clean reauthorization this year.

I do not deny that there are other FDA reforms that frankly I

would like to see enacted this year. For example, I am very interested in the Greenwood-Eshoo Device Reform Bill, as well as some

of the other reforms.

Mr. Burr has one of them, in that I am very interested, and some

of which may not sit very well with my friends on the Democratic

side of our committee. And I know that there are FDA reforms that

some on the other side may wish to add to this bill that may not

sit well with members of this side.

But if we weigh this bill down with those kinds of debates, if we

continue to fight old battles over issues in which everybody had a

fair chance to debate them and offer amendments on the floor, and

if we continue to fight those old battles and add new battles to this

issue, we just won’t get our job done, and this committee will have

failed America’s patients.

My message is that this is not the vehicle for consideration of all

of these matters. We can’t allow this reauthorization to be turned

into some kind of a Christmas tree.

If we do this, we increase the likelihood that the hardworking

FDA employees, critical to American patients, will be presented

with RIF notices later this summer, and we can’t let that happen.

So let’s deal with PDUFA now, and then turn our attention to

the other FDA reforms. It is my every intent to see the committee

consider these other FDA matters later in this session, if the members will continue to cooperate as they have done so willingly in a

bipartisan fashion to keep on our schedule.

And I intend to work with the chairman of this committee, and

you, Mr. Brown, to see to it that those issues are addressed in good

order, and I yield back the balance of my time.

[The prepared statement of Hon. W.J. ‘‘Billy’’ Tauzin follows:]

PREPARED STATEMENT OF HON. W.J. ‘‘BILLY’’ TAUZIN, CHAIRMAN, COMMITTEE ON

ENERGY AND COMMERCE

Mr. Chairman: I commend you for holding this hearing, and look forward to working with you and the rest of the Subcommittee in ensuring that the Prescription

Drug User Fee Act, or PDUFA, is reauthorized cleanly and quickly. Further, I’d like

to congratulate both the FDA and industry for completing their negotiations on the

side agreements which will accompany the legislation, and I look forward to learning more about the substance of the agreement.

I think it’s important to start by noting certain facts which will guide the Committee’s consideration of PDUFA. One, PDUFA has worked very well. Since the Act

was first passed in 1992, drug review times have decreased markedly, and the rate

of drug withdrawal has remained constant. Roughly half of all new drugs are first

made available in the United States, and 80% of all new drugs are available to

American patients within a year of first approval. In short, PDUFA is working and

must be renewed.

Second, if the Act is not reauthorized by the end of this Fiscal Year, there are

no carry-over balances which will allow the FDA to continue to pay the reviewers

funded by PDUFA. This means that these reviewers will have to be laid off if we

do not reauthorize the bill this year. Further, if we do not complete work on this

bill prior to August, the FDA will begin the process of notifying employees that their

positions may be eliminated. I think this should not be allowed to occur as it would

be so harmful to employee morale.

Last, the Committee and the Congress have a very aggressive health care agenda

this year. Because this Committee is going to dedicate so much time to creating a

Medicare prescription drug benefit and enacting structural Medicare reforms, it is

absolutely essential that the Committee address PDUFA reauthorization now.

8

Because of these factors, I believe it is essential that the Committee produce a

clean reauthorization this year. I do not deny that there are other FDA reforms I

would like to see enacted this year. For example, I am very interested in the Greenwood/Eshoo device reform bill, as well some other reforms which may not sit well

with those on the Democrat side. And I know that there are FDA reforms that some

on the other side may have which would not sit well with me.

My message to all is that this is not the vehicle for consideration of those matters.

We cannot allow reauthorization of PDUFA to be turned into a Christmas tree. If

we do this, we increase the likelihood that hard-working FDA employees will be presented with RIF notices later this summer. We cannot allow this to happen. Let’s

deal with PDUFA now, and then turn our attention to other FDA reforms. It is my

every intent to see the Committee consider other FDA matters later in this Session,

so let’s produce a clean PDUFA reauthorization now.

Mr. BILIRAKIS. Thank you. The Chair yields to Mr. Dingell.

Mr. DINGELL. Mr. Chairman, I thank you, and I commend you

for scheduling this hearing today. We will soon be considering for

the third time legislation to provide user fees for prescription drug

approvals.

I have supported these user fees from the beginning, and will

continue to do so. I would like to tell a little bit about the history

of this. The Subcommittee on Oversight and Investigations of this

committee conducted a series of investigations on behavior at Food

and Drug with regard to a major part of the pharmaceutical industry, namely the generic drug industry.

We found massive scandal there. We found serious misbehavior

in the Agency, picking and choosing, and making judgments on

who would be considered. Because the docket of the Agency was

clogged, and because there were not enough people, and the people

were not properly paid to do the kind of work that was necessary

to see to it that the business of the agency was conducted speedily

and that the concerns of persons and corporations interested in

new drug applications was handled speedily, well efficiently, and

honestly. The result of these investigations were several things.

First, there were a lot of people who went to jail as they very

well should. Second of all, there were a number of changes in the

administrative procedures at the agency. Third of all, the agency

found as everybody knew that it needed to beef up its business, because it was proceeding far too slowly in terms of making the necessary clearance.

The industry was waiting 7 to 10 years and more for a new application to be cleared. There is only one way that we can address

the root of these problems, and that was to see that a sufficient

number of properly paid and adequate in number employees at

Food and Drug would address these problems.

The industry understood it, and the committee understood it, and

the Congress understood it, and we passed PDUFA as a result

thereof.

The result of this was that we got good people to do the work

that needed to be done. The Food and Drug Administration cleaned

up its act, and as I said a number of deserving people did go to

jail.

The result was that industry, because of the user fees that were

imposed, and to which they agreed, and to which they supported,

made it possible for FDA to hire enough people from essentially a

dedicated fund to provide the services that the industry needed.

9

The result was that the consumer benefited. The industry has

been happy, and the industry has honored its commitments, and

the Food and Drug has provided excellent service in these matters.

The review time has speeded up, and industry is able to get its new

drug applications more speedily processed.

The result has been everybody has profited. The result has been

that this committee has defended these user fees, and has not allowed the budgeteers who in their enthusiasm of run around and

grab any loose nickel in the government till to apply to some purpose that they happen to believe is in the public interest, has not

been able to prevail.

It is time for this legislation to be extended because to go back

to the situation that it was before would be intolerable from the

standpoint of everybody; the industry, the committee, the Congress,

FDA, the consuming public, which is dependent upon getting these

drugs speedily and thoroughly, and carefully, and honestly processed.

And of course the business and the economic activity, and not

just of the pharmaceutical houses, but of the United States. This

is a good piece of legislation and it should move rapidly, and I hope

that my colleagues are keeping in mind the history of this and will

understand why it is necessary for us to proceed speedily.

I ask therefore that the entirely of my statement be inserted in

the record, and I urge the speedy, favorable, and friendly consideration to an important piece of legislation upon which everyone has

agreed, and I thank you for your courtesy to me, Mr. Chairman.

[The prepared statement of Hon. John D. Dingell follows:]

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

FROM THE STATE OF MICHIGAN

Mr. Chairman, thank you for scheduling today’s hearing. Soon we will consider

for the third time legislation to provide user fees for prescription drug approvals.

I have supported user fees from the beginning, and continue to do so. I will repeat

here what I said on the floor of the House in November 1997 when we passed the

current user fee: ‘‘These user fees, and FDA’s own commitment to excellence, help

make this agency the finest of its kind in the world.’’

But this program can be improved. I join my colleagues, Representatives Stupak

and Brown, in their desire to improve the current program’s post market safety features. More drugs than ever are first launched in the United States. Modern marketing and advertising practices result in more consumers using more drugs in a

shorter period of time after FDA approval than ever before. Our population is more

diverse than ever. Diseases and drug therapies to treat them present new challenges. These factors argue in favor of an enhanced post market surveillance system

that tracks drugs after they have been approved so that we know drugs are safe

and effective in the real world and not just at the moment they leave FDA’s door

after clinical trials. I know that we will hear encouraging testimony about improvement in this area. The legislative text, plus any related side agreements, will need

to implement safety improvements.

Also, concerns have been raised about PDUFA’s role in the drug review process,

so I look forward to today’s testimony on these as well. Mr. Chairman, I ask unanimous consent to have included in the record the Patient and Consumer Coalition’s

PDUFA paper, which outlines many of these concerns. This coalition includes many

consumer advocates, patient groups, including the International Union, UAW. I further request that Dr. Crawford review this paper and provide us with a response

or comment to the points and concerns raised in that document.

Finally, I want to echo the request of our Ranking Member, Mr. Brown, that this

Subcommittee consider drug price and access issues this year. While I support the

effort to produce a bipartisan PDUFA bill, we all know that there is a great deal

of interest in these other issues, and we must begin to address them.

10

Mr. BILIRAKIS. We are going to try to continue on here, and I am

not sure that we will be able to do it. Dr. Ganske, the Chair exercises its preoperative under the rules to limit additional opening

statements to 3 minutes. Dr. Ganske.

Mr. GANSKE. Thank you, Mr. Chairman, and I will be much

briefer than that. I share the concerns of you and Chairman Tauzin. There come sometimes in Congress where you need to agree

on what you can agree on, and move on with contentious issues in

other forums.

This is a very important bill, and you can see from the data that

has been gathered that the approval times have been reduced by

more than half in many instances. I think that is a testimony that,

as Chairman Tauzin has pointed out, we have not seen an increase

in drug withdrawals we were dealing with when PDUFA was first

passed. There was a general consensus, a bipartisan consensus,

that it was just taking too long, and we needed to streamline the

process, and maintain safety standards, but try to help to get this

process moving because lives were at stake.

Patients needed their drugs, and it has been making a difference

in their health and maybe even in staying alive. And delays were

causing people their health and their lives.

So let’s move to a resolution on this in an expeditious manner.

I look forward to reviewing the testimony by the people on the panels today, and thank you for coming.

Mr. BILIRAKIS. Thank you, Dr. Ganske.

Mr. Waxman.

Mr. WAXMAN. Thank you very much, Mr. Chairman. The Prescription Drug User Fee Act has achieved its primary goal to speed

the review of new drugs in the U.S. New drugs are now available

in the U.S. faster than anywhere else in the world.

This is an important achievement, and we should make every effort to ensure that people have access to safe and effective new

medicines as quickly as possible. This achievement, however, has

come at a cost. That cost is an under-funded drug review staff

working on too many drugs, and too little time.

Even the FDA has called the working environment there a sweat

shop; hours are long, and salaries and training opportunities are

poor, and turnover is high.

Speeding drug approvals has had another cost as well. It has siphoned off essential funds for post-market safety programs, for review of direct to consumer ads, and for generic drug approvals.

All of these FDA programs are critical to ensuring that drugs are

safe, and affordable, and all are severely under-funded. Most importantly, the cost of faster approvals has been a loss of public confidence in the safety of new drugs.

And as this has been happening, we have witnessed a large increase in direct to consumer advertising of prescription drugs, ads

that were not permitted at the time that PDUFA was first enacted.

It has been demonstrated that these ads are extremely successful

at fueling both demand by consumers and prescribing by physicians. What is so troubling is that many of these ads are often misleading and unbalanced.

11

We should have a system that ensures that direct to consumer

drug ads are adequate and fair. The FDA has only 13 staff to review over 37,000 pieces of prescription drug advertising each year.

Speeding the review of new drugs is important, but ensuring the

public that drugs are safe and effective demands more, and we cannot sacrifice safety for speed. User fees paid by the pharmaceutical

companies have provided the means to turn a slow approval process into one of the fastest in the world.

It could provide the means to build a program that provides assurance to the public that new drugs are safe and effective, and

that the advertising is truthful. Until now the pharmaceutical industry has resisted paying user fees for any purpose other than

speeding approvals.

I understand that this agreement that has been worked out with

the FDA would have some of the user fees go to a post-market, as

well as a premarket review of drugs. I applaud this beginning, but

much more is needed. In closing, let me note that today’s hearing

covers only one of the prescription drug issues confronting us.

The most critical of these is the high price of prescription drugs

causing hardship to the poor, and to our seniors, and to driving up

the cost of health care for all of us. And adding to the crisis in affordability, we know that there have been serious abuses of the

Hatch-Waxman law by brand-name manufacturers trying to keep

generic drugs off the market. We owe it to the public that this committee address these issues as well, and I look forward to working

with my colleagues on the committee to solve thee pressing problems.

And I hope that we can do so in a fair and bipartisan manner,

and be sure that we consider all of these issues as carefully as possible. Thank you.

[The prepared statement of Hon. Henry A. Waxman follows:]

PREPARED STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN CONGRESS

FROM THE STATE OF CALIFORNIA

The Prescription Drug User Fee Act has achieved its primary goal—to speed the

review of new drugs in the US. New drugs are now available in the US as fast or

faster than anywhere else in the world. This is an important achievement. We

should make every effort to ensure that people have access to safe and effective new

medicines as quickly as possible.

This achievement has come at a cost, however.

That cost is an underfunded drug review staff working on too many drugs in too

little time. Even FDA has called the working environment there a ‘‘sweatshop.’’

Hours are long, salaries and training opportunities are poor, and turn-over is high.

Under those conditions, it is difficult to have complete confidence in the approval

decisions they reach.

Speeding drug approvals has had another cost as well. It has siphoned off essential funds for post-market safety programs, for review of direct-to-consumer ads, and

for generic drug approvals. All of these FDA programs are critical to ensuring that

drugs are safe and affordable, and all are severely underfunded.

Most importantly, the cost of faster approvals has been a loss of public confidence

in the safety of new drugs.

As this has been happening, we have witnessed a large increase in direct-to-consumer advertising of prescription drugs—ads that were not permitted at the time

PDUFA was first enacted. It has been demonstrated that these ads are extremely

successful at fueling both demand by consumers and prescribing by physicians.

At the same time, many believe that these ads are often misleading and unbalanced. Whatever your view of whether these ads should be allowed (and frankly I

don’t believe they should), most of us would agree that we should have a system

that ensures that direct-to-consumer drug ads are accurate and fair. We do not have

12

such a system. Right now, FDA has only 13 staff to review over 37,000 pieces of

prescription drug advertising each year.

Speeding the review of new drugs is important. But ensuring the public that

drugs are safe and effective demands more. We cannot sacrifice safety for speed.

And we must be vigilant in our oversight of prescription drug ads to be sure that

misleading ads do not prompt unsafe or inappropriate use of drugs.

User fees paid by the pharmaceutical company have provided the means to turn

a slow approval process into one of the fastest in the world. And they could provide

the means to build a program that provides assurance to the public that new drugs

are safe and effective, and that their advertising is truthful.

Until now, the pharmaceutical industry has resisted paying user fees for any purpose other than speeding approvals.

They have fought proposals to use their fees to ensure that the safety and effectiveness of their drugs is monitored and validated after approval.

They have been unwilling to allow their fees to be used to ensure that their advertising is fair and truthful.

I believe that the industry has been short-sighted. It is in the interest of manufacturers to support programs that give Americans confidence that prescription drugs

can be safely used as advertised.

This week we learned that the industry has agreed to pay increased fees to adequately fund the premarket review of drugs and a small amount to support a postmarket safety program. I applaud this beginning. But much more is needed.

Right now, the pharmaceutical industry spends one tenth of one percent of its revenues on user fees. Meanwhile, faster approvals have saved the industry billions of

dollars per year. I don’t think it’s too much to ask that the industry pay what is

necessary to ensure the safety and effectiveness of their drugs before and after approval. I don’t think it’s too much to ask that the industry help FDA ensure that

direct-to-consumer ads are accurate and balanced. Continued public confidence in

prescription drugs is in the balance.

While I have concerns about some of the details of this reauthorization, I believe

that good progress is being made and I look forward to working with my colleagues

on both sides of the aisle on this important legislation.

In closing, let me note that today’s hearing covers only one of the prescription

drug issues confronting us. The most critical of these is the high price of prescription drugs—causing hardship to the poor and to our seniors and driving up the cost

of health care for all of us. Adding to the crisis in affordability, we know that there

have been serious abuses of the Waxman-Hatch Amendments by brand-name manufacturers trying to keep generic drugs off the market. We owe it to the public that

this Committee address these issues. I look forward to working with my colleagues

on the Committee to solve these pressing problems.

Mr. BILIRAKIS. I thank the gentleman. Mr. Bryant.

Mr. BRYANT. I thank the chairman, and I will be brief in light

of the pending vote, as well as the need to begin to hear our outstanding panels of witnesses.

And I simply will echo and adopt those statements of my colleagues on either side of the aisle that are in support of moving

this bill expeditiously, and in an unencumbered fashion, and not

getting into these contentious issues that seem to always crop up

that are legitimate in some ways, because they are contentious.

But there are certainly different sides to the issue that need to

be fully aired at some point in the future. The issue today is this

bill, and we need to move it quickly. Second, and I will close by recognizing my happiness in having a Tennessee doctor here today

testifying from Vanderbilt, Dr. Wood, who will be on the second

panel.

And I welcome him, especially as I do all the other witnesses,

and look forward to his testimony. Many of us are in other committees, and I have another committee marking up a bill which requires votes, and so I will be in and out of this hearing.

But, Mr. Chairman, thank you for having it nonetheless, and I

yield back my time.

13

Mr. BILIRAKIS. I thank the gentleman, and I think it is only fair

that we give everyone who wants to make an opening statement a

fair opportunity to do so. I am afraid in wanting to go and vote that

you are liable to miss out.

Dr. Norwood is coming back to sort of take over, but I would like

to think that we would hold it open, the opening statement period.

Let’s see. Mr. Pallone for an opening statement.

Mr. PALLONE. Thank you. Thank you, Mr. Chairman. I will try

to be brief. I just wanted to say that I think it is sort of a nobrainer that we are going to reauthorize PDUFA before its sun

sets, and I obviously agree with that.

But I just wanted to reiterate what some of my Democratic colleagues have said, is that we know that this is coming up, and this

is another bill that the brand name pharmaceutical industry supports, but we don’t get the attention focused on some of the other

issues that we consider important.

I have to say that I was at—you know, I went and bought a prescription for my cat. I guess it was Monday night. Today is Tuesday or Wednesday, as I forget, but when we were back in the District and I was waiting in line as the pharmacy in my hometown

and everybody at the counter was considered about the pricing

issue.

You know, how much they were paying, and how the prices were

going up, and then I bought the prescription for the cat, which was

probably the lowest prescription that was being sold at that

counter that evening.

And it is so amazing to think—you know, because we talk about

this as sort of a joke, but the fact of the matter was that I was paying less for the cat than most of the people at the counter were

paying for the prescription drugs that they had to buy for themselves for human beings.

And when you talk about the pricing issue, it just seems that our

Republican colleagues are reluctant to bring it up. Even the President, over the week, he rolled out this drug card again, and he is

talking about the drug card and how that is going to do all these

wonders.

And everybody in my district tells me that the drug card—you

know, they already have it, and maybe they will get a 10 or 15 percent reduction, but they already have it. And so why is this Administration promoting that, rather than dealing with the pricing

issue.

But of more immediate concern when you talk about PDUFA is

my concern that PDUFA in fact underscores the need for generic

drugs to enter the market. As resources within the FDA are allocated to approving drugs in accordance to user fees, it has been reported that limited FDA resources are taken away from other important areas within the agency, particularly an area within the

FDA that are responsible for evaluating and approving generic

drugs.

And I really think that generics in many ways are the keys of

trying to reduce prices. We need statutory and legislative initiatives that allow timely access to availability of generic drugs.

14

However, today we are preparing to reauthorize legislation that

guarantees timely approval of brand name drugs, while leaving behind necessary generics from potentially entering the market.

So once again it is not just a question of what we roll out and

what bills we deal with first, which clearly favors the brand names

and not these other issues. But it is also the fact that even this legislation I think short changes generics, which I think is a major

issue that we want to deal with if we are going to deal with the

pricing issues.

So I am concerned, and I know that the time is short, but I am

not concerned that although this bill needs to be reauthorized, and

we are here to do it, let’s get to some of these other issues.

Let’s not shortchange generics and let’s deal with the pricing

issues, and at least have some hearings on it. Thank you, Mr.

Chairman.

Mr. BILIRAKIS. We have 5 minutes before the vote is up. All

right. When Dr. Norwood returns, he will just have to wait until

we return. We are in recess.

[Brief recess.]

Mr. BILIRAKIS. Shall we continue?

Dr. Norwood.

Mr. NORWOOD. Thank you, Mr. Chairman, and especially thank

you for holding this hearing. It is very timely and very appropriate

for us to consider PDUFA reauthorization.

And in the interest of getting to our witnesses, I will be

uncharacteristically brief. Mr. Chairman, PDUFA has worked. It’s

just of that simple. It is a program that is getting new drugs to

Americans who need them, and it is getting those drugs to Americans far faster than before we passed PDUFA in 1992, and in a

safe manner.

We are approving drugs much faster, but yet drug safety doesn’t

seem to have been compromised. And I am very heartened by the

work that the FDA is doing to improve on the original model, and

I am looking forward to their comments on their efforts to date.

However, Mr. Chairman, I have serious concerns about the cost

and pricing of drugs, and I have some strong opinions about areas

that I think we need to give oversight to FDA.

But I want to point out that I am not going to press any of those

things as part of a conversation with PDUFA because I agree with

you and Chairman Tauzin that we need to have a very clean reauthorization bill, and do it sooner rather than later.

It doesn’t need to have things tacked on it that are controversial,

and so I support you 100 percent. But I do hope as the chairman

said that we will return to the subject of drug costs later this year,

and give us all an opportunity to discuss that and look at that very

closely.

I would like to encourage frankly my colleagues on this committee to do the same, and let’s get this reauthorized because it is

the right thing to do for the American patient, and then let’s have

our discussions that we need to have. Thank you, Mr. Chairman.

Mr. BILIRAKIS. I thank the chairman. Mr. Stupak.

Mr. STUPAK. Thank you, Mr. Chairman, and with 3 minutes, let

me get right to the gist of my opening statement. We have heard

15

a lot about how PDUFA works, but at what cost? What have we

sacrificed?

What we have sacrificed under PDUFA is honesty, accuracy, and

informative labels. These are the duties and responsibilities that

affect every American consumer. Therefore, we must be very careful to make sure that we do not compromise safety or effectiveness

that the American public has come to expect.

Now, I have heard a lot about this tentative agreement, and we

don’t know what it is because it is not in writing. It is verbal. Now

we were briefed yesterday by FDA officials, and here are some of

my concerns from that briefing.

First of all, the FDA is financially dependent upon an industry

that it regulates, and because under the new agreement user fees

are dramatically increased, dependence will grow dramatically.

Instead of using industry funds, Congress should appropriate

enough money to ensure FDA’s regulatory authority is completely

independent, above approach, and free of undue pressure from the

drug industry.

Second, it is more than clear that the approval of the drug or device based on a relatively short term information does not always

give us complete information about a drug.

The number of drugs pulled off the market in the last 4 years

is 12.

Now, I agree that three were pre-PDUFA, but nine drugs that

raced through an accelerated PDUFA approval process with incomplete information brings me to my third point, Phase IV studies,

also known as post-marking surveillance, are nightmarishly inadequate, and neglected to a shameful extent by both the FDA and

drug manufacturers.

In 1997, we did PDUFA-2, and we ordered a study from the FDA

that would summarize how well the industry complied over the

past 5 years with mandates to do Phase IV studies.

This report, which was due to Congress by October 1, has been

sitting in the Office of the Secretary of Health and Human Services, even though by law we are supposed to receive it 5 months

ago so we can do PDUFA reauthorization. Why the hold-up?

I believe the results of this study will show the vast majority of

drug companies do not do their mandated post-marketing surveillance studies. According to some estimates, 90 percent of them

were never completed. Ninety percent. So how do we enforce it?

I understand that PDUFA-3 as negotiated thus far comes a long

way to address the major concerns with post-marketing surveillance, but without any enforcement, there will be no post-marketing surveillance as we see in PDUFA-2.

So I suggest that we put civil monetary penalties pegged to the

sales of drugs as one option that we should consider.

Another area of concern is the ability of the drug manufacturers

to game the system.

While waiting for requested and required information from the

manufacturer, the FDA should be able to stop the clock on the time

constraints that PDUFA imposes. Due to extremely tight deadlines

in PDUFA, manufacturers know that they can delay their response

to FDA’s request for information long enough so that the FDA is

16

forced to make a decision without being able to do a thorough review, and double-check data.

We had one breast cancer drug, and the FDA got the information

11⁄2 weeks before the PDUFA deadline would run.

My final concern is subpoena power. The FDA is one of the few

health and safety regulatory agencies that does not have subpoena

power.

Subpoena power would give the FDA the authority it needs to inspect manufacturers’ documents in a timely fashion. This is one

issue that we need to explore in this context.

And last, but not least, safety, adequate labeling, and compliance

with Federal regulations always seem to fall by the wayside when

we rush through PDUFA or whatever it might be.

We did pediatric exclusivity here recently, and we are still waiting for studies. While this committee may have defeated pediatric

exclusivity, it is going to come back under PDUFA.

I recently wrote a letter to Bristol-Myers SQUIB last month

about a drug called Serzone. Sixteen other members joined me.

That was a drug that did a pediatric exclusivity in 1994. We are

still waiting for the results of that study.

We have young people who have suffered liver damage from this

drug, and we can’t even get anyone to tell us what the results of

that study was for pediatric exclusivity 6 years ago. That’s ridiculous, and it has to stop.

We want to make sure that drugs are safe, and we want to make

sure that we have adequate labeling, and we want to make sure

that the FDA has adequate information. Therefore, Mr. Chairman,

from subpoena power to enforcement power, the pediatric labeling

under the pediatric exclusivity issue, these are all issues that must

come up.

I know that you and the chairman have said don’t cloud up this

bill with other issues. Mr. Chairman, this is the only vehicle we

will probably see this year. On this side of the aisle, some of us are

going to work to make safety, accuracy, honesty, and labeling, is

put back in to the Food and Drug Administration and the Cosmetic

Act of this country.

Mr. BILIRAKIS. Mr. Pitts for an opening statement.

Mr. PITTS. Thank you, Mr. Chairman, for holding this important

hearing today on PDUFA reauthorization. I look forward to hearing

from our witnesses. Since I have got two hearings going on at the

same time, I may miss some questioning.

I want to up-front mention my concern that the plasma industry

be represented as the dialog on performance standards moves forward. As you may know the plasma industry provides unique life

saving therapies, and also pays substantial user fees.

I learned just recently that the CBER director has agreed to

meet with the plasma industry to discuss performance standards,

and I am hopeful that these discussions are productive. Mr. Chairman, the new medicines approved by the FDA in recent years include innovative treatments for many life threatening diseases, and

patients and their families will benefit from the industry’s innovation and so will the health care system.

17

As we all know, recent research shows new medicines can help

keep people out of the hospital and help them avoid costly surgery

and other treatments.

Mr. Chairman, while we may have many ineffective programs in

our Federal Government that some would like to see expire,

PDUFA is certainly not one of them. Our committee should act as

quickly as possible to reauthorize this act, and I yield back the balance of my time. Thank you.

[The prepared statement of Hon. Joseph R. Pitts follows:

PREPARED STATEMENT OF JOSEPH R. PITTS, A REPRESENTATIVE IN CONGRESS FROM

THE STATE OF PENNSYLVANIA

Thank you, Mr. Chairman for holding this important hearing today on the Reauthorization of the Prescription Drug User Fee Act.

I look forward to hearing from our witnesses today about whether the Act has met

its purpose of speeding the review of drugs and biologics without compromising patient safety.

From my preliminary reading, it is clear that PDUFA has decreased the review

time for drugs and biologics.

It is gratifying to see the positive results of PDUFA that occurred almost immediately after passage. The fact that the review time for standard drug applications

has been reduced from 26.9 months in 1993 to less than 12 months in 2001 is great

progress.

Mr. Chairman, since we all share the goal of getting life-saving drugs to patients

as quickly as possible, I am hopeful that we can reauthorize this important Act as

soon as possible.

I hope that this committee can finish our business on this by August, 2002, so

that the FDA does not have to begin the process of notifying PDUFA-funded employees that they may be laid off.

I am also interested hearing from our witnesses today about the recent agreement

between FDA and industry on the goals they have developed that will pave the way

for us to reauthorize PDUFA III.

Since I have another hearing right now in another committee, I may miss my

chance to ask questions. Therefore, I want to mention my concern that the plasma

industry be represented as the dialogue on performance standards moves forward.

As you may know, the plasma industry provides unique life-saving therapies and

also pays substantial user fees.

I learned just recently that the CBER Director of FDA has agreed to meet with

the plasma industry to discuss this issue. I am pleased that this has been arranged

and hopeful these discussions are productive.

Mr. Chairman, the new medicines and biologics approved by the FDA in recent

years include innovative therapies for many life threatening diseases. Patients and

their families will benefit from the industries’ innovation, and so will the health

care system. As you know, recent research shows these new treatments can help

keep people out of the hospital and help them avoid costly surgery and extensive

medical care.

Mr. Chairman, while we have many ineffective programs in our federal government that some of us would like to see expire, PDUFA is certainly not one of them.

Our committee should act as quickly as possible to reauthorize this Act.

Mr. BILIRAKIS. Ms. Capps for an opening statement. Ms. Eshoo

for an opening statement.

Ms. ESHOO. Thank you, Mr. Chairman, along with all of my colleagues from the committee for having this important hearing. I

am very proud of the PDUFA program and how it has revolutionized the prescription drug approval process.

So reauthorizing this legislation is one of the most important

things that I think our committee can do this year, and we must

do it this year.

Prescription drugs and biologics are changing health care on a

daily basis. I am constantly amazed by the science and what products have done to make our lives better. Twenty years ago, a paVerDate 11-MAY-2000 13:57 Jun 26, 2002 Jkt 080092 PO 00000 Frm 00021 Fmt 6633 Sfmt 6602 W:\DISC\78503 pfrm09 PsN: 78503
18

tient with chronic diabetes could expect extended hospital stays,

shorter life span, and higher health care costs.

Today, prescription drugs allow diabetics to manage their illness

from the comfort of their own home, and they have expectations of

a much fuller and better life. PDUFA has gone a long way toward

ensuring the drugs to treat diabetes, and other illnesses, reach the

patients that so desperately need them in a timely and responsive

manner.

Prior to the initial passage of PDUFA, it often took years for

drugs and biologics to be reviewed by the FDA. The agency was

strapped for both financial and human resources, and was unable

to devote enough time and energy to the review process.

And that’s really where the rubber meets the road. It is the review process. In the 10 years since it was passed, PDUFA funding

has revamped and revitalized the review process, and allowed the

FDA to increase its staff and its expertise, and upgrade its IT systems, and better structure the management of the review process.

So clearly this is an example of legislation that has worked, and

is working very well. So we have to seize this opportunity, and we

need to reauthorize, and we need to do it in an expeditious manner.

The FDA and the drug biotech industries have been working

closely to draft what is known as a side agreement that always accompanies PDUFA. I am glad that they have come to an initial

consensus, and I look forward to reviewing the agreement soon.

I do want to take this opportunity to stress to the chairman and

my colleagues the importance of reviewing this agreement before,

and not after, but before we mark up the legislation.

Given that this agreement is not bound by statute, it is important that members be given ample time to review and have any

concerns addressed by the stakeholders. We shouldn’t let a desire

for expeditious action overtake good, sound policymaking.

So, in closing, I would like to once again reiterate my support for

PDUFA, the user fee program, and in hearing Chairman Tauzin

make his opening statement, I, too, am proud of the work that we

did in reauthorizing in 1997.

But we also have part of PDUFA, and I understand the complications of not joining them this time, because that is the chairman’s

view and wish, and I think that he obviously has very good reasons

for it.

We are not going to issue with notices, but the reauthorization

of FDAMA is a very, very important step for this committee and

the Congress to take this year as well. As we talked about he reliance of patients across the country on prescription drugs, they are

also increasingly reliant on the medical devices that not only give

them hope, but bring them good and improved health day in and

day out.

So I think that it is very important for the committee, and Mr.

Chairman, for you, to start thinking about that, and that we have

a hearing on the bill, and you know that I will work closely with

you in order to accomplish that.

So thanks again for having this, and I look forward to the review

of the side agreement and legislation moving so that we can get

this done. It is good legislation, and it has worked well, and it has

19

served the American people well. That’s the reason that we are all

here. Thank you, Mr. Chairman.

Mr. BILIRAKIS. Thank you. Mr. Deal for an opening statement.

Mr. DEAL. Thank you, Mr. Chairman.

Just a couple of thoughts. I would like to thank Dr. Woodcock for

your willingness to meet with me in the past on the issues that are

related to your agency’s functions.

And to Ms. Pendergast, to say that Elan Pharmaceutical, which

is headquartered in my district, we are always pleased to have representation here. Certainly the issue is an important one, and one

that many of us have looked forward to this hearing, and I thank

the chairman for holding it.

Certainly the issues that will make the availability of drugs in

a more responsive and quicker fashion is certainly something that

I think all of our constituents want.

But at the same time the concerns voiced by many of my colleagues about safety are concerns that I think this hearing hopefully, and others, will reinforce to assure us that we have the best

and safest products on the market. And with that, I yield back my

time, Mr. Chairman.

Mr. BILIRAKIS. I thank the gentleman.

Ms. Capps for an opening statement.

Ms. CAPPS. Mr. Chairman, I appreciate the opportunity that you

are giving the subcommittee to review the Prescription Drug User

Fee Act. Prescription medications have radically changed health

care, and improved the lives of millions of Americans.

They have become an essential component of what is now standard medical care, at least for those that can afford it. This committee has often struggled with issues relating to prescription

drugs.

And whether we are talking about seniors on Medicare or pharmaceuticals for children, there are basically three questions that

we asked when we address prescription drugs. How fast can a patient get them, and how safe and effective are they, and how much

do they cost.

We want them to be quick to market, save to use, and affordable

to patients. PDUFA has addressed the first matter by significantly

improving FDA’s ability to review and approve new medications.

These medications that are quicker to market seem to have

helped many Americans enjoy a higher quality of life. That being

said, PDUFA raises some questions about the issue of safety, and

may contribute to some of our problems addressing cost.

In theory, while PDUFA accelerates the approval process for new

drugs, these drugs still must be safe before they are approved, and

there is some concern that the performance goals of PDUFA may

end up putting drugs on the market before they are sufficiently

tested and reviewed.

That is what we must examine.

Post-market surveillance is supposed to catch anything like this,

but with the resources for these surveys, and FDA’s authority to

insist on them, are limited. This is certainly something that we

need to correct as we move toward reauthorization of PDUFA.

I am also worried that PDUFA may help keep the cost of prescription drugs inflated. The fees themselves, of course, add the

20

cost to medications, but more importantly PDUFA also forces the

FDA resources toward the approval of brand name drugs, denying

those resources for the review of generic drugs.

Generics access to the market is given to lower the cost of prescription drugs dramatically, but the effect is limited because the

FDA is so slow to approve them. In 2001, the average time it took

to review and approve a new brand name drug was 12 months.

The FDA took nearly twice that long, 22 months on average, to

approve generic drugs. I think this is appalling. And even when

these generics are approved, it does not necessarily mean that they

are going to get to the market right away.

Brand name pharmaceutical companies find various legal ways

to extend their patent or market exclusivity to block generic competition. So as we review PDUFA, it would be beneficial to consider

these related issues and look for ways in which we might adjust

PDUFA to address them.

I understand that we expect two studies from the Administration

on safety and effectiveness of PDUFA to be released later this year,

and I think it would be a disservice to act on PDUFA for reauthorization without the benefit of those studies.

So I hope, Mr. Chairman, that you will not schedule a mark up

until we have them in-hand, and to this end, I look forward to

hearing our witnesses’ testimony on this subject, and I look forward to working on this with you, Mr. Chairman, and I yield back

my time.

[The prepared statement of Hon. Lois Capps follows:]

PREPARED STATEMENT OF HON. LOIS CAPPS, A REPRESENTATIVE IN CONGRESS FROM

THE STATE OF CALIFORNIA

Mr. Chairman I appreciate the opportunity you are giving the subcommittee to

review the Prescription Drug User Fee Act.

Prescription drugs have radically changed health care and improved the lives of

millions of Americans. They have become an essential component of what is now

standard medical care, at least for those who can afford it.

This committee has often struggled with issues relating to prescription drugs.

But whether we are talking about seniors on Medicare or pharmaceuticals for

children there are basically three questions we ask as we discuss prescription drugs:

How fast can a patient get them, how safe and effective are they, and how much

do they cost.

We want them to be quick to market, safe to use, and affordable to patients.

PDUFA has addressed the first matter by significantly improving the FDA’s ability to review and approve new medications.

These medications’ quicker access to market seems to have helped many Americans enjoy a higher quality of life.

That being said PDUFA raises some questions about the issue of safety, and may

contribute to some of our problems addressing cost.

In theory, while PDUFA accelerates the approval process for new drugs, these

drugs still must be safe before they are approved.

But there is some concern that the performance goals of PDUFA end up putting

drugs on the market before they are sufficiently tested and reviewed.

Post market surveillance is supposed to catch anything like this, but the resources

for these surveys and FDA’s authority to insist on them are limited.

This is certainly something we need to correct as we move towards reauthorization of PDUFA.

I am also worried that PDUFA may help keep the costs of prescription drugs inflated.

The fees themselves of course add cost to medications, but more importantly

PDUFA also forces FDA resources towards the approval of brand name drugs, denying those resources for the review of generic drugs.

Generics access to the market is proven to lower the cost of prescription drugs

dramatically, but the effect is limited because FDA is so slow to approve them.

21

In 2001, the average time it took to review and approve a new brand name drug

was 12 months. FDA took nearly twice that long, 22 months on average, to approve

generic drugs. This is appalling.

And even when these generics are approved, it does not necessarily mean that

they get to market right away.

Brand name pharmaceutical companies find various legal ways to extend their

patent or market exclusivity to block generic competition.

As we review PDUFA, it would be beneficial to consider these related issues and

look for ways we might adjust PDUFA to address them.

I understand that we expect two studies from the administration on the safety

and effectiveness of PDUFA to be released later this year.

I think it would be a disservice for this subcommittee to act on PDUFA reauthorization without the benefit of those studies, and I hope, Mr. Chairman, that you will

not schedule a markup until we have them in hand.

To this end I look forward to hearing our witnesses’ testimony on this subject and

I look forward to working on this with you Mr. Chairman.

Mr. BILIRAKIS. Mr. Buyer for an opening statement.

Mr. BUYER. I have just a couple of thoughts, Mr. Chairman. I

think it is very valuable to America’s society that our drug companies lead the world in the cutting edge in science and biologics.

I don’t think we want to do anything that would dull that innovation and creativity of the greatest minds of the world. And there

are so many countries out there that their governments have imposed systems that have had a detrimental impact upon those industries.

And they look to the United States and the great minds of the

world come here. And we have to be very careful in what we do.

So, sure, there are the pressures that different members receive

from their constituencies to gain access to these great drugs because of what it can do for the quality of life or their loved one who

is sick or ailing.

But Congress, and the industry, and the agency, did something

right. You know, someone who is critical toward government, you

also have to compliment when something was done right.

In 1992, something was done right. I think it is thoughtful for

us to sort of look back now over the last 10 years and say, okay,

what are some of the lessons learned. I believe that our process

here in reauthorization should be the maintenance of something

that works.

And not trying to change something, and not bring political agendas in an election year into something that is very critical and is

something that we have to do, and that is reauthorize a successful

program.

I will accept recommendations from the agency, and the industry

will have some, and I think that is part of the oversight function

of Congress to do. But we have to be very careful here not to miss

something that is so successful. With that, I yield back.

Mr. BILIRAKIS. I thank the gentleman.

Mr. Strickland for an opening statement.

Mr. STRICKLAND. I want to thank you, Mr. Chairman, and Ranking member Brown, for this hearing today. I was pleased to read

in the submitted testimony of the success since 1992 in speeding

FDA’s review times for drug applications.

The numbers are impressive. Median review times for priority

drugs have decreased from a median of 20.5 months to 6 months,

and the median review time for standard new drug applications fell

from 26.9 months to about 12 months. PDUFA has meant that

22

more Americans have access to new remedies faster, and I am glad

that we will reauthorize the program to continue these successes.

However, I hope that we use the opportunity this reauthorization

gives us to strengthen PDUFA and ensure that the program has

not sacrificed safety for speed.

Since drugs are getting to the market and American consumers

more quickly, we should consider the effects of this faster time line

on drug safety and dedicate a portion of PDUFA’s resources for

FDA to track post-market outcomes of drugs.

Similarly, I believe we should take this opportunity to consider

the effect of direct to consumer advertising on prescription drug

use and cost. If PDUFA’s triggers cause the FDA to devote less resources to functions like post-market tracking, and the review of direct to consumer ads, we should we think the way these triggers

operate for the limits on the use of PDUFA funds.

This debate would not be complete without a consideration of the

effects of faster review times on the cost of prescription drugs. I

hear every day from Medicare beneficiaries, in particular, who are

struggling to afford the cost of their prescription drugs.

Put in this context, even the shortest possible FDA review will

not help those Americans who lack drug coverage to access the

drugs. They need to live healthy and productive lives.

And that is an issue that this Congress must address and should

address this year. I want to thank you, Mr. Chairman, and I yield

back the remainder of my time.

Mr. BILIRAKIS. I thank the gentleman. I ask for unanimous consent, first of all, that the opening statements of all members of the

subcommittee be made a part of the record, and without objection,

that will be the case.

[Additional statements submitted for the record follow:]

PREPARED STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN CONGRESS FROM

THE STATE OF MICHIGAN

Mr. Chairman, thank you for holding today’s hearing on the reauthorization of the

Prescription Drug User Fee Act. I am sure that we will hear a lot of statistics this

morning about the impact that this important law has had on improving both the

quality and the timeliness of the review and approval of new drugs and biologics.

But I want to focus on the difference that this law has made in the lives of individuals—of friends and family members who have greatly benefited by the FDA’s ability to give timely review and approval to potentially life-saving drugs and biologics.

Just about a year ago, a call came into my district office from a constituent asking

if we could do anything to speed the FDA’s review of a very promising new drug— Gleevec—for the treatment of the rare form of leukemia with which her husband

was suffering. Like very many in the Kalamazoo community, my staff and I have

known and valued the friendship of this couple for many years. As was typical, her

husband ‘‘didn’t want to bother us’’ with their problems, our constituent reported,

but she was very worried. We knew he had been suffering from leukemia, but until

that call, we didn’t know that the medication he was taking was no longer effective

in controlling it and that his condition was deteriorating. This drug may well have

been his last hope.

We checked with the manufacturer and learned that the FDA appeared to be very

close to approving the drug. That proved to be the case. Within a week or so of the

call, the FDA approved Gleevec, and we worked with Novartis to get the drug to

our constituent’s hospital pharmacy. It has proved to be the miracle we were all

praying for. He is back on his feet enjoying life, and my life and the lives of so many

in our community who know them and treasure their kindness and friendship are

the richer for his recovery, too.

In all likelihood, this would not have happened before we enacted user fees and

the FDA Modernization Act, which together give the FDA the flexibility and resources it needs to review and approve Gleevec and similar, breakthrough drugs.

23

Recognizing the promise of this drug, the FDA reviewed the marketing application

in less than three months under its accelerated approval regulations. That is a

record—the fastest ever approval for an oncology drug.

I know we will hear today from those who are concerned that perhaps the agency

is moving too fast on new drug approvals. But had the agency not acted with the

speed and expertise it did on Gleevec, my friend and constituent would probably not

be with us today. There is a human cost—a great cost—in delaying this reauthorization.

PREPARED STATEMENT OF HON. BARBARA CUBIN, A REPRESENTATIVE IN CONGRESS

FROM THE STATE OF WYOMING

The Prescription Drug User Fee Act (PDUFA) is, in large part, what separates

the United States from the rest of the world when it comes to consumer access to

innovator drugs.

No one rivals this country in the manufacturing, approval, and distribution of innovator pharmaceutical products and devices—thanks to PDUFA. I would like to see

that continue.

The issue we face at this point is how do we do it even better?, especially since

funds needed for the drug approval process at FDA outweigh the revenue coming

in through drug application fees.

The last thing any of us wants is to see drug safety and approval time slip because FDA does not have what it needs to get the job done.

PDUFA must be reauthorized this year, not only for the sake of patients everywhere but for the continued high standard of innovation set by this country.

My interest today is to better understand the recent agreement reached between

the FDA and industry on application fees and performance standards.

Since this agreement is paramount in any PDUFA reauthorization we attempt,

it is important we give our full attention to our witnesses today.

With that, Mr. Chairman, I yield back my time.

PREPARED STATEMENT OF HON. ROBERT L. EHRLICH, JR., A REPRESENTATIVE IN

CONGRESS FROM THE STATE OF MARYLAND

Mr. Chairman, thank you for holding this important hearing to discuss the reauthorization of the Prescription Drug User Fee Act (PDUFA).

PDUFA, which was first enacted in 1992, authorizes FDA to charge pharmaceutical companies user fees to expedite the review process for human drug and biologic applications. There are three types of fees: 1) application fees are paid when

human drug applications or supplements are submitted; 2) product fees are due annually for each marketed prescription drug product; and 3) establishment fees are

also due annually for each establishment manufacturing prescription drugs.

Mr. Chairman, reauthorization of this legislation is critical. The federal government must have in place at the FDA an effective procedure with sufficient resources, personnel, and expertise to review new drugs to ensure that the American

population receives speedy access to the cutting-edge drugs available to treat so

many health conditions today. PDUFA has worked to significantly reduce approval

times.

For their part, the biotechnology and pharmaceutical companies should have the

guarantee of an expedited, streamlined administrative review process to ensure that

their innovations are reviewed thoroughly and sent to market as soon as possible

for safe consumption. To ensure speedy review, companies must pay the costs of the

application, product, and manufacturing fees so FDA has the resources to do its job

right.

Mr. Chairman, as Co-Chair of the Congressional Biotechnology Caucus, and recognizing the over 270 biotechnology companies in Maryland, I know that it is critical

that new drug treatments receive expeditious, thorough scrutiny of their latest products.

Ultimately, this legislation is about patients, and as we work with all groups to

ensure an effective review process, we must keep patient safety and speedy access

to medical innovations in mind.

I look forward to the testimony today as we consider reauthorizing this important

legislation.

Thank you, Mr. Chairman.

24

PREPARED STATEMENT OF HON. ED TOWNS, A REPRESENTATIVE IN CONGRESS FROM

THE STATE OF NEW YORK

Today’s hearing gives us another opportunity to promote a unique relationship between government and industry: the reauthorization of the Prescription Drug User

Fee Act (PDUFA). PDUFA is a successful partnership that allow the F.D.A. to collect user fees from the pharmaceutical industry in order to hire additional drug reviewers and accelerate the drug review process.

By all accounts, the program has been extremely successful in bringing new drugs

to market in a more reasonable timeframe. For example, before this legislation was

enacted by this committee in 1992, review times for new drug entities averaged

about 2.5 years. By 1999, the average review time had been reduced to 12.6 months.

I am aware that some have criticized this legislation as compromising F.D.A.’s independent review authority. It is important to ensure that the enhanced efficiency of

the drug review process has not compromised drug safety. Therefore, I am anxious

and eager to learn whether drug withdrawals can, in fact, be traced to faster approval times.

Finally, Mr. Chairman, we should remember that the reauthorization of PDUFA

will not only determine whether 1,000 drug reviewers will keep their jobs past July

of this year but it could also well determine how quickly we approve a new treatment for diabetes, lupus or cystic fibrosis or many other diseases. Certainly, we

should examine proposals to strengthen ‘‘post-market surveillance.’’ The F.D.A. has

designed a new proposal which allows the drug sponsor to design the appropriate

studies to monitor and assess potential risks. This approach process allow quality

to be built in from the beginning of the review process. We should also remember

that this law, in its current form, has been remarkably effective in bringing additional resources to the F.D.A. as well as reducing the market approval time for

drugs. I am hopeful that this committee can continue to provide the kind of policy

leadership which has resulted in new, faster drug approvals with the safety and efficacy standards which has previously characterized F.D.A. reviews. I look forward

to hearing from today’s witnesses.

PREPARED STATEMENT OF HON. GENE GREEN, A REPRESENTATIVE IN CONGRESS FROM

THE STATE OF TEXAS

Thank you Mr. Chairman for holding this hearing today on the Prescription Drug

User Fee Act.

When the PDUFA program was first authorized in 1992, there were many critics

who worried that it would be a conflict of interests for the FDA to accept user fees

in order to expedite the review of pharmaceuticals and biologics.

And while there are still critics of the PDUFA program, the evidence indicates

that the FDA and the industry can work together in a fashion that gets life-saving

medicines to the public in an efficient and safe manner.

In 1993, the median review time for a standard new drug application was almost

26 months.

For an individual dying of a serious illness, this was far too long of a wait.

Since PDUFA’s implementation, however, there has been a dramatic decrease in

the length of time it takes to have a new drug approved. Today, the median has

dropped to just twelve months.

More importantly, for priority new drug applications—which are the life-saving

therapies that often represent the last hope for people with serious terminal illnesses—the median approval time was six months in 2001.

As Dr. Crawford points out, the life-saving breast cancer treatment, Herceptin,

was approved by FDA in less than five months.

This is exactly the kind of result that the Congress intended when it passed this

law a decade ago.

PDUFA is not without its problems, however, and that is what we are here today

to discuss.

A common complaint from both consumer groups and FDA alike, is that ‘‘sweat

shop’’ conditions have impacted employees at FDA, prohibiting them from attending

continuing education classes, raising their stress levels, and resulting in high turnover.

This environment is not only bad for employees, but it’s bad for the process.

Training scientists takes a tremendous amount of time and resources. The loss

of those human resources impacts the ability of the FDA to do its job.

There is also a real shortage of financial resources at FDA.

25

Many have expressed concern that PDUFA is crowding out other non-PDUFA programs, such as post market surveillance, approval for generic pharmaceuticals, and

oversight of direct-to-consumer marketing.

It is important that the activities at FDA be balanced and that adequate resources are provided to ensure that FDA can meet its mission.

Mr. Chairman, these are important issues and I am glad that we are holding a

hearing to learn more about them.

It is certainly of importance to all of my constituents that the FDA has the resources it needs to review pharmaceuticals to ensure their safety and efficacy.

But I would be remiss if I did not raise other concerns about prescription drugs—

the costs of these vital medications, the affects of direct-to-consumer advertising,

and the absence of a Medicare prescription drug benefit.

Last year, the National Institute for Health Care Management Foundation stated

that spending on retail outpatient prescription drugs rose by almost 19% in 2000,

from $111.1 billion to $131.9 billion.

Approximately half of that spending increase can be attributed to just 23 drugs.

Among those drugs are blockbuster drugs like Vioxx, Lipitor, Celebrex, and

Glucophage the very drugs that seniors rely on every day to treat chronic, long-term

illnesses like diabetes, arthritis, and high cholesterol.

It is no coincidence that these are the same drugs that are so heavily advertised

in direct-to-consumer marketing.

We must ensure that patients understand what these drugs do—and don’t do—

and the risks associated with taking them.

But most importantly, after decades of rhetoric, the Congress must act to provide

a meaningful, comprehensive prescription drug benefit under Medicare.

A full one-third of Medicare beneficiaries—more than 14 million seniors—have no

prescription drug coverage at all.

We need a prescription drug benefit that makes sure that seniors, who have

worked hard and paid taxes their whole lives, have access to these life-saving medications.

The Congress has been slow to act on this issue, and it is inexcusable.

But I have to give credit where credit is due. Recently, various companies in the

pharmaceutical industry have announced discount cards and programs for low-income seniors who do not have access to a prescription drug benefit.

Just yesterday, Eli Lilly joined the ranks of Pfizer, Novartis and GlaxoSmithKline

and announced the creation of their prescription drug discount program.

These programs are by no means a solution to the Medicare prescription drug

problem but these companies have made an effort to help the poorest seniors get

access to the drugs they need.

I thank them for their efforts in this regard, and hope that they will prompt Congress to do the same.

With that, Mr. Chairman, I yield back the balance of my time.

Mr. BILIRAKIS. I also ask for the unanimous consent that a couple of documents here, one entitled, ‘‘Patient and Consumer Coalition, Background of Prescription Drug User Fee Act,‘‘ and also a

letter to the four chairmen and ranking members from a group of

organizations, and it doesn’t have a date on it, but these have been

shared with the minority, that they be made a part of the record.

That being the case, and without objection, they are so made a part

of the record.

[The information referred to follows:]

26

The Honorable W.J. BILLY TAUZIN

Chairman

Energy and Commerce Committee

The Honorable JOHN DINGELL

Ranking Member

Energy and Commerce Committee

The Honorable MIKE BILIRAKIS

Chairmnan

Health Subcommittee

The Honorable SHERROD BROWN

Ranking Member

Health Subcommittee

DEAR CHAIRMEN AND RANKING MEMBERS: We, the undersigned patient advocacy

organizations implore you to consider a swift and clean reauthorization of the Prescription Drug User Fee Act (PDUFA) that has been of enormous benefit to patients

with all types of diseases in all parts of our country.

The user-fee law has been an unqualified success—a poster child for Congressional achievement. Before the law was first enacted ten years ago, review of new

drugs took about 21⁄2 years and the timeliness of drug review was a big concern to

patients who were not so patiently waiting for their life-saving medicine.

Countless thousands of patients have benefited from Congress’ leadership in enacting the first PDUFA law in 1992, and supporting its reauthorization in 1997.

Since that time, life-saving drugs have been made available to patients sooner, and

without in any way compromising the gold standard of drug approval upon which

patients rely. According to the FDA, the rate of drug withdrawal has remained constant at 2.7 percent before 1992 and 2.7 percent today.

The result: the average review time for new drugs has been cut almost in half

from 30 months to less than 18 months—for some patients, that’s a lifetime. And

today, about half of all new drugs are approved first in the U.S.

The law is working. Patients are not waiting as long for their new medicines—

and Congress must act without delay to ensure that patients continue to receive

new cures and treatments as expeditiously as possible. Moreover, it is vital that

PDUFA, which is set to sunset on September 30, be reauthorized by July so FDA

does not have to begin laying off reviewers and the drug approval process is not disrupted in other ways.

Our organizations represent literally millions of American patients and their families. We are all depending on your leadership to reauthorize PDUFA cleanly and

quickly.

THE ALS ASSOCIATION; LEUKEMIA AND LYMPHOMA SOCIETY;

PARKINSONS DISEASE FOUNDATION; AMERICAN ASSOCIATION OF

CLINICAL ENDOCRINOLOGISTS; PANCREATIC CANCER ACTION NETWORK;

KIDNEY CANCER ASSOCIATION; CANCER RESEARCH INSTITUTE;

ASSOCIATION OF CLINICIANS FOR THE UNDERSERVED; NATIONAL ALLIANCE

FOR HISPANIC HEALTH; NATIONAL AIDS TREATMENT ADVOCACY PROJECT;

CANCER RESEARCH FOUNDATION OF AMERICA; AMERICAN LIVER FOUNDATION;

PULMONARY HYPERTENSION ASSOCIATION; AMERICAN FOUNDATION

FOR UROLOGIC DISEASE; CYSTIC FIBROSIS FOUNDATION;

AND NATIONAL COALITION FOR WOMEN WITH HEART DISEASE

PATIENT AND CONSUMER COALITION

BACKGROUND ON THE PRESCRIPTION DRUG USER FEE ACT

The Prescription Drug User Fee Act was enacted in 1992 to address concerns

about the length of time it took for new drugs treating life-threatening and disabling

conditions—especially AIDS—to be reviewed and approved by the FDA. The authors

of PDUFA recognize that Congress was not going to provide enough in new appropriations to support the increased staff that a shorter approval process would require. PDUFA mandated that drug manufacturers pay user fees when they filed a

New Drug Application for review and approval of a product.

PDUFA was reauthorized in 1997 as part of the Food and Drug Administration

Modernization Act. However, this iteration included more stringent ‘‘performance

goals’’ requiring that the FDA meet very tight review deadlines. These faster deadlines were insisted upon by the pharmaceutical industry, which argued that these

‘‘measurables’’ were necessary to ensure that the user fees they paid were not disVerDate 11-MAY-2000 13:57 Jun 26, 2002 Jkt 080092 PO 00000 Frm 00030 Fmt 6633 Sfmt 6621 W:\DISC\78503 pfrm09 PsN: 78503
27

1FDA Consumer Magazine, ‘‘User Fees for Faster Drug Review: Are They Helping or Hurting

the Public Health?,’’ September-October 2000. 2 Ibid.

3David Willman, ‘‘How a New Policy Led to Seven Deadly Drugs,’’ Los Angeles Times, December 20, 2000. 4 Ibid.

persed to fund other agency activities. For the first time, PDUFA II also included

stipulated time frames for the scheduling of meetings and response to industry requests (‘‘management goals’’).

As a result of PDUFA I and II, the FDA has both dramatically increased the

amount of resources it devotes to new drug and biologics review and decreased the

review time. But this has come at a price. PDUFA requires that the agency increase

funding from non-user fee revenues for drug reviews by an inflation-adjusted

amount every year. But, Congressional appropriations for the FDA have not kept

pace with inflation and with the increased mandates on and responsibilities of the

agency. As a result, the only way the FDA can comply with PDUFA’s requirements

to increase non-user fee funding for the drug review process is to take resources

away from other essential activities, such as post-market research and surveillance,

on-site inspections, and regulation of medical devices. Moreover, the agency has said

that user fees generate less than the total expenditures the agency must make to

satisfy PDUFA performance and management goals. As Former Commissioner Jane

Henney said, ‘‘. . . the truth is, the program is barely surviving because of the way

it was designed. We don’t have the resources to do the things we believe are essential, such as adverse event reporting, because they are not supported by PDUFA

funds.’’ 1

The short review times mandated under PDUFA II have had other negative effects. The director of FDA’s Center for Drug Evaluation and Research, Dr. Janet

Woodcock, has expressed a great deal of concern about the high rate of turnover

among review staff, which means that the agency has had difficulty retaining experienced, competent reviewers. Dr. Woodcock has said that the intense timelines

under PDUFA have created a ‘‘sweatshop environment that’s causing high staffing

turnover.’’ 2

There have also been concerns about a series of high-profile drug withdrawals

over the last few years. According to the Pulitzer Prize-winning investigation by

David Willman of the Los Angeles Times, seven of these drugs—Lotronex, Propulsid,

Rezulin, Raxar, Posicor, Duract and Redux—are suspected in 1,002 deaths.3 While

FDA officials claim that these safety problems were not necessarily linked to

PDUFA, the withdrawals raise troubling questions about whether the agency performance goals mandated by the Act may be overriding its public health responsibilities.

In fact, several former FDA employees told the Los Angeles Times that they were

under a great deal of pressure to approve drugs quickly. Bill Schultz, former deputy

commissioner at the FDA said, ‘‘You can meet the [performance] goal by either approving the drug or denying the approval. But there are some who argue that what

Congress really wanted was not just decisions, but approvals. That is what gets

dangerous.’’ Dr. Solomon Sobel, the former director of the FDA’s metabolic and endocrine drugs division told the Los Angeles Times that deadline pressure under

PDUFA was not just to make decisions: ‘‘The pressure to meet deadlines is enormous. The basic message is to approve.’’ 4

REAUTHORIZATION OF THE PRESCRIPTION DRUG USER FEE ACT

The undersigned members of the Patient and Consumer Coalition believe that the

upcoming re-authorization of PDUFA offers an important opportunity to increase

the safety of prescription drugs and devices in this country and to insure that the

protection of the public’s health is the FDA’s top priority under the Act. We urge

Congress to:

• Hold balanced hearings on PDUFA reauthorization and drug safety concerns. The

hearings should include testimony from patients who have been harmed by

problem drugs—or their representatives—and consumer advocates who are

knowledgeable about PDUFA. Such hearings would send a vital signal to FDA

from Congress that what the public wants and deserves is a thorough review

and oversight process for drugs and biologics, not just speedy approval of new

products.

• Adequately fund the entire range of FDA’s approval and safety oversight activities

from general revenues. There is an urgent need for increased funding for postmarketing surveillance and other safety-related activities not covered by current

28

5PDUFA II establishes deadlines that require FDA to review 90 percent of priority (‘‘fast

track’’) new drug Applications within 180 days and 90 of standard applications within ten

months.

user fees. User fees are not a substitute for adequate federal funding of these

vital and growing public health functions. Adherence to this principle would be

the surest way to remove the worrisome potential for conflict-of-interest that

arises when dedicated income streams flow to the regulator from the regulated

industry.

• Give the FDA total control over all review and surveillance activities. If an unwillingness to appropriate adequate funds leads Congress to consider the expansion

of user fees, it is absolutely essential that the FDA alone determine their usage,

without the kind of inappropriate control over the use of these fees (through

mandated decision-making deadlines) that the industry has exercised with new

drug approvals.

• Address drug safety concerns created by PDUFA’s excessive and inappropriate

focus on swift approval over public health. PDUFA III should include new safety

protections that, to the greatest extent possible, protect the public from potential harm caused by adverse reactions, side effects and adverse events related

to pharmaceutical products and biologics. Decision-making deadlines for drug

review should be redefined to focus on the FDA’s responsibility to guarantee

safe drugs, not only on the speed with which reviews are conducted. The agency’s antiquated and under-funded adverse event reporting system (for drugs,

biologics and devices) should also be modernized.

1. Restructure User Fees

• Eliminate the linkage between appropriated and user fee funds. The current law

results in disproportionate funding for the drug approval process compared to

most other research, regulatory, and public education functions. At a minimum,

the program must be re-designed in such a way as to prevent the draining of

funds from vital FDA functions.

• Require that user fees support the life cycle of the review process. Presently, FDA

staff hold numerous pre-New Drug Application meetings with manufacturers

before the agency receives any PDUFA fees for the intended application. While

these meetings benefit sponsors greatly by improving their understanding of

FDA expectations and the quality of their applications, they also divert FDA

staff time from other review functions and increase the cost and difficulty of

meeting PDUFA goals. In other words, the required meetings are an un-funded

mandate on the agency.

2. Eliminate or Overhaul Performance Goals

Although PDUFA’s deadlines are for decision-making on drugs and biologics, not

approval, these goals put the FDA under tremendous financial pressure to move

very quickly on the overall approval process. By requiring that decisions must be

made within the same timeframes for priority and standard reviews,5 these goals

force the agency to take an unvarying, ‘‘cookie cutter’’ approach to approvals. Congress should eliminate these required goals. If this does not occur, the agency should

be given greater flexibility to set its own priorities and/or extend the goals, including:

• Consult All Stakeholders—If performance goals are not eliminated in PDUFA III,

consumers and patient representatives should be involved in developing them.

• Grant FDA a ‘‘Scientific Override’’—When the FDA requires additional information or clarification from the manufacturer as part of the review process, the

FDA should be allowed to ‘‘stop the clock’’ on review deadlines while waiting

for this information to be provided.

• Eliminate Rigid Management Goals—These goals require the agency to set up

meetings with the industry within specific timeframes. They should be replaced

by a more flexible system that allows the FDA to prioritize these requests, thus

decreasing undue burden on the agency.

• Allow FDA More Flexibility For Standard Reviews—There is no public health justification for requiring the FDA to decide on a ‘‘me too’’ drug that duplicates

therapies already on the market at the same speed as a drug that might offer

therapeutic advantages to some patients. The FDA should be granted greater

authority to prioritize the review of standard drug applications.

• Create Safety Goals—FDA should establish performance goals oriented toward

protecting the health and welfare of consumers, such as tracking and reviewing

Phase IV trials, improving the collection, analysis and response of adverse event

29

6 As a condition of approval of a new drug by the agency, drug companies often commit to

doing post-marketing or Phase IV studies. These studies can help to identify previously unknown dangers presented by a new drug so that its safety labeling can be updated or if necessary the drug can be withdrawn. According to a Public Citizen report released in 2000, of the

88 new drugs that were approved between 1990 and 1994 with the understanding that the sponsor would complete at least one post-marketing study, only 13 percent (11 of 88) had completed

all of the studies they had agreed to as of December 1999. 7 According to a 1990 Congressional Research Service study, almost every other U.S. health

and safety regulatory agency has subpoena power. Without the ability to subpoena company

records, the FDA’s efforts to assure drug safety are hamstrung. The case of the FDA’s post-approval investigation of the drug Halcion demonstrates the problems the agency faces. In that

case, the agency could not subpoena the company’s records even though it had suspicions of

criminal wrongdoing. At one point in that investigation, the agency even went so far as to ask

for the intervention of a federal judge to modify a gag order in a tort action against the maker

of Halcion so that the agency could have access to crucial documents. 8 Under this system, suggested by Seymour Fisher and Stephen G. Bryant, patients would be

given information about how to report adverse drug reactions by their pharmacist. This system

would make it possible to compare the rates of adverse drug reactions to a new drug with drugs

already on the market for the same indication. (S. Fisher, S.G. Bryant, ‘‘Postmarketing surveillance of adverse drug reactions: patient self-monitoring’’ Journal of the American Board of Family Practice, 1992; 5:17-25.) 9 Under its proposed rule of December 1999 implementing FDAMA’s requirement for the industry to report its progress on completion of phase IV tests to the agency this information

would have been made available to the public. However the industry objected, claiming that

FDAMA did not give the agency the authority to make this information public and this requirement was removed from the final rule, which was published in October of 2000. Legislation is

needed to clearly give the agency the authority it needs to disclose this information.

reports, and enhancing the speed and quality of review of direct-to-consumer

advertisements.

3. Enhance Drug Safety Measures and FDA Enforcement Authority

• Grant FDA Civil Monetary Fine Authority and Subpoena Power—When companies

fail to complete Phase IV confirmatory trials or when companies repeatedly violate prescriber and direct-to-consumer advertising guidelines, the agency should

be given the authority to levy significant monetary penalties.6 The agency

should also have the power to compel companies to produce relevant documents.7

• Launch Independent Drug Withdrawal Investigations—An office or agency independent of the FDA should investigate the circumstances surrounding the withdrawal of medical products from the market, as the National Transportation

Safety Board does for plane crashes. • Increase Monitoring and Review of Phase IV Trials—Require the FDA to track

Phase IV trials, strictly monitor and enforce the informed consent and protection of human subjects in those studies, and, in a timely manner, review the

quality of the studies and the accuracy of the findings. • Improve Adverse Event Reporting—Hospitals, HMOs, nursing homes and other

healthcare providers should be required to automatically report (the present

system is voluntary) serious adverse drug events, adverse reactions and medical

errors to the FDA, CDC, and/or other relevant agencies. Appropriations for

FDA’s oversight of adverse event reporting should be dramatically increased. • Utilize the Centers for Education and Research on Therapeutics—CERTS should

examine the feasibility of: (1) implementing a patient self-monitoring reporting

system for signaling possible adverse drug reactions;8 and, (2) expanding the

use of medical registries to follow patients who may be at risk of serious reactions • Broaden Distribution of medication Guides—Consumers should be given power to

make informed decisions about drugs and devices and to avoid preventable

harm. It is time to mandate that medication guides with scientifically accurate,

unbiased and clearly worded information about the risks and benefits of a treatment be included with every dispensed drug (as proposed by the FDA in 1995.)

Such medication guides would also, for the first time, provide a mechanism for

notifying consumers directly when new safety concerns about a drug emerge

that require a change in a drug’s approved labeling. • Provide Consumers with More Post-Market Drug Safety Information—Section

506B of the Food, Drug and Cosmetics Act should be amended to expand the

scope of information made available to the public to include information as

study protocols, patient accrual rates, reports of unexpected, i.e., unlabeled, suspected adverse reactions, and study results.9

• Scrutinize Single Controlled Clinical Studies—An increasing number of drug manufacturers have indicated that they will begin submitting new drug applications

30

using data from only one controlled clinical study, which is now allowed by law,

rather than multiple studies. An independent study should be conducted at an

appropriate time to assess the effectiveness of single controlled studies in assessing the safety of drugs and biologics.

• Examine Comparative Safety Data—Manufacturers should be required, as part of

their application to the FDA to market a new drug or biologic, to submit the

results of tests comparing the safety and efficacy of their product to others already on the market that are used to treat the same indication.

This position paper is endorsed by the following members of the Patient and Consumer Coalition: the Alpha I Foundation; Center for Medical Consumers; Consumer

Federation of America; Gray Panthers; International Union, UAW; the National

Consumers League; the National Organization for Rare Disorders; the National

Center for Policy Research for Women & Families; the National Women’s Health

Network; and the Title II Community AIDS National Network.

Mr. BILIRAKIS. And having waited very patiently, is Dr. Lester

M. Crawford, Deputy Commissioner of the Food and Drug Administration. Dr. Crawford, thank you very much for being here, and

proceed, sir.

We are going to set the clock at 10 minutes, and you do what

you can, and we won’t worry about the clock.

STATEMENT OF HON. LESTER M. CRAWFORD, DEPUTY COMMISSIONER, FOOD AND DRUG ADMINISTRATION; ACCOMPANIED BY JANET WOODCOCK, DIRECTOR, CENTER FOR

DRUG EVALUATION AND RESEARCH; AND CATHERINE ZOON,

DIRECTOR, BIOLOGICS EVALUATION AND RESEARCH

Mr. CRAWFORD. Thank you very much, Mr. Chairman, we thank

you and the other members for scheduling today’s hearing. I am

joined at the table by Dr. Janet Woodcock, who is the Director for

the Center for Drug Evaluation and Research; and Dr. Catherine

Zoon, who is the Director of the Center for Biologics Evaluation

and Research.

I have a written statement for the record, and I will confine my

remarks to within the 10 minutes. In my oral remarks, I will describe the Agency’s success in implementing the Prescription Drug

User Fee Act, identify priorities for PDUFA-3, and emphasize the

importance of reauthorizing this law in advance of its September

30, 2002 expiration date.

PDUFA has been a remarkable success. Since PDUFA was enacted in 1992, the FDA has met the highest expectations for performance, while continuing to adhere to rigorous standards for

safety and effectiveness.

We now have 8 years of data on our efforts to achieve PDUFA

goals. During this period the FDA faced a total of 73 performance

goals. We met or exceeded 71 of those goals.

If you add procedural goals to that total, the Agency met or exceeded 86 out of 92 PDUFA goals. The result has been a dramatic

reduction in product approval times. Drugs are now reviewed in

the U.S. as fast or faster than anywhere in the world, without compromising the very stringent standards that Americans have come

to expect.

With the enactment of PDUFA, U.S. companies have overtaken

their European counterparts, and now have a commanding lead in

world markets. A July 2001 report found that the European share

of the world pharmaceutical market fell by 10 percent over the past

decade, while the U.S. market share rose by more than 10 percent.

31

During the same period U.S. research and development increased

a remarkable five-fold, and that is why the Tufts University Center

for the Study of Drug Development declared that the U.S. environment for pharmaceutical innovation since PDUFA is nothing short

of remarkable.

The membership of this Subcommittee deserves a large share of

the credit for championing PDUFA and for making this record of

achievement possible. Your efforts have produced significant benefits for public health.

The public has gained access to 717 new drugs and biologics

under PDUFA. These include important new products to treat cancer, AIDS, cardiovascular disease, and to fight infection.

Every day the lives of patients are immeasurably improved as a

result of the great emphasis on priority review that we instituted

under PDUFA. While our experience under PDUFA-2 has generally

been good, significant issues have surfaced that undermine the program’s financial foundation.

During the final 3 years of PDUFA-2, fee revenue has been less

than the cost of performing review activities. The FDA has been

able to sustain its review effort by spending fee revenue collected

in previous years that has been held in reserve.

However, unspent revenues from previous years will be depleted

by September 30. A top priority will be to establish a fee structure

to ensure that income covers the cost of PDUFA enhancements to

the drug and biologic review process.

Funding a program of risk assessment for PDUFA drugs and biologics is a second priority. While drugs and biological products are

under development, clinical testing is usually limited to small,

carefully selected populations.

After approval, when the drug reaches a much larger and diverse

population, adverse events not seen during clinical trials may

emerge. I want to emphasize that there is no evidence that drugs

are being withdrawn from the market for safety reasons at a greater rate during the PDUFA era.

In fact, the withdrawal rate for new drugs approved prior to

PDUFA is identical to the withdrawal rate for drugs approved

since PDUFA was enacted. However, a more effective program of

risk management for new drugs that improve patient safety is warranted by the reality that more drugs are launched for the first

time in the U.S.

Mr. Chairman, PDUFA-2 expires on September 30, 2002. I want

to emphasize again the importance of achieving a timely reauthorization of this law. If we are to sustain our record of accomplishment under PDUFA-2, it is critical that reauthorization occur without a gap between the expiration of the old law and the enactment

of PDUFA-3.

Retaining FDA’s skilled employees is essential to the success of

PDUFA-3. A delay in the reauthorization of this program may precipitate an erosion in our work force, particularly among senior reviewers, whose skills are in very high demand.

The repercussions of such a loss would be with us for years to

come, and rebuilding the infrastructure that we would lose in such

an event would be very difficult indeed. Thank you for your comVerDate 11-MAY-2000 13:57 Jun 26, 2002 Jkt 080092 PO 00000 Frm 00035 Fmt 6633 Sfmt 6602 W:\DISC\78503 pfrm09 PsN: 78503
32

mitment to the mission of the FDA, and to the continued success

of PDUFA.

Thank you very much.

[The prepared statement of Hon. Lester M. Crawford follows:]

PREPARED STATEMENT OF HON. LESTER M. CRAWFORD, DEPUTY COMMISSIONER, FOOD AND DRUG ADMINISTRATION

INTRODUCTION

Mr. Chairman and Members of the Subcommittee, I am Lester M. Crawford, Deputy Commissioner of the Food and Drug Administration (FDA or the Agency). I am

pleased to be here today to discuss the Agency’s success in implementing the Prescription Drug User Fee Act and to emphasize the importance of reauthorizing this

law in advance of its September 30, 2002, expiration date.

BACKGROUND

In 1992, Congress enacted the Prescription Drug User Fee Act (PDUFA I). This

law provided additional resources to hire more medical and scientific reviewers to

conduct premarket reviews, to hire support personnel and field investigators to

speed up the application review process for human drug and biological products, and

to acquire and support critical information technology infrastructure.

In 1997, after the success of PDUFA I, Congress reauthorized the program for an

additional five years. With this reauthorization (PDUFA II), came higher expectations for reviews and additional goals designed to reduce clinical drug development

times. The President’s budget request for Fiscal Year (FY) 2003 recommends that

PDUFA be reauthorized through FY2007, and we have been engaged in discussions

with consumers, health providers, and industry over the past year to develop proposals for PDUFA III. These discussions have been very useful, and we hope to complete the consultation process in the very near future and forward our PDUFA III

recommendations to the Department of Health and Human Services.

PDUFA ACHIEVEMENTS

During PDUFA I and PDUFA II, FDA met the highest expectations for performance while continuing to adhere to rigorous standards for safety and effectiveness.

We now have eight years of data on our efforts to achieve PDUFA goals, and the

Agency’s record of achievement is impressive. The Agency faced a total of 73 performance goals during this period. These goals governed the review of priority and

standard new product applications, resubmitted applications, and supplements. During this eight-year timeframe, FDA met or exceeded 71 of 73 PDUFA performance

goals.

In addition to the 73 performance goals, procedural and processing standards

were instituted under PDUFA II. A total of 19 goals governing meetings, clinical

holds, dispute resolution, and special protocols were established when the law was

reauthorized. FDA met or exceeded 15 of 19 procedural and processing goals. If you

combine our performance and procedural accomplishments, the Agency met or exceeded 86 out of 92 PDUFA goals.

Not only has FDA significantly reduced application review times under PDUFA,

it also has significantly reduced product approval times, and therefore, the time for

new drugs to reach the market. Review time is the time it takes FDA to review

original or resubmitted new product applications, efficacy supplements, and manufacturing supplements and issue an action letter. Approval time is measured from

the date an application was initially submitted to the date an approval letter is

issued. Approval time includes the period of FDA review, as well as the time a sponsor may spend responding to deficiencies identified by the Agency during application

review. Because of these deficiencies, some products require more than one review

cycle. While PDUFA established goals for review times, and faster reviews tend to

produce quicker approvals, the quality and completeness of an individual application

and the public health priority of the product significantly affect time to approval.

The result of our efforts has been a dramatic reduction in product approval times.

The median approval time for priority new drug and biologic applications dropped

from 13 months in FY1993 to only six months in FY2000. We do not have complete

data for FY2001, but median approval times are projected to remain at six months.

For standard new drug applications, the median approval time was 22 months in

FY1993. By FY1999, however, median approval times had declined to 12 months.

For a variety of reasons, such as competing PDUFA goals and priorities and unanswered questions that must be addressed within some applications, we may experiVerDate 11-MAY-2000 13:57 Jun 26, 2002 Jkt 080092 PO 00000 Frm 00036 Fmt 6633 Sfmt 6621 W:\DISC\78503 pfrm09 PsN: 78503
33

ence a slight increase in approval time in FY2000 for this category of applications.

The data for FY2000 are only preliminary, however.

THE WORLD LEADER

Drugs are now reviewed in the U.S. as fast or faster than anywhere in the world,

without compromising the very stringent standards that Americans have come to

expect. Between FY1993 and FY 2001, pharmaceutical firms have introduced 285

new molecular entities (NMEs) and 73 biologics into the market, a dramatic increase compared to any other period of time.

Ten years ago, European pharmaceutical companies were the industry leaders.

With the enactment of PDUFA, however, U.S. companies have overtaken their European counterparts and now have a commanding lead in world markets. According

to a July 2001 report in the Financial Times, the European share of the world pharmaceutical market fell from 32 to 22 percent over the past ten years while U.S. market share rose from 31 to 43 percent. During this period, pharmaceutical R&D investment doubled in the European Union, while U.S. R&D increased a remarkable

five-fold.

This turn-around prompted the Tufts Center for the Study of Drug Development

to describe the U.S. environment for pharmaceutical innovation since PDUFA as

‘‘nothing short of remarkable.’’’ The members of this Subcommittee deserve a large

share of the credit for championing PDUFA and for making these successes possible.

PDUFA RESULTS

Your efforts have produced significant benefits for public health. The public has

gained access to 717 new drugs and biologics under PDUFA, including 174 that represent significant therapeutic advancements. During the PDUFA era, FDA reviewers have approved:

• 30 new medicines for cancer; • 37 new medicines for AIDS; • 29 medicines to fight infection; and • 18 medicines for cardiovascular disease.

Every day, the lives of cancer patients are measurably improved as a result of

the greater emphasis on priority review that we instituted under PDUFA. For example, Herceptin, a biological product to treat breast cancer, was approved by FDA

in less than five months. In Europe, the approval process took 18 months. Because

of FDA’s priority review, 10,000 American women with advanced breast cancer had

earlier access to this drug. These patients will gain an estimated 2,300 additional

years of life because of early access to this important new therapy.

The pharmaceutical industry also enjoys significant R&D savings as a result of

shorter review times. Under PDUFA, FDA reduced new drug review by 12 months.

Each month of reduced review results in an average saving of $2.5 million, or $30

million in R&D cost savings over 12 months. Given that FDA approves an average

of 40 NMEs and biologics per year, the savings to industry represent $1.2 billion

annually. The program represents a bargain in light of the $133 million that industry paid in user fees in FY2001.

Finally, PDUFA has also brought significant benefits for FDA:

• Performance goals have helped streamline and harmonize the management of

drug and biological product review.

• The program’s requirement for comprehensive product reviews and responses has

resulted in improvements to the quality of the application review process.

• Most importantly, the fees have enabled the Agency to hire additional medical reviewers and other specialists, and upgrade the technology that is essential for

the success of the program.

FDA GOALS FOR PDUFA III

1. Sound Financial Footing

While our experience under PDUFA II has generally been good, a number of significant issues have surfaced that undermine the program’s financial foundation. In

PDUFA III, we are working to address these issues and ensure that the Agency has

a sound financial footing to conduct essential review and approval activities.

During the final three years of PDUFA II, the amount of fees collected has been

substantially less than the cost of performing review activities. FDA has been able

to sustain its review effort only by spending fee revenue collected in previous years

that has been held in reserve—an arrangement permitted under the Act. In FY2001

and FY2002, spending from fee revenues will exceed fee income by about $30 million

each year. FDA is reducing operations in FY2002 to adjust to this revenue shortfall.

34

However, unspent revenues from previous years will be depleted by the end of this

fiscal year and there will be little or no fee balances available after September 30.

Establishing a fee structure to ensure that income covers the cost of enhancements

to the drug and biologic review process authorized by PDUFA is an issue that we

are working to address in PDUFA III.

Another problem is that PDUFA application fees are only paid on new drug and

biologic applications and efficacy supplements. Yet the review of fee-paying applications represents only a fraction of FDA’s actual review workload. There are many

activities associated with the process for the review of human drugs and biological

products that are not covered by PDUFA fees. These activities continue to grow

steadily and demand more resources each year, while the number of fee-paying applications, and the revenue they generate, fluctuates considerably. This dynamic

was not taken into account when the fee formula was established.

The uncertainty about fee revenue is further complicated by the relationship between application fees and the product and establishment fees that also we collect

under PDUFA II. The law directs that establishment and product fees rise and fall

based upon the number of fee-paying applications, yet the volume of work associated

with these activities has little or no relationship to the number of applications. The

reality of this situation is inconsistent with the expectation that product and establishment fees were intended to be a stable element of PDUFA revenue in order to

insure a consistent and predictable source of fees.2. Risk Management

While drugs and biological products are under development, clinical testing is

usually limited to small, carefully selected populations of 5,000 or less. After approval, however, millions of patients may be exposed to the drug. When the drug

is exposed to a much larger and diverse population, adverse events not seen during

clinical trials often emerge in the first few years after a new product is on the market. PDUFA has fostered a dramatic reduction in product approval times, and the

U.S. market is increasingly the country where drugs are first launched.

There is no evidence that drugs are being withdrawn from the market for safety

reasons at a greater rate during the PDUFA era than prior to the enactment of this

landmark legislation. In fact, the withdrawal rate for new drugs approved prior to

PDUFA is identical to the rate of withdrawal for drugs approved since PDUFA was

enacted (2.7 percent). However, the need to institute a more effective program of

risk management for new drugs, and thereby ensure greater patient safety, is clearly warranted by the intrinsic limitations of drug development programs (particularly

the size of clinical trials) and the reality that more drugs are launched for the first

time in the U.S. Where risks can be effectively managed, we avoid the need to withdraw drugs that are highly beneficial to many patients, though harmful to some.

CONCLUSION

As you know, PDUFA II expires on September 30, 2002, and I want to emphasize

again the importance of achieving a timely reauthorizion of this law. FDA is ready

to work with you to accomplish this.

I have described the status of FDA’s user fee account—Agency carryover balances

will be exhausted by the end of the current fiscal year. If we are to sustain our

record of accomplishment under PDUFA II, it is critical that the reauthorization

occur without a gap between the expiration of the old law and the enactment of

PDUFA III.

Timely reauthorization is a priority for the pharmaceutical industry, the American public, and the many talented staff at FDA that we rely upon to conduct

human drug and biologic reviews. Retaining FDA’s skilled employees is essential to

the success of PDUFA III. Any hesitation or delay in the reauthorization of this program could trigger sudden erosion in our work force, particularly among senior reviewers whose skills are in very high demand. The repercussions of such a loss

would be with us for years to come.

Thank you for your commitment to the mission of FDA, and to the continued success of PDUFA. I am happy to answer questions you may have.

Mr. BILIRAKIS. Thank you very much, doctor. Dr. Crawford, when

might we expect to receive in writing the goals performance letter,

the agreement that was reached?

Mr. CRAWFORD. The goals performance letter is in draft, and I

will ask Dr. Woodcock to comment to the extent that she is able

to do so, when it might be delivered. However, I have seen it and

have reviewed it, and I would say it is quite far along.

35

Mr. BILIRAKIS. All right. Before Dr. Woodcock speaks, I would

like to say that I requested that FDA meet with the committee

staff of minority and majority. They did so a couple of days ago.

Then of course there was a members meeting yesterday and Dr.

Woodcock was there, with others. Dr. Zoon was there. I wanted to

express our appreciation for that.

Dr. Woodcock, please tell us something good. You might also address the goals performance study, because as you heard members

say here, before we go into a mark-up, we need to have that documentation to give you further cooperation.

Mr. CRAWFORD. I can address that. It is correct that it is being

reviewed in the department. However, it is my understanding that

both the FDA and the department share in the reasons for the

delay.

It is very close to release, and I would say it is a matter of days.

I communicated personally with the department yesterday and I

expect that it will be released very soon indeed.

Mr. BILIRAKIS. Very soon? Can you give us an idea of what very

soon is?

Mr. CRAWFORD. Days.

Mr. BILIRAKIS. Days? That’s good. That is the goals performance

study. Dr. Woodcock.

Ms. WOODCOCK. The letter, as Dr. Crawford said, is written—a

draft is written and it must be reviewed by the original parties who

have been negotiating this, as well as up the line.

We understand the need for urgency in getting this letter to you,

and we will have it in a matter of weeks.

Mr. BILIRAKIS. Weeks?

Ms. WOODCOCK. Yes. We will make every effort to get it to you

as soon as possible.

Mr. BILIRAKIS. The letter?

Ms. WOODCOCK. The letter, in a week or weeks.

Mr. BILIRAKIS. Week or weeks?

Ms. WOODCOCK. Yes.

Mr. BILIRAKIS. That is a little better.

Mr. CRAWFORD. It is a letter that is more like a novella. It is very

large, and we want to make sure that it is right. But it should be—

it is in very good shape now, I think, and it just needs to be reviewed by some more people.

Mr. BILIRAKIS. Okay. Well, please review. I understand sometimes that haste makes waste, but we need to have that documentation here as soon as we can so that we can continue.

We have an awful lot of things on our plate as you know, and

as you heard, for example, prescription drugs and Medicare. We

would like to get this thing on course.

Doctor, you have heard people up here state they are concerned

that PDUFA may have resulted in a reduction in safety. PDUFA2’s trigger, is the requirement that PDUFA funds must augment

and not replace the amount of reviews paid for by appropriated

funds. A concern is that money is being diverted from other FDA

centers, and that has been said here more than once.

Can you tell us what in the FDA-industry agreement, the performance goals agreement, will make this situation better? Has it

36

in fact been a concern? Has there been a reduction in terms of safety, efficiency, et cetera?

Mr. CRAWFORD. In reviewing the record of PDUFA, going back to

the first one a number of years ago, over the past few days, I have

personally been very interested in what the record is, and I believe

it is safe to say that PDUFA-1 or PDUFA-2 have decreased risks.

The rate of withdrawal of drugs is essentially the same as it was

before then. The agency is always extremely concerned about safety, and we will continue to be. With respect to what will be done

in the new package to deal with the trigger, I am going to ask Dr.

Woodcock once again to comment.

However, I know that that was a priority consideration and one

that continues, and that I will follow up with that.

Ms. WOODCOCK. First, to set the record clear on one thing. We

have increased our resources over the past 8 years devoted to drug

safety within the agency. However, perhaps this has come at the

expense of other programs.

The PDUFA trigger that you are talking about forces us to

maybe overspend a little, because if we got down—if we went below

the trigger, we could not collect user fees, and we would have to

immediately lay off our staff.

We have tried in this agreement to build more flexibility into

that, and that will allow us to be much closer, and not overspend

in this program. Any time there is a decreasing resource environment overall for the FDA, some programs have to become smaller.

Mr. BILIRAKIS. Are we saying that PDUFA results in other programs being hurt?

Ms. WOODCOCK. If there is an overall decrease in appropriations

to FDA, or the cost of living is not given to the program, then our

number of staff must shrink. Just as if you were to give a raise,

and you have 10 employees, and you gave a raise to all of them,

and you didn’t have any more revenues, you would have nine employees, and that is what has happened to the FDA over the last

decade.

Mr. BILIRAKIS. In other words regardless of PDUFA, the same

thing would have taken place because the money has not been

there the way you would have liked to have had it?

Ms. WOODCOCK. But the trigger exacerbated that situation because we could not have nine employees in the user fee program.

We had to maintain that program.

Mr. BILIRAKIS. My time is expired, but Dr. Crawford, very quickly you could compliment that.

Mr. CRAWFORD. I was just going to say that one of the things

that Dr. Woodcock refers to is the fact that over the last few years

that we have gotten raises for the FDA and we have had to absorb

them from our budget.

This year, things are different as you well know, and we are

grateful for that.

Mr. BILIRAKIS. All right. Thank you. Mr. Brown.

Mr. BROWN. Thank you, Mr. Chairman. Dr. Crawford, in light of

what I have heard this morning, and especially what I will say as

well on what we heard in the briefing yesterday from some of your

fellow colleagues at the FDA, I am concerned about sort of the evolution of the FDA mission.

37

I hear some of your people calling industry its customer, and I

heard yesterday talk and today about the launch of new products

into the market. You have talked about a term that you learn in

Marketing 101.

Industry uses the term launch, but the FDA using that term concerns me. Discussing the success of PDUFA, in terms of changes

in the U.S. drug industry’s market share, I guess I grew up thinking the FDA was there to protect safety and not to play a role in

enhancing the U.S. market share.

And then coming yesterday and bragging about it with great enthusiasm, and coming in today and talking about that, and I just

didn’t know that that was the mission of this government agency

to help U.S. companies’ enhance market share.

Then I hear you quote Tufts, the Tufts’ drug center or whatever

it is called, which is always the group of experts that the drug industry both fires and then quotes for their drug studies.

It is mostly funded by them and I am just concerned about where

the separation is. You are a regulatory body, and you are not a

subsidiary of the drug industry. I am not accusing you of that.

But I just wondered where the separation is. I understand that

one of the new agreements in the goals document is does it require

the FDA to hire an outside consultant if the drug industry wants

it to as long as criteria are set out in the agreement?

I understand the agreement requires the FDA to review its management practices because the industry is unhappy with these

practices? I mean, I wonder where is the separation, and who is in

control?

Is the FDA in control or is the industry that regulates in control?

Then I hear that the stakeholders, when it comes to new drug reviews, and in a goals document, it includes industry and consumers.

But while the FDA held private negotiations with the industry,

as I understand it the public forums were for patient and consumer

groups. So the industry met behind closed doors, and the public

meeting was with patients and consumers.

Then I read in the Congress Daily today that a landmark deal

brokered by the prescription drug industry and the FDA, and it

goes on and on, as if there are no other interested parties in this.

I realize that the industry funds PDUFA, but it is for a public

purpose is what we were told 5 years ago and 10 years ago, and

both public dollars and private dollars, fund new drug reviews.

Why were the stakeholders in this case, specifically why were

they treated differently? Why the private negotiations with the industry, and then the public forum with the rest of us?

Mr. CRAWFORD. The FDA treads a tightwire of remaining correct,

but aloof, in terms of its enforcement and in its consideration of the

industry. Referring to the industry as a client or as a customer is

sort of part of the new emphasis on stakeholder involvement.

And in the two public hearings that we held, where patient organizations and consumer groups came in, as you may recall, we had

28 different groups that came in to discuss their positions, and all

made testimony.

And 23 of those were non-industry sources, and so that base was

in fact covered. But I am sure they were——

38

Mr. BROWN. That was the public hearing, Dr. Crawford.

Mr. CRAWFORD. That’s right.

Mr. BROWN. The private meetings, any of those 23 groups in

there?

Mr. CRAWFORD. No. No. Now one of the——

Mr. BROWN. Then what am I missing here?

Mr. CRAWFORD. One of the reasons that it was necessary to meet

with industry is because of a couple of things in my view. One is

we have to be apprised of what the pipeline is; how many drugs

are being developed, and what the needs are.

One of the goals, stated goals in the bill of PDUFA-1 was to

speed up the drug approvals. And the second one as you know better than I was the same thing, plus performance standards that we

would meet.

In order to set both of those, we needed a dialog with the industry. Many of the things that we discuss in these kinds of meetings

are or have a lot to do with both the stock market and also the future of the industry, and how many things are there.

We have no way in FDA of knowing that until we have communication with industry.

Mr. BROWN. Well, perhaps then, Dr. Crawford, if those were public, then you might not be able to trot out that really cool chart of

increasing and enhancing U.S. market share for the drug industry.

Is that connected somehow?

Mr. CRAWFORD. Well, let me address that. Again, it is delicate,

and I grant you that for sure. But the lesson that we have learned

over the many years of the FDA Act is that each new generation

of drugs is safer and more effective.

If we keep them off the market, or if we are not——

Mr. BROWN. Let me interrupt you there—I’m sorry—because I

only have 5 minutes, and now I have no minutes. If each new generation is safer than a previous generation, why did you come in

here a minute ago and brag about how you are taking no fewer percentage off the market. You are taking no more off the market than

before.

In other words, PDUFA has worked well. But if these drugs are

generally safer anyway, then there ought to be fewer recalls with

these drugs that you approve. So in that way, PDUFA is not—

PDUFA is working to get drugs to the market, and that is good for

our consumers, and our patients, and our constituents.

But its primary object is safety, and it is failing on safety then

if it is only the same rate as it was back when drugs weren’t as

safe as they were 10 years ago.

Mr. CRAWFORD. Well, we won’t think it is failing on safety. There

are more of them being approved, that’s for sure, and Dr. Woodcock

would like to make a comment.

Ms. WOODCOCK. There is a countervailing force, which is that

more U.S. patients are the first in the world to be exposed to these

drugs now. It used to be that Europeans, or Australians, or many

people around the world, those populations, were the first to be exposed.

Mr. BROWN. And I might add in much higher numbers because

of this extravagant launch in this huge use initially of these drugs,

39

in part because of the FDA’s assistance with this launch in direct

to consumer advertising. But go ahead, I’m sorry to interrupt.

Ms. WOODCOCK. Mr. Chairman, may I finish?

Mr. BILIRAKIS. Are you really sure?

Mr. BROWN. I’m sort of sorry, yes. Sorry.

Mr. BILIRAKIS. Please do it briefly, Dr. Woodcock.

Ms. WOODCOCK. Yes. Back when other populations were exposed,

in those people the problems were discovered, and the drug was

pulled off the market, and the application was withdrawn from the

U.S. approval process before it got on the U.S. market.

Now that situation has totally changed, and that’s why we feel

that we need more of an emphasis on risk management.

Mr. BROWN. Okay. Thank you.

Mr. BILIRAKIS. Mr. Deal to inquire.

Mr. DEAL. Thank you, Mr. Chairman. My previously alluded to

contact with Dr. Woodcock was quite the opposite. It was a complaint by a constituent of mine who had a drug pulled off the market, and they felt that it was a drug that needed to be there, and

was considered lifesaving from their standpoint.

So there are points of view many times that the removal of drugs

from the market is maybe overly zealous by some people’s points

of view. So I would simply make that point.

One of the concerns that we have heard expressed is that because of the so-called second trigger or the funding mechanism that

funds are being diverted away from other functions within FDA.

Would you comment on that and is the agreement going to resolve that issue?

Mr. CRAWFORD. Well, of course it is our job to make sure that

nothing that we are mandated to do gets compromised as a result

of this or any other legislation. So we believe that PDUFA-3 will

better address that problem.

We also as we mentioned a little bit ago, as long as we don’t have

to pay for the pay raise increases and some of these other things,

we are more able to predict resources and do a better job.

And that issue has been dealt with very effectively in this Congress, and we are happy about that.

Mr. DEAL. Thank you. Since we have other members who have

questions, I will waive the rest of my time, Mr. Chairman.

Mr. BILIRAKIS. Well, thank you. You caught me unawares here.

Mr. Stupak.

Mr. STUPAK. Well, thank you. Dr. Crawford, I want to pick up

where my friend, Sherrod Brown, left off. We talk about the mission statement of the FDA, which is safety and consumer protection is it not, or is it speed and more drugs?

Mr. CRAWFORD. It is not speed and more drugs, no.

Mr. STUPAK. Okay. On page eight of your testimony, you compare

the withdrawal of pre-PDUFA and during PDUFA, and conclude

that drug safety has not suffered because the withdrawal rates are

basically the same 2.7 percent.

Out of those 12 drugs that have been withdrawn, only one was

a life threatening drug, and the other 11 were for things like upset

stomach and other things, correct?

Mr. CRAWFORD. Yes, I believe that is correct.

40

Mr. STUPAK. And you have over a thousand deaths, correct, with

those 12 withdrawals?

Mr. CRAWFORD. We can——

Mr. STUPAK. To be exact, 1,012.

Mr. CRAWFORD. Well, we can submit that for the record. I am not

prepared to say that.

[The following was received for the record:]

The Adverse Event Reporting System (AERS) maintained by the Center for Drug

Evaluation and Research contains information on adverse events that may be associated with pharmaceutical drugs. AERS is a computerized information database designed to support the FDA’s post-marketing safety surveillance program for all approved drug and therapeutic biologic products. The reports in AERS are evaluated

by FDA clinical reviewers to detect safety signals and to monitor drug safety.

In evaluating AERS data, it is important to keep a number of considerations in

mind. First, there is no certainty that the drug in question caused the reported

deaths. A given death may actually have been due to an underlying disease process,

use of a concomitant drug, or other unknown factors. The report rarely provides any

basis for assessing whether the product caused the death. Second, since more than

one health professional or other individual may file a report there may be duplicate

reports filed on a single incident. Third, since many factors influence reporting for

a particular drug, reliable comparisons between drugs cannot be made from this

data. Fourth, AERS does not provide us with data on actual numbers of patients

using the drugs in question. Therefore the ratio of deaths to the number of users

cannot be calculated.

Finally, the decision to withdraw a product is complex and based on the totality

of available evidence, including risks of potentially life-threatening adverse events,

availability of alternative therapies, etc. The decision is not driven solely by reports

of death, although such events are of most concern.

With these considerations in mind, the following list identifies the numbers of

U.S. death reports in AERS from the time that a drug is marketed to the date of

withdrawal, for drugs recently withdrawn from the market:

Pondimin-46

Redux-19

Seldane-354

Posicor-28

Hismanal-14

Duract-5

Raxar-3

Rezulin-188

Propulsid-288

Lotronex-7

Baycol-93.

Total number of death reports in AERS associated with these 11 products is

1,045.

Mr. STUPAK. Well, besides that, can you comment on the drug

safety that are of concern the FDA that does not include product

withdrawals?

By that I mean, provide us with the pre-PDUFA and PDUFA

comparison of such post-market drug safety matters, such as warning letters, dear doctors letters, package inserts, black boxes, and

other action taken by the FDA?

Those have dramatically increased under PDUFA, as opposed to

pre-PDUFA, is that not correct Dr. CRAWFORD. I don’t believe so.

I am going to ask Dr. Zoon to answer your question from the standpoint of biologics, and then Dr. Woodcock to add whatever she

would like, and they will give you a historical response, as well as

an up-to-date response, and then I will follow through.

Ms. ZOON. Thank you. For biologics——

Mr. STUPAK. Excuse me. I don’t want to spend my whole minutes

talking by biologics. I just want to know about prescription drugs;

41

pre-PDUFA and post or during PDUFA. Do you have more black

boxes, and more warning letters, more dear doctors?

[The following was received for the record:

A report to the Commissioner of FDA from the Task Force on Risk Management

entitled, ‘‘Managing the Risks from Medical Product Use’’ was issued in May 1999.

Appendix A of the enclosed report provides a comparison of post-approval risks for

drugs and biological products approved before and after the implementation of

PDUFA. This report was also provided in its entirety in response to questions for

the record.

Ms. ZOON. The withdrawal rate for biologics is actually less postPDUFA than pre-PDUFA. The issue of the warning letters and

other labeling instances we would be happy to get back to you.

Mr. STUPAK. So you don’t have an answer? Okay.

Ms. ZOON. I don’t have the numbers right here with me.

Mr. STUPAK. Well, let me ask you this. In the goals and performance letter that we are going to get either in a week or weeks,

whatever it might be, what mechanism is there in the performance

letter to make sure that these performance and goals are actually

met by the pharmaceutical industry?

Or are we going to have a situation like PDUFA-2, where you do

your post-marketing, and 90 percent of it isn’t done, and here you

want to reauthorize PDUFA-3, and 90 percent of the goals were

met in PDUFA-2?

Mr. CRAWFORD. Well, we believe that this goals letter does represent the newest science, and we feel that we will do a far better

job because of that. One of the things that we have come to deal

with is risk management and also the problems with the peri-approval process.

Just as the product is about to enter the market, as we have

talked earlier about direct to consumer advertising, the label itself,

and all these sorts of things, which make a lot of difference.

In other words, the product has been reviewed, and it is getting

close to labeling and market entry, and we are going to emphasize

that a great deal more. It helps us, I think, to think in terms of

pre-market activities, and also to think of the approval and review

activities, and then the peri-approvals time.

The time was when the agency quite frankly approved the drugs,

and allowed them on the market, and then unless we got adverse

event reports, adverse reactions, we didn’t do very much.

Mr. STUPAK. Doctor, with all due respect, how are you going to

enforce it? What is the enforcement mechanisms? Why are we

here? You have no subpoena power, and you can’t fine anybody,

and you can’t subpoena anybody.

For Serzone, we have been waiting for over 6 years for the pediatric exclusivity study. Over 6 years. They got a 6 month extension,

and we are still waiting for that. What power do you have to get

the pharmaceutical company to give you that study?

And in another drug, in accutane, you have been waiting since

1985 for the raw data from the manufacture. Tell me how you are

going to enforce that?

Mr. CRAWFORD. Well, we have certain enforcement activities.

Mr. STUPAK. Tell me one.

42

Mr. CRAWFORD. I am going to ask Dr. Woodcock, because I don’t

know what happened in the 1994 thing, if I may be permitted to

do so, and then I will follow up.

Ms. WOODCOCK. Well, first of all, under the new—your first question, under this agreement, under a proposal that we have, we will

be substantially increasing our post-marketing staff and our risk

management staff. That was your first question. Your second

question—— Mr. STUPAK. So you have more staff, and that doesn’t mean enforcement. You have more staff. Go ahead.

Ms. WOODCOCK. Currently for many of the—as you know, for

many of the post-marketing problems that we encounter, our major

authority and major step that we can take is to pull the drug off

the market.

Mr. STUPAK. How many have you ever pulled when you didn’t get

a study or report that you have been demanding? Serzone is still

there, and still pediatric exclusivity, and granted by the way, and

should not be used for minors, but it is still out there.

Doctors are still prescribing, and they still don’t know after 6

years what it is safe or not for adolescents. That is not pulled.

Accutane, 1985, and we are still waiting for the raw material, and

there have been repeated requests of the manufacturer. That has

not been pulled.

Have you ever pulled a drug because they have not complied

with your request for studies for data, for information, that is critical to the safety of a drug? Have you ever done that?

Ms. WOODCOCK. I think only when that was coupled with a safety problem, a severe safety problem that warranted pulling it off.

Mr. STUPAK. So there has to be something more or there is no

enforcement?

Mr. BILIRAKIS. The gentleman’s time has expired.

Mr. STUPAK. Thank you, Mr. Chairman.

Mr. CRAWFORD. Mr. Burr.

Mr. BURR. Thank you, Mr. Chairman. Dr. Crawford, and Dr.

Woodcock, and Dr. Zoon, welcome. Thank you for all the work that

you do. I apologize, Mr. Chairman, that I wasn’t here for opening

statements, but I would like to reinforce something that I understand that the chairman said in his opening statement.

I think that the FDA has done an extremely good job of meeting

with the industry and trying to put together a goals letter. I very

much would like to see that in a matter of days, signed, and a copy

delivered, and I think that weeks is not an option here. And I hope

that you will take that back——

Mr. BILIRAKIS. If the gentleman would yield. As significant as it

is to get this thing reauthorized before the time expires, I don’t

know how I in good conscience can set up a mark-up unless we

have the goals performance agreement in writing, as well as the

study. This should be presented to us in adequate time.

Please proceed, Mr. Burr.

Mr. BURR. I thank the chairman for that. In an effort to try to

keep our efforts focused, as your efforts are, and that is to a very

valuable tool in the process of processing applications, and bringing

new drugs to the market in a timely fashion, I hope that as we

move through this mark-up period that my colleagues on this subVerDate 11-MAY-2000 13:57 Jun 26, 2002 Jkt 080092 PO 00000 Frm 00046 Fmt 6633 Sfmt 6602 W:\DISC\78503 pfrm09 PsN: 78503
43

committee, as well as the full committee and the House, understand the importance of this reauthorization.

Sure, we can chicken out and stick it on the appropriations bill

later this year, and not talk about some of the things that are legitimate in this debate, but at the end of the day reauthorization

of user fees mean that we bring potential new products to the marketplace that have a tremendous quality of life effect on the individuals that are waiting for these drugs.

And, yes, we potentially bring down long term health care costs

because we eliminate the in-patient stays. And I think that is the

real work of this committee as we try to sort out the health care

marketplace in the future.

Let me ask you if I could relative to the goal sheet. I understand

that a risk management program was agreed to by the industry

and the FDA that will effectively double the number of FTEs dedicated to drug and biologic safety. What type of advance is this for

the American people and does the industry support the FDA’s risk

management plan?

Mr. CRAWFORD. Yes. We believe that they do and they will. This

is an extension of what I was talking about, this peri-approval

process. We are going to devote more effort, and more resources of

other types to that, not the least of which will be electronic information technology.

And as I mentioned earlier, I believe that in FDA’s history there

was a time when we sort of put the drug out there and we didn’t

worry that much about it. And that time is changing, and we recognize that this kind of surveillance, once a product is on the market,

is a very real and sacred trust that we have. And we will be working hard on that.

Mr. BURR. Dr. Crawford, in your testimony, I think you alluded

to the fact that there was a—I call it a disparity, a difference between the review and approval times for drugs, versus biologics.

Why does that disparity exist between the two centers?

Mr. CRAWFORD. Well, I will give a general response and then ask

Dr. Zoon if she has comments. Drugs, as you well know, are chemical entities, and many of them are similar to drugs that have already existed, and that simply have another molecule on them or

something like that.

And we are able to have a body of information, and we have had

even the most advanced drugs like anti-cancer drugs and antibiotics now for many, many years. So we have a residue or body

of understanding about them that enables us to review them more

carefully.

With biologics, many of them are bioengineered drugs of one sort

or another, and they are also—there is gene therapy that is covered

in biologics, and this is something new for us, and we have to do

it very, very carefully indeed. And it just takes a little more time.

Ms. ZOON. There are a number of issues, particular speaking

about biologic supports and solicitation of getting to the marketplace for consumers, safe and effective therapies as quickly as possible.

And in fact the Center for Biologics has met all of its PDUFA

goals. All of them were exceeded, all of its PDUFA goals. The issue

then comes down to what is the reason why the times are longer.

44

And there is multiple reasons, and it is not all related to one single

issue.

One deals as Dr. Crawford said with the complexity of biological

products, and many of these are cutting edge technologies, and a

lot of the issues with large complex molecules need to be dealt

with, and things can go wrong with them.

Sometimes in the manufacturing and the ability to be able to

make these products consistently, and other times they deal with

manufacturing and facility issues, and being able to prepare them

in a way to ensure that they meet GMP compliance.

And then other issues surrounding the clinical efficacy data, and

safety data with many of these ground breaking products. We tried

to work very hard with the companies to work out these issues.

I think in the context in the future of PDUFA-3 that there will

be more support for those interactions, and to try to deal with

those problems proactively by having additional resources to facilitate those issues.

Mr. BILIRAKIS. The gentleman’s time has expired.

Mr. BURR. I thank you for that progress and I thank you for the

time, Mr. Chairman.

Mr. BILIRAKIS. Again, that is why we are very anxious to see the

results of all of your negotiations and your discussions. Ms. Eshoo.

Ms. ESHOO. Thank you, Mr. Chairman, and I want to thank you

for what you said just a few moments ago, and that is how important it is to have the side agreement come to us sooner rather than

later.

And I have to tell you that if you want to see this thing move,

weeks is not good. Weeks means more than a month, and what we

have to do—this Congress is not going to bump up to Christmas.

There are elections this year, and so we are going to be getting out

in October.

So we have a very limited timeframe here, and so thank you, Mr.

Chairman, for setting that down as a priority. It is an important

one. I want to pursue with Dr. Zoon if I might the whole issue of

outcomes. How do you explain the differences—well, first of all, to

set the stage.

Most of the companies that we are dealing with relative to the

special protocol reviews and that are small. And so they really need

help navigating this process. So in many ways they are more agency reliant than others are, than the big guys are. How do you explain the differences in special protocol reviews?

It is 129 for the CDER, which for my colleagues if the scrambled

letters don’t make that much sense to you, that is the Center for

Drug Evaluation and Research. It is 129 for the CDER and one for

the Center for Biologic Evaluation, and Research.

And given that these reviews as I said are supposed to help the

smaller companies negotiate the complicated process, wouldn’t you

expect the reverse? I would expect the reverse to be true. Can you

enlighten us about this?

Ms. ZOON. Well, I can say that I don’t know all the answers. I

think there are some explanations at least that I can give, and perhaps our colleagues when they have a chance can also elaborate on

that.

45

Many of the issues of concerns to biologic manufacturers are generally arranged during our planned meetings that have been scheduled under the PDUFA program.

So one does not actually need to utilize the special protocol in

order to discuss important clinical trial design issues or manufacturing issues, or other items of importance in product development.

So many of those issues are addressed during those meeting, and

the meeting minutes are generated and agreed to.

Ms. ESHOO. Well, let me just interject something though. As we

listen to constituents and what they say, I am always mindful that

if you only pick up on what one person says, and put a multiplier

on it, you may be causing a boomerang on a hundred others.

But there is a common thread of complaint in this area. So if this

were being taken care of in the consultation, or what did you just

refer to what it is?

Ms. ZOON. Our meetings?

Ms. ESHOO. Your meetings. Why would there be these complaints? I mean, if it is already being taken care of, and it is a lopsided number. Maybe you can’t give the answer, and maybe subsequent panels will speak to it, panel members. But it is an area that

is a rub.

Are you pleased with it, and do you have something from inside

the agency where you are trying to beef this up and improve upon

this outcome?

Ms. ZOON. Well, I think the answer is that if in fact this particular vehicle under PDUFA-2 was made available for everyone—

the question is how many people actually know about it and utilize

it to the extent perhaps they may wish to, or want to, in other

areas.

Ms. ESHOO. Let me ask you this. What is the agency doing to

proactive if you think that people don’t know, and you see it as

being highly workable and a problem solving arena?

I have a sense that there is a shortcoming here, and I am not

trying to pick on you or find something. In our review of when we

reauthorize this, it is always about making something good even

better.

So I am mindful of that and I think that this is an area where

there is a shortcoming, and the approval times that CBER—I think

that seriously when you look at the numbers, they seriously lag behind those at the CDER.

So that is up to the agency to tell us why this is so. These are

the numbers that you have created, and that’s why I raised them.

Mr. CRAWFORD. If I could respond. These meetings are as Dr.

Zoon indicated optional, but the reason that we—we need to find

out the reason that they are not taking advantage of them. So

there is some sort of shortcoming.

Ms. ESHOO. But have you raised them from inside the agency to

take a look at it, or is it the Congress through these hearings

weighing in that is making you aware of it?

Are we both doing it at the same time, or have you looked at it,

looked at this number, 129-to-1, and said, all right, now we see

that this isn’t all that it should be, and this is what we are doing.

46

Or is this news to you today, or is it something that you have

not had time to take a look at, even though you are aware that the

numbers aren’t so great?

Mr. CRAWFORD. This is not new to us. It is something that I have

not had time to take a look at, but I will, and I appreciate that.

Ms. ESHOO. Is there any news about the appointment of the

Commissioners at the FDA?

Mr. BILIRAKIS. Why don’t you ask Dr. Crawford very briefly Ms.

ESHOO. Dr. Crawford, do you want to comment on that? You know,

I raised that because—I know that people are thinking I am raising it because of political sensitivity or whatever.

The FDA is one of the most important Federal Agencies in our

entire Nation. My constituents bank on the FDA protecting them.

I mean, they feel very strongly about it, and I know in the past

when there were attacks and whatever, they said, look, don’t destroy or take the whole thing down.

And so for an agency to be—well, I shouldn’t say rudderless, but

not to have a person at the top I think is why I raise it. What can

you tell us?

Mr. BILIRAKIS. Very briefly, Dr. Crawford.

Mr. CRAWFORD. Unfortunately, I can’t tell you anything, and I

will be honest with you.

Ms. ESHOO. All right. Thank you. Thank you, Mr. Chairman.

Mr. BILIRAKIS. Dr. Zoon, do you have something to add to that?

Ms. ZOON. The only thing, and just to further address one of the

issues is that one of our thoughts is, and we actually are going to

be doing some proactive outreach to make sure that people understand what PDUFA offers to them in a outreach program as part

of our center initiatives.

Because I think we saw the numbers, and we are trying to understand them, but we think one thing we can do is do more outreach to make sure that people understand the options open to

them.

Mr. BILIRAKIS. All right. Thank you, doctor.

Ms. ESHOO. Thank you, Mr. Chairman.

Mr. BILIRAKIS. Dr. Norwood to inquire.

Mr. NORWOOD. Thank you, Mr. Chairman, and I do thank all the

panelists for being here, particularly Dr. Crawford, who is a former

professor at the University of Georgia, and at Georgetown University, a couple of my favorite universities out there.

So welcome one and all. The questions have all been good it

seems to me for once, and we are all sort of on the same page, but

I want you to tell it to me. Do you believe PDUFA-3 needs to be

preauthorized?

Mr. CRAWFORD. I do believe it needs to be authorized. It is very

important for the public health of this country.

Mr. NORWOOD. It is very important for the public health of this

country, and I would say that in some ways that it is pretty important for the FDA, too, wouldn’t you agree with that?

Mr. CRAWFORD. Absolutely, yes, sir.

Mr. NORWOOD. Well, since you were down in Georgia long

enough, we can have some straight talk. Dr. Crawford, we need

that performance goal letter by 5 p.m. Monday. There is absolutely

47

no reason that all of us are going to work next weekend, and you

put your people to work, too.

If you want to have this thing authorized, you get that letter to

the chairman. We have problems, too. Now, get it done. And if you

can’t get it done on Monday by 5 p.m., tell me right now why; or

just better yet tell me you will get it done.

Mr. CRAWFORD. It pains me to beat around the bush here,

but——

Mr. NORWOOD. Please don’t. Please don’t do that.

Mr. CRAWFORD. But we will make every effort to get it as soon

as we possibly can, and that is——

Mr. NORWOOD. No, that is not an answer. It is not reasonable for

you not to answer the question. If you can’t get it by 5 p.m. Monday, when? The date. And then make it work. This is critical.

Mr. CRAWFORD. Okay. Well, you know, until we get into it, we

can’t really say the exact date, but I hear you.

Mr. NORWOOD. Yes, you can. You set the date and make them

go to it. The chairman will not authorize this without that document.

Mr. CRAWFORD. We understand that, and we will get to work on

it, and that is a promise.

Mr. NORWOOD. Can anybody tell me if 5 p.m. on Monday is okay?

Mr. CRAWFORD. I think I am the one, and I do, too. I do know

that. Okay. I hear you.

Mr. NORWOOD. Well, I don’t know how to say this any other way,

except to say that you are not answering the question, and it is a

good thing that we are friends, and all of that, but you need to answer the question.

You need to commit yourself to when the chairman will have the

documents so we know what to do, because we all want to look at

the document, and we hope then from that that we can reauthorize

a critical issue. Now, set the darn time, and work, and make it

happen.

Mr. CRAWFORD. We will surprise you.

Mr. NORWOOD. Well, I have a feeling that we will surprise you

back if you don’t surprise the subcommittee.

Mr. CRAWFORD. I am well aware of that, yes.

Mr. NORWOOD. Mr. Chairman, I think I am through.

Mr. BILIRAKIS. We have a series of votes. I had hoped that we

could finish up with Dr. Crawford before we left, but there is just

no way that we can do it. I think we are going to have to break.

Please, let’s get back just as soon as we cast that second vote.

I think there is two of them, and let’s finish up. Thank you.

[Brief recess.]

Mr. BILIRAKIS. Mr. Bryant to inquire of Dr. Crawford.

Mr. BRYANT. Thank you, Mr. Chairman, and Dr. Crawford, welcome. I just have a few follow-up questions, three to be precise, and

so I will try to squeeze those in about 5 minutes, and so if you

could take and consider that when you answer.

I have been in and out, but I know that the FDA has done some

studies in regard to the issue that perhaps some have been about

rushing these reviews, and in some respects compromising safety.

48

I don’t know how much you have talked about those studies, but

I would like to have those, if reasonable, attached to your testimony. Is that a very large study, or is it feasible?

Mr. CRAWFORD. No, we can give you some information on that

and attach it without exception.

[The following was received for the record:]

The Office of Inspector General (OIG) of the Department of Health and Human

Services is evaluating the efficiency and effectiveness of the review process for new

drug applications under PDUFA II. We understand that the OIG is in the drafting

stages of their report.

Mr. BRYANT. Can you give me a bottom line?

Mr. CRAWFORD. Yes. The bottom line is that since PDUFA-1

went into effect, the number of drugs that have to be recalled because of safety concerns has not changed, and although more drugs

are being approved, no higher percentage are having these kinds

of difficulties.

Mr. BRYANT. You were about to answer a question earlier on

from someone, and you were cutoff a little bit, and you started out

if you can remember this that if you keep the drug off the market,

and you were kind of cutoff at that point.

I assume that this has some connection with the impact of

PDUFA on making drugs and biologics more available to the American consumer? Could you explain that for me?

Mr. CRAWFORD. Yes. What I was referring to was that each new

generation of drugs that FDA has regulated has genuinely been

safer and even more effective than the previous generation.

So when a new drug, which is a breakthrough entity that has

real prospects for improving public health in the country comes

along, it is incumbent upon us in my view to review it as fast and

as accurately as we possibly can so that it can get on the market

and begin improving the public health of this country.

We can’t compromise the safety and efficacy requirements that

we have, but if it isn’t introduced expeditiously, and it hasn’t been

too many years ago when it took 4 or 5 years to do what we are

doing now in about 6 months.

And people did suffer as a result of that, and so we have done

a variety of things, like PDUFA, and even some other initiatives

to try to be sure that the drug is safe, and be sure it is effective,

and then if it has the promise that many of these do, try to get it

on the market, or try to get it approved as soon as we possibly can.

Mr. BRYANT. My last question is has PDUFA had any effect on

pharmaceutical research and development?

Mr. CRAWFORD. Well, actually, if you go back and look, and all

of us have been briefed on this, one of the goals was to send a signal to the pharmaceutical industry, and the biologics industry, that

the FDA is shaping up its approval process.

We are changing as a result of PDUFA, and rather than getting

credit for turning down drugs, we are going to get credit for approving drugs correctly.

And that message being sent to the pharmaceutical industry was

intended to spur innovation and development of these new drugs,

particularly those for diseases that no drug existed for, and we

think by and large that it has worked.

49

Mr. BRYANT. I have no other questions, but just one comment

just in follow-up to Mr. Norwood. I think you received his message

clearly, and coming from an arena of law here I had to negotiate

quite a bit, and I understand the situation that you are in with this

letter, and there is some give and take on this, but if one side is

under a deadline, usually they are at a disadvantage.

But I think in this case that neither side—I think that both sides

have a real interest in getting this done, and so even though you

are here and we are talking to you, I would send that message out

clearly to those in the audience that represent the other side, and

who very clearly have a strong interest in this bill being reauthorized that we really need agreement as quickly as possible, and

maybe even as soon as next Monday.

But it would help us in that regard. So I think that all the parties agree that we need to have this done. Thank you, and I yield

back my time.

Mr. BILIRAKIS. I would expect that there are an awful lot of representatives here from quote, the other side, who have gotten that

message. Mr. Waxman to inquire.

Mr. WAXMAN. Thank you very much, Mr. Chairman. Dr.

Crawford, rapid drug approval has put an extra burden on FDA to

watch for unexpected safety problems after marketing.

The FDA no longer has the luxury of a lengthy review period to

detect safety issues before approval, nor does it have the advantage

of watching the European experience with a drug before it is marketed here.

At the same time the FDA’s post-market surveillance system is

seriously flawed. It is based on voluntary reporting from health

care professionals, and I understand that the FDA estimates that

it hears of less than 1 percent of serious adverse reactions.

And while the FDA allocates over 2,000 FTEs to premarket reviews of new drugs, it has been able to assign less than 5 percent

of that number to post-market safety monitoring.

I am concerned that the FDA’s current post-market surveillance

system is not up to the challenge posed by rapid drug approvals.

What changes in FDA’s post-market surveillance program are

needed to run an effective program, and will the amount of money

the industry has put forward pay for the needed changes?

Mr. CRAWFORD. That is one of the things that I am very concerned about, and have been briefed on by Dr. Woodcock and her

staff. And I would if I may like to ask her to give the bottom line

of those briefings.

Ms. WOODCOCK. That is a complex question you are asking. The

recommendations that we have arrived at would actually double

the size of the review staff in drug safety at the agency, and that

would be a tremendous boost.

However, there are many drugs, of course, that are generic, that

are off patent, that have safety problems. Most of the drugs on the

market have not been newly approved, and as you know, my feeling is that drug safety is a broad issue, and it does not pertain to

the first year or so after a drug is approved.

It pertains to all drugs that are on the market. We find problems

years, sometimes decades, after a drug is on the market.

50

Mr. WAXMAN. Well, you mentioned that this funding from user

fees will double the staff of post-marketing, but I understand that

is over a 5 year period.

Ms. WOODCOCK. Correct.

Mr. WAXMAN. Just tell us in your best professional judgment

what would FDA need to have in place to do a post-market surveillance program that will accomplish what we would like to see

ideally to assure the public about the safety of drugs that are on

the market?

Ms. WOODCOCK. For drugs, we need money for access to data

bases, and the linked health care data bases that exist now, and

the health care organizations that link adverse reactions to prescriptions, and outcomes, we need the money to do studies so that

when health problems are detected or suspected with drugs, we can

go out and confirm or evaluate whether or not these are real, and

if so, what to do about them.

Mr. WAXMAN. I assume the money that will be provided in this

agreement with the industry will not be sufficient to do what ought

to be done for a post-marketing surveillance program.

Ms. WOODCOCK. In my judgment that is true, but that many of

these drugs are not new drugs.

Mr. WAXMAN. How much money and how many staff people in

your best professional judgment would be needed to do a good postmarketing surveillance program? You might want to get it for the

record.

Mr. CRAWFORD. Yeah, I think that is a good idea. Can we submit

that for the record?

Mr. WAXMAN. Yes, please. I understand in this agreement with

the industry that it authorizes the FDA to use a portion of the user

fees to gain approximately a hundred new FTEs devoted to postmarket safety over the next 5 years.

And while it is a good start, and welcome change, I am concerned

that though there is apparently nothing explicit in the agreement

about the number of FTEs that FDA can add to the post-market

surveillance program.

Instead, the only explicit part of the agreement is a goal that is

set for premarket review. And I would like to know how we in Congress can be sure that the fees currently earmarked for post-market safety will in fact be used for that purpose.

For example, if in a given year the FDA does not have sufficient

resources to meet its performance goals, which again are only for

pre-market approvals, what will stop the agency from taking resources from the post-market safety program to help meet performance goals for faster approvals?

Ms. WOODCOCK. We issue a report to Congress yearly, both a

performance report and a financial report. We would expect that

the yearly reports issued under this new program would have a

line item for how many dollars, and how many FTEs are devoted

in drug safety from user fees.

Mr. WAXMAN. Well, I guess what I want to try to focus on is that

the agreement, which could be the basis for legislation, spells out

a performance goal for premarket reviews, and no performance

goals for post-market safety activities.

51

Don’t you guarantee that post-market safety will always be sacrificed in order to meet pre-market review deadlines? And is premarket review speed more important than post-market safety evaluation from a public health point of view. I think we would both

say no.

But can we be assured that we are not going to find ourselves

in a position where that money is going to be used for pre-market

instead of post-market if you fail to meet those performance standards?

Ms. WOODCOCK. We have viewed it as an obligation to use the

money as it has been intended under the user fee program, and

that is laid out in the reports that we give to Congress. And I don’t

think that we would change the money around.

Mr. WAXMAN. And will the people hired with user fee money be

allowed to work on non-PDUFA-3 drugs?

Ms. WOODCOCK. Could I answer that, because it is complicated?

Mr. WAXMAN. Yes, sure.

Ms. WOODCOCK. It is a level of effort arrangement. We don’t have

people with a star on their head saying user fee people, and nonuser fee people. So we would have to devote a certain level of effort

to the PDUFA-3 drugs, if that makes sense to you.

But it would not be by individual, individually. Individuals would

work on whatever was appropriate.

Mr. WAXMAN. Can I ask just one last question, Mr. Chairman?

Mr. BILIRAKIS. Yes, but just briefly.

Mr. WAXMAN. My last question is this. I am concerned about the

fact that we have direct to consumer advertising by the pharmaceutical manufacturers, and the FDA has a role to make sure that

it is not false and misleading.

I also understand that the FDA has very, very, little resources

to accomplish that goal. Perhaps for the record you could tell us

what you would need if you were actually going to do the job that

you have the power to do, but not the resources to do, to supervise

these consumer ads to be sure that they are not false and misleading.

Mr. CRAWFORD. May we submit that analysis for the record also?

Mr. WAXMAN. And please submit the answers to my questions

about optimal staff and budget, in terms of your best professional

judgment, and not what is approved by every politician around, but

your professional judgment.

Mr. CRAWFORD. Thank you, sir.

[The following was received for the record:]

The Division of Drug Marketing and Advertising (DDMAC) in the Center for Drug

Evaluation and Research (CDER) is responsible for the regulation of prescription

drug advertising. This Division currently has assigned 39 full-time equivalents

(FTEs) positions. While DDMAC has worked to maximize its productivity and is currently undergoing a reorganization that is designed to further improve its efficiency

and effectiveness, the current staffing is not adequate to keep pace with the rapidly

increasing number of professional and direct-to-consumer advertisements for prescription drugs. It is estimated that CDER would need approximately 35 additional

FTEs and supporting operating funds to fully staff the advertising review program.

Currently, the Center for Biologic Evaluation and Research (CBER) has 4 FTEs

to review all advertising and promotional labeling materials submitted. In order to

adequately assess these materials and bring timely enforcement actions, a large increase in staff would be required. Based on the projected number of submissions for

FY2003, and conservative estimates of man-hours needed to review these submissions, 30 additional review FTEs would be required. Additional management and

52

support staff would also be needed, for a total of 38 FTEs at a cost of $5,130,000.00.

An additional $550,000 would be required for IT upgrade and support of a tracking

system. This would result in a total requirement of $5,680,000.00.

Mr. BILIRAKIS. We will be submitting, of course, a number of

questions to you. There are people here who have sat around all

morning long, and haven’t had the opportunity to inquire of you,

Dr. Crawford.

Per usual, you will be responding to those in a timely fashion.

That being the case, we are going to finally excuse you and express

our appreciation to you, and Dr. Zoon, and Dr. Woodcock, for the

long delays and sitting in the chair as long as you have.

Mr. CRAWFORD. Thank you very much.

Mr. BILIRAKIS. Thank you very much. Again, help us to help

those who need to be helped.

Mr. CRAWFORD. We shall do that.

Mr. BILIRAKIS. Thank you. Panel Number 2 will consist of Dr.

Timothy R. Franson, Vice President of Clinical Research and Regulatory Affairs, U.S. Eli Lilly Research Laboratories; Dr. Alastair J.

J. Wood, Assistant Vice Chancellor for Research, Professor of Medicine, and Professor of Pharmacology, at Vanderbilt University

School of Medicine; and Dr. Mary Pendergast, Executive Vice President of Elan Corporation.

Welcome to all three of you. We can start off with Dr. Franson.

If you would, please. We are setting the clock at 5 minutes. Your

written statement, of course, is a part of the record.

We would hope that you would supplement or compliment it, and

let’s do the best that we can.

Dr. Franson, please proceed.

STATEMENTS OF TIMOTHY R. FRANSON, VICE PRESIDENT OF

CLINICAL RESEARCH AND REGULATORY AFFAIRS, U.S. ELI

LILLY RESEARCH LABORATORIES; ALASTAIR J.J. WOOD, ASSISTANT VICE CHANCELLOR FOR RESEARCH, VANDERBILT

UNIVERSITY SCHOOL OF MEDICINE; AND MARY K.

PENDERGAST, EXECUTIVE VICE PRESIDENT, ELAN CORPORATION

Mr. FRANSON. Thank you very much. Chairman Bilirakis, Ranking Member Brown, and members of the subcommittee, thank you

for the opportunity to discuss the reauthorization of PDUFA.

My name is Tim Franson, and I am a physician, a pharmacist,

and Vice President of Clinical Research and Regulatory Affairs at

Eli Lilly and Company. And I am representing the views of the

Pharmaceutical Research and Manufacturers of America, PhRMA.

Very few legislative initiatives have been as effective and successful as PDUFA. The user fee program was created while keeping

two overriding and principled goals in mind. There must be no real

or perceived paying for a drug approval, and patient access to new

treatments must be expedited.

The results of the program are tangible. Since enactment of the

program in 1992, the FDA has approved 712 drugs, and 198 of

these being priority reviews, which have had a remarkable positive

impact on patients.

It is critical to note that the user fees are designed to be added

to FDA appropriated base funds. Congress wisely added two trigVerDate 11-MAY-2000 13:57 Jun 26, 2002 Jkt 080092 PO 00000 Frm 00056 Fmt 6633 Sfmt 6602 W:\DISC\78503 pfrm09 PsN: 78503
53

gers to assure that the FDA could not collect user fees unless the

base line appropriation for FDA was preserved, and the necessary

funds within the appropriations were spent on drug review in the

full sense.

The public health advantages of PDUFA cannot be overstated.

Patient access to new, safe, and effective medicines has been expedited. Prior to the initial passage of the legislation, drug reviews

at FDA took on average over 30 months.

The review time has been cut in half over the past 9 years that

the program has been in effect. The FDA is now approving new,

life-saving therapies before other regulatory agencies in the world,

giving American patients first access to these important medicines.

There is improved, appropriate communication between the FDA

and the companies developing these new drugs, and thus facilitating the decisionmaking process. And according to FDA statistics,

the law has had no effect on market withdrawal rate, which has

remained at 2.7 percent, both pre-and-post-PDUFA.

Clearly, this program is an excellent example of how to structure

a successful working relationship between the regulator and the

regulated without compromising safety and efficacy standards.

The integrity of the program is in its simplicity; incremental resources for FDA and measurable performance goals. These goals

have been kept out of the statute and dealt with in a side-letter

from the Secretary of HHS to Congress.

The statute is explicit about the use of user fee funds, and they

can only be used for the process for the review of human drug applications. The retention of this limitation is critical to the proper

scope of PDUFA.

It focuses the additive resources on the activities that best serve

the broad public health goal of the law, the prompt review of important new drugs.

PDUFA-1 focused solely on the drug review process, and PDUFA2 focused on improving interactions during the clinical drug development phase. As we look forward to extending this program, we

identified several key objectives.

Continuing to assure a sufficient financial base for FDA. Incorporating the most current information technology into the review

process. Exploring new concepts to bring additional efficiencies to

the process.

Improving performance management, and continuing to assure

that the safety of new drugs is of the highest priority. The FDA has

proposed a risk management program in which the agency would

gain additional resources to evaluate risk management plans associated with new products.

These will address questions of what may occur as products

reached to a larger number of patients in the first 2 to 3 years of

marketing, the time in which a vast majority of risks are identified.

Additional user fees will be allocated for the risk management

program, and this will complement the extensive programs that the

FDA and PhRMA member companies have in place to monitor

post-market safety of new drugs.

In closing, I want to acknowledge the over 1,000 professionals at

FDA, who are a large part of the success of this program, and who

are dedicated to doing their job to the highest standards.

54

PhRMA hopes that Congress will act to reauthorize this program, assuring these employees of the shared commitment of all

parties to continue the program for another 5 years, and to assure

continued, timely flow of new therapeutic advances to waiting patients.

Thank you, and I will be happy to answer any questions that

members of the committee may have.

[The prepared statement of Timothy R. Franson follows:]

PREPARED STATEMENT OF TIMOTHY R. FRANSON, VICE PRESIDENT, CLINICAL RE- SEARCH AND REGULATORY AFFAIRS, ELI LILLY & COMPANY ON BEHALF OF THE

PHARMACEUTICAL RESEARCH AND MANUFACTURERS OF AMERICA

Mr. Chairman and Members of the Subcommittee, I’m pleased to be here on behalf of the Pharmaceutical Research and Manufacturers of America (PhRMA) to

present its views on the reauthorization of the Prescription Drug User Fee Act

(PDUFA). PhRMA represents the nation’s leading research-based pharmaceutical

and biotechnology companies, which are devoted to inventing medicines that allow

patients to live longer, healthier, and more productive lives. Investing more than

$30 billion in 2001 to discover and develop new medicines, PhRMA companies are

leading the way in the search for cures. Right now, our companies have some 30,000

researchers working on more than 1,000 potential new medicines. We want patients

to have access to safe and effective medicines as soon as possible. That’s why we’re

here today.

As members of this Subcommittee well know, opportunities to make a real societal

difference through legislation are unique and special. PDUFA, enacted in September

1992, was clearly a central piece of legislation that has affected the lives of many

American citizens who needed prompt access to important new medicines. The Energy and Commerce Committee played a critical role at that time and the Commerce

Committee was key again in 1997 when PDUFA was reauthorized as part of the

Food and Drug Administration Modernization Act. As the members of this Subcommittee are aware, PDUFA expires at the end of this federal fiscal year. Prompt

reauthorization is critical to all the stakeholders: to industry, which seeks to maintain timely review; to the FDA, which anticipates gaining important additional resources; and most of all, to the American public, who await new advances that our

industry is developing to treat their diseases from cancer and AIDS to Alzheimer’s

and diabetes.

The public health benefits of PDUFA cannot be overstated. Patient access to new

safe and effective medicines has been expedited. Prior to the initial passage of the

legislation in 1992, drug reviews at FDA took on average over 30 months. The review time has been cut in half over the past nine years that the program has been

in effect. FDA is now approving new life-saving therapies before other regulatory

agencies in the world, giving American patients first access to these important

medicines. There is improved appropriate communication between FDA and the

companies developing these new drugs. This leads to a greater and timelier exchange of information, facilitating the decision-making process. Finally, this program is a clear example of how to structure a successful working relationship between the regulator and regulated without compromising standards.

The results of this program are tangible. One need only look at the number of

drugs and biologics approved over the past nine years. FDA has approved 712

drugs; 198 of these were priority reviews. Among the examples of new treatments

that American patients have access to are:

(1) Gleevec—A drug approved for the treatment of chronic myeloid leukemia,

which is a rare and deadly disease that affects some 25,000 Americans. A priority

drug, it was approved in just over two months.

(2) Xigris—A drug approved for the treatment of adults hospitalized with severe

sepsis that are at a high risk of dying. Prior to the approval of Xigris, about 1,000

people died of this condition every single day. A priority drug, it was approved in

under 10 months.

(3) Trisenox—A drug approved for the treatment of leukemia (acute promyleocytic

leukemia) in patients who have not responded to, or have relapsed following all

trans-retinoic acid and anthracycline-based chemotherapy. A priority drug, it was

approved in six months.

(4) Mylotarg—A drug approved for the treatment of a certain type of leukemia

(CD33 positive acute myeloid leukemia) for patients 60 years or older who have relapsed for the first time and are not suitable candidates for the standard but poorly

55

tolerated cytotoxic therapy. A priority and orphan drug, it was approved in about

seven months.

(5) Zyvox—A drug approved for the treatment of bloodstream infection, hospitalacquired pneumonia, and community-acquired pneumonia. A priority drug, it was

approved in six months.

The concept of a user fee program to augment FDA resources was first proposed

by the Agency. The lengthy time of drug reviews was attributed to the lack of adequate resources, a view put forth by the FDA and agreed to by the pharmaceutical

industry. A distinct need for supplemental resources on top of those appropriated

by Congress was established with one principal goal: there must be no real or perceived ‘‘paying for a drug approval.’’ Over the past nine years this goal has been

met. Although performance goals were established in both PDUFA-1 and PDUFA2, these were kept out of the statute and dealt with in a side letter from the Secretary of HHS to Congress. Thus, the PDUFA law itself is rather simple, covering

the fee structure, how fees can be collected, and what they can be used for.

It is critical to note that the user fees are designed to be additive to the FDA appropriated base funds. Congress, in its wisdom, added two ‘‘triggers’’ to assure that

FDA could not collect user fees unless there was a baseline appropriation for all of

FDA and the necessary funds within the full appropriation were spent on drug review activities. Collectively the two ‘‘triggers’’ emphasize the ongoing public responsibility to provide FDA with adequate resources to carry out its mission to advance

the public health.

PDUFA-1 focused solely on the drug review process, reducing the time to FDA action to six months for priority drugs and twelve months for standard drugs. FDA

also agreed to process the backlog of pending applications within the first two years

of the program. Both goals were accomplished.

While PDUFA-1 focused on FDA review time, PhRMA stressed that the FDA review of an application, while significant, is only a fractional portion of the whole

drug development time that was taking as long as 12 years. As the pharmaceutical

industry looked toward the first reauthorization of PDUFA in 1997, proposals were

offered to the FDA that would improve interactions during the clinical development

phase of drug development with the hope that improvements in this lengthy process

(6-8 years) could be realized with the same degree of success that occurred with the

FDA review phase. Agreement was reached on a set of metrics that has made such

interactions more predictable. In addition, PDUFA-2 incorporated processes for resolving disputes, assessing special protocols, providing prompt feedback when sponsors submit information in response to a clinical hold, and simplifying the action

letter that the sponsor receives following the review of an application. Collectively,

these enhancements are beginning to improve the drug development process.

As PhRMA began preparing for the PDUFA-3 reauthorization, we recognized that

this is a sound program that works and works well. The integrity of the program

is its simplicity: measurable performance goals in return for the added incremental

resources for FDA. The statute is explicit about the use of user fee funds; they can

only be used for the ‘‘process for the review of human drug applications.’’ The retention of this limitation is critical to the proper scope of PDUFA; it focuses the additive resources on the activities that best serve the broad public health goal of the

law, the prompt review of important new drugs. While no less important, the broad

array of other FDA regulatory activities that deal with a host of post-market issues

are best funded out of the federally appropriated budget. PhRMA recognizes the

critical role of these activities and the necessity for full funding of the Food and

Drug Administration.

One critical issue that surfaced back in 1992 was whether the nature of the proposed legislation constituted a ‘‘tax’’ on industry. It was argued at that time, successfully, that the program would not be a tax, but rather a fee for service. Thus,

Congress avoided a difficult jurisdictional decision as to whether referral to the

House Ways and Means and the Senate Finance Committees would be required.

PhRMA would urge the Subcommittee to preserve the current language in the statute to insure that PDUFA continues to meet the above-mentioned process definition.

In this manner, PhRMA hopes that Congressional jurisdiction will remain clear and

unambiguous.

The goals for the program over the next five years are straightforward. We must

preserve the significant process improvements that have been made over the past

nine years of PDUFA. PhRMA consistently has complimented the FDA for meeting

every established performance goal, in most cases well ahead of schedule. Interactions between the FDA and sponsors of new medicines have never been better.

The predictability of the regulatory process provides a degree of certainty to companies’ drug development programs.

56

There are some key aspects of the proposed PDUFA-3 program that are worth discussion.

• We need to continue to assure a sufficient financial base that preserves the current services and achievements made during the first two cycles of PDUFA. The

current FDA budget that fully funded the Agency’s current cost of living increase was of great assistance in meeting this goal. • We must continue to move toward incorporating the most current Information

Technology (IT) into the review process. Over the five years of PDUFA-2, industry has provided over $80 million of user fees to upgrade the IT infrastructure

of both the Drugs and Biologics Centers. By the end of this fiscal year, FDA

will be in a position to receive all regulatory submissions in electronic format.

This includes not only the New Drug Application, but also the large amount of

information that is required during the clinical development process, the annual

reports that are required of all approved drugs, and the reports of adverse drug

reactions. Industry is willing to continue this level of funding and add extra

funds toward targeted programs. We must remember that FDA is responsible

for managing large amounts of information and this ongoing IT initiative is critical to the Agency’s function. • We need to continue to explore new review concepts that will bring additional efficiencies to the process. PhRMA has proposed to pilot a ‘‘cumulative marketing

application’’ in PDUFA-3. Rather than waiting until the full application is complete, FDA would begin to review defined modules of the submission, as they

are finished. This ‘‘building’’ of a reviewed NDA may lead to marked improvements in the way drugs are reviewed. • We need to develop a workload adjuster that reflects all of the activities of the

new drug review process, rather than just the completed NDA submission. FDA

allocates user fee resources to the review of efficacy and manufacturing supplements as well as all of the interactions with sponsors during the clinical development time period. During PDUFA-2, workload was calculated only on the

basis of fee-paying applications. By a rough estimate this represents only about

40% of the net review burden of the Agency. If the number of these applications

dip, as it has in the last couple of years, FDA’s ability to carry out all of its

responsibilities will be hampered by insufficient additional resources. • PhRMA and the FDA have been in agreement that the safety of new drugs must

continue to be one of the highest priorities in the development and approval

process. To this end, we have been in frequent discussions with other PDUFA

stakeholders to improve this function. We all acknowledge that drugs are not

without risks. The basic premise of drug development is managing the benefit/

risk relationship. Additional information on the safety of drugs emerges constantly, particularly in early use following approval. PhRMA companies already

dedicate significant resources, both personnel and money, to pre- and post-approval safety vigilance activities. While there has been no increase in the rate

of drug withdrawals during PDUFA compared to pre-PDUFA periods, the FDA

has proposed a risk management program in which the agency would gain additional resources for the purpose of evaluating risk management plans associated

with new products, and to address questions of what will occur as products

reach larger numbers of patients in the first 2 to 3 years of marketing—the

time in which the vast majority of risks are identified. Additional user fees will

be allocated for the risk management program. • We should allocate a modest proportion of PDUFA funds for improving performance management. By implementing ‘‘good review management principles,’’ FDA can bring consistency throughout the review divisions that are located

within both CDER and CBER. Secondly, as the PDUFA program enters its

third cycle, PhRMA believes that this is an appropriate time for a major management review focusing on process review and analysis within the two Centers.

This review should be comprehensive, involving a thorough analysis of IT utilization, review management, and activity cost. The resultant process map should

enable FDA to make far greater use of its principal resource, people power.

Finally, we must not lose sight of the dedicated employees at the Food and Drug

Administration who are a large part of the success of this program. User fees now

support well over 1000 men and women who are dedicated to doing their job to the

highest professional standards. PhRMA believes that Congress needs to act with all

due speed to reauthorize this program, assuring these employees of the shared commitment of all parties to continue the program for another five years and the continued timely flow of new therapeutic advances to waiting patients.

Mr. BILIRAKIS. Thank you very much, Mr. Franson.

Dr. Wood.

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STATEMENT OF ALASTAIR J.J. WOOD

Mr. WOOD. Mr. Chairman, Representatives, and Ladies and Gentlemen, thank you also for giving me the opportunity to testify

today. As you already heard, I am Alastair Wood from Vanderbilt

University, where I am Assistant Vice Chancellor, and Professor of

Medicine, and Professor of Pharmacology.

But I am also the drug therapy editor of the New England Journal Of Medicine. Prescription drug user fees have provided the

FDA with additional resources to allow effective therapies to reach

patients faster.

The program has clearly been a great success and has achieved

its goal. And with respect to that, I would like to highlight a number of points from my written testimony that addressed the future

under PDUFA.

We are at a time when the potential for innovative drug development has never been greater. While that innovative potential is

enormously exciting, it will put extraordinarily new demands on

the FDA.

If only a percentage of the genes discovered by the Human Genome Project reveal new drug targets, this will provide thousands

of new drug classes, and I am not just talking about new drugs.

New drug classes never before seen.

Facilitating such innovative therapies to market will require paradigm shifts in the way that we think about evaluation of safety

and efficacy. Some of these new challenges are already apparent.

The old models used to demonstrate efficacy may not be optimal

for the therapies of the future. Drugs are being developed, for example, to enhance immune function in HIV AIDS.

The reduction in viral load, which is the current standard measure of efficacy, may not be the optimal efficacy end point for such

drugs. In the cancer area, a number of novel therapeutical strategies are in development.

Here, too, the old measures of effectiveness based simply on reduction in tumor size may need reevaluating. Pharmacogenetics,

defined as the effect of genetics on drug response, has the potential

to identify patients whose particular genetic backgrounds made

them either more likely to respond to therapy, or put them at particular risk from side effects.

If it is an early stage in the drug development process, we can

identify patients who, because of their genetic make-up, respond to

a drug. And then by including only such patients in clinical trials,

we could substantially reduce the number of patients that we need

to study.

The agency needs to work with industry to identify the issues related to the use of these more efficient trial designs, and ensure

that their use does not result in overly restrictive labeling.

Questions have been raised this morning about the effects of

PDUFA on drug safety. The issue is framed sometimes in different

ways. Sometimes the question has been posed are we approving

drugs too quickly.

I think the answer is clearly no. We are not approving drugs too

quickly. In fact, I would go further and say that there is no intuitive reason to imagine that slowing the approval process will enhance safety.

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Drugs are not like wines; they don’t improve with keeping. An

additional way that the question has been posed is are we withdrawing more drugs because of safety concerns since PDUFA.

Again, the data do not appear to support that conclusion. Another question that has been raised is how should PDUFA influence post-marketing surveillance? As someone has already said, the

answer is complicated.

First, it is worth saying that effective post-marketing surveillance is not and should not be the enemy of industry. Poorly performed post-marketing surveillance may result in the needless removal, as we have already, of safe and effective drugs from the

market on the basis of invalid data.

Fortunately, the information technology revolution is about to

radically change the way physicians prescribe drugs. At Vanderbilt

Medical Center, all physician’s orders for in-patients must now be

entered by computer.

Dosage, interaction risks, et cetera, are checked automatically at

the time of prescribing, and the results fed back to the physician

before direct transmission of the prescription to the pharmacy.

The implications for improved patient safety are obvious and

compelling, but there are also substantial opportunities for postmarketing surveillance.

We will have access to complete data sets on prescriptions and

outcomes, with positive implications for the drug approval process.

The greater our confidence in the post-approval data, the earlier

and faster we should be able to approve drugs.

These prescribing systems are moving forward rapidly, and the

FDA needs immediately to be a player in the development of such

systems.

In summary the upcoming challenges to the FDA are substantial.

These challenges can only be met if the agency has the resources

to hire and retain the quality scientific staff it needs.

The salaries of FDA scientists need to be maintain parity with

academia, and should be tied to the NIH salary cap. If we are to

fulfill our hopes for novel therapies in the future, it is essential

that the FDA has the increased resources it needs to participate as

a full and credible scientific partner.

User fees alone cannot be expected to provide the required increases in resources. Additional public funds are required to adequately fund this critical public health agency. Mr. Chairman,

thank you for giving me the opportunity to present these views.

[The prepared statement of Alastair J.J. Wood follows:]

PREPARED STATEMENT OF ALASTAIR J.J. WOOD, ASSISTANT VICE CHANCELLOR,

VANDERBILT UNIVERSITY SCHOOL OF MEDICINE

Mr. Chairman, Representatives, Ladies and Gentlemen, I am Alastair Wood from

Vanderbilt University where I am Assistant Vice Chancellor, Professor of Medicine

and Professor of Pharmacology. I have spent my entire professional life studying

and writing about drugs. I have served on FDA advisory committees and have been

the Drug Therapy Editor of The New England Journal of Medicine for over a decade.

The purpose of the Prescription Drug User Fee Act was to provide the FDA with

the additional resources it needed to allow faster review of NDAs and therefore have

effective therapies reach our patients faster. The program has clearly been a great

success and has achieved that goal. The success of the program and the occasion

of its reauthorization provide an opportunity to look into the future to determine

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what actions are required to ensure that we can continue to further enhance the

drug approval process.

There has probably never been a time in drug development at which the opportunities were greater. While these opportunities are exciting they will also put extraordinary new demands on the FDA. It has been estimated that all of the drugs

currently on the market act on only 500 different molecular targets. If only a percentage of the genes discovered by the Human Genome Project reveal new drug targets this will provide thousands of new Drug Classes—Not just new Drugs—But

completely new drug classes never seen before. Facilitating such innovative therapies to market will require, not more of the same but paradigm shifts in the way

we think about evaluation of safety and efficacy.

Some of these new challenges are already apparent. The old models used and demanded to demonstrate efficacy may not be optimal in the future. New approaches

from biotechnology drug development are already posing new and unanswered regulatory questions. Drugs are being developed to enhance immune function in HIV/

Aids—Reduction in viral load—the current standard measure of efficacy in HIV patients may be inappropriate for such drugs. In the cancer area drugs are in development to reduce the occurrence of metastatic cancer, to reduce blood vessel supply

to tumors, to increase drug entry into cancer cells, while yet others will target the

cell signaling processes that are deranged in cancer cells. Here too the old models

of effectiveness based simply on reduction in tumor size may need re-evaluating.

The development of such new approaches will require all of the stakeholders—Industry, regulators, academics and patients working together to define robust, relevant and measurable end points for the clinical trials of the future.

Pharmacogenetics—The effects of genetics on drug response has considerable potential to enhance drug investigation and the approval process. It will allow us to

identify patients whose particular genetic backgrounds either make them more likely to respond to therapy or put them at particular risk from side effects. Such genetic information is already being used to optimize drug dosage in the treatment

of childhood leukemia. Of particular relevance to our discussion today is how this

pharmacogenetic information could improve the drug approval process. If at an early

stage in the drug development process we can identify patients who, because of their

genetic makeup, respond to a drug, then by including only such patients in our clinical trials we could substantially reduce the number of patients who have to be entered into the pivotal trials required for drug approval. Conversely the ability to

identify patients at particular risk of developing side effects from a drug and the

exclusion of such patients from treatment or studies will also affect the risk benefit

profile of such a drug. Drugs, which might otherwise be considered too toxic for

widespread use, may be safely developed if we can exclude the patients at risk of

toxicity. The regulatory issues are enormous and will again require substantial effort on the part of all the stakeholders. The Agency needs to work with industry

to identify the issues related to the use of these more efficient trial designs and ensure that their use does not result in restrictive labeling.

Concerns have been raised about the effects of PDUFA on drug safety. The issue

has been framed in various ways.

Sometimes the question is posed—‘‘Are we approving drugs too quickly?’’ I think

the answer is clearly—No—we are not approving drugs too quickly in fact I would

go further and say that there is no intuitive reason to imagine that slowing the approval process will enhance safety but such delays do prevent effective therapy

reaching our patients. Delay has no inherent safety value, but may simply reflect

indecision or lack of intellectual confidence.

An additional way that the question is posed is ‘‘Are we withdrawing more drugs

since PDUFA?’’ Again the data do not appear to support that conclusion.

Another question that has been raised is ‘‘How should PDUFA influence post marketing surveillance?’’ The answer is complicated. But first it is worth saying that

effective post marketing surveillance is not, and should not, be the enemy of industry. Inadequate post marketing surveillance will fail to identify drugs with unacceptable risk/benefit profiles. However just as importantly poorly performed post

marketing surveillance is also dangerous because it may result in the needless removal of safe and effective drugs from the market on the basis of invalid data. Neither of these outcomes is acceptable. In addition the greater our confidence in the

ability to generate quality post marketing data the greater should be our ability to

approve drugs earlier.

Fortunately changes in information technology may assist us. Doctors still prescribe drugs much as they have done for 2,000 years. With little assistance, they

write out a prescription from memory (sometimes still in Latin!), give the prescription to their patient who carries it to a pharmacist, who tries to read it and dispense

the correct drug. That process is about to change rapidly. At Vanderbilt Medical

60

Center all physicians’ orders for inpatients must now be entered by computer. Dosage, interaction risks etc are checked automatically at the time of prescription before direct transmission of the prescription to the pharmacy. Such systems will soon

also be available and widely used in the outpatient setting. The implications for improved patient safety are obvious and compelling. However the introduction of such

computerized prescribing systems also have huge implications for post marketing

surveillance—For the first time we will have access to complete data sets on prescriptions and outcomes. Again I see these innovations as having positive implications for the drug approval process. The greater our confidence in the post approval

data the earlier and faster we should be able to approve drugs and use them to treat

our patients. Issues of privacy need to be dealt with but these systems are moving

forward rapidly and the FDA needs to be integrated into such systems now so that

the information can be used to push back the time to drug approval.

I list these examples of the exciting new challenges and opportunities to you to

emphasize that in the immediate future we are going to have to undertake considerable rethinking of our approach to the demonstration of drug safety and efficacy.

Such innovative thinking will need to involve all of the constituencies—industry,

regulators, legislators, academics and patients and will require considerable effort

from us all. Reducing the time to drug approval does not depend solely on the review time for an NDA it also requires efficient trial design and execution and enhanced sponsor confidence that innovations in trial design and in definition of end

points will be accepted at the time of NDA review. The strategy to speed drug approval needs to extend across the entire life cycle of development and use of a drug

and therefore demands investment not just in the review process itself but also in

developing and maintaining excellence in the pre and post approval process. The

speed of scientific change and development of new knowledge requires a strategy to

ensure that FDA’s scientific staff maintains cutting edge scientific skills. Such strategies will require funding which will not come from user fees, yet the benefits

should flow directly to better reviews and more efficient drug development strategies. Drugs can be developed faster if only meaningful high quality studies are demanded and required to be performed.

Thus as we think about PDUFA reauthorization the opportunities offered by

drugs to relieve the diseases that have plagued mankind are enormous. The challenges to the FDA to develop the new paradigms required will be substantial. These

innovations will only be forthcoming if the agency has the resources to hire and retain the quality scientific staff it needs. The FDA competes with both industry and

academia for such scientific talent. The salaries of FDA Scientists need to maintain

parity with academia and should be tied to the NIH salary cap. If we are to fulfill

our hopes for novel therapies in the future it is essential that the FDA has the increased resources it needs to participate as a full and credible scientific partner.

User fees alone cannot be expected to provide the required increase in resources.

Additional public funds are required to adequately fund this critical public health

agency.

Mr. Chairman thank you for giving me the opportunity to present my views today.

Mr. BILIRAKIS. Thank you, Mr. Wood.

Ms. Pendergast.

STATEMENT OF MARY K. PENDERGAST

Ms. PENDERGAST. Mr. Chairman and members of the subcommittee, I am Mary Pendergast, Executive Vice President of

Elan Pharmaseuticals, a member of the biotechnology industry organization.

Thank you for letting me testify on behalf of BIO. Our message

today is simple and it echoes what you have heard before. The Prescription Drug User Fee Act is an extraordinarily successful piece

of legislation, and we are here to urge you to renew the program

for another 5 years, quickly, and without taking on other issues.

The additional resources provided to the Food and Drug Administration through user fees have facilitated FDA’s review of new

biotech therapies, many of which are life-saving, without compromising the agency’s ability to make sound and scientific medical

and regulatory decisions.

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In fact, the proportion of drugs removed from the market for

safety reasons has not changed because of the user fee program.

Yet, because safety is a paramount concern of industry, consumers, and FDA, we are ready to provide the FDA with additional

resources to work with companies, physicians in and academic

medicines, such as Dr. Wood, and consumer groups, to improve our

understanding of the risks imposed by drugs and biologicals.

And to find new methods to reduce those risks, companies will

also work with the FDA to develop specific risk management plans

for products that will be coming on to the market in the next 5

years.

These new risk management efforts will buildupon the FDA’s already considerable powers to give the public an added margin of

safety. We also hope that the user fee resources will be used to respond to a problem we see in the FDA’s implementation of the user

fee program.

There appears to be significant differences among FDA review divisions, as well as one center to the other, in both their review

processes, and the timeframes for their application reviews.

We want to understand the reasons for these differences, and we

want to find ways to address them and hopefully reduce or eliminate them. So we hope that the FDA will study how it is conducting reviews now, devote both management attention and user

fee resources to improve their review processes.

And look at ways to enhance communication with companies during reviews, and to minimize the inconsistencies between the Center for Biologics and the Center for Drugs.

Finally, because we recognize that biotechnology products are

often novel and complex, we propose that FDA spend new and additional user fees that we are willing to put forward to bolster its

access to the expertise crucial to the review of biotechnology products.

We hope that user fees will be used when necessary to hire outside experts to help determine how a company could demonstrate

safety and effectiveness. These experts would be selected by the

FDA and screened by the agency, and the agency of course would

have final decisionmaking authority.

Thank you for the opportunity to present BIO’s views at this

meeting. We look forward to working with the subcommittee and

the committee to reauthorize this important program.

[The prepared statement of Mary K. Pendergast follows:]

PREPARED STATEMENT OF MARY K. PENDERGAST, EXECUTIVE VICE PRESIDENT, ELAN

CORPORATION

Mr. Chairman and Members of the Subcommittee, I am Mary K. Pendergast, Executive Vice President for Government Affairs at Elan Pharmaceuticals Management Corporation. I am pleased to be here today on behalf of the Biotechnology Industry Organization (BIO), to talk with you about the Prescription Drug User Fee

Program and to urge the Subcommittee and the Congress to reauthorize this program, which expires at the end of this fiscal year.

The Biotechnology Industry Organization, BIO, represents more than 1000 biotechnology companies, academic institutions, and state biotechnology centers in all

50 U.S. States. BIO members are involved in the research and development of

health-care, agricultural, and environmental biotechnology products. The companies

BIO represents range from large, multinational corporations to much smaller,

emerging companies. Since its establishment in 1993, BIO has worked with this

Subcommittee on a variety of issues, including the one we discuss today—the prodVerDate 11-MAY-2000 13:57 Jun 26, 2002 Jkt 080092 PO 00000 Frm 00065 Fmt 6633 Sfmt 6621 W:\DISC\78503 pfrm09 PsN: 78503
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uct review and approval process at the Food and Drug Administration (FDA). BIO

was active during congressional deliberations in 1996 and 1997 that led to the Food

and Drug Administration Modernization Act and, importantly, to the reauthorization of the Prescription Drug User Fee Act (PDUFA).

I want to begin by thanking this Subcommittee and its Members for your work

over nearly ten years in creating and then continuing the user fee program for

drugs and biologics. You were there at the beginning, with the first user fee bill

sponsored by Mr. Dingell, Mr. Waxman, and others on the Energy and Commerce

Committee; you were there five years later at the first reauthorization, with legislation sponsored by you, Mr. Chairman, Mr. Burr, Mr. Greenwood, and others; and

here you are again. We greatly appreciate your support of this critical program.

I also want to reiterate what already has been said here today: the Prescription

Drug User Fee Act has been and remains an extraordinarily successful piece of legislation. Prior to enactment of PDUFA, FDA was often behind other nations of the

world in approving new pharmaceutical products. What Congress and FDA repeatedly heard was that American patients waited while patients elsewhere had access

to important new therapies. The drug and biologic user fee program reversed that

scenario. Because of the additional funding made possible through the user fee program, the United States now leads the world, rather than following it. Today, FDA

is the world’s leading regulatory agency, not only in terms of the quality and safety

of the products it approves for marketing, but also in terms of ensuring that new

products are available to patients as soon as possible.

For BIO, two key measures of the success of PDUFA I were, first, whether the

law has facilitated FDA’s review and approval of new products without compromising the agency’s ability to make sound scientific, medical, and regulatory decisions and, second, whether the law worked for patients.

By both of these measures, the initial user fee program succeeded. User fees enhanced FDA’s resources so the agency could hire additional medical and scientific

reviewers and function more effectively in its review of new products. And that was

accomplished without a diminution in safety. Anyone who has worked with FDA

knows they are now, as they always have been, the toughest regulators in the world.

User fees have not changed that, nor has reducing average review times changed

the proportion of products withdrawn from the market for safety reasons.

Thus, when the time came to reauthorize the program in 1997, there was a keen

recognition that we were seeing something unusual—a newly established program

that had worked the way it was expected to work—one that a wide variety of stakeholders were praising. PDUFA II also has been successful by many measures. Communication between FDA and application sponsors has continued to improve, leading to better applications and more effective use of scientific resources in making

decisions. And, most importantly, the health of patients has improved through access to new products like Herceptin for metastatic breast cancer, Zevulin for nonHodgkins lymphoma, Enbrel—the first disease modifying agent for rheumatoid arthritis, Xigris—the first therapy for life-threatening sepsis, and Synagis to protect

newborns from potentially fatal infections.

Mr. Chairman, as the Subcommittee moves forward with its work on reauthorizing this program for a second time, we know you will build on its successes. In

particular, we are hopeful that in the next five years of the user fee program, while

FDA maintains the strong standards it now requires, we will see enhanced efforts

regarding product safety. This enhanced product safety program—FDA’s risk management proposal—will be supported by user fees. With these additional user fees,

FDA’s risk management program will hopefully prove to be an even better

pharmacovigilance system than that which already exists in the United States.

We also hope that you will recognize that positive results do not necessarily

equate with perfection. As we have looked more deeply into the statistics regarding

what has occurred over the last four years, we have recognized that some modifications in how the program is implemented may be in order and may improve on successes already achieved. The things we are looking at do not involve ways in which

we think the law needs to be changed. Indeed, it is BIO’s view that minor, largely

technical, changes in the law may be called for, but that fundamentally this statute

works well and should remain essentially intact. We also hope that this important

legislation will not become a magnet or a train to which many unrelated provisions

will be attached.

Reports of PDUFA progress generally deal in averages across the agency, and

often do not separate these averages to allow examination of whether different components of the agency are fulfilling the goals of PDUFA at the same level. This kind

of sub-analysis is of great importance to the biotechnology industry, which often

brings to FDA products that are complex, unique, and the outgrowth of emerging

science. We are keenly interested in how the process for reviewing these bioVerDate 11-MAY-2000 13:57 Jun 26, 2002 Jkt 080092 PO 00000 Frm 00066 Fmt 6633 Sfmt 6621 W:\DISC\78503 pfrm09 PsN: 78503
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technology products—which are the primary preserve of the Center for Biologics

Evaluation and Research (CBER)—and the time frames in which they are reviewed,

tracks the review process and time frames for other pharmaceutical products.

When BIO has examined the data, we have seen what appear to be significant

differences among review divisions, as well as from one center to another, in both

the review processes and the time frames for application reviews. We want to understand the reasons for these differences and we want to find ways to address and

even reduce or eliminate them.

To achieve this goal, BIO is proposing some modifications that we hope will enhance the FDA’s review processes over the next five years. These proposals would

not require any change in the legislation, nor in the standards for approval, but

would be achieved within FDA through the agency’s modification of some of its existing processes.

First, BIO hopes to be able, through the user fee annual reporting mechanisms

already in place, to see more clearly where there are differences among review divisions and between the two reviewing centers, the Center for Drug Evaluation and

Research (CDER) and CBER, in terms of meeting the various goals of the user fee

program.

Second, BIO wants to see a more structured allocation of user fee resources to activities related to review process improvements, as well as greater involvement by

officials in the Office of the Commissioner in evaluating these review processes,

looking for opportunities for improvements and efficiency gains, and taking steps to

implement them. Therefore, we propose that a small portion of user fee resources

be specifically dedicated to review process performance improvement activities and

that these resources and activities be overseen by the Office of the Commissioner.

Third, we hope to improve further the level of communication between FDA and

sponsors during the first review cycle. As you know, Mr. Chairman, the goal of

PDUFA is for FDA to complete its review of an application in a designated period

of time—six months for a so-called priority application, and ten months for a nonpriority, or standard application. FDA’s action on an application may be a letter to

the sponsor requesting more data or information, a letter stating that the application is disapproved, or a letter stating that the application is approved. If FDA asks

for more information, the sponsor generally provides the information to the agency,

and then FDA enters into a second cycle of review, which can take several additional months. After this, third, fourth, and even fifth review cycles may be needed,

depending on what additional information FDA requests after each of its reviews.

Our review of data in FDA’s reports to Congress, and information provided on the

agency’s web site, shows quite striking differences between the centers in regard to

their ability to reach final decisions within one review cycle.

With reviews that both FDA and sponsors believe have worked well, one of the

common themes we have found is early and on-going communication. Another factor

that influences review processes—and, consequently, review times—is inconsistency

among divisions and between centers in review practices. To address both of these

factors—communication and consistency—we propose that FDA look at ways to enhance communication and to minimize inconsistency through the development, articulation, and implementation among divisions and between centers of effective review practices. We believe such sharing of good practices will go a long way to resolving differences among divisions and between the centers and will also contribute

to greater efficiency of review across the board.

Finally, BIO would like to encourage FDA to use another mechanism for obtaining

expert advice on cutting edge issues. BIO recognizes that biotechnology products are

often novel and complex so that only a small number of research scientists and medical specialists have the expertise to understand how the products’ development

should proceed. Specifically, it is often the case with these products that appropriate

design of the clinical trials needed for product approval is more difficult than it

would be with more well-understood science. The resources CBER currently devotes

to its laboratory-based, scientific studies do not address sufficiently this expertise

shortage. We propose that FDA initiate a mechanism whereby an outside expert

could be brought in to a meeting between the product sponsor and the FDA to assist

the sponsor and the agency in deciding how best to achieve the data needed to demonstrate safety and effectiveness for the product. Such an expert would, of course,

be selected by the FDA and, as is currently the case, would be screened by FDA,

to ensure no conflicts of interest and no breach of the confidentiality of proprietary

information. We propose that a company be provided one opportunity for such an

expert consultation, so this would not become overly burdensome for the agency. As

is always the case, the recommendations or views of any consultant would be advisory to the FDA, which would remain the final decision-maker.

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In summary, BIO shares with FDA the goal of reauthorizing PDUFA in a way

that not merely maintains but strengthens the FDA’s drug and biologic review programs. We believe that the user fee program has provided, and will continue to provide, the agency the user fee resources it needs to do its work. Indeed, we propose

that under PDUFA III, FDA receive a substantial infusion of new resources. But

we also hope in the course of PDUFA III to achieve a better handle on review process efficiency, especially as it relates to biotechnology products, so we can look forward to even more enthusiastic support for the program reauthorization in the year

2007.

Mr. Chairman, we share the belief that timing is critical in this reauthorization

process. FDA must, because of federal personnel rules, initiate a Reduction in Force

(RIF) unless the agency has the legislative authority to continue providing the salaries and expenses that are derived from user fees. Notices of the possibility of such

a RIF must be sent to FDA employees no later than August 1, 2002, 60 days before

the end of the fiscal year and detailed plans for any RIF must be developed months

earlier than that. BIO urges you, Mr. Chairman, and the Subcommittee and Committee, to act with all appropriate speed to ensure the future of this program.

Mr. Chairman, thank you for the opportunity to present BIO’s views at this hearing. BIO looks forward to working with the Subcommittee and the Committee in

your continuing role as the initiators and overseers of this important and highly

successful program. This program has improved and even saved patients’ lives, and

has made the U.S. biotechnology industry the most productive in the world.

I would be happy to answer any questions you may have.

Mr. BILIRAKIS. Thank you.

Well, Dr. Wood, and I will say Ms. Pendergast, how does the

FDA compare to other countries in terms of regulating drugs; the

efficacy, the safety, et cetera?

Mr. WOOD. I think this is undoubtedly the gold standard internationally and for drug regulation. It is the gold standard in lots

of ways, both in terms of scientific expertise, in terms of the rigor

with which drugs are reviewed.

But also importantly I think, and something that we tend not to

think about it in this country, the openness with which that process operates. In many other countries the process is much more secretive and advisory committees being held in the open, and individuals’ views being exposed to open criticism in the public, and is

not characteristic of the approach taken in many other countries.

So I think we have an excellent system, but that doesn’t mean

that we can’t do better, and we can’t improve many of these things,

but most countries I think would view this as one to which they

would aim rather than the opposite.

Mr. BILIRAKIS. Thank you. Ms. Pendergast.

Ms. PENDERGAST. I share Dr. Woods’ views. The FDA is and remains the gold standard for the rest of the world, and I think this

is especially true with regard to safety.

I feel as though the FDA has been unfairly criticized for its safety record.

I think we need to remember that in the United States that only

approximately a tenth of the drugs are pulled from the market as

they are pulled in other countries. So I think that while it is true

that drugs do get pulled from the market from time to time, the

FDA has an enviable record compared to the regulators in the rest

of the world.

Mr. BILIRAKIS. Concerns have been raised by members of the

panel that PDUFA, or at least this is the way that I interpreted

their statements, that PDUFA may have hurt the quality of FDA,

particularly safety, and maybe shifting from what was done previously to PDUFA because of the fees coming in.

65

Do you have any comments regarding that, Ms. Pendergast?

Ms. PENDERGAST. I do not think that the prescription drug user

fee program has impacted safety. I think the data shows that a

lesser percentage of drugs have been pulled from the market now

than before.

I think we have studied twice as many patients before putting

drugs on the market than we did before the prescription drug user

fee program began, and I think we have a solid safety base upon

which the FDA can make decisions.

So I do not think that the user fee program, which has given the

FDA additional resources, has impacted adversely on safety.

Mr. BILIRAKIS. Thank you. Dr. Wood you are an academic. I

would say you probably don’t have any axes to grind, I am not insinuating that anybody does, about your opinion.

Mr. WOOD. Yes, I think that one of the things that we need to

do is we need to look at the safety of a drug throughout its life

cycle, and one of the things that we have focused on today, I guess,

has been PDUFA, which really focuses on the narrow part of the

life cycle of a drug, the time during which an NDA, or a new drug

application is being considered and approved.

But really we need to—and of course that is the part for which

PDUFA fees are available—we really need to focus on the breadth

of the entire life history of the drug before the NDA is filed during

the appropriate—ensuring that the appropriate studies are done,

but not excessive studies are done.

And that requires an appropriate interaction to industry, and

FDA, and others. But also in the post-market, what I have heard

is the concerns about the post-marketing surveillance being inadequate, and whether that should be wrapped up, and we can talk

about that, I guess, later.

Mr. BILIRAKIS. Dr. Wood, I want to go into one area very quickly.

These recommendations that you have just made in terms of details, I understand that you touched on that in your statement.

If you have any specific recommendations regarding these areas,

if you could give that to us in writing so that we can take them

all into consideration, and the sooner the better obviously, so that

we can do this on a timely basis, and consider them.

Post-market surveillance. All of us agree that it is a necessary

function of the FDA. I don’t know that anybody has disagreed with

that. Just comment, in terms of the user fees, on whether user fees

will be adequate for that, and if not, should it be accomplished with

appropriated dollars.

Mr. WOOD. Well, I have not seen the specifics as you have either.

Mr. BILIRAKIS. Well, we haven’t either.

Mr. WOOD. But the stories that are circulating include statements which may not be correct. That the ability to use these user

fees will be restricted to some period after approval, and 2 years

for drugs without a black box warning, and 3 years for drugs with

a black box warning.

That seems to be inappropriate, and if—— Mr. BILIRAKIS. Inappropriate?

Mr. WOOD. Inappropriate, given that for the first 6 months of a

drug’s approval you usually have no data. It just does not come in

that quickly, unless something really bad is happening.

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And then after that, and in the last 6 months of that 2 year period, people obviously are going to be distracted and thinking about

other things. So you are really looking at a window of a year in

there, and that seems inadequate, and seems like an inappropriate

restriction to put on it.

There are two problems in the post-marketing surveillance area.

One is for drugs where we already know the side effect before the

drug goes on the market. And the second one is where we are looking for novel side effects that have not been recognized prior to the

drug going on the market.

And these are different problems, and that need different solutions. In the first case, where we already know about the side effects before the drug goes on the market, you are talking about a

management issue.

How do you educate doctors and others appropriately to use

these drugs, and we have done a relatively poor job of that. It is

not the FDA’s fault entirely. It is people like me perhaps that are

to blame for that, academics and physicians, who perhaps have not

gotten that word out.

But uniformly when we have made labeling changes to drugs,

these labeling changes have not been widely incorporated into physicians’ practices. So where we have information on side effects, we

are not able to translate that readily into action.

In the other setting where we are looking if you like and sort of

drilling for oil, and we are looking for unexpected side effects that

have never been described before, that is difficult, because we are

better at identifying side effects that have already been recognized.

For example, it is easy for a physician when a patient develops

a rash to say that might be the antibiotic that you were taking,

and to make that connection. It is much harder for a physician to

make a connection between some adverse event that may be drug

related, but has not been previously described.

Now, that’s where the opportunity of a computerized prescribing

really opens up tremendous opportunities. Quite quickly, physicians are going to start prescribing drugs on their Palm Pilots. And

they are going to be prescribing the drugs like that, and then sending it to the pharmacy.

We still prescribe drugs very much like we have done for the last

2,000 years. You know, we get our pen out of our pocket, and we

get a bit of paper, and we try and remember the dosage, and we

try and remember the drug, and all the stuff that goes with that.

And we write it down, sometimes in Latin still on a bit of paper,

and the patient carries that in their hand to a pharmacy, and the

pharmacy tries to read my writing, and translate that and give the

patient the drug.

And that really has been virtually unchanged in 2,000 years.

Clearly that is going to change dramatically, and has already

changed in the in-patient setting at Vanderbilt, and will change

dramatically over the next 2 years.

This is not going to take long, and we need to have the agency

incorporated into these systems at the get-go for two reasons. One

is that we can use these systems to capture data and totally transform the issues that were discussed earlier this morning.

67

Somebody said that only less than 1 percent of adverse reactions

are reported. If we were capturing a hundred percent of any particular dataset, we would have a totally different perspective on

drug safety.

Second, as we move to the computerized prescribing, drug labeling is going to change. Drug labeling right now is a paper-based

system. It goes with the dispensing of the drug, or it is put up in

a book like the PDR.

Once we are prescribing drugs on our Palm Pilots, what is on the

Palm Pilot is going to be what my residents, or interns, or physicians, see.

They are not going to be running around looking for bits of paper

anymore. We need to know what is on that Palm Pilot, and we

need to ensure that labeling is appropriate to that.

So there are huge opportunities, I think, to transform the way

that we do this, and the agency needs the funds, and it needs the

intellectual horsepower, and it needs the ability to recruit people

who can really do that.

And to do that in a collegial way with all of the stakeholders— industry, academia, and others.

Mr. BILIRAKIS. Doctor, with the indulgence of my colleagues, I let

you go because—— Mr. WOOD. Sorry.

Mr. BILIRAKIS. No, it is of great interest to me and to all of us

here. I know that Mr. Stupak, in particular, and you might expand

in writing on your comments regarding that subject. I appreciate

that very much. Mr. Brown.

Mr. BROWN. Thank you, Mr. Chairman. Ms. Pendergast and Dr.

Wood, I had—Dr. Wood, you had said as we develop entirely new

medicines, particularly those rooted in pharmacogenetics, then regulators in the drug development industries have to think of how efficacy and safety should be demonstrated in entirely new ways.

Most of us have visited biotech firms in our districts or in our

regions. I visited a firm called Athersis some time ago, and saw the

sort of exciting new things they are doing in research development.

And you see that and you are given the revolution promised by

the expediential growth and understanding of how and why disease

occurs, and why drugs work in individuals.

Does it make sense, and if both of you would respond, to continue

or to separate the regulators into separate entities in this CDER

and CBER? Does it make sense to continue that separation, and

why?

Ms. PENDERGAST. We are not prepared to make recommendations

as the board management changes that the FDA might want to

make.

But we do see differences between how biotech products, which

are regulated by both the Center for Drugs, and the Center for Biologics, are handled by the number of rounds of review that they

take, and the number of months that it takes for the FDA to make

a decision.

So what we are proposing in our performance management assessment is that we give the FDA money so that they can do the

management, and so they can study what works, and what doesn’t

work, and so they can develop consistency across the agency.

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We are not prepared to tell them what to do, or to manage it.

We are just saying please study it. We see major differences.

Please, take a look.

Mr. BROWN. Dr. Wood.

Mr. WOOD. I think innovation is going to occur across both those

areas, both in CDER and CBER, and I think we need to be prepared to embrace innovation in both areas. And I am not sure that

it makes a lot of difference now whether the drug came from a biological background, or came from a chemical background.

Eventually they are going to produce the same novel effects, and

some of these effects that we are talking about are going to be in

drugs that may have exactly the same action, and exactly the same

target, but maybe generated in one case from a biological background, and in the other case from a chemical background.

It makes little sense to regulate these differently, I think, and although there are some issues that obviously are peculiar to biologics that need to be addressed on issues of infection and so on.

Mr. BROWN. Dr. Franson, we all know that prices in the United

States for prescription drugs are based in large part on whatever

the market will bear, whether you are negotiating with an HMO

or whether you are selling to the Federal Government.

And that is not really market will bear, but certainly when you

are selling individual drugs to individual consumers. Our neighbor

to the north as you know sells its drugs at their pharmacies at

much lower prices.

Could you tell me how Eli Lilly, how they sell drugs into the Canadian market, and how those prices are determined?

Mr. FRANSON. Well, that is not an area that I have expertise in,

and I am sure that PhRMA or Lilly would be happy to provide you

information as you wish in writing.

But as a physician and regulator, I am not even allowed to handle the checkbook at home. So certainly I am not prepared to answer that.

Mr. BROWN. Is that at the office or at home that you are not?

Mr. FRANSON. Both.

Mr. BROWN. All right. That’s fine. Thank you, Mr. Chairman.

Mr. BILIRAKIS. Mr. Stupak, you may inquire.

Mr. STUPAK. Well, thanks. Let me pick up where Sherrod left off,

Mr. Franson, or Dr. Franson. I realize that you came here to testify

on behalf of a trade association and not Eli Lilly, but nonetheless

your testimony presents me with an opportunity to clarify just

what Eli Lilly and other industry is prepared to do about protecting the safety of patients when the FDA is denied legal tools

to compel compliance.

You know, if you take a look at it, post-marketing surveys or

risk-management as it is called. First of all, I want to ask you a

question that arose last year. The committee was considering the

reauthorization of a pediatric exclusivity provision, and at that

time the industry opposed it, and did everything that they could to

defeat my amendment.

Common sense requirements to require drug companies to make

changes in their labels to reflect the results of studies of their

drugs in children before they could take an advantage of the 6

months additional exclusivity that you receive for undertaking this

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important research, really got their 6 months exclusivity for studying the effects of prozac in children.

You completed the study some time ago. In fact, you received

your exclusivity, I believe, last year, somewhere between February

and August. So generic was permitted on the market, and so you

had a chance to do another 6 months of marketing, which is estimated to be worth $900 million to your executives and your shareholders.

As of January 2002, Lilly still has not changed the label for this

drug, while consumers in this country continue to pay for it. What

is the status of the labeling change for pediatric exclusivity with

Lilly?

Mr. FRANSON. Well, I am happy to answer that, realizing that it

has no relationship to PDUFA, but I will tell you that——

Mr. STUPAK. No, no. You will see a pediatric exclusivity fight

again in PDUFA, and that’s why I am bringing it up, just to refresh your memory. You will see this fight again on pediatric exclusivity.

Mr. FRANSON. I am happy to address that, and I will tell you

that I believe that four clinical studies and three clinical pharmacokinetic studies were submitted to the FDA in timely fashion, and

those discussions as to labeling remain under review.

So I believe that we have met our obligation and our desire, and

we are working with the FDA to expedite that.

Mr. STUPAK. So as of January of this year then, you have submitted your studies?

Mr. FRANSON. We actually submitted it well over a year prior to

that.

Mr. STUPAK. A year prior to that? So if there is a labeling

change, we still don’t know if there is a required labeling change,

even though you got your exclusivity last year, right?

Mr. FRANSON. Well, the provision of exclusivity is a submission

to data to FDA, with their acknowledgement that it meets their

standards.

Mr. STUPAK. But, you know, in your statement, you said that patients should have access to more drugs. But shouldn’t patients

also have information, access to information? You have the information, Lilly does, and it has been given to the FDA.

You get your 6 month exclusivity, and get $900 million more in

profit. All the while, we don’t know if prozac, in the dosage and the

amount that the doctors have prescribed, is appropriate for adolescents.

And yet you get your exclusivity and your 6 month patent protection. Shouldn’t we have that information before you get the patent

protection, the extra 6 months? Shouldn’t the labeling be done before?

Mr. FRANSON. Well, we certainly acknowledge the importance of

providing information to prescribers, and we also recognize our obligations to comply with FDA in terms of labeling, and the pharmaceutical manufacturer, be it my company or others, cannot go out

and talk about new uses and so forth, such as in pediatrics, without the approval of FDA, and we respect FDA’s oversight.

70

Mr. STUPAK. But you get the approval before you even have the

study completed and submitted, and a label change is even made.

That is part of the enforcement problem that we have.

Let’s go to PDUFA-2, where you are supposed to do post-marketing surveillance, okay? We here, even though the study has

been sitting on the Director’s desk for 5 months, we hear that 90

percent of the pharmaceutical companies did not do PDUFA-2 postmarketing surveillance.

Is that a true statement, that 90 percent have not done it under

PDUFA-2?

Mr. FRANSON. I actually believe that that is seriously flawed information.

Mr. STUPAK. What is the number then? What is the number?

Mr. FRANSON. Well, I can tell you what our company’s number

is, because—— Mr. STUPAK. I thought you were on top, on the part of PhRMA,

the whole industry, and so I was hoping you would give me that

number.

Mr. FRANSON. I do not have an industry number because we

have not seen the report from the FDA, but I can tell you that my

understanding from colleagues and from the FDA is when their

data base was updated, that one is probably looking at 90 percent

of studies being completed, and others pending.

So I believe that information was flawed because of poor data

submission, tracking and collection by both industry and FDA.

Mr. STUPAK. So that was updated recently then, within the last

5 months, since the study has been sitting on the Director’s desk?

Mr. FRANSON. My understanding is that the update that has

been submitted would verify that, but I have not seen that, nor

have my colleagues. So I think it would be very important to validate that information.

Mr. STUPAK. Well, it is updated on the computer, and we should

just go to the computer and we can get the information, and we

don’t have to wait for the director then do we?

Mr. FRANSON. I’m sorry, but to wait for—— Mr. STUPAK. I mean, if it is all updated on the computer as you

said, the computer has been updated, and it is 90 percent completion, and so we shouldn’t have to wait for the director.

We should just be able to go to this computer. Do you have the

website where we could get this updated information, because I

would really like to know about it, because if I am saying something wrong here, I would really like to know about it.

Mr. FRANSON. I think it would be important to see this report

which is pending, and we are also anxious to see that. I am certainly glad to verify as a company what kind of commitments have

been met.

Mr. STUPAK. Well, you had indicated that it has been updated

and it is on a website.

Mr. FRANSON. I did not indicate a website.

Mr. STUPAK. I’m sorry, that the computer was updated, that the

FDA updated their computer, I believe you said.

Mr. FRANSON. Our understanding was that that tracking system

had not been maintained because it was not a performance goal or

requirement.

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Mr. STUPAK. But now it is your understanding that it has been

updated?

Mr. FRANSON. That is correct.

Mr. STUPAK. And the number is now 90 percent completed and

did not?

Mr. FRANSON. My understanding from colleagues with whom I

have spoken is that the companies with whom I am interacting

have that kind of compliance. We anticipate that would be it broadly, but we have not seen the report.

Mr. STUPAK. Can you tell me what computer has been updated

so that I can go there and get the most recent information on this

issue?

Because to a lot of us, when you talk about the integrity of

PDUFA, there is no integrity when 90 percent of the reports have

not been completed. That lessens the integrity of PDUFA.

Mr. FRANSON. I think it would be very important to see that report, and our understanding is that with updates that information

is seriously outdated.

Mr. STUPAK. Okay. Well, hopefully we see it before we have any

further mark-ups or hearings on this, because it is hard for us on

whether or not we should reauthorize PDUFA, especially when we

are trying to get to enforcement issues. Do you agree that the FDA

should have subpoena power to get to your records, and access to

reports?

Mr. FRANSON. I am not aware that the FDA has had any difficulty obtaining any information on inspection, visits, and so forth.

So I am not sure what you are asking for.

Mr. STUPAK. Really? Like Serzone, were you here for my opening

statement, where with Serzone in 1994, they did a report, and the

FDA has been asking for the report, and they still don’t have it?

That is over 6 years old.

Mr. FRANSON. I am not aware of that situation. I am aware of

your reference to it, of course. PDUFA

Mr. STUPAK. Do you believe that they should have subpoena

power to get information if it does take 6 years, or in another case,

15 years? Do you think they should have subpoena power to get

that information as a regulatory agency concerned with the safety

for the American public?

Mr. FRANSON. I think it is important for any regulatory body to

be able to validate information that they receive. As to the specifics

here, since I have no knowledge, and since it is to a degree a legal

matter, I am over my head in that.

Mr. STUPAK. You don’t know the difference between subpoena

and not?

Mr. FRANSON. What I don’t understand is what the gap is, and

whether it is a systematic gap.

Mr. STUPAK. Would you support putting the PDUFA-3 agreement

in the Federal Register so the public can take a look at it before

we authorize PDUFA-3? Would you support that?

Mr. FRANSON. I think it would be very good for all parties to

have full knowledge of the kinds of things that have been discussed

by those who have directly been involved with PDUFA processes,

and probably can offer the best insight on what has worked well,

and what can be improved.

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Mr. BILIRAKIS. The gentleman’s time has expired.

Mr. STUPAK. Thank you, Mr. Chairman.

Mr. BILIRAKIS. Mr. Waxman.

Mr. WAXMAN. Thank you, Mr. Chairman. Dr. Franson, in this

recommendation that the industry and the FDA is submitting to

Congress to review and to adopt in either form it is submitted to

us, or with changes that we might make, we have been told that

you pushed forward and got an agreement that requires the FDA

to retain an outside consultant whenever an applicant requests

one.

This consultant would advise the FDA on an outstanding issue

of the applicant’s choice during review of a new drug application.

Now, it is my understanding right now that the FDA voluntarily

retains outside consultants to supply needed expertise.

And, in fact, the FDA did so dozens of times last year in its oncology division alone. It is also my understanding that applicants

are always free to bring their own outside experts to meetings with

the FDA.

Why do you feel it was necessary to remove FDA’s discretion

about whether it should hire its own outside expert and place that

decision solely in the hands of the applicant; and what was wrong

with the voluntary system?

Mr. FRANSON. Well, all I can say is that on PhRMA’s behalf, and

looking primarily at the Center for Drugs’ processes, we are comfortable that the dispute resolution and use of consultants, and so

forth, are very appropriate.

And we are comfortable with the FDA’s oversight. However, we

respect the fact that there are other considerations that are important to address in other centers. And I guess that I would have to

defer comment. That is not one that——

Mr. WAXMAN. But am I wrong in assuming that you personally

had asked for the mandatory outside consultants to be brought in

if an applicant requested it?

Mr. FRANSON. That was not PhRMA’s proposal, no.

Mr. WAXMAN. That was not PhRMA’s proposal. Ms. Pendergast,

was it yours?

Ms. PENDERGAST. Representative Waxman, there is no mandatory requirement that the FDA engage the services of an expert.

Rather, the biotech companies have asked that for biotech products

only at the Center for Biologics, that a company may ask once the

agency to bring in an outside expert into a meeting.

And we will pay for these expert consultancy fees, but the choice

of the expert is up to the agency.

Mr. WAXMAN. Why is there a mandatory requirement that the

agency must hire an outside consultant?

Ms. PENDERGAST. There is no mandatory requirement. It is totally at the FDA’s discretion, and we aren’t given additional funds

so that they may do this when we ask, but they are under no obligation to do it even when we ask.

Mr. WAXMAN. Thank you. Then that clarifies that issue. Dr.

Wood, it appears that even with the money that this agreement

will pay toward post-market safety programs, pre-market review

will receive far more resources than post-market safety. Do you beVerDate 11-MAY-2000 13:57 Jun 26, 2002 Jkt 080092 PO 00000 Frm 00076 Fmt 6633 Sfmt 6602 W:\DISC\78503 pfrm09 PsN: 78503
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lieve that post-market surveillance deserves fewer resources than

pre-market review?

Mr. WOOD. No. I think it needs adequate resources. I can’t tell

you that it should be fewer or more, and I would say what I said

earlier. I think it is important that we think about drug safety as

a continuum.

That there is a continuum that starts with the right studies

being done in the early stages before an NDA is filed, and that continues through the relatively small number of subjects or patients

who are studied prior to an NDA being filed, and often as few as

2,000 or 3,000 people.

Mr. WAXMAN. Well, back to the adequacy question. Do you feel

that that the post-market safety program agreed to under the industry-FDA proposal is adequate to protect consumers from the

risk of marketed drugs?

Mr. WOOD. My concern about the rumors, which is what they

are, and from what I hear about this agreement, is that there

seems to be excessive restrictions on both what these additional

FTEs can do, and what they can spend their time doing, although

I heard Janet Woodcock say that they won’t be people with a star

on their hat.

And as specifically designated, there will still be some expectation that at the end of a year that people have spent an appropriate amount of time on PDUFA approved drugs. Drug safety is

an overall issue that involves not just the PDUFA drug.

Sometimes it is an interaction with a standard drug. Sometimes

the appearances of the toxicity has occurred because of the longstanding, and long approved drug, when in fact it is an interaction

with the newly approved drug. So that kind of rigidity seems inappropriate to me.

Mr. WAXMAN. Ms. Pendergast, it is my understanding that at

some point in the negotiations between the industry and the FDA,

a tentative agreement was reached that would allow user fees to

be used to support some drug advertising reviews. Why was that

tentative agreement withdrawn?

Ms. PENDERGAST. There was never a tentative agreement. Rather, the FDA has the capacity to, and does use user fee monies, to

review advertising, and they are free to do that in the future.

And nothing about this agreement changes either their substantive ability or the standards they impose. The question on the

table was if industry gave the FDA more money to review advertising, could the FDA review it quicker.

So the FDA cost it out on how much it would cost to get the FDA

to do it faster than it does now, and not better, and not to a different standard, but just faster. And when the FDA came back

with how much it would cost to serve the industry by getting their

reviews done quicker, the industry looked at it and said of all of

the priorities of the things we have to spend money on, this goes

to the bottom of the list, or at least below what people were willing

to give additional resources for.

So I don’t think it is fair to say that in any way, shape, or form,

does this stop FDA’s review. They are free to devote whatever resources they wish to to it, but it is just speeding it up didn’t seem

cost effective.

74

Mr. WAXMAN. Dr. Wood, just on the question of the——

Mr. BILIRAKIS. Just a very brief question and response.

Mr. WAXMAN. The others have had a little bit more time, and I

would like just another minute or so. Dr. Wood, do you believe that

mandatory use of outside experts is a good policy? If you could answer just yes or no?

Mr. WOOD. I think there are a number of problems with that.

First of all—and I will try and be brief.

Mr. WAXMAN. If you could just answer yes or no, and then we

can get—because I want to ask just one other question after my

time has already expired.

Mr. WOOD. All right. I think it is complex, and I think in an ideal

world the answer is no, although there are lots of opportunities.

And I personally have served as an expert for the FDA on occasion,

and told them to get experts in. I think that is a good thing.

And I think that should be a decision that should be left to the

FDA.

Mr. WAXMAN. My last question relates to Mr. Stupak’s issue that

he raised, and it is my understanding that several of the drugs

that were recently withdrawn from the market for safety reasons

ran into problems because doctors prescribed them against the

label directions, and continued to do so even after the label warnings were repeatedly strengthened.

It looks to me like doctors either don’t read label directions and

warnings, or don’t believe them. Do you believe the FDA should

continue to rely on label warnings to solve known safety problems

with drugs?

Mr. WOOD. Can I take time to answer that?

Mr. BILIRAKIS. Take time, doctor.

Mr. WOOD. That is a very complicated question, and I think it

does merit a longer answer. The issue is that frequently drugs—

a problem is identified which people believe can be avoided by increasing the amount of testing that is done on patients prior to

them receiving the drug or while they are receiving the drug.

An excellent example is an anti-diabetic drug called Rezulin that

caused liver failure, and increasingly frequent liver function tests

were ordered, and were suggested in the labeling, to allow Rezulin

to remain on the market.

And these were changed every few months, and rezulin was a

drug that was being used to treat diabetes. When patients were

being asked to return for a liver function test to be performed every

2 weeks, or 3 weeks, that becomes an incredible imposition on a patient’s lifestyle, and is clearly unrealistic.

We know that only 7 percent of the patients who were taking

Rezulin were actually following these instructions. It may be a

problem with physicians, but it clearly is an expectation problem.

It is unreasonable to expect that a patient with a chronic disease

like diabetes can come back to the doctor’s office on a regular basis

to have liver function tests drawn when they have another life.

They have got a job and so on.

So we need to work out how we are going to manage these risks

better, and this is a complex question, and it involves education of

physicians, and it involves setting reasonable expectations.

75

It involves defining and making certain that introducing these

restrictions actually improves safety. That is not always the case.

And sometimes there is just a desire to do more.

And so I think it is a very complicated question, and I think the

answer is unclear, and I think it is something that we need a lot

more work on.

Mr. WAXMAN. Thank you, Mr. Chairman.

Mr. BILIRAKIS. All right. Mr. Green, do you have questions of this

panel?

Mr. GREEN. I will try and be brief, Mr. Chairman. I appreciate

it. I’m sorry I was not here earlier for the first round, but it is the

nature of the business. If any of the panel could—one of the criticisms of PDUFA has been that some of the drugs that are receiving

priority are neither innovative nor life-saving.

While we all appreciate the need for drugs to treat, for example,

male pattern baldness, we certainly want to make sure that truly

innovative drugs are receiving the highest priority at the FDA.

And we understand that the FDA has a process whereby certain

NDAs receive priority in the review process. Can any of you share

some information about that concern that maybe some of these

pharmaseuticals are not necessarily life-saving or innovative?

Mr. WOOD. Well, male-pattern baldness sounds like a pretty high

priority for me.

Mr. GREEN. Well, I have to admit that I may be getting there,

but it is not life-saving.

Mr. WOOD. I think if I could respond to that. I think one of the

things that we do at our peril is apply paternalistic views to patients’ suffering, and sometimes—and I plead guilty to that, too.

And the drugs that have been used for diseases that patients

truly suffer from, but may not be life-threatening, can still be very

debilitating for patients. Novel therapies for these diseases still

should receive rapid review and approval, because they can still be

very debilitating for patients.

I am only being a little facetious about male-pattern baldness,

but irritable bowel syndrome, for instance, which doesn’t sound

such a serious disease to some patients, has devastating effects in

one’s life.

It is clearly not life-threatening, but devastating effects in one’s

life. So I think we need to be—and we meaning experts, need to

be careful about adopting an attitude that views life-threatening as

the only criteria for urgent approval.

Mr. GREEN. And again it is a priority, I guess.

Mr. WOOD. Right.

Mr. FRANSON. And I was just going to add that the category of

priority reviews are usually made on the basis of an unmet medical

need, which can include, but isn’t limited to, life-threatening illness.

And the determination on that is not made by the sponsor submitting the application, but by the FDA.

Mr. GREEN. Mr. Chairman, just one more question. Ms.

Pendergast, in your testimony you presented about BIO, it makes

clear that your organization is concerned about both CDER and

CBER meet the review times set out in the performance goals.

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The CBER takes longer and more cycles to approve biologic

based drugs; is that correct?

Ms. PENDERGAST. Yes, sir, it is. If we look at the data for the last

4 years of PDUFA-2, what we see is that year in and year out the

Center for Drugs is able to organize itself such that roughly half

of all drugs are finally reviewed on the first cycle.

Whereas, that percentage for the Center for Biologics is only 20

percent. The differences are also striking in terms of the number

of months it takes for the FDA’s consideration for them.

Again, the Center for Drugs is simply faster than the Center for

Biologics, and we would like to understand the reasons for those

differences.

Mr. GREEN. I think some of us would also to see if there is an

interest in it. We are informed that the FDA also enacted with

PDUFA-2 when it was reauthorized provides for something called

special protocol reviews, whereby firms presumably through the advantage of inexperienced companies that more typically submit

their applications, the CBER can take advantage of the FDA expert

assistance in designing that special protocol that binds the FDA,

absent scientific breakthrough to accepting the terms of that protocol in the review process. Is that correct?

Ms. PENDERGAST. Yes, there are certainly many more companies

that have availed themselves of this opportunity for consultation

with the agency, and the Center for Drugs than for the Center for

Biologics.

Again, we are not giving the reasons for this widely disparate set

of numbers, but we are offering to give the agency additional resources so they can conduct studies to find out why it is that companies are so hesitant to do it, and why the FDA is so hesitant to

offer this service for biotech companies.

Mr. GREEN. How many members of BIO are also members of

PhRMA or not members? Is there——

Ms. PENDERGAST. The vast majority of the members of BIO are

not also members of the Pharmaceutical Manufacturers Association. There are a few, and we would have to get that for the record,

but it is probably less than 10 percent.

Mr. GREEN. Okay. Do you believe that Dr. Zoon puts less pressure on her reviewers than Dr. Woodcock, or do you want to touch

base on that?

Mr. BILIRAKIS. Are you going to withdraw that?

Mr. GREEN. I will withdraw it. Thank you, Mr. Chairman.

Mr. BILIRAKIS. Mr. Bryant to inquire.

Mr. BRYANT. Thank you, Mr. Chairman. Dr. Wood, I have rushed

back here so that I could be sure to let you see me here so that

you could go back home to Tennessee and tell people I am working.

Mr. WOOD. I will be sure to tell them that.

Mr. BRYANT. We don’t work away from these rooms here. Let me

ask you, and I know that I am sort of catching up here, and you

have already given your testimony and answered a number of questions, but the performance goals which accompany the PDUFA

focus on review times, I know that you are very interested in finding ways to shorten the clinical developmental time or development

times.

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Do you have any suggestions on how to best shorten clinical development times?

Mr. WOOD. Yes. I think we need to avoid doing studies that are

either of low quality—and I don’t mean that they were not performed right, but were done because somebody perceives the FDA

may ask for them later.

And we need an increased certainty that a package of studies put

together will indeed satisfy the agency when they get there, and

that was addressed a moment ago. And so I think we need to work

as a group with all the stakeholders to work out what it is that

we are going to need to do to get a drug approved.

In many examples that are currently out there, we don’t know

that right now. We are talking about novel therapies that work by

novel approaches, and that work in ways that have not been seen

before.

And we are going to have to put a lot of effort, and the agency

is going to have to spend a lot of time and effort in working out

what the best approach to these new drugs is. And that is going

to have to be done in a way that reassures industry that if they

follow that approach that they will target approval if the studies

come out the right way obviously.

Mr. BRYANT. In your written testimony, and I believe in your

oral statement today also, you speak about the need to find new

ways to measure efficacy. In the future should this debate be a part

of the PDUFA negotiations or should it be left solely to the agency?

Mr. WOOD. The reason that I emphasized that is that I think it

is important that the agency have sufficient funds independently of

PDUFA, and to allow them to make the innovative changes that

we are going to have to do.

That is going to take a lot of time, and it is going to take a lot

of consultations, and it is going to take a lot of effort. And this

should not become a distraction in NDA approvals, but it will take

effort, and that seems to be an appropriate reason for funding to

be increased.

The past is not going to be a prologue to the future here. We are

going to have to make paradigm shifts in the way that we think

about drugs, and that is going to take effort and expenditure.

Mr. BRYANT. You speak of pharmacogenetics, and I am not pronouncing that correctly. Do you believe that we will ever get to the

point where drugs and biologics are only approved for certain individuals with specific genetic makeups?

Mr. WOOD. Well, that is a very interesting question,and one that

the FDA and industry really need to work on, because what we

don’t want—we want to encourage the development of drugs for

identified patient populations.

We want to discourage patients who are not going to respond to

drugs getting drugs, and we want to discourage patients who are

going to develop adverse effects getting these drugs.

And industry on the other hand, and I shouldn’t speak for them,

I guess, but industry is also worried that they don’t get an overly

restrictive label for a drug, and that would restrict the potential

market for the drug.

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So somehow we need to work to use the genuine benefits of

pharmacogenetics to allow us to better target drugs to our patients

without limiting the potential for these drugs in the future.

Mr. BRYANT. Do either of the other witnesses on the panel have

brief comments on any of those questions, or would like to add to,

or take away from?

Mr. FRANSON. I would just say that the notion of

pharmacogenetics, and the opportunity that it does offer is exciting

and probably will be a centerpiece for PDUFA-4, given the time

that it will take to evolve.

And I would just say that we would foresee the same high standards of efficacy and safety being held in approval, but perhaps different measures to get at those end points.

Ms. PENDERGAST. I would just like to say that while today we are

talking about the funding that the companies are providing to the

agency, I would like to underscore what Dr. Wood said before.

In an era where we are doubling the NIH’s budget, we know that

the products that they are studying and developing will come to the

FDA 5 years down the road. And there will be paradigm shifts in

terms of the impact of the genetic revolution, pharmacogenomics.

And I urge the Congress to consider increasing the appropriations for FDA and not rely obviously just on what bit the companies can throw into the pot.

Mr. BRYANT. Thank you, Mr. Chairman.

Mr. BILIRAKIS. Thank you, Mr. Bryant.

Mr. BROWN. Mr. Chairman, I want to make sure that—and again

I think you had already done this, but any members that have

written questions for the panelist—Dr. Franson—I had asked him

about the Canadian pricing, and if you or the people at PhRMA

would answer that.

Mr. BILIRAKIS. Yes. Members have 3 days to submit questions to

the committee and we will submit them to you. I know that you

would be very pleased to respond to them.

Obviously your response being sooner rather than later would be

very helpful. The knowledge that you all have is just terrific, stupendous, and it is going to be of great benefit to us.

Again, I not only ask you to respond to the questions, but submit

to us any information voluntarily that might help us do our job.

Thank you very much. The hearing is adjourned.

[Whereupon, at 1:42 p.m., the subcommittee was adjourned.]

[Additional material submitted for the record follows:]

RESPONSES OF THE FOOD AND DRUG ADMINISTRATION FOR THE RECORD

QUESTIONS SUBMITTED BY CHAIRMAN MICHAEL BILIRAKIS

1. Is the United States now the country where most new drugs are firstapproved? Was this the case prior to PDUFA?

Yes, the United States (U.S.) is now the country where most new drugs are first

approved. A study by the Tufts University Center for the Study of Drug Development confirmed that FDA’s implementation of PDUFA has helped enable American

patients to be first in the world to have access to many new drugs. During the years

1991-1995, drugs were first marketed in the U.S. only 31 percent of the time. During the same period, drugs marketed for the first time in other countries were first

marketed in the U.S. within a year of their foreign introduction only 43 percent of

the time.

During the period 1996-1998, however, nearly 47 percent of all new drugs marketed world-wide were first marketed in the U.S., and American patients had access

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to 78 percent of the world’s new drugs within the first year of their introduction.

(Kaitin, KI. ‘‘Impact of the Prescription Drug User Fee Act of 1992 on the Speed

of New Drug Development.’’ Tufts University Center for the Study of Drug Development, prepared for FDA Public Hearing on PDUFA, September 2000.)

2. I understand that after this year there will be no carry-over funds

available to pay FDA reviewers. That is, if the Congress doesn’t reauthorize

the program, FDA will have to lay-off employees. Is this the case? If so, how

many reviewers will have to be laid off? When will these employees first

be notified of the possibility that they may be laid-off if the program is not

reauthorized?

Your understanding is correct, Mr. Chairman. FDA will have virtually no carryover PDUFA funds available to pay our employees when the fiscal year ends on September 30, 2002. FDA currently has about 2,400 staff-years devoted to the drug review process. Since prescription drug user fees are used to support approximately

50 percent of the staff devoted to the drug review process, FDA will begin planning

for a furlough and/or a reduction in force (RIF) in June and by August 1, 2002, we

would issue a general notice of a possible RIF to all 2,400 employees.

3. FDA has stated that increasing revenues and addressing risk management were its top two priorities in the discussions with industry. How successful was FDA in addressing these issues in the negotiations?

FDA believes that both of these priorities are successfully addressed in the proposed Goals Letter and proposed statutory changes to PDUFA. If these recommendations are enacted into law, FDA will receive a substantial increase in funding. Fee revenues would increase from an estimated $148 million in Fiscal Year

(FY) 2002 to $222.9 million in FY 2003. Ultimately, fee revenues would increase to

$259.3 million in FY 2007. The increased fee revenues would enable FDA to achieve

both the letter and spirit of the performance goals. Increased resources would be

available for increased staffing, training, guidance development, and other key aspects of the process for the review of human drugs.

The proposed funding for risk management activities would allow FDA to double

its safety staff by FY 2007. The increase in staff and resources would enhance

FDA’s ability to monitor new drugs for safety problems that could emerge after their

introduction on the U.S. market. Enhancing this programmatic ability is especially

critical now that U.S. patients are increasingly the first population to receive new

drugs.

4. You state in your testimony that PDUFA performance goals have

helped harmonize drug and biologic product review. However, on January

25, 2002 FDA issued a report on review times, and it shows that CDER reviews and approves priority drugs in six months, but that CBER reviews

priority biologics in 11.5 months and approved them in 13.2 months. Similar disparities existed for standard reviews. Why the disparity between the

two Centers?

The Center for Drug Evaluation and Research (CDER) and the Center for Biologics Evaluation and Research (CBER) have met the performance goal deadlines

for review and action on priority (90 percent within 6 months) and standard (90 percent within 12 months) applications. Approval times, on the other hand, have differed between the Centers. Although there has been no systematic study of the reasons for these differences, the Agency believes that they are the result of multiple

forces including the difficulties that applicants experience in manufacturing the

product. Another problem that occurs frequently with biological products is the inability to ‘‘scale-up’’ the manufacturing process. The sponsor can produce a batch of

product for clinical trials, but when larger scale production is initiated the product

no longer meets the same specifications as the product tested in trials. These difficulties can lead to longer approval times.

5. What will be done under PDUFA III to lessen the disparity in review

and approval times between CDER and CBER?

The PDUFA III proposals recommended to Congress include several initiatives to

evaluate and address differences between Centers. The First Cycle Review Performance initiative provides for increased communication (e.g., of the early-identified deficiencies) to the sponsor at the time of the filing review and the development of

a guidance document by review staff on Good Review Management Principles. This

initiative includes further training to implement those principles, and a study to

evaluate best practices on the part of both FDA and industry during the first cycle

of review. The Performance Management initiative includes funding for a review

and analysis of the review process in both Centers.

6. I understand that one key component of the tentative agreement made

between FDA and industry relates to performance management. Specifically, FDA has agreed to a study of internal management and performance.

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Please describe for us the nature of the performance management agreement and how your office will ensure that this important piece of PDUFA

III is fulfilled.

FDA’s Office of the Commissioner will conduct a series of studies to identify opportunities for enhanced program performance. These will include a study through

an outside consultant to perform a comprehensive process review within CDER and

CBER. The anticipated outcome of this review will be a thorough documentation of

the drug and biological review process, a re-map of the process indicating where efficiencies can be gained, activity-based project accounting, optimal use of review tools,

and a suggested path for implementing the recommendations. FDA would anticipate

delivery of a report of the consultant’s findings and recommendations in FY 2004-

2005. The Agency would consider these recommendations in planning any redesign

or process reengineering to enhance performance.

7. Recent data indicate that drug approval times have been increasing.

The approval times for novel drugs (‘‘NCEs’’) have increased from 12.6

months to 17.6 months between 1999 and 2000. What are the reasons for the

upward trend?

The median total approval time for priority new molecular entities (NMEs, i.e.,

drugs not previously approved by FDA) approved by CDER has been approximately

6 months for the past 5 calendar years (1997-2001). Over the same 5 calendar years,

the median approval times for standard NMEs approved by CDER have ranged

from a low of 13.4 months in calendar year 1998 to a high of 19.9 months in calendar year (CY) 2000. For calendar year 2001 the median approval time for standard NMEs was 19.0 months.

While FDA has met or exceeded all of its performance goals for the review of

NME applications during PDUFA II, the median total approval times for NMEs

over the past three calendar years have been higher compared to the all-time low

of 13.4 months experienced in CY 1998 (16.3 months in CY1999, 19.9 months in

CY2000, 19.0 months in CY2001). There are many factors that may affect the total

approval times for standard NMEs in any calendar year including the quality and

completeness of the applications and the time required for the sponsor to resolve

any safety, efficacy, or manufacturing deficiencies identified by FDA. However, FDA

has noted that the trend of increased total approval times for NMEs during the past

three calendar years has coincided with implementation of the increased procedural

goals (e.g., meeting management goals) under PDFUA II. FDA believes that the increased workload it has experienced during PDUFA II and the implementation of

FDAMA requirements may have contributed to this trend. It is important to note

that a similar trend has not been seen for priority applications or for standard nonNME new drug applications (NDAs).

8. When will the FDA issue its draft guidance on use of surrogate markers in imaging?

The only guidance that FDA is developing on medical imaging is the guidance for

industry on Developing Medical Imaging Drugs and Biological Products. This guidance for industry is being developed with extensive input from the public. A first

draft of the guidance was issued for comment on October 14, 1998. FDA held public

meetings on the draft guidance on January 25 and March 26, 1999. After considering the discussion and comments at the meetings and after reviewing all written

comments, FDA issued a second draft for comment on July 31, 2000. The Agency

has considered carefully the second round of comments, and the final version of the

guidance is currently moving through the clearance process. We expect it to be released during the next month or two.

9. When will FDA address the cGMP requirements for PET products?

The Food and Drug Administration Modernization Act (FDAMA) directs FDA to

consult with patient advocacy groups, professional associations, manufacturers, and

physicians and scientists who make or use PET drugs as we develop PET drug

CGMP requirements and approval procedures. We have taken extraordinary steps

to develop the PET CGMPs with extensive input from these groups. We presented

our initial tentative approach to PET drug CGMP requirements and responded to

numerous questions and comments about that approach at a public meeting on February 19, 1999. In the September 21, 1999, issue of the Federal Register (64 FR

51274), we published a notice of availability of preliminary draft regulations on PET

drug CGMP requirements. These preliminary draft regulations were discussed at a

public meeting on September 28, 1999. After considering the comments on the preliminary draft regulations, FDA has decided to make several changes to those regulations, to publish a notice of availability of a revised preliminary draft proposed

rule, and to publish an accompanying draft guidance document. These documents

should publish very soon. We intend to hold another public meeting on May 21,

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2002, after which we will evaluate the comments, make appropriate changes, and

publish a proposed rule for comment.

10. To what extent has CDER and CDRH worked to harmonize requirements for drug and device manufacturers seeking similar indications (e.g.,

perfusion indications for MR/US drugs and MR/US machines)?

CDER, the Center for Devices and Radiological Health (CDRH) and the FDA Ombudsman’s office work together to assure that sponsors of similar drug/device products are treated the same with respect to regulatory requirements and review procedures. If any company believes they are being treated differently than similarly situated competitors, they are encouraged to bring the issues to the FDA Ombudsman

or to the CDER or CDRH Ombudsmen.

QUESTIONS SUBMITTED BY REPRESENTATIVE JOHN D. DINGELL

What is the legal status of the side agreement? Specifically, is this a contract, a regulation, a guidance, or something else?

The document referred to as the ‘‘side agreement,’’ which is a letter sent from the

Secretary of the Department of Health and Human Services (HHS) to the Committee on Energy and Commerce of the House of Representatives and the Committee on Health, Education, Labor, and Pension of the Senate (the ‘‘Goals Letter’’),

is not a contract, regulation, or guidance. The goals letter is a statement by the Secretary about what the FDA intends and expects to accomplish with the additional

resources provided through the proposed legislation. This letter is specifically referenced in the proposed PDUFA legislation in the findings section (section 101) and

in the section specifying annual reports (section 104).

Does this side agreement create any enforceable rights on the part of industry or FDA? If so, please describe these.

The Goals Letter does not create enforceable rights on the part of industry or

FDA. The PDUFA III legislation, if enacted, would provide FDA the authority to collect and spend user fees as specified in the enacted legislation.

Are the provisions of the side agreement enforceable in any way by third

parties?

No. However, there is substantial oversight of FDA’s activities under PDUFA that

allows the Administration, Congress, the regulated industry, and all other interested persons to evaluate FDA’s performance on a regular basis. The proposed

PDUFA legislation, if enacted, would direct the FDA to provide both an annual performance report and an annual financial report setting forth its performance in

achieving the goals and its expenditures from PDUFA funds, as it has during

PDUFA I and II. Both of these reports are made available to the public.

If enforceable by anyone, what are the available remedies?

As discussed above, while neither industry nor other interested persons can file

suit against FDA to enforce the performance goals contained in the letter, the annual reports provide Congress, regulated industry, and other interested persons

with the information about the Agency’s accomplishments and use of funds collected

under the PDUFA.

Is FDA free to modify or ignore any or all of the provisions of the side

agreement for any reason? Can it modify or ignore the agreement in the

name of public safety?

FDA fully intends and expects to perform in a manner consistent with the Goals

Letter. FDA’s performance under PDUFA over the past 10 years demonstrates that

this expectation is likely to be met. Under the PDUFA legislation, FDA may only

use user fees for health activities related to the process for the review of human

drug applications. If a public safety emergency required FDA to shift resources

away from the process for the review of human drug applications, FDA could shift

resources, but would not be able to collect or spend user fees for any activities not

authorized by PDUFA.

On page eight of your testimony you compare product withdrawals pre

PDUFA and during PDUFA and conclude that drug safety has not suffered

because withdrawal rates are basically the same. Can you comment on

drug safety issues that are of concern to FDA, but that do not result in

product withdrawals? For example, could you provide us with a pre

PDUFA and PDUFA comparison of such post market drug safety matters

as warning letter, package inserts, black boxes and the like taken by FDA

other that withdrawals?

A report to the Commissioner of FDA from the Task Force on Risk Management

entitled, ‘‘Managing the Risks from Medical Product Use’’ was issued in May 1999.

This report is enclosed as Appendix 1. Appendix A of the enclosed report provides

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a comparison of post-approval risks for drugs and biological products approved before and after the implementation of PDUFA.

Could you outline in detail each element of the side agreement? I realize

that it is still undergoing departmental review, but it would be helpful to

us to have a run down of the agreement now. Will you provide us with written text of the agreement as it currently stands?

Since the Subcommittee held its hearing on March 6, the Administration has

transmitted the Goals Letter to the Energy and Commerce Committee. The full text

of the Goals Letter appears in Appendix 2.

Can you explain for us exactly why this side agreement needs to be

cleared by OMB. That sounds a lot like a regulation. If so, why aren’t APA

notice and comment procedures being followed?

Regulations are not the only documents appropriate for the Office of Management

and Budget (OMB) clearance or review. OMB reviews budget estimates as well as

documents in support of pending or planned legislative proposals. (See OMB Circular A-19 for the policy on clearance of legislative proposals and Circular A-11 for

the policy on clearance of budget matters). The Goals Letter is, in part, a budgetary

matter since it involves Agency resource commitments. It is also referred to in a legislative proposal that the Administration has decided to advance for FY 2003. For

these reasons it is appropriate for OMB review. Because the Goals Letter is not a

regulation, the Administrative Procedure Act (APA) requirements for notice and

comment rulemaking are not applicable.

Could you explain the pros and cons of subjecting the side agreement to

notice and comment in the Federal Register before making it final?

Wouldn’t such a procedure provide a broader base of input to FDA and a

greater assurance to all that the agreement is in the public interest?

FDA believes that this process, as well as the legislative process that Congress

engages in, provides great assurance that the PDUFA program will continue to be

in the public interest. In order to receive input from a broad range of interested persons on the concepts in the proposed legislation and Goals Letter, FDA hosted a series of discussions over the past 18 months. Since the fall of 2000, FDA has engaged

in a series of public meetings with patients, consumers and other stakeholders to

obtain their views on their issues and priorities for PDUFA reauthorization. FDA

has also engaged in a series of meetings with representatives of the biotechnology

and pharmaceutical industry to discuss some of the more technical aspects of application review, information technology in support of application review, and fee collection and use.

RESPONSES TO THE RECOMMENDATIONS AND/OR CONCERNS RAISED IN THE PAPER COMPILED BY THE PATIENT AND CONSUMER COALITION, AS REQUESTED BY REPRESENTATIVE JOHN DINGELL.

Hold balanced hearings on PDUFA reauthorization and drug safety concerns. The hearings should include testimony from patients who have been

harmed by problem drugs—or their representatives—and consumer advocates who are knowledgeable about PDUFA. Such hearings would send a

vital signal to FDA from Congress that what the public wants and deserves

is a thorough review and oversight process for drugs and biologics, not just

speedy approval of new products.

FDA defers to the prerogatives of the Energy and Commerce Committee to determine the choice of witnesses for its hearings.

Adequately fund the entire range of FDA’s approval and safety oversight

activities from general revenues. There is an urgent need for increased

funding for post-marketing surveillance and other safety-related activities

not covered by current user fees. User fees are not a substitute for adequate federal funding of these vital and growing public health functions.

Adherence to this principle would be the surest way to remove the worrisome potential for conflict-of-interest that arises when dedicated income

streams flow tot he regulator from the regulated industry.

Administrations, both past and present, as well as Congress have determined that

the process for the review of human drugs and biologics at FDA should be funded

through a combination of appropriations and user fees. FDA has been able to administer this policy without compromising its integrity or the safety and efficacy of

the products it approves.

Give the FDA Total Control Over All Review and Surveillance Activities—

If an unwillingness to appropriate adequate funds leads Congress to consider the expansion of user fees, it is absolutely essential that the FDA

alone determine their usage, without the kind of inappropriate control

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over the use of these fees (through mandated decision-making deadlines)

that the industry has exercised with new drug approvals.

Under PDUFA, fee revenues may be used by FDA to cover the costs of the process

for the review of human drugs. In the context of receiving these additional revenues,

FDA agreed to meet certain performance goals for the review of applications and

certain procedural and processing goals. FDA retains the ability to allocate the fee

revenues as it sees fit in order to meet its public health obligations and to meet the

PDUFA performance goals. It is important to remember that the performance goals

in PDUFA relate to the timeliness of review and processing of applications, not the

approval of applications. FDA believes that the current system works well and the

PDUFA program has overall been good for the public health.

Address Drug Safety Concerns Created by PDUFA’s Excessive and Inappropriate Focus on Swift Approval—PDUFA III should include new safety

protections that, to the greatest extent possible, protect the public from potential harm caused by adverse reactions, side effects and adverse events

related to pharmaceutical products and biologics. Decision-making deadlines for drug review should be redefined to focus on the FDA’s responsibility to guarantee safe drugs, not only on the speed with which reviews

are conducted. The agency’s antiquated and under-funded adverse event

reporting system (for drugs, biologics and devices) should also be modernized.

A report to the Commissioner of FDA from the Task Force on Risk Management,

entitled, ‘‘Managing the Risks from Medical Product Use’’ was issued in May 1999.

That report (enclosed as Appendix 1) found that, for drugs approved during the

PDFUA era, the rate of drug withdrawals for safety concerns was relatively unchanged from the rate of drug withdrawals for safety concerns in the pre-PDFUA

era. The most recent data show that the percentage of PDUFA drugs withdrawn for

safety concerns is the same (2.7%) as the percentage of drugs withdrawn for safety

concerns during the pre-PDFUA period (2.7%). This finding is particularly notable

when one takes into account the fact that nearly 80% of newly approved drugs are

either approved first in the United States or are approved in the United States

within one year of their being approved anywhere else in the world.

The draft Goals Letter for PDUFA III includes no substantive changes to the performance goals for review of applications compared to those currently in place. The

draft Goals Letter also includes a proposal for an expanded risk management program for new drugs approved under PDFUA III. FDA believes that this new risk

management program will significantly enhance its ability to detect risks of drugs

early and improve FDA’s ability to work with the sponsor, health care providers,

and patients to manage the risks of new drugs more effectively. The proposal for

PDUFA III would allow FDA to use PDUFA fee revenues to cover the costs of this

new risk management program, including activities that occur for up to three years

after drug approval. The availability of these new PDFUA fee revenues for risk

management would allow FDA to approximately double the staffing in its drug safety program over five years.

Please refer to the response provided to the question below relating to ‘‘Improve

Adverse Event Reporting’’ for details relating to adverse events.

Eliminate the linkage between appropriated and user fee funds. The current law results in disproportionate funding for the drug approval process

compared to most other research, regulatory, and public education functions. At a minimum, the program must be re-designed in such a way as to

prevent the draining of funds from vital FDA functions.

During the period of FY 1994 to FY 2001, the effect of the statutory triggers established under Prescription Drug User Fee Act (PDUFA) on the availability of

funding for non-PDUFA programs has been less significant than the absence of additional appropriations to fund the annual pay raises for Food and Drug Administration (FDA) employees. During these years, FDA’s appropriations failed to include

increases to cover the annual costs of mandated Federal pay raises. The cumulative

impact of absorbing the cost of the Federal pay raise during this eight-year period

was more than $200 million. This resulted in a reduction in staffing for activities

other than the process for the review of human drug applications (e.g., compliance

activities, review of over-the-counter drugs, etc.) of more than 1,100 staff years since

PDUFA I was enacted.

Although the absence of additional funds to pay the cost of mandated pay raises

has had the greatest effect on non-PDUFA programs, one of the PDUFA triggers

has also had a significant effect. Section 736(g)(2)(B) requires that FDA annual

spending on drug review from appropriations be at least as much as the amount

of appropriations that FDA spent on drug review in FY 1997, adjusted for inflation.

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The legislation that the Administration has proposed includes modifications to the

trigger (Section 736(g)(2)(B)) such that FDA will no longer be compelled to spend

amounts that are significantly greater than the amount required by this trigger.

The proposal would provide FDA a margin of error in its effort to meet this requirement of the law. Under this proposed modification, if FDA’s spending from appropriations on drug review is within 5 percent of the amount required by this section

of the law, the requirement is considered to be satisfied. In cases where FDA’s spending from appropriations is within 3 percent of the trigger amount, no adjustment in fees will be required. If the spending is between 3 percent and 5 percent

below the trigger amount, then FDA will, in a subsequent year, decrease user fees

by the amount of the shortfall that is between 3 and 5 percent (i.e., a maximum

of 2 percent).

The purpose of this change is to relieve FDA of the need to overspend from appropriations each year, as has occurred consistently since FY 1993. Spending from appropriations on the drug review process each year is still expected to be at, or very

close to, the amount specified by this trigger, and may never be more than 5 percent

below the trigger amount.

Require that user fees support the life cycle of the review process. Presently, FDA staff hold numerous pre-New Drug Application meetings with

manufacturers before the agency receives any PDUFA fees for the intended

application. While these meetings benefit sponsors greatly by improving

their understanding of FDA expectations and the quality of their applications, they also divert FDA staff time from other review functions and increase the cost and difficulty of meeting PDUFA goals. In other words, the

required meetings are an un-funded mandate on the agency.

The financial provisions in the legislation that the Administration has submitted

should satisfy the concerns that prompt this issue.

First, it is important to note that PDUFA revenues come from three fees—application fees, product fees, and establishment fees. The fees from all of these sources

can be used by FDA to enhance its activities in any part of the drug review process,

from the submission of an investigational new drug application through the FDA

decision to approve or not approve a new drug application. Some of the revenue

from product and establishment fees is used to support the work FDA does at the

investigational new drug stage, before a marketing application is ever submitted.

The Agency agrees that under PDUFA II, FY 1998 through FY 2002, fee revenues

were insufficient to adequately fund the work necessary to meet the PDUFA II performance goals. The legislative proposal that the Administration has forwarded to

the Energy and Commerce Committee addresses this problem by significantly increasing the revenue levels from FY 2003 through FY 2007. This proposal calls for

revenues of $222.9 million in FY 2003—a 30% increase over revenue levels FDA expects to spend in FY 2002. These revenue levels will rise to $259.3 million by FY

2006 and 2007—an increase of more than 50% compared to FY 2002 spending levels. Further, these figures are in FY 2003 dollars, and will be adjusted to account

for the impact of inflation and workload increases. FDA believes that this proposal

would fully fund the work obligations that would be required of the Agency over the

next 5 years.

Finally, under the proposal, FDA would be allowed to use fee revenues to fund

some activities that the Agency will perform after a drug is approved. For drugs approved on or after October 1, 2002, risk management and epidemiological studies

that may be needed in the first two to three years after approval may be paid for

from PDUFA fees. The Agency expects that this provision will enable FDA to approximately double its headquarters drug safety employment levels in CDER and

CBER by FY 2007. We believe that this is an important addition to the resources

available to FDA that helps to assure the safety of drugs in their first two or three

years of market life.

Question Consult All Stakeholders—If performance goals are not eliminated in PDUFA III, consumers and patient representatives should be involved in developing them.

FDA has conducted a fair and balanced effort to hear from all parties that have

a viewpoint about PDUFA. In preparation for submitting the Administration’s PDUFA III proposal to Congress, the Agency engaged in a comprehensive initiative

to involve all PDUFA stakeholders—consumers, health providers, patient groups,

and the manufacturers of drugs and biologics—in the development of PDUFA III

proposals. This process included:

• Two public hearings.

• ‘‘Listening’’ sessions with consumer and patient groups.

• Consumer roundtables where PDUFA was a major topic of discussion.

• Meetings with drug and biologic manufacturers.

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At our public hearings, FDA received 12 hours of testimony. Of the total of 28

witnesses who provided testimony, 23 were representatives from consumer, patient

and health provider groups. Seventy-five consumer, patient and health provider

groups were also represented at the ‘‘listening’’ sessions and roundtables. This is

evidence of the broad representation that served as a foundation for the Administration’s PDUFA III proposal and the development of the PDUFA III performance

goals.

Grant FDA a ‘‘Scientific Override’’—When the FDA requires additional information or clarification from the manufacturer as part of the review

process, the FDA should be allowed to ‘‘stop the clock’’ on review deadlines

while waiting for this information to be provided.

The fundamental premise of the performance goals for review of applications outlined in the letter from the Secretary of HHS to Congress is that sponsors are expected to submit a complete application for FDA review and FDA will perform a

complete review of the application within a defined time (i.e., 6 months for priority

applications and 10 months for standard applications). If FDA determines during

the review of an application that additional information is needed from the sponsor,

FDA may request the information from the sponsor while continuing its review of

the application as submitted. If the additional information is submitted to FDA during the same review cycle, FDA has several options on how to handle the new information. If there is sufficient time remaining on the review clock, FDA may choose

to review the new information without changing the review clock. Alternatively,

FDA may choose to extend the review clock by up to three months if the new information constitutes a major amendment to the application and is submitted within

the last three months of the review cycle. Finally, FDA may defer review of the new

information until the next review cycle. Thus, FDA already has a significant degree

of discretion in deciding how to process new information submitted during the review of an application and FDA considers these options sufficient to address issues

that arise when new information is submitted to an application during a review.

Eliminate Rigid Management Goals—These goals require the agency to

set up meetings with the industry within specific timeframes. They should

be replaced by a more flexible system that allows the FDA to prioritize

these requests, thus decreasing undue burden on the agency.

FDA is satisfied with the current prioritization of meetings into three categories,

such that a meeting about a critical issue takes precedence over a more routine discussion. Type A meetings are considered necessary for an otherwise stalled drug development program to proceed (a ‘‘critical path’’ meeting). For example, a Type A

meeting would be held when FDA has placed an investigational new drug on ‘‘clinical hold’’ and the investigation cannot continue. Type A meetings are held within

30 days. Type B meetings are usually held to discuss anticipated submissions (preinitial IND, end of Phase II, or pre-NDA) and are held within 60 days. Type C meetings are any other type of meeting and accordingly, have the longest timeframe of

75 days. Fee revenues in the proposed statutory changes for PDUFA provided the

necessary resources to support these meetings.

Allow FDA More Flexibility For Standard Reviews—There is no public

health justification for requiring the FDA to decide on a ‘‘me too’’ drug that

duplicates therapies already on the market at the same speed as a drug

that might offer therapeutic advantages to some patients. The FDA should

be granted greater authority to prioritize the review of standard drug applications.

FDA has existing criteria by which decisions are made regarding whether to

prioritize the review of new drug applications based on the therapeutic potential of

the drug. The two review classifications and their definitions are:

• Priority review drug—The drug product, if approved, would be a significant improvement compared to marketed products in the treatment, diagnosis, or prevention of a disease. Improvement can be demonstrated by, for example: (1) evidence of increased effectiveness in treatment, prevention, or diagnosis of disease; (2) elimination or substantial reduction of a treatment-limiting drug reaction; (3) documented enhancement of patient compliance; or (4) evidence of safety and effectiveness of a new subpopulation. • Standard review drug—All non-priority applications will be considered standard

applications.

Under PDUFA, the review clock for priority applications is 6 months and the review clock for standard applications is 10 months. FDA’s performance goals for a

complete review of both types of applications are 90% completed within the goal

dates.

FDA believes that the current system for designation of products for priority review and the current review clocks and performance goals work well and allow FDA

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to prioritize its review work. The PDUFA III proposal would not change the current

performance goals.

Create Safety Goals—FDA should establish performance goals oriented

toward protecting the health and welfare of consumers, such as tracking

and reviewing Phase IV trials, improving the collection, analysis and response of adverse event reports, and enhancing the speed and quality of

review of direct-to-consumer advertisements.

The PDUFA III proposal does not include performance goals for the activities

identified in this question. However, FDA has conducted, and will continue to conduct, significant activities in the areas identified in this question. Details of these

activities follow:

Tracking and Reviewing Phase IV Trials

Following the enactment of FDAMA, FDA initiated a number of steps to implement the provisions on postmarketing studies (section 130). In addition, several procedural improvements were made and a data tracking system was developed to improve monitoring and processing of annual status reports and final study reports.

The improvements include:

• Updating staff operating procedures at CDER to clarify how postmarketing commitments and the annual status reports will be processed, reviewed, and

archived.

• Designating CDER personnel to be responsible for monitoring the submission of

reports. Target review timelines have been established for annual status reports

and for the review of final study reports. These timelines will be tracked and

monitored.

• Developing new CDER data systems to more efficiently capture the existence of

postmarketing commitments, the submission of annual study progress reports,

the submission of final study reports, and final review determinations. This new

database was implemented in July, 2001.

Improving the Collection, Analysis and Response of Adverse Event Reports

One of the objectives of the risk management component of the PDUFA III proposal is to develop surveillance approaches in a directed and well thought out manner that could yield the greatest value for the particular drug. In circumstances

where there are suggestions in the pre-market database of adverse events of concern, risk management and active surveillance approaches could be developed to

manage and further evaluate those concerns. In other situations where there are

unexpected events, the current reporting system has been able to detect signals of

an event of concern. Good pharmacovigilance requires evaluation of drug safety from

many perspectives and sources. In addition, the current system depends upon the

involvement of drug companies to ensure that they conduct the initial follow up that

is so important for full evaluation of a report.

Enhancing the Speed and Quality of Review of Direct-to-Consumer Advertisements

CDER currently has an active program focused on the timely review of direct-toconsumer advertisements. CDER recognizes the importance of insuring that such

advertisements are accurate and provide balanced information about the benefits

and risks of the product. CDER is currently implementing plans to reorganize its

advertising review division to improve its ability to review direct-to consumer advertisements. CDER, however, has limited resources to apply to this area in the face

of an increasing number of direct-to consumer advertisements.

Grant FDA Civil Monetary Fine Authority and Subpoena Power—When

companies fail to complete Phase IV confirmatory trials or when companies repeatedly violate prescriber and direct-to-consumer advertising

guidelines, the agency should be given the authority to levy significant

monetary penalties. The agency should also have the power to compel companies to produce relevant documents.

As part of FDAMA, Congress provided additional authority in section 21 USC

356b to monitor the progress of postmarketing studies that sponsors have agreed

to conduct. Congress also instructed FDA to provide a report providing information

on the status of postmarketing studies that sponsors have agreed to conduct and

for which annual reports have been submitted. As indicated in the recent ‘‘Report

to Congress on Reports on Postmarketing Studies,’’ in implementing 21 USC 356b

FDA has defined the content and format of annual progress reports for postmarketing studies. The Agency has also modified a number of internal operating

procedures and programs to more efficiently track and monitor the status of postmarketing studies. At this time, FDA is not recommending any changes to legislaVerDate 11-MAY-2000 13:57 Jun 26, 2002 Jkt 080092 PO 00000 Frm 00090 Fmt 6633 Sfmt 6621 W:\DISC\78503 pfrm09 PsN: 78503
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tive authority regarding postmarketing studies since the Administration’s proposals

only relate to PDUFA.

FDA has an active enforcement program to help ensure compliance with the Act

and regulations governing promotion and advertising. If the Agency determines that

the enforcement program governing these activities is not resulting in sufficient levels of compliance with the law, FDA will inform Congress and, if necessary, seek

authority for additional penalties.

A number of provisions both in the Act and the implementing regulations enable

FDA to gather information from manufacturers related to drug safety. For example,

FDA’s inspectional authority is set out in 21 USC 374. Under this authority, FDA

is authorized to enter and inspect any factory, warehouse, or establishment where

drugs are manufactured, processed, packed, or held for introduction into interstate

commerce. New drug application (NDA) and abbreviated new drug application

(ANDA) holders are also required to establish and maintain records and make reports to FDA of relevant data determined by FDA to be ‘‘. . . necessary to enable the

Secretary to determine... whether there is or may be ground for invoking subsection

(e) . . .,’’ the provision in the Act setting forth the procedures for the withdrawal of

approval of an NDA or ANDA on safety grounds. 21 USC 355(k)(1). NDA and ANDA

sponsors are required to report adverse events associated with the use of a drug in

human to FDA. 21 CFR 314.80. NDA and ANDA sponsors must report other safetyrelated information to FDA under 21 CFR 314.81. Under 21 CFE 310.305, manufacturers, packers, and distributors of marketed prescription products without NDAs

or ANDAs must also report serious, unexpected adverse events to the FDA. Under

the proposed PDUFA legislation, funds from user fees will be able to be expended

on pre- and peri-NDA/BLA risk management plan activities. This change in the

PDUFA program will help ensure that drugs approved for use in the United States

continue to be among the safest in the world. As stated, if FDA determines that the

tools currently in place are not adequate to maintain the high degree of drug safety

in the U.S., FDA will inform Congress, and if necessary, seek additional authorities.

Launch Independent Drug Withdrawal Investigations—An office or agency independent of the FDA should investigate the circumstances surrounding the withdrawal of medical products from the market, as the National Transportation Safety Board does for plane crashes.

The complex decision to withdraw an approved product from the market requires

multi-disciplinary expertise, often the same expertise critical to the decision to initially approve the product. Since FDA’s mission is to protect and promote the public

health, FDA believes that the creation of a separate agency to evaluate product

withdrawals is unnecessary and would result in the duplication of functions that are

currently being performed, and must continue to be performed, by FDA.

Increase Monitoring and Review of Phase IV Trials—Require the FDA to

track Phase IV trials, strictly monitor and enforce the informed consent

and protection of human subjects in those studies, and, in a timely manner,

review the quality of the studies and the accuracy of the findings.

Please see response to the question relating to creating safety goals, above.

Improve Adverse Event Reporting—Hospitals, HMOs, nursing homes and

other healthcare providers should be required to automatically report (the

present system is voluntary) serious adverse drug events, adverse reactions

and medical errors to the FDA, CDC, and/or other relevant agencies. Appropriations for FDA’s oversight of adverse event reporting should be dramatically increased.

At the present time, FDA does not have authority to require hospitals, Health

Maintenance Organizations (HMOs), nursing homes, and other healthcare providers

to report all adverse drug events to FDA. In addition, to have all healthcare providers report every adverse event directly to FDA would overtax the system without

necessarily yielding additional quality data. Part of the objective of the risk management component of the PDUFA III proposal is to develop surveillance approaches

in a directed and well thought-out manner that could yield the greatest value for

the particular drug. In circumstances where there are suggestions in the pre-market

database of adverse events of concern, risk management and active surveillance approaches could be developed to manage and further evaluate those concerns. In

other situations where there are unexpected events, the current reporting system

has been able to detect signals of an event of concern. Good pharmacovigilance requires evaluation of drug safety from many perspectives and sources. The current

system also depends upon the involvement of drug companies to ensure that they

conduct the initial follow up that is so important for full evaluation of a report.

Utilize the Centers for Education and Research on Therapeutics—CERTS

should examine the feasibility of: (1) implementing a patient self-monitoring reporting system for signaling possible adverse drug reactions; and,

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(2) expanding the use of medical registries to follow patients who may be

at risk of serious reactions.

FDA is currently working with the Centers for Education and Research on Therapies (CERTS) on a number of projects that relate to risk management. A current

area of active work is a series of workshops that FDA, CERTS, and industry are

conducting that address risk communication, risk assessment, and risk management. The objective of these workshops is the development of a research agenda to

further advance the science of risk management as it relates to pharmaceuticals. In

addition, the CERTS and FDA are beginning to look at the feasibility of active surveillance in emergency departments for adverse events related to drugs.

Broaden Distribution of Medication Guides—Consumers should be given

power to make informed decisions about drugs and devices and to avoid

preventable harm. It is time to mandate that medication guides with scientifically accurate, unbiased and clearly worded information about the

risks and benefits of a treatment be included with every dispensed drug (as

proposed by the FDA in 1995). Such medication guides would also, for the

first time, provide a mechanism for notifying consumers directly when new

safety concerns about a drug emerge that require a change in a drug’s approved labeling.

As noted in the question, in 1995 FDA published a proposed rule to increase the

quality and quantity of written medication information for consumers. FDA proposed requiring manufacturers to produce Medication Guides for certain medications that pose serious and significant public health concerns. In addition, the proposal encouraged that written information be produced and distributed for all drugs,

and set targets for the distribution of such information with new prescriptions.

The following year a workshop was convened by FDA to discuss this proposal and,

subsequent to the workshop, Congress passed legislation (P.L. 104-180) that asked

interested parties to develop a plan which would attempt to achieve in a voluntary

manner the goals of FDA’s 1995 proposal. A plan was developed in response to the

legislation that included identifying mechanisms and incentives to ensure voluntary

efforts to provide useful information to consumers. The target goals established in

P.L. 104-180 provided that by 2000, 75% of individuals receiving a new prescription

receive useful information. By 2006 the target goal increased to 95%. FDA currently

requires a Medication Guide in certain circumstances, but for most drugs the distribution of medication information to patients by a pharmacist is voluntary and is

accomplished using third party vendors of such information.

Regarding the voluntary distribution of information, FDA contracted for a study

of the quality and quantity of the information that was being distributed in response to the year 2000 goals. FDA is currently evaluating the results of this study

and will be determining what additional actions and public discussion may be needed in an effort to ensure that the 2006 goals are achieved.

Regarding the required medication guides, these are a relatively new risk communication tool that also requires further evaluation. In particular, FDA is now working with the CERTS to develop projects evaluating the effectiveness of medication

guides as a risk management tool. In addition, more study is needed of the degree

to which medication guides are distributed by pharmacists and how frequently they

are read and comprehended by consumers.

Section 506B of the Food, Drug, and Cosmetic Act should be amended to

expand the scope of information made available to the public to include information [such] as study protocols, patient accrual rates, reports of unexpected, i.e., unlabeled, suspected adverse reactions, and study results.

As a public health agency, FDA supports making useful information available to

consumers regarding the safe and effective use of regulated products. However,

there are a number of considerations that must be taken into account when a determination is made to make information publicly available. Given the complex issues

involved, the Agency would need to examine the language of a specific proposal in

order to comment on whether or not it is advisable.

Scrutinize Single Controlled Clinical Studies—An increasing number of

drug manufacturers have indicated that they will begin submitting new

drug applications using data from only one controlled clinical study, which

is now allowed by law, rather than multiple studies. An independent study

should be conducted at an appropriate time to assess the effectiveness of

single controlled studies in assessing the safety of drugs and biologics.

The usual requirement for more than one adequate and well-controlled investigation reflects the need for independent substantiation of experimental results. A single clinical experimental finding of efficacy, unsupported by other independent evidence, has not usually been considered adequate scientific support for a conclusion

of effectiveness. However, FDA has, under certain circumstances, approved drugs on

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the basis of development programs that included only one well-controlled clinical

trial in addition to evidence from other studies that confirmed its results. The Agency issued a ‘‘Guidance for Industry: Providing Clinical Evidence of Effectiveness,’’ in

1998 to specifically address this, as required by FDAMA. Situations in which a single controlled clinical trial might be considered adequate (in combination with confirmatory evidence) for drug approval include:

1. When the effectiveness of a new use can be extrapolated from existing studies

of an already approved use (e.g., a new dosage regimen; pediatric uses).

2. When a single study for a new use is supported by data from related adequate

and well controlled trials (e.g., a different phase of the same disease or a closely

related disease, studies in a new special population, studies in combination or

as monotherapy; studies in a closely related disease).

3. When a single controlled study includes multiple centers and is so large that it,

in effect, serves as multiple studies.

4. When the endpoint and results of the single controlled study are such that the

study could not ethically be repeated or the statistical results are very persuasive, with consistency across subsets of the analysis.

Although FDAMA encouraged the Agency to issue a Guidance on the subject, FDA

has applied these principles for many years and continues to be actively engaged

in discussions to further refine them. For example, FDA participated in a meeting

convened by the Center for Drug Development Science at Georgetown University in

January, 2002, entitled, ‘‘Confirmatory Evidence to Support a Single Clinical Trial

(SCT) as a Basis for Drug Approval.’’ Participants included academicians, leaders

from FDA’s CDER, CBER and CDRH and the pharmaceutical industry. A written

summary of the conference is currently being drafted. Discussion topics included: 1)

the nature, sources and standards for evidence of effectiveness; current issues concerning satisfactory requirements for ‘‘confirmatory evidence;’’ 2) the standards for

a single clinical trial itself, and; 3) current issues in establishing an adequate safety

database, assuming that effectiveness is independently confirmed.

Discussions at the meeting were constructive and productive. In general, at the

meeting there was a great deal of reluctance on the part of regulators and the pharmaceutical industry, as well as many of the academicians, to apply the SCT model

widely. This was felt to be a model that should only be used in limited circumstances, such as those already articulated in FDA’s 1998 Guidance. It was generally acknowledged that scientifically sound clinical studies should be the goal of

any drug development program, and simply conducting large numbers of poorly designed or inefficient trials is not in the interest of the public health. While most of

the work at the conference centered around clarifying the principles related to the

single adequate and well-controlled trial, it was widely agreed that one of the greatest needs for data at the time of NDA review is regarding safety. This point is often

lost in discussions about single controlled trials and must not be, particularly in

light of recent public concerns about drugs reaching the market prior to adequate

safety testing.

Examine Comparative Safety Data—Manufacturers should be required,

as part of their application to the FDA to market a new drug or biologic,

to submit the results of tests comparing the safety and efficacy of their

product to others already on the market that are used to treat the same

indication.

FDA does not have the legal authority to require sponsors to submit the results

of clinical trials comparing the safety and efficacy of their product to others already

on the market that are used to treat the same condition. While FDA does not have

this legal authority, FDA often encourages sponsors to conduct such comparative

trials and in many cases the sponsors do conduct comparative trials and submit

them for FDA review. If these trials meet FDA standards, the data are often included in the approved labeling for the product.

FURTHER QUESTIONS SUBMITTED BY REPRESENTATIVE JOHN D. DINGELL

Dr. Woodcock, as Director of CDER, you have the responsibility of assuring that new drugs approved under NDAs are safe. I understand that clinical trials, even ones involving thousands of patients, cannot be expected

to pick up safety problems, less frequently occurring but dangerous, even

fatal, side effects, is that correct?

It is correct that clinical trials would not be expected to detect rare adverse events

due to the limited numbers of patients in such trials. In addition, clinical trials are

limited in duration and tend to include carefully selected patient populations. For

these reasons, it is critical that we maintain careful vigilance over newly marketed

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drugs to be able to detect such events. The new risk management program in

PDUFA III will be an important step forward toward this goal.

So safety is primarily evaluated through animal studies and pharmacokinetic models is that correct?

No. The safety of a new drug is evaluated prior to approval based on data available from a variety of studies. This includes data on how the drug is manufactured

and the drug’s stability over time, an analysis of safety of drug impurities, inactive

ingredients, and degradation products, data from an extensive battery of animal

toxicology and pharmacology studies, data from human pharmacodynamic and pharmacokinetic studies, and data from the clinical trials of the drug in humans. While

the amount of safety data in humans varies depending on the drug and the indication to be treated, for chronically administered drugs, the International Conference

for Harmonization (ICH) standard for the minimum size of the clinical safety database is 1,500 volunteers/patients. In many cases, FDA may require that the clinical

safety database be far greater than the ICH minimum prior to approval. FDA also

considers any data available from foreign post-marketing surveillance of the drug

if the drug has been approved in other countries prior to approval in the United

States.

I understand that CDER is working on better early measures of liver toxicity and heart toxicity both in animals and in humans so drugs that product unacceptable side effects are detected earlier in the process. Could you

elaborate on you work in this area? When might we see more sensitive tests

leading to greater assurance of safety at time of approval?

Regarding cardiac toxicity, FDA is addressing this issue from both the pre-clinical

and clinical standpoint. FDA is working to develop guidances on appropriate preclinical assessment of drugs to screen for cardiac toxicity, in particular prolongation

of the QTc interval on ECGs. This activity is still in its early stages and it may

be some time before a guidance is finalized. From the clinical standpoint, FDA is

working on developing guidance for industry regarding appropriate cardiac evaluation of a drug during its development. In addition, it is important for FDA to have

direct access to ECG data as we evaluate drugs, and so a public meeting has been

held on the topic of submitting ECG data electronically for analysis. Another public

workshop is planned for this spring following which draft guidance will be developed.

Regarding hepatotoxicity, a public workshop was held in February 2001 at which

time a White Paper on hepatotoxicity was written which described the issues to be

addressed. These included pre-clinical, clinical and post-marketing issues. Since that

time FDA has been working with industry and others to further identify the issues

to be addressed and develop plans to address the various issues that are identified.

These include:

• Examining the sensitivity and specificity of screening tests.

• Examining the time course and patterns of hepatotoxicity related to drugs to better inform future actions.

• Determining background rates.

• Determining the feasibility of active surveillance approaches.

FURTHER QUESTIONS SUBMITTED BY REPRESENTATIVE RICHARD BURR

When will the Agency issue the final ‘‘Guidance for Industry on Developing Medical Imaging Drugs and Biological Products’’? The last draft was

issued in June 2000. This Guidance is necessary in order to implement the

radiopharmaceutical regulation directed by Section 122 of FDAMA which

was supposed to be effective almost 3 years ago under FDAMA.

The guidance for industry on Developing Medical Imaging Drugs and Biological

Products is being developed with extensive input from the public. A first draft of

the guidance was issued for comment on October 14, 1998. FDA held public meetings on the draft guidance on January 25 and March 26, 1999. After considering

the discussion and comments at the meetings and after reviewing all written comments, FDA issued a second draft for comment on July 31, 2000. The Agency has

considered carefully the second round of comments, and the final version of the

guidance is currently moving through the clearance process. We expect it to be released during the next month or two.

FURTHER QUESTIONS SUBMITTED BY REPRESENTATIVE HENRY A. WAXMAN

It is my understanding that FDA has fewer than 15 FTEs to review over

37,000 prescription drug ads each year, and the triggers in the user fee program have been partly to blame because FDA has been forced to drain resources from other programs, including drug advertising, to meet its obliVerDate 11-MAY-2000 13:57 Jun 26, 2002 Jkt 080092 PO 00000 Frm 00094 Fmt 6633 Sfmt 6621 W:\DISC\78503 pfrm09 PsN: 78503
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gations under PDUFA. In your best professional judgment, how many FTEs

would be needed and how much would it cost to fund an effective drug advertising review program and bring enforcement actions against misleading ads in a timely manner?

The Division of Drug Marketing and Advertising (DDMAC) in CDER is responsible for the regulation of prescription drug advertising. This Division currently has

assigned 39 FTEs. While DDMAC has worked to maximize its productivity and is

currently undergoing a reorganization that is designed to further improve its efficiency and effectiveness, the current staffing is not adequate to keep pace with the

rapidly increasing number of professional and direct-to-consumer advertisements for

prescription drugs. It is estimated that CDER would need approximately 35 additional FTEs and supporting operating funds to fully staff the advertising review program.

Currently, CBER has 4 FTEs to review all advertising and promotional labeling

materials submitted. In order to adequately assess these materials and bring timely

enforcement actions, a large increase in staff would be required. Based on the projected number of submissions for FY2003, and conservative estimates of man-hours

needed to review these submissions, 30 additional review FTEs would be required.

Additional management and support staff would also be needed, for a total of 38

FTEs at a cost of $5,130,000.00. An additional $550,000 would be required for IT

upgrade and support of a tracking system. This would result in a total requirement

of $5,680,000.00.

Have statutory triggers in PDUFA adversely affected funding of other

FDA programs? If so, which ones?

As is mentioned above, during the period of FY 1994 to FY 2001, the effect of the

Prescription Drug User Fee Act’s (PDUFA) statutory triggers has had on the availability of funding for non-PDUFA programs has been less significant than the absence of additional appropriations to fund that annual pay raises for Food and Drug

Administration (FDA) employees. During these years, FDA’s appropriations failed to

include increases to cover the annual costs of mandated Federal pay raises. The cumulative impact of absorbing the cost of the Federal pay raise during this eightyear period was more than $200 million. This resulted in a reduction in staffing for

programs other than the process for the review of human drug applications (e.g.,

compliance activities, review of over-the-counter drugs) of more than 1,100 staff

years since PDUFA I was enacted.

Although the absence of additional funds to pay the cost of mandated pay raises

has had the greatest effect on non-PDUFA programs, one of the PDUFA triggers

has also had a significant effect. Section 736(g)(2)(B) requires that FDA annual

spending on drug review from appropriations must be at least as much as the

amount of appropriations that FDA spent on drug review in FY 1997, adjusted for

inflation.

There are two aspects of this trigger that may adversely affect FDA programs

other than drug review. These are:

(1) The minimum that FDA must spend from appropriations increases by an inflation factor each year. In years when FDA does not receive appropriated increases to cover the cost of the Federal pay raise, FDA must increase the

amount allocated for PDUFA drug review programs by an amount sufficient to

meet the adjustment for inflation established in the PDUFA statute. The only

means of accomplishing this is to reduce the amount spent on non-PDUFA programs. This aspect of the section 736(g)(2)(B) trigger is directly related to

whether or not FDA receives the appropriations necessary to cover the cost of

the Federal pay raise.

(2) This trigger is based on FDA spending, an amount that cannot be measured

until after the fiscal year ends, when the accounts are closed and final reports

are produced. Failure to meet this spending threshold would be catastrophic.

Fee revenue collected in the previous year would all have to be returned and

this loss in revenue would mean that FDA would have to lay off a significant

number of employees. To avoid these catastrophic consequences, FDA must always err on the side of caution by spending more on the drug review process

than the minimum amount required. This is necessary to be certain that, when

the final accounting is completed at the end of the year, FDA will have met the

minimum spending required.

The table below outlines this situation. It depicts:

(1) the minimum amount of spending required from appropriations each year as a

result of this trigger (Section 736(g)(2)(B));

(2) the actual FDA spending from appropriations each year on the drug review process; and

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(3) the amount by which FDA spending exceeded the minimum spending mandated

by the statutory trigger (i.e., the difference between 1 and 2.)

Fiscal Year

Minimum Spending

Required by Section

736(g)(2)(B)

Actual Spending from

Appropriations Difference PercentDifference

1993 ..................................................................... $120,057,253 $126,515,577 $6,458,324 5

1994 ..................................................................... $123,380,438 $129,337,138 $5,956,700 5

1995 ..................................................................... $126,958,144 $139,830,318 $12,872,174 10

1996 ..................................................................... $124,302,476 $152,289,387 $27,986,911 23

1997 ..................................................................... $125,872,166 $147,959,689 $22,087,523 18

1998 ..................................................................... $147,959,689 $151,836,635 $3,876,946 3

1999 ..................................................................... $150,083,954 $159,669,575 $9,585,621 6

2000 ..................................................................... $153,508,177 $167,646,122 $14,137,945 9

2001 ..................................................................... $158,213,295 $162,691,657 $4,478,362 3

Will your recommended alteration in one of the triggers ensure that

funding for other programs is no longer drained?

The most important action to assure that funding from other programs is not

drained in the future is an appropriation each year that includes the full costs of

the mandatory Federal pay raise. We are pleased that for the current fiscal year

the President requested, and Congress appropriated, funds that specifically included

amounts to enable FDA to meet the costs of the mandatory Federal pay increase.

Further, the President’s budget for FY 2003 that is now before Congress also includes specific increases to cover the cost of the mandatory Federal pay raise anticipated in FY 2003.

In addition, the legislation that the Administration has proposed will include

modifications to the trigger (Section 736(g)(2)(B)) such that FDA will no longer be

compelled to spend amounts that are significantly greater than the amount required

by this trigger. The proposal will provide FDA a margin of error in its effort to meet

this requirement of the law. Under this proposed modification, if FDA’s spending

from appropriations on drug review is within 5 percent of the amount required by

this section of the law, the requirement is considered to be satisfied. In cases where

FDA’s spending from appropriations is within 3 percent of the trigger amount, no

adjustment in fees will be required. If the spending is between 3 percent and 5 percent below the trigger amount, then FDA will, in a subsequent year, decrease user

fees by the amount of the shortfall that is between 3 and 5 percent (i.e., a maximum

of 2 percent).

The purpose of this change is to relieve FDA of the need to overspend from appropriations each year, as has occurred consistently since FY 1994. Spending from appropriations on the drug review process each year is still expected to be at, or very

close to, the amount specified by this trigger, and may never be more than 5 percent

below the trigger amount.

What changes in the triggers would be necessary to protect the funding

of the generic drug and advertising review programs?

The PDUFA statute does not apply to generic drugs or to post-approval drug advertising. Since there are no user fee or non-user fee amounts authorized for these

programs under the PDUFA statute, it is difficult to conceive of a modification to

the PDUFA statute that would accomplish this objective.

The best way to protect funding for these and other non-PDUFA programs is to

assure that they receive adequate appropriations each year, including increases to

cover the costs of mandatory Federal pay raises.

In your best professional judgment, how many FTEs would be needed

and how much would it cost to fund a generic drug program that can review generic drug applications in the statutory 180 days.

It is estimated that the Office of Generic Drugs (OGD) would need approximately 55 additional FTEs at a cost of $9,570,000 above its current base to meet the statutory review time of 180 days. This amount includes salary, operating costs, and

overhead to support these additional employees.

In addition, other parts of the Agency, such as the Office of Compliance, CDER,

and FDA’s Office of Regulatory Affairs and Office of Chief Counsel, would need additional FTEs and budgetary support. These other organizations provide essential inspection and legal support to OGD’s review activities. It is estimated that an additional 66 FTEs would be needed to cover the increased workload in these organizations in support of the Office of Generic Drugs for a total of $20,430,000. This figure

includes salary, operating costs, and overhead.

As I understand it, your agreement with the pharmaceutical industry will

include a performance goal of 6 months for reviewing any portion of a cuVerDate 11-MAY-2000 13:57 Jun 26, 2002 Jkt 080092 PO 00000 Frm 00096 Fmt 6633 Sfmt 6621 W:\DISC\78503 pfrm09 PsN: 78503
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mulative marketing application. This is the same review period as a priority drug; hence these partial applications are going to be given as high

as priority as priority drugs. I am concerned that this will take resources

away from needed drugs that are ready for approval, and give them to

drugs that may be far from approval. Does your agreement include sufficient additional fees to cover the cost of carrying out these additional high

priority reviews? Can we be sure that resources will not be diverted from

the review of drugs that are ready for approval to review CMAs?

FDA carefully considered the resources that would be necessary to implement the

two pilot studies of continuous marketing application (CMA) review without taking

resources away from the review of completed new drug applications. The necessary

resources have been included in the PDUFA III proposals. It is also important to

note that both pilot CMA programs will be limited to Fast Track drugs—those drugs

that are intended to treat serious or life-threatening conditions and that demonstrate the potential to address unmet medical needs. Additionally, Pilot 1 is limited to Fast Track drugs that have already demonstrated significant promise as a

therapeutic advance in clinical trials and Pilot 2 is limited to one application per

review division over the five-year period of PDUFA III. FDA believes the additional

resources and the limitations on the CMA pilot program will provide opportunities

to shorten drug development time for promising new drugs, while ensuring appropriate resources are devoted to other new drugs that are ready for approval. FDA

proposes to conduct a formal evaluation of these Pilot programs during PDUFA III

in order to evaluate these and other considerations.

After FDA has completed a review of a portion of a cumulative marketing

application, is the agency free to rereview all or part of that portion when

the full application is submitted, if the agency believes a rereview is needed?

Yes. FDA plans to publish a guidance to industry on the cumulative marketing

application pilot programs by the end of FY03 and the pilot programs will begin in

FY04. FDA anticipates that the guidance document will outline the procedures that

FDA will follow with regard to any changes that may occur to a ‘‘reviewable unit’’

from the time that it was pre-submitted for review until the time that the complete

application is submitted. The pilot programs described in the PDUFA III proposed

Goals Letter do not preclude FDA from re-reviewing previously reviewed ‘‘reviewable units’’ if that is felt to be necessary. The pilot programs as described in the

draft Goals Letter also make clear that the deficiencies transmitted to the sponsor

in a discipline review letter on completion of review of a pre-submitted ‘‘reviewable

unit’’ are ‘‘not final, definitive decisions relevant to the NDA/BLA.’’

At the hearing, the witnesses representing BIO testified that, under the

agreement, the decision whether to use an outside expert requested by an

applicant is completely within FDA’s discretion. I was pleased to hear this,

because I believe that restricting FDA’s discretion raises serious questions

about the integrity of the review process. What are the specific terms in

the agreement concerning the use of outside experts that establish FDA’s

discretion to use them as the agency sees fit?

Section IX of the Goals Letter provides for the use of independent consultants for

biotechnology clinical trial protocols. The text of this section of the Goals Letter is

reprinted below.

IX. INDEPENDENT CONSULTANTS FOR BIOTECHNOLOGY CLINICAL

TRIAL PROTOCOLS

A. Engagement of Expert Consultant: During the development period for a biotechnology product, a sponsor may request that FDA engage an independent expert

consultant, selected by FDA, to participate in the Agency’s review of the protocol

for the clinical studies that are expected to serve as the primary basis for a claim.

B. Conditions

1. The product must be a biotechnology product (for example, DNA plasmid products, synthetic peptides of fewer than 40 amino acids, monoclonal antibodies for in

vivo use, and recombinant DNA-derived products) that represents a significant advance in the treatment, diagnosis or prevention of a disease or condition, or have

the potential to address an unmet medical need;

2. The product may not have been the subject of a previously granted request

under this program;

3. The sponsor must submit a written request for the use of an independent consultant, describing the reasons why the consultant should be engaged (e.g., as a result of preliminary discussions with the Agency the sponsor expects substantial disagreement over the proposed protocol); and

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4. The request must be designated as a ‘‘Request for Appointment of Expert Consultant’’ and submitted in conjunction with a formal meeting request (for example,

during the end-of-Phase II meeting or a Type A, meeting).

C. Recommendations for Consultants: The sponsor may submit a list of recommended consultants for consideration by the Agency. The selected consultant will

either be a special government employee, or will be retained by FDA under contract.

The consultant’s role will be advisory to FDA and FDA will remain responsible for

making scientific and regulatory decisions regarding the clinical protocol in question.

D. Denial of Requests: Except in the most unusual circumstances (for example,

it is clearly premature) FDA will honor the request and engage the services of an

independent consultant, of FDA’s choosing, as soon as practicable. If the Agency denies the request, it will provide a written rationale to the requester within 14 days

of receipt.

E. Performance Goal Change: Due to the time required to select and screen the

consultant for potential conflicts of interest and to allow the consultant sufficient

time to review the scientific issues involved, the performance goals for scheduling

the formal meeting (see section III) may be extended for an additional sixty (60)

days.

F. Evaluation: During FY 2006, FDA will conduct a study to evaluate the costs

and benefits of this program for both sponsors and the Agency.

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