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FDA USER FEES 2012: HOW INNOVATION HELPS 

PATIENTS AND JOBS 

HEARING 

BEFORE THE

SUBCOMMITTEE ON HEALTH 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

APRIL 18, 2012 

Serial No. 112–136 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 

(II) 

COMMITTEE ON ENERGY AND COMMERCE 

FRED UPTON, Michigan 

Chairman 

JOE BARTON, Texas 

Chairman Emeritus 

CLIFF STEARNS, Florida 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

JOSEPH R. PITTS, Pennsylvania 

MARY BONO MACK, California 

GREG WALDEN, Oregon 

LEE TERRY, Nebraska 

MIKE ROGERS, Michigan 

SUE WILKINS MYRICK, North Carolina 

Vice Chairman 

JOHN SULLIVAN, Oklahoma 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

BRIAN P. BILBRAY, California 

CHARLES F. BASS, New Hampshire 

PHIL GINGREY, Georgia 

STEVE SCALISE, Louisiana 

ROBERT E. LATTA, Ohio 

CATHY MCMORRIS RODGERS, Washington 

GREGG HARPER, Mississippi 

LEONARD LANCE, New Jersey 

BILL CASSIDY, Louisiana 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

CORY GARDNER, Colorado 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

HENRY A. WAXMAN, California 

Ranking Member 

JOHN D. DINGELL, Michigan 

Chairman Emeritus 

EDWARD J. MARKEY, Massachusetts 

EDOLPHUS TOWNS, New York 

FRANK PALLONE, JR., New Jersey 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

JANICE D. SCHAKOWSKY, Illinois 

CHARLES A. GONZALEZ, Texas 

TAMMY BALDWIN, Wisconsin 

MIKE ROSS, Arkansas 

JIM MATHESON, Utah 

G.K. BUTTERFIELD, North Carolina 

JOHN BARROW, Georgia 

DORIS O. MATSUI, California 

DONNA M. CHRISTENSEN, Virgin Islands 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

(III) 

SUBCOMMITTEE ON HEALTH

JOSEPH R. PITTS, Pennsylvania 

Chairman 

MICHAEL C. BURGESS, Texas 

Vice Chairman 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

MIKE ROGERS, Michigan 

SUE WILKINS MYRICK, North Carolina 

TIM MURPHY, Pennsylvania 

MARSHA BLACKBURN, Tennessee 

PHIL GINGREY, Georgia 

ROBERT E. LATTA, Ohio 

CATHY MCMORRIS RODGERS, Washington 

LEONARD LANCE, New Jersey 

BILL CASSIDY, Louisiana 

BRETT GUTHRIE, Kentucky 

JOE BARTON, Texas 

FRED UPTON, Michigan (ex officio) 

FRANK PALLONE, JR., New Jersey 

Ranking Member 

JOHN D. DINGELL, Michigan 

EDOLPHUS TOWNS, New York 

ELIOT L. ENGEL, New York 

LOIS CAPPS, California 

JANICE D. SCHAKOWSKY, Illinois 

CHARLES A. GONZALEZ, Texas 

TAMMY BALDWIN, Wisconsin 

MIKE ROSS, Arkansas 

JIM MATHESON, Utah 

HENRY A. WAXMAN, California (ex officio) 

(V) 

C O N T E N T S 

Page 

Hon. Joseph R. Pitts, a Representative in Congress from the Commonwealth 

of Pennsylvania, opening statement ................................................................... 1 

Prepared statement .......................................................................................... 2 

Hon. Joe Barton, a Representative in Congress from the State of Texas, 

opening statement ................................................................................................ 2 

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

New Jersey, prepared statement ........................................................................ 3 

Hon. John D. Dingell, a Representative in Congress from the State of Michigan, prepared statement ...................................................................................... 4 

Hon. Fred Upton, a Representative in Congress from the State of Michigan, 

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

Prepared statement .......................................................................................... 5 

Hon. Michael C. Burgess, a Representative in Congress from the State of 

Texas, opening statement .................................................................................... 6 

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

California, opening statement ............................................................................. 7 

WITNESSES

Janet Woodcock, M.D., Director, Center for Drug Evaluation and Research, 

U.S. Food and Drug Administration ................................................................... 8 

Prepared statement .......................................................................................... 10 

Answers to submitted questions ...................................................................... 200 

Jeffrey E. Shuren, M.D., J.D., Director, Center for Devices and Radiological 

Health ................................................................................................................... 44 

Prepared statement .......................................................................................... 46 

Answers to submitted questions ...................................................................... 200 

David E. Wheadon, M.D., Senior Vice President, Scientific and Regulatory 

Affairs, Pharmaceutical Research and Manufacturers of America .................. 113 

Prepared statement .......................................................................................... 115 

Sara Radcliffe, Executive Vice President of Health, Biotechnology Industry 

Organization ......................................................................................................... 122 

Prepared statement .......................................................................................... 124 

David Gaugh, R.Ph., Vice President, Regulatory Sciences, Generic Pharmaceutical Association .............................................................................................. 135 

Prepared statement .......................................................................................... 137 

Joseph A. Levitt, J.D., Partner, Hogan Lovells US LLP, on behalf of the 

Advanced Medical Technology Association ........................................................ 157 

Prepared statement .......................................................................................... 159 

Allan Coukell, Director of Medical Programs, Pew Health Group, The Pew 

Charitable Trusts ................................................................................................. 172 

Prepared statement .......................................................................................... 174 

SUBMITTED MATERIAL

Statement of the National Alliance on Mental Illness, submitted by Mr. 

Pitts ....................................................................................................................... 194 

Statement of the California Healthcare Institute, submitted by Mr. Bilbray .... 198 

(1) 

FDA USER FEES 2012: HOW INNOVATION 

HELPS PATIENTS AND JOBS 

WEDNESDAY, APRIL 18, 2012 

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

The Subcommittee met, pursuant to call, at 10:15 a.m., in room 

2123 of the Rayburn House Office Building, Hon. Joe Pitts (chairman of the subcommittee) presiding. 

Members present: Representatives Pitts, Burgess, Shimkus, Rogers, Myrick, Murphy, Blackburn, Gingrey, Latta, Lance, Cassidy, 

Guthrie, Barton, Bilbray, Upton (ex officio), Pallone, Dingell, Engel, 

Capps, Schakowsky, Matheson, Eshoo, Markey, and Waxman (ex 

officio). 

Staff present: Clay Alspach, Counsel, Health; Gary Andres, Staff 

Director; Nancy Dunlap, Health Fellow; Paul Edattel, Professional 

Staff Member, Health; Debbee Keller, Press Secretary; Ryan Long, 

Chief Counsel, Health; Carly McWilliams, Legislative Clerk; 

Monica Popp, Professional Staff Member, Health; Chris Sarley, Policy Coordinator, Environment and Economy; Heidi Stirrup, Health 

Policy Coordinator; Alli Corr, Democratic Policy Analyst; Eric 

Flamm, FDA Detailee; Karen Lightfoot, Democratic Communications Director, and Senior Policy Advisor; Karen Nelson, Democratic Deputy Committee Staff Director for Health; and Rachel 

Sher, Democratic Senior Counsel. 

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

OF PENNSYLVANIA 

Mr. PITTS. The subcommittee will come to order, and the chair 

recognizes himself for 5 minutes for an opening statement. 

Today’s hearing addresses the FDA user fee package discussion 

draft. This draft is the product of over a year of hard work by various parties. While the individual industries—prescription drugs, 

medical devices, generic drugs and biosimilar drugs—represented 

in this draft were negotiating with FDA on their user fee agreements, this subcommittee was holding at least 10 hearings on subjects related to the draft. After intense negotiation between both 

sides of the aisle, we have arrived at a discussion draft that I hope 

all members of the subcommittee will be able to support. 

There are still some outstanding issues that staff continues to 

work on, and I hope that they can be resolved before next week’s 

subcommittee markup. 

2 

*The discussion draft is available at http://energycommerce.house.gov/sites/republicans.energycommerce.house.gov/files/Hearings/Health/20120418/BILLS-112HR-PIHUFAreauthorization.pdf. 

This package is critical to patients. It will ensure that FDA has 

the resources and reforms needed to speed new drugs, devices and 

treatments to those who are ill. These user fee agreements will 

make the approval process more transparent, more consistent and 

more predictable, benefiting patients, but also keeping the United 

States the preeminent leader in drug and device development and 

manufacturing. 

Good-paying jobs in the drug and device industries, like those in 

my home State of Pennsylvania, will be critical to our economic recovery, and we cannot afford to outsource them. 

I look forward to hearing from our witnesses today, to get their 

thoughts and reactions on the discussion draft. *

[The prepared statement of Mr. Pitts follows:] 

PREPARED STATEMENT OF HON. JOSEPH R. PITTS

Today’s hearing addresses the FDA user fee package discussion draft. This draft 

is the product of over a year of hard work by various parties. While the individual 

industries—prescription drugs, medical devices, generic drugs, and biosimilars 

drugs—represented in this draft were negotiating with FDA on their user fee agreements, this Subcommittee was holding at least ten hearings on subjects related to 

the draft. 

After intense negotiation between both sides of the aisle, we have arrived at a discussion draft that I hope all members of the Subcommittee will be able to support.There are still some outstanding issues that staff continues to work on, and I 

hope that they can be resolved before next week’s Subcommittee markup. 

This package is critical to patients. It will ensure that FDA has the resources and 

reforms needed to speed new drugs, devices, and treatments to those who are ill. 

These user fee agreements will make the approval process more transparent, more 

consistent, and more predictable, benefitting patients, but also keeping the United 

States the preeminent leader in drug and device development and manufacturing.Good-paying jobs in the drug and device industries, like those in my home 

state of Pennsylvania, will be critical to our economic recovery, and we can’t afford 

to outsource them. 

I look forward to hearing from our witnesses today, to get their thoughts and reactions on the discussion draft. 

Mr. PITTS. I yield the remaining time to the chairman emeritus 

of the committee, Mr. Barton. 

OPENING STATEMENT OF HON. JOE BARTON, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS 

Mr. BARTON. Thank you, Mr. Chairman, and thank you for holding this hearing today. 

Put me down, as I said at the last hearing you had on this, as 

undecided on this particular bill. I know that you have worked very 

hard and your staff has worked very hard and the minority staff 

and members have worked very hard on the bill. My basic problem 

is that I am not sure the FDA deserves a large increase in user 

fees given the amount of money that they have been receiving in 

general fund increases. 

As you know, under the Patient Protection and Affordable Care 

Act, there is a new 2.3 percent gross sales tax on the sale of all 

medical devices in the United States beginning in the year 2013. 

This tax is supposed to raise $20 billion to help offset the cost of 

3 

President Obama’s $1 trillion new health bill. A 2.3 percent tax is 

imposed on revenues, as you know, and not profits, so that the tax 

applies to devise regardless of they are sold at a loss. This is on 

top of the current federal tax rate of 35 percent on corporate profits 

and all State and local taxes in addition. It is obvious that companies have less incentive to stay in the United States than they did 

before these bills became law. 

This Administration has indicated that the increased tax will 

have little to no negative effect on medical innovation in the United 

States. That just begs credulity, Mr. Chairman. When you increase 

taxes across the board and then throw these user fee increases on 

top of it, that has to have a negative effect. It is simply a law of 

physics, so to speak. 

In any event, I do want to commend you and others for trying 

to come together on a bipartisan bill. I think it is obvious by my 

comments that I may be a no vote but I do want to be a positive 

part of the process if at all possible. 

I want to thank our witnesses for being here today, and with 

that, Mr. Chairman, I can yield the remaining 1 minute to someone 

else or yield it back to you. 

Mr. PITTS. All right. The gentleman yields back. The chair recognizes the ranking member of the Subcommittee on Health, Mr. 

Pallone, for 5 minutes. 

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

Mr. PALLONE. Thank you, Chairman Pitts. 

Today, the subcommittee is meeting to hear testimony about the 

released discussion draft concerning the prescription drug, medical 

device, generic drug and biosimilar drug user fee agreements as 

well as several other FDA-related proposals including programs to 

foster the development of prescription drugs for children, administrative and regulatory reforms at the FDA, and drug shortages. 

I will note as a matter of process that each of these issues has 

had its own hearing in the subcommittee over the course of the 3 

months, and I want to commend Chairmen Pitts and Upton and 

the staffs on both sides. We have worked very hard to cover a lot 

of ground, and I would also like to thank all the subcommittee 

members for their participation in these hearings and I welcome 

their comments and suggestions on the discussion draft as we continue to move forward. 

Let me state that we have not yet reached full agreement on the 

discussion draft in time for today’s hearing. As we will be seeing, 

the bill contains language largely identical to the March draft released by the Republicans except for the brackets surrounding a 

majority of the text. These brackets indicate that the bill is a work 

in process and we continue to make headway. 

There are many issues that have been worked out. Specifically, 

we have been able to make substantive changes to the FDA reforms in this draft would have led to many unintended and unacceptable consequences to FDA’s regulatory scheme. We have also 

been working hard to include language that would equip the FDA 

with the authority and the resources it needs to address a growing 

4 

global drug supply. That language has come a long way, and I am 

optimistic that we can strengthen it further. 

It is important to note that there are still key concerns remaining but the process has been a good one to date and I am hopeful 

that we can come together to address those outstanding issues and 

generate a consensus, a bipartisan product that both sides can support. 

I just wanted to quickly comment on the four user fee proposals 

that are the impetus behind this legislation. The discussion draft 

is largely based on the agreements between the FDA and the industry. These programs represent a critical opportunity to work 

alongside FDA, industry and other stakeholders to build upon and 

improve these critical programs. Together we can help give patients access to safe, effective and breakthrough medical treatments while supporting the advancement of science and promoting 

a thriving life science industry in the United States. 

A particular note of course is the new generic drug user fee 

agreement, which will dramatically improve the median approval 

times for generic applications. This program will cause an influx of 

generic drug products onto the market and into the hands of consumers, thereby significantly lowering health care costs. 

I just want to welcome back our witnesses here today. You have 

been a great resource to our subcommittee throughout this process. 

We are eager to hear your opinions and your suggestions, and I 

look forward to working with you, Chairman Pitts, leading up to 

next week’s scheduled markup to improve the discussion draft further. And again, thanks for the continued bipartisanship. 

I would like to yield my 2 minutes left to the chairman emeritus, 

Mr. Dingell. 

OPENING STATEMENT OF HON. JOHN D. DINGELL, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MICHIGAN 

Mr. DINGELL. Mr. Chairman, I thank you for holding today’s 

hearing and I thank my good friend, Mr. Pallone, for yielding to 

me. 

I am delighted that we are having this hearing and I am happy 

to work together with my colleagues in a bipartisan consensus effort to achieve a good piece of legislation on food and appliance and 

other performance by the FDA. 

FDA’s authorities are not sufficient to protect our drug supply 

chain. Investigations by this committee found the FDA not only 

lacks knowledge of how many drug manufacturing facilities are operating overseas, what entities are importing drugs or when incidents like adulteration, theft, counterfeiting, contamination or repeated manufacturing failures are posing health risks. FDA has 

lacked the authority to detain or destruct harmful drugs, to prevent medical product from entering the country if the manufacturer 

prohibits inspection or to require importers to provide compliance 

information at the border. 

Current law has unintentionally created an unlevel playing field 

which hurts our domestic manufacturers. While FDA inspects domestic manufacturers every 2 years, it may or may not inspect foreign manufacturing facilities, although it occasionally gets around 

5 

to it about every 9 years. This committee must address these critical gaps in FDA’s authority and the knowledge of our entire food 

chain from active ingredients to the patient’s medicine cabinet. 

FDA ought to know the parties who are manufacturing, distributing or importing drugs and should be able to take action against 

those who are allowing harmful drugs into the United States market. 

We have before us today an opportunity to deal with the shortage of money and personnel and see to it that we stop making 

Americans sick or killing Americans by having a failure to have 

Food and Drug have the ability to carry out its responsibilities. I 

thank you, Mr. Chairman. 

Mr. PITTS. The gentleman yields back, and I now recognize the 

chairman of the full committee, Mr. Upton, for 5 minutes. 

OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MICHIGAN 

Mr. UPTON. Thank you, Chairman Pitts, for today’s hearing on 

the reauthorization of the FDA user fees and the impact of innovation on American patients and jobs. 

Since the beginning of February, this subcommittee has held six 

hearings on the FDA, and during these hearings, we have heard 

from witnesses from around the country on how Congress can help 

FDA become more predictable, consistent and transparent and how 

that will foster innovation here in the United States. I have heard 

this back home from my constituents as well. I think we all agree 

that fostering innovation does help American patients and aids in 

creating American jobs. As part of our efforts to foster that innovation, we need to fix the recent problems with the investigational device exemption approval process and the medical device modifications guidance document. Recent FDA policy changes have created 

some problems, and we intend to use the user fee legislative process to rectify them. 

I really want to thank Mr. Waxman and Mr. Pallone and Mr. 

Dingell and other members of this committee for their constructive 

and bipartisan work to reauthorize these user fees. During the past 

couple of months, we have had a number of productive conversations on ways to improve the regulatory process at FDA. As I said 

at the start of this process, we need to reauthorize the user fees 

by the end of June to assure continuity at the FDA and increase 

predictability for America’s medical innovators and job creators. We 

still have work to do but because of the bipartisan commitment 

from members on both sides of the aisle, I am convinced that we 

are on track to do that, and I appreciate all the hard work, particularly from the staff as they have spent countless numbers of hours 

working to make sure that we can have a productive bill, and I 

yield the balance of my time to the vice chairman of the subcommittee, Dr. Burgess. 

[The prepared statement of Mr. Upton follows:] 

PREPARED STATEMENT OF HON. FRED UPTON

I’d like to thank Chairman Pitts for holding today’s hearing on the reauthorization of the Food and Drug Administration user fees and the impact of innovation 

on American patients and jobs. 

6 

Since the beginning of February, this subcommittee has held six hearings on the 

FDA. During these hearings, we’ve heard from witnesses from around the country 

on how Congress can help FDA become more predictable, consistent and transparent and how that will foster innovation here in the United States. I have heard 

this back home from my constituents too. 

I think we all agree that fostering innovation helps American patients and aids 

in creating American jobs. As part of our efforts to foster innovation, we need to 

fix the recent problems with the investigational device exemption approval process 

and the medical device modifications guidance document. Recent FDA policy 

changes have created major problems, and we intend to use the user fee legislative 

process to rectify them. 

I’d like to thank Ranking Member Waxman, Ranking Member Pallone, Mr. Dingell and the other Democratic members of the Energy and Commerce Committee for 

their bipartisan work on reauthorizing the user fees. During the past few months, 

we’ve had productive conversations on ways to improve the regulatory process at 

FDA. 

As I said at the start of this process, we need to reauthorize the user fees by the 

end of June to assure continuity at the FDA and increase predictability for America’s medical innovators and job creators. We still have work to do but because of 

the bipartisan commitment from members on both sides of the aisle, we are on track 

to do that. 

OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS 

Mr. BURGESS. I thank the chairman for yielding. I want to thank 

the chairmen of the full committee and subcommittee as well as 

the ranking members of the full committee and subcommittee for 

moving this legislation forward. I think the manner that this has 

been approached is one that has been constructive and certainly 

been respectful of individual member concerns. We have been sensitive to patient concerns and we are focused on finding an end 

product that is workable for the agency and for the patients that 

it serves. 

The impact of these areas, the medical device, the pharmaceutical, the biologic and generic industries of the United States 

certain reaches farther than the patients that benefit from them, 

and we will hear a lot about job creation and help to the economy, 

but the patient concerns must remain our primary focus. And these 

industries do affect commerce. They affect technology. They do affect the economy and they provide quality jobs to Americans, which 

range from the scientific to the highly skilled and technical and 

those involved in their manufacturing. 

The Food and Drug Administration has one of the most important missions of any federal agency to ensure that medical products 

are safe and effective. They are also the gateway to providing patients with products that help them maintain their health, perhaps 

help them live with a chronic condition. We have to be certain that 

that gateway does not become a bottleneck. I think there are constructive updates that can be made and I appreciate so much the 

discussion draft now being out there for all of us to reflect and offer 

our thoughts. 

Again, I want to thank the chairman for his approach to the 

process, thank our witnesses for their willingness to come before 

this committee multiple times, for the transparency that they have 

exhibited and the fact that this has come through under regular 

order and that the chairman has worked to a product which I think 

both sides of the dais can justifiably be proud, and I—— 

7 

Mr. SHIMKUS. Will the gentleman yield? 

Mr. BURGESS. Yes, I will be happy to yield. 

Mr. SHIMKUS. Thank you. I want to just take a minute and talk 

about this process and some of the reforms that are proposed and 

just make the point, especially in two areas that I have been interested in, the investigative device exemption and the 510(k) modifications. 

The attempt is really to remedy through public policy changes in 

the operation that the FDA has done in the last couple years. So 

it is an attempt to return back to a day when these two areas were 

working and we weren’t losing innovation and jobs and folks moving overseas to get these approvals. And so I hope that you all will 

when we get into that part of the discussion receive it in the attempt that we are trying to portray it. We really want to get back 

to where we don’t have this backlog and we are the innovators, we 

are the producers and we lead the world again. 

I yield back my time. 

Mr. PITTS. The chair thanks the gentleman and now recognizes 

the ranking member of the full committee, Mr. Waxman, for 5 minutes for an opening statement. 

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

Mr. WAXMAN. Chairman Pitts, thank you for holding this hearing 

today. 

Although we were not able to come to full agreement in time for 

the discussion draft released yesterday, I am pleased with the 

progress that we have made on this user fee package thus far. I 

am optimistic that we will get to full agreement soon. We all know 

how important it is to reauthorize the underlying user fee programs in a timely way. No one is served by adding controversial 

proposals to the bill. That would only serve to slow the process. 

So far, we have worked together to avoid weighing down this 

critical legislation with extraneous policies about which we cannot 

agree. This will ensure that we get the work on these critically important bills done in time. 

I am particularly hopeful about the progress we have made in 

the area of drug safety as it relates to the increasingly globalized 

supply chain. Mr. Dingell has a strong bill that has served as a 

template in this area, and I appreciate all the work that Mr. Upton 

and Mr. Pitts have done to incorporate provisions modeled on that 

bill. 

I want to note however that I continue to have strong concerns 

with respect to devices. We have all heard the increasing rhetoric 

that FDA is slowing innovation and forcing jobs abroad, but that 

does not justify the troubling provisions that could compromise patient safety that are under consideration. There are numerous examples of unsafe medical devices that have been permitted on the 

market and have caused incalculable suffering for victims. And 

that occurs under the current system with the powers FDA has 

today. Now is not the time to go backwards and take away important authorities from the FDA that it needs to help ensure the 

safety and effectiveness of devices. I will continue to oppose any adVerDate Nov 24 2008 10:27 May 30, 2013 Jkt 037690 PO 00000 Frm 00013 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 112\112-136 CHRIS
8 

dition of any provisions that would prevent FDA from doing what 

it feels necessary to protect patients from unsafe and ineffective devices. 

Let me turn now to the area of antibiotics. The discussion draft 

includes the GAIN Act, which is a good first step toward creating 

incentives for the development of new antibiotics, which we all 

agree we desperately need. I remain concerned that the bill does 

not narrowly target antibiotics that treat dangerous infections for 

which we don’t have adequate treatments. The bill should also include provisions to ensure that the efficacy of these newly developed antibiotics is preserved once they are on the market. These 

are goals we should all share and I am optimistic that we will fix 

the bill to achieve them. 

I also look forward to learning more today about the proposal put 

forward by the Infectious Disease Society of America, the Limited 

Population Antibacterial Drug, or LPAD—it sounds like a new 

technical device sold by Apple—approval mechanism. This proposal 

would establish a more rapid regulatory pathway for new antibiotics targeted at the most serious infections. 

The concept appears to have great promise at speeding important 

new antibiotics to the market, but I think we need to be assured 

that these drugs will not be inappropriately used. If we cannot get 

that assurance, we should all be concerned about moving forward 

with this kind of proposal. 

Strengthening and improving FDA is in the interest of all Americans. I look forward to continuing to work with all of my colleagues 

on this committee to reach bipartisan agreement on this critically 

important legislation, and I yield back the balance of my time. 

Mr. PITTS. The chair thanks the gentleman. 

We will now to go to panel one. We have two panels today. Our 

first panel will have two witnesses: Dr. Janet Woodcock, Director 

of the Center for Drug Evaluation and Research at the FDA; and 

Dr. Jeffrey Shuren, Director, Center for Devices and Radiological 

Health. We are happy to have both of you here today. 

Dr. Woodcock, you are now recognized for 5 minutes for your 

opening statement. 

STATEMENTS OF JANET WOODCOCK, M.D., DIRECTOR, CENTER FOR DRUG EVALUATION AND RESEARCH, U.S. FOOD 

AND DRUG ADMINISTRATION; AND JEFFREY E. SHUREN, 

M.D., J.D., DIRECTOR, CENTER FOR DEVICES AND RADIOLOGICAL HEALTH 

STATEMENT OF JANET WOODCOCK 

Dr. WOODCOCK. Thank you. Mr. Chairman, members of the subcommittee, thank you for the opportunity to testify about the three 

important drug user fee proposals that are laid out in the discussion draft. Each of three drug user fee programs is important for 

the public, and will, if enacted, impact positively on patients, industry and on biomedical innovation. 

The fifth iteration of the prescription drug user fee program contains important advances for regulatory science and patient-centered drug development as well as maintaining consistent and predictable review process for the innovator industry. The biosimilars 

9 

user fee program will support the growth of a new industry and 

will help provide more affordable biological drugs to the public. 

Both I think are very important public goals. 

The generic drug user fee program as proposed would represent 

a historic agreement to maintain a high and uniform level of drug 

quality no matter where the drug is sourced in the world. It also 

will ensure a robust and predictable path to market for generic 

drugs that should invigorate the industry. 

That said, implementation of these three new programs if enacted will create a significant body of work for the agency. We are 

eager to undertake this but we are wary of additional provisions, 

unfunded provisions. The experience after the FDA Amendments 

Act I think is illustrative. While FDA implemented the many needed safety programs that were stipulated in the Amendments Act, 

we had to miss a number of user fee goals under the prescription 

drug user fee program and slow down our review process, and 

while that was a worthy tradeoff, we have to recognize that any additional provisions will have tradeoffs on workload. 

I understand that there are other policy issues and development 

challenges that are unaddressed by the user fee proposals, which 

are really about process and procedures, and I am happy to answer 

questions about these issues and I really look forward to the discussion. Thank you. 

[The prepared statement of Dr. Woodcock follows:] 

10 


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~#r~l!l:.(). 

STATEMENT 

OF 

JANET WOODCOCK, M.D. 

DIRECTOR 

CENTER FOR DRUG EVALUA nON AND RESEARCH 

FOOD AND DRUG ADMINISTRATION 

DEPARTMENT OF HEALTH AND HUMAN SERVICES 

BEFORE THE 

COMMITTEE ON ENERGY AND COMMERCE 

SUBCOMMITTEE ON HEALTH 

U.S. HOUSE OF REPRESENTATIVES 

Food and Drug Administration 

Silver Spring, MD 20993 

"FDA USER FEES 2012: HOW INNOVA nON HELPS PATIENTS AND JOBS" 

April 18,2012 

Release Only Upon Delivery 
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INTRODUCTION 

Mr. Chairman and Members of the Subcommittee, I am Dr. Janet Woodcock, Director of 

the Center for Drug Evaluation and Research (CDER) at the Food and Drug Administration 

(FDA or the Agency), which is part of the Department of Health and Human Services (HHS). 

Thank you for the opportunity to be here today to discuss the fifth reauthorization of the 

Prescription Drug User Fee Act (PDUFA),l also referred to as PDUFA V, as well as the 

negotiated recommendations for a generic drug user fee program and a biosimilar user fee 

program. I will also discuss a number of other important issues facing FDA, including 

expediting access to new therapies, the renewal oflegislation to promote pediatric drug testing, 

securing the supply chain for prescription drug products, the regulation of medical gases, efforts 

to facilitate the development of antibacterial drug products, as well as update you on actions the 

Agency is taking to address the ongoing problem of drug shortages. 

Background on PDUFA 

FDA considers the timely review of the safety and effectiveness of New Drug 

Applications (NDA) and Biologics License Applications (BLA) to be central to the Agency's 

mission to protect and promote the public health. Prior to enactment ofPDUFA in 1992, FDA's 

review process was understaffed, unpredictable, and slow. FDA lacked sufficient staff to 

perform timely reviews, or develop procedures and standards to make the process more rigorous, 

consistent, and predictable. Access to new medicines for U.S. patients lagged behind other 

countries. As a result of concerns expressed by both industry and patients, Congress enacted 

I PDUF A was enacted in 1992 and authorizes FDA to collect fees from companies that produce certain human drug 

and biological products. Industry agrees to pay fees to help fund a portion of FDA's drug review activities, while 

FDA agrees to overall performance goals, such as reviewing a certain percentage of applications within a particular 

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PDUF A, which provided the added funds through user fees that enabled FDA to hire additional 

reviewers and support staff and upgrade its information technology systems. At the same time, 

FDA committed to complete reviews in a predictable time frame. These changes revolutionized 

the drug approval process in the United States and enabled FDA to speed the application review 

process for new drugs, without compromising the Agency's high standards for demonstration of 

safety, efficacy, and quality of new drugs prior to approval. 

Three fees are collected under PDUF A: application fees, establishment fees, and product 

fees. An application fee must be submitted when certain NDAs or BLAs are submitted. Product 

and establishment fees are due annually. The total revenue amounts derived from each of the 

categories-application fees, establishment fees, and product fees-are set by the statute for each 

fiscal year (FY). PDUFA permits waivers under certain circumstances, including a waiver of the 

application fee for small businesses and orphan drugs. 

Of the total $931,845,581 obligated in support of the process for the review of human 

drug applications in FY 2010, PDUFA fees funded 62 percent, with the remainder funded 

through appropriations. 

PDUF A Achievements 

PDUFA has produced significant benefits for public health, providing patients faster 

access to over 1,500 new drugs and biologics, since enactment in 1992, including treatments for 

cancer, infectious diseases, neurological and psychiatric disorders, and cardiovascular diseases. 

In FY 2011, FDA approved 35 new, groundbreaking medicines, including two treatments for 

hepatitis C, a drug for late-stage prostate cancer, the first drug for Hodgkin's lymphoma in 30 

years, and the first drug for lupus in 50 years. This was the second highest number of annual 

time frame. The current legislative authority for PDUFA expires on September 30, 2012. On January 13,2012, 

HHS Secretary Kathleen Sebelius transmitted recommendations to Congress for the next reauthorization ofPDUFA. 
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approvals in the past 10 years, surpassed only by 2009. Of the 35 innovative drugs approved in 

FY 20 II, 34 met their PDUF A target dates for review. 

Substantially Reduced Review Times 

PDUF A provides FDA with a source of stable, consistent funding that has made 

possible our efforts to focus on promoting innovative therapies and help bring to market critical 

products for patients. 

According to researchers at the Tufts Center for the Study of Drug Development, the time 

required for the FDA approval phase of new drug development (i.e., time from submission until 

approval) has been cut since the enactment of PDUF A in 1992, from an average of 2 years for 

the approval phase at the start ofPDUFA to an average of 1.1 years more recently. 2 

FDA aims to review priority drugs more quickly, in six months vs. 10 months for 

standard drugs. Priority drugs are generally targeted at severe illnesses with few or no available 

therapeutic options. FDA reviewers give these drugs priority attention throughout development, 

working with sponsors to determine the most efficient way to collect the data needed to provide 

evidence of safety and effectiveness. 

Reversal afthe "Drug Lag" 

Importantly, PDUFA has led to the reversal of the drug lag that prompted its creation. 

Since the enactment ofPDUFA, FDA has steadily increased the speed of Americans' access to 

important new drugs compared to the European Union (EU) and the world as a whole. Of the 35 

innovative drugs approved in FY 2011, 24 (almost 70 percent) were approved by FDA before 

any other regulatory agency in the world, including the European Medicines Agency. Of 57 

2 Milne, Christopher-Paul (2010). PDUFA and the Mission to Both Protect and Promote Public Health 

[PowerPoint slides]. Presentation at the FDA PDUFA Public Meeting, Rockville, MD. 

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novel drugs approved by both FDA and the EU between 2006 and 2010,43 (75 percent) were 

approved first in the United States. 

Figure 1 below shows that since the late 1 990s, the United States has regularly led the 

world in the first introduction of new active drug substances? Preliminary data show that in 

2011, over half of all new active drug substances were first launched in the United States. 

Figure 1. U.S. Share of New Active Substances (NAS) First Launched on the World Market 

70% ~~"~."-"."""-""-~~~-. 

60% 

50% 

40% 

30% 

20% 

10% 

0% 

Year ofNAS First Launch Worldwide 

Tn recent years, FDA's drug review times also have been. on average, significantly faster 

than those in the EU. It is difficult to compare length of approvals for FY 2011, because many 

of the drugs approved in the United States have not yet been approved in the EU. A comparison 

of drugs approved in the United States and the EU between 2006 and 2010 is illustrative, 

however. For priority drugs approved between 2006 and 2010, FDA's median time to approval 

was six months (183 days), more than twice as fast as the EU, which took a median time of 13.2 

months (403 days). For standard drug reviews, FDA's median time to approval was 13 months 

(396 days). 53 days faster than the EU time of 14.7 months (449 days). 

3 Scrip NCE Review/Scrip Yearbook/Scrip Magazine (1982 -2005), PharmaProjects R&D Annual Review (2006-

2010). New active substances include novel chemical or biological substances not previously approved to treat any 

disease. There is a close, but not complete overlap, between new active substances and new molecular entities: new 

active substances exclude radiopharmaceuticals. 
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A recent article in the journal Health Affairs also compared cancer drugs approved in the 

United States and EU from 2003 through 2010. Thirty-five cancer drugs were approved by the 

United States or the EU from October 2003 through December 20 I O. Of those, FDA approved 

32-in an average time of8.6 months (261 days). The EU approved only 26 of these products, 

and its average time was 12.2 months (373 days). This difference in approval times is not due to 

safety issues with these products. All 23 cancer drugs approved by both agencies during this 

period were approved first in the United States. 4 

Speeding Access fo New Therapies 

PDUF A funds help support a number of existing FDA programs to expedite the approval 

of certain promising investigational drugs, and also to make them available to the very ill before 

they have been approved for marketing, without unduly jeopardizing patient safety. 

The most important of these programs are Accelerated Approval, Fast Track, and Priority 

Review. In 1992, FDA instituted the Accelerated Approval process, which allows earlier 

approval of drugs that treat serious or life-threatening diseases and that fill an unmet medical 

need based on a surrogate endpoint that is reasonably likely to predict clinical benefit but is not 

fully validated to do so, or, in some cases, an effect on a clinical endpoint other than survival or 

irreversible morbidity. A surrogate endpoint is a marker-a laboratory measurement, or physical 

sign-that is used in clinical trials as an indirect or substitute measurement for a clinically 

meaningful outcome, such as survival or symptom improvement. For example, viral load is a 

surrogate endpoint for approval of drugs for the treatment of HIV I AIDS. The use of a surrogate 

endpoint can considerably shorten the time to approval, allowing more rapid patient access to 

promising new treatments for serious or life-threatening diseases. Accelerated Approval is given 

4 "Despite Criticism Of The FDA Review Process, New Cancer Drugs Reach Patients Sooner In The United States 

Than In Europe," Samantha A. Roberts, Jeff D. Allen, and Ellen V. Sigal, Health Af/airs. June 20] L 

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on the condition that sponsors conduct post-marketing clinical trials to verify the anticipated 

clinical benefit. 

Over 80 new products have been approved under Accelerated Approval since the 

program was established, including 29 drugs to treat cancer, 32 to treat HIV, and 20 to treat other 

conditions such as pulmonary arterial hypertension, Fabry disease, and transfusion-dependent 

anemia. Three of the 30 new molecular entities (NMEs) and new BLAs approved in 2011 in 

CDER were approved under Accelerated Approval. Corifact, the first treatment approved for a 

rare blood-clotting disorder, also was approved under Accelerated Approval in FDA's Center for 

Biologics Evaluation and Research (CBER) on February 17, 20 II. 

Fast Track is a process designed to facilitate the development, and expedite the review, of 

drugs to treat serious or life-threatening diseases that will fill an unmet medical need. Once a 

drug receives Fast-Track designation, early and frequent communications between FDA and a 

drug company are encouraged throughout the entire drug development and review process. The 

frequency of communications ensures that questions and issues are resolved quickly, often 

leading to earlier drug approval and access by patients. For example, Zelboraf (vemurafenib) 

was given a Fast-Track designation because it had the potential to improve overall survival in 

patients with melanoma, the most dangerous type of skin cancer. Because of convincing early 

findings with this drug. FDA scientists worked proactively with the sponsor during drug testing 

to encourage early submission of the application. FDA approved Zelborafin 2011 to treat 

patients with late-stage (metastatic) or unresectable (cannot be removed by surgery) melanoma. 

In 1992, under PDUF A, FDA agreed to specific goals for improving drug review times 

and created a two-tiered system of review times-Priority Review and Standard Review. FDA 

aims to review priority drugs more quickly. in six months versus 10 months for standard drugs. 

Priority review designation is given to drugs that offer major advances in treatment, or provide a 

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treatment where no adequate therapy exists, while Standard Review is applied to drugs that offer 

at most only minor improvement over existing marketed therapies. FDA reviewers give Priority 

Review drugs priority attention throughout development, working with sponsors to determine the 

most efficient way to collect the data needed to provide evidence of safety and effectiveness. 

For example, on January 31, 2012, FDA approved Kalydeco (ivacaftor) to treat patients age 6 or 

older with Cystic Fibrosis (CF) and who have a specific genetic defect (0551D mutation), after a 

Priority Review. CF occurs in approximately 30,000 children and adults in the United States. 

The 0551D mutation occurs in approximately 4 percent of patients with CF, totaling 

approximately 1,200 patients in the United States. CF is a serious inherited disease that affects 

the lungs and other organs in the body, leading to breathing and digestive problems, trouble 

gaining weight, and other problems. There is no cure for CF, and despite progress in the 

treatment of the disease, most patients with CF have shortened life spans and do not live beyond 

their mid-30's. After the results of studies ofivacaftor showed a significant benefit to patients 

with CF with the 0551 D mutation, ivacaftor was reviewed and approved by FDA in 

approximately three months-half of the Priority Review period. Ivacaftor is the first medicine 

that targets the underlying cause ofCF; to date, therapy has aimed at treating symptoms or 

complications of the disease. 

FDA also recognizes circumstances in which there is public health value in making 

products available prior to marketing approval. A promising but not yet fully evaluated 

treatment may sometimes represent the best choice for individuals with serious or lifethreatening diseases who lack a satisfactory therapy. 

FDA allows for access to investigational products through multiple mechanisms. Clinical 

trials are the best mechanism for a patient to receive an investigational drug, because they 

provide a range of patient protections and benefits and they maximize the gathering of useful 

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information about the product, which benefits the entire patient population. However, there are 

times when an individual cannot enroll in a clinical trial. In some cases, the patient may gain 

access to an investigational therapy through one of the alternative mechanisms, and FDA's 

Office of Special Health Issues assists patients and their doctors in this endeavor. 

We are committed to using these programs to speed therapies to patients while upholding 

our high standards of safety and efficacy. Balancing these two objectives requires that we 

continue to evaluate our use of the tools available to us and consider whether additional tools 

would be helpful. We are eager to work with Congress in this area, and we note that several of 

the enhancements proposed for PDUF A V are aimed at expediting the availability of new 

therapies and providing FDA the scientific understanding necessary to modernize and streamline 

our regulatory process. 

Providing Guidance to Industry 

Increased resources provided by user fees have enabled FDA to provide a large body of 

technical guidance to industry that clarified the drug development pathway for many diseases, 

and to meet with companies during drug development to provide critical advice on specific 

development programs. In the past five years alone, FDA has held over 7,000 formal meetings 

with drug sponsors within a short time after a sponsor's request. Innovations in drug 

development are being advanced by many new emerging companies as well as more established 

ones, and new sponsors may need, and often seek, more regulatory guidance during 

development. In FY 2009 through FY 2011, more than halfofthe meetings FDA held during 

drug development were with companies that had no approved product on the U.s. market. 

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Weighing Benefit and Risk 

It should be noted that FDA assesses the benefit-risk of new drugs on a case-by-case 

basis, considering the degree of unmet medical need and the severity and morbidity of the 

condition the drug is intended to treat. This approach has been critical to increasing patient 

access to new drugs for cancer and rare and other serious diseases, where existing therapies have 

been few and limited in their effectiveness. Some of these products have serious side effects but 

they were approved because the benefit outweighed the risk. For example, in March oflast year, 

FDA approved Yervoy (ipilimumab) for the treatment of unresectable or metastatic melanoma. 

Yervoy also poses a risk of serious side effects in 12.9 percent of patients treated, including 

severe to fatal autoimmune reactions. However, FDA decided that the benefits ofYervoy 

outweighed its risks, especially considering that no other melanoma treatment has been shown to 

prolong a patient's life. 

As discussed in more detail below, PDUF A V will enable FDA to develop an enhanced, 

structured approach to benefit-risk assessments that accurately and concisely describes the 

benefit and risk considerations in the Agency's drug regulatory decision-making. 

Challenges for the Current Drug Program 

Although we can report many important successes with the current program, new 

challenges have also emerged that offer an opportunity for further enhancement. While new 

authorities from the Food and Drug Administration Amendments Act of2007 (FDAAA) have 

strengthened drug safety, they have put strains on FDA's ability to meet premarket review 

performance goals and address post-market review activities. In addition, there has been a 

significant increase in the number of foreign sites included in clinical trials to test drug safety 

and effectiveness, and an increase in the number of foreign facilities used in manufacturing new 

drugs for the U.S. market. While foreign sites can play an important role in enabling access to 

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new drugs, the need to travel much farther to conduct pre-approval inspections for clinical trials 

and manufacturing sites overseas has created additional challenges for completion of FDA's 

review within the existing PDUF A review performance goals, while at the same time trying to 

communicate with sponsors to see if identified issues can be resolved before the review 

performance goal date. 

Despite these challenges, FDA has maintained strong performance in meeting the 

PDUFA application review goals, with the exception of a dip in FY 2008-09, when staff 

resources were shifted within the discretion afforded FDA to ensure timely implementation of all 

the new FDAAA provisions that affected activities in the new drug review process. Recent 

performance data show that FDA has returned to meeting or exceeding goals for review of 

marketing applications under PDUFA. This is shown in Figure 3. 

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COER data alOof 1213112011. reflect aggregate performance ror all NDAs, BLAs, and 

SIJ,,,,,If • ..,.,.,,,t.: based on month oftoe PDUFA 

However, FDA wants to meet not only the letter, but also the spirit of the PDUFA 

program. That is, we want to speed patient access to drugs shown to be safe and effective for the 

indicated uses while also meeting our PDUF A goals. 

The NDAIBLA approval phase of drug development is reported to have the highest 

success rate of any phase of drug development. That is, the percentage of drugs that fail after the 

sponsor submits an NDAIBLA to FDA is less than the percentages that fail in preclinical 

development and in each phase of clinical development. At the same time, it is critical to our 

public health mission that we work with industry and other stakeholders to take steps to reduce 

uncertainty and increase the success of all phases of drug development. We must leverage 

advances in science and technology to make sure that we have the knowledge and tools we need 

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to rapidly and meaningfully evaluate medical products. The science of developing new tools, 

standards, and approaches to assess the safety, efficacy, quality, and performance of FDAregulated products-known as regulatory science-is about more than just speeding drug 

development prior to the point at which FDA receives an application for review and approval. It 

also gives us the scientific tools to modernize and streamline our regulatory process. With so 

much at stake for public health, FDA has made advances in regulatory science a top priority. 

The Agency is both supporting mission-critical science at FDA and exploring a range of new 

partnerships with the National Institutes of Health (NIH) and academic institutions to develop 

the science needed to maximize advances in biomedical research and bring the development and 

assessment of promising new therapies and devices into the 21 st century. With this effort, FDA 

is poised to support a wave of innovation to transform medicine and save lives. 

For example, FDA is working to improve the science behind certain clinical trial designs. 

Recent advances in two clinical trial designs-called non-inferiority and adaptive designs-have 

required FDA to conduct more complex reviews of clinical trial protocols and new marketing 

applications. Improving the scientific bases of these trial designs should add efficiency to the 

drug review process, encourage the development of novel products, and speed new therapies to 

patients. 

FDA also has taken steps to help facilitate the development and approval of safe and 

effective drugs for Americans with rare diseases. Therapies for rare diseases-those affecting 

fewer than 200,000 people in the United States-represent the most rapidly expanding area of 

drug development. Although each disease affects a relatively small popUlation, collectively, rare 

diseases affect about 25 million Americans. Approximately one-third of the NMEs and new 

biological products approved in the last five years have been drugs for rare diseases. Because of 

the small numbers of patients who suffer from each disease, FDA often allows non-traditional 

approaches to establishing safety and effectiveness. For example, FDA approved Voraxaze 

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(glucarpidase) in January 2012 to treat patients with toxic methotrexate levels in their blood due 

to kidney failure, which affects a small population of patients each year. Methotrexate is a 

commonly used cancer chemotherapy drug normally eliminated from the body by the kidneys. 

Patients receiving high doses of methotrexate may develop kidney failure. Voraxaze was 

approved based on data in 22 patients from a single clinical trial, which showed decreased levels 

of methotrexate in the blood. Prior to the approval ofVoraxaze, there were no effective 

therapies for the treatment of toxic methotrexate levels in patients with renal failure. 

PDUFA Reauthorization 

In PDUFA IV, Congress directed FDA to take additional steps to ensure that public 

stakeholders, including consumer, patient, and health care professional organizations, would 

have adequate opportunity to provide input to the reauthorization and any program enhancements 

for PDUF A V. Congress directed the Agency to hold an initial public meeting and then to meet 

with public stakeholders periodically, while conducting negotiations with industry to hear their 

views on the reauthorization and their suggestions for changes to the PDUF A performance goals. 

PDUF A IV also required that minutes from negotiation sessions held with industry be made 

pUblic. 

Based on a public meeting held in April 2010, input from a public docket, and the 

Agency's own internal analyses of program challenge areas, FDA developed a set of potential 

proposed enhancements for PDUFA V and in July 2010, began negotiations with industry and 

parallel discussions with public stakeholders. These discussions concluded in May 2011 and we 

held a public meeting on October 24, 20 II, where we solicited comments on the proposed 

recommendations. We also opened a public docket for comments. We considered these 

comments, and on January 13, 2012, we transmitted the final recommendations to Congress. 

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We are very pleased to report that the enhancements for PDUFA V address many of the top 

priorities identified by public stakeholders, the top concerns identified by industry, and the most 

important challenges identified within FDA. PDUF A V enhancements include a review program 

for New Drug Applications, New Molecular Entities, and Original Biologics License 

Applications, regulatory science enhancements to expedite drug development, risk-benefit 

assessment enhancements, FDA drug safety system enhancement and modernization, requiring 

electronic submissions and standardization of electronic application data. a user fee increase, and 

enhancements for a modified inflation adjuster and additional evaluations of the workload 

adjuster. 

Generic Drug User Fees 

As a result of the Drug Price Competition and Patent Term Restoration Act of 1984, 

commonly known as Hatch-Waxman Amendments passed by Congress more than a quarter of a 

century ago, America's generic drug industry has been developing, manufacturing, and 

marketing-and FDA has been reviewing and approving-lower-cost versions of brand-name 

drugs. This legislation and the industry it fostered has been a true public health success. Last 

year, approximately 78 percent of the more than 3 billion new and refilled prescriptions 

dispensed in the United States were filled with generics. In the last decade alone, generic drugs 

have provided more than $931 billion in savings to the nation's health care system.s 

This success, however, also has come to represent a significant regulatory challenge, and 

delays in approvals of generic drugs have emerged as a major concern for the generics industry, 

FDA, consumers, and payers alike. Unlike the brand manufacturers who pay fees under 

PDUF A, the generic industry does not pay a user fee to support FDA activities related to its 

5 "An Economic Analysis of Generic Drug Usage in the U.S." Independent Analysis by IMS Health, Sept. 2011, 

hltp:llfJl!haonline.orrjsitesldefi:JUitlfilesIGPhA%20IMS%20Studv%2OWEB%20Sep20%20ii.pd(. 

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applications. Over the last several years, the time it takes for FDA to approve a generic drug has 

nearly doubled as FDA's resources have not kept pace with an increasing number of Abbreviated 

New Drug Applications (ANDA) and other submissions related to generic drugs. The number of 

generic drug submissions sent annually to FDA has grown rapidly, reaching another record high 

this year, including nearly 1,000 ANDAs. Drug Master Files6 have grown at a comparable pace 

and have reached similar heights. The current backlog of applications pending review is 

estimated to be over 2,500. The current median time to approval is approximately 31 months, 

though it should be noted that this includes time the application is back with the sponsor to 

answer any questions FDA may have about the application. 

The regulatory challenge of ensuring safe, high-quality generic drugs includes inspecting 

manufacturing facilities, where the challenge is not just one of numbers but also of geography. 

To keep pace with the growth of the generic drug industry, FDA has had to conduct more 

inspections as the number of facilities supporting those applications has also increased, with the 

greatest increase coming from foreign facilities. Currently, the number of foreign Finished 

Dosage Form (FDF)7 manufacturers exceeds the number found in the United States. The generic 

industry is also experiencing significant growth in India and China, a trend expected to continue. 

Foreign inspections represent a significant challenge and require significant resources. 

The generic drug user fee agreement is designed to address the regulatory challenges 

mentioned above in an affordable manner. The annual fee total proposed represents 

approximately one half of 1 percent of generic drug sales. This modest cost should be offset by 

benefits received by the industry, as faster review times will bring products to market sooner. 

6 Drug Master Files are widely used to provide FDA with information about the drug substance, also known as the 

active pharmaceutical ingredient (API). 

7 An FDF is the final drug product (e.g. tablet, capsule). An FDF is made up of both APl(s) and any inactive 

excipients. 

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Overview of/he Proposed Generic Drug User Fee Program 

To develop recommendations for a generic drug user fee effective beginning FY 2013, 

FDA conducted a process that involved the generic drug industry and public stakeholders. In 

addition to the negotiation sessions with industry trade associations, there were numerous public 

stakeholder meetings open to all, including industry, patient advocates, consumer advocates, 

health care professionals, and scientific and academic experts. The final agreement and the goals 

FDA and industry have agreed to were transmitted to Congress on January 13, 2012. 

The Generic Drug User Fee Act (GDUFA) proposal, as negotiated, is aimed at putting 

FDA's generic drugs program on a firm financial footing and providing the additional resources 

necessary to ensure timely access to safe, high-quality, affordable generic drugs. The proposal 

focuses on quality, access, and transparency. Quality means ensuring that companies, foreign or 

domestic, that participate in the U.S. generic drug system are held to the same consistent highquality standards and that their facilities are inspected biennially, using a risk -based approach, 

with foreign and domestic inspection frequency parity. Access means expediting the availability 

of low-cost, high-quality generic drugs by bringing greater predictability and timeliness to the 

review of ANDAs, amendments, and supplements. Transparency means requiring the 

identification of facilities involved in the manufacture of generic drugs and associated APls, and 

improving FDA's communications and feedback with industry to expedite product access and 

enhance FDA's ability to protect Americans in our complex global supply environment. 

The additional resources called for under the agreement will provide FDA with the ability 

to perform critical program functions that could not otherwise occur. With the adoption of user 

fees and the associated savings in development time, the overall expense of bringing a product to 

market is expected to decline. The program is expected to provide significant value to small 

companies and first-time entrants to the generic market. In particular, these companies will 

benefit significantly from the certainty associated with performance review metrics that offer the 

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potential to dramatically reduce the time needed to commercialize a generic drug, when 

compared to pre-GDUF A review times. 

In addition, the variety of funding sources for the program will ensure that participants in 

the generic drug industry, whether FDF manufacturers or API 8 manufacturers, whether foreign 

or domestic, appropriately share the financial expense and benefits of the program. The broad 

range of funding sources, including and across facility and application types, as well as the large 

number of each, ensures that individual fees remain reasonable and significantly lower than 

associated branded drug fees. 

As in all ofFDNs other medical product user fee programs, under the proposed generic 

drug user fee program, user fee funding would supplement appropriated funding to ensure 

sufficient resources for the Agency's generic drug review program, and guarantees are in place 

to ensure that the user fees are supplemental to annual appropriations in the budget. 

Biosimilars User Fees 

A successful biosimilars review program within FDA will spark the development of a 

new segment of the biotechnology industry in the United States. The Biologics Price 

Competition and Innovation Act (BPei Act) of2009, which was enacted as part of the 

Affordable Care Act of201O, established a new abbreviated approval pathway for biological 

products shown to be "biosimilar to" or "interchangeable with" an FDA-licensed biological 

product. With this new abbreviated approval pathway, a biosimilar biologic can be approved by 

demonstrating, among other things, that it is highly similar to a reference biological product 

already licensed by FDA. Development ofbiosimilars is expected to be less risky, less costly, 

and take less time; therefore, approved biosimilars are expected to be less expensive than the 

, An API is the drug substance responsible for the therapeutic effect (e.g. the chemical aspirin that is combined with 

excipients to produce the FDF aspirin tablet). 

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reference product. This program will provide significant benefits for patients, making available 

more affordable treatments that clinicians will know are biosimilar or interchangeable. The 

development of this new market segment will expand the opportunities for technical innovation 

and job growth. 

Background 

A biosimilar is a biological product that is highly similar to a U.S.-licensed reference 

product, notwithstanding minor differences in clinically inactive components, and for which 

there are no clinically meaningful differences between the biosimilar product and the reference 

product in terms of the safety, purity, and potency of the product. 

Under the transition provisions in the BPCI Act, user fees for a biosimilar biological 

product are assessed under PDUF A. Accordingly, currently, user fees for biological products are 

the same, regardless of whether the BLA is submitted under the new, abbreviated biosimilar 

pathway or under the previously existing approval pathway for biological products. However, 

PDUFA IV expires on September 30, 2012, and the BPCI Act directs FDA to develop 

recommendations for a biosimilars user fee program for fiscal years 2013 through 2017. To 

develop these recommendations, FDA consulted with industry and public stakeholders, including 

patient advocates, consumer advocates, health care professionals, and scientific and academic 

experts, as directed by Congress. The final recommendations were transmitted to Congress on 

January 13,2012. 

Program Funding and Metrics 

The proposed biosimilars user fee program for FY 2013 to 2017 addresses many of the 

top priorities identified by public and industry stakeholders and the most important 

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challenges identified by FDA. The proposed biosimilars user fee program is similar to the 

PDUF A program in that it includes fees for marketing applications, manufacturing 

establishments, and products. However, there are some differences because of the nascent state 

of the biosimilars industry in the United States. For example, there are no 

currently marketed biosimilar biological products; accordingly, the recommended biosimilars 

user fee program includes fees for products in the development phase to generate fee revenue in 

the near-term and to enable sponsors to have meetings with FDA early in the development of 

biosimilar biological product candidates. 

As in all of FDA's medical product user fee programs, the proposed biosimilars user fee 

program supplements appropriated funding to ensure sufficient resources for the Agency's 

review programs. Under the proposed biosimilars user fee program, FDA would be authorized 

to spend biosimilars user fees on Agency activities related to the review of submissions in 

connection with biosimilar biological product development, biosimilar biological product 

applications, and supplements. This would include activities related to biosimilar biological 

product development meetings and investigational new drug applications (lNDs). It would also 

include development of the scientific, regulatory, and policy infrastructure necessary for review 

ofbiosimilar biological product applications, such as regulation and policy development, related 

to the review ofbiosimilar biological product applications, and development of standards for 

biological products subject to review and evaluation. 

The biosimilars user fee program would support FDA activities at the application stage, 

such as review of advertising and labeling prior to approval of a biosimilar biological product 

application or supplement; review of required post-marketing studies and post-marketing studies 

that have been agreed to by sponsors as a condition of approval; the issuance of action letters that 

communicate decisions on biosimilar biological product applications; and inspection of 

biosimilar biological product establishments and other facilities undertaken as part of FDA's 

20 
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78635.021

review of pending biosimilar biological product applications and supplements (but not 

inspections unrelated to the review ofbiosimilar biological product applications and 

supplements). Finally, it would support some activities at the post-approval stage, such as postmarketing safety activities, with respect to biologics approved under biosimilar biological 

product applications or supplements. 

Best Pharmaceuticals for Children Act !Pediatric Research Equity Act 

Background 

The Best Pharmaceuticals for Children Act (BPCA), enacted in 1997 as part of the Food 

and Drug Administration Modernization Act (FDAMA) and reauthorized in 2002 and 2007, 

provides incentives to manufacturers who voluntarily conduct studies of drugs in children. This 

law provides six months of additional exclusivity for a drug (active moiety), in return for 

conducting pediatric studies in response to a written request (WR) issued by FDA. To qualifY 

for pediatric exclusivity, the pediatric studies must "fairly respond" to a WR issued by FDA that 

describes the needed pediatric studies (including, for example, indications to be studied or 

number of patients). The Patient Protection and Affordable Care Act (Affordable Care Act) 

extended availability of pediatric exclusivity to biological products but, due to the recent nature 

of this change, no biological product has received pediatric exclusivity to date. 

The Pediatric Research Equity Act (PREA), enacted in 2003, works in concert with 

BPCA. PREA provides FDA the authority to require pediatric studies under certain conditions. 

PREA requires pediatric assessments of drugs and biological products for the same indications 

previously approved or pending approval, when the sponsor submits an application or 

supplemental application to FDA for a new indication, new dosing regimen, new active 

ingredient, new dosage form, or new route of administration. 

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78635.022

Both BPCA and PREA expire September 30, 2012, ifnot reauthorized. 

Needfor Pediatric Information 

Before enactment ofBPCA in 1997, approximately 80 percent of medication labels in the 

Physician's Desk Reference did not have pediatric-use infonnation-data to establish the correct 

dose for pediatric patients or confirm safety or efficacy in the pediatric population. All too often 

health care professionals were forced to rely on imprecise and ineffective methods to provide 

medications for children, such as adjusting dosing based on weight or crushing pills and mixing 

them in food. Pediatric patients are subject to many of the same diseases as adults and are, by 

necessity, often treated with the same drugs and biological products as adults. Inadequate dosing 

infonnation may expose pediatric patients to overdosing or underdosing. Overdosing may 

increase the risk of adverse reactions that could be avoided with an appropriate pediatric dose; 

underdosing may lead to ineffective treatment. The lack of pediatric-specific safety information 

in product labeling also means caretakers and health care professionals are unable to monitor for 

and manage pediatric-specific adverse events. In situations where younger pediatric populations 

cannot take the adult fonnulation of a product, the failure to develop a pediatric fonnulation that 

can be used by young children (e.g., a liquid or chewable tablet) also can deny children access to 

important medications. 

Success of BPCA and P REA 

Together, BPCA and PREA have generated pediatric studies on many drugs and helped 

to provide important new safety, effectiveness, and dosing information for drugs used in 

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78635.023

children. Both statutes continue to foster an environment that promotes pediatric studies and to 

build an infrastructure for pediatric trials that was previously non-existent. 

Over the past 15 years, approximately 400 drugs have been studied and labeled for 

pediatric use under these two laws. Since 1997, BPCA, the exclusivity incentive program, has 

generated labeling changes for 250 products. The labeling for 120 products has been updated to 

include new information, expanding use of the product to a broader pediatric population; the 

labeling of 29 products had specific dosing adjustments; the labeling of 69 products was changed 

to show that the products were found not to be safe and effective for children; and 55 products 

had new or enhanced pediatric safety information added to the labeling.9 

Since PREA was enacted, FDA has approved approximately 1,450 NDAs and 

supplemental NDAs that fell within the scope of PRE A (i.e., applications for new active 

ingredients, new dosage forms, new indications, new routes of administration, or new dosing 

regimens). These approvals have resulted in approximately 23 I labeling changes involving 

pediatric studies linked to PREA assessments. In addition, FDA has approved approximately 

105 BLAs and supplemental BLAs that fell within the scope of PREA. 

Examples of New Pediatric Information Generated by BPCA and PREA 

• Migraine headaches - Axert (almotriptan) was studied and labeled for age 12 years and 

older. Before enactment ofBPCA and PREA, no medications were studied and labeled 

for migraines in children. 

9 These numbers add up to a number greater than 205 because some products had more than one change to the 

labeling. 

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78635.024

• Diabetes - Apidra (insulin gluilsine recombinant) has been studied and labeled down to 

age 4 for Type I diabetes. 

• Arthritis - Actemra (tocilizumab) has been studied and labeled down to age 2 for Active 

Systemic Juvenile Idiopathic Arthritis (SJIA). 

• Pain Ofirmev/acetaminophen injection has been studied and labeled down to age 2 for 

mild-to-moderate pain/moderate-to-severe pain with adjunctive opioid analgesics and 

reduction of fever. 

• Brain Tumors - Afinitor (everolimus) has been studied and labeled down to age 3 for 

subependymal giant cell astrocytoma (SEGA) associated with tuberous sclerosis (TS). 

BPCA and PREA require review of adverse event reports on a regular basis. To date, 

adverse event reviews have been presented to the Pediatric Advisory Committee (PAC) for 129 

products. In addition, as directed by BPCA, FDA has worked with NIH and the Foundation for 

the National Institutes of Health (FNIH) to facilitate the study of off-patent drugs not eligible for 

exclusivity under BPCA. 

Despite the successes of these two programs, there is more work to be done. There is still a 

large number of drug and biological products that are inadequately labeled for children. More 

broadly, long-term safety and effects on growth, learning, and behavior are critically important to 

the safe use of certain medications and continue to be understudied. Due to technical challenges 

and the need for sequential studies, slow but deliberate progress is being made studying the 

safety and efficacy of approved therapies used to treat neonates (age birth to one month). These 

issues are still of concern, as it is this youngest population that is undergoing marked physiologic 

and developmental changes, which are affected by drug therapies. 

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78635.025

FDA welcomes the opportunity to work with Congress to ensure that the benefits of an 

incentive program can continue, in conjunction with FDA's authority to require mandatory 

studies, as Congress considers the reauthorization of the BPCA and PREA programs. 

Securing the Supplv Chain for Prescription Drugs 

As FDA has previously testified before this Committee, the increasingly complex drug 

supply chain, from raw source materials to finished products for consumers, presents multiple 

opportunities for the product to be contaminated, diverted, counterfeited, or otherwise 

adulterated. Our efforts to secure the supply chain both in the United States and abroad include 

minimizing risks that arise anywhere along the supply chain continuum, from sourcing a 

product's ingredients through the product's manufacture, storage, transit, sale, and distribution. 

A breach at any point in this continuum could lead to dangerous and even deadly outcomes for 

consumers. Supply chain safety threats also affect manufacturers' bottom lines due to costs 

associated with both recalls and decreased public confidence. 

Counterfeit drugs also raise significant public health concerns, because their safety and 

effectiveness is unknown. A counterfeit drug could be made up of a substance that is toxic to 

patients. But even a non-toxic counterfeit drug with a substitute or no active ingredient could 

prove harmful to patients who take it, thinking that they are taking a lifesaving or life-sustaining 

medication. In 2003, over $20 million in illegally imported and counterfeit Lipitor (atorvastatin 

calcium), a popular cholesterol-lowering drug, was distributed throughout the United States. The 

source and manufacturing methods of the product were unknown and had the potential to 

endanger patients. Just last month, FDA alerted 19 medical practices in three states that they had 

purchased unapproved drugs, which may have included a counterfeit version of a widely used 

cancer drug, from a foreign supplier and distributed through a wholesaler in the United States. 

25 
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78635.026

While labeled as Avastin (bevacizumab), the imported injectable vials contained none of the 

medicine's active ingredient. This fake product presents a major public health issue, because 

some patients may not have received needed therapy. 

Implementation of a system to fully track and trace prescription drugs throughout the 

supply chain would help in combating incidents like the counterfeit Avastin example. Currently 

there is no complete record of all parties who have been involved with the distribution of a 

product after it leaves the manufacturer until it reaches the hands of the patient. This leaves 

multiple opportunities for counterfeit, adulterated, stolen, or otherwise violative products to be 

introduced into the supply chain. 

While the Food and Drug Administration Amendments Act of2007 (FDAAA) gives 

FDA authority to set standards for identification, validation, authentication, and tracking and 

tracing of prescription drugs, explicit authority to require and enforce the implementation of a 

national track-and- trace system throughout the supply chain is lacking. In March 2010, FDA 

issued a final guidance for industry, which describes the Agency's current thinking for 

standardized numerical identification (also known as serialization) for prescription drug 

packages. This guidance was the first of several steps that FDA intends to take to implement 

these provisions ofFDAAA. FDA continues to work on developing these standards and held a 

Track and Trace Public Workshop in February 2011 to obtain public input on the necessary 

elements to achieve effective authentication and the desirable attributes of a track-and-trace 

system. Providing the Agency authority to require a cost-effective track-and-trace system for all 

drug products throughout the supply chain would improve the security and integrity of the drug 

supply and ensure transparency and accountability of product manufacturing and distribution, 

whether the product is manufactured domestically or internationally. 

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78635.027

FDA Regulation of Medical Gases 

Medical gases are among the most widely prescribed drugs in the United States, and 

some have been in use since before the enactment ofthe Federal Food, Drug, and Cosmetic Act 

of 1938. Medical gases are typically used to treat vulnerable patient populations, including the 

elderly and the seriously ill, in a range of health-care settings such as emergency rooms, 

intensive care units, neonatal care units, ambulance transport, and home/ambulatory use. They 

are often used in combination with other medical products, such as medical devices. 

Medical gases, including those that have been in widespread use for decades, may under 

some circumstances pose safety and efficacy concerns similar to other new drugs. These gases 

have been associated with adverse events, and in some cases have been implicated in mislabeling 

and contamination incidents that have resulted in deaths or serious injuries. Accordingly, as with 

other drugs, it is critical that the benefit associated with any given medical gas outweighs its 

risks when used in a particular patient population for a specific purpose, dose, and duration. 

Facilitating the Development of New Antibacterial Products 

Antimicrobial agents have been used in human and veterinary medicine for more than 70 

years, with tremendous benefits to both human and animal health. However, because bacteria 

are so adept at becoming resistant to antibacterial drugs, it is essential that such drugs be used 

judiciously to delay the development of resistance. Preserving the effectiveness of current 

antimicrobials and encouraging the continued development of new ones is vital to protecting 

human and animal health against infectious microbes. 

The field of antibacterial drug development is currently facing challenges because of the 

complexities in designing informative, ethical, scientifically sound, and feasible, clinical trials 

27 
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78635.028

for studying antibacterial drugs. In addition, there are challenges because of the lack of 

standardized data on the effect of treatment with antibacterial drugs in certain infections. 

FDA cannot overcome these scientific challenges alone, so we have been working to 

address these issues through guidance development, public workshops, and Advisory Committee 

meetings. We are working to provide scientifically sound guidance to industry on demonstrating 

the safety and effectiveness of new antibacterial drugs, particularly on indication-specific trial 

designs used to study a new drug. 

Although the development of new antibacterial drugs is not the entire solution to the 

important public health problem of antimicrobial resistance, it is a very important part. We are at 

a critical juncture in this field. We are in urgent need of new therapeutic options to treat the 

resistant bacteria that we currently face, and we will need new therapeutic options in the future. 

FDA will continue to work with patients, health care providers, academia, industry, and others 

within the federal government to modernize the paradigm of antibacterial drug development 

through guidance and clinical trial designs, and to seek additional solutions to the challenging 

scientific issues facing the field of antibacterial drug development. 

Drug Shortages 

In September of last year, Dr. Howard Koh, Assistant Secretary for Health at HHS, 

testified before this Subcommittee to discuss the growing problem of drug shortages. FDA and 

the Administration at large share your concern about the rising incidence of drug shortages in the 

United States and the significant and even life-threatening impact of these shortages on patients, 

and I am pleased to have the opportunity to update you on what FDA has been doing to help 

alleviate this problem. Although many of the root causes of drug shortages are beyond our 

28 
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78635.029

control, we are committed to addressing this important issue and look forward to working with 

this Subcommittee on this issue. 

Manufacturers can playa critical role in avoiding shortages by taking appropriate 

measures to reduce the risk of unplanned disruptions in supply. For example, manufacturers who 

maintain their facilities and equipment in good working order, develop contingency plans to 

minimize the effects of unanticipated problems, and work closely with FDA to resolve potential 

problems are less likely to face shortage situations. Manufacturers can also help to minimize 

drug shortages and decrease the impact of shortages by notifYing FDA as early as possible of 

situations that might lead to a drug shortage. 

When FDA learns of a potential shortage situation, we work directly with the affected 

manufacturer to help prevent the shortage or to minimize its effect on patients. This may include 

developing temporary workaround solutions to manufacturing or quality issues; consulting with 

the manufacturer to resolve the underlying problem; or helping the manufacturer find additional 

sources of raw materials. We also expedite the review of submissions by the manufacturer that 

may alleviate the drug shortage while continuing to meet safety standards, which may include 

requests to extend the expiration date of products, make manufacturing changes to increase 

capacity, use a new raw material source, or change product specifications. FDA can also use our 

regulatory discretion for a manufacturer to continue marketing a medically necessary drug, ifthe 

manufacturer can develop a method to resolve a quality issue prior to the drug's administration. 

A recent example was potassium phosphate, which is a medically necessary injectable drug 

needed for intravenous nutrition in critically ill patients. The firm found glass particles in the 

vials, posing a significant safety concern. The manufacturer was able to provide data to FDA 

showing the particles could successfully be removed with a filter. FDA then exercised 

enforcement discretion for the drug to be shipped with a letter to notifY health care professionals 

29 
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78635.030

that the filter needed to be used with the drug. This resulted in the drug being available for 

patients in a safe manner while the firm addressed the particulate issue for future production. 

In addition to working with the affected manufacturer, FDA also works with third parties 

to determine whether they can help avoid or minimize the shortage. For example, our Drug 

Shortage Staff frequently reaches out to alternate manufacturers who may be able to initiate or 

ramp-up production of the product at issue. We also expedite reviews of generic applications for 

products facing potential shortages. In certain situations, when a shortage cannot be resolved 

immediately, we will use our regulatory discretion for the temporary import of non-FDAapproved versions of critical drugs after ensuring there are no significant safety or efficacy risks 

for U.S. patients. 

For example, FDA announced on February 21, 2012, that in response to the critical 

shortage of the cancer drug Doxil (doxorubicin hydrochloride Iiposome injection) and rapidly 

declining supplies of methotrexate, FDA took proactive steps needed to increase available supply 

for patients in the United States. For Doxil, FDA exercised enforcement discretion to allow 

temporary importation of a replacement drug, Lipodox (doxorubicin hydrochloride liposome 

injection). With regard to methotrexate, FDA successfully engaged many firms to assist in 

maintaining supplies to meet all patient needs, in addition to approving a preservative-free 

methotrexate generic application, which we prioritized. 

Although our work has enabled the Agency to successfully prevent 255 potential 

shortages since the beginning of201O, drug shortages are on the rise. In response to this 

growing problem, the Administration has taken several actions to better understand and respond 

to drug shortages. On September 26,2011, FDA hosted a public meeting to gain additional 

insight into the causes and impacts of drug shortages and possible strategies for preventing or 

mitigating drug shortages. Interested parties who attended included professional societies, 

30 
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78635.031

patient advocates, industry, researchers, phannacists, and other health care professionals. A 

docket has been opened in relation to the public workshop, where comments can be received 

from the public. 

On October 31,2011, the President issued an Executive Order, 10 which directed FDA, as 

well as the Department of Justice, to take action to help further reduce and prevent drug 

shortages, protect consumers, and prevent inappropriate stockpiling and exorbitant pricing of 

prescription drugs in shortage situations. In an effort to encourage broader reporting of 

manufacturing discontinuances, the President's order directs FDA to use all appropriate 

administrative tools to require drug manufacturers to provide adequate advance notice of 

manufacturing discontinuances that could lead to shortages of drugs that are life-supporting or 

life-sustaining, or that prevent debilitating disease. The Executive Order also requires FDA to 

expand its current efforts to expedite review of new manufacturing sites, drug suppliers, and 

manufacturing changes to help prevent shortages. Under the President's Order, FDA is also 

directed to report to the Department of Justice situations in which secondary wholesalers or other 

market participants have responded to potential drug shortages by stockpiling medications or 

pricing drugs exorbitantly, so that the Department of Justice can detennine whether these actions 

are consistent with applicable law. Since the issuance of the Executive Order, FDA has 

successfully prevented 118 drug shortages. 

On the same day the President signed the Executive Order, the Administration announced 

its support for bipartisan bills (S. 296 and H.R. 2245) that would require all prescription drug 

shortages to be reported to FDA and would give FDA new authority to enforce these 

requirements. The Administration also announced that FDA would provide additional staffing 

resources to enhance the Agency's ability to prevent and mitigate drug shortages. Additionally, 

1

0 http://www. whitehouse.govithe-press-officel20 11 I 10/31 Iwe-can-t-wait-obama-administration-takes-actionreduce~prescription~drug. 

31 
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78635.032

FDA released a report entitled "A Review of FDA's Approach to Medical Product Shortages" on 

its role in monitoring, preventing, and mitigating drug shortages, which included 

recommendations to further reduce the impact of these shortages. 

In addition, FDA sent a letter to pharmaceutical manufacturers, reminding them oftheir 

current legal obligations to report certain discontinuances to the Agency, and urging them to 

voluntarily notifY FDA of all potential disruptions ofthe prescription drug supply to the U.S. 

market, even where disclosure is not currently required by law. The letters to manufacturers and 

the Executive Order have produced a significant increase in the number of potential shortages 

reported to FDA. In the 10 months preceding the Administration's actions (January through 

October 2011), the Agency received an average of approximately 10 notifications per month. In 

the four weeks following the letters to the manufacturers and issuance of the Executive Order, 

we received 61 notifications, a six-fold increase. This increased level of reporting by 

manufacturers of potential supply problems has continued into 2012. 

Also, on December 19,2011, FDA issued an Interim Final Rule (IFR) amending 

regulations relating to provisions of the Federal Food, Drug, and Cosmetic Act requiring 

manufacturers who are the sole source of certain drug products to notifY FDA at least six months 

before discontinuance of manufacture of the products. The IFR modifies the term 

"discontinuance" to include both permanent and temporary disruptions in the manufacturing of a 

drug product and clarifies the term "sole manufacturer" to mean the only manufacturer currently 

supplying the U.S. market with the drug product. The broader reporting resulting from these 

changes will enable FDA to improve its collection and distribution of drug shortage information 

to physician and patient organizations and to work with manufacturers and other stakeholders to 

respond to potential drug shortages. We requested comments on the IFR to be submitted by 

February 17,2012. 

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78635.033

Since the Executive Order was issued, FDA has continued its work to help prevent or 

mitigate drug shortages in a number of ways, including: 

• Doubling the number of staff in the Center to assist in coordination and response 

activities, as well as expediting actions (e.g., inspections) that would help to 

alleviate drug shortages; 

• Meeting with various stakeholders to discuss shared opportunities to prevent and 

mitigate shortages, including the Generic Pharmaceutical Association, the 

Pharmaceutical Research and Manufacturers of America, the Biotechnology 

Industry Organization, manufacturers, and wholesalers; 

• Exploring options for improving our drug shortage database for the tracking of 

shortages, as well as utilizing the database to develop prediction models for drug 

shortages; 

• Working with the Department of Justice, as directed in the Executive Order, 

regarding issues related to stockpiling and exorbitant pricing, including reports 

from pharmacists and other health care professionals in connection with drug 

shortages; and 

• Continuing to prioritize review applications for products that are in shortage 

situations. 

FDA is committed to doing everything in our authority to prevent and address drug 

shortages and looks forward to working with the Subcommittee on this important issue. 

33 
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78635.034

CONCLUSION 

Thank you for your interest in the important work we do at FDA. We look forward to 

working with you to continuously improve our processes to enable new products to reach 

patients faster while maintaining the safety of our drug supply. I am happy to answer questions 

you may have. 

34 
44 

Mr. PITTS. The chair thanks the gentlelady. 

Dr. Shuren, you are recognized for 5 minutes for your opening 

statement. 

STATEMENT OF JEFFREY SHUREN 

Dr. SHUREN. Mr. Chairman and members of the committee, 

thank you for the opportunity to testify today. 

As you know, on February 15th, FDA and representatives from 

the medical device industry reached an agreement on proposed recommendations for the reauthorization of the Medical Device User 

Fee Act, or MDUFA, the details of which we provided to you on 

March 16th. As required by law, we held a public meeting on 

March 28th and sought public comment on the proposal package. 

We plan to send the final package to you by the end of this week. 

When I came to CDRH in 2009, in response to concerns expressed by industry and others, we initiated a review of our device 

premarket review programs. The following year, we released two 

reports that concluded as I have testified before that we had not 

done as good a job managing the review programs as we should 

have. The number one problem we found was insufficient predictability, which was leading to inefficiencies, higher costs for industry and FDA, sometimes delays in bringing safe and effective products to market. 

In January 2011, we announced a plan with 25 specific actions 

that we would take that year to improve the predictability, consistency and transparency of our premarket programs. We announced 

additional steps since then. As of today, 30 actions have been completed or well underway. They are intended to create a culture 

change toward greater collaboration, interaction, transparency and 

the appropriate balancing of benefits and risk. They focused on assuring predictable and consistent decision making and application 

of the least-burdensome principle and implementing more efficient 

regulatory processes. 

Preliminary data indicate that the actions we have taken have 

started to bear fruit. For example, the backlog of 510(k) submissions that had been steadily increasing from 2005 to 2010 decreased for the first time last year and are continuing to decline 

in 2012. The backlog of PMA submissions that had been steadily 

increasing from 2007 to 2011 has decreased this year for the first 

time, and average total time for review appears to be decreasing 

for the first time as well. 

However, we still have much work to do. Reauthorization of 

MDUFA will provide the resources that CDRH needs to continue 

improving the device review programs and help reduce the high 

staff turnover that has adversely affected review predictability and 

consistency. The proposed MDUFA recommendations we have 

agreed upon with industry includes several important process improvements. For example, if a performance goal on a device application is missed, the MDUFA proposal would require FDA and applicants to work out a plan to complete the work on the submission, ensuring that no submission would be left behind, and requiring a new substantive interaction between FDA and an applicant 

would help assure sufficient time for the applicant to properly respond to appropriate questions. These and other proposed enhanceVerDate Nov 24 2008 10:27 May 30, 2013 Jkt 037690 PO 00000 Frm 00050 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 112\112-136 CHRIS
45 

ments are intended to achieve a shared outcome goal of reduced average total time to decision, which both we and industry believe is 

an important indicator of a successful premarket review program. 

The agreement we have reached with industry strikes a careful 

balance between what industry agreed to pay and what FDA can 

accomplish with the amount of funding proposed. However, we 

have concern that even if device user fee resources are increased 

under MDUFA III, additional new legislative mandates imposed on 

CDRH could divert resources and undermine FDA’s ability to 

achieve the new performance goals. We are very willing to work 

with Congress on initiatives that complement the user fee agreement. However, just as FDA and industry mutually agreed that 

some initiatives would be part of the formal agreement, we also 

agree that some initiatives would not be part of the agreement. Additional legislation to codify initiatives the agency and industry 

chose not to devote resources to risks diverting resources from 

achieving MDUFA goals and could undermine the user fee agreement entirely. 

When PDUFA was last reauthorized in 2007, as you heard, the 

addition of new policy-related requirements ultimately resulted in 

FDA’s drug review program having to temporarily suspend meeting 

its PDUFA review goals in order to meet the statutory mandates. 

We want to avoid such a situation so that CDRH can focus on 

meeting the ambitious new proposed MDUFA program goals and 

achieving timely patient access to safe and effective devices, which 

is an objective that we share with industry, health care practitioners, patients, consumers and you. 

Mr. Chairman, we share your goal of timely reauthorization of 

MDUFA. We look forward to working with you toward enactment 

of this critical legislation. I commend the subcommittee’s efforts 

and am pleased to answer any questions the subcommittee may 

have. Thank you. 

[The prepared statement of Dr. Shuren follows:] 

46 


78635.035

.,,,,,~"::& (' ..# DEPARTMENT OF HEALTH AND HUMAN SERVICES 

,,,~~lSTATEMENT 

OF 

JEFFREY SHUREN, M.D., J.D. 

DIRECTOR 

Food and Drug Administration 

Silver Spring, MD 20993 

CENTER FOR DEVICES AND RADIOLOGICAL HEALm 

FOOD AND DRUG ADMINISTRATION 

DEPARTMENT OF HEALTH AND HUMAN SERVICES 

BEFORE THE 

SUBCOMMITTEE ON HEALTH 

COMMITTEE ON ENERGY AND COMMERCE 

U.S. HOUSE OF REPRESENTATIVES 

"FDA USER FEES 2012: HOW INNOVATION HELPS PATIENTS AND JOBS" 

April 18, 2012 

Release Only Upon Delivery 
47 


78635.036

INTRODUCTION 

Mr. Chainnan and Members of the Subcommittee, I am Dr. Jeffrey Shuren, Director of 

the Center for Devices and Radiological Health (CDRH) at the Food and Drug Administration 

(FDA or the Agency). I am pleased to be here today to discuss reauthorization of the Medical 

Device User Fee Act, or MDUFA. 

Background on MDUF A 

The enactment in 2002 of the Medical Device User Fee and Modernization Act 

(MDUFMA I) was prompted by growing concerns about the medical device review program's 

capacity and perfonnance. MDUFMA I and MDUF A II (enacted in 2007) authorized user fees 

for the review of medical device premarket applications, reports, supplements, and premarket 

notification submissions. These additional resources enabled FDA to make its reviews more 

timely, predictable, and transparent to applicants. MDUF A fees and mandated appropriations for 

the medical device program helped FDA expand available expertise, modernize its infonnation 

management systems, provide new review options, and provide more guidance to prospective 

applicants. 

MDUF A authorizes FDA to collect user fees for certain medical device applications, the 

registration of certain medical device establishments, and certain other purposes. Small 

businesses may qualify for a waiver or a reduced fee on certain submissions to FDA. 

Ofthe total $292,707,540 obligated in support of the process for the review of medical 

device submissions in FY 2010, MDUFA fees funded about 20 percent. The remainder of the 

funding was through appropriations. Fees currently charged for device review under MDUFA 

include $220,050 for a Premarket Approval (PMA) application for high-risk medical devices (a 

2 
48 


78635.037

business with gross receipts under $100 million qualifies for the "small business" PMA fee of 

about $55,000, and for firms with gross receipts under $30 million, the firm's first PMA fee is 

also waived). For lower-risk devices cleared under the 51O(k) review program, manufacturers 

pay $4,049 per 51 O(k) application review ($2,024 for small businesses).] As a point of 

comparison, PDUFA fees-nearly $568 million in FY 201 O-currently account for about twothirds of the drug review program's budget, and the current fee for FY 2012 associated with 

review ofa New Drug Application (NDA) requiring clinical data is $1,841,500.2 

The medical device user fee program has produced benefits for public health. A betterresourced premarket device review program has enhanced FDA's abilities to help bring more 

safe and effective medical devices to the market, while keeping pace with the increasing 

complexity of technology and changes in clinical practice. Since MDUFA II was reauthorized in 

2007, FDA has approved 106 original PMAs and cleared more than 13,000 devices under the 

510(k) program. 

For example, approvals have included devices intended to address unmet needs in the 

pediatric population, such as the first heart pump designed to support the hearts of infants to 

adolescents until they receive a heart transplant, and the first percutaneous heart valve (approved 

for both children and adults). 

The device program also has approved important new laboratory tests, including an 

emergency-use diagnostic test in response to HI N 1 outbreak in humans, and the first quick test 

for malaria. Device reviews have significantly contributed to the very important trend toward 

1 See U.S. FDA, "Medical Device User Fee Rates for Fiscal Year 2012," 76 Federal Register 45,826-45,831 (Aug. 

1,2011), available at hllp.//ll·H'1l',gpO,gov:fdsys,pkg'FR·20] ]·08·0]!hlmI20] ]·]9335.hlm. 

2 See U.S. FDA, "Prescription Drug User Fee Rates for Fiscal Year 2012," 76 Federal Register 45,831-45,838 (Aug. 

I, 201 I), available at hllp .. /11'1fll',gpo,gorfdsys·pkgFR·20 Jl·08·0 I Ipdf'20 JJ·J9 332.pd/ 
49 


78635.038

personalized medicine through clearance of a test system that can assist in assessing the risk of 

tumor recurrence and long-term survival for patients with relatively high-risk breast cancer. 

Other important devices that have become available to patients over the course of 

MDUFA II include, for example, the Implantable Miniature Telescope (IMT), used for 

monocular implantation to improve vision in elderly patients with stable severe to profound 

vision impairment associated with end-stage age-related macular degeneration (AMD)3; the 

InfrascannerTM infrared brain hematoma detector, a non-invasive hand-held device that uses 

near-infrared spectroscopy to evaluate suspected brain hematomas at the site of injury within the 

"golden hour" (the period following head trauma when pre-hospital analysis is needed to rapidly 

assess a patient's neurological condition)4; and the NeuRx DPSTM RA14 Respiratory Stimulation 

System, an implantable electronic device that stimulates the diaphragm and allows certain spinal 

cord injury patients to breathe for at least four hours a day without a mechanical ventilator. 5 

However, neither the FDA nor industry believe that the user fee program has reached the 

level of performance, or produced the extent of benefits, that it has the potential to achieve. 

MDUF A II Performance 

FDA has been meeting or exceeding goals agreed to by FDA and industry under MDUF A 

II for approximately 95 percent of the submissions we review each year. For example, FDA 

completes at least 90 percent of 51 O(k) reviews within 90 days or less. In the few areas where 

FDA is not yet meeting its MDUFA goals, the Agency's performance has generally been 

3 See FDA News Release, "FDA Approves First Implantable Miniature Telescope to Improve Sight of AMD 

Patients" (July 6, 2010), available at 

htlp:./'wll'wjda.gol'/ Nell'S E vents!?\' ewsroom PressA nnOUf1ce me fIts 'ucm218066. htm. 

4 See Office of Naval Research, "Naval Technology Could be a Lifesaver" (Dec. 21, 2011), available at 

hIlP:!/WlfW. onr.llavy. mill Media-Center Press-Releasesl20 11 I lnjrascanner-brain-T 81-FDA -approval. aspx. 

5 See FDA News Release, "FDA Approves Diaphragm-Pacing Device" (June 18,2008), available at 

hllpfIl'1I'H'jda.gowForConsumers·ConsumerUpdates·ucmI16914.ht111. 

4 
50 


78635.039

improving-despite growing device complexity and an increased workload. FDA's performance 

over the course ofMDUFA II has not been limited to achieving quantitative goals for the timely 

review of premarket submissions like PMAs and 51 O(k)s; we have also accomplished a number 

of "qualitative" goals set by MDUFA II in 2007, including issuing more than 50 new and 

updated guidances for industry. Guidance documents are important resources for industry 

because they describe the Agency's interpretation of, or policy on, regulatory issues, and as such, 

are critical to support industry efforts to comply with the law and develop new products that may 

benefit the public health.6 The availability of guidance documents also facilitates regulatory 

predictability and consistency. 

It is important to note that MDUF A metries reflect FDA time only; they do not reflect the 

time taken by device sponsors to respond to requests for additional information. Overall time to 

decision-the time that FDA has the application, plus the time the manufacturer spends 

answering any questions FDA may have-has increased steadily since 2001. As the graphs 

below illustrate, while the time FDA spends reviewing an application has improved (for both 

low- and high-risk devices), average total days for the review of 51 O(k)s has been increasing 

since 2005, and has been increasing for PMA applications since 2004. 

6 Guidance documents include documents that relate to: (I) the design, production, labeling, promotion, 

manufacturing, and testing of regulated products; (2) the processing, content, and evaluation or approval of 

submissions; and (3) FDA's inspection and enforcement policies. See generally, "Food and Drug Administration 

Report on Good Guidance Practices: Improving Efficiency and Transparency" (issued Dec. 20 II), available at 

http:h'·\l'w/da.gOl' 'd01fnloads!A bOUlFDA.'Transparency.'Transparency.lnilialive! (Je112 8512 4.pdf, 

5 
51 


78635.040

Average Time to Decision: 510{k)s* 

(Receipt Cohorts as of March 11,2012) 

160r----------------------------------M~ 

1~+-~----~--~----------------~~--~ 

1~+---~~----------------~~~~----~~ 

100 te 102 lIl' 

.. tll 1:'110 H~--.. n-.!ti::::_;:;_-.....,.. Q 

IIO+-------------~~~=-

40+------

~+-----~~ 2' al 1t o+-~--~~~~-~--~~--~-~~~~--4 

2000 200'1 2m2 2t)03 2004 2005 2006 2001 2.00$ 2:(1)9. 2010*" 

Fiscal Year (Flied Cohortl 

6 
52 


78635.041

FDA bears some responsibility for the increase in total time to decision, and we have 

been instituting management, policy, and process changes to address this issue, As a result, we 

are to see indicators of improved review performance, For example, the Agency has 

currently completed review of85 pereent of the 5l0(k) submissions received in FY 2011. The 

graph below, illustrating average time to decision during the last five years at this same point (85 

percent of 51 O(k)s reviewed), shows that progress was made, last year, ill stabilizing 

510(k) review times, 

Average Time to Decision: 510(k)s* 

- Comparison of Receipt Cohorts When 85% Closed -

160 

140 

120 

100 

tao 

Q 

60 

40 

20 

(I 

.. , 

... 

.. 

tM 

n :---- .' ." 

It n 

" ;..;-- M 

•• .' ... ..' 

.' . 

Fiscal Year (Receipt Cohort) 

In addition, in FY 2011, CDRH for the first time began 

'. 

121 

"".! 

2011 

what previously was an 

increasing UnI'eS<llvIOid 51 O(k) submissions, as indicated in the chart below-and that 

trend is clearly continuing as we approach the mid-pelnt ofFY 2012: 

7 
53 


78635.042

510(k)s Pending* at End of Year 

2000 

1!lllO 

1!lllO 

I 1400 

l5' 1200 

1D 1000 'Ii !lllO i !lllO 

400 

200 

0 

2005 2005 2001 2005 200II 2010 2011 2012*' 

·Under revtew Of Oft hold 

.*FY 2012 uofMarch 11, 20'12 

Likewise, there had been a continuous annual increase, since FY 2002, in the percentage 

of 51 O(k) submissions an Additional Information (AI) after the first review 

cycle, which had contributed to the increasing total time from submission to decision. As 

indicated in the chart below, however, in FY 2011, the percentage ofSlO(k)s requiring an AI 

letter declined for the first time since 2002. 
54 


78635.043

Percent of S10(k)s 

With Additional Information (AI) Request 

on 1 st FDA Review Cycle 80% ,,-------:-------:----:- -----::-----, 

.. 70% t------'--'----.c.....-.-,. 

180% t---'----.._,.._,~~ 

~ 80% t--.._,---.._,.._,.._,""""" « 

5 40% ~~=+:::::::;::;;;;:?"""""~~C!U&-:'-..-,~----,~",---,-:,1 

i30%~~~~~-S~--'-_~~"_'--~·-~~~~4 C! 

320% +..,...,---:-.....,.-.:....-:,-------'--,......--'-:-----1 l10%t-~----'~----~---.:....~,......,......--~----~~~_l 

O%+-~---~~---~--~-----~------'~--~ 2000 _________ 2<1102011 

Fiscal Year (Rec&lpt Cohort) 

FDA that, ifthe United States is to maintain its leadership role in this area, we 

must continue to streamline and modernize our proeesses and procedures to make device 

approval not just scientifically rigorous, but clear, consistent, and predictable, without 

compromising safety. We are committed to continued jml)rO'\le~nenlts in the device 

process to address legitimate concerns raised by industrY and other stakeholders. 

A little over two years ago, CDRH recognized that, given the growing complexities of 

medical product development, we needed to re-evaluate and modernize our regulatory review 

processes in order to ensure that patients had timely access to safe and effective medical devices. 

At that time, CDRH began to undertake a new systematic approach to device regulation, moving 

away from the traditional mil,pereepti(}n that safety and effectiveness and innovation are 
55 


78635.044

incompatible. Rather than focus on more regulation or less regulation, we began to focus on 

"smart regulation." 

Our goal has been to ensure that safety and effectiveness and innovation are 

complementary, mutually supporting aspects of our mission to promote the public health. As 

part of our process to improve CDRH's internal systems, we first reached out to stakeholders to 

hear their concerns and listen to their recommendations about our premarket programs. This is 

what we heard: industry felt that inadequate predictability, consistency, and transparency were 

stifling innovation and driving jobs overseas; and consumer groups, third-party payers, and some 

health care professionals believed that one of our premarket pathways-the 51 O(k) programdid not provide adequate protection for American patients and did not generate sufficient 

information for practitioners and patients to make well-informed treatment and diagnostic 

decisions. In tum, CDRH employees expressed concerns that the 510(k) program had not 

adapted to the increasing complexity of devices, and that poor-quality 51 O(k) submissions, poorquality clinical studies conducted in support of PM A applications, and an ever-growing 

workload were straining already overburdened premarket programs. 

We also began two assessments of our premarket programs to identifY issues, their root 

causes, and the appropriate solutions. One assessment focuses on the 51 O(k) program. The other 

looks at how we use science in regulatory decision-making, touching on aspects of several of our 

premarket review pathways, such as our clinical trials program. In addition, we contracted with 

the Institute of Medicine (10M) to conduct an independent evaluation of our 51 O(k) program. 

In August 20 I 0, following extensive public input, we released two reports that identified 

issues regarding our premarket programs and proposed potential actions for us to take to address 

the underlying root causes. The number one problem we found was insufficient predictability in 

10 
56 


78635.045

our premarket programs, which can create inefficiencies, increase costs for industry and FDA, 

and delay bringing safe and effective products to market. We identified several root causes of 

these issues. They include very high reviewer and manager turnover at CDRH (almost double 

that ofFDNs drug and biologics centers); insufficient training for staff and industry; extremely 

high ratios of employees to front-line supervisors; insufficient oversight by managers; CDRH's 

rapidly growing workload, caused by the increasing complexity of devices and the number of 

overall submissions we review; unnecessary and/or inconsistent data requirements imposed on 

device sponsors; insufficient guidance for industry and FDA staff; and poor-quality submissions 

from industry. 

While it is true that providing more user fee resources alone won't solve the problems 

with our premarket programs, insufficient funding is at the root of, or a contributing factor to, 

several of these problems. Adequate and stable funding is one key component to our and 

industry's success in bringing safe and effective devices to market quickly and efficiently. 

After considering extensive and varied public input on our recommendations, in January 

2011, FDA announced a Plan of Action that included 25 specific actions that we would take in 

2011 to improve the predictability, consistency, and transparency of our premarket programs. 

We continued to engage in dialogue about issues of importance to CDRH and to members of the 

public, including the medical device industry, health care professionals, patients, and 

11 
57 


78635.046

consumers, 8 and foJlowed up the Plan of Action with eight additional steps we would take. As 

of April 2012, 29 actions are already completed or are well underway.9 

In February 2011, we announced our Innovation Initiative, which included several 

proposals to help maintain the position of the United States as the world's leader in medical 

device innovation, including the creation of a new approach for important, new technologies 

called the Innovation Pathway. On April 9, 2012, CDRH launched its second version of the 

Innovation Pathway, caJled "Innovation Pathway 2.0." Innovation Pathway 2.0 offers new and 

modified tools and methods to deepen collaboration between FDA and innovators early in the 

process, prior to premarket submission, with the goal of making the regulatory process more 

efficient and timely. The Pathway also serves as a living laboratory to test new tools and 

methods for breakthrough devices that we may also apply to other technologies to enhance all of 

our device premarket programs. Under the Pathway, CDRH selected three companies with 

promising breakthrough treatments for end-stage renal disease (ESRD), which is an area of 

growing public health concern that could benefit from innovative technology. We plan to accept 

up to five more companies during the year with promising, breakthrough treatments for ESRD to 

participate in the Innovation Pathway and to test out new tools for reducing the time and cost of 

device development and assessment. 

We have announced additional efforts to improve our premarket programs, including 

actions to improve our program for clinical trials and the Investigational Device Exemption 

8 Numerous public meetings and workshops, including three "town hall" discussions with the Center Director and 

senior CDRH management, were held in 2011; similar CDRH outreach to stakeholders is ongoing. For more 

details. see htlp:liJl'll'wfda.gol'iMedicalDel'ices!Ne1!'sEl'enlsTVorkshopsConjel'encesiucml 1105 l.hlm. 

9 More information about FDA's progress in implementing the CDRH "Plan of Action for 510(k) and Science" is 

available on FDA's wehsite at 

hl/p: .il''''w fda.gov/AbouIFDA. C entel'sO{fices/OfficeojAledicaIPl'oduclsandT obacco.'C DRH C DRHReporls/ucm276 

286 him. 

12 
58 


78635.047

(IDE) program. The actions we are taking can be grouped into three main areas of emphasis. 

Overall, our actions seek to: 

• Create a culture change toward greater transparency, interaction, collaboration, and the 

appropriate balancing of benefits and risks; 

• Ensure more predictable and consistent recommendations, decision-making, and 

application of the least-burdensome principle; and 

• Implement more efficient processes and use of resources. 

Specific steps that we are taking include: 

• Issuing guidance clarifYing the criteria used to make benefit-risk determinations a part of 

device premarket decisions. This will provide greater predictability and consistency and 

apply a more patient-centric approach by considering patients' tolerance for risk in 

appropriate cases (draft guidance issued August 15, 20 II, and final guidance issued on 

March 27,2012); 

• Creating standard operating procedures for when a reviewer can request additional 

information regarding a premarket submission and identifYing at what management level 

the decision must be made. These steps are intended to provide greater predictability, 

consistency, and the appropriate application of the least-burdensome principle by 

reducing the number of inappropriate information requests (Standard Operating 

Procedures issued November 10,2011); 

• Developing a range of updated and new guidances to clarifY CDRH requirements for 

predictable, timely, and consistent product review, including device-specific guidance in 

several areas such as mobile applications (draft guidance released July 19,2011) and 

artificial pancreas systems (draft guidance released December I, 20 II); 

13 
59 


78635.048

• Revamping the guidance development process through a new tracking system, 

streamlined processes, and, to the greatest extent possible within available resources, core 

staff to oversee the timely drafting and clearance of documents (December 2011); 

• Improving communications between FDA and industry through enhancements to 

interactive review (some enhancements are already in place); 

• Streamlining the clinical trial (IDE) processes by providing industry with guidance to 

claritY the criteria for approving clinical trials, and the criteria for when a first-in-human 

study can be conducted earlier during device development. These actions aim to create 

incentives to bring new technologies to the United States first (guidances issued 

November 10, 2011) (IDEs are required before device testing in humans that involves 

significant risks may begin, and they ensure that the rights of human subjects are 

protected while gathering data on the safety and efficacy of medical products); 

• Implementing internal business process improvements to ensure that decisions are made 

by the appropriate level of management, that decisions are made consistently and 

efficiently, and that we appropriately apply the least-burdensome principle. For example, 

CDRH created the internal Center Science Council to actively monitor the quality and 

performance of the Center's scientific programs and ensure consistency and predictability 

in CDRH scientific decision-making (Center Science Council established March 31, 

2011); 

• Creating a network of experts to help the Center resolve complex scientific issues, which 

will ultimately result in more timely reviews. This network will be especially helpful as 

FDA confronts new technologies (Standard Operating Procedures issued September 30, 

2011); 

14 
60 


78635.049

• Instituting a mandatory Reviewer Certification Program for new reviewers (program 

launched September 2011); 

• Beginning a pilot Experiential Learning Program to provide review staff with real-world 

training experiences as they participate in visits to manufacturers, research and health 

care facilities, and academia (to begin in May 2012); 

• Providing industry with specific guidance on how to ensure the quality and performance 

of clinical trials while applying the least-burdensome principle, so that industry conducts 

studies that are more likely to support the approval of their products (guidance released 

August 15,2011); and 

• Streamlining the de novo review process, the pathway by which novel, lower-risk devices 

without a predicate can come to market (draft guidance released October 3,2011). 

Our efforts to improve the premarket review programs at CDRH are ongoing. We 

recently released our Strategic Priorities for 2012,10 in which we commit to completing or 

continuing the work we already started in four priority areas: (I) Fully Implement a Total 

Product Life Cycle Approach, II (2) Enhance Communication and Transparency, (3) Strengthen 

Our Workforce and Workplace, and (4) Proactively Facilitate Innovation to Address Unmet 

Public Health Needs. Our plan for 2012 includes time frames associated with each strategy and 

10 CDRH, "2012 Strategic Priorities," available at 

http://11'1I'1':fda.gol'.·/!boutFDA·CentersOjlicesOfficeqj?lfedicaiProducrsandTobacco 'C D RiPC D RHI'isionandAfissi 0 

w·ucm288735.htm. 

11 A Total Product Life Cycle (TPLC) approach involves making well-supported regulatory decisions that take into 

consideration all of the relevant information available to CDRH at any stage of a product's life cycle to assure the 

safety, effectiveness, and quality of medical devices and the safety of non-device radiation-emitting products. The 

Center's TPLC database integrates premarket and post-market data about medical devices. For more information, 

see CDRH's website at 

hrtp:,wllW fda.gol'.A boutFDA 'Centers()/fices, OfficeofMedicaiProduclsandTobacco. C DRH CDRHTraf1.lparency'uc 

m199906.htl11. 

15 
61 


78635.050

specific actions we will take to meet those goals or make significant progress toward achieving 

those goals, including, for example: 

By April 30, 2012, begin the Triage of Pre market Submissions Pilot to increase 

submission review efficiency and better manage the premarket review workload; 

By September 30, 2012, make recommendations on how to adequately recognize good 

employee performance and address poor performance; 

By September 30, 2012, create processes and tools that will improve the pipeline for 

innovative medical devices and transform the way CDRH works with medical device 

innovators, such as the new Entrepreneurs-in-Residence program; 

By September 30, 2012, develop methods and procedures for the systematic analysis and 

use of medical device recall information; 

By October 31, 2012, develop a comprehensive strategy to assess real-world device 

performance; 

By December 31, 2012, conduct an evaluation ofCDRH staffing, infrastructure, policies, 

and practices pertaining to medical device software; 

By December 31, 2012, review remaining Class III pre-amendment medical devices; 

By December 31, 2012, fully implement the Experiential Learning Program to enhance 

premarket reviewer knowledge of how medical devices are designed, manufactured, and 

utilized by providing real-world learning opportunities; and 

By December 31,2012, launch the CDRH Leadership Enhancement and Development 

(LEAD) program to provide CDRH managers and supervisors information and tools to 

ensure effective leadership. 

16 
62 


78635.051

We believe the actions that we've taken and plan to take in the future will have a positive 

impact on the device review process by providing greater predictability of data requirements 

through guidance, reducing unnecessary data requests through training and policy and process 

changes, implementing policies to appropriately balance benefit-risk determinations, using 

external experts more extensively (consistent with conflict-of-interest guidelines), creating 

incentives to conduct clinical studies first in the United States, speeding up IDE approval 

decisions, and instituting efficiencies in the premarket review process. 

For example, I'm pleased to report that, consistent with our many improvements to the 

SIO(k) program, the recent increase in the "not substantially equivalent" (NSE) rate!2 appears to 

be turning around. For manufacturers and FDA, NSE determinations often represent an 

inefficient use of time and resources. NSE determinations require significant Agency resources 

and time, yet fail to result in the marketing of a new product. As shown in the chart below, from 

a peak of8 percent in FY 2010, the NSE rate has decreased to 4 percent by the end of the first 

five months ofFY 2012. Just as important, we also may be seeing a reversal in the trend of 

declining rate in Substantially Equivalent (SE) decisions that clear a 51 O(k) submission for 

marketing. After several years of declining percentages, reaching a low of 73 percent in 20 I 0, 

SE rates increased by 6 percentage points by the end of the first five months ofFY 2012, as 

shown in the chart below. 

12 Among the reasons that 51 O(k) submissions result in NSE determinations are: lack of a suitable predicate device; 

intended use ofthe new device is not the same as the intended use of the predicate; technological characteristics are 

different from those of the predicate and raise new questions of safety and effectiveness; and/or performance data 

failed to demonstrate that the device is as safe and effective as the predicate. The vast majority ofNSE decisions are 

due to the absence of adequate performance data, sometimes despite repeated FDA requests. 

17 
63 


78635.052

Percent of 510(k)s Determined to be 

Substantially Equivalent (SE) 

100% r--------:__---------,-------, 

$0% 

80% 

!70%~---------:__-----~------~~~ 

I~%r-------------~--~--~--~----~ 

~~%~---------------~--~~~------~-1 

~~%+-~----~----------~--~--~~~------_1 

i30%+------------~------~--~------:__:__~_1 ~%~~-4~~--~--------~_,~~~~~~~~ 

10%+-----~~~~~~~ __ c~~~=_~~~~~_,~ 

O%+-~~~~~~~~-~--~~~~-+------~ 

To best serve patients, both the medical device industry and FDA must have the 

tleldbilitv to be innovative and entrepreneurial. CDRH must continue making criticel 

improvements to our device program. At the same time, the medical device industry and CDm 

must continue to work together to ensure that the Center receives high-quality submissions thm 

contain the information we need to make well-informed and timely decisions. Finally, CDm 

must have adequate and stable resources to get the job done right and quickly. Timely 

reauthorization ofMDUFA, as weI! as the Congressional appropriations process, is critical to 

achieving tbese goals. 

Moving Forward: Reauthorization ofMDUFA 

When MDUFA was reauthorized in 2007, Congress directed FDA to take additional steps 

to ensure that public stakeholders would have adequate opportunity to input to any 

18 
64 


78635.053

program enhancements. In addition to FDA receiving input from stakeholders during an initial 

public meeting13 in September 2010, as directed by Congress, we met with stakeholders, 

including representatives of patient and consumer groups, between January 2011 and February 

2012, and made the minutes of those meetings available to the public. 14 

During that 13-month period, we also held discussions with representatives of the 

medical device industry, as required under the MDUF A II statute, in an effort to develop a 

package of proposed recommendations for MDUFA reauthorization. Minutes of those 

consultation meetings were also made available to the public. IS 

We were pleased to announce that on February 1, FDA and representatives from the 

medical device industry reached an agreement on the proposed recommendations for MDUF A 

III. That agreement, which would authorize FDA to collect $595 million in user fees over five 

years (plus increases based on inflation), strikes a careful balance between what industry agreed 

to pay and what FDA can accomplish with the amount of funding proposed. We believe that it 

will result in greater predictability, consistency, and transparency through a number of 

improvements to the review process. On March 15, 2012, FDA made public the package of 

proposed recommendations,16 requested written public comment on those proposed 

recommendations, and announced that we would be holding a public meeting at which interested 

stakeholders could present their views. That public meeting took place on March 28, 2012. 

13 A transcript of the September 2010 public meeting, and related meeting materials, are available on FDA's website 

at http:l'1nl'w fda.govMedicalDel'ices.WewsEl'entsiWorkshopsC onferences.ucm21825 O. hIm. 

14 The minutes of the stakeholder discussions on MDUFA III reauthorization are available on FDA's website at 

htlp:/ii"ll'l''fda.gow,l/edicalDevices·Del·iceRegulalionandGliidanceIOl'eITiell'iMedicalDel'iceC'serFeeandlloderni= 

alionAcl.lfDUFMA,·lIcm236902.hlln. 

"The minutes oftbe industry discussions on MDUFA III reauthorization are available on FDA's website at 

http:. /Wll'll·fda.gov. ~\ledicalDel'ices 'Derice ReglilalionandGu idance. ·Ol'en'iew.;\ fedical Device User F'eeandModerni= 

ationAcIMDUFAfA,ucm236902.llIrn. 

16 The proposed package of recommendations for MDUFA III is available on FDA's website at 

hllp:.;\"lI·l,.jda.gov.AfedicaiDel'icesl.Vel1'sErents.WorkshopsConferences1ucm292860.llIm. 

19 
65 


78635.054

The proposed recommendations for MDUFA III address many of the priorities and 

concerns identified by public stakeholders and the device industry and many of the important 

challenges identified by FDA. Some of the notable improvements to the MDUFA program in 

the MDUF A III proposed recommendations include: 

Review Process, Infrastructure, and Capacity Enhancements: 

o Facilitating earlier and more transparent and predictable interactions between FDA 

and the applicant, both during the early product development or "pre-submission" 

stage as well as during the review process, by implementing a structured process for 

managing pre-submissions and continuing to incorporate an interactive review 

process; 

o Providing more detailed and objective "submission acceptance criteria" for 

determining when a premarket submission is complete and when a premarket 

submission is incomplete and should not be accepted for review; 

o Improving the process of developing, reviewing, tracking, issuing, and updating 

guidance documents; 

o Recommending reauthorization of the third-party review program and working with 

interested parties to strengthen and improve the current program as resources permit; 

o Fully implementing guidance on factors to consider when making benefit-risk 

determinations, meeting with patient groups to better understand the patient 

perspective on disease severity and unmet medical need, and increasing FDA's 

utilization of Patient Representatives to provide patients' views early in the medical 

product development process; 

20 
66 


78635.055

o IdentifYing additional low-risk medical devices to exempt from premarket 

notification requirements; 

o Working with industry to develop a transitional In Vitro Diagnostics (IVD) approach 

for the regulation of emerging diagnostics; 

o Enhancing scientific and regulatory review capacity by hiring additional staff and 

reducing the ratio of review staff to front line supervisors-FDA is seeking to obtain 

streamlined hiring authority in order to accomplish this; 

More Rigorous Review Performance Goals and Shared Outcome Goals: 

o Adopting streamlined FDA review goals to provide better overall performance and 

greater predictability, including a commitment to meet with an applicant if FDA's 

review of their submission extends beyond the goal date; 

o Eliminating the "two-tier" goal structure of MDUF A II and adopting a more 

simplified structure, incorporating a single, high-percentage goal for each 

performance metric; 

o Instituting more rigorous performance review goals: 

• increasing the percentage of 51 O(k) reviews that are completed in 90 review 

days from the current 90 percent to 95 percent by FY 2015; 

• increasing the percentage of PM A reviews that are completed within 180 

review days, from the current 60 percent to 90 percent by FY 2016, for PMAs 

not requiring external advisory panel review-for PMAs that do undergo 

panel review, FDA will complete 90 percent of the reviews within 320 review 

days by FY 2017; 

21 
67 


78635.056

o Instituting a Substantive Interaction goal for several submission types to track the 

Agency's communication with applicants at specified points during the review 

process; 

o Ajoint commitment between FDA and industry to accomplish shared outcome goals 

to reduce the total average calendar time to a decision for PMAs and 51 O(k)s so that 

safe and effective devices reach patients and health care professionals more quickly; 

Enhanced Metrics for Improvements to the Premarket Review Process: 

o Conducting a comprehensive independent assessment ofthe premarket review 

process to identifY potential enhancements to efficiency and effectiveness, and 

incorporating those findings and recommendations into management of the review 

program; 

o More detailed quarterly and annual reporting ofMDUFA III review program 

performance. 

Additional details regarding the proposed recommendations for reauthorization of 

MDUFA, including the draft MDUF A III Commitment Letter and Legislative Language, are 

available on FDA's website at 

hltp:llwwwfda.govIMedicalDevicesINewsEventsIWorkshopsConjerenceslucm292860.htm. 

The public comment period for review of the proposed recommendations for MDUFA III 

began on March 15, 2012, and closed on April 16, 2012. FDA is in the process of considering 

the public'S views and comments, and will revise the proposed recommendations as necessary 

and transmit a final package of recommendations to Congress, along with a summary of the 

views and comments that were received and any changes that were made to the proposed 

22 
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78635.057

recommendations in response to the public's views and comments. As we continue to work with 

all interested stakeholders and Congress toward reauthorization of MDUF A in order to provide 

adequate and stable funding for the program, we will also be moving forward with our ongoing 

CDRH program improvements, focusing on smart regulation that will facilitate device 

innovation. As these new policies and processes continue to be implemented, we expect to see 

notable improvements in the consistency, transparency, and predictability of our premarket 

review programs. 

Smart Regulation's Role in Assuring Patient Safety 

As we continue to look for ways to improve our ability to facilitate innovation and to 

speed safe and effective products to patients, we must not lose sight of the benefits of smart 

regulation to the medical device industry, to patients, and to society. Smart regulation of medical 

devices results in better, safer, more effective treatments as well as worldwide confidence in, and 

adoption of, the devices that industry produces. 

We at FDA see daily the kinds of problems that occur with medical devices that are 

poorly designed or manufactured, difficult to use, and/or insufficiently tested. We appreciate the 

concern that some devices come on the market in the European Union (EU) before they do in the 

United States. While we want devices to be available to American patients as soon as possible, 

consistent with U.S. law, they need to be both safe and effective. The U.S. system has served 

patients well by preventing devices from entering the U.S. market that were later shown to be 

unsafe or ineffective. 17 

17 See, e.g., D. Cohen and M. Billingsley, "Europeans Are Left to Their Own Devices," British Medical Journal, 

342:d2748 (2011), available at http./mn ... bmj.com'content342bmj.d27.JS. 

23 
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There are significant differences between the EU and the U.S. medical device review 

systems. In the EU, manufacturers must demonstrate safety and performance, while in the 

United States, the standard for approval is safety and effectiveness. 18 In the EU, more than 70 

private, non-governmental entities called "Notified Bodies" review and approve devices by 

giving them a "CE mark." These decisions are kept confidential and are not released to the 

public or to EU regulatory bodies. In fact, the EU does not have one centralized regulatory body. 

Instead, each country can designate an entity as a Notified Body, yet the decision of one Notified 

Body applies to all EU countries. 

Because of these factors, it is impossible to track medical device approvals, adverse 

events, or recalls in the EU, since there are few to no publicly accessible, centralized systems for 

collecting and monitoring information about medical device approvals or safety problems. The 

use of Notified Bodies has been criticized as encouraging "forum shopping" by sponsors to 

identifY those Notified Bodies with the most lax operating standards, and the varying levels of 

expertise among Notified Bodies has been critiqued. 

Some have suggested that the United States adopt the medical device regulatory system 

of the EU. Yet, outside the United States, pressure is growing toward greater premarket scrutiny 

of medical devices. A June 2011 report from the Belgian Health Care Knowledge Centre (a 

governmental agency that produces studies to advise policymakers when deciding on health care 

and health insurance) 19 concluded that "[f]or innovative high-risk devices the future EU Device 

Directive should move away from requiring clinical safety and 'performance' data only to also 

18 See "Recast ofthe Medical Devices Directives: Public Consultation," available at 

http:,/ec,europa,eu consumers sectors:medical-devices}! les 'recast_docs j008public _consultation Jnpdj; 

European Conunission, "Guidelines on Medical Devices: Clinical Evaluation: A Guide for Manufacturers and 

Notified Bodies" (Dec. 2009), at p. 4, available at hllp:'/ec,eul'opa,eu:healtit'medicaldel'icesfilesmeddev:2 j_ll'el' _3 _enpdf 

19 Additional infonnation about the Belgian Health Care Knowledge Centre, and its mission and activities, is 

available at hllps:! kcejgov.bekontent abollt-the-kce. 

24 
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require pre-market data that demonstrate 'clinical efficacy,'" and "[t]he device industry should 

be made aware of the growing importance of generating clinical evidence and the specific 

expertise this requires.,,2o 

In May 2011, the European Society of Cardiology (ESC) issued a "case for reform" of 

the European medical device regulatory system: that body's recommendations included creating 

a unified regulatory system, imposing stronger clinical data requirements, and requiring more 

accountability for notified bodiesY The ESC cited examples of several different cardiovascular 

technologies that were implanted in patients in the EU that were later proven to be unsafe and/or 

ineffective through clinical trials required under the U.S. system and were subsequently removed 

from the European market. 

Also in May 2011, a series of feature articles was published in the British Medical 

Journal, criticizing the opacity of the European medical device regulatory system, and raising 

concerns about the regulation of high-risk devices and how well they are tested before coming on 

to the European market. 22 Several of the featured articles cited the FDA system's transparency 

as helping physicians to make informed decisions about which devices to use and providing 

patients with access to information about the devices that will be used on them. 

20 Belgian Health Care Knowledge Centre. "The Pre-market Clinical Evaluation oflnnovative High-risk Medical 

Devices," KCE Reports 158 (2011) at p. vii, available at http://I'ww.kce.fgo1'.bdndexen.aspx?SGRl::;F~202677. 

21 See "Clinical evaluation of cardiovascular devices: principles, problems, and proposals for European regulatory 

reform," Alan G. Fraser, et aI., European Ileart Journal, May 2011. 

22 "The Truth About Medical Devices," British Medical Journal, vol. 342, at pp. 1115-1130 (May 21, 2011), 

available at hllp:hnrw.bmj.com/contend42i7807iFeature.fullpd.f(Deborah Cohen, "Out of Joint: The Story of the 

ASR," British Medical Journal 201 I; 342:d2905; Deborah Cohen and Matthew Billingsley, "Medical Devices: 

European Patients Are Left to Their Own Devices," British Medical Journal 201 1; 342:d2748); see also Fiona 

GodJee, "Editorial: The Trouble With Medical Devices," British Medical Journal 201 I; 342:d3123, available at 

hltpiidl'ww.bmj.comcontenI'342:bmj.d3123.full; Carl Heneghan, et aI., "Medical-Device Recalls in the UK and the 

Device-Regulation Process: Retrospective Review of Safety Notices and Alerts," BUJOpen (May 20 II), available 

at http:,'bmjopel1.bmj.comcolltentearly/20l I 05i12ibmjopen-20ll-000l55./idl.pdf 

25 
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78635.060

Most recently, France's Directorate General for Health and its consumer safety body 

AFSSAPS23 issued a report24 urging stronger national and European regulation and monitoring 

of medical devices. In an accompanying statement, France's Minister of Health, Xavier 

Bertrand, said that EU rules on regulating and monitoring medical devices "must be radically 

overhauled.,,25 

FDA continues exploring ways to get medical products to patients with serious and lifethreatening diseases or conditions faster, but lowering U.S. approval standards isn't in the best 

interest of American patients, our health care system, or U.S. companies whose success relies on 

the American public's confidence in their products. We are pleased that a U.S. medical device 

industry trade association, AdvaMed, has stated that it supports maintaining our current rigorous 

standards of safety and effectiveness for marketing medical devices: "The medical technology 

industry has long recognized that a strong and well-functioning FDA is vital to maintaining 

America's preeminence in medical technology innovation, and we support the current regulatory 

framework in the U.S.,,26 

Moving Forward 

The user fee agreement we have reached with industry strikes a careful balance between 

what industry agreed to pay and what FDA can accomplish with the amount offunding 

proposed. The device user fee resource increases contemplated under MDUFA III are designed 

23 Agence franl'aise de securite sanitaire des produits de sante. France's Agency for the Safety of Health Products. 

24 See AFSSAPS, "Poly Implant Prothese: remise d'un rapport de la DOS et de I' Afssaps aux ministres charges de la 

sante - Communique," available at hilI': , '1l'1nl',qfSsapsfi:indexphpln/os-de-securileX' ommuniques-Foinlspresse!Foly-Implant-Prothese-remise-d-un-rapport-de-la-DGS-et-de-I-AfSsaps-aux-minislres-charges-de-Ia-santeCommunique. 

25 See "France Calls for Europe-wide Control on Prosthetics following PIP Breast Implant Scare," The Telegraph 

(Feb. I, 2012), available at ht/p.·/inn ... telegraph co. ukihealth!lI'omen _sheallh!9054282iFrance-calls:for-Europe11'ide-control-ol1-proslhelics:foIl011'ing-FIP-breast-implant-scare.hlml. 

26 Advanced Medical Technology Association (AdvaMed), "AdvaMed Statement on the House Energy and 

Commerce Subcommittee Hearing on FDA Device Regulation" (July 20, 2011). 

26 
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78635.061

to help CDRH meet specific goals. Additional mandates that are beyond the scope of the 

agreement risk diverting resources from product review, challenging FDA's ability to achieve 

the new, agreed-upon performance goals. 

While we recognize that there are some areas in which legislation may complement the 

user fee agreement, we note that the success of the user fee agreement rests on enabling CDRH 

to focus on meeting the ambitious new MDUF A program goals and enhancing timely patient 

access to safe and effective devices. This is an objective that we share with industry, health care 

practitioners, patients, and consumers. 

CONCLUSION 

Over the course ofMDUFA II, and especially during the last two years, CDRH has been 

working, with extensive input from industry and other stakeholders, to take concrete actions 

toward creating a culture change toward greater transparency, interaction, collaboration, and the 

appropriate balancing of benefits and risks; ensuring predictable and consistent 

recommendations, decision-making, and application of the least-burdensome principle; and 

implementing efficient processes and use of resources. These actions-geared toward a system 

of smart regulation-have already started to have a measurable, positive impact on our 

premarket programs, and we fully expect that positive trend to continue as we proceed to 

implement the improvements we have committed to make. 

While we work with industry, other stakeholders, and Congress in the statutory process 

toward the reauthorization of medical device user fees, in order to ensure adequate and stable 

funding of the program, we are also continuing to move forward with CDRH program 

improvements. MDUF A II is scheduled to expire on September 30, 2012, and FDA is ready to 

27 
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78635.062

work with you to ensure timely reauthorization of this critical program. Ifwe are to sustain and 

build on our record of accomplishment, it is critical that the MDUF A reauthorization occurs 

seamlessly, without any gap between the expiration of current law and the enactment ofMDUFA 

III. At the same time, we must remain mindful that, unlike the PDUF A program in which fees 

fund more than 60 percent of drug review costs, user fees under MDUF A III (as described in the 

recently announced agreement) will fund about a third of the total cost of the medical device 

premarket review process, making it important to keep these resources focused on the 

performance goals identified in the MDUF A agreement. 

Mr. Chairman and Members of the Subcommittee, I share your goal of smart, streamlined 

regulatory programs. Thank you for your commitment to the mission of FDA, and to the 

continued success of our medical device program, which helps to ensure that patients and 

practitioners have access to safe and effective innovative medical technologies on a daily basis. 

am happy to answer questions you may have. 

28 
74 

Mr. PITTS. The chair thanks the gentleman. 

I will begin the question period and recognize myself for 5 minutes for that purpose. Dr. Woodcock, we will begin with you. In 

your testimony, you say that FDA is expediting manufacturing 

change submissions to help with drug shortages. In the discussion 

draft, we include a section on expediting manufacturing changes 

that will alleviate a drug shortage. In talking with patients and 

manufacturers and providers, they tell me it is one of the best 

parts of the discussion draft and it will really help with shortages. 

Do you agree with those patients, providers and manufacturers 

that expediting manufacturing changes that will alleviate drug 

shortages is a good idea? I would like your comments on that section. 

Dr. WOODCOCK. We are currently able to expedite manufacturing 

changes and we do to alleviate shortages or to prevent them if we 

hear about them in advance. So we do not need authority authorities to expedite a review of manufacturing changes or implementation by manufacturers. 

Mr. PITTS. All right. What is the latest on medical gases? We had 

a hearing on this issue. Will you have a proposal to share with the 

committee by the end of the week on this? 

Dr. WOODCOCK. Well, both parties will have to. We are in active 

discussions with the association. I have had personal meeting with 

the association and my staff and there have been multiple additional discussions. I think we are in substantial agreement but we 

are continuing to go back and forth and make sure we have all the 

details nailed down, so I can’t guarantee, because it is only my side 

of it, that it will done by the end of the week but we certainly are 

working very hard on bringing this to a conclusion. 

Mr. PITTS. The user fee discussion draft includes language to enhance FDA performance reporting in the drug space by including 

division-level data. I believe there is great value in regularly gathering and analyzing the best possible data in order to understand 

where there are working and where they need improving. Collecting more granular information at the review division level will 

allow FDA management, patients, industry and Congress to better 

identify where things are working and where improvements are 

needed. As an example, in November of 2011, the agency issued a 

report citing the approval of 35 innovative drugs that represented 

advances in treatment for many serious disorders. If we had division-level data, we could better understand what practices led to 

such an accomplishment and how we could apply those lessons in 

other areas. Do you agree that collecting, reporting this information is a good idea given that it will help us understand how we 

can apply these best practices in other parts of the drug center and 

agency? Would you comment on that, please? 

Dr. WOODCOCK. Certainly. We have calculated the requirements 

for personnel and investment in generating additional formal reports. We really do believe in transparency of all our processes, and 

I believe I as a manager am accountable to you and to the public 

to make sure that we review particularly lifesaving or life-altering 

drugs as rapidly as possible. It is one of my highest priorities. However, setting up additional reporting systems, we calculate would 

cost us $4.7 million based on what is laid out in the draft and 

75 

would require 15 FTEs, or full-time equivalents, of people to work 

on that. Those people would be diverted from working on reviewing 

the applications. 

Now, the division-by-division variability in how many applications come out and how many of those are approved and so forth 

is primarily a function of the input. So right now, if you looked at 

it sort of naı ̈vely, you would say our cancer group is like the most 

productive group and they do the best job. But they get—right now 

there is a renaissance of cancer therapies based on the molecular 

knowledge of cancer that has been generated and so they are able 

to approve—we are seeing a lot of very good applications and we 

are able to approve those rapidly. 

So I don’t think you can make a cause-and-effect link between 

what comes out in a given disease area and their particular productivity. For example, I think our neurology division is wonderful and 

does a fantastic job but we haven’t been able to approve a lot of 

new drugs for Alzheimer’s because those drugs have failed in development. 

Mr. PITTS. The chair thanks the gentlelady. My time is expired. 

I yield to the ranking member, Mr. Pallone, for 5 minutes for 

questions. 

Mr. PALLONE. Thank you, Mr. Chairman. 

I am going to start with Dr. Woodcock and may able to get to 

Dr. Shuren if there is time. Well, first, welcome back, and I appreciate your being with us again today. I wanted to focus on review 

times for Abbreviated New Drug Applications, or ANDAs. Under 

current law, what is the length of time in which the FDA is required to review generic drug applications? 

Dr. WOODCOCK. This is like a quiz. I think it might be—— 

Mr. PALLONE. At least it is not yes or no. 

Dr. WOODCOCK. I think it is 180 days. 

Mr. PALLONE. OK. And what is the median review time for 

ANDAs today? 

Dr. WOODCOCK. Currently, the average or median or approximately average review time is 30 months. 

Mr. PALLONE. And how long do you think it will take to significantly reduce the review times for generic drug applications? 

Dr. WOODCOCK. I believe if the proposed user fee program that 

is put within the discussion draft is enacted, within several years 

we will be seeing a greatly improved performance. 

Mr. PALLONE. And then can we expect to see any meaningful reduction in review times in year one or year two of the generic user 

fee program? 

Dr. WOODCOCK. We will certainly try. However, we have a backlog that comprises almost—there are 2,600 applications in the 

queue that we have to clear out, and that would be our first priority. 

Mr. PALLONE. Chairman Pitts just asked and referred to the discussion draft on PDUFA, and I guess on pages 18 and 19 there is 

some bracketed language that will require FDA to report to Congress on various statistics about the agency’s drug reviews, and I 

wanted to ask you about this language. Was this part of the negotiated user fee agreement? 

Dr. WOODCOCK. Could you repeat the question? 

76 

Mr. PALLONE. Sure. I’m talking about PDUFA, and the chairman 

asked and referred to the discussion draft. On pages 18 and 19, 

there is some bracketed language that would require the FDA to 

report to Congress on various statistics about the agency’s drug reviews. I don’t think that was part of the negotiated user fee agreement, correct? 

Dr. WOODCOCK. Yes, that was not part of what we negotiated 

with the public and with industry, and it was not accounted for in 

the resource calculations for the user fee. 

Mr. PALLONE. So that was my question. I am concerned about 

putting a burden on the agency that is not funded by user fees and 

could result in an unwarranted reshuffling of resources that Congress intended to be dedicated to other activities, and I think we 

need to be careful when we start opening up the PDUFA agreement. I don’t know if you wanted to comment on that a little more. 

Dr. WOODCOCK. Yes. I believe, as I said, very highly believe in 

transparency and accountability of the new drug review program to 

the public, to Congress and to any of our stakeholders. However, 

we feel these additional tracking requirements when unfunded will 

divert us from actually accomplishing the objectives that are laid 

out by Congress in the user fee agreement. 

Mr. PALLONE. Now, let me go to Dr. Shuren for a question. I 

have a couple minutes or less. I wanted to ask you about one of 

the provisions in the discussion draft related to devices, specifically 

Section 706 would change the standard for when device manufacturers are required to submit a new 510(k) application for changes 

to their already cleared devices. It might seem like an arcane issue, 

but I know it is an extremely important one. Permitting companies 

to make changes to their devices without first obtaining FDA clearance could result in devices on the market over which the FDA had 

had very little oversight and knows very little about. Industry of 

course would say that if they are just making small changes to the 

device, there is no need to go through the 510(k) process again. But 

I wanted to get a better sense from you about what is going on 

here. Is there a need for any change here? Can you speculate on 

why the language of 706 is being included in the draft, and basically does the FDA have concerns about the language in Section 

706? 

Dr. SHUREN. We believe the existing standard that we have for 

modifications is a good one. Most modifications made to a device 

do not come to the FDA for review. The only ones that come are 

those that could significantly affect safety or effectiveness. The 

issue right now is about a guidance we put out on modifications 

that we did not put out with the intention of increasing in any significant way the number of 510(k)s coming in but provide greater 

clarity in places that have been gray zones and emerging technologies. We recognize there are many concerns with the guidance. 

That is why we have had lots of meetings with industry. We have 

even had two all-day meetings with a group of companies, trade associations coming in the door and raising their issues and working 

it through. Our intent is to get that guidance right, and we know 

because of the concerns, our plan is, we would actually put out a 

new draft guidance and make sure we work it out. 

77 

Our concern with what has been proposed in the legislation is it 

would change the existing approach that we had that had been 

working for many years, and instead changes it to only submit if 

it does significantly affect safety and effectiveness. If it does affect 

safety and effectiveness, you don’t submit a 510(k). The product 

wouldn’t come on the market. So essentially companies will be 

making changes to their devices and none of those changes will be 

coming to the FDA for review. That causes significant concern. You 

have devices like linear accelerators that blast radiation at patients 

to treat cancers. You can now make modifications that can impact 

that technology, and we won’t see it, and we have plenty of cases 

where companies made changes, they did some testing, and there 

were big problems that but for the FDA review, those unsafe technologies would have gotten to patients, and that is what we worry 

would happen with this change in the law. 

Mr. PALLONE. All right. Thank you, Doctor. 

Mr. PITTS. The chair thanks the gentleman and now yields to the 

vice chairman of the committee, Dr. Burgess, 5 minutes for questions. 

Mr. BURGESS. Thank you, Mr. Chairman. 

Dr. Shuren, we might come back to the issue of modifications if 

I have time, but let us talk for a minute about the 510(k) process. 

It is my understanding that when the Food and Drug Administration clears a device through the 510(k) process, it tells the company 

that they have received a substantial-equivalence determination 

and then the FDA sends a letter to the company that expressly 

states, please be advised that the FDA’s issuance of a substantialequivalence determination does not mean that the FDA has made 

a determination that your device complies with other requirements 

of the act, that being the Food, Drug and Cosmetic Act. Is that a 

correct statement? 

Dr. SHUREN. As a paraphrase, and then the company is responsible for assuring they have met what we have called general controls, things that pertain to reporting requirements or labeling or 

meeting our quality systems or Good Manufacturing Practices. 

Mr. BURGESS. If there is a device that is found to be defective 

that has been approved under a 510(k) authority and another device is found to be substantially equivalent, because of the defect 

that you discovered in the predicate device, you would do something to prevent that follow-on device from going to the market. Is 

that not correct? 

Dr. SHUREN. What we do in those cases, and there are limited 

cases, we try to—within our authority we might put explanations 

in the labeling, try to address it as best we can. The challenge is 

that those may be ineffective. Right now, there is not a responsibility on the part of the manufacturer to show that if they replicate 

a design flaw, for example, that they have put in appropriate mitigations to make sure that does not affect patient safety or effectiveness. It has been proposed by some in industry what we would do 

is, well, you would clear it. They could go to market and then you 

would build a legal case to say it is misbranded and then take an 

enforcement action against the company, which kind of puts the 

cart before the horse. In reality, what we do is clear a device, then 

maybe take an enforcement action, and what they would have to 

78 

do is actually come back in the door with another 510(k). So we do 

what we can with the authorities that we have but it is not a perfect solution. There is a way of solving it that focuses very narrowly—— 

Mr. BURGESS. Please let me ask a question so I am sure that I 

understand it. Right now you are compelled to approve an unsafe 

device under the 510(k) program? 

Dr. SHUREN. Well, compelled to determine that there is substantial equivalence between the predicate and the new product. 

Mr. BURGESS. Right. So substantial equivalence, but then that 

does not necessarily infer that there is approval to market the device under the Food, Drug and Cosmetic Act. Is that correct? 

Dr. SHUREN. The terminology, just so we have it right, is clearance. The manufacturer is then responsible for meeting the other 

requirements of the law to then put it on the market but they do 

not wait for any other affirmative determination by the agency to 

go to market. 

Mr. BURGESS. This is important, and I am not trying to be argumentative, but has the FDA allowed products that they know to be 

harmful to reach the market? 

Dr. SHUREN. We believe that we have tried to take the best actions we can to assure that the devices that come to market are 

safe. 

Mr. BURGESS. Well, why didn’t you just immediately say these 

are misbranded and must not be marketed? 

Dr. SHUREN. So in the few cases where this has happened, we 

have tried to either address it with labeling and it is our hope that 

that will be an adequate mitigation. What we don’t have in a normal case in premarket review is the data to support that it would 

be an adequate mitigation. 

Mr. BURGESS. Can you provide this committee—you keep saying 

there are a limited number of examples. We actually need to see 

those cases. I have to tell you, that concerns me greatly that the 

Food and Drug Administration for all of the heft that you have has 

allowed devices to come to the market that may be inherently unsafe that you knew were unsafe before they were marketed. So can 

you please—how many cases do we have like that? You say there 

are a few but is it like three or five or nine? 

Dr. SHUREN. There are a handful. We will get you some of them. 

We would be happy to do so. 

Mr. BURGESS. All of them, Dr. Shuren. We need all of them because we have to make a determination about where the process 

is not working because clearly this is—I don’t believe you want it 

and I certainly don’t want it where the FDA is approving, because 

of a finding of substantial equivalence, allows a device to come to 

market that is inherently unsafe. I don’t understand, why would 

you not issue a mandatory recall immediately? 

Dr. SHUREN. Well, first of all, a mandatory recall, if there is a 

problem, first of all, that we find the problem thereafter. We tend 

to work with the company for a voluntary recall. A mandatory recall winds up taking—can actually take several years because it involves a formal hearing, and oftentimes we work with the company—— 

79 

Mr. BURGESS. All I know is, in a medical staff situation, if you 

know you have a provider, a doctor, who presents a clear danger 

to patients, I mean, there is an immediate revocation of that person’s privileges. I don’t see why the same should not apply within 

your agency in the device world. 

Dr. SHUREN. No, I appreciate that, and if folks think that we actually have the authority to do that right now and immediately 

stop it from going to market, it would be helpful to us then to provide that clarity in legislation. 

Mr. BURGESS. Well, and part of the clarity is providing us the 

cases because that is—Mr. Chairman, I think we may need to involve the Subcommittee on Oversight and Investigations to look 

into this because this is a fundamental issue of patient safety, and 

if the primary federal agency charged with providing that drugs 

and devices are safe and effective is not meeting that first goal, 

that is a serious, serious problem, and I will yield back my time. 

Mr. PITTS. The chair thanks the gentleman and now recognize 

the ranking member of the full committee, Mr. Waxman, 5 minutes 

for questions. 

Mr. WAXMAN. Thank you very much, Mr. Chairman. The point 

Mr. Burgess raised is an important one, and if you feel you need 

stronger or clearer legislation in that area, let us know because we 

are concerned about whatever, even a handful of devices that may 

be harmful. 

Dr. Woodcock, I would like to ask you about two proposals designed to help get new important antibiotics to market. One is 

GAIN and the other is LPAD. First of all, on GAIN, we know the 

pipeline for new antibiotics is essentially dry. It is a serious public 

health threat and it is clear that we need to look at ways to 

incentivize the development of these lifesaving drugs. One way to 

do that, of course, is to provide additional exclusivity. I think 

whenever we talk about adding new exclusivity, we need to ensure 

that it is truly necessary, and in this case, I think a good case can 

be made that it is, but then it should be narrowly targeted so that 

only the drugs we need to have developed are rewarded with this 

generous prize, and exclusivity is often very generous and you 

never get it back even when it is no longer valid or useful. 

I am concerned that the language in the discussion draft does not 

adequately target, and I want to get your views on that subject. As 

I read it, the legislation would provide 5 years additional exclusivity to an antibiotic that received FDA approval based only its 

ability to treat or prevent essentially any antibiotic-resistant bacterial pathogen. I think this legislation should be narrowly targeted 

and only apply to antibiotics approved for serious or life-threatening diseases for which there is an unmet medical need. I would 

like to know whether you agree. If so, how would that work in 

practice? Is that a standard FDA could easily apply? 

Dr. WOODCOCK. We do apply a standard on approval on review 

called the Priority Review, and we determine whether or not a 

product would be an advance in its class or is simply yet another 

option amongst multiple options, so we do have some experience in 

applying some standard like that. I think of course it is up to Congress how you weigh these different tradeoffs as far as the affordability of drugs versus their availability. You don’t want to set up 

80 

an incentive program, in my opinion, that drives developers toward 

the broadest market and thus to neglect potentially those challenging areas of, say, drug-resistant organisms, which is where we 

have the greatest need for new antibiotics. But because that is a 

narrow market, if you do an incentive program, often the desire is 

to apply that to the broadest market possible to gain the most obviously profit from doing that. So I think Congress needs to think 

about what incentive you are offering and how is that incentive 

going to operate, and will it operate to solve the problem that has 

been identified. There are several problems. One problem is, we 

don’t have antibiotics—— 

Mr. WAXMAN. Let me—it is very helpful but then I think about 

all the things I still want to ask. So you agree that we ought to 

be sure to narrowly focus this incentive because otherwise an incentive becomes just very beneficial to those who get it but not 

really solving the main problem that we have. Is that correct? 

Dr. WOODCOCK. I believe that Congress ought to define the problem that you are trying to address and make sure you design an 

incentive that incentivizes drug development to solve that problem. 

Mr. WAXMAN. I want to ask you about the LPAD approach. This 

has been discussed by the Infectious Disease Society of America, 

and as I understand it, this approach is intended to establish a 

more rapid regulatory pathway for new antibiotics targeted at the 

most serious infections. The risk-benefit ratio for such antibiotics 

will often support more narrowly tailored clinical trials that are 

needed for other antibiotics. A fundamental aspect of this proposal 

is that it would require that any antibiotic approved under this 

pathway bear a strong label statement describing the limited population of patients with serious or life-threatening infections for 

which the drug had been approved and noting that its safety and 

effectiveness had not been established beyond this limited population. Companies would have to provide their promotional materials to FDA before distributing them. It seems this kind of approach could really get help critically important antibiotics on the 

market more rapidly than otherwise possible. However, for it to 

work as intended and for it not to lead to lowering of the approval 

standard, it has to have effective mechanisms for ensuring that 

antibiotics approved for small populations are indeed used by those 

small populations. I would like to hear your views on whether you 

think LPAD maintains that balance. Specifically, do you think that 

it will facilitate the more rapid approval of important new antibiotics for limited populations, and do you think that there are adequate controls to prevent widespread off-label use in a much broader population than for which it was tested and approved? 

Dr. WOODCOCK. Yes, and yes. I believe that probably a narrow 

development program, and we could offer, we believe, a radically 

smaller development program than for an antibiotic intended for 

broad uses is a stronger incentive than financial—than exclusivity, 

number one. And number two, we believe that particularly if Congress were to make a statement about the antibiotic stewardship 

of this class of products, good stewardship in the market, that that 

would have the effect of limiting the use. 

Mr. WAXMAN. Thank you. 

Thank you, Mr. Chairman. 

81 

Mr. PITTS. The chair thanks the gentleman and recognizes the 

gentleman from Illinois, Mr. Shimkus, for 5 minutes for questions. 

Mr. SHIMKUS. Thank you, Mr. Chairman. Thank you all for coming. 

Dr. Woodcock, I agree that Congress needs to define a problem 

we want to address, and that is part of this process of the hearing 

and also some of the bills that have been introduced. So I couldn’t 

agree more, and of course, I will focus mine on the IDE and the 

510(k) issue. 

First of all, Dr. Shuren, you said that the number of applicants 

is down. Is that what you said in your opening statement? 

Dr. SHUREN. No, the backlog, so the number of 510(k)s that are 

still under review at the end of the year has gone down. It had 

been going up for 510(k)s since 2005 every single year. 

Mr. SHIMKUS. OK. Let me follow up then. According to companies who I have talked to, your draft guidance could increase 

510(k) submissions by 300 to 500 percent. Do you agree with that? 

And do you have the capability to respond to that if that is the 

case? 

Dr. SHUREN. So first of all, we don’t know if that number is correct. 

Mr. SHIMKUS. Have you heard that number before? 

Dr. SHUREN. We have heard that number before. But putting 

aside whether data support that or not, we agree there are concerns with the policy we put out, which is why we are working with 

industry to make adjustments and try to get it right. Our intent 

is not to see—— 

Mr. SHIMKUS. And that is what we are trying to do legislatively 

also in response to what Dr. Woodcock said that we should define 

a problem we want to address and we are trying to legislatively address that problem. 

Let me go to the IDE real quick, and you have also—a couple 

concerns. First of all, one is that we do have an issue that we think 

disregards the Administrative Procedures Act in that it acts as— 

the guidance contradicts regulation so concern one on that. It 

also—we do think it also could be not in compliance with the Federal Food, Drug and Cosmetic Act and a former IDE administrator 

says, and I quote, ‘‘It does not look like the authority is there to 

disapprove an IDE based upon the fact that FDA doesn’t anticipate 

that it would support a marketing approval or clearance.’’ So the 

question is, how have innovators reacted to your policy change? 

Dr. SHUREN. There have been concerns raised of what we would 

not consider truly a policy change. Our IDEs, we will not approve 

if it doesn’t provide sound science or if the investigational plan is 

inadequate. Now, what we said in the guidance is, if it is a pivotal 

clinical trial and a pivotal clinical trial is intended to demonstrate 

safety and effectiveness—— 

Mr. SHIMKUS. The question is, how have the innovators reacted? 

What have the innovators told you? I can tell you what they have 

told me. 

Dr. SHUREN. So their concern is whether or not this will actually 

lead to our not approving more clinical studies than before. We 

think the language may not have articulated clearly what we are 

talking about. That is namely that if you submit a study that is 

82 

producing sound science for its intended purpose, what it is intended to do. In case of a pivotal trial—— 

Mr. SHIMKUS. Let me—I only have a minute and 40 left. One innovator told me that in 2012, he will only have been in the United 

States for 5 weeks prior to the first 5 months of the year because 

he had to do clinical trials overseas. That is what we are hearing 

from innovators based upon this policy, and I think if the policy is 

questionable that it is against the Administrative Procedures Act 

and legally may be against the Federal Food, Drug and Cosmetic 

Act, I think that would raise some concerns as to the policy which 

is new and implemented under the last couple of years. 

Let me go to funding. In the last hearing, you did talk about 

funding and the like. Is it true that even under the agreement 

which doubles the user fees that FDA gets from industry, you will 

still get about 70 percent of your CDRH budget from appropriations? 

Dr. SHUREN. About 65 to 70 percent of funding will come 

from—— 

Mr. SHIMKUS. So you will have other non-user fee funds that are 

appropriated by Congress? 

Dr. SHUREN. That is correct. 

Mr. SHIMKUS. Shouldn’t Congress be able to give direction on 

how these funds are spent? 

Dr. SHUREN. Congress has broad authority to weigh in on how 

we should actually use our funds. 

Mr. SHIMKUS. Thank you. Isn’t it true that the FDA undertook 

activities during the life of MDUFA II that were significant resource investments and outside the agreement? And you probably 

know what I am talking about, the Institute of Medicine report 

that was unfinished and not totally accurate? 

Dr. SHUREN. First of all, the IOM report, we didn’t pay out of any 

user fee dollars. 

Mr. SHIMKUS. Right, and $1.3 million of taxpayer funds went to 

the IOM report. 

Dr. SHUREN. Well, there were concerns raised on the 510(k) program, how well it was operating to meet the—— 

Mr. SHIMKUS. But there was obviously concern about the accuracy of the IOM report also. 

Dr. SHUREN. Well, we did disagree with one of their recommendations regarding the 510(k) program. We actually agreed 

with most of their other recommendations. 

Mr. SHIMKUS. Thank you, Dr. Shuren. I appreciate your time. 

Dr. SHUREN. But I do want to make the point on clinical trials, 

because it is an important one, and we don’t want innovators going 

overseas, but quite frankly, if we are approving a clinical trial and 

we are putting our name on it saying that this study is good 

enough to show safety and effectiveness but it doesn’t and it is not 

going to then support that product coming to market, then we have 

put patients at risk because they are—— 

Mr. SHIMKUS. But they are going overseas. 

Dr. SHUREN. And then the companies come in the door, and this 

is exactly what was happening, with studies that then they weren’t 

getting their products approved, and that is the worst thing for the 

company and it is the worst thing for patients. So the policies we 

83 

have put out have actually tried to address the real problem, which 

is reviewers who are coming back to ask for a study that quite 

frankly they believe is the better study but that is not the point. 

It is the least-burdensome principle. They need to put out the 

study that is least burdensome and approve it. And the second is 

that they were holding up approvals trying to address questions 

that were not relevant at that time for making a decision and so 

draft policy we put out in the fall was meant to readjust that so 

that we were freeing up and making decisions and approving products. In fact, we are now seeing that first cycle approvals for clinical trials are going up. 

Mr. SHIMKUS. And I would just end by saying what I think we 

have done is moved our innovators overseas, and I yield back my 

time. 

Mr. PITTS. The chair thanks the gentleman and now recognizes 

the ranking member emeritus, Mr. Dingell, for 5 minutes for questions. 

Mr. DINGELL. Mr. Chairman, thank you. I commend you for this 

meeting of the committee and for your fine cooperation in framing 

this legislation and working with the minority. I also want to express the same commendations to our distinguished chairman. 

These questions go to Dr. Woodcock. Please respond yes or no. 

The heparin incident made it clear that there needs to be robust 

communications between drug manufacturers and FDA regarding 

unsafe or compromised drugs. Currently, does the Food, Drug and 

Cosmetic Act require manufacturers to notify FDA if they have reason to believe that their products have been adulterated, contaminated or misbranded prior to distribution? Yes or no. 

Dr. WOODCOCK. No. 

Mr. DINGELL. Are drug manufacturers currently required to notify FDA if their drug has been stolen, counterfeited, lost or there 

have been repeated manufacturing quality incidents? Yes or no. 

Dr. WOODCOCK. My understanding is that they do have to notify 

us for quality problems under field alert reports. The rest is no. 

Mr. DINGELL. OK. Now, would requiring drug manufacturers to 

report such information to FDA confer benefit on the public health? 

Dr. WOODCOCK. Yes. 

Mr. DINGELL. As FDA continues to regulate an increasingly 

globalized market, the ability of FDA to work and share information with trusted foreign regulatory counterparts is critical. Do you 

believe that, and is that a correct statement? 

Dr. WOODCOCK. Yes. 

Mr. DINGELL. Doctor, is it true that FDA only shares commercial 

confidential information with State, local or trusted foreign regulators when FDA has written assurance that the agency will not 

disclose? Yes or no. 

Dr. WOODCOCK. Yes. 

Mr. DINGELL. Doctor, can FDA currently share trade secret information with State, local or trusted foreign regulators? Yes or no. 

Dr. WOODCOCK. No. 

Mr. DINGELL. Now, would authority to share this information 

with other regulators help monitor FDA’s efforts to protect the 

American public with regard to today’s globalized drug supply? Yes 

or no. 

84 

Dr. WOODCOCK. Yes. 

Mr. DINGELL. Now, would this authority help FDA to have better 

information to assess risk and target oversight? Yes or no. 

Dr. WOODCOCK. Yes. 

Mr. DINGELL. Doctor, if given this authority, FDA would commit 

to only sharing such information with trusted foreign regulators 

when they have proper and satisfactory assurances that the foreign 

agency will not disclose. Is that correct? 

Dr. WOODCOCK. Absolutely yes. 

Mr. DINGELL. Is that necessary for us to do? 

Dr. WOODCOCK. Yes. 

Mr. DINGELL. I happen to think so. Now, Doctor, so then the 

agency would not share proprietary commercial information like 

the formulation of Coca-Cola with China or any foreign country. 

Am I correct on that? 

Dr. WOODCOCK. Yes. 

Mr. DINGELL. And FDA would protect that concern and that policy. Is that right? 

Dr. WOODCOCK. That is correct. 

Mr. DINGELL. Now, Doctor, I have a concern. We have the ability 

to regulate to some degree the shipment into this country of food, 

drug, cosmetics and devices. How about the raw materials or the 

components of this? What is FDA’s ability to regulate? Do you have 

a statutory ability to regulate or not? 

Dr. WOODCOCK. We have very limited ability to regulate the supply chain of components. 

Mr. DINGELL. Now, I must assume that being able to regulate 

that kind of activity and that kind of product would be extremely 

important to assure the safety of American consumers. Is that 

right? 

Dr. WOODCOCK. Yes. 

Mr. DINGELL. We found that out in the heparin case, did we not? 

Dr. WOODCOCK. We did. 

Mr. DINGELL. Now, this committee looked at this problem over 

the years of safety and that sort of thing, and one of the things 

that we found is that nobody seems to be able to keep out the admission of illegal substances, unsafe, counterfeits and things of 

that kind including some controlled substances, and I sense that a 

part of that, although not all, is the inability of Food and Drug to 

have the money, the personnel and the necessary cooperative 

agreements with other regulatory bodies that deal with entry of 

commodities and people into this country. Am I correct in that? 

Dr. WOODCOCK. Yes. 

Mr. DINGELL. Do you need additional authority there? 

Dr. WOODCOCK. Yes. 

Mr. DINGELL. Mr. Chairman, I notice I have used all my time. 

I thank you for your courtesy. 

Mr. PITTS. The chair thanks the gentleman and now recognizes 

the gentleman from Michigan, Mr. Rogers, for 5 minutes for questions. 

Mr. ROGERS. Thank you, Mr. Chairman. 

Dr. Woodcock, I want to thank you and your staff for working 

with us on the permanent reauthorization of BPCA and PREA. 

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tive. I introduced that legislation with my friend, Ms. Eshoo from 

California, and Mr. Markey, and I think it is representative of good 

bipartisan work, which is included in the committee’s draft today, 

so I am hoping that other members will join us in supporting that 

effort. I think they will, and I am proud to say the bill has support 

of numerous stakeholders, as you know, including the American 

Academy of Pediatrics, BIO and PhRMA. So I think we are in a 

good place. We will do good things. And again, I want to thank you 

and your staff for that. While making these laws permanent, the 

bill also includes important reforms to encourage earlier submission of pediatric plans, give the FDA new enforcement tools to 

make sure sponsors meet their PREA commitments and improve 

FDA’s ability to track pediatric studies. I believe our bill strikes 

that right balance and will improve pediatric drug research, and I 

hope all members on the committee can support it. 

Dr. Woodcock, as you know, there was some language actually 

authored in 2007 that began the process of developing a standard 

numerical identifier, or SNI, to help the tracking and tracking of 

prescription drugs. However, the FDA currently does not have the 

authority to require the use of SNIs throughout the supply chain. 

Is that correct? 

Dr. WOODCOCK. That is correct. 

Mr. ROGERS. So you are familiar with the proposal put forward 

by a broad group of stakeholders in the drug supply chain on this 

particular issue? 

Dr. WOODCOCK. Yes. 

Mr. ROGERS. Great. So if you agree that additional statutory authority is needed to protect the drug supply chain, and I assume 

you aren’t comfortable waiting another 5 years, at least I hope you 

are not, for the next UFA reauthorization, to create a system that 

protects patient safety, I would encourage you to roll up your 

sleeves and sit down with this coalition, and I hope you can do that 

soon. I think it would be highly productive, and I believe there is 

a solution here that provides FDA with more authority than it has 

today but does so in a reasonable, thoughtful way that balances 

costs and enhancements to patient safety and the supply chain, so 

I am hoping that we can get a commitment that you will sit down 

with that coalition and begin that process. 

Dr. WOODCOCK. I would be happy to do so, and we obviously 

need to make advancements in this area. We are seeing, as we saw 

recently with the counterfeit Avastin and others, we are seeing 

more incursions of actual drugs that are totally fake into the U.S. 

drug supply. 

Mr. ROGERS. Which is highly concerning, and concerning for you 

as well. So I look forward to hearing reports on those coalition 

meetings. Hopefully they will happen soon. 

Dr. Shuren, I have some concerns about that new proposal, and 

I know Mr. Shimkus talked about it a little bit on the 510(k) submissions. It is my understanding that they would have to submit 

these submissions under your new rules for small manufacturing 

issues like changing suppliers. Is that correct? 

Dr. SHUREN. In a number of cases, it depends. The supplier 

change may be something that actually doesn’t get reported to us. 

86 

Mr. ROGERS. But apparently there has been some confusion, but 

in some cases it would and in some cases it would not. Is that correct? 

Dr. SHUREN. Yes, and we can actually get back to you with more 

details. 

Mr. ROGERS. So there are details, so if I read that in total, as 

a manufacturer I would understand when exactly I have to report 

or when I do not have to report. Because my understanding is, 

there is confusion in the way it is written, and if you are on the 

manufacturing side of that, you are going to have to err on the side 

of reporting. 

Dr. SHUREN. So there are a number of parts in that guidance 

where confusion has arisen. We recognize that. Our intent in the 

guidance was to clarify circumstances for submitting a modification 

because we had guidance out there beforehand and manufacturers 

were then running into circumstances where we have never addressed the question. They didn’t know what to do. Our intent was 

to actually clarify those circumstances. We recognize there still is 

a lot of confusion, which is why we have taken the effort to try to 

work with industry and we will continue to do so to provide clarity 

that will be most helpful to them, but our goal is not to suddenly 

raise up the bar and see many more 510(k)s getting in the door. 

Mr. ROGERS. But unfortunately, the reality is, that is what is 

happening and they are going through these processes now believing that they have to do it, so having future conversations aren’t 

really all that helpful. 

Dr. SHUREN. Well, it is a draft guidance, so nothing has changed, 

and that is the whole point of the guidance process. We go out 

there, we get public comments and we can work this through. That 

happens all the time. If you actually look at the guidances we put 

out last year, it is about 44. We heard concerns about maybe three 

of them in any big way, and that kind of shows the process ultimately works. 

Mr. ROGERS. I hear you, but that is the difference between not 

having to meet a payroll, meeting a payroll, meeting the guidelines 

for the government that regulates you. They will start to make adjustments based on those guidelines. It will cost them money. They 

are doing it today, which is exactly why we are hearing from 

innovators, this isn’t worth it anymore, it is easier for me to head 

overseas than it is to try to deal with what is an untenable regulatory environment. That is what concerns me, and this notion that 

it is all just fine and it is only guidance and nobody should worry 

about it is absolutely incongruent with the real world. That worries 

me greatly, and I hope you will take a hard look at this and come 

back, and if that is the case, then start making serious indications 

to the folks who are actually under the gun for this investment to 

save kids’ lives or devices or fill in the blank that you will make 

that early. Otherwise they are going to have to make these adjustments, and I think that is what you are missing and that is where 

the frustration is coming from. And I see my time is done, and I 

thank you, Mr. Chairman. I look forward to hearing about your 

progress in the coalition’s effort to bring manufacturing and clinical 

trials back to the United States. 

87 

Dr. SHUREN. We would be happy to do it. We would actually be 

happy to come and talk to you in more detail on what is going on 

with clinical trials. In fact, some of the policies, if you really want 

to get technology to this country and keep it here, you focus on the 

very first clinical studies because the innovators have said loud and 

clear, if there is a good opportunity to start clinical studies here, 

we bring the technology here, we keep it here, because we keep 

going back to the same doctors and we put out policy in November 

to actually make it easier to start those early studies and start it 

earlier in device development than ever before. The feedback was 

very positive. In fact, companies have wanted to act under a draft 

policy, and we have allowed them if they wanted to because they 

like that policy so much, and we have heard very good feedback 

from the innovators on that. 

For modifications, it is a draft policy, it is not in effect, and we 

will work with companies and we are happy to come back and give 

you updates on it to finally get it right, and as I said, this is one 

where we anticipate we would go out with another draft before 

even moving to final. 

Mr. ROGERS. Thank you, Doctor. 

Mr. PITTS. The chair thanks the gentleman and now recognizes 

the gentlelady from California, Ms. Capps, for 5 minutes for questions. 

Mrs. CAPPS. Thank you very much, Mr. Chairman, and to our 

guests, thank you very much for being here today. I appreciate 

your testimony, Dr. Shuren. 

A couple of months ago at our hearing on medical device user 

fees, I had asked you about the Sentinel system for postmarket 

surveillance. The PDUFA V agreement allows for postmarket surveillance of prescription drugs through the Sentinel system. However, the same progress has not been made on the device side and 

the bill draft before us does not address this issue, and that is why 

I am working on language that would start the process of adding 

devices to the Sentinel program. I believe this would be a win-win 

for patients and the industry because patients would gain the security that potential device issues would be found early and recalls 

targeted to only those devices at risk. Similarly, industry would 

have the knowledge that data, not newspaper articles, would drive 

safety decisions. So I am going to have a question for Dr. Woodcock 

as well, but I would like you to discuss, please, the opportunities 

for Sentinel in the device base as you see them. 

Dr. SHUREN. We think greater engagement for devices in Sentinel could be of tremendous value for not only patients but also 

for companies as we can identify if there is a problem more quickly 

so we don’t get those big newspaper articles, and even more robust 

systems that we might be able to leverage in terms of informing 

for premarket review and ease some of the burden there. The barriers right now, the biggest one is, we don’t have there a unique 

device identifier as we have on the drug side and therefore it is 

hard to link an actual device with a patient’s experience with the 

device, and we have developed proposed legislation that—regulation—we can’t do legislation yet—a regulation that is currently 

under review by the Administration that will help, and it was helpful when Congress said that Sentinel should be there, should be for 

88 

drugs, because it gave a push for people to engage. We don’t have 

quite the same push on the device side. 

Mrs. CAPPS. Well, so if we could get some language in this bill 

that would give you that push, if you will, would that be a value 

to you and do you see that it is not a one-to-one corollary, I am 

sure, but there are ways to make it possible for a direct connection 

to be made, at least some kind of connection to be made from the 

device to the patient’s experience? 

Dr. SHUREN. Yes, we do think that could be helpful. 

Mrs. CAPPS. I appreciate that. Thank you very much. 

Dr. Woodcock, I appreciate your testimony as well. Back in February at our hearing where you testified on generic drug user fees, 

you and I had discussed the drug shortage problems this country 

is facing. It is still facing them. It is a very important issue that 

affected then and continues to affect a great number of people including many of my constituents, and I had shared one story at 

that hearing. Given the gravity of this situation, I am pleased to 

see that current legislation now before us includes measures to try 

to address this problem, but I am concerned that the way the draft 

is written, it could preclude some health care providers from being 

involved. Currently, in three separate sections of the FDA user fee 

discussion draft, the bill lists stakeholders to be consulted with in 

regards to drug shortages. However, it doesn’t specify what kind of 

stakeholders and health providers like nurse practitioners and physician assistants are notably absent from these lists, despite the 

fact that the work they do have been affected by drug shortages, 

in some ways even more directly because they are so much on the 

front lines. This is evident, for example, in a nurse anesthetist’s 

difficulty in finding anesthesia drugs or an oncology nurse practitioner who is the actual person who dispenses the medication 

under the doctor’s direction and they see firsthand the cancer drug 

shortages, so would you share with us your thoughts on the kinds 

of stakeholder engagement with regard to drug shortages? 

Dr. WOODCOCK. Well, we believe that we need to hear from the 

whole prescribing community, which includes a wide range of individuals. Also, the entire pharmacy community is a very important 

resource for us. So the stakeholders are almost anyone who uses, 

dispenses, prescribes or manages drug supply in this country and 

so it is a very broad group of people. 

Mrs. CAPPS. And I thank you for that. I believe there is an easy 

fix here, which I am sort of saying to our committee members to 

ensure participation and then just including the phrase ‘‘all relevant health professionals’’ not just doctors and hospitals, and that 

is something you would then agree with? 

Dr. WOODCOCK. Yes. 

Mrs. CAPPS. That would be useful language to include? 

Dr. WOODCOCK. Yes. 

Mrs. CAPPS. I appreciate that. Thank you, and I yield back the 

balance of my time. 

Mr. PITTS. The chair thanks the gentlelady and now recognizes 

the gentlelady from North Carolina, Ms. Myrick, for 5 minutes for 

questions. 

Mrs. MYRICK. Thank you, Mr. Chairman, and I thank both of you 

for being here. 

89 

Dr. Woodcock, as you know, the discussion draft at hand makes 

an effort to further address the drug shortage issue, and I know 

the FDA is playing close attention to shortage issues as well as 

working with DOJ on issues of price gouging and stockpiling, but 

it recently came to my attention that there appears to be a growing 

problem with drug shortages for trauma and critical-care patients 

so I have got two questions for you. Does the FDA have a sense 

of how widespread the shortage is for drugs often used in trauma 

and critical-care settings, and how do the FDA and DEA need to 

work together to prevent further shortages in controlled substances 

used in the critical-care field? For example, are there changes that 

need to be made to the DEA number assignment system for controlled substances that are being substituted in the event of a 

shortage or are there other interagency solutions that could alleviate the shortage problem for DEA-controlled drugs, you know, 

short of an act of Congress, something that you could do internally 

or with the other agencies? 

Dr. WOODCOCK. Well, on the first question, we are well aware 

that both critical-care settings and trauma settings are being impacted by drug shortages. The shortages are for sterile injectable 

products, products that are injected directly into, say, a vein or 

your IV line primarily, and these actually are used in a wide variety and unfortunately very important medical illnesses, very serious and life-threatening illnesses. They are used in ICUs and emergency rooms as well as in cancer treatment, and we are aware of 

these shortages. We have heard from the professional societies, I 

have heard personally, and we are doing everything we can. This 

year we have averted 22 shortages already because we have heard 

early notification. However, shortages do remain and they are causing serious consequences for the public. 

As far as the DEA, we work closely with the DEA. They have a 

system of allocating materials to companies based on—we provide 

information to the DEA on projected use for each year as part of 

their process, and we work with them on shortages, informing 

them and so forth, but I believe that further discussion of this 

might require going into more detail, and we would be happy to 

work with you on that. 

Mrs. MYRICK. I would appreciate it very much if you could get 

back to us because that is an issue I think that there may be some 

solutions as other people have said with other things. 

I have got a second question too. Your testimony goes into some 

detail about FDA’s calculation of risk and benefit when it comes to 

approving treatments for fatal diseases, and you list a recently approved metastatic-melanoma drug as an example of this risk-benefit approval calculation. It is stated it poses severe and even fatal 

autoimmune reactions in 12.9 percent of the patients treated yet 

the drug was approved. The drug is not a cure but, you know, patients successfully treated live much longer than with others. My 

question is, was this drug approved in tandem with a screening 

test to distinguish the patients who might respond well from those 

who might suffer serious autoimmune responses? 

Dr. WOODCOCK. No. I think scientifically we aren’t there yet to 

be able to predict that. I am a rheumatologist, and I can tell you 

90 

our understanding of rheumatic diseases and autoimmunity is still 

not as advanced as it should be. 

Mrs. MYRICK. Well, would it not be helpful to do some screening 

test to try and figure out in addition to what you are doing on this 

issue? 

Dr. WOODCOCK. Absolutely, and we support at FDA the concept 

of personalized medicine. It is simply that scientifically we don’t 

have the tools to develop such a test, and because the patients can 

develop a wide range of autoimmune symptoms, and to predict 

each one of those and whether people would develop autoimmunity 

against their thyroid or their brain or their vessels, we don’t have 

the technology to do that right now. But in the future, that is the 

future of medicine. 

Mrs. MYRICK. Thank you, Mr. Chairman. 

Mr. PITTS. The chair thanks the gentlelady and now recognizes 

the gentlelady from Illinois, Ms. Schakowsky, 5 minutes for questions. 

Ms. SCHAKOWSKY. Thank you, Mr. Chairman, and I want to 

thank both of you for your testimony. 

Dr. Shuren, I want to revisit a topic we discussed at the February 15th MDUFA reauthorization hearing. There had been suggestions that FDA’s mission statement should be changed to include things like job creation and innovation, and in fact, the draft 

House user fee bill does include those changes to the FDA mission 

statement. And when you testified in February, you spoke about 

the ‘‘unintended consequences’’ that could lead to ‘‘troublesome 

changes’’ at the agency, changes that could actually slow down or 

complicate the review process, not to mention change the standard 

of evidence for product approvals. You also said that changing the 

mission statement could even force the FDA to expose confidential 

industry information, something industry was telling you please 

don’t do, and could require the FDA to review commercial financial 

records. So I am asking if you could comment on the implications 

of revising the FDA mission statement to include things like promoting innovation, economic growth, competitiveness, and I am 

particularly interested in whether you think these should be a part 

of the core mission of a public health agency. I would also like to 

know whether these and other requirements in the mission statement might be the basis for lawsuits or other challenges against 

the agency. 

Dr. SHUREN. Well, we do have concerns about some of the 

changes that would be made to our mission statement, and the 

highlighted economic growth or job creation is of concern. If this 

now becomes a part of what we take into account in making decisions, think about approval decisions. Whose jobs are we talking 

about, the job of the companies coming in with a product and they 

may get some more jobs or the competitors who may lose jobs? In 

fact, when there is disruptive technology, many of the competitors, 

there are shakeups in the market and some of the companies, their 

product lines go and people’s jobs may go. Are we talking about foreign companies? Are we talking about U.S. companies? Are we now 

taking into account financial considerations in terms of those companies’ anticipated market growth or not? Those are things our scientists shouldn’t be dealing with. We should focus on science in asVerDate Nov 24 2008 10:27 May 30, 2013 Jkt 037690 PO 00000 Frm 00096 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 112\112-136 CHRIS
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suring that the products that come on the market are safe and effective, and that is protecting public health and we are also promoting public health, which is already in our mission statement. 

Regarding lawsuits, just within the past few months we have 

had two lawsuits where the mission was cited as one of the bases 

for that lawsuit, and we do see that coming. So if there are changes 

to the mission statement, yes, people will use that as a basis for 

lawsuits. 

Ms. SCHAKOWSKY. Thank you. Those changes concern me very 

much as taking away from the core mission that you have, and I 

would also like to ask Dr. Woodcock, because the dramatic changes 

to the FDA mission statement would apply across all product areas 

including drugs, I wonder if you could also comment on those proposed changes. 

Dr. WOODCOCK. I agree with Dr. Shuren. We neither have the expertise to figure out the economic consequences and parse them finally nor—our primary public is the people who take medicines 

and the people prescribing give those medicines. To them we owe 

our central obligation of making sure those drugs are safe and effective and they reach them as rapidly as possible. So I see this 

could have negative consequences. 

Ms. SCHAKOWSKY. And you are suggesting that those negative 

consequences could be patients, industry, the agency. What are 

your main concerns? I mean, would you view this as a distraction 

from what you are currently doing? 

Dr. WOODCOCK. Yes, and it would be primarily that we would 

have challenges of our approval decisions based on factors that 

most people would consider extraneous to whether the product will 

really help people. That has to be our main consideration, is it effective in the population, is it safe, and if we are asked—that is 

what I believe we should be focused on: impact on patients. 

Ms. SCHAKOWSKY. Well, I agree. I think this would be a dramatic 

shift in focus and one that really the agency has no historical expertise nor in my view should it. So I thank you and yield back. 

Mr. PITTS. The chair thanks the gentlelady and recognizes the 

gentleman from Pennsylvania, Dr. Murphy, for 5 minutes for questions. 

Mr. MURPHY. Thank you very much. 

Dr. Woodcock, welcome back. I always appreciate your candor 

and information to us. I also want to thank my colleague, Mr. Dingell, for working with us on some of the issues involving GDUFA. 

And finally, in your testimony, I want to thank you for working on 

the accelerated approval of Kalydeco for cystic fibrosis. Many of the 

patients I know in my area are grateful for that. I know it is a 

small step but it is a significant step, and I think it is an example 

of why we need to be moving on some things with accelerated action here. 

At a recent Senate hearing, you stated—you were talking about 

the challenges in international factory inspections. Here is your answer. You said there are two issues here. One is the FDA’s ability 

to inspect to inspect those foreign facilities and the generic drug 

user fee program squarely addresses that, and I will level the playing field and make sure that the intensity of inspection, domestic, 

foreign, no matter where, will be the same and will be able to use 

92 

a risk-based approach to inspection. Now, under the GDUFA goals 

letter, the FDA says it wants to achieve biannual inspection of foreign plants within 5 years, so here is my two-part question. First, 

is your answer from the Senate hearing still true, and two, can the 

FDA achieve parity between foreign and domestic facility inspections within the 5-year $1.5 billion time zone outlined in GDUFA? 

Dr. WOODCOCK. Yes, we believe that the answer is true. I was 

at a meeting yesterday where we were discussing this with our 

field organization and the Center for Drugs how we would implement this inspectional program, and we would really look forward 

to having that global safety net in place. 

Mr. MURPHY. Thank you. Now, I should disclose an important generic drug manufacturer, Mylan, is headquartered in my district, 

and we want to make sure that any inspections they have to go 

through are equivalent to what takes place overseas. Now, my understanding is that based on the current statute, the FDA inspects 

domestic plants more frequently because they are looking for socalled ‘‘known risks’’ even if the plant has no history of problems 

but inspectors don’t have the same body of knowledge about foreign 

factories because they haven’t been there, and sometimes not in the 

last decade. So Dr. Woodcock, will you agree that inspectors have 

a certain comfort level visiting domestic factories because there is 

a record of inspection history that helps to identify known risks to 

these factories? 

Dr. WOODCOCK. My understanding is that we have a statutory 

requirement to inspect domestic facilities every 2 years, and that 

is partly what drives the frequency of inspection. It is also that 

there is considerable logistical challenges to covering the globe. But 

the Center for Drugs has a risk-based approach to inspecting facilities. We try to identify the facilities that pose the most risk including the fact that we don’t very much about them and try to target 

out inspections based on those risks. In addition, we do 

preapproval inspections, so that drives quite a few inspections because before a drug is released on the market, we want to know 

that the facility that is producing it and often it is multiple facilities are in compliance. 

Mr. MURPHY. Thank you. I am just concerned here that if you 

go to a domestic factory, you see a problem, you can follow up or 

even a suspicion something might have happened but if we have 

long time delays—and I understand the global problems there but 

it is a concern that there is not the same follow-up. If Congress directs the FDA away from a statutory requirement to inspect facilities once every 2 years and instead allows the agency to adopt a 

risk-based approach, what factors might the agency consider using 

to determine what is a facility in need of inspection versus one that 

may not be? 

Dr. WOODCOCK. Well, we currently have a model. Obviously one 

of them is how recently have we been to the facility and how much 

do we know about it, and really, the less we know, the more important it is to know more and to visit the facility but also, for example, parenteral drugs that have to be sterile are a higher bar of 

manufacturing than tablets or capsules or creams, so that is a factor. The number of products that are produced in a facility ups the 

ante of risk, so to speak, because it is harder. There are more 

93 

changes for mix-ups and so on if you have a lot of products made 

on the line. We have multiple factors like that that are technical 

on the challenges of manufacturing that go into the calculation as 

well as the history of the firm—have they been having problems, 

has that facility had problems in the past. That should prompt 

more frequent visits. 

Mr. MURPHY. Well, thank you. I know that I am just about out 

of time but I wanted to also note that I am exploring putting guidance into the FDA for placing higher priority on inspecting foreign 

plants that have not been visited within the last 4 years. I could 

see this is beneficial for public safety because I think it would establish something of a psychology for plants that haven’t been visited in the past 4 years that the FDA might be visiting soon, and 

I welcome your thoughts on that too, and also, in the goals letter 

for GDUFA, the FDA estimates that are 2,000 finished dosage form 

and active pharmaceutical ingredients manufacturing facilities that 

are associated with generic drug applications. I hope you can get 

to me in the future and let us know if this estimated all included 

the FDF and API facilities and does the FDA believe that there are 

other registered facilities under its jurisdiction that solely support 

branded applications. I will get you those questions in writing and 

I appreciate some feedback. Again, Doctor, thank you for your candor. I really respect your comments. I yield back. 

Dr. WOODCOCK. Thank you. 

Mr. PITTS. The chair thanks the gentleman and recognizes the 

gentleman from Utah, Mr. Matheson, 5 minutes for questions. 

Mr. MATHESON. Thank you, Mr. Chairman. And Mr. Chairman, 

I want to acknowledge how you have been working in a bipartisan 

manner on the reauthorization of this. I really appreciate that. 

Over the past several years, I have worked with drug supply 

chain stakeholders in crafting legislation to develop a national system to better protect our Nation’s drug supply against counterfeiting threats. Last year, I introduced legislation along with my 

colleague, Mr. Bilbray, to address this issue, and I certainly want 

to thank him for all the work he has done with me on that bill. 

Recently, a consortium of stakeholders from all sectors of the supply chain have come together to craft a proposal to address counterfeiting and supply chain safety. I am pleased to see that many 

of the elements of the legislation that I have worked on were included in this RxTEC proposal. I am supportive of this proposal, 

and I hope to see its inclusion in this year’s user fee reauthorization, and I would like to note that the last time this committee attempted to work on a national track-and-trace system, we failed because there was no consensus among the supply chain stakeholders. The FDA has raised concerns over this proposal because 

it does not mandate a unit-level system by a date certain. 

Dr. Woodcock, in your written testimony, you note that Congress 

should provide FDA with the authority to require a ‘‘cost-effective 

track-and-trace system in order to improve the security and integrity of the drug supply and show transparency and accountability 

in product manufacturing and distribution.’’ However, many in the 

supply chain have raised concerns that a date-certain mandate approach would be cost-prohibitive and create a logistical challenge 

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tion that I have for you, Dr. Woodcock, first, how do we ensure that 

a date-certain approach is in fact cost-effective and does not have 

unintended consequences such as job loss or further exacerbating 

the growing drug shortage problem in this country? 

Dr. WOODCOCK. Well, to start with, I would like to say again that 

we need to look at the problem we are trying to solve and make 

sure that any interventions we take will solve the problems that 

we are trying to address. My understanding with track and trace 

is, we are trying to deal with counterfeits, stolen drugs that are reintroduced, recalls, substandard drugs and so forth and prevent 

them from actually reaching patients and harming people. Our concern about the current proposal by the coalition, we have talked to 

them. As I said, I am happy to meet with them but that it will not 

meet the objectives of preventing those problems. It may help—in 

my analysis, it may help in reconstructing what went wrong after 

the fact, but if you want to interdict counterfeits and tampered 

drugs and so forth from reaching patients, then you have to be able 

to recognize it at the time it is introduced into the system, and so 

any system, any new requirements that don’t accomplish that may 

not be worth the cost because they may be additional things that 

people have to do, but if they don’t accomplish the objectives of protecting patients, they may not be worth it. 

Mr. MATHESON. I am all for looking for the objective but you just 

mentioned cost, it may not be worth the cost, so I am suggesting 

that the concerns raised that if you want a date-certain mandate 

that that is going to have negative cost consequences, and so my 

question is, how do we evaluate, how do you intend to look at if 

there is going to be—the cost effect is not going to be a problem 

here? 

Dr. WOODCOCK. Well, we have been looking at this. We plan to 

develop and are developing voluntary standards that we would put 

out that people could use and hoping that the technology which 

many products in the market are tracked this way already, not 

pharmaceuticals, so hoping that the technology will reach a state 

where it will be cost-effective and not excessively burdensome. 

Mr. MATHESON. I have to admit, hoping technology gets there 

and seeing date certain, those things in my mind are in conflict. 

I don’t actually think that matches well. 

Noting some of the challenges that the California law is facing, 

I am trying to understand why this date-certain approach would 

work at a federal level when it has caused difficulties at the State 

level in California, and should we not look at the types of systems 

that are feasible across the supply chain system before we decide 

what and when to mandate? 

Dr. WOODCOCK. Well, I do believe that we should look at feasibility, absolutely. However, many of the stakeholders have told us 

they are worried about having 50 different systems. 

Mr. MATHESON. That is why I introduced my bill. I hear you. We 

need a national standard. I am just trying to figure out how we are 

going to manage it. 

Dr. WOODCOCK. But that means we have to settle on the technology if we do that, and what is going to be tracked and how it 

is going to be tracked, and that has been difficult because right 

now the costs have been fairly significant to some of the stakeVerDate Nov 24 2008 10:27 May 30, 2013 Jkt 037690 PO 00000 Frm 00100 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 112\112-136 CHRIS
95 

holders because they don’t do this now. They don’t electronically 

track the products as they move through the supply chain and all 

the way to the patient. So I agree, there are tradeoffs here, and it 

will cost money to put such a system into place. 

Mr. MATHESON. I will just close by saying I think the RxTEC 

proposal represents a consensus of a lot of the stakeholders. It does 

agree on a one-size-fits-all for the country and not 50 different 

State approaches. And I think we ought to continue this discussion 

about looking for if there is a way to accommodate this proposal 

without mandating a date-certain approach. 

With that, Mr. Chairman, I will yield back. 

Mr. PITTS. The chair thanks the gentleman and recognizes the 

gentleman from Ohio, Mr. Latta, for 5 minutes for questions. 

Mr. LATTA. Thank you, Mr. Chairman, and welcome back to the 

committee. Great to see you again. 

Kind of going in a little bit different direction here. Dr. 

Woodcock, I know of a number of hospital systems that are coping 

with the hospital drug shortage by repackaging those drugs into 

smaller dosages, and these hospitals have also noted that the current law does not allow for the hospital to repackage a drug for use 

in another hospital within their own system, and we have quite a 

few systems, of course, not only in Ohio but across the country, and 

this appears to be an older regulation dating back to when hospitals were typically only in one building before they became the 

hospital systems. Has the FDA looked at updating this requirement to allow for repackaging within the same hospital system? 

Dr. WOODCOCK. I would have to get back to you on that. I do not 

think that we would object to such practices if they would help alleviate shortages but whether there is a law on the books that is 

being interpreted as prohibiting that, I am not aware of that. 

Mr. LATTA. And again, I am glad to hear that because again, it 

seems a logical way to help solve it, because again, if one hospital 

has it, they could get it out to one or others in the same locale. 

That would be helpful because, again, it would help alleviate those 

shortages. 

Dr. WOODCOCK. If I may interject? 

Mr. LATTA. Absolutely. 

Dr. WOODCOCK. We allow pharmacy compounding. Usually the 

hospital pharmacy would be handling these products and they 

would be the ones to put it into smaller vials or whatever. So that 

is why I am confused about why they feel that that isn’t allowed, 

and we will get back to you on that. 

Mr. LATTA. I appreciate that. And over time, it would help alleviate the problem, because again, we are talking about these shortages, I know you have been here before. We have quite a bit of discussion about that as to how to alleviate it, and when you have the 

situation that at least in the chain that one of the hospitals has 

the ability to supply the other ones, it would be very helpful, and 

so I look forward to your response on that. I would like to get back 

to these hospitals to be able to say that they can get this done and 

help alleviate that problem. 

And with that, Mr. Chairman, I yield back. 

96 

Mr. PITTS. The chair thanks the gentleman and recognizes the 

gentleman from Louisiana, Dr. Cassidy, for 5 minutes for questions. 

Dr. CASSIDY. I always enjoy both your testimonies. Thank you. 

And as a practicing physician, I respect what you said earlier, Dr. 

Shuren, that the FDA’s obligation is to protect patients’ health. I 

thank you for that too. 

I would like to build upon, Dr. Woodcock, our conversation last 

time which was very good. The last time, I think we agreed that 

a valid prescription would be important to have, not just for controlled substances as currently but also for non-controlled drugs. So 

I just wanted to state that for the record. 

Dr. WOODCOCK. I agree. 

Dr. CASSIDY. Secondly, we also spoke a lot about illegitimate online pharmacies. Now, you had mentioned the VIPPS program, 

which I had mentioned as a practicing physician married to a physician we did not know about, but since then we have kind of 

looked at it. I gather that this, although a good effort, only has 

about 30 pharmacies listed even though it is estimated there are 

about 1,500 legitimate pharmacies and just an explosion of illegitimate pharmacies. And secondly, that we still have, despite our 

conversation last time, there continues to be reports of adulterated 

drugs causing harmful effects to patients here in the United States. 

So with that said, Representative Ross and I in a companion bill 

to something that Senators Feinstein and Cornyn and others have 

introduced on the other side have an online pharmacy bill requesting that FDA compile a registry of legitimate online pharmacies so 

that I as a doc or I as a patient or I as a dad of a patient could 

log on and see, is this a legitimate online pharmacy. I gather FDA 

has some objections to that. Could you kind of go through those objections? 

Dr. WOODCOCK. Certainly. Basically there are practical difficulties in us doing that. As you said, there is a huge plethora of pharmacies that are probably not legitimate that consumers do order 

their drugs from and often they have no assurance that those are 

actual drugs. 

Dr. CASSIDY. That is why we have the bill. 

Dr. WOODCOCK. Yes, so we are in agreement on the problem. We 

have trouble certifying Internet sites that would be legitimate. We 

have difficulties—— 

Dr. CASSIDY. But see, the National Association of Boards of Pharmacy, the NABP, currently does that. 

Dr. WOODCOCK. Yes. 

Dr. CASSIDY. So why can they do it and the government cannot, 

or why could you just not contract with them to ask them to do it? 

Dr. WOODCOCK. I think it is worth discussion on how to establish 

a broader list of legitimate pharmacies. It is another work stream 

that we don’t actually understand how we could accomplish very 

well. 

Dr. CASSIDY. Now, in our bill, we allow you to contract that. I 

mean, I can tell you, Google can tell you who is legitimate and who 

is illegitimate, you know, Google, the big Internet—— 

Dr. WOODCOCK. I know Google but we are talking about a pharmacy here and so—— 

97 

Dr. CASSIDY. But they advertise via Google, and so I suspect 

that—I mean, it is not an impossibility to do it. You may not have 

expertise nor I but I promise you, NAPB has that expertise, and 

our bill allows you to contract out to them. Why not? 

Dr. WOODCOCK. Well, we are not sure that a certification by the 

federal government could—it would have to be very frequent inspection of the distribution center because you have a web page but 

there is not necessarily a brick-and-mortar entity behind that. 

Dr. CASSIDY. Now, in there we do require to have some sort of 

U.S. asset, and we have spoken with NABP. Obviously, we weren’t 

concerned if someone could come in as legitimate and flip to being 

rogue. 

Dr. WOODCOCK. Exactly. That is one of our concerns. 

Dr. CASSIDY. NABP says that has never occurred in their experience. 

Dr. WOODCOCK. Of course, they only have 15 in there. 

Dr. CASSIDY. Thirty. That said, at some point we have to move 

beyond existential fear, oh, my gosh, we don’t know all the unknowns, and say if we are going to protect patient safety and we 

know this is an incredible problem, let us embrace the fear, if you 

will. Again, why do we allow existential fear to paralyze our efforts 

to protect our patients? 

Dr. WOODCOCK. I don’t think it is existential fear. I believe that 

we are having difficulty conceiving of how we would add this program to our existing programs. So we would be very happy to work 

with you on this and talk to you about it. 

Dr. CASSIDY. I would love it if you would support the bill because 

we will contract this out and there is someone out there that can 

do it, which I think is a logical thing. Someone out there knows 

how to do it even if the federal government doesn’t. When I go 

through TSA, they know everything about me. To think that we 

can’t figure who is legitimate and illegitimate just seems not quite 

to make sense to me. 

I have 2 seconds left but you have been giving everybody slack. 

Can I quickly ask one more question? 

Dr. Shuren, the unique identifier that has been suggested for 

medical devices, it is my understanding it has been held up at 

OMB for 5 years. That is what I was told. Maybe it not 5 years, 

maybe it is a shorter period of time. But even at the glacial pace 

at which government works, that seems a way to take a proposal 

and never get it out. Any thoughts about why OMB is holding up 

a unique ID system which really could help us improve safety of 

medical devices? 

Dr. SHUREN. It is probably a question best put to the Administration. I will say the rule has been under review since July of 2011, 

so not 5 years. 

Dr. CASSIDY. Oh, good. I am comforted by that. 

Dr. SHUREN. Well, sometimes when people hear that things take 

longer, sometimes it is not always correct. 

Dr. CASSIDY. OK. So any idea? Is there ongoing discussion or is 

it just a wall of silence? Do you have any sense of is progress being 

made on this? 

Dr. SHUREN. We continue to engage with OMB. We certainly believe it is important to have a unique device identification system 

98 

in place in the United States. It will be critical to have a robust 

postmarket surveillance system. It will help in terms of recalls and 

adverse-event reporting but can also allow us to have a system in 

which we may get sufficiently good data that can be used to support new products coming to market. So it is not just about better 

understanding of benefit-risk profile once out the gate. It may actually be able to help companies in reducing the new evidence they 

need to generate to bring a new device to the United States. 

Dr. CASSIDY. I yield back. Thank you. 

Mr. PITTS. The chair thanks the gentleman and recognizes the 

gentleman from Kentucky, Mr. Guthrie, for 5 minutes for questions. 

Mr. GUTHRIE. Thank you, Mr. Chairman, and first, Dr. Shuren, 

I just have a comment. I know we have met in my office over medical device approval processes. I thought that was a very good, productive meeting, and you have talked today about the first-time approvals or the innovators and the least burdensome and getting it 

right, being safe and effective, but also efficient. I think that is important. I appreciate that, because it has been a big concern of 

mine that we are having people go overseas to get their products 

approved but not going to the least common denominator, going to 

the European Union and other areas and trying to get approved. 

And so we are interested as oversight monitor how that goes forward and appreciate your openness in meeting on that. 

Dr. Woodcock, there is a question I have. I talked to anesthesiologists and anesthetists and of course in the childcare cancer drugs 

of the shortages. When there is a shortage in a drug, I guess you 

can go to an alternative source if a manufacturer can’t produce the 

drug. How does that process work? How do you actually make that 

happen? 

Dr. WOODCOCK. We hope usually we would get early notification 

from a manufacturer that they may be having to go out of production or reduce production and not meet the supply. We will then 

look around to all other manufacturers who have ever made that 

drug and see if they can ramp up so that we would avert the shortage. If that doesn’t happen, then we might look outside the United 

States to people making a comparable drug elsewhere and we 

would check with other regulatory authorities to make sure their 

production was proper and the history of the drug so make sure we 

are not introducing a substandard drug into the United States, and 

then we would allow importation of that drug to cover if a shortage 

actually developed and we would talk to that manufacturer. 

Mr. GUTHRIE. Is there a formal process for that? 

Dr. WOODCOCK. A formal process? 

Mr. GUTHRIE. A formal process. Does somebody have to notify 

you when they know they are not going to make shipments and 

things like that or it is something that you have to react to? 

Dr. WOODCOCK. Well, there is some requirement to notify us but 

of course there is interest in more formalizing that notification 

process, and we think that would be helpful. 

Mr. GUTHRIE. And I have had people talking about having to 

delay surgeries for anesthesia and childhood cancers. Those are the 

two I mentioned. I know there are others. But since you have a 

handful that seem to be the bigger issue, do you have like a list 

99 

of the people that can come online when you need to get them online? 

Dr. WOODCOCK. We have done extraordinary efforts to try and 

deal with this situation. The problem is that these are sterile 

injectables. There were only a few facilities in the United States 

that made these. They made large numbers of products so hundreds of products, and they had problems that they had to take 

their production offline and it almost sort of happened—it was like 

a perfect storm of problems. So we are having to look elsewhere 

and we are working with them as closely as possible to try to bring 

them back up into production of these medically necessary drugs. 

Mr. GUTHRIE. Do you think it would be helpful to have some kind 

of program that maybe manufacturers could voluntarily participate 

in? I know there are some areas you are just going to get 

blindsided because something happened in manufacturing. I know 

sometimes things happen in a manufacturing facility. But do you 

think if there would be a more formal program that maybe companies could volunteer to participate in, manufacturers could that 

could react quicker or do you think—— 

Dr. WOODCOCK. We have heard from the private sector, and they 

are putting together some efforts on exchanging information and 

providing better information to us, and we think that things like 

that would help also. I would stress that we already have the flexibility. We will allow the manufacturers to continue in production 

even if they are having manufacturing problems. Maybe they will 

release batch by batch. We have even had manufacturers sent a filter with the product that had particulates in it which can’t go into 

your veins, but we let them put a filter in after tests showed that 

would work and shipped that with the product so that that product 

so people could have anesthesia or they could have their cancer 

drugs. So we have a lot of flexibility. We do a lot of things now but 

it would probably help us to get more information earlier. 

Mr. GUTHRIE. OK. Thanks. I appreciate that very much, and I 

yield back. 

Mr. PITTS. The chair thanks the gentleman and recognizes the 

gentlelady from Tennessee, Ms. Blackburn, for 5 minutes for questions. 

Mrs. BLACKBURN. Thank you, Mr. Chairman. 

Dr. Shuren, I had a couple of questions for you. I really wanted 

to follow up on a letter that some of my colleagues and I sent to 

you earlier regarding the wireless medical devices and the mobile 

medical applications. You have talked a little bit about bringing 

technology and keeping technology-based jobs here in the country, 

talking to innovators. So I wish that you would take a couple of 

minutes and just detail what primary activities related to wireless 

health services and health devices are underway at the FDA including the independent and jointly with the FCC and the ONC, 

if you will, if you will just talk about what is underway there. And 

then I would also like to know who is tasked, if you have got one 

person that is tasked with overseeing the policy development in 

this area looking at regulations, guidance, documents, etc. 

Dr. SHUREN. Certainly. For wireless technologies specifically, we 

are working on guidance to provide greater clarity to industry. We 

know this is a booming market and we want to make sure that 

100 

innovators have the information they need to help bring those 

products to market. We have been working with the FCC. We sort 

of have split responsibility because they oversee what spectrum 

may be available and then we assure that when we are dealing 

with medical devices that they are safe and effective and so we 

have been getting together periodically to assure this good coordination where there are those areas in which we engage and to also 

make sure that we stay out of each other’s way. 

Mrs. BLACKBURN. And do you have one specific point person that 

is handling that? 

Dr. SHUREN. The person on our end who handles that engagement is Bakul Patel, and he is in my office. 

Mrs. BLACKBURN. OK. And then is he handling the intra-agency 

coordination as well as the interagency? 

Dr. SHUREN. Yes, that is correct, so one person. 

Mrs. BLACKBURN. So he is the guy in charge basically on that? 

Dr. SHUREN. So to speak, yes. 

Mrs. BLACKBURN. And then could we get a listing or a memo that 

would give us more or less the primary activities related to these 

wireless devices that are underway? Could you give us a little bit 

more information or guidance on that? And you can submit that in 

writing. 

Dr. SHUREN. We would be happy to do so. We can also provide 

more information regarding medical apps, an area where I think 

you know we took a position that while many of these apps could 

be under FDA authority, we actually made the decision that you 

know what, for the majority of these, they shouldn’t come to us 

even if they should as a matter of law and we are willing now 

to—— 

Mrs. BLACKBURN. So are you traveling then with your guidance 

to which—and this is one of my other questions for you. Realizing 

that there is a difference between medical devices and medical software, are you moving that direction to being able to provide that 

guidance? 

Dr. SHUREN. So there is also guidance on clinical decision support software. Some software has been regulated as medical devices 

for years. What we are doing is going back for those kind of software to say some of these things, you know what, we shouldn’t 

even look at even though they might fall under our purview and 

a lot of things that otherwise we would, we are going to come out 

with a policy that says we are leaving you alone. 

Mrs. BLACKBURN. So you are adjusting what would and would 

not fall under the Drug and Cosmetics Act of 1970? 

Dr. SHUREN. We are going even further to say even if you fall 

under it, we may go out and say we will exercise enforcement discretion, don’t worry about it, you don’t have to come to us. We are 

going to narrow actually our purview even further than what the 

law may otherwise say. We are trying to adapt to the emerging 

technologies and adapt our approach to the business models for 

software, because we realize that even in those cases where it 

comes to us, you can’t apply a traditional approach. There needs 

to be the ability to make frequent updates and for us not to get in 

the way of that technology. 

101 

Mrs. BLACKBURN. OK. Should we as legislators go in here and 

update the definitions of devices and software based on those advances in technology that you just touched on? 

Dr. SHUREN. We don’t think there is a need for it, and, you know, 

one of the challenges is, when you make the change in statute, it 

winds up having broad ramifications. It is very hard to put in 

something that applies the appropriate touch, if you will, and that 

is why we are able to do through a public process with policy 

changes where we can—— 

Mrs. BLACKBURN. OK. Let me ask you this then. You just talked 

about some of the software updates. I get notices for updates for 

different software packages all the time. I mean, it seems like almost a daily occurrence. So would each update that goes out, if it 

is under your jurisdiction, would each update need a separate approval process, or how do you envision that working? 

Dr. SHUREN. No, and in fact, we are kind of looking to have an 

approach where you can make those kind of routine changes in 

software and not have to bother coming to us. It would only be certain things where you really change the technology itself and what 

it was about where that is an issue, and even there, the universe 

where we are going to be focusing is very, very narrow, even 

though more things might fall under our purview, so we are truly 

restricting where we would focus, and at the end of the day there 

is the value added, but you will see that the majority of the stuff 

out there, our intent is to just leave it alone. 

Mrs. BLACKBURN. OK. Thank you. I yield back. 

Mr. PITTS. The chair thanks the gentlelady and recognizes the 

gentleman from Georgia, Dr. Gingrey, for 5 minutes for questions. 

Dr. GINGREY. Mr. Chairman, thank you very much. 

I will address my first question to Dr. Woodcock. First of all, let 

me apologize for coming in at the last minute. We had a concurrent 

hearing that I chaired, so I apologize for that. 

In reference to antibiotic shortages in general and specifically the 

GAIN Act in particular, I know that my colleague on the other side 

of the aisle, the ranking member, Mr. Waxman, had talked about 

that a little earlier this morning in regard to this limited population antibiotic drug proposal. Staff at FDA told my staff just this 

Monday that the FDA has not officially endorsed the LPAD, if you 

can call it that, that proposal. Has the FDA officially endorsed the 

Limited Population Antibiotic Drug proposal as part of the GAIN 

Act or in any way? 

Dr. WOODCOCK. Well, the Commissioner, Dr. Hamburg, and I 

have talked about this, a program like this to many different stakeholders so we certainly feel that is something that should be considered by Congress. But if course, there is nothing specific in the 

GAIN Act right now that reflects this proposal. So we do feel that 

it would be beneficial. The GAIN Act provides long-term incentives 

for companies to move back into the antibiotic space. A shortened 

development program, a very narrow development program would 

provide that short-term incentive. In fact, I have already heard 

from a company that has written me a letter asking if they could 

be designated as one of these products because they would be interested in entering that space if they had a very clear development 

path to market. 

102 

Dr. GINGREY. Well, I understand, and you said that you and Dr. 

Hamburg have discussed it and certainly I am not saying that the 

proposal does not have merit. I am just suggesting that at this late 

date, industry has some concerns in regard to making this part of 

the GAIN Act and subsequently of course part of PDUFA. I wanted 

to very specifically ask, and I will do that one more time. The FDA 

has not officially endorsed this. Is that correct? 

Dr. WOODCOCK. Well, the Administration has not put forth a proposal. 

Dr. GINGREY. Thank you very much, Dr. Woodcock. 

Dr. Shuren, there is a line in the FDA industry agreement that 

reads ‘‘The FDA proposes to work with industry to develop a transitional IVD, in vitro diagnostics, approach for the regulation of 

emerging diagnostics.’’ Dr. Shuren, explain to me what this means 

exactly. 

Dr. SHUREN. Well, actually this is something that industry put 

on the table, and they put it after 13 months of negotiation back 

and forth. It actually came up in our second to last meeting, so it 

was at the very end. And even though we have committed in 

MDUFA III to talk about it, we have actually already been meeting 

with industry on it. What we have seen is to date a very broad 

brush proposal that needs a lot of work but we will work with industry and MDUFA III in putting it forward, and the broad brush 

strokes are for certain IVDs yet to kind of be determined. Would 

they come on the market under a lower standard than currently is 

in place for products to get on the market in the United States 

with the requirement that they provide the additional data to show 

that they are ultimately safe and effective at a later date in time, 

and if not, to then come off the market. Those are the broad brushstrokes. One of the issues we will also have to wrestle with are the 

implications for the FDA because even if we went down that path, 

it involves two reviews and two decisions on the part of the FDA 

for every single one of those devices going through as opposed to 

the one review and the one decision, and those kind of resource applications we didn’t address in—— 

Dr. GINGREY. Let me ask you this, Dr. Shuren. I am about to run 

out of time. I have one other question I wanted to ask. Does the 

FDA see the benefit and support transitional pathway approaches? 

Do you believe that such a pathway can benefit patients and industry? 

Dr. SHUREN. Right now we need to work with industry on exactly 

what this is and what the ramifications would be. 

Dr. GINGREY. Will you keep the committee updated on the talks 

with industry in these coming months? 

Dr. SHUREN. Yes. 

Dr. GINGREY. I very much appreciate that. And real quickly, Mr. 

Chairman, get it in under the line, and this is also Dr. Shuren. A 

review of the Office of Device Evaluation’s annual report shows a 

decline in the percentage of IDEs approved on the first IDE review 

cycle. They dropped actually from 76 percent approval in fiscal year 

2000 down to 56 percent 9 years later, 2009. What is the explanation for the huge drop in IDEs approved on the first review cycle 

between 2009 and 2010? And real quickly, is it true that with each 

new review cycle, a company must pay an additional user fee for 

103 

one product and these multiple review cycles are a strain on the 

FDA’s valuable time and resources? 

Mr. Chairman, thank you for your indulgence, if maybe Dr. 

Shuren could quickly respond to that. 

Dr. SHUREN. Certainly. There are no user fees tied to the review 

of IDEs, so we don’t get any additional funding from industry for 

that. What has happened over time, and this is what we are addressing, is that we have got cases where we were not consistently 

applying the least-burdensome principle. So a decision was held up 

because a reviewer might be coming back to say we think you 

should be doing a better study when in fact the study was really 

good enough for its intended purpose moving forward. And the second is where approvals were being held up to get answers to questions that either did not need to be answered at that time, it may 

be something for later on, or there were questions that it would be 

nice to know but we don’t need to know it, and that is why we put 

out draft policy in November of 2011 to sort of free that up to lay 

out very clearly here are all the different circumstances where we 

should approve that trial and these are other issues that can be 

put off to later, in fact, allowing for some cases where we never 

would have let the trial go through even in the past where we 

might actually do a staged approval, let some patients come in, 

make sure there is good data for safety and let it move forward. 

That is the kind of flexibility we are trying to—— 

Dr. GINGREY. Well, I am real encouraged to hear that response, 

Dr. Shuren. Thank you. 

Mr. Chairman, thank you for your indulgence. 

Dr. SHUREN. And if I can just add that the IDE first cycles have 

dropped. This year in 2012, they have actually been going upwards 

for the first time. 

Mr. PITTS. The chair thanks the gentleman. That concludes the 

subcommittee questioning. We have a couple of members on the 

full committee who would like to ask questions. Without objection, 

we will go to them at this time. 

Mr. Markey from Massachusetts, you are recognized for 5 minutes for questions. 

Mr. MARKEY. Thank you, Mr. Chairman and Ranking Member 

Pallone, for allowing me to participate in today’s legislative hearing. I also thank you for including the bipartisan Pediatric Research Equity Act and the Best Pharmaceuticals for Children Act 

that I was proud to work on with Mr. Rogers and Ms. Eshoo, and 

I look forward to continuing to work on these important bills. 

Dr. Shuren, I am concerned that the current discussion draft 

misses an important opportunity to improve the safety of medical 

devices. If a car is recalled because it had faulty brakes, no consumer would want to purchase a new car with the same brake 

problem. Yet when it comes to medical devices that are implanted 

in patients’ bodies, companies can and do base their products on 

faulty predecessor technologies. The definition of insanity is doing 

the same thing over and over again and expecting a different result, but when it comes to medical devices, we have an insane policy that makes no sense. Devices have been recalled because they 

severely injured patients and they are used again and again as 

104 

models for new devices with devastating, life-altering consequences 

for the patients who are injured by them. 

In fact, just last month, I issued a report that documented this 

problem in detail and shared the stories of patients whose lives 

were destroyed as a result of this federal loophole. Under current 

law, the vast majority of medical devices are not required to undergo clinical testing in humans before being sold. Instead, companies 

need only prove that their new device is substantially equivalent 

in technology in use to a device that FDA has previously cleared, 

known as the predicate technology. As we heard, Dr. Shuren, from 

your exchange with Dr. Burgess, if the device proves to be substantially equivalent to a device that is now known to be defective, the 

FDA has no choice. The FDA is legally obligated to clear that product for market. The law does not clearly provide the FDA the authority it needs to protect patient safety so that new victims are 

not created from a technology that we already known is defective. 

Dr. Shuren, if a new device proves substantial equivalence to a 

predicate technology that has been voluntarily recalled for a serious design flaw that could seriously injure people who used it, 

would FDA have the legal authority to reject that application? 

Dr. SHUREN. We would have to find that it is substantially equivalent but we will then look for other opportunities to clarify this, 

use other mitigations to address it and protect the public. The challenge becomes more about having the ability to just get information. 

Mr. MARKEY. But if you found that it was substantially equivalent, would you be able to reject it? 

Dr. SHUREN. Not for purposes of substantial equivalence determinations. 

Mr. MARKEY. You could not reject it even though you knew it 

was defective. Is that correct? 

Dr. SHUREN. That is correct. 

Mr. MARKEY. Well, what if the FDA had knowledge that the new 

device repeated the same flaw as the predicate technology? Would 

the FDA still be required to find it substantially equivalent? 

Dr. SHUREN. We would have to find it substantially equivalent. 

We oftentimes with the company at least try to look for changes 

in labeling or other things that—— 

Mr. MARKEY. But that would be voluntary? You would not have 

the legal authority to reject it. Is that correct? 

Dr. SHUREN. That is correct. 

Mr. MARKEY. Now, the device industry argues that FDA has 

complete authority to assure the safety and effectiveness of a product including demanding clinical trails when they deem it necessary. Is that true in a case where the product has been shown 

is substantially equivalent to its defective predicate technology? 

Dr. SHUREN. No. 

Mr. MARKEY. You do not have that authority? 

Dr. SHUREN. We don’t. 

Mr. MARKEY. Does FDA currently have any authority to invalidate defective predicate technologies? 

Dr. SHUREN. So to invalidate a predicate where there is a problem, we would either rescind the 510(k) as a matter of law. We 

105 

could do that, a mandatory recall, or of by judicial order the device 

is found—— 

Mr. MARKEY. So you can only do something after the fact, labeling, etc. right? That is what you can do? But you can’t reject it. Is 

that correct? 

Dr. SHUREN. Yes, and the labeling we will do before the product 

comes on the market. 

Mr. MARKEY. Does FDA—some have argued that to get around 

the lack of authority, FDA could just issue more mandatory recalls, 

thereby invalidating the defective device as a predicate. Why is 

that not a feasible response? 

Dr. SHUREN. If there is sufficient justification to do a recall, we 

would actually work with the company on a voluntary recall, and 

companies generally comply with it. To run to a mandatory recall 

is profoundly resource-intensive, and because there is a formal 

hearing that can actually take years to do. 

Mr. MARKEY. You are saying it is a huge resource drain, not 

often the best use of FDA’s limited resources, but a device recall 

voluntarily is still available to be cited as predicate. Is that not correct? 

Dr. SHUREN. No, that is correct, and quite frankly, it is not a 

case of necessarily that predicate shouldn’t be out there to be used 

as a predicate but rather having the ability to assure that if there 

was a problem, one, it is either not replicated in the device, or if 

it is replicated, there is adequate mitigation, and right now while 

we can try to work with the company—— 

Mr. MARKEY. Final question. Would you like—— 

Dr. SHUREN [continuing]. Having the ability to—— 

Mr. MARKEY [continuing]. The authority to reject certain devices 

if they repeatedly had the same dangerous design flaws as other 

previously recalled defective devices? Would you like that authority? 

Dr. SHUREN. We would be happy to work with the committee on 

what may be the best approach on how to deal with those—— 

Mr. MARKEY. Would you like to have the authority or not have 

the authority? 

Dr. SHUREN. We would like to have appropriately tailored authority. 

Mr. MARKEY. OK. Great. I think I would like to work with you 

to hopefully accomplish that goal so you do have that appropriate 

authority. 

I thank you, Mr. Chairman. 

Mr. PITTS. The chair thanks the gentleman and now recognizes 

the gentleman from California, Mr. Bilbray, for 5 minutes for questions. 

Mr. BILBRAY. Following up on that line of questioning, Mr. 

Chairman, if you had an inhaler, let us just say an insulin inhaler, 

that was a new model that could be produced cheaper and was 

smaller than the original but gave the same dosage, same reliability, it was a different design but basically the outcome to the 

patient was the same. Do we have the ability to say yes, that is 

comparable, and thus you don’t have to go through the entire review process over again? 

106 

Dr. SHUREN. It depends upon the changes you make. If those 

changes made would not significantly affect safety and effectiveness, then you don’t have to—— 

Mr. BILBRAY. Basically, my point is, you have two little devices. 

One is this big and one is this big. Your doses are the same, the 

same insulin is being used, it is just a different—basically has been 

upgraded. You get a call from a flip phone or you get a call from 

an iPhone, same product, same delivery, different ways of doing it 

but the same deal. Do we have the ability for you to say OK, this 

is comparable and thus we can allow it to move forward or does 

the iPhone now have to go through the whole thing, the review 

process all over again? 

Dr. SHUREN. So for some changes, size actually could affect safety and effectiveness. If it does, that modification comes to us. So 

you have things like certain joint replacements that when you 

change the size, that can actually affect—— 

Mr. BILBRAY. That is inside the body, though. I am talking about 

an external—— 

Dr. SHUREN. So some of the other things that may change in 

size—— 

Mr. BILBRAY. Like bringing an inhaler down from the size of a 

liter bottle down to the size, you know, smaller than a lighter. Do 

you have a comment on that? 

Dr. WOODCOCK. Yes. We have a lot of experience in inhaled 

drugs, regulating them, and—— 

Mr. BILBRAY. Well, I have a lot of family members that have that 

same problem, but that is a different issue. 

Dr. WOODCOCK. So the problem with the inhalation devices is 

that we do not have a good way to determine bioprevalance, and 

that has hampered us in fact in improving generics of, say, asthma 

drugs that are out there because we can’t determine whether they 

deliver the same dose as the innovator, so that is the real question, 

OK. So if you move from one inhalation device to another, it may 

be the same plume—we do plume testing which is particle size, distribution, right? However, the user interface is very important in 

inhaled devices because some people—you know, we had some devices they were using upside down or sucking on the wrong end, 

and so there are a lot of issues with user interface with inhaled 

medicines that influence whether or not how equivalent we can determine them to be another version. 

Mr. BILBRAY. Dr. Woodcock, the question that us Californians 

are talking about, and it has been a few years, the State of California is going to start putting mandates on the issue that had 

been talked about before, and that is the pedigree issue or the tracing. The fact is, they are talking about going to requiring every 

unit to be tagged and identified, and we are hearing from a lot of 

manufacturers that there is just no way they can follow that physically or cost-effectively. What is the possibility of us working on 

a compromise proposal with being able to trace lots and at least 

start the process down the road sooner rather than waiting for the 

crisis that is coming down the road in a couple years when you 

have a State like California that controls over 12 percent of the 

market, probably almost 20 percent of the market all at once starting to have a standard that the rest of the country doesn’t have? 

107 

Dr. WOODCOCK. Well, number one, we agree that it is better to 

have uniform standards than develop 50 different standards, which 

would be a nightmare. Number two, you have to, I think, determine what problem you are trying to solve and then see if your solution will address the problem that you are trying to prevent or 

solve, and then think about how much it would cost to implement 

it and then you decide the tradeoffs between the costs and the investment you have to make and the benefits that it will bring. We 

are concerned that the coalition’s proposal doesn’t provide enough 

benefits to justify doing that, but you need to think about what else 

could be done, and I think we are willing to work on that. 

Mr. BILBRAY. Are you willing to commit to work on that within 

this year so that we get some definitive approach or at least some 

unified strategy on this issue within the year? 

Dr. WOODCOCK. I am certainly willing to sit down and work with 

the coalition on this, absolutely. 

Mr. BILBRAY. Thank you very much, Mr. Chairman. 

Mr. PITTS. The chair thanks the gentleman. That concludes the 

questioning. We have one follow-up on each side. We will go to Mr. 

Pallone for 5 minutes for follow-up. 

Mr. PALLONE. So Mr. Chairman, I would like to yield time to Mr. 

Markey. 

Mr. MARKEY. It would be just Dr. Shuren, if you could. I had a 

woman that I brought to Washington and we had a press conference about 2 weeks ago, and it was a bladder mesh that she had 

surgically inserted into her body, and she was assured that it was 

safe and had been FDA approved, and since then, because of that 

faulty bladder mesh, she has lost her livelihood as a truck driver, 

had to undergo multiple corrective surgeries, and because of the 

medical bills is now being foreclosed upon by the bank, and she has 

a mother who is living with her, an elderly woman, and there are 

thousands of other people who have had this faulty bladder mesh 

inserted in them as well and it is all FDA approved because you 

cannot reject something that is based upon this predicate technology. 

So maybe you could explain a little bit about what happens out 

there in the real world because the FDA does not have this authority to protect women like that and thousands of others like them 

that have FDA approval on a technology that has a defect in it that 

you know about but you cannot take off the market. 

Dr. SHUREN. First of all, we empathize with that patient and for 

other people who may have had adverse effects from medical devices. I will say in the case of surgical mesh, generally the issues 

we are dealing with may be more of, are they in the right regulatory framework, and we just went through in the case of surgical 

mesh for pelvic organ prolapse where in fact we held an advisory 

panel meeting to say should these actually be 510(k) devices or 

should they be subject to the more stringent requirements for a 

high-risk device or PMA, and that is a process we are moving forward towards. If we make that decision and if it is rulemaking, and 

that is the challenge. If we change classification and we up-classify, 

it is rulemaking. 

Mr. MARKEY. What do you say to this woman? What can you do 

for the thousands of other women out there? The device is still out 

108 

on the market, so what can you say to all these tens of thousands 

of additional women who are being advised by their doctors right 

now that it is an FDA-approved technology. I mean, this is something that doesn’t work and in fact it harms women. What should 

we say to that woman? 

Dr. SHUREN. So I will tell you in the case of pelvic organ 

prolapse, one, we have gone out with information communications 

to patients. We have been working with the health care professional community. 

Mr. MARKEY. This woman is a truck driver, and her physician in 

some town in Colorado told her it was safe. What can we say to 

her in terms of other women who are just in the same similarly situated predicament? 

Dr. SHUREN. Again, I empathize. 

Mr. MARKEY. I understand. Empathy is important, and we appreciate your empathy. But what can you say to her beyond empathy 

in terms of she is concerned and she is like a Paul Revere trying 

to warn these defective bladder meshes are coming? 

Dr. GINGREY. Would the gentleman yield? 

Mr. MARKEY. Sure, I would be glad to yield. 

Dr. GINGREY. And I appreciate the gentleman from Massachusetts yielding to me. Of course, as he knows, I am a physician 

member, and I am, like Dr. Shuren, certainly tremendously empathetic to this individual’s situation but meshes have been used in 

surgery for years and years, and whether it is an abdominal hernia 

situation where just a simple repair and trying to stitch things 

back together is not sufficient, you need that insert product to give 

a little strength to the repair. You know, again, in this particular 

situation, is it the product or could it have been an improperly 

placed stitch to sew the product in place? Could it have been an 

iatrogenic hospital-acquired infection that occasionally happens 

that made the procedure unsuccessful or it is really a defective 

product? Thank you for yielding. I just wanted to—— 

Mr. MARKEY. Thank you, Doctor. In this particular case, it is in 

fact a recurrence of a defect in the technology that had already 

been identified and was in the original predicate technology that 

the FDA did not have the ability to take off the market as another 

company is making the same technology with the same defect in 

it that was correctable but the new company did not feel it had to 

correct it because the FDA was still approving it. So that was 

where the problem originated, and thousands of women are still 

having it inserted into them. Is that not correct? 

Dr. SHUREN. Most of the issues we are dealing with with surgical 

mesh are probably not a matter of replicating a problem in the 

predicate. Many of the things we are seeing may be issues about, 

are they in the right framework to begin with, are we actually getting adequate assurances in the way they are currently regulated 

generally that they are in fact safe and effective. 

Mr. MARKEY. But you do need authority here, don’t you? Don’t 

you need stronger authority to protect women like this, or what do 

you say to a woman like that? You need appropriate authority here 

to make sure that a woman like this is not victimized and thousands of others. Don’t you agree? 

109 

Dr. SHUREN. Again, in her particular case, I don’t know what 

happened, and I know people don’t want to hear ‘‘empathize’’ but 

I do. I do think the case, if we wind up making a change in surgical 

mesh, and again, we are looking at pelvic organ prolapse but also 

urinary incontinence, the challenge for us is, if we change classification, this is a slightly different issue but an important one, we 

go through a rulemaking process, and in those rare cases where 

that product based upon new evidence should move to a different 

classification, we have to take years to make that change. That is 

a challenge that we do face. We are going through questions now 

with metal-on-metal hips. You have raised it in terms of preamendment devices. Our barrier is actually in those cases statutory 

requirement to do rulemaking, and that makes it hard, and you 

want to know something? I don’t know what you tell patients if you 

find a problem like that and you make a decision to up-classify, 

what you do for all that time and all those—— 

Mr. MARKEY. This woman’s life is ruined, and the only thing I 

could tell her is that her now ruined life in her own words, will 

now pay dividends for other women who won’t be facing the same 

thing. 

Mr. PITTS. The chair thanks the gentleman. 

Mr. MARKEY. I thank you, Mr. Chairman. 

Mr. PITTS. We will proceed for a follow-up to Dr. Burgess. 

Mr. BURGESS. I thank the chairman, and I have got some other 

things I want to ask, but I just feel obligated. Once again, substantial equivalence does not necessarily equate clearance, and your 

own information that you sent to a company that receives a substantial equivalence determination, ‘‘Please be advised the FDA’s 

issuance of a substantial equivalence determination does not mean 

that the FDA has made a determination that this complies with 

other requirements of the Act.’’ They are referring to the Food, 

Drug and Cosmetic Act. I think you have authority there. Now, this 

situation is perhaps a little bit more ambiguous than an 

implantable pacemaker. I would be happy to work with you too on 

this issue of implantable mesh because I do think it is an important one. As the baby boom generation ages, we are going to see 

a lot of demand for these type of procedures, and as Mr. Markey 

points out, it is important that we get it right because the problems 

with defects down the road can be significant. 

Dr. Woodcock, let me just ask you a question. I know we visited 

drug shortages in these hearings, and I appreciate the work that 

you have done, and while I wish there were some single legislative 

product that would correct the defect, I am not sure that there is, 

and then the problem is with legislative products that we may 

make things worse if it leads to hoarding and that sort of activity. 

But it also seems like, you know, we brought specific examples in 

these hearings to your attention—methotrexate, doxorubicin—and 

things have happened then as a consequence, and I am very grateful for that. I am sure the patients are grateful. But it also makes 

me wonder if the problem isn’t one of maybe if there were a little 

more flexibility or creativity on the part of the FDA that some of 

these shortages could be mitigated without having them become a 

national crisis. You provided us a long list at another hearing. Do 

you have someone on your staff who is looking at that? There may 

110 

be unique ways to mitigate some of these shortages and perhaps 

we ought to get busy about doing that rather than trying to find 

ideal legislation. 

Dr. WOODCOCK. Well, we were working on methotrexate and 

doxorubicin for quite a long time and we had different solutions 

emerge for both of those. In every case, we are using almost every 

tool we have. We don’t make the drugs. The manufacturers make 

the drugs, and we try to provide them with encouragement and 

flexibility and lot release, like we said, batch by batch. Even if 

their manufacturing isn’t perfect, we can mitigate many of these 

things. So I think we have tools to do this. We think that additional notification may be helpful. We think the proposals by the 

private sector for more information sharing will be helpful. We feel 

that some of the proposed discussion draft legislative might have 

unintended consequences. For example, we have this expedited review. If we have a lot of people requesting that and we know that 

other companies are going to be able to come up and provide the 

product, because we have talked to them, then we don’t want to be 

reviewing a lot of people or clamoring for expedited review if we 

feel there is not going to be a shortage and the company is in production. We think deeming compliance would be a problem, all 

right? Because people are either in compliance or not in compliance. If they are not in compliance with GMPs, we have flexibility 

and they don’t have to be in full compliance to be producing these 

shortage drugs. They just have to be producing drugs that are of 

good enough quality that we feel comfortable with them going into 

the veins of our patients, right? 

Mr. BURGESS. Right. Well, the only point I was trying to make 

is, it does seem like there are sometimes out there that if we just 

worked a little harder, we would come up with them, and I just encourage you to keep doing that. 

Dr. WOODCOCK. We are working very hard. 

Mr. BURGESS. But one specific instance, of course, a shortage occurs right now today at any pharmacy across the country that an 

asthmatic cannot walk into a pharmacy and buy an over-thecounter asthma inhaler like they used to be able to before January 

1st. So there is a solution there, and that would be to allow the 

manufacturer of the old CFC product to sell what stock they have 

left. This product was not deemed to be defective. It was an EPA 

requirement that they stop selling, not an FDA requirement, and 

I appreciate the fact that you are working through this problem 

with getting a new over-the-counter preparation available, but as 

you pointed out, you have difficulty with bioequivalency, and I will 

also readily admit that HFA is not nearly as good a propellant as 

CFC, and don’t blame the victim. It was not because I was holding 

the thing upside down. It is just not as good. But having said all 

of that, could you help us with the EPA if you were to write Administrator Jackson that because of the difficulties you are having 

with assessing bioequivalence of these new products that it would 

be helpful to allow the company to sell the product that it already 

has manufactured. We are not asking them to make a single vial. 

All the CFC that is going to be put into vials has already been put 

in. The only problem is, we are preventing asthmatics from having 

it accessible. Can I get your help to write a letter to Administrator 

111 

Jackson to let her know of your problem so that maybe she can 

help us with the problem that asthmatics are having? 

Dr. WOODCOCK. We have been discussing and working with the 

EPA on this matter. 

Mr. BURGESS. Yes, but this is something that people just frankly 

do not understand why one federal agency and another federal 

agency cannot come together on a reasonable solution. That reasonable solution is, be able to sell the product as it exists in warehouses today. Again, not one single molecule of CFC is going to be 

produced that has not already been produced. The hole in the ozone 

is not going to get one millimeter bigger because we are allowing 

this product to be sold. Again, the CFC has already been produced 

and it is already in the canisters. One day it is going to come out 

by some mechanism or another. I just think it would helpful to the 

patients of America. We could eliminate this one drug shortage 

overnight if you could get some cooperation with the EPA. 

Mr. PITTS. The chair thanks the gentleman. Mr. Engel for 5 minutes for questions. 

Mr. ENGEL. Thank you, Mr. Chairman. 

Dr. Woodcock, I just have two quick questions. I want to get back 

to the issue of drug shortages again because during your last appearance before the subcommittee, I mentioned my concerns about 

drug shortages of medications that overlap with the DEA’s controlled-substance jurisdiction, and I am pleased to see in this discussion draft there are provisions for the Attorney General to increase quotas as necessary within 30 days of a request from a manufacturer. So let me ask you this. Do you believe that the majority 

of drug shortages in the controlled-substance category can be effectively prevented if the Attorney General addresses this request 

within the 30-day window or do you believe a shorter window 

would be necessary to ensure patient access to needed medications? 

Dr. WOODCOCK. I am not familiar enough with DEA procedures 

to answer your question accurately. There are many causes of drug 

shortages, and certainly not all shortages of controlled substances 

may be related to DEA procedures or quotas or what have you. So 

I think it is a complicated issue and we would be glad to work with 

you. 

Mr. ENGEL. OK. How about the 30 days, though? Do you think 

that is sufficient? It might be a little too long if someone really 

needs a medication. 

Dr. WOODCOCK. Again, it is very difficult for me to put that 

into—to understand what impact 30 versus a shorter time would 

have on an unfolding shortage situation. 

Mr. ENGEL. OK. Well, we will work with you on it. 

During the last PDUFA reauthorization, I worked—this is a couple years ago—I worked with Congresswoman Blackburn and Congresswoman Giffords at that time to authorize critical path publicprivate partnerships, and to date, the Critical Path Institute in Arizona and the Clinical Data Interchange Standards Consortium 

have worked under this partnership to improve the regulatory 

science that FDA and industry depend on when developing and improving new pharmaceuticals and medical devices. So I am wondering if you could comment on that? It is sort of loaded question, 

but I want you to be on the record, because I feel strongly about 

112 

the importance of the critical path public-private partnerships and 

the FDA’s work, so I would like you to comment on that and what 

role you see for these partnerships in the future. 

Dr. WOODCOCK. Well, first of all, the Critical Path Institute has 

done a number of projects that are essential. For example, we have 

new biomarkers now being tested in the clinic for drug-induced 

renal failure, something we don’t have any sensitive indicators for, 

and so this is a tremendous advance in regulatory science if we can 

get these. We have qualified them for animal studies. If we can use 

them in humans, that would be a tremendous advance for drug development. 

As far as the clinical data standards, as we move into developing 

electronic health records for the public and so forth, having unified 

standards for how you collect data in clinical trials not only will 

help companies, it will help the FDA and it will help all the investigators in efficiently performing clinical trials. Right now, we have 

a tremendous problem of loss of clinical studies from the United 

States and going elsewhere, and harmonized standards within the 

United States for clinical data are a tremendous requirement and 

would really help both drug development and understanding the 

role of medical products and their outcomes in our population. So 

this type of regulatory science that is being done by the Critical 

Path Institute and other public-private partnerships is really building for the future, and we really endorse it. 

Mr. ENGEL. Well, thank you. I couldn’t agree with you more, and 

you gave me the answer I wanted, so thank you very much. 

Mr. Chairman, I yield back the balance of my time. 

Mr. PITTS. The chair thanks the gentleman and yields to the 

ranking member for a unanimous consent request. 

Mr. PALLONE. Thank you, Mr. Chairman. I just would like to 

make a unanimous consent request that the statement of Congresswoman Anna Eshoo as well as some questions that she is promulgating to Dr. Janet Woodcock be entered into the record. 

Mr. PITTS. Without objection, so ordered. 

We will make sure you get all of the questions for follow-up, if 

you would respond in writing. 

That concludes our first panel. Thank you, Dr. Woodcock, thank 

you, Dr. Shuren, for your testimony and your responses. The committee will recess for 5 minutes as we change for panel number two 

and we will reconvene in 5 minutes. 

[Recess.] 

Mr. PITTS. The 5 minutes having expired, we will reconvene the 

subcommittee, and we now have panel number two. I would like to 

thank all of you for agreeing to testify before the subcommittee 

today. I would like to quickly introduce our expert panel. 

First, Dr. David Wheadon is Senior Vice President of Scientific 

and Regulatory Affairs at Pharmaceutical Research and Manufacturers of America. Dr. Sara Radcliffe is Executive Vice President 

of Health at Biotechnology Industry Organization. Mr. David 

Gaugh is Vice President of Regulatory Sciences at the Generic 

Pharmaceutical Association. Mr. Joseph Levitt is Partner at Hogan 

Lovells and is testifying on behalf of Advanced Medical Technology 

Association. And Mr. Allan Coukell is Director of Medical Programs 

of Pew Health Group at the Pew Charitable Trust. 

113 

Again, thank you all for coming. We have your prepared statements. They will be entered into the record. We ask that you summarize your opening statements in 5 minutes. We are scheduled to 

vote in about 20 minutes. We will try to get through the presentations before having to go to the floor for the vote. 

So with that, Dr. Wheadon, we will begin with you. You are recognized for 5 minutes to summarize your testimony. 

STATEMENTS OF DAVID E. WHEADON, M.D., SENIOR VICE 

PRESIDENT, SCIENTIFIC AND REGULATORY AFFAIRS, PHARMACEUTICAL RESEARCH AND MANUFACTURERS OF AMERICA; SARA RADCLIFFE, EXECUTIVE VICE PRESIDENT OF 

HEALTH, BIOTECHNOLOGY INDUSTRY ORGANIZATION; 

DAVID GAUGH, R.PH., VICE PRESIDENT, REGULATORY 

SCIENCES, GENERIC PHARMACEUTICAL ASSOCIATION; JOSEPH A. LEVITT, J.D., PARTNER, HOGAN LOVELLS US LLP, 

ON BEHALF OF ADVANCED MEDICAL TECHNOLOGY ASSOCIATION; AND ALLAN COUKELL, DIRECTOR OF MEDICAL 

PROGRAMS, PEW HEALTH GROUP, THE PEW CHARITABLE 

TRUSTS 

STATEMENT OF DAVID E. WHEADON 

Dr. WHEADON. Chairman Pitts, Ranking Member Pallone and 

members of the subcommittee, good afternoon. I am David 

Wheadon, Senior Vice President, Scientific and Regulatory Affairs, 

at the Pharmaceutical Research and Manufacturers of America, 

better known as PhRMA. PhRMA appreciates this opportunity to 

appear before you again today in order to share our views on the 

5th reauthorization of the Prescription Drug User Fee Act and on 

the reauthorization of the Best Pharmaceuticals for Children Act 

and the Pediatric Research Equity Act. 

PhRMA and its member companies strongly support the original 

goals of PDUFA, namely to provide patients with faster access to 

innovative medicines, to preserve and strengthen FDA’s high 

standards for safety, efficacy and quality, and to advance the scientific basis for the agency’s regulatory oversight. PDUFA has advanced public health by accelerating the availability of innovative 

medicines to patients while helping to ensure patient safety. 

PDUFA has also played a role in improving America’s competitiveness around the world. 

Since the passage of the original PDUFA in 1992, the United 

States has become the world leader in bringing new medicines to 

patients first, ensuring that the United States maintains a policy 

and regulatory environment that encourages an efficient, consistent 

and predictable drug review process is key to keeping America competitive in today’s global economy. 

The PDUFA V performance goals letter was created with an impressive inner transparency and involvement from diverse stakeholders including patients, health care providers and academia. 

This agreement will provide FDA with the resources and tools required for further enhancing the timeliness, completeness and efficiency of the drug review process including provisions to advance 

regulatory science and modernize drug development, to improve 

benefit-risk decision making and to further strengthen FDA’s focus 

114 

on patient safety. PhRMA strongly endorses the recommendations 

of the PDUFA V performance goals letter and urges Congress to reauthorize this important legislation in a timely manner based on 

the negotiated agreement. Failure to reauthorize PDUFA in a timely fashion would have catastrophic effects on the ability of FDA to 

carry out its important role in bringing innovative medicines to patients. 

I would like to focus for a moment on one specific aspect of 

PDUFA. The enhanced New Molecular Entity review model, or 

NME review model, will improve the review process for new molecular entity drug and biologic applications. This will be particularly 

significant for patients because NMEs are novel compounds that 

have the potential to address unmet medical needs and advance 

patient care. Specifically, it is anticipated that earlier and more 

comprehensive communication between the agency and drug sponsors as required in this enhanced review model will improve the 

rate of on-time first-cycle successes. The success of the new review 

program and of the agency’s ability to achieve its drug review goals 

will be independently assessed in 2015 and 2017. 

PDUFA V will continue to provide FDA with the necessary tools 

and resources that are essential to support patient safety and promote medical innovation through enhanced timeliness, completeness and efficiency of the drug review process. PhRMA encourages 

Congress to reauthorize PDUFA in a timely manner based on the 

negotiated PDUFA V performance goals and to minimize the inclusion of additional provisions that may have the unintended consequences of distracting from the Act’s original intent. 

The Best Pharmaceuticals for Children Act and the Pediatric Research Equity Act have been extraordinarily successful in improving medical care for children by driving research to create innovative medicines for use in pediatric patients. According to the FDA, 

the current pediatric exclusivity program has done more to spur research and create critical information about the use of medicines 

in pediatric patients than any other government initiative. Ensuring that the pediatric exclusivity incentive is preserved is key to 

continued innovation and improved pediatric medical care in the 

face of rising research costs. 

Since its initial enactment and subsequent reauthorizations, 

BPCA and PREA have been subject to a sunset clause under which 

their provisions expire after 5 years unless reauthorized by Congress. To build upon the tremendous success of BPCA and PREA 

in improving medical care for children, Congress should permanently reauthorize BPCA and PREA. 

We would particularly like to thank Representatives Eshoo, Rogers and Markey for their work towards a bipartisan effort for a permanent reauthorization of these important pieces of legislation. 

In summary, PhRMA and its member companies are committed 

to working closely with FDA, Congress and all stakeholders to ensure the continued success of PDUFA in bringing safe, effective 

and innovative medicines forward to address unmet medical needs 

for all patients including children. PhRMA therefore urges Congress to reauthorize PDUFA V and to permanently reauthorize 

BPCA and PREA in the most expeditious manner possible. 

Thank you, and I would be happy to entertain any questions. 

115 

[The prepared statement of Dr. Wheadon follows:] 


78635.063

TESTIMONY OF DA VID E. WHEADON, M.D. 

SENIOR VICE PRESIDENT, SCIENTIFIC AND REGULATORY AFFAIRS 

PHARMACEUTICAL RESEARCH AND MANUFACTURERS OF AMERICA (PhRMA) 

HOUSE COMMITTEE ON ENERGY AND COMMERCE, SUBCOMMITTEE ON HEALTH 

HEARING ON "FDA USER FEES 2012: 

HOW INNOVATION HELPS PATIENTS AND JOBS" 

APRIL 18, 2012 

Chairman Pitts, Ranking Member Pallone, Members of the Subcommittee, good afternoon. I am David 

Wheadon, Senior Vice President, Scientific and Regulatory Affairs at the Pharmaceutical Research and 

Manufacturers of America (PhRMA). PhRMA appreciates this opportunity to testity today and share 

our views on the fifth reauthorization of the Prescription Drug User Fee Act (PDUFA) and the 

reauthorization of the Best Pharmaceuticals for Children Act CBPCA) and the Pediatric Research Equity 

Act (PREA). 

Reauthorizatiou of the Prescription Drng User Fee Act (PDUFA-V) 

PDUFA has been a great success for patients -the tens of millions of Americans who rely on innovative 

drugs and biologics to treat disease and to extend and improve the quality of their lives. The PDUFA 

user fee program has provided FDA with additional staffing and resources it needed to significantly 

reduce the timeframe for review of new medicines, while protecting public health by assuring the safety 

ofthese products. Furthermore, PDUFA has helped to improve America's competitiveness around the 

world. Since the passage of the original Prescription Drug User Fee Act in 1992, the U.S. has become 

the word leader in bringing new medicines to patients first. 

The PDUFA-V performance goals letter is the result of extensive negotiations between the U.S. Food 

and Drug Administration (FDA) and the innovative biopharmaceutical industry and is intended to 

improve FDA's ability to conduct thorough and efficient reviews of new medicines for patients. FDA's 

process for negotiating these performance goals included unprecedented transparency and input from all 

stakeholders, including patient advocates, healthcare professionals, consumers and academia. 
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78635.064

PhRMA and its members, the country's leading pharmaceutical research and biotechnology companies, 

strongly support the original goals ofPDUFA, namely - to provide patients with faster access to 

innovative medicines, to preserve and strengthen FDA's high standards for safety, efficacy and quality, 

and to advance the scientific basis for the Agency's regulatory oversight. 

PhRMA strongly endorses the recommendations of the PDUFA-V performance goals letter. This 

agreement will provide FDA with the resources and tools required to further enhance the timeliness, 

completeness, and efficiency of the drug review process. Failure to reauthorize PDUFA in a timely 

manner would have catastrophic effects on the FDA's ability to carry out its important role in bringing 

new medicines to patients suffering from debil itating diseases. 

The Role ofPDUFA in Encouraging Innovation and Economic Growth. Ensuring that the U.S. 

maintains a policy and regulatory environment that encourages an efficient, consistent and predictable 

drug review process is key to keeping America competitive in today's global economy. A 2011 report 

by Battelle i found that the U.S. biopharmaccutical industry "is well recognized as a dynamic and 

innovative business sector generating high quality jobs and powering economic output and exports for 

the U.S. economy:' According to the report. nationwide the sector supported a total of 4 million jobs in 

20()9. including 674.192 dil'cctjobs. The total economic output trom (he sector's direct indirecl, and 

induced impacts was $918 billion. Because PDUFA has injected greater consistency. transparency and 

predictability into the FDA '5 drug review process, its reauthorization is an important factor in ensuring 

that biopharmaceutical companies maintain this level of job creation and economic growth. Failure to 

reauthorize PDUF A in a timely manner would not only have an extraordinarily disruptive effect on the 

Agency and impede patients' access to new and innovative treatments, but such a failure would also 

endanger biopharmaceutical innovation. 

There are a number of important new commitments in the carefully negotiated PDUFA-V performance 

goals letter, including provisions to make the regulatory review of new medicines more efficient and 

timely, to advance regulatory science and modernize drug development, to improve benefit/risk 

decision-making, and to further strengthen FDA's focus on patient safety. 

1 Battelle Technology Partnership Practice, The U.s, Biopharmaceutlcals Sector: Economic Contribution of the Nation. July 2011. Battelle 

Memorial Institute. Prepared for the Pharmaceutical Research and Manufacturers of America. 

2 
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Below I discuss these significant enhancements of the PDUFA-V perfonnance goals letter. 

Enhanced NME Review Program. PDUFA-V will improve the review process for new molecular 

entity (NME) drug and biologic applications which will be particularly significant for patients, because 

NMEs are novel compounds that have the potential to address unmet medical needs and advance patient 

care. The enhanced NME review model addresses the increasing complexity of reviewing new drug 

applications (NDAs) and biologic license applications (BLAs), and provides for increased 

communication between FDA and drug sponsors prior to and during the drug review process. A 

validation period will help FDA plan activities such as inspections and advisory committee meetings, 

and will accommodate iterative interactions between sponsors and the Agency. As a result, the NME 

review program is expected to improve the efficiency ofthe review process and reduce the overall time 

until new medicines become available to patients. Specifically, it is anticipated that earlier and more 

comprehensive communication between the Agency and drug sponsors will improve the rate of "ontime, first-cycle" successes - that is, the number of new medicines that are fully reviewed and for which 

definitive regulatory action is taken within the target timeframe following initial submission. The 

success ofthe new review program and of the Agency's ability to achieve its drug review goals will be 

independently assessed and publicly reported in 2015 and 2017. 

Advancements in Regulatory Science. Several new provisions in the PDUFA-V perfonnance goals 

letter will afford FDA with appropriate staffing and resources to develop, through public input, new 

tools and methods to integrate emerging scientific data and techniques into the drug development and 

review process. These advancements in regulatory science will rely on engagement with industry, 

academia and other stakeholders to identiJY best practices so the Agency can provide appropriate 

guidance to stakeholders involved in drug development. 

Provisions to enhance FDA's regulatory review capabilities include: 

>- The use of phannacogenomics and biomarkers to decrease drug development time by helping 

demonstrate therapeutic benefits more rapidly, and identiJYing patients who are likely to benefit 

from treatment, as well as those at increased risk for serious adverse events. 

>- Avenues for accelerating drug development for rare and orphan diseases and provide FDA with the 

necessary regulatory flexibility to encourage and advance research into novel treatments for patients 

3 
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78635.066

with significant unmet needs today. 

? Standards for and validation of patient-reported outcomes and other assessment tools that may assist 

regulators in evaluating treatment benefits and potential risks from the patient's point of view. 

? And the evaluation of the use of meta-analyses in regulatory review and decision-making, 

highlighting best practice and potential limitations. 

Systematic Approach to Benefit-Risk Assessment. A key provision in the PDUFA-V performance 

goals letter recognizes that the drug review process could be improved by a more systematic and 

consistent approach to benefit-risk assessment that fairly considers disease severity and unmet medical 

needs. During PDUF A-V, the Agency will implement a structured benefit-risk framework, and hold 

public meetings to assess the application of such frameworks in the regulatory environment. In addition, 

over the course ofPDUFA-V the Agency will hold a series of public meetings with the patient advocacy 

community to identity disease states that - from the patient perspective - have considerable unmet 

needs. Development and implementation of a patient-focused, structured framework for evaluating 

benefits and risks of new treatments will help inform the drug development process as well as ensure 

that regulatory decisions are consistent, appropriately balanced, and based on best science. 

Modernizing the U.S. Drug Safety System. Finally, further enhancement and modernization of the 

FDA drug safety system under PDUF A-V will ensure that patient safety remains paramount. The 

PDUFA-V performance goals letter provides for a public process to help standardize risk evaluation and 

mitigation strategies (REMS), with the intent to assess and reduce burden on healthcare providers and 

patients. Additionally, FDA will continue to evaluate the feasibility of using the Agency's Sentinel 

Initiative to actively evaluate post-marketing drug safety issues. 

PDUFA has advanced public health by accelerating the availability of innovative medicines to patients 

while helping to ensure patient safety. The PDUFA program has strengthened the scientific basis of 

FDA's regulatory review process through the development and application of new tools, standards, and 

approaches that facilitate assessment of the safety and efficacy of innovative drugs and biologics. 

PDUFA-V will continue to provide FDA with the resources and tools that are essential to support patient 

safety and promote medical innovation through enhanced timeliness, completeness, and efficiency of the 

drug review process. PhRMA encourages Congress to reauthorize PDUFA in a timely manner based on 

the negotiated PDUFA-V performance goals, and to minimize the inclusion of additional provisions that 

may have the unintended consequence of distracting from the Act's original intent - to provide patients 

4 
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78635.067

with faster access to innovative medicines, to preserve and strengthen FDA's high standards for safety, 

efficacy and quality, and to advance the scientific basis for the Agency's regulatory oversight. 

Reauthorization of the Best Pharmaceuticals for Children Act (BPCA) and the Pediatric Research 

and Equity Act (PREA) 

Prior to passage of the pediatric exclusivity provisions in the Food and Drug Modernization Act 

(FDAMA) of 1997, there were significant disincentives for biopharmaceutical companies to conduct 

clinical trials for pediatric use - generally speaking, in patients under the age of 18 - for medicines 

developed primarily for adults. At the same time, there were concerns that many FDA-approved drugs 

had not been clinically tested in children. For example, at that time about 70 percent of medicines used 

in children had been dispensed without adequate pediatric dosing information.2 

Growing recognition ofthe need for pediatric-specific information prompted action by Congress and the 

FDA. Congress responded by establishing BPCA to provide incentives to encourage manufacturers to 

conduct pediatric studies of medicines with the potential for use in children as part ofFDAMA. The 

legislation included a provision that granted pharmaceutical companies an additional six-month period 

of exclusivity, known as pediatric exclusivity, upon the completion and submission of pediatric studies 

that meet the terms of a written request from FDA. 

In addition to BPCA, the Pediatric Research and Equity Act (PREA) gave FDA the authority to require 

manufacturers to conduct pediatric studies for certain new drugs and biologics approved for use in adults 

where the indication for use in children would be comparable to that for adults and produce formulations 

appropriate for children, e.g. liquid or chewable tablets. 

Although FDAMA included a sunset provision effective January I, 2002, Congress subsequently 

reauthorized these provisions in BPCA and PREA in 2002, and again in 2007 as part of the Food and 

Drug Administration Amendments Act (FDAAA). Similarly, there are provisions in the Biologics Price 

Competition and Innovation Act of2009 (BPCIA) to provide pediatric exclusivity for biologics if the 

2 U.S. Pediatric Studies Incentive Led to New Labeling for Nearly 100 Drugs, Impact Report, Tufts Center for the Study of Drug Development, 

Vol. 7, No.4, July/August 2005. 

5 
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sponsor submits pediatric studies in accordance with a written request from FDA. BPCA and PREA 

both sunset on September 30,2012, unless reauthorized or made permanent. 

BPCA and PREA have been extraordinarily successful in improving medical care for children by 

driving research to create innovative medicines for use in pediatric patients. According to the FDA, the 

current pediatric exclusivity program has done more to spur research and generate critical information 

about the use of medicines in pediatric patients than any other government initiative.3 As of2008, an 

estimated 50 to 60 percent of prescription drugs used to treat children have been studied in some part of 

the pediatric population.4 Since 1998, BPCA and PREA have resulted in 426 pediatric labeling 

changes5 and a GAO report released in May 20 II states that pediatric studies conducted in the past five 

years represent 16 different therapeutic areas including oncology, endocrinology, hematology, 

cardiovascular disease, infectious disease, and neurology. 

A recent issue of the NIH's NIH MedlinePlus magazine notes the importance of pediatric clinical trials 

and cites several examples of how clinical trial knowledge has improved the lives of children. The 

article states that, among other examples of great progress in innovative pediatric drug development, "as 

a result of repeated clinical trials in children with cancer, most children who develop leukemia survive" 

compared to 50 years ago when "acute leukemia was almost universally fatal in young children". 

Additionally, clinical trials in young children "showed that surfactant - a substance that keeps air sacs in 

the lungs inflated - helps premature infants breathe" and with this knowledge "the lives ofthousands of 

babies who would otherwise die of respiratory failure are saved each year".6 

Permanent Reanthorization of BPCA and PREA is Key to Ensuring Innovation in Pediatric 

Research. Ensuring that the pediatric exclusivity incentive is preserved is key to continued innovation 

and improvement in pediatric medical care in the face of rising research costs. Since its initial 

enactment and subsequent reauthorizations, the pediatric exclusivity incentive and PREA have been 

subject to a "sunset clause" under which their provisions expire after five years unless reauthorized by 

Congress. To build upon the tremendous success of BPCA and PREA in improving medical care for 

children over the past fifteen years, Congress should permanently reauthorize BPCA and PREA. 

3 Pediatric Study Costs Increased 8MFoid Since 2000 as Complexity Level Grew, Impact Report, Tufts Center for the Study of Drug 

Development, Vol. 9, No.2, MarchlApril2007 . 

• FDA, "Giving Medication to Children: Q&A With Dianne Murphy, MD." June 2009, 

~ FDA, http://www.fda.gov/downloads/ScienceResearch/Specia!Topics/PediatricTherapeuticsResearch/UCM1631S9.pdf 

1> NIH Medline Plus, "Developing Safe and Effective Medicines for Children," Winter 2012. < 

http://www.fnlm.orgIProgram_MLPIMLP_intro.html> 

6 
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Penn anent reauthorization of these provisions would provide greater certainty to companies by allowing 

a more predictable regulatory path and would help spur increased pediatric research, a fact also 

highlighted in the recently released Institute of Medicine (lOM) report entitled, "Safe and Effective 

Medicines for Children" 7. Pediatric product development would also benefit from updated regulatory 

guidance to assist both industry and FDA review staff in achieving a common understanding ofthe 

requirements under the Federal Food, Drug, and Cosmetic Act (FDCA). Because of the five-year 

BPCAfPREA sunset and reauthorization cycle, no such current guidance exists, since every 

reauthorization has brought new changes to the law. The lack of current FDA guidance creates 

additional challenges for sponsors involved in pediatric product development to incorporate any 

differences into its plans due to changes in statutory requirements. If Congress were to reauthorize 

BPCA and PREA permanently, it would enable the FDA to publish and maintain up-to-date regulatory 

guidance for companies that seek to develop pediatric treatments. 

Further, making BPCA and PREA pennanent would allow sponsors to build upon the existing pediatric 

research infrastructure and expand their capacity to conduct clinical studies. Uncertainty about whether 

incentives will continue could deter this vital investment. A similar pediatric incentive was successfully 

introduced in the European Union in 2007, and while the regulation is subject to review, the EU's 

pediatric incentive is permanent. The pennanent incentive in the EU has enabled the European 

Medicines Agency (EMA) to publish clear guidelines for industry and regulators making the process 

more efficient, transparent, and predictable. 

Given the undisputed success of BPCA and PREA, we urge Congress to permanently reauthorize BPCA 

and PREA in its current fonn to allow pediatric research to thrive and create more options for our most 

vulnerable population, children. Additionally, PhRMA and its member companies are committed to 

working closely with FDA, and all stakeholders, to insure the continued success ofPDUFA in bringing 

safe, effective innovative medicines forward to address unmet medical needs for all patients. PhRMA 

therefore urges Congress to reauthorize PDUFA in a timely manner based on the negotiated PDUFA-V 

agreement. 

Thank you for the opportunity to testify today and I welcome any questions you may have. 

7 10M (Institute of Medicine). 2012. Safe and Effective Medicines for Children.' Pediatric Studies Conducted Under the Best Pharmaceuticals 

for Children Act and the Pediatric Research Equity Act. Washington, DC: The National Academies Press. 

7 
122 

Mr. PITTS. The chair thanks the gentleman. 

Ms. Radcliffe, you are recognized for 5 minutes. 

STATEMENT OF SARA RADCLIFFE 

Ms. RADCLIFFE. Thank you. Chairman Pitts and Ranking Member Pallone, I appreciate the opportunity to be here today. I am 

Sara Radcliffe, Executive Vice President for Health for the Biotechnology Industry Organization, BIO. I led BIO’s engagement in 

the Prescription Drug User Fee Act technical discussions with the 

Food and Drug Administration and managed BIO’s involvement in 

the biosimilars user fee technical discussions as well. 

BIO supports quick enactment of the PDUFA V recommendations and we are supportive of the draft user fee package that the 

committee has released. This committee has reached strong bipartisan compromises on many issues that of critical importance to our 

industry. We believe that enhancements under PDUFA V will improve the drug development and review process through increased 

transparency and scientific dialog, advance regulatory science and 

strength postmarket surveillance. Most importantly, from the 

standpoint of young, innovative companies, our hope is that 

PDUFA V will provide patients and doctors with earlier access to 

the cures and treatments of tomorrow. 

The PDUFA V legislation will reinforce FDA’s review performance and get back to basics for patients. These enhancements include a New Molecular Entity review program that will lead to 

fewer review cycles and earlier patient to needed treatment, enhanced communication during drug development, regulatory 

science modernization and robust drug safety and postmarket surveillance capacities. 

BIO supports FDA’s ongoing implementation of a well-constructed, science-based pathway for the approval of biosimilar products. Establishing a sound BSUFA was also a priority for us. A 

transparent, predictable and balanced regulatory framework for the 

review and approval of biosimilars accompanied by reasonable performance goals and a dedicated independent funding stream will 

ensure that FDA can facilitate the development and evaluation of 

biosimilar products. 

There are a number of other important provisions included in the 

draft that are of critical importance to BIO. Modernizing the Accelerated Approval pathway has been a top priority, and we are extremely pleased that the draft included H.R. 4132, the Faster Access to Specialized Treatments, or FAST Act, introduced by Congressmen Cliff Stearns and Ed Towns. FAST will ensure that FDA 

can utilize the Accelerated Approval pathway as fully and frequently as possible while maintaining FDA’s safety and effectiveness standards. 

The Accelerated Approval pathway has been a great success 

story. In certain disease areas such as cancer and HIV, the pathway has stimulated an explosion of investment in innovation and 

has brought immense benefit to patients. We appreciate Congress 

working to expand the pathway so that patients suffering from 

other life-threatening and rare diseases can benefit as well. 

The Best Pharmaceuticals for Children Act and Pediatric Research Equity Act have greatly improved health outcomes for chilVerDate Nov 24 2008 10:27 May 30, 2013 Jkt 037690 PO 00000 Frm 00128 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 112\112-136 CHRIS
123 

dren. However, the 5-year sunset periods have resulted in an uncertain regulatory environment for pediatric drug development that 

makes it difficult for our company and practically impossible for 

the FDA to issuance guidance to promote understanding of the current regulatory framework. BIO thanks Congressman Mike Rogers, 

Congresswoman Anna Eshoo and Congressman Ed Markey on their 

championship of this important issue and we support the inclusion 

of their legislation in the committee draft. 

It is also important that FDA has access to the most knowledgeable and most qualified scientific minds to help inform key public 

health decisions and evaluate the safety and effectiveness of innovative new cures and treatments for patients. BIO thanks Representative Burgess and Ranking Member Pallone for their work to 

enhance FDA’s ability to impanel highly qualified external scientific advisors while maintaining the highest levels of integrity for 

these proceedings. 

Additionally, BIO looks forward to continuing to work with the 

committee to enhance oversight over the upstream supply chain for 

pharmaceutical ingredients and modernizing the downstream domestic supply chain for finished pharmaceutical products. BIO supports the establishment of strong, uniform national standards for 

serialization and tracing systems rather than relying on the emerging patchwork of individual State mandates. In this case, BIO believes that Congress should enact laws governing drug product serialization and traceability systems that regulators can leverage to 

hold supply chain member accountable for ensuring that legitimate 

product reaches the patient. A national system using existing and 

proven technologies would best protect supply chain integrity and 

patient safety. 

Thank you again for the opportunity to testify. We look forward 

to working with all of you to ensure that the user fee package is 

quickly enacted. 

[The prepared statement of Ms. Radcliffe follows:] 

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TESTIMONY OF SARA RADCLIFFE 

EXECUTIVE VICE PRESIDENT, HEALTH 

BIOTECHNOLOGY INDUSTRY ORGANIZATION (BIO) 

HOUSE COMMITTEE ON ENERGY AND COMMERCE, 

SUBCOMMITTEE ON HEALTH 

HEARING ON "FDA USER FEES 2012: HOW INNOVATION HELPS 

PATIENTS AND JOBS." 

APRIL 18, 2012 

Chairman Upton and Pitts, Ranking Member Waxman and Pallone, Members of the Committee, 

it is my privilege to provide testimony before you today. My name is Sara Radcliffe and I am 

Executive Vice President for Health for the Biotechnology Industry Organization (BIO). In that 

role, I led BIO's engagement in the Prescription Drug User Fee Act (PDUFA) technical 

discussions with the Food and Drug Administration (FDA) and managed BIO's involvement in 

the biosimilars user fee (BsUFA) technical discussions. 

BIO represents over 1,100 members involved in the research and development of innovative 

healthcare, agricultural, industrial, and environmental technologies. The U.S. biotechnology 

industry is poised to be a major driver in an innovation-driven economy. Biotechnology offers 

real solutions to our most pressing health care needs: curing disease, reducing costs, increasing 

quality, and ensuring that people enjoy not only longer lives, but better and more productive 

lives. 

PDUFA V: GETTING BACK TO BASICS FOR PATIENTS 

BIO supports quick enactment of the PDUFA V recommendations as we believe they can 

enhance the drug development and review process through increased transparency and scientific 

dialogue, advance regulatory science, and strengthen post-market surveillance. Most 

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importantly, from the standpoint of young, innovative companies, our hope is that PDUFA V 

will provide patients and doctors with earlier access to breakthrough therapies. 

When we began the process of organizing for our discussions ofPDUFA V, we in the industry 

started with a simple set of principles that could provide the foundation for our discussions with 

FDA and other stakeholders. These were that a science-based, transparent, and well-managed 

review process that appropriately balances benefits and risks can enhance public trust and 

increase patient access to new medicines. 

With these principles in mind, industry and FDA agreed upon a set of enhancements under 

PDUFA V that seek to reinforce FDA's review performance and get back-to-basics for patients. 

These proposals also have been informed by an unprecedented level of public input through 

workshops, meetings, and stakeholder outreach, which further strengthened the technical 

agreement. These enhancements include: 

• New Molecular Entity (NME) Review Program: Historically, nearly 80% of all NME 

applications submitted to FDA are ultimately approved, but fewer than half are approved 

on the first submission' Sponsors and FDA can and must do better for patients. By 

strengthening scientific dialogue and transparency between FDA and Sponsors under the 

proposed review program for novel drugs and biologics, we can minimize the potential 

review issues that can delay patient access to needed treatments. Increased FDASponsor scientific dialogue and transparency, such as a mid-cycle communication, 

exchange of discipline review letters and advisory committee information, and a 

significant new late-cycle meeting, will help to identify and resolve issues earlier in the 

review. This represents a significant paradigm shift in FDA's review process while 

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maintaining FDA's high standards for safety and efficacy. An additional two-month 

validation period during the review period will help to ensure FDA has all the 

information it needs at the beginning of the process to perform a complete review. 

Finally, a robust third-party evaluation will provide data on whether we have been 

successful in this program of leading to fewer review cycles, shorter approval times, and 

earlier patient access to needed treatment. 

• Enhanced Communication during Drug Development: To help advance American 

innovation and promote the development of the next generation of modern medicines, 

FDA has also committed to a philosophy under PDUFA V that timely, interactive 

communication with biotechnology and life science companies during drug development 

is a core Agency activity. The scientific method does not operate in a vacuum, and it is 

critical to promote interactive, scientist-to-scientist communication between FDA and 

Sponsors. In the course of drug development, Sponsors sometimes have simple or 

clarifying questions, the responses to which could have a significant impact on the 

development program, but which are not extensive enough to warrant formal meetings. 

To obtain timely responses to such questions, Sponsors currently often have to engage in 

a lengthy exchange of multiple formal letters with FDA, which is an inefficient and 

cumbersome use of both FDA's and the Sponsor's time. For small biotechnology 

companies reliant on limited venture capital, these delays can create significant 

impediments to development programs. 

• Modernizing Regulatory Science: Additionally, the PDUFA V agreement makes new 

resources available to modernize regulatory science, for example, in the areas of 

personalized medicine and rare disease drug research. Modem approaches to drug 

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development and evaluation, such as through the application of new tools for rare disease 

drug development, flexibility with regard to creative study designs and new endpoints, 

greater utilization of biomarkers and patient reported outcome tools will introduce new 

efficiencies in the drug development enterprise and provide FDA with additional tools to 

evaluate the benefits and risks of pharmaceutical products. These proposals will also 

integrate more structured and systematic approaches to assessing benefits and risks of 

therapies, and allow FDA to conduct outreach to patients and hold workshops to 

understand better patient perspectives on disease severity and unmet medical need. 

• Robust Drug Safety and Post-Market Surveillance Capacity: PDUFA V continues 

industry's commitment to a lifecycle approach to product evaluation by strengthening 

FDA's post-market surveillance and benefit/risk management capacity. Earlier 

discussion of risk management strategies, standardized approaches to REMS, and further 

validation of the Sentinel Network will promote patient confidence in drug and biologics. 

Under the PDUFA V agreement, industry has reinforced its commitment to a well-funded drug 

and biologics program that supports sound, science-based regulation consistent with FDA's 

public health mission. However, user fees are intended to support limited FDA activities around 

the drug review process and were never intended to supplant a sound base of appropriations. 

User fees currently account for nearly two-thirds of the cost of human drug review. We urge 

Congress to support FDA's mission and fund the Agency at the Administration's FYI2 

requested levels. 

BIO SUPPORTS PASSAGE OF THE BIOSIMlLARS USER FEE PROGRAM 

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BIO supports FDA's ongoing implementation ofa well-constructed, science-based pathway for 

the approval ofbiosimilar products. A transparent, predictable, and balanced regulatory 

framework for the review and approval ofbiosimilars, accompanied by reasonable performance 

goals and a dedicated, independent funding stream, will ensure that FDA can facilitate the 

development and evaluation ofbiosimilars products. 

Throughout both the legislative consideration of the Biologics Price Competition and Innovation 

Act of 2009 (BPCIA) and ongoing FDA implementation of the pathway, BIO has articulated 

several key principles that will promote the development of an effective regulatory framework 

for biosimilar products: 

• Ensuring Patient Safety 

• Recognizing Scientific Differences Between Drugs and Biologics 

• Maintaining the Physician-Patient Relationship 

• Preserving Incentives for Innovation 

• Ensuring Transparent Statutory and Regulatory Processes 

• Continuing to Prioritize FDA Review and Approval of New Therapies and Cures 

BIO believes that the proposed user fee program is consistent with these principles and supports 

Congressional enactment of the program. 

FAST PROVIDES CRITICAL REFORMS TO ACCELERATED APPROVAL 

The FDA's Accelerated Approval pathway allows for earlier approval of new drugs that provide 

a benefit for patients with serious and life-threatening diseases based on a new product's effect 

on surrogate or clinical endpoints that are deemed "reasonably likely to predict clinical benefit.,,;1 

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Under Accelerated Approval, FDA can approve the marketing of a drug to seriously ill patients 

based on earlier evidence of effect with a commitment from the sponsor to conduct further postmarket studies to confirm and define the degree of clinical benefits to patients. The Accelerated 

Approval pathway has been a great success story, but on ly in part. While its applicability has 

been largely limited to certain disease areas (mainly cancer and HIV/AIDS) and certain 

situations, the pathway has stimulated an explosion of investment in innovation in those diseases, 

and has brought immense benefit to patients suffering from these diseases. In HIV/AIDS, for 

example, there are now over 20 new medicines on the market. In oncology, FDA has granted 

Accelerated Approval to 49 new indications for 37 novel oncology drug products since 1995.iii 

BIO supports H.R. 4132, the Faster Access to Specialized Treatments (FAST) Act, introduced by 

Congressmen Cliff Stearns and Ed Towns, which would ensure that FDA could utilize the 

Accelerated Approval pathway as fully and as frequently as possible while maintaining FDA's 

safety and effectiveness standards, and by codifying, modernizing and expanding FDA's 

Accelerated Approval pathway with four targeted revisions. First, it would empower FDA to 

consider a broad range of surrogate and clinical endpoints, including endpoints that can be 

measured early in the clinical trial process, and endpoints applicable to a wider array of diseases 

and conditions. Second, it would encourage FDA to consider a wider array of supporting 

evidence, in addition to clinical trial evidence, to help inform the Agency's assessment of 

whether there is a reasonable basis to predict clinical benefit. Third, the bill would ensure that 

FDA takes into consideration the severity or rarity of the condition and the adequacy of any 

alternative treatments. And lastly, the bill would increase the transparency, predictability, and 

consistency of the review process by ensuring that FDA develop new guidance and revise 

existing guidance and regulations to clarifY the scope and process for utilizing the expanded 

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Accelerated Approval pathway, including specifically for rare diseases. Nothing in this bill 

would alter FDA's efficacy or safety standards. These important reforms would create a robust 

Accelerated Approval pathway that would enable the safe and expeditious development of the 

next generation of modem medicines to treat particularly dire conditions. 

PEDIATRIC DRUG DEVELOPMENT 

The Best Pharmaceuticals for Children Act (BPCA) and Pediatric Research Equity Act (PREA) 

have been remarkably successful in ensuring that the medications used in children are tested and 

labeled appropriately for their use. BPCA and PREA have generated a wealth of pediatric drug 

information for physicians and parents, contributing to improved health outcomes for pediatric 

patients. Working in tandem, BPCA and PREA have resulted in nearly 425 pediatric labeling 

changes since 1998, according to the FDA. Congress should recognize the success of these 

programs and: 

• Reauthorize the existing framework and incentive for ongoing pediatric research, and 

• Make the programs permanent by eliminating their sunset provisions. 

The five year sunset periods for BPCA and PREA result in an uncertain regulatory environment 

for pediatric drug development. Since the average pediatric clinical research program spans 6 

years, most clinical programs will span two reauthorization periods in which the ground-rules for 

pediatric research are subject to change. This uncertainty makes it difficult for companies to 

invest in infrastructure to support development of products for children, and practically 

impossible for the FDA to issue guidance to promote understanding of the current regulatory 

framework. 

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Since their enactment, BPCA and PREA, working together, have been widely acknowledged as 

effective in promoting pediatric drug research. There is no logical reason to continue to allow 

such important legislation to sunset, as the ambiguity associated with this situation has the 

potential for limiting or endangering the pediatric research infrastructure that companies have 

been endeavoring to build and expand. BIO supports H.R 4274, the BPCA and PREA 

Reauthorization Act and thanks Congressman Mike Rogers, Congresswoman Anna Eshoo, 

Congressman Ed Markey and others on their championship of this important issue. 

REFORM OF ADVISORY COMMITTEE CONFLICT OF INTEREST POLICIES 

As a pre-eminent science-based regulatory agency, it is critical that FDA have access to the most 

knowledgeable and most qualified scientific minds to help inform key public health decisions 

and evaluate the safety and effectiveness of innovative new cures and treatments for patients. 

BIO thanks Representative Burgess for his work on this issue and for introducing legislation that 

will enhance FDA's ability to empanel highly-qualified external scientific advisors, while 

maintaining the highest levels of integrity for these proceedings. 

In recent years, arbitrary limits and unnecessarily restrictive interpretations of conflict of interest 

rules have created barriers that have prevented FDA from consistently recruiting highly qualified 

scientific advisors. Consequently, advisory committee vacancies are at an all-time high, the 

quality of the scientific discourse on such panels has suffered, and FDA has at times had to rely 

on scientific advice from panel members lacking relevant expertise, particularly with respect to 

rare diseases and cutting-edge technologies where the pool of available experts can be quite 

small. 

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810 believes that FDA should have greater flexibility and discretion to select the most 

appropriate advisors, consistent with the rules that apply to other federal agencies. Such changes 

will help to ensure that FDA decisions are informed by the best available scientific experts and in 

the best interest of patients. 

FDA MISSION STATEMENT 

FDA's mission, as amended by the Food and Drug Administration Modernization Act of 1997 

and set forth in section 903 of the Federal Food, Drug, and Cosmetic Act (FFDCA), is to 

promote and protect the public health. However, the FDA mission statement does not reflect the 

Agency's critical role in incorporating modem scientific advances into review practices to ensure 

that innovative treatments and therapies are made available to the patients who need them. 

The pathway for such long-sought health technology advances as personalized medicine, health 

applications of nanotechnology, and other cutting-edge developments to reach patients and to 

improve healthcare in the United States goes through FDA. The Agency has a critical role in 

facilitating healthcare innovation, but this fact is not formally and forcefully recognized in 

FDA's legislative mandate. 810 applauds Congressman Mike Rogers for introducing legislation 

and advancing a dialogue on updating the FDA's mission for the 21st century. 

SUPPLY CHAIN INTEGRITY & ADOPTION OF A NATIONAL PHARMACEUTICAL 

TRACEABIL TY SYSTEM 

Due to the nature of the United States' closed and highly regulated pharmaceutical supply chain, 

American patients have high confidence in the integrity of the drugs and biologics they are 

prescribed. BIO member companies believe the quality and safety oftheir products is their 

responsibility to the patients they serve, and is their first priority. BIO supports the initiatives 

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that FDA has already implemented to expand the Agency's global presence through foreign 

offices; expand the foreign inspectorate and part of a risk-based inspectional strategy; and 

modernize registration and facility tracking systems and information technology infrastructure. 

This Committee has also been examining granting the Agency several new regulatory authorities 

to further secure the supply chain and BIO looks forward to working with the Committee to 

further strengthen FDA's import programs and oversight. BIO is supportive of well crafted 

proposals to increase penalties for criminal counterfeiters and adulterers, provide FDA with 

authority to detain or destroy known counterfeits at our ports, modernize FDA's facility 

registration and tracking systems, and better leverage the resources of established international 

regulatory authorities through joint inspections. 

In addition to enhancing oversight over the "upstream" supply chain for pharmaceutical 

ingredients, it is critical to make enhancements to the "downstream" domestic supply chain for 

finished pharmaceutical products. BIO supports the establishment of strong, uniform, national 

standards for serialization and tracing systems, rather than relying on the emerging patchwork of 

individual state mandates. In this case, BIO believes that the Congress should enact laws 

governing drug product serialization and traceability systems that regulators can leverage to hold 

supply chain members accountable for ensuring that legitimate product reaches the patient. A 

national system using existing and proven technologies would best protect supply chain integrity 

and patient safety. 

Specifically, this approach would standardize efforts nationwide and provide immediate 

measures to increase supply chain security. Such an approach would enable the identification 

and adoption of a consensus standard for a traceability system and establish the foundational 

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building blocks and scalable infrastructure to facilitate additional system advancements. Such a 

system should be sufficiently flexible to allow the end-state to reflect the realization of the 

project's goal-facilitating the identification, and preventing the introduction, of counterfeit, 

diverted, substandard, adulterated, misbranded or expired drugs from the supply chain and 

improving the efficiency and effectiveness of recalls. 

CONCLUSION 

Thank you for the opportunity to offer BIO's support for the "UFA" Package. We believe that 

these are common sense recommendations that will help advance innovative new cures for 

patients. We call on Congress to fully support FDA's appropriated budget and to pass PDUFA 

Vas expeditiously as possible. I would be pleased to answer any questions from the committee. 

'FYlO PDUFA Performance Report, p.4, 

http://www.fda.gov/downloads/AboutFDA/ReportsManu al sForms/Reports/UserFee Reports/Performa nceReports/ 

PDUFA/UCM243358.pdf 

;, 21 C.F.R. § 314.500; 21 C.F.R. § 601.40 

;" Dr. Paul Kluetz. ODAC. February 8, 2011, the U.s. Food and Drug Administration (FDA) OncologiC Drugs Advisory 

Committee (ODAC) 

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Mr. PITTS. The chair thanks the gentlelady. 

Mr. Gaugh, you are recognized for 5 minutes for an opening 

statement. 

STATEMENT OF DAVID GAUGH 

Mr. GAUGH. Good afternoon, Chairman Pitts, Ranking Member 

Pallone and members of the subcommittee. I am David Gaugh, Vice 

President of Regulatory Science for the Generic Pharmaceutical Association and a Licensed Pharmacist. GPhA represents the manufacturers and distributors of finished dose pharmaceuticals and 

bulk pharmaceutical chemicals. 

Generic pharmaceuticals account for 80 percent of all prescription drugs dispensed in the United States but consume just 27 percent of the total drug spending for prescription medicines. Today’s 

generic industry is one marked by diverse, innovative companies 

who have grown to become global leaders in providing equivalent 

medicines. At the same time, generic competition continues to play 

a vital role in driving pharmaceutical innovation. This growth in 

the generic industry has led to the creation of tens of thousands of 

new American jobs and dozens of States across the country. It has 

also served to underscore the critically important role of the Food 

and Drug Administration. However, the administration remains 

underfunded and responsibility of ensuring access to safe and affordable medicines is one that is shared with the rest of the entire 

pharmaceutical industry, not just the FDA. That is why the generic 

industry has stepped up to help provide the FDA with additional 

resources to address the ongoing challenges caused by an increasing global drug supply chain, the increase in the agency’s workload 

and the regulation of complex technologies. 

Currently, more than 2,700 generic drug applications are awaiting approval from the FDA’s Office of Generic Drugs, and the average approval time for an application is now stretching beyond 30 

months, more than five times longer than the statutory six-month 

review time that was called for in Hatch-Waxman. Unfortunately, 

this backlog keeps safe, low-cost generic drugs off the market and 

reduces competition that may drive prices down even further. 

The proposed Generic Drug User Fee Act, or GDUFA, that we 

are discussing today will help alleviate this backlog and expedite 

consumer access to these generic drugs. GPhA also recognizes, 

however, that while providing early access to effective medicines is 

critical and is a key aim of the other user fee programs, an equally 

important pillar of FDA and industry is to ensure drug safety. That 

is why GDUFA takes the unprecedented step of holding all players 

contributing to the U.S. generic drug system both foreign and domestic to the same inspection standards and enhances FDA’s ability to identify and require the registration of active pharmaceutical 

ingredients and finished fill dosage for manufacturers involved in 

each generic drug product that is sold in the United States. It is 

paramount that we work to shape the future of our country’s generic drug industry. We also work to bring the FDA into the 21st 

century and ensure that the agency’s authorities to achieve its mission in this global age are up to date. 

This is further exemplified by the other fee program we will discuss today, which is for generic biologic drugs or biosimilars. BioVerDate Nov 24 2008 10:27 May 30, 2013 Jkt 037690 PO 00000 Frm 00141 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 112\112-136 CHRIS
136 

logic medicines are often the only lifesaving treatment for many of 

the more severe diseases encountered in patients today. In many 

respects, they represent the future of medicine. However, their 

price tag can keep these products out of the reach of many patients. 

During the biosimilar user fee negotiations, GPhA expressed its 

support for the user fee funding to provide FDA with the adequate 

resources to apply consistent regulatory standards to all biologics 

and review new applications as they are filed. Both industry and 

patients will benefit from this user fee program by gaining a higher 

degree of certainty in the timeliness of applications and their reviews. We applaud the FDA for recognizing the importance of the 

biosimilars and the need to apply state-of-the-art science in an 

agency activity governing the review and approval of these very important drugs. 

Now let me turn to drug shortages. The generic pharmaceutical 

industry has spearheaded the development of an unprecedented 

multi-stakeholder private sector collaboration which we believe will 

accelerate the recovery of certain critical drugs in short supply to 

the patients in need. This solution, which has been labeled the Accelerated Recovery Initiative, will play a crucial role in assisting 

the FDA with a more accurate, timely and comprehensive review 

of current potential drug shortages and in establishing practices to 

lessen or even eliminate in some cases current shortages. 

Finally, we urge the inclusion in the user fee legislation of a proposal introduced by Ranking Member Pallone and Representative 

Guthrie, H.R. 4332, the Generic Drug Application Review Fairness 

Act, which will ensure that generic drug manufacturers are not unfairly penalized for delays in the drug application approval process. 

In conclusion, Mr. Chairman, this is truly an historic time for 

GPhA. Nothing is more important to our industry than ensuring 

patients have access to lifesaving generic medications they require 

and these historic agreements will provide the critical step towards 

accomplishing that goal. Thank you. 

[The prepared statement of Mr. Gaugh follows:] 

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SUMMARY OF THE GENERIC PHARMACEUTICAL ASSOCIATION TESTIMONY 

BEFORE THE ENERGY AND COMMERCE SUBCOMMITTEE ON HEALTH 

UNITED STATES HOrSE Of' REPRESENTATIVES - APRIL 18,2012 

"FDA USER FEES 2012: How INNOVATION HELPS PA TIEl'iTS AND JOBS" 

I am David Gaugh, Vice President for Regulatory Sciences at the Generic Phannaceutical Association 

and a licensed phannacist. GPhA represents the manufacturers and distributors of finished dose generic 

phannaceuticals, manufacturers and distributors of bulk phannaceutical chemicals and suppliers of other 

goods and services to the generic industry. Generic pharmaceuticals fill 80 percent of the prescriptions 

dispensed in the U.S. but consume just 27 percent of the total drug spending. 

Today's generic industry is one marked by diverse, innovative companies, who have grown to become 

global leaders both in providing equivalent medicines and pioneering new treatment options for patients. 

Generic competition also continues to playa vital role in driving phannaceutical innovation. This growth 

in the generic industry has led to the creation of tens of thousands of new jobs across the country. We 

urge the Committee to approve Generic Drug User Fee Act (GDUFA) and Biosimilar User Fee Act 

(BSUF A) as negotiated and in a timely manner, so that patients, the FDA, and generic manufacturers can 

begin to see the many benefits of these agreements. 

Landmark User Fee Programs Will Provide Additional Resources 

Through the negotiation of GDUF A, the generic industry has stepped up to help provide the FDA with 

much-needed additional resources. GDUFA will help ensure U.S. drug safety, establish a more level 

playing field among the U.S. phannaceutical supply chain, and make certain that Americans receive 

timely access to safe, effective and affordable generic drugs. Currently, more than 2,700 generic drug 

applications, or Abbreviated New Drug Applications (ANDAs), are awaiting approval from the FDA's 

Office of Generic Drugs (OGD), and the average approval time for an application is now stretching 

beyond 30 months. GDUFA's performance goals call for FDA to complete, by the end of year five, the 

review of 90 percent of all ANDAs that are pending on October I, 2012 - effectively eliminating the 

current application backlog. By the end of the program's fifth year, GDUFA also calls on the FDA to 

review 90 percent of ANDAs within 10 months after they are submitted - almost two years faster than 

today's average review time. GDUFA also takes the unprecedented step of holding all players 

contributing to the U.S. generic drug system, foreign or domestic, to the same inspection standards, and 

enhances FDA's ability to identiJY and require the registration of API and finished dosage form 

manufacturers involved in each generic drug sold in the U.S. 

Biosimilar User Fee Act 

BSUF A will benefit both patients and industry by providing a higher degree of certainty in the timeliness 

of application reviews. The program creates a separate review platform for biosimilar sponsors that will 

be jointly financed annually by industry and the FDA through $20 million in Congressional 

appropriations and then supplemented by user fees equivalent to those under the Prescription Drug User 

Fee Act. The program's performance goals call for FDA, by the end of the program's fifth year, to review 

90 percent of the original biosimilar applications it receives within 10 months of their submission. 

Additional Measures are needed to Ensure Access to Affordable Medicines 

Drug Shortages - GPhA supports the proactive reporting and expedited review measures in the 

previously released discussion draft. 

Forfeiture - GPhA urges the inclusion of the forfeiture proposal introduced by Rep. Pallone and Rep. 

Guthrie, the Generic Drug Application Review Fairness Act of2012. 

Supply Chain Security - GPhA supports a risk-based model for foreign inspections and urges the 

inclusion of the RxTEC drug tracking model outlined by the Pharmaceutical Distribution Security 

Alliance (PDSA) 

Antibiotics - GPhA supports appropriate efforts to increase incentives to develop new novel antibiotics 

but has concerns regarding the increased filing moratorium in the previously released draft. 
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TESTIMONY OF DAVID R. GAUGH, R.PM. 

VICE PRESIDENT FOR REGULATORY SCIENCES 

GENERIC PHARMACEUTICAL ASSOCIATION 

FDA USER FEES 2012: How INNOVATION HELPS PATIENTS 

AND JOBS 

BEFORE THE ENERGY AND COMMERCE SUBCOMMITTEE ON HEALTH 

UNITED STATES HOUSE OF REPRESENTATIVES 

APRIL 18,2012 

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Good morning Chairman Pitts, Ranking Member Pallone, and Members of the House 

Energy and Commerce Subcommittee on Health. Thank you for inviting me to testify 

before your subcommittee on this very timely and important subject. 

I am David Gaugh, Vice President for Regulatory Sciences at the Generic 

Pharmaceutical Association and a licensed pharmacist. GPhA represents the 

manufacturers and distributors of finished dose generic pharmaceuticals, bulk 

pharmaceutical chemicals, and the suppliers of other goods and services to the generic 

industry. Generic pharmaceuticals now fill 80 percent of all prescriptions dispensed in 

the U.S., but consume just 27 percent of the total drug spending for prescription 

medicines. 

According to an analysis by IMS Health, the world's leading data source for 

pharmaceutical sales, the use of FDA-approved generic drugs in place of their brand 

counterparts has saved U.S. consumers, patients and the health care system more than 

$931 billion over the past decade - $158 billion in 2010 alone - which equates to $3 

billion in savings every week. 

Prior to joining GPhA, I was Vice President and General Manager for Bedford 

Laboratories, the generic injectable division of Ben Venue Laboratories, I have also 

served as Senior Director, Pharmacy Contracting and Marketing, for VHAlNovation, one 

of the largest Group Purchasing Organizations in the U.S., and was System Director of 

Pharmacy for a regional referral tertiary-care healthcare system in the Midwest. 

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Introduction 

I would like to begin today by commending the Committee for your continued focus on 

the important issues we will examine today. As someone who has worked in and 

around the generic industry for more than two decades, I have witnessed firsthand the 

industry's remarkable growth and the vital role it plays in the lives of Americans every 

day. By providing consumers access to safe and effective medicines at an affordable 

price, the generic industry fills an essential role not only for patients, but for our health 

care system and, indeed, our national economy. 

Today's generic industry is one marked by diverse, innovative companies, who have 

grown to become global leaders not only in providing equivalent medicines, but in 

pioneering new treatment options for patients. At the same time, generic competition 

continues to playa vital role in driving pharmaceutical innovation. New life saving 

medicines can only help patients if they have access to them, and this is made possible 

through the savings generics create both directly and indirectly by bringing down the 

total drug costs for every household. 

Since the enactment of the Hatch-Waxman Act, which created the modern day generic 

industry, there has been a multiple-fold increase in the innovation of new drugs -

including the cholesterol drugs Lipitor and Zocor, antidepressants Prozac and Paxil, and 

antiulcerants Prilosec and Nexium, among others - while at the same time an 

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increased use in generic drugs. By creating a fair balance between innovation of new 

medicines and accessibility to lower cost generic medicines, the legislation established 

a win-win-win system for providers, payers and consumers. 

This dynamic will only heighten as the industry moves toward the development of new, 

complex technologies such as generic versions of biologic drugs, or biosimilars. As the 

Federal Trade Commission (FTC) concluded in its report "Follow-On Biologic Drug 

Competition", market competition from biosimilars actually will spur biologic innovation 

and the introduction of new medicines. 

This growth in the generic industry has led to the creation of tens of thousands of new 

American jobs in dozens of states across the country. It has also served to underscore 

the critically important role of the Food and Drug Administration (FDA). As I will 

highlight, the level of cooperation between industry and the FDA has never been 

greater. The two historic user fee agreements we are discussing today represent only a 

small measure of our ongoing collaboration. It is our hope that this collaboration will 

continue and extend throughout all of our interactions with the agency. 

As evidenced by these accomplishments, the FDA's work during this period of growth 

for the generic industry has been extraordinary. Thanks to their efforts, the U.S. drug 

supply remains the safest of anywhere in the world, and the FDA's drug approval and 

inspection processes represent the gold standard for regulatory agencies worldwide. 

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However, the agency remains underfunded, and the responsibility of ensuring access to 

safe and affordable medicines is a shared one that rests with the entire pharmaceutical 

industry, not just the FDA That is why the generic industry has stepped up to help 

provide the FDA with additional resources to address the ongoing challenges caused by 

an increasingly global drug supply-chain, the increase in the agency's workload, and the 

regulation of complex technologies. 

Throughout much of last year, GPhA and our member companies worked closely with 

the FDA to negotiate a generic drug user fee program designed to help the agency 

obtain additional resources to ensure all participants in the U.S. generic drug system, 

whether U.S.- based or foreign, comply with all of our country's strict quality standards. 

Most importantly, the program will make certain that all Americans receive timely access 

to safe, effective and affordable generic drugs, and will provide a level playing field for 

U.S. and foreign manufacturers. 

Landmark User Fee Programs Will Provide Additional Resources 

Currently, more than 2,700 generic drug applications are awaiting approval from the 

FDA's Office of Generic Drugs (OGD), and the average approval time for an application 

is now stretching beyond 30 months, five times longer than the statutory six-month 

review time called for by Hatch-Waxman. Unfortunately, this backlog keeps safe, lowcost generic drugs off the market and reduces competition that may drive drug prices 

down further. 

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The proposed Generic Drug User Fee Act, or GDUFA, that we are discussing today will 

help alleviate the backlog and expedite consumer access to generic drugs, while also 

enhancing drug quality and safety by ensuring inspection parity among both foreign and 

domestic manufacturing sites, 

Specifically, FDA will receive $299 million per year over the five-year GDUFA program, 

or about $1.5 billion in total. Of that funding, 80 percent, or about $240 million, will 

come from finished-dose manufacturers, and the remaining 20 percent will be paid by 

manufacturers of active pharmaceutical ingredients. Thirty percent of the funding will 

stem from application fees and 70 percent will be derived from fees on manufacturing 

sites, or facility fees, 

Splitting the fees in this manner will provide the FDA with a predictable source of annual 

income, as the number of facilities manufacturing generic drugs on a yearly basis 

provides a more consistent figure than the number of generic drug applications 

submitted. Any finished dose or active pharmaceutical ingredient manufacturing facility 

that is referenced or listed in a generic drug application - commonly referred to as an 

Abbreviated New Drug Application, or ANDA -will pay a facility fee under GDUFA 

The new user fee program will also establish performance goals for the FDA As part of 

these goals, GDUFA calls for the agency to complete, by the end of year five, the 

review of 90 percent of all generic drug applications that are pending on October 1, 

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2012 - the proposed start date for the program. By achieving this goal, the GDUFA 

agreement will effectively eliminate the current application backlog. 

In addition, by the end of the program's fifth year, GDUFA calls on the FDA to review 90 

percent of ANDAs within 10 months of submission - almost two years faster than 

today's average review time. 

These are great strides that will go a long way toward ensuring patients have timely 

access to safe and effective generic medicines for years to come. GPhA also 

recognizes that while providing earlier access to effective medicines is critical - and 

the key aim of all other existing user fee programs - an equally important pillar of 

FDA's and industry's mission is ensuring drug safety. 

Since the enactment of the Federal Food, Drug and Cosmetic Act in 1938, the core 

public health mission of the FDA has been to protect and promote the public's health. 

As part of that mission, the FDA has a critical responsibility to ensure the safety, 

efficacy and security of the entire U.S. drug supply, both brand and generic. Ensuring a 

safe and effective drug supply, however, is significantly more challenging today than it 

was in 1938 due to the increasing globalization of drug manufacturing, supply and 

testing and an increase in FDA-regulated drug products. 

GPhA believes that the FDCA should be amended to ensure that all facilities, foreign 

and domestic, are held to the same inspection frequency and prioritized on a risk basis. 

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This will improve quality, consistency and availability within the drug supply chain and 

create a level playing field, allowing U.S. pharmaceutical manufacturers to be more 

competitive. It will also benefit foreign manufacturers, who are likewise disadvantaged 

through delayed approval times, as a recent inspection history is required for new 

product approval. 

These important updates to the law will result not only in a safer drug supply with 

consistent oversight for all players in the U.S., but will also help reduce approval times 

of new drugs undergoing FDA review and help expedite the availability of new medicine, 

as all facilities will be subject to routine FDA inspection. 

GPhA has also long-maintained that, in light of increasing globalization and with nearly 

40 percent of all the prescription drugs in the U.S. being imported, the FDA needs more 

resources to ensure adequate oversight of the nation's drug supply. 

A 2010 Government Accountability Office (GAO) report found that FDA was able to 

conduct Good Manufacturing Practice, or GMP, inspections at only 11 percent of the 

foreign establishments in its database, compared to 40 percent of the domestic sites it 

inspected. According to the GAO, in the absence of a paradigm shift, it would take FDA 

nine years to inspect all foreign facilities. 

That is why GDUFA takes the unprecedented step of holding all players contributing to 

the U.S. generic drug system, foreign or domestic, to the same inspection standards, 

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and enhances FDA's ability to identify and require the registration of active 

pharmaceutical ingredient and finished dosage form manufacturers involved in each 

generic drug product sold in the U,S, The program will significantly improve the 

resources the FDA has to do this important work, ensuring that it can be done with 

increasing speed, but without any sacrifice to today's high quality standards, 

To that end, a critically important metric of the GDUFA program is that FDA will conduct 

risk-adjusted biennial current Good Manufacturing Practice, or cGMP, surveillance 

inspections of generic finished-dose and API manufacturers, with the goal of achieving 

parity of inspection frequency between foreign and domestic firms in FY 2017, 

Achieving this inspection parity will provide significant value to industry participants, as 

the majority of outstanding inspections delaying ANDA approvals are associated with 

foreign facilities, These applications are currently disadvantaged by having to wait for 

an inspection before approval. 

Further, the disparity in the degree of oversight experienced by domestic versus foreign 

facilities creates an uneven playing field between those that are receiving regular GMP 

inspections and those that are not. The GDUFA program will help ensure that any 

noncompliant players within the drug supply chain, wherever they are based, are 

identified in order to ensure the safety of drugs and protect the reputation of our industry 

around the world, 

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Through the novel and landmark generic drug user fee agreement, the generic industry 

has truly stepped up to do our part to help insure U.S. drug safety, establish a more 

level playing field among all participants in the U.S. pharmaceutical supply chain and 

significantly reduce the time needed to commercialize a generic drug. 

By designing the program to spread fees across multiple stakeholders and sources to 

keep individual amounts as low as possible, the program will help assure that American 

consumers continue to receive the significant cost savings from generics that, over the 

past dozen years, have provided more than $1 trillion in savings to the nation's health 

care system. 

It is paramount that, as we work to shape the future of our country's generic drug 

industry, we also work to bring the FDA into the 21 st century and ensure that the 

agency's authorities to achieve its mission in this global age are up to date. 

In many ways, this process is already underway. Perhaps the best and most immediate 

example rests with the other user fee program we will discuss today - for generic 

biologic drugs, or biosimilars. 

Biosimilar User Fee Act 

Biologic medicines are often the only lifesaving treatments for many of the most severe 

diseases encountered by patients today. In many respects, they represent the future of 

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medicine. Their high price tag, however, can keep them out of reach for many patients. 

The cost of biologics is increasing annually at a faster pace than almost any other 

component in health care. As proven with chemical prescription drugs, competition 

from generic biologic drugs will be the most important factor in holding down the future 

costs of these lifesaving medicines. 

With the FDA still working to determine the process by which these products will be 

approved, GPhA continues to stress the importance of creating a workable regulatory 

mechanism that does not serve as a barrier to competition, but rather ensures the 

robust competition needed to lower costs and spur future innovation. If such a system 

is not put in place, it is our fear that the exponential growth of biologics over the next 10 

to 20 years, without adequate generic alternatives, could bankrupt our health care 

system and the national economy. Moreover, the lack of lower-cost generic biologics 

will keep vital treatments away from the patients who need them most. 

Within our organization, we represent manufacturers who currently produce highquality, safe and effective biosimilars approved in Europe and other regulated markets 

around the world. These member companies are dedicated to bringing the same level 

of access and affordability for these critical medicines to U.S. patients. 

During the biosimilar user fee negotiations, GPhA expressed its support for user fee 

funding to provide FDA with adequate resources to apply consistent regulatory 

standards to all biologics, and review new applications as they are filed. Both industry 

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and patients will benefit from this user fee program by gaining a higher degree of 

certainty in the timeliness of application reviews. 

The proposed program creates a separate review platform for biosimilar sponsors, to be 

financed annually through $20 million of the funds appropriated to the FDA and 

supplemented by user fees equivalent to those under the Prescription Drug User Fee 

Act. A portion of the application fee paid during the biosimilar development phase will 

be used to support earlier resourcing for product reviews. Similar to GDUFA, the 

program also includes performance goals for the FDA, which call for the agency, by the 

end of the program's fifth year, to review 90 percent of the original biosimilar 

applications it receives within 10 months of their submission. 

We applaud the FDA for recognizing the importance of biosimilars, and the need to 

apply state-of-the-art science in all agency activities governing the review and approval 

of these important drugs. 

Additional Measures are needed to Ensure Access to Affordable Medicines 

It is important to emphasize that the funding provided by both of these user agreements 

is in addition to, not a substitute for, Congressional appropriations. And while the 

programs provide an excellent framework for industry to help support the growing global 

needs of FDA and speed the entry of generic drugs to market, they do not completely 

solve the problem. With this in mind, we urge the Committee to address additional 

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areas - outside the scope of the user fee agreements - that would further increase 

access to safe and effective generic medicines. 

This is particularly true in regard to the Committee's important work to address drug 

shortages. As members of the public who also are affected by shortages, the generic 

pharmaceutical industry is acutely aware of the distress caused to patients, families and 

clinicians by the shortage of critical drugs. Drug shortages represent a complex, multifaceted issue and our industry has, and will continue, to work tirelessly to be part of the 

solution. 

The Committee's previously released discussion draft of the user fee legislation 

contains a proposal to formalize the process for proactively reporting drug shortages to 

the FDA - as many generic manufacturers now do voluntarily - and allow the FDA to 

expedite regulatory reviews. We believe this proposal would enable both the agency 

and industry to mitigate the damage a shortage can cause. We also applaud the 

inclusion in the discussion draft of a provision to expedite the review of major 

manufacturing changes in order to prevent or alleviate a drug shortage. 

In conjunction with these efforts, the generic pharmaceutical industry is spearheading 

the development of an unprecedented multi-stakeholder collaboration, which we believe 

will accelerate the recovery of certain critical drugs in short supply to patients in need. 

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This solution, which we have labeled the Accelerated Recovery Initiative (ARI), is 

designed to provide a more accurate, timely and comprehensive view of critical drugs in 

drug shortage situation, provide greater visibility to potential shortages of these critical 

drugs and establish practices that allow for potential, voluntary production adjustments 

to lessen or eliminate the impact of a current shortage. 

The ARt is predicated on.voluntary communication between an Independent Third Party 

and stakeholders involved in the manufacturing and distribution of generic injectable 

medications currently in shortage. It is designed to use real-time supply and distribution 

information to give the FDA a better understanding of current conditions and expand the 

supply of critical medications. 

This voluntary initiative will take place in conjunction with the excellent work currently 

being done by the FDA and members of Congress. The type of information gathered 

and disseminated will increase early visibility and communication between the FDA and 

industry relating to current and potential drug shortages. 

We also urge the inclusion in the user fee legislation of a proposal introduced by 

Ranking Member Pallone and Representative Guthrie, H.R. 4332, the Generic Drug 

Application Review Fairness Act. As I mentioned earlier, the average approval time for 

a generic drug application is now stretching beyond 30 months, five times longer than 

the statutory six-month review time called for by the Hatch-Waxman Act. While GDUFA 

will help to lower this approval time to 10 months over the next five years, in the short 

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term this delay is causing certain generic manufacturers to forfeit the 180-days of 

market exclusivity period they would gain by successfully challenging a brand drug's 

patent. 

This is happening because, under a provision included in the Medicare Modernization 

Act (MMA) of 2003, a first filer of a generic drug application must forfeit its 180-day 

exclusivity if it does not receive a tentative approval from the FDA within 30-months of 

the date its application is received. The intent of the provision was to encourage first 

filers to submit quality applications. If the application was not sufficiently complete to be 

eligible for approval upon review, it would have the threat of losing the 180-days of 

exclusivity. 

When Congress passed MMA, the average review and approval time for an ANDA was 

16 months. FDA median review and approval time of ANDAs, however, has slowly 

increased since 2003 and is now approximately 30 months. This unprecedented 

increase in approval time has caused several first filers to forfeit the 180-days of 

exclusivity, which was clearly not the intent of Congress. The proposed solution 

provides temporary relief from this unintended consequence by temporarily increasing 

the 30-month period to reflect the increase in median ANDA approval time in 2012. As 

GDUFA goes into effect, the average approval time for ANDAs will eventually be 

reduced. The proposal is therefore tied to the GDUFA timeline and will sunset at the 

end of 2017. Additionally, this relief would be available on a prospective basis only and 

would only apply to those first-to-file applications that have not hit their 30 months from 

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filing date at the time of enactment. By providing this temporary relief, the legislation 

will ensure that generic manufacturers can continue to challenge patents and bring 

generic drugs to the market sooner. 

As this user fee legislation moves forward, GPhA also respectfully urges the Committee 

to consider including a measure to ensure the security of the U.S. pharmaceutical 

supply chain. 

As noted previously, we strongly support the unprecedented steps taken in GDUFA to 

ensure that all contributors to the U.S. drug system, both foreign and domestic, are held 

to the same quality standard. 

GPhA further supports a "risk-based" model for inspections that follows the model 

established by GDUFA. This model prioritizes inspections according to an 

establishment's inspection, safety and compliance track record and whether an 

establishment is associated with ANDAs that are otherwise approvable, or eligible for 

tentative approval, except for an outstanding inspection. Establishments associated 

with ANDAs that have not been inspected previously, as well as facilities in need of a 

recent inspection history, also would gain priority. 

This system would ensure that questionable or problematic facilities receive a 

comprehensive review and evaluation sooner, rather than later, or not at all as can be 

the case under the current system. Facilities with strong records of compliance and 

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positive inspections would be placed further down on the inspection schedule, unless 

awaiting an inspection for an application approval, allowing the agency to prioritize its 

immediate attention on facilities that have never had an inspection or that have a history 

of compliance issues. 

GPhA also recommends that Congress adopt a federal drug tracking system with 

uniform standards across all states. Given that products are distributed throughout 

interstate commerce and across state lines, having multiple standards will be 

problematic. The challenge to implementation will be to ensure that the technology is 

reliable and feasible in light of numerous economic, technical and logistical factors, so 

that the end product delivers patient safety and does not result in increased costs to 

consumers and payers. 

As a member of the Pharmaceutical Distribution Security Alliance (PDSA), a multistakeholder group working to develop a national model for drug tracking, GPhA, in 

consensus with other supply chain partners, supports the RxTEC model, which will 

increase patient safety and help to achieve the goals we share with the FDA. 

We believe this model will help prevent the introduction of counterfeit drugs, facilitate 

their identification, provide accountability for the movement of drugs by supply chain 

partiCipants and improve the efficiency and effectiveness of recalls. Establishing a 

national uniform drug tracking system, as opposed to a system based on a patchwork of 

state laws and regulations, is critical to achieving these goals. 

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Finally, I would like to note briefly our concerns with the Committee's proposal in the 

previously released discussion draft to incentivize new antibiotic development. 

GPhA supports appropriate efforts to increase incentives to develop new novel 

antibiotics. Market exclusivity is a powerful tool, however, that Congress should 

judiciously use as an incentive to spur the development of new products. An increase in 

market exclusivity for specific classes of drugs is a slippery slope and prioritizes certain 

medical conditions over others. 

Moreover, an increase in market exclusivity for certain classes of drugs could have the 

unintended consequence of pharmaceutical manufacturers overly focusing efforts on 

those classes of drugs that have larger market exclusivity periods at the expense of 

developing new cures for other diseases that have shorter market exclusivity periods. 

GPhA has always been supportive of ensuring that innovator companies receive an 

appropriate amount of time to recoup their investment into research and development. 

The 10 years of market exclusivity that this bill affords accomplishes this balance. 

However, we must also be mindful of the public health aspect of antibiotics. Thus, it is 

important that Congress strike a delicate balance between affording market exclusivity 

to manufacturers and providing patients timely access to low-cost generic versions of 

these products. Increasing the filing moratorium to nine years, which, due to an 

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automatic 30-month stay and the likely six months of exclusivity for pediatric testing, 

would represent a de facto 12 years of market exclusivity, overlooks this balance. 

Additionally, Hatch-Waxman, the Orphan Drug Act, and the Biologics Price Competition 

and Innovation Act all have four-year filing moratoriums. Increasing the filing 

moratorium for novel antibiotics to nine years would create a new and separate filing 

standard solely for this specific class of drugs. 

Conclusion 

In conclusion, Mr. Chairman, this truly is an historic time for GPhA. The user fee 

proposals are the culmination of months of negotiations between FDA and industry, and 

the final product as transmitted to Congress represents a careful balance among all the 

stakeholders involved. We respectfully urge the Committee to approve GDUFA and 

BSUFA as negotiated by FDA and industry, without any changes to the underlying 

agreements. It is also vital that the agreements be approved in a timely manner so that 

patients, the FDA, and generic manufacturers can begin to see the many benefits of 

these agreements. Nothing is more important to our industry than ensuring patients 

have access to the lifesaving generic medications they require, and these historic 

agreements provide a critical step toward accomplishing this goal. Thank you and I 

would be happy to address any questions you may have. 

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Mr. PITTS. The chair thanks the gentleman. 

Mr. Levitt, you are recognized for 5 minutes. 

STATEMENT OF JOSEPH A. LEVITT 

Mr. LEVITT. Thank you. Chairman Pitts, Ranking Member 

Pallone and members of the committee, my name is Joe Levitt. I 

am a partner in the law firm of Hogan Lovells, and I am here 

today on behalf of AdvaMed, MDMA and MITA, the three trade associations who participated in the MDUFA negotiations with the 

FDA. I was on that negotiating team throughout that process, and 

I am pleased to be testifying with you here today. I also spent 25 

year at the FDA and for 61⁄2 of those years during the 1990s I held 

the senior position in FDA’s Medical Device Center. 

As many of you know, the medical technology industry has been 

a true success story for patients and for the U.S. economy. Our industry truly leads the world but our leadership is slipping. One key 

reason, perhaps the most important reason, is the decline we have 

seen in FDA efficiency, consistency and predictability in recent 

years. To their credit, the FDA leadership has recognized the need 

to vigorously address the issues affecting the device center. The 

new user fee agreement has the potential to be a significant additional step in the right direction. It is good for industry, it is good 

for FDA, and most of all, it is good for American patients. 

The user fee agreement builds the conditions for success in a 

number of major ways. First, for the first time ever, this user fee 

agreement establishes average total time goals for FDA review. 

Our previous agreements had set goals only for terms of the FDA 

clock but what matters most to industry and to patients is the actual calendar, the time from beginning of submission to final FDA 

decision. By setting in place this new goal, efforts will be focused 

on the metric that truly matters. 

Second, the agreement also establishes improved goals for time 

on the FDA clock. These goals are a key management tool for the 

agency and they work in concert with the total time goal to produce 

better performance than either could achieve alone. 

Third, the agreement includes new procedures that we anticipate 

will improve the review process. These include before the review 

actually begins meaningful presubmission interactions between 

FDA and companies to be sure everybody is on the same wavelength going in, during the review process a mandatory mid-course 

substantive interaction between FDA and the company midway 

through the process to check in and be sure we are all on the right 

wavelength there, and finally at the tail end, a new procedure that 

we call ‘‘no submission left behind’’ so that if FDA time target is 

missed, that submission does not fall off the radar screen. 

Fourth, the agreement provides for greater accountability. Under 

the agreement, there will be quarterly and annual reporting on a 

variety of key metrics that both industry and FDA agree are important. In addition, the agreement provides an analysis of FDA’s 

management of the review process by an independent consulting 

organization coupled with FDA corrective action plan to address 

opportunities for improvements. We see this as being critical. It is 

a way to bring fresh eyes to the issues and work constructively towards meaningful process improvements. 

158 

Finally, to give FDA the additional tools to meet the new goals, 

the agreement provides for $595 million in user fees over the life 

of the agreement. Additional reviewers, lower management-to-reviewer ratios, enhanced training and other resources totaling about 

200 additional FTEs for the agency are provided by the agreement 

and will give FDA what it needs to improve performance. 

Of course, no agreement, no matter how good on paper, is selfexecuting. Making it work as intended will require the full efforts 

of all concerned. Continued oversight and interest from the Congress will also be important. Patients are depending on all of us. 

In conclusion, I should note that a number of legislation proposals have been introduced with the goal of improving FDA’s operations also. We are appreciative of efforts by all members who seek 

to give FDA the tools and structure it needs to succeed. At the 

same time, I want to emphasize that we are strongly committed to 

the user fee agreement as negotiated and do not support any proposals that would change the terms of the agreement or undermine 

its goals. Just as the user fee agreement has the potential to help 

FDA move in a positive direction, failure to reauthorize the program in a timely way would be nothing short of catastrophic, as my 

colleagues on the panel have also echoed. 

So I thank the committee for the opportunity to testify and urge 

it act promptly to reauthorize the program which is so critical to 

patients, to FDA and to our industry. 

[The prepared statement of Mr. Levitt follows:] 

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Testimony Summary of Joseph A. Levitt 

Partner, Hogan Lovells US LLP 

On behalf of the Advanced Medical Technology Association 

House Energy & Commerce Health Subcommittee -- April 18, 2012 

• The U.S. medical technology industry is an American success story, directly employing more 

than 400,000 workers nationwide. 

• Success in our industry comes only from innovation. We are very proud of our contributions to 

the U.S. economy and are even more proud of our contributions to improving patient care. 

• FDA is a critical partner in our companies' efforts to bring safe and effective medical devices to 

patients. Without a strong, effective and efficient FDA, we cannot have a strong and competitive 

industry. 

• While the FDA has consistently maintained a strong record of assuring safety and effectiveness 

of the products it reviews, delays in product approval, inconsistency in the review process, and 

the resulting downstream effects on investment and innovation have undermined the 

competitiveness of our industry and harmed patient access to new treatments, diagnostics, and 

cures. 

• We are pleased that after extensive negations, FDA and industry reached a user fee agreement 

that has the potential to help achieve meaningful change in FDA performance through 

groundbreaking accountability and transparency measures and enhanced FDA resources. 

• This user fee agreement establishes average total time goals for FDA product review. Total time 

is the best indicator of whether FDA is consistent and efficient in its review and is providing 

sponsors with adequate information in advance of what data is needed for different types of 

products. These total time goals are shared performance goals, because industry also has an 

obligation to submit good applications to FDA. 

• The agreement also establishes improved goals for time on the FDA clock and the improved 

FDA goals and the total time goals work together to encourage FDA to focus on a thorough but 

efficient review of all product submissions. 

• The agreement includes process standards that we anticipate will improve the consistency and 

timeliness of the review process, including meaningful presubmission interactions, midway 

review interactions, and a new process for submissions that are outside the FDA time target. 

• The agreement provides greater accountability to industry, patients and to Congress and the 

Administration, through regular reporting on key metrics and an outside analysis ofFDNs 

management of the review process, coupled with an FDA corrective action plan to address 

opportunities for improvement. 

• Lastly, to give FDA additional tools to meet the new goals, the agreement provides $595 million 

in user fees for 2013-2017. 

• Each of the provisions of this agreement has the potential to make a difference in improving 

FDA performance, but the whole is truly greater than the sum of its parts. 

• We urge the Committee to act promptly to reauthorize the MDUF A program and enact this 

agreement into law. Failure to act would not only jeopardize the critical improvements made by 

the new agreement but would have a devastating impact on our industry'S ability to bring 

improved treatments and cures to patients. 
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Testimony of Joseph A. Levitt 

Partner, Hogan Lovells US LLP 

On behalf of the Advanced Medical Technology Association 

House Energy & Commerce Health Subcommittee 

April 18, 2012 

Thank you Chairman Pitts, Ranking Member Pallone and members of the Committee for the 

opportunity to testifY today. 

My name is Joe Levitt, and I am a partner with the firm of Hogan Lovells US LLP. I am here 

today on behalf of the Advanced Medical Technology Association (AdvaMed), although my 

testimony today on the MDUFA agreement is submitted on behalf of three of the medical 

technology industry associations who participated in the MDUFA negotiations-AdvaMed, the 

Medical Device Manufacturers Association (MDMA), and the Medical Imaging Technology 

Association (MIT A). 

I want to thank you for convening today's hearing, and for your interest in improving medical 

device regulation for patients and industry. Over the course of the last year, members of this 

committee have demonstrated their focus on improving the efficiency and effectiveness of FDA 

regulation, and your outreach to the agency and the policy proposals that have been introduced 

show your commitment to this important issue. 

The U.S. Medical Technology Industry 

The medical technology industry is an American success story. Our industry directly employs 

more than 400,000 workers nationwide. Typically, for every worker our industry directly 

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employs, another four workers are employed by businesses supplying components and services 

to our industry so that the total number of employees generated by our industry exceeds two 

million. 

The jobs our industry provides are good jobs-the kinds of jobs that allow employees to live the 

American dream. Industry pay levels are 38 percent higher than average pay for all U.S. 

employment and 22 percent higher than other manufacturing employment. While the number of 

manufacturing jobs was plummeting across the larger economy, even before the recent economic 

downturn, employment in our industry was expanding. Between 2005 and 2007, medical 

technology employment grew 20.4%, adding 73,000 jobs. During the recession, between 2007 

and 2008, MedTech employment dropped 1.1 percent, compared to 4.4% for manufacturing as a 

whole. 

Our industry is heavily skewed toward small companies-the kind of companies that begin with 

a doctor, an engineer, and an idea to improve patient care. Almost two-thirds of the 7,000 

medical technology firms in the U.S. have fewer than 20 employees. A high proportion of the 

breakthrough products in our industry come from these small, often venture-capital funded 

companies. 

And whether the firm is large or small, success in our industry comes only from innovation-the 

creation of diagnostics, treatments and cures that extend and enhance lives. Our industry'S 

investment in research and development is more than twice the national average. Our product 

life-cycle is only 18-24 months. 

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Our industry is so competitive that price increases have averaged only one-quarter the rate of 

other medical goods and services and just one-half the general CPI for almost 20 years. 

With $33 billion in total exports in 2008, medical technology ranks eleventh among all 

manufacturing industries in gross exports. Notably, unlike virtually every other sector of U.S. 

manufacturing, medical technology has consistently enjoyed a favorable balance of trade. With 

the aging of both U.S. and foreign populations, the projected explosive growth of large middle 

class populations demanding modern health care in developing countries like China and India, 

and the accelerating pace of biomedical discovery, the potential for growth of our industry is 

great. 

While we are very proud of our contributions to the U.S. economy, we are even more proud of 

our contributions to improving patient care. For patients, medical progress has been remarkable. 

Between 1980 and 2000, medical progress added more than three years to life expectancy. The 

death rate from heart disease was cut in half; the death rate from stroke was cut by one-third, and 

the death rate from breast cancer was cut 20%. Medical technology has been a major driver of 

this progress. 

FDA Regulation of Medical Devices - MDUF A III 

While we are making progress in improving patient care and see immense future opportunities to 

provide jobs and contribute to long-term economic growth, we are also worried. Today, America 

is the world leader in medical technology. But there are warning signs. As a recent 

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PriceWaterhouse Coopers report showed, our lead is slipping on a number of dimensions of 

competitiveness. And a key factor in our loss of competitiveness has been the decline in FDA's 

performance in ensuring timely patient access to safe and effective medical devices. 

Put simply, FDA is a critical partner in our companies' efforts to bring safe and effective medical 

devices to patients. Without a strong, effective, and efficient FDA, we cannot have a strong and 

competitive industry. The predictability, consistency and efficiency of FDA decision-making, as 

well as reasonable, risk-based standards of evidence to assure the safety and effectiveness of 

medical technology products, is essential to drive new innovations for patients and for the longterm success of the medical device industry. 

As a former FDA veteran of25 years who served in a variety of capacities, including as Deputy 

Director for Regulations and Policy at the FDA's device center in the 1990's, I can tell you that 

FDA has consistently maintained a strong record of assuring the safety and effectiveness of the 

products it reviews. The hard working staff at FDA has always focused on patient safety as a top 

priority, and the data bear out their dedication to protecting the end users of medical devices. 

At the same time, there has been slippage in FDA's track record of reviewing products in a 

timely and consistent manner. FDA has recognized this as well. Taken together, longer FDA 

review periods, inconsistency in the review process, and the resulting downstream effects on 

investment and innovation have lessened the competitiveness of our industry and harmed patient 

access to new treatments, diagnostics, and cures. 

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The user fee agreement reached between FDA and industry after extensive negotiations has the 

potential to help achieve meaningful improvement in FDA performance through groundbreaking 

accountability and transparency measures and enhanced FDA resources. 

The FDA leadership and Dr. Shuren have recognized the need to vigorously address the issues 

affecting the device center and are already taking a number of steps that we believe have the 

potential to bring significant improvements. The user fee agreement has the potential to be an 

additional step in the right direction. It is good for industry. It is good for FDA. And most of all, 

it is good for patients. 

We urge this Committee and the Congress as a whole to act promptly to reauthorize the user fee 

program and enact this agreement into law. Failure to act would not only jeopardize the critical 

improvements made by the new agreement but would have a devastating impact on our 

industry's ability to bring improved treatments and cures to patients. 

The user fee agreement builds the conditions for success in a number major ways: 

Total Time to Decision Goal 

For the first time ever, this user fee agreement establishes the shared outcome goal of average 

total time to decision for FDA product review. All previous agreements have set goals in terms 

oftime on the FDA clock. When the FDA asks sponsors for additional information or data, the 

FDA clock stops. The result was that, while FDA may have been technically meeting the goals 

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for 51O(k) submissions in terms of FDA review times, the total average time from submission to 

final decision increased 43% when comparing the 2003 through 2007 timeframe with 

comparable data from 20 I O. Of course, what matters to companies and patients is not an 

artificial construct like time on the FDA clock, but rather the total time (including any necessary 

time spent by the device sponsor in answering FDA's questions) it actually takes to get a final 

decision from FDA. 

We refer to this new performance metric as a shared performance goal. Under the agreement, 

industry has an obligation to submit good applications and to respond expeditiously to legitimate 

questions from FDA about an application, and FDA will have authority to decline to begin 

review of an application that is obviously deficient when it is submitted. We recognize that FDA 

cannot control the amount of time it takes for a sponsor to respond to questions about any 

individual application. What FDA can and should do better at, however, is communicating to 

device sponsors, in advance, what the data requirements are for a given device, so sponsors have 

maximum likelihood of getting it right the first time. This would, in tum, reduce the total time 

from submission to final decision. All sponsors want to submit applications that meet FDA 

standards, so transparency of data expectation is key to their success. We believe total time is 

the best indicator of whether FDA is consistent and efficient in its review and is providing 

sponsors with adequate information in advance of what data are needed for different types of 

products. 

By setting in place this new goal, efforts will be focused on the metric that is truly most 

important to all concerned. 

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Improved FDA Day Goals 

Second, the agreement also establishes significantly improved goals for time on the FDA clock. 

For example, in the case of PM As receiving advisory panel reviews-which tend to be the most 

innovative products-90% ofthose PMA products will be receiving a decision within 320 days 

by the end of this agreement. The improved FDA day goals and the total time goals work 

together to encourage FDA to focus on a thorough but efficient review of all product 

submissions. 

Process Improvements 

Third, the agreement includes process improvements that we anticipate will improve the 

consistency and timeliness of the review process independent of the specific time goals. 

The agreement provides for meaningful presubmission interactions between FDA and companies 

where agreements reached will not change, so that companies know what FDA expects and FDA 

is bound by its commitments, unless, of course, new information arises that requires a change to 

protect public health. As noted earlier, this is a key element for improving the efficiency of the 

device review program--communicating data requirements in advance so sponsors have 

maximum chance of getting it right the first time. 

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Additionally, there will be a substantive interaction between FDA and the company midway 

through the review process. This will assure that both companies and FDA identifY any 

deficiencies in the application early, so that they can be corrected promptly. 

Also, a new procedure that we call "no submission left behind" will be instituted, so that if the 

FDA time target is missed for SIO(k) and PMA submissions, the company and the FDA will 

meet to work out a schedule for resolving remaining issues, so that the submission doesn't go to 

fall off the radar screen. 

Greater Accountability 

Fourth, the agreement provides for greater accountability. Greater accountability means that 

FDA's success under this agreement will be transparent to FDA management, to industry, to 

patients, and to Congress and the Administration, so that any problems that arise can be 

corrected promptly. Under the agreement, there will be quarterly and annual reporting on key 

metrics, providing reliable and consistent tracking of new performance indicators that both FDA 

and industry have agreed are important. 

In addition, the agreement requires an analysis of FDA's management ofthe review process by 

an independent consulting organization, coupled with an FDA corrective action plan to address 

any identified inefficiencies and provide opportunities for improvement. We were gratified 

during the negotiations with FDA that the agency welcomed this independent review as a way to 

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bring fresh eyes to the issues and work constructively towards meaningful process 

improvements. 

Appropriate Resources 

Finally, to give FDA additional tools to meet the new goals, the agreement provides $595 million 

in user fees for 2013-2017. Additional reviewers, lower manager-to-reviewer ratios, enhanced 

training, and other resources provided by the agreement will give FDA what it needs to improve 

performance. Overall, the agreement will allow FDA to hire approximately 200 additional FTEs, 

the vast majority of which will be put it into place where needed most - additional reviewers. 

This, coupled with additional supervisors who are being hired this year, should lead to improved 

consistency in the review process. 

Each of the provisions ofthis agreement has the potential to make a difference in improving 

FDA performance. But the whole is truly greater than the sum of its parts. Each of the elements 

of the agreement reinforces the others. For example, as I noted earlier, the combination of total 

time goals and faster FDA time goals should result in greater improvements than either one 

would achieve separately. 

And, of course, no agreement, no matter how good on paper, is self-executing. Making it work as 

intended will require the full efforts of FDA's dedicated staff and managers. Our industry is 

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committed to work with FDA in any way we can to make it a success. Continued oversight and 

interest from the Congress will also be important. Patients are depending on all of us. 

Legislative Package 

In addition to the underlying user fee agreement, a number oflegislative proposals have been 

introduced with the goal of improving the FDA's operations. We are appreciative of efforts by 

all Members who seek to give the FDA the tools and structure it needs to succeed, and are 

encouraged by the package oflegislative reforms released by the committee. Legislative reforms 

that do not alter the substance of the negotiated agreement between FDA and industry and seek 

to improve consistency and predictability in the FDA device review process hold the potential to 

create a legislative reauthorization package that maximizes the opportunity for success at the 

agency, which should be the shared goal of all involved. 

For example, legislation has been proposed to streamline the de novo process by eliminating the 

statutory requirement that a sponsor receive a finding of "not substantially equivalent" before 

even beginning the de novo process. FDA itself has recognized that the current process is 

cumbersome, and FDA is looking at using its regulatory discretion to improve that process. 

However, statutory change may be the most effective way to address the problem, which will 

help FDA, industry, and ultimately patients. 

There is also a proposal to address the confusion created by FDA's draft guidance regarding 

when, under the FDCA, a modification to a cleared device requires the submission of a new 

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510(k) application. Left in its current form, this draft guidance could be interpreted as 

establishing a standard that requires a new 51 O(k) submission for almost every modification. 

This has the potential to dramatically increase the number of510(k) applications required, with 

no related public health benefit. According to a survey of AdvaMed members, this has the 

potential to increase submissions by 300 to 500%. This could serve to seriously impact patient 

access to medical devices, increase FDA's workload and put pressure on agency resources. We 

believe Congress should provide clarity and certainty that the existing approach to device 

modifications is appropriate. 

In addition, the committee's legislative package seeks to address FDA's new approach to the 

investigational device exemption, or IDE. In the preamble to the IDE final rule, an IDE is 

described as "conditions under which investigations of medical devices involving human 

subjects may be exempt from certain requirements of the Federal Food, Drug, and Cosmetic Act 

... to permit devices to be shipped for clinical investigations to determine their safety and 

effectiveness." We believe the IDE review and approval process therefore should focus on the 

determination of whether the anticipated benefits of the device outweigh risks to human subjects, 

the importance of the knowledge to be gained and whether the investigation is scientifically 

sound. This new FDA policy is not only inconsistent with the regulation but is 

counterproductive from a public health point of view. It has been a major factor in slowing 

down the clinical trial process and extending the time it takes a product to get to market. It 

requires FDA to make early stage judgments that should appropriately be reserved for product 

clearance or approval. It has encouraged reviewers to try to resolve every possible trial design 

question in advance, making the trials themselves more cumbersome and costly than may be 

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necessary. FDA's apparent expansion of authority to include the additional deteooination of 

whether an investigation is sufficient to support product approval or clearance is not appropriate, 

and goes beyond what is contained in the statute and in the regulation. IDE approval should not 

be tied to product approval, but rather, should be based on what the clinical study is intended to 

do. 

These are but a few examples of areas that we believe are appropriate to consider as legislative 

reforms to accompany the user fee agreement. At the same time, I want to emphasize that we are 

strongly committed to the user fee agreement as negotiated and do not support any proposals that 

would change the teoos of the agreement or undeooine its goals. Further, any legislative refooos 

should strike the appropriate balance between giving FDA the appropriate tools while preserving 

companies' due process rights so that innovative, life-improving and life-saving products can 

receive proper consideration. 

I thank the Committee for the opportunity to testifY and urge you to act promptly to reauthorize 

the user fee program, which is so critical to patients, to the FDA and to our industry. 

12 
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Mr. PITTS. The chair thanks the gentleman. 

We are in the middle of a vote on the floor. We have about 10 

minutes. We will take one more witness and then we will break for 

the vote. 

Mr. Coukell, you are recognized for 5 minutes. 

STATEMENT OF ALLAN COUKELL 

Mr. COUKELL. Thank you, Mr. Chairman, Ranking Member 

Pallone and committee members. I appreciate the opportunity to 

testify. 

My name is Allan Coukell, and I am the Director of Medical Programs for the Pew Health Group. Our research and analysis aim 

to improve the safety and well-being of American consumers with 

the major focus on drugs, medical devices and the FDA. I will focus 

today on the importance of the FDA user fee agreements to patients and public health and about three key policy areas that the 

committee is considering. 

Since 1992, PDUFA agreements have given FDA significant and 

sustained resources, allowing for faster reviews of new products. 

Indeed, preliminary results of a study that Pew has funded show 

that FDA reviews drugs faster than its counterparts in the E.U. 

and Canada. The development of new antibiotics is a particular 

focus for Pew’s Antibiotics and Innovation Project, and we thank 

this committee for consideration of the GAIN Act, the bipartisan 

bill introduced by Mr. Gingrey that would grant extra market protection to certain antibiotics. 

Unlike other drugs, antibacterials lose their effectiveness over 

time as the bugs become resistant. That is why experts are so 

alarmed about the years-long decline in new antibiotics and the 

dearth of products in late-stage development. We look forward to 

working with this committee to see that this provision targets and 

incentivizes the drugs we most need, those that treat serious or 

life-threatening infections. 

Turning now to medical devices, we ask Congress to swiftly reauthorize MDUFA. Under this new agreement, FDA would add 200 

device staff and nearly $600 million for the review of device applications. Let me illustrate the importance of this funding with an 

analysis recently commissioned by Pew showing that FDA’s Device 

Center has a higher attrition rate than the Centers for Drugs and 

Biologics or the Office of Regulatory Affairs. In fact, nearly 10 percent of FDA’s device staff left in fiscal year 2010, and the majority 

reported not having sufficient resources to get their job done. To 

function effectively, the center must have adequate funding. 

But let us never forget that true innovation is not just about 

speed to market but about developing products that are safer or 

more effective than existing drugs and devices, and because medical devices often enter the market with little or no clinical data, 

it is especially important that we have a robust system for 

postmarket surveillance, and we urge this committee to include legislation that will medical devices to FDA’s Sentinel Surveillance 

System which is currently on for drugs, require that FDA issue and 

implement rules that assign a unique identifier like a barcode to 

each new device as we have on most other things that we buy, and 

clarify the agency’s authority to order safety studies when necVerDate Nov 24 2008 10:27 May 30, 2013 Jkt 037690 PO 00000 Frm 00178 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 112\112-136 CHRIS
173 

essary for high-risk devices. We must also ensure that these studies are completed in a timely way. Such a system would detect 

safety problems faster and would facilitate innovation by increasing the confidence of the public and the FDA on marketed devices. 

On safety, I am pleased to note that the landmark new generic 

drug user fee agreement while speeding the review of these products will also enhance safety by ensuring that FDA performs more 

inspections of overseas generic drug plants. As Pew’s drug safety 

project has noted, 80 percent of the ingredients in our drug supply 

now come from overseas yet we inspect U.S.-based drug makers 

every 2 years, as the law requires. Meanwhile, the FDA inspections 

in China, for example, average out about every 17 years. Addressing this disparity will level the playing field for U.S.-based manufacturers and help to protect patients. Congress should hold FDA 

accountable by ensuring that no facility goes indefinitely without 

an inspection. But inspections are only part of the story. Several 

additional key measures would improve confidence in the supply 

chain. 

For example, we should ensure that every company takes responsibility for its own upstream suppliers, verifying that appropriate 

quality systems are in place. We should reward manufacturers who 

have strong systems. We support a national track-and-trace system 

for drugs but such a system must include standards that will detect counterfeits before they get to patients and, for example, provide law enforcement with the tools needed to address illegal-drug 

diversion. 

We thank the committee for its bipartisan work on the prescription drug supply chain. A poll we commissioned showed that Americans of all political persuasions recognize the risks and support 

Congressional action. 

I will conclude with a reference to FDA’s mission statement, 

which acknowledges the agency’s dual role: protecting patients and 

ensuring innovation. The user fee agreements support both aims, 

and we urge Congress to pass them quickly along with the three 

essential additions: drug supply chain safety, antibiotic development and medical device safety. 

Thank you, and I welcome your questions. 

[The prepared statement of Mr. Coukell follows:] 

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Summary Testimony before the 

Committee on Energy and Commerce 

Subcommittee on Health 

United States House of Representatives 

April 18, 2012 

Allan Coukell, Director of Medical Programs, Pew Health Group 

Since 1992, user fee agreements have given FDA significant and sustained resources that allow 

the agency to review new products quickly. In fact, preliminary findings of a study that Pew has 

funded show that FDA reviews new drugs faster than its counterparts in the European Union and 

Canada. 

The user fee legislation is also an important opportunity to consider key updates to the Food, 

Drug and Cosmetic Act that will protect Americans and support innovation, in particular: 

• Drug supply chain safety: FDA needs regulatory systems that are appropriate for today's 

global supply chain. 

• Medical device safety and innovation: We urge the Committee to include legislation 

to create a more robust system of post-marketing surveillance, which would promote 

safety by identifying problematic medical devices more quickly. It would also 

facilitate innovation by increasing confidence in the safety of medical devices on the 

marketplace. 

• Antibiotic development: We urge the Committee to include the Generating 

Antibiotic Incentive Now Act, which would provide economic incentives to stimulate 

the development of new antibiotics. 

The user fee agreements are essential to an effective FDA that can foster innovation while 

ensuring the safety and efficacy of the products we depend. We urge Congress to swiftly 

reauthorize this program with three important additions - drug supply chain safety, medical 

device safety and innovation, and antibiotic development. 
175 


78635.115

Testimony before the 

Committee on Energy and Commerce 

Subcommittee on Health 

United States House of Representatives 

April 18, 2012 

Allan Coukell, Director of Medical Programs, Pew Health Group 

Chainnan Pitts, Ranking Member Pallone, and members of this committee, thank you for the 

opportunity to testify about the importance of the user fee agreement (UFA) legislation to 

patients and public health. I am also pleased to discuss three key policy initiatives that should be 

considered along with the UF A legislation. 

Based on data, science, and non-partisan research, the Pew Health Group seeks to improve the 

health and well-being of all Americans by reducing unnecessary risks to the safety of medical 

and other consumer products and supporting medical innovation. Pew applies a rigorous, 

analytical approach to improve public policy, infonn the public, and stimulate civic life. 

Since 1992, user fee agreements have given FDA significant and sustained resources that allow 

the agency to review new products quickly. In fact, preliminary findings of a study that Pew has 

funded show that FDA reviews new drugs faster than its counterparts in the European Union and 

Canada. 

Medical device user fees are especially important for the review of devices. An analysis 

commissioned by the Pew Health Group compared the Center for Devices and Radiologic Health 

(CDRH) with the Center for Biologics Evaluation and Research, Center for Drug Evaluation and 

Research, and the Office of Regulatory Affairs. The report reveals that CDRH has the highest 

annual attrition rate of the four centers, with nearly 10 percent ofthe center's science, 

technology, and engineering staff leaving in FY 20 10. Resource issues may help explain the high 

attrition rates; less than half of CDRH employees surveyed agreed that their workload is 

reasonable and even fewer reported having sufficient resources to get their job done. For it to 

function as efficiently and effectively as possible, CDRH must have adequate funding. 
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The user fee agreement would provide FDA with additional resources to review applications and 

add about 200 much-needed staff members to the agency. The total fees collected over the five 

year period from 2013 to 2017 are expected to reach $595 million, a significant increase over the 

previous agreement. This will help create a more efficient center that is sufficiently resourced to 

better protect consumer safety and facilitate the introduction of innovative devices. 

The landmark new Generic Drug User Fee agreement will hasten the review of generic drugs, as 

well as ensure that FDA has the resources and the mandate - to conduct more frequent 

inspections of overseas drug manufacturing facilities. We urge you to pass these bills swiftly to 

ensure that FDA can continue its important public health activities uninterrupted. 

The user fee legislation is also an important opportunity to consider key updates to the Food, 

Drug and Cosmetic Act that will protect Americans and support innovation. I would like to 

discuss three particular issues that Congress is considering and urge you to include them as part 

of the user fee reauthorizations: 

• Drug supply chain safety, 

• Medical device safety and innovation, and 

• Antibiotic development. 

Drug supply chaiu safety 

Many Americans would be surprised by the rapid and profound changes in how our prescription 

drugs are made - and the new risks this process brings. Today, 40 percent of all finished 

pharmaceuticals, and 80 percent of the active ingredients and bulk chemicals in U.S. drugs, are 

sourced from foreign countries. 

Yet FDA oversight of manufacturing has not kept pace with these changes. This puts consumers 

at risk and American manufacturers on an uneven playing field. While the best companies are 

already doing thorough assessments of their supply chains, we must make sure there is no 

incentive for the weaker actors to gain a competitive advantage by cutting comers. 

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FDA needs regulatory systems that are appropriate for today's global supply chain. I've already 

mentioned that the GDUFA agreement will increase FDA's ability to conduct foreign 

inspections. However, there is more that must be done. We should ensure that every company 

has appropriate supply chain controls in place, and that companies that do have such systems will 

not face delays at the border. At the same time, FDA needs the clear authority to refuse products 

when the plant that made them has denied an FDA inspection. 

Today, a plant outside the U.S. knows FDA may visit only once, before the product is first 

approved, and then never return. That reduces the incentive to make ongoing investments in 

quality. The FDA should inspect plants, both domestic and overseas, based on risk, which will 

permit the Agency to make much more efficient use of its limited resources. However, no plant 

should go indefinitely without an inspection. A minimum frequency of 4 years should also be 

established. 

Risks to the drug distribution system 

The United States currently has no national system to detect or prevent incidents of 

counterfeiting and drug diversion. Although incidents in the U.S. are far less common than in 

other parts of the world, a recent example illustrates the serious nature of the risks. In February, 

FDA warned that cancer patients in the U.S. were exposed to counterfeit Avastin® - a critical 

chemotherapy agent used to treat numerous cancers. Just two weeks ago, the FDA warned that it 

had discovered yet another batch of counterfeits of the same drug, this time being sold in the 

United States under the drug's Turkish brand name. 

Congress is considering an industry proposal that would result in a unique serial number being 

affixed to each package of drugs. While this proposal contains some good elements, including 

national standards for wholesaler licensure, it falls short in two crucial respects. First, the 

industry proposal calls for keeping track of drugs only by lot number, and a lot may include 

thousands of vials distributed across numerous wholesalers and pharmacies. Second, the 

proposed system would not routinely check for, or identify, counterfeit drugs. 

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However, there is a way forward. We urge the Committee to ensure that any national track and 

trace legislation include a date certain for unit-level traceability and for routine checks - known 

as authentication - to detect counterfeits. 

Medical Device Safety and Innovation 

Medical devices are important in improving the health of many Americans. These products 

include, for example, artificial hips, pacemakers, and ventilators. However, as with all medical 

products, there are risks associated with devices, which often enter the market with little or even 

no clinical data. 

We urge the Committee to include legislation to create a more robust system of post-marketing 

surveillance, which would promote safety by identifYing problematic medical devices more 

quickly. It would also facilitate innovation by increasing confidence in the safety of medical 

devices on the marketplace. This system would require: 

• Adding medical devices to the Sentinel, FDA's active surveillance system currently 

solely for drugs; 

• Requiring that FDA issue and implement rules that assign new devices a unique 

identifier, like a barcode; 

• ClarifYing FDA's authority to order safety studies, when necessary, for high-risk 

products that will be used in patients - and ensuring that these studies are completed in a 

timely fashion; 

• Clarifying that FDA can order short-tenn studies, known as 522 studies that assess safety 

and efficacy at the time a device is approved or cleared. Manufacturers would have a 

year to commence this post-marketing study. 

We also urge Congress to give FDA the authority to classify medical devices as high, medium, 

or low risk without going through a lengthy regulatory process. In fact, new device types already 

can be classified by FDA in this manner. This will help ensure that devices enter the marketplace 

with the appropriate amount of testing-neither too much nor too little. 

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I would also like to comment on some of the proposals the Committee is actively considering: 

1. Streamlining the de novo pathway: We are pleased that the Committee is considering 

striking the requirement that certain novel devices first go through the 51O(k) process. 

This can speed the approval of these products without jeopardizing safety. Under current 

law, FDA has 90 days to review a 510(k) notification for a device that is substantially 

equivalent to a device that FDA has reviewed before. For a streamlined de novo pathway 

for truly innovative devices to work, FDA needs at least 120 days to properly review the 

new devices. 

2. Changing the Investigational Device Exemption: The Committee is considering a 

proposal which would lower the standard by which FDA approves a clinical trial. Since 

even seemingly low-risk clinical trials have the potential to cause harm to the patients 

who agree to participate in the trials, Congress must ensure that clinical trials for untested 

medical devices will only be conducted if they are designed to meet the ultimate 

endpoints for devices: safety and efficacy. 

3. Changes to rules about modifYing 510(k) devices: This legislation could jeopardize 

patient safety by undermining FDA's ability to determine which changes to a device 

require a full or partial 510(k) application. The agency already has clear guidance for 

manufacturers about the level of documentation required for different types of changes to 

product design. Under the current system, minor changes require only a note to the file. 

4. Voidance of guidance documents: The Committee is considering legislation that would 

automatically void draft guidance documents if they are not finalized within 12 months. 

While we share the view that FDA should finalize guidances as quickly as possible, we 

are concerned that this policy could have unintended consequences. First, it could divert 

finite FDA resources away from issuing new guidance, and, secondly and more 

importantly, an automatic voiding of draft guidance would leave manufacturers with even 

less clarity about regulatory expectations. Instead of automatic expiration of draft 

guidance, we propose that Congress require FDA to give regular reports on the reasons 

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guidances are delayed and also to provide a timetable for the finalizing of guidances that 

have been in draft for longer than 18 months. 

5. Changing FDA's mission statement: FDA's mission is to assess the safety and 

effectiveness of the products it regulates while, at the same time, making sure that 

innovative products get to market in a timely way. Changes to the FDA mission 

statement should not dilute these important goals. For example, we are concerned that 

there could be significant unintended consequences from adding job creation and 

economic growth to FDA's mission statement. No product developer should have to wait 

on an approval decision while the FDA conducts an economic analysis. Moreover, 

beneficial technologies are sometimes disruptive. No life-saving device should be 

delayed because it will take the place of some other less effective product made by a 

company that may employ more people. 

Generating Antibiotic Incentives Now (GAIN) Act 

Let me turn to a third area, one where innovation is essential - the development of new 

antibiotics. Antibacterial drugs are unlike other medicines. Most drugs retain their effectiveness 

forever. But bacteria inevitably become resistant. Alas, the number of new antibiotics has been 

dwindling. Today, we find ourselves on the brink of what the Centers for Disease Control and 

Prevention Director Dr. Thomas Frieden has warned could be a "post-antibiotic era."j 

We wish to thank Rep. Gingrey, Rep. Green, and their fellow co-sponsors of H.R. 2182, the 

Generating Antibiotic Incentives Now (GAIN) Act, for their bipartisan leadership on this 

important legislation that will stimulate the development of new antibiotics. This bill enjoys 

broad support in both chambers of Congress and on both sides of the aisle. 

The GAIN Act builds on precedents set by laws such as the Orphan Drug Act. It would grant an 

economic incentive for the development of new antibiotics by granting additional exclusivity -

that is freedom from generic competition - for certain qualified products. We recognize that this 

is not a change that Congress undertakes lightly, and Pew is working with Members of Congress 

to ensure that the bill squarely targets the development of the most-needed new drugs-those to 

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treat serious or life-threatening diseases, such as healthcare-associated and community-acquired 

pneumonia, complicated skin, intra-abdominal and urinary tract infections, sepsis, tuberculosis, 

meningitis, and other infections of vital organs and systems. 

Conclusion 

The user fee agreements are essential to an effective FDA that can foster innovation while 

ensuring the safety and efficacy of the products we depend. We urge Congress to swiftly 

reauthorize this program with three important additions drug supply chain safety, medical 

device safety and innovation, and antibiotic development. 

Thank you, and I look forward to answering any questions. 

i Antibiotic Resistance and the Threat to Public Health, before the Committee on Energy and Commerce, Subcommittee on 

Health, United States House of Representat;ves, 111 th Congress, 2nd Session (2010) (statement of Thomas Frieden, M.D., M.P .H'I 

Director, Centers for Disease Control and Prevention, U.S. Department of Health and Human Services). 

7 
182 

Mr. PITTS. The chair thanks the gentleman. 

That concludes the opening statements. We are in the middle of 

a vote. I think we have about 5 minutes left, so at this point the 

subcommittee will break until the third vote. Five minutes after 

the third vote, we will reconvene. The subcommittee stands in recess. 

[Recess.] 

Mr. PITTS. The recess having expired, we will reconvene the Subcommittee and go to the questioning. I will now begin the questioning and recognize myself for 5 minutes for that purpose. 

First of all, Dr. Wheadon, how does the PDUFA agreement help 

mitigate the issue of delayed reviews of drug applications at FDA 

and help America maintain their role as the leading innovator in 

the pharmaceutical space? If you would please elaborate on that. 

Dr. WHEADON. I will answer that, Chairman Pitts, on two fronts, 

focusing initially on the New Molecular Entity—— 

Mr. PITTS. Is your microphone on? Just pull it down. Yes. 

Dr. WHEADON. Focusing initially on the New Molecular Entity 

Review Program, that was really set up to enhance ongoing communication between drug sponsors and FDA such that sponsors 

would understand up front what FDA expectations may be as they 

enter into the review. As the review progresses, there would be 

feedback to the sponsor. There are questions that come out of the 

review that could be answered contemporaneously rather than 

waiting until the end of the review. The intention is that by the 

time you get to the end of the review, most of the issues could have 

been discussed and hopefully rectified, allowing for FDA to make 

a final action, hopefully an approval, thus allowing the drug to be 

approved in the first cycle and available to patients. 

Beyond that, the other aspects of the agreement, the availability 

of innovative medicines to patients, really looks at the regulatory 

science initiatives, things like benefit-risk, biomarker development, 

pharmacogenomic processes, enhancing the utilization of REMS in 

terms of standardizing that process rather than starting from 

square one with each necessity for utilizing of REMS for approval. 

So taken as a whole, the intention is to make the review process 

more efficient and more effective use of FDA resources, allowing for 

a thorough review but hopefully a one-cycle review and ultimately 

really addressing the issue that we started out looking at, and that 

is for roughly 50 percent of applications, they don’t get approved 

in the first cycle. They ultimately do get approved with following 

cycles of review. That is an inefficient use of FDA resources and 

that is really what we are trying to tackle with the agreement. 

Mr. PITTS. Ms. Radcliffe, would you like to add to that as far as 

bio is concerned? 

Ms. RADCLIFFE. Yes, I would. Thank you. I would like to support 

everything that Dr. Wheadon said about the weight of the PDUFA 

Technical Agreement will enhance the availability of products for 

patients but mention also one other thing. It was particularly important for our small companies and that was a provision to enhance timely interactive communication during the drug development phase. Our small companies tell us that very often they have 

simple, informal questions where they need timely answers in 

order to proceed. We were very pleased that the Agency agreed to 

183 

state explicitly that they have a philosophy of timely, interactive 

communication with sponsors and also that we were able to agree 

to establish a liaison staff that would work to ensure that that 

communication occurs. 

Mr. PITTS. Thank you. 

Mr. Gaugh, the discussion draft includes a section on expediting 

manufacturing changes to alleviate a drug shortage. Would you 

comment on this provision, tell us how it would help? 

Mr. GAUGH. I am sorry. Could you repeat that? 

Mr. PITTS. Yes. The draft includes a section on expediting manufacturing changes to alleviate drug shortages. Comment on that 

provision. 

Mr. GAUGH. Yes, in today’s environment it takes anywhere from 

18 to 24 months for those review cycles to occur, so if you have a 

product that is in drug shortage, that is an additional time point 

with everything else that you are adding to it. The provisions in 

here are going to be for expedited review, which could be as quickly 

they say as 3 to 6 months, which would help tremendously. 

Mr. PITTS. Mr. Levitt, can you explain IDEs—what are they, 

what companies get IDEs traditionally, how does FDA evaluate 

IDEs? I understand FDA has a new policy on IDEs. How does that 

differ from previous policy and what is your opinion of the new policy? 

Mr. LEVITT. OK. An IDE stands for Investigational Device Exemption. What it basically means is that FDA reviews applications 

for new clinical studies. New clinical studies are needed generally 

for all Class 3 devices going through the premarket approval process and for a small minority of 510(k) products. But if a company 

wants to test their device in humans and it doesn’t fit into one of 

the minor categories that they are exempt from submitting, then 

they submit an application to the FDA that includes the data to 

show that the device is safe enough to test in humans. So the first 

question is safety. And the second question is, what is the protocol 

that they are going to use during the study? They will submit those 

to FDA. FDA has 30 days only to review that, reflecting that FDA’s 

review is really just to focus on is it safe and is this essentially a 

bona fide study where the potential benefits outweigh the potential 

risks. So that is the historical process. 

What has happened recently is that FDA has brought greater 

scrutiny to the clinical protocol part and they are trying to say that 

you can only do this clinical study if it is good enough to get final 

approval. And there is a lot of concern within the industry that 

that is much more than has ever been done in the past and is certainly much more than the regulations their statute require, that 

the process should be able to go forward at the pace that the company is prepared to undertake. It might be a preliminary study, it 

might be a study that will depend on how strong the results are, 

how big you need. 

And so I think the concern that you are hearing is that that 

study should not be the most robust possible, but instead, the FDA 

should allow the study to go forward if it is safe and if it is bona 

fide research where the potential benefits outweigh the potential 

risks and there is valid information to be learned from the study. 

184 

That essentially is the company’s call on how they want to investigate the device and develop the program. 

Mr. PITTS. The chair thanks the gentleman. My time is expired. 

The ranking member is recognized for 5 minutes for questions. 

Mr. PALLONE. Thank you, Mr. Chairman. 

I wanted to start with Mr. Gaugh. I appreciated GPhA’s support 

for the bill that Representative Guthrie and I recently introduced, 

the Generic Drug Application Review Fairness Act. We heard earlier from Dr. Woodcock about the long review times for generic 

drug applications that currently exist. If the median review time 

for generic drug applications currently exceeds 30 months, how 

does that impact the generic manufacturers and what are the consequences if you will? 

Mr. GAUGH. Well, you heard in earlier testimonies if you go back 

to the statute that it is 6-month review time, which we are well, 

well past that, 30 months, so almost 2 years past the statute. So 

in that 2-year time point, once you have put your drug application 

in, market dynamics can change significantly in that additional 2 

years. So it may be a situation where by the time the 30 months 

has expired, the market is not still effective for the company to get 

into. That is one issue. 

Mr. PALLONE. And what about the significance of the 180-day exclusivity period for generic firms? 

Mr. GAUGH. The 180-day exclusivity has become a real factor because in that approval process, it affects first-filers in paragraph 4 

certifications, and if you don’t have the product approved or tentatively approved by the FDA within that 30-day time point, you 

lose your 180-day exclusivity. 

Mr. PALLONE. Do you know how many applications since maybe 

2003 have unfairly lost the 180-day exclusivity because of the FDA 

review delay? 

Mr. GAUGH. Somewhere in the range of 8 to 10. 

Mr. PALLONE. OK. I mean, it seems to me that the increasing 

meeting of approval time of generic drug applications is unintentionally placed into jeopardy the 180 days of exclusivity rewarded 

to the generic applicants, and I am hopeful that my colleagues will 

support inclusion of the Generic Drug Application Fairness Act into 

the User Fee package, which is being considered, because this 

would at least temporarily fix the consequences that you discussed. 

Let me ask Mr. Wheadon, if you would, we heard from Dr. 

Woodcock a little bit ago that there is added language to the discussion draft that was not part of the negotiated PDUFA agreement, and in FDA’s view, these extensive reporting requirements 

would place a burden on the Agency and could result in an unwarranted reshuffling of resources in other areas. What is PhRMA’s 

view on this added provision? 

Dr. WHEADON. Well, there are two aspects to consider. In many 

meetings with the FDA we have asked for data going down to the 

division level so that we can see whether or not there were some 

learnings to be garnered in terms of divisions that actually are 

more efficient versus those that may not be as efficient. Having 

said that, we also recognize that we don’t want to burden the Agency with a panoply of measurements coming out of the PDUFA 

agreement. As Dr. Woodcock described, that may have the uninVerDate Nov 24 2008 10:27 May 30, 2013 Jkt 037690 PO 00000 Frm 00190 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 112\112-136 CHRIS
185 

tended effect of diverting resources from the needed activities of reviewing applications and getting those applications acted upon. So 

it is a very nuanced position if you will that in terms of getting 

data down to the review division can be useful and we certainly 

have asked for such data, but we don’t want to have so many measurements loaded onto the Agency such that they aren’t able to do 

the basic work that they are there to do. 

Mr. PALLONE. But I mean you said—and I think she said—that 

this wasn’t part of your original agreement, correct? 

Dr. WHEADON. The review division data was not part of the original, no. 

Mr. PALLONE. OK. You are kind of answering it but, you know, 

I know you are trying to kind of—you are expressing your concern 

that we have to be careful but I guess my concern would be even 

if we knew that FDA could fail to accomplish other activities because of the need to shift their times and resources, you know, do 

you think that adding that would make sense if that were the consequence? 

Dr. WHEADON. Certainly if it was resource-neutral, if we could, 

for example, substitute review division data for other measurements that are currently being collected such that the resources 

are not diverted from needed activities along drug approval—— 

Mr. PALLONE. Yes, but she said that is not likely. 

Dr. WHEADON. But if there are ways that you can do it and not 

be overly burdensome, we would be supportive of getting review division data. 

Mr. PALLONE. I think that we all agree that we have to be careful. If we were to tinker with the negotiated language that PhRMA 

signed off on we could very well hinder FDA’s ability to accomplish 

their other performance goals. So I think you are basically expressing the view that you wish there were some way to accomplish this 

without jeopardizing the other. 

Dr. WHEADON. Exactly. 

Mr. PALLONE. All right. Thanks. My time is completed. Thank 

you, Mr. Chairman. 

Mr. PITTS. The chair thanks the gentleman. I recognize the vice 

chairman of the subcommittee for 5 minutes for questions. 

Mr. BURGESS. I thank the chairman for the recognition. 

Mr. Levitt, let me ask you a question just so I have my facts correct. Your previous experience was as a deputy director at the Center for Devices and Radiological Health? 

Mr. LEVITT. That is correct. I was deputy director for regulations 

and policy. 

Mr. BURGESS. And currently, you are with the Medical Device 

Manufacturers, is that correct? 

Mr. LEVITT. Currently, I am a lawyer at the law firm Hogan 

Lovells, and I am representing AdvaMed and the other trade associations here today. 

Mr. BURGESS. In either role, can you imagine a scenario where 

it would be a company’s business plan to go to market with something that they knew was flawed and going to cause harm or damage to patients? Would that be a viable business strategy? 

Mr. LEVITT. It is hard for me to imagine anybody having that 

business strategy. 

186 

Mr. BURGESS. But you have heard the exchanges this morning 

between Mr. Markey and Dr. Shuren, myself and Dr. Shuren. Do 

you have any thoughts on what you have heard this morning? Do 

you think there is a risk out there that rogue companies are going 

to be putting damaging products out there on the market that the 

FDA’s hands are essentially tied and they can’t do anything? 

Mr. LEVITT. I think it is hard for me to believe that there is a 

significant issue, problem there that needs legislation. The reviewers have enormous latitude to ask questions on devices. There almost always are incremental differences between new devices and 

old ones, and as has been pointed out, even after a final 510(k) decision is made, the Agency has additional authorities to prevent 

adulterated or misbranded devices from going onto the market. It 

is hard for me to believe—and Dr. Shuren, I thought, said as 

much—that the Agency doesn’t believe it has let out onto the market unsafe devices. 

Mr. BURGESS. And just from where I sit here, that was pretty 

troubling. Even if there is only a handful, we really need to know 

those devices and where the system failed us if that is happening. 

And I am with you. I cannot believe that it actually is happening. 

In today’s medical legal climate, I don’t think a company could 

exist if it pursued such a strategy. 

Mr. LEVITT. Right. I think we would have to see the examples, 

but I can’t imagine any company going in with a business plan to 

say I am going to sell a flawed device. 

Mr. BURGESS. Additionally—and of course your testimony and, 

Mr. Coukell, I think your testimony as well—the indication was 

that specifically the Center for Devices and Radiological Health required an additional 200 employees. Did I pick up that information 

correctly? 

Mr. COUKELL. Yes, sir, that is a consequence of the User Fee 

Agreement that has been negotiated between the industry and 

FDA. 

Mr. BURGESS. And will these 200 new employees, will they be 

housed at White Oak or will they be reviewers out somewhere else 

in the country or will they be put on the job inspecting manufacturing plants? Where do they go? I visited Dr. Shuren. It is very 

lovely and spacious offices out there at White Oak, but I didn’t see 

space for 200 more people. 

Mr. COUKELL. Well, there is a lot of construction out there, sir, 

but I don’t know the answer to that. 

Mr. BURGESS. OK. So we are expanding government in the process of doing this. And I am not disputing that they are not necessary, but at the same time, maybe, Mr. Chairman, we can, as a 

written question, follow up to Dr. Shuren. We can get a breakdown 

on the activities and duties of those 200 new personnel that are 

going to be hired under the monies provided by the User Fee 

Agreement. 

Ms. Radcliffe, let me ask you a question. I have worked on the 

issue of conflicts. 2007, when the reauthorization was done that 

year, I thought the language on conflicts went a little bit too far 

and was too restrictive. Do you think that the concerns I had that 

day in June were justified about the conflicts language being a little too restrictive? 

187 

Ms. RADCLIFFE. We do and we thank you very much for your 

work on that issue. The conflicts of interest are extremely important and we respect the need to ensure that conflicts of interest 

don’t affect the way—— 

Mr. BURGESS. Correct. 

Ms. RADCLIFFE [continuing]. That FDA does its very important 

work. That being said, we have heard from many stakeholders that 

the provisions that were put in place have limited FDA’s ability to 

put the right expertise on its advisory committees, and that is also 

I think of great concern to patients and certainly to industry. And 

so we appreciate the effort to return FDA to being governed by the 

same conflict-of-interest provisions that the rest of the U.S. Government is governed by. 

Mr. BURGESS. And certainly I want to thank you for working 

with committee staff to try to get that issue resolved. 

Mr. Gaugh, let me just ask you a question. I mean drug shortages come up every time we have a hearing such as this. Do you 

have an opinion as to is there enough in the User Fee Agreements, 

the draft that you have, is there enough in there to deal with the 

issue of drug shortages from the generic manufacturers’ standpoint? 

Mr. GAUGH. We believe that the draft, including to the draft 

would be the private stakeholder group, the ARI, Accelerated Recovery Initiative. Between those two, there would be enough, yes. 

Mr. BURGESS. Let me ask you this. Sometimes it occurs to me 

that maybe we have tightened things down too much, that the 

hyper-competition that has been introduced into the marketplace 

has made it unprofitable for a manufacturer to continue manufacture of something. And then if a problem occurs with their manufacturing floor, they just say forget it. I am out of the business. Is 

that in fact happening? 

Mr. GAUGH. I think part of the answer to that is, as Dr. 

Woodcock said today, the majority of the drug shortages in our environment as we see today is the sterile injectables, and sterile 

injectables are a highly sophisticated process and there is really 

only a handful in the United States that make the sterile 

injectables. So when an issue happens with the line, as you have 

said, that puts a severe crunch on the entire pipeline. 

Mr. BURGESS. OK. Thank you, Mr. Chairman. I will yield back. 

Mr. PITTS. The chair thanks the gentleman and recognizes the 

ranking member emeritus, Mr. Dingell, for 5 minutes for questions. 

Mr. DINGELL. Thank you, Mr. Chairman. 

And again, I want to thank you for this hearing but I also want 

to thank my colleague, Mr. Murphy, for working with me on the 

important system and issue of priority in inspections. These questions will go first to Mr. Gaugh. 

Mr. Gaugh, yes or no, under the User Fee Agreement negotiated 

by the generic drug industry, your industry is committed to paying 

additional fees to ensure that both foreign and domestic manufacturers are held to the same inspection standards? Is that correct? 

Yes or no? 

Mr. GAUGH. Yes. 

Mr. DINGELL. And I believe that it is in good part because you 

are concerned that our domestic industry is inspected rather more 

188 

and is policed rather more carefully than the foreigners, is that 

right? 

Mr. GAUGH. Yes. 

Mr. DINGELL. Now, again, Mr. Gaugh, yes or no, these additional 

fees will ensure foreign and domestic manufacturers are held to the 

same inspection frequency and standards? Is that correct? 

Mr. GAUGH. Yes. 

Mr. DINGELL. Now, again, if you please, the same inspection frequency as agreed to by FDA and the generic drug industry under 

the User Fee Agreement is routine inspection every 2 years, is that 

correct? 

Mr. GAUGH. That is correct, yes. 

Mr. DINGELL. Now, again, do you agree routine inspections with 

parity between foreign and domestic manufacturers will help level 

the playing field for your industry? Yes or no? 

Mr. GAUGH. Yes. 

Mr. DINGELL. Is it fair to say that those in your industry are 

comfortable with being inspected every 2 years? 

Mr. GAUGH. Yes. 

Mr. DINGELL. Now, thank you for your kindness. 

Mr. Coukell, these questions for you, yes or no again to the degree you can. FDA is currently required by the Federal Food and 

Drug and Cosmetic Act to conduct a GMP inspection of domestic 

drug manufacturers every 2 years. Is that correct? 

Mr. COUKELL. Yes, sir. 

Mr. DINGELL. Many have proposed removing the requirement for 

biannual inspections and instead moving to a fully risk-based inspection system with no minimum inspection frequency. FDA currently uses a fully risk-based approach for inspections of foreign 

drug manufacturing facilities with no minimum inspection frequency. Is that correct? 

Mr. COUKELL. Yes. 

Mr. DINGELL. Under this approach, how is FDA currently inspecting foreign drug manufacturing facilities? 

Mr. COUKELL. We look at all facilities outside the U.S. it is about 

every 9 years. If we look at China, for example, it is about every 

17. Those are averages that come from the GAO. 

Mr. DINGELL. Now, would a fully risk-based inspection schedule 

guarantee that no drug manufacturing facility went indefinitely 

without an inspection? 

Mr. COUKELL. No. 

Mr. DINGELL. But it could, could it not? 

Mr. COUKELL. Would a fully risk-based system—— 

Mr. DINGELL. Yes. 

Mr. COUKELL [continuing]. Guarantee that—— 

Mr. DINGELL. Yes, if it just says that we are going to do this on 

the basis of risk, they could say, well, we don’t find any basis for 

inspecting this particular facility. 

Mr. COUKELL. Yes, I agree with you. 

Mr. DINGELL. OK. Now, would a minimum inspection frequency 

provide regulatory certainty to our drug manufacturers, promote 

parity between our domestic and foreign drug manufacturers, and 

better protect the public’s health and safety? 

Mr. COUKELL. Yes, it would. 

189 

Mr. DINGELL. Mr. Chairman, I am giving you back a minute and 

14 seconds. 

Mr. PITTS. The chair thanks the gentleman. 

Mr. DINGELL. Thank you. 

Mr. PITTS. Recognizes the gentleman from Louisiana, Dr. 

Cassidy, for 5 minutes for questions. 

Dr. CASSIDY. I see in your testimony you are concerned regarding 

the tracking of drugs in order to detect counterfeiting. One of my 

concerns though, and which Dr. Woodcock agreed, if somebody is 

buying from an illegitimate online pharmacy, they are buying 

straight from an overseas provider, then really the absence of an 

RID or something similar, a unique identifier, would not provide 

any benefit. The person is going to open up their package and they 

are going to open it and they are not going to look to see, oh, my 

gosh, is there something tracking it? Would you agree with that? 

Mr. COUKELL. I think it is important to note that there are both 

legitimate and illegitimate online pharmacies and many of our big 

retail chains operate online pharmacies. So if a person is obtaining 

drugs from the legitimate supply, whether they are going to a 

brick-and-mortar pharmacy or online—— 

Dr. CASSIDY. Well, I agree with that totally—— 

Mr. COUKELL [continuing]. Then it is difficult. 

Dr. CASSIDY [continuing]. And I don’t mean to interrupt; it is limited time. 

Mr. COUKELL. But—— 

Dr. CASSIDY. In fact, that is my point. Right now, the consumer 

has limited ability to tell the difference between a legitimate and 

an illegitimate. And even though one of the things we can use to 

track counterfeits would be this unique ID system. Nonetheless, it 

still would not identify counterfeit drugs arriving in your mailbox 

from an illegitimate pharmacy. 

Mr. COUKELL. That is correct. 

Dr. CASSIDY. Yes. So now, that said, Ms. Radcliffe and Dr. 

Wheadon, I am very interested in these rare pediatric diseases. 

Your heart tugs, they affect so few, it is hard to get an adequate 

in for a clinical trial, and there is never going to be a major investment by a pharmaceutical company if it is based upon return, OK. 

I read your testimony regarding the bills we have to promote pediatrics. What ideas do you have in order to encourage research into 

cures for these terribly tragic but rare diseases? You see where I 

am going with that. 

Ms. RADCLIFFE. This is an issue of extreme interest to many of 

our companies for the reason that you say. It tugs on the 

heartstrings when there are these very rare pediatric conditions 

and there are no cures for them. We have worked on this issue in 

a number of different ways. Specific to the issue at hand in this 

hearing today within the PDUFA agreement there is a provision 

for helping companies to move forward with drug development on 

rare conditions where FDA will have additional resources to hire 

expertise and to reach out to the community and gain input on how 

that may be done. 

Additionally, we support—as I said in my both written and oral 

testimony—the Faster Access to Specialized Treatments Act, which 

seeks to expand accelerated approval in a way that would allow the 

190 

use of that pathway for more conditions by encouraging FDA to 

take advantage of modern tools, whether it is biomarkers, 

pharmacogenomics, predictive toxicology and so forth, and to expand these so that pathway to—— 

Dr. CASSIDY. Let me ask you because that seems as if those products would be a byproduct of research focused elsewhere. Does that 

make sense? 

Ms. RADCLIFFE. In some cases, yes, but that may be a very effective way of ensuring that those products do get developed. 

Dr. CASSIDY. Is there a way to encourage the pharmaceutical 

companies in a market-based approach to focus resources on a particular illness? You are more likely to get to your destination if you 

go there directly theoretically than if you just kind of as a, you 

know, circuitous route end up there. 

Ms. RADCLIFFE. Right. That gets to a much broader discussion, 

I think, about the incentives that are available for research and development, whether it is R&D tax credits, whether it is the way the 

products are reimbursed and so forth, a very complicated decision 

that I think goes far beyond what FDA could accomplish. FDA, 

however, has a huge role in ensuring that companies have the information that they need to create drug development programs in 

rare disease which encounter challenges that are, honestly, not just 

related to the return that companies get—— 

Dr. CASSIDY. A friend of my who has such a child—so there is 

kind of a personal interest in mine—— 

Ms. RADCLIFFE. Yes. 

Dr. CASSIDY [continuing]. He tells me that there is a bill being 

considered or proposed and if the company came up with such a 

drug for such a rare condition, they would get a transferrable sort 

of expedited review of any other drug. Now, would that be an effective way to do this or would that be—and I will open that up to 

the panel if anybody has a thought on this. 

Ms. RADCLIFFE. Sure. We are aware of that legislation and we 

haven’t taken a position on it. That mechanism has been tried in 

other settings and we certainly think that where such a mechanism 

could be put in place, it is useful to do so, but it hasn’t proven so 

far to really be a major incentive for this type of work. 

Dr. CASSIDY. Thank you. I yield back. Thank you. 

Mr. PITTS. The chair thanks the gentleman and recognizes the 

ranking member of the full committee, Mr. Waxman, for 5 minutes 

for questions. 

Mr. WAXMAN. Thank you very much, Mr. Chairman. 

Mr. Coukell, I am going to ask you about antibiotics. I know that 

Pew has had a longstanding interest in making sure that we get 

more antibiotics, new antibiotics, so our arsenal is full, but I don’t 

think we just want any antibiotics. We don’t need two versions of 

the same antibiotics we already have. That would I am sure only 

serve to worsen the problem of antibiotic resistance. So I want to 

search your views on whether the language in the discussion draft 

for this hearing will achieve this goal. 

The bill, as it is currently written, would grant exclusivity for 

any antibiotic to treat essentially any resistant bacterial pathogen. 

Is that approach adequate to ensure that we get only the antibiotics that we truly need? And if not, is there another approach 

191 

that you would suggest we take so that we can better target those 

drugs? 

Mr. COUKELL. Thank you for that question, sir. I think the goal 

in the discussion draft is to make it more attractive for companies 

to be in the business of antibiotics. So that means they need predictability. We need to address the serious public health problem 

and we need to make sure that we are using taxpayer resources 

wisely. While we are on predictability, right now, the discussion 

draft has a list of bugs in it, and the question is if you get qualified 

early on as you do under the Orphan Drug Act as a qualified product, how does that carry through to you doing your clinical studies 

and coming to market? Bleach will kill resistant bugs; nobody 

would suggest it is a good drug. And so the question is, is there 

an established way to look at antibiotics and say here are the ones 

we need and here is how it would work through to market? And 

we think that looking at serious and life-threatening infections 

would be a very workable way to do it. It would address the public 

health need and provide great predictability. 

Mr. WAXMAN. So target it in that way and not have it more general—— 

Mr. COUKELL. In some ways that is broader in the sense that you 

don’t have to have activity against the resistant organism but you 

are tackling the public health aide, which is a treatment for a serious or life-threatening infection. 

Mr. WAXMAN. OK. Now, the LPAD offers an approach that I 

think should be given serious consideration because it has a potential to get important new antibiotics into market more quickly than 

usually possible. However, when we are getting products to market 

more quickly based on more limited clinical data they usually require, it becomes that much more important that we are confident 

that they will be used only in the small populations for which the 

drug was approved. 

With antibiotics, this concern is doubled. We must worry not only 

about patients receiving medications that could be dangerous to 

them because their safety has not been established in broader populations, we also need to act in a way that will preserve the efficacy of new antibiotics by using them only when truly necessary. 

Do you believe that the mechanism for limiting off-label use of 

antibiotics approved under LPAD will be effective in achieving both 

of these goals, and if not, do you have suggestions for additional 

mechanisms? 

Mr. COUKELL. We think it is an interesting proposal. And let me 

make a couple of points about what we are thinking as we consider 

it. And we are still trying to understand how it would work. But 

first, it is attractive if you could have a faster pathway and then 

use the drugs only in patients that you couldn’t treat with existing 

drugs. That would be good for public health and it would be good 

for the companies assuming there is a viable business model there. 

So one question is what does it take to get these drugs to market 

and get that particular designation? 

And then the limited population part of the Limited Population 

Provision is how do we ensure that if they are coming with a higher risk or lower evidence that they are used the way we intend— 

and there is nothing in the statutory language that ensure that— 

192 

so the question is how would individual providers, how would payers, how would hospital formulary committees use these drugs and 

ensure that they were used only on label. And that is something 

that we are still trying to understand. 

And then the other thing I think you would want to know is if 

you are approving drugs based on less evidence, do we have a 

mechanism of post-market surveillance so we can continue to learn 

as they are in clinical use? 

Mr. WAXMAN. Well, what is your reaction to what is in the draft? 

Mr. COUKELL. We are still studying. We think it is interesting, 

but as I say, we are trying to understand—— 

Mr. WAXMAN. You are still thinking but it needs to be refined in 

some way. You are trying to think it through? 

Mr. COUKELL. Trying to think it through. 

Mr. WAXMAN. Is that it? OK. Well, we are, too, and so we would 

appreciate your suggestions. 

Mr. Chairman, I am going to yield back my time. Thank you. 

Mr. PITTS. The chair thanks the gentleman and recognizes the 

gentleman from Illinois, Mr. Shimkus, for 5 minutes for questions. 

Mr. SHIMKUS. Thank you, Mr. Chairman. 

And it may have been noted before but I see Dr. Shuren is still 

in the committee room. Thank you for being here. This is important. Even my follow-up is going to be on the, again, working on 

the IDEs and the 510(k) a little bit more. Most of my questions will 

be directed to Mr. Levitt, but I do appreciate you being here. I did 

like Dr. Woodcock’s statement Congress needs to define a problem 

that we want to address, and we really do think there is a problem 

with the change in the process in these two areas. 

So with that, Mr. Levitt, you said in the explanation to the chairman’s question about—kind of explain the Investigative Device Exemption, safety and protocol were the two primary issues. And then 

the FDA’s change in the processing, that it has to be good enough 

for final approval. Are there benefits to going through the Investigational Device Exemption process even though you might not 

eventually get to a final approval in the process? Are there 

positives going through this process? 

Mr. LEVITT. Well, I think there are positives any time you are 

learning new information in a structured setting under informed 

consent of course about the performance of new devices or improved devices both for safety and for effectiveness. Very often, a 

company may want to try something and if it is not working have 

a small trial and learn that quickly and pursue another direction. 

Or they may want to proceed in a more robust way because they 

have greater confidence. So I think there is value in any clinical 

study that is safe and that has a bona fide research protocol to 

greater learning. 

Mr. SHIMKUS. So the FDA’s change in focus—I do think there are 

benefits from going through—if you meet the two criteria of safety 

and bona fide protocol—and that the information you learn may 

help you or may help the sector move in a more robust path forward or to change course and start anew. That is summarizing 

what you said? 

Mr. LEVITT. Yes. 

193 

Mr. SHIMKUS. I am not going to go over the issue of what is the 

legal law and what is the—what was the other thing I had here 

on the Administrative Procedures Act? And there are some, I think, 

legal concerns with the change without it being bona fide. You 

might have some experience in your legal background and your 

other history with that, but I think I addressed that enough. 

On the 510(k) process, can you walk us through what currently 

happens when a company makes a modification to existing 510(k)? 

Mr. LEVITT. Yes. When companies often make changes to their 

devices, FDA has a flowchart to help companies walk through is 

this a significant change affecting safety and effectiveness? If it is, 

then the company submits a new 510(k). If it isn’t, the company 

documents what their decision and a basis is. They make the 

change and they move on. That information is available to FDA 

during an FDA inspection so there is still transparency. 

Mr. SHIMKUS. So have you heard—obviously, from the sector now 

that you are representing—the concern that with the changed 

rules, there may be a projected backlog of 300 to 500 percent and 

that this is harmful to the process, not helpful? 

Mr. LEVITT. Yes, I have certainly heard that. I mean what Dr. 

Shuren testified this morning, if I heard him correctly, was that 

FDA really was just trying to affect a little gray zone, a small number around the margin. But as companies went back and applied 

the examples, companies saying oh, no. You, FDA, really missed 

the mark. This would result in just a flood of new 510(k)s where 

there really is not a significant change. But the examples that FDA 

gave led them to believe they would have to submit this. So there 

is clearly a gap between what FDA intended and how the industry 

is perceiving it. And I think Dr. Shuren testified he recognized that 

and he needs to address that. 

Mr. SHIMKUS. I appreciate you all being here today and, Dr. 

Shuren, that is why I appreciate you remaining in the committee 

room because, you know, the other issue is resources, which we can 

agree to disagree. But I do think we want to improve the system. 

This is our one opportunity to do that. 

And my time is expired, Mr. Chairman. Thank you. 

Mr. PITTS. The chair thanks the gentleman. 

That concludes the questioning. I would like to thank the panel. 

This has been an extremely valuable hearing, very important information. 

I have a unanimous consent request to enter into the record 

statements from the National Alliance on Mental Illness and the 

California Healthcare Institute. That has been shared without objection, so ordered. 

[The information appears at the conclusion of the hearing.] 

Mr. PITTS. I remind Members that they have 10 business days 

to submit questions for the record, and I ask all witnesses to respond to questions promptly. Members should submit their questions by the close of business on Wednesday, May the 2nd. 

Without objection, the subcommittee is adjourned. 

[Whereupon, at 2:44 p.m., the subcommittee was adjourned.] 

[Material submitted for inclusion in the record follows:] 

194 


78635.122

STATEMENT TO THE HOUSE ENERGY & COMMERCE 

COMMITTEE, SUBCOMMITTEE ON HEALTH ON THE PDUFA V 

TECHNICAL AGREEMENT 

February 1,2012 

Chainnan Pitts, Ranking Member Pallone and members of the Subcommittee, on behalf 

of the National Alliance on Mental Illness (NAMI), I am pleased offer our views on the 

Prescription Drug User Fee Act (PDUFA) V Technical Agreement. NAMI is the nation's 

largest grassroots mental health organization dedicated to building better lives for the 

millions of Americans affected by mental illness. NAMI advocates for access to 

services, treatment, supports and research and is steadfast in its commitment to raising 

awareness and building a community of hope for all those in need. 

PDUFA & Access to Innovative Treatments for Serious Mental Illness 

NAMI has always placed the highest priority on expanding access to newer and more 

effective treatments for serious mental illness. The reality is that all of the current 

treatments for serious mental illness are palliative in nature and are designed to alleviate 

symptoms (both positive and negative) and improve functioning. What is desperately 

needed are a new generation of treatments and therapies that genuinely change the course 

of disorders such as schizophrenia and bipolar disorder and allow for complete recovery. 

At NAMI, we refer to this as moving to cure. We are not there yet, but cutting edge 

research on genetics and biomarkers are demonstrating enonnous promise. As this 

research moves forward, it must be accompanied by a modem and efficient PDUF A 

process at the FDA. 

NAMI also believes that incremental improvements to the treatments we have today for 

serous mental illness are also critically important for many people living with these 

disorders. For example, new compounds that can demonstrate innovation with respect to 

negative symptoms or cognition and executive functioning in schizophrenia can be 

critical tools in helping a patient attain greater independence, employment or community 

integration. Likewise, a new compound that offers incremental improvements with 

respect to a particular side effect profile can make a vast difference in helping with 

treatment adherence for many patients. Improvements to POUF A can and should take 

into account this incremental progress that can genuinely advance treatment for people 

living with serious mental illness. 

NAMI Supports the PDUFA V Technical Agreement 

NAMI was pleased to take part in the Patient and Consumer Stakeholder Group that has 

worked with the FOA throughout this POUF A V process. We are grateful for the time 

and resources that the leadership at COER has put into this process over the past 18 

NAMI. 3803 N. Fairfax Drive, Arlington, VA 22203 

(703) 524-7600 • www.nami.org 
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months. NAMI is now pleased to go on record in support of the major provisions in this 

Technical Agreement. 

1) Performance Goals 

NAMI strongly supports the new performance goals that will increase drug review 

efficiency and predictability. These performance goals can and should result in more 

consistent and transparent drug reviews. NAMI is pleased that the provisions in this 

Agreement will more clearly discern how efficacy and safety parameters are balanced 

as part ofthe FDA's risk-benefit analysis. We also hope that the new performance 

goals will help ensure that the FDA's regulatory decisions are based on the best 

available scientific methods. NAMI also supports the inclusion of measures to ensure 

better communication with sponsors to support more efficient review. 

2) Enhanced Benefit Risk Assessment 

As noted above, NAMI is pleased that this Agreement will bring greater transparency 

to the benefit-risk assessments FDA makes that too many of us has often been opaque 

and difficult to understand, especially when decisions have been made across multiple 

divisions and offices. The improvements in this Agreement should bring more 

transparency to this process. Increasing the public's understanding ofthis process 

should also help improve public confidence in the agency's decisions. 

3) Electronic Submissions and Standardization of Application Data 

During the work of the Stakeholders Group, we were stunned to learn that 

applications for NMEs often involved submission of large volumes of data in the 

form of paper records stored in dozens of boxes with no system or process for FDA 

reviewers to efficiently examine the results of randomized clinical trials that took 

place at multiple sites. This new requirement for electronic submission and 

standardization of application is long overdue. It is central to making the overall 

review process more timely, efficient and less costly. 

4) Independent Review ofPDUFA Performance Goals 

NAMI strongly supports the provisions in the Agreement on enhanced independent 

review of performance goals. In order to ensure that the PDUF A V goals are met, 

there must be an independent third party assessment. NAMI is pleased that this 

assessment would be required both in 2015 and 2017, with full opportunity to all 

stakeholders to offer comments on the assessment. 

5) Regulatory Science Improvements 

NAMI supports the new investments in the Agreement aimed at improvements on 

pharmacogenomics and biomarkers. The application of qualified biomarkers has 

enormous potential to accelerate drug development by helping to identifY and predict 
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which patient will respond to a particular medication. Biomarkers offer particular 

promise with respect to treatment for schizophrenia. Under the Agreement, FDA will 

be able to access new resources to augment its clinical pharmacology and statistical 

capacity to better address submissions that propose to utilize biomarkers or 

pharmacogenomics. NAMI also supports the provisions in the Agreement that will 

allow FDA to support the advancement and validation of meta-analysis to improve 

drug safety decision-making. 

6) Patient Reported Outcomes (PROs) 

PROs can be critical endpoints for measuring the benefit-risk profile of a new 

treatment from the patient's perspective. NAMI is pleased that the Agreement 

includes advancement and validation of PROs. This should help improve the agency's 

clinical and statistical capacity to address submissions involving PROs and other end 

point assessment tools. NAMI is also supportive of the requirement for FDA to hold a 

public meeting to examine standards for PRO qualification and development. 

7) Patient Safety Improvements, REMS & Sentinel 

NAMI supports the improvements in PDUFA V to enhance FDA's existing safety 

system. The improvement to REMS and Sentinel are vital to this ongoing effort to 

ensure patient safety. For example, improvements will allow FDA to test the 

feasibility of using Sentinel for evaluating drug safety issues that may require some 

form of regulatory action such as a label change. This should help accelerate the time 

it takes to understand an emerging safety issue. Likewise, the requirement in the 

Agreement for standardizing REMS is a needed improvement. This should better 

integrate REMS-related activities into FDA's review process and the larger health 

care system with the goal of reducing the burden of REMS on patients and providers. 

8) Conflict of Interest in FDA Advisory Panels 

While this issue is not a part ofthe formal PDUF A V Technical Agreement, NAMI 

would like to call attention to a recent letter signed by NAMI and more than a dozen 

colleague health and patient advocacy organizations calling attention to deficiencies 

in FDA's current process for assessing conflicts ofinterests among scientists and 

researchers serving on agency advisory panels. NAMI agrees that protections must be 

in place when individuals are appointed to positions where their own financial 

interests might influence their service on agency advisory panels. At the same time, 

current conflict of interest statutes that apply to the FDA have resulted in a system 

that is out of balance to the point that conflict avoidance is the primary driver of who 

serves on advisory panels, regardless of the extent of the conflict, the uniqueness of 

their expertise, or the government's need for their services. 

The result is that many ofthe agency's advisory panels, including the 

Psychopharmacologic Drugs Advisory Committee, are routinely deprived of the most 

experienced and knowledgeable experts in a particular therapeutic area. NAMI 
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therefore joins our colleagues in supporting the elimination of the e additional 

conflicts of interest restrictions that apply only to the FDA. In fact, the existing 

provisions in the Federal Advisory Committee Act and the Ethics in Government Act 

of 1978 can serve as an adequate safeguard against conflicts of interest, while still 

allowing those with the necessary expertise and perspective to serve on these very 

important advisory committees. 

Respectfully Submitted, 

Andrew Sperling, Director of Legislative Advocacy 

National Alliance on Mental Illness 

3803 North Fairfax Drive, #100 

Arlington, VA 22203 

703-524-7600 

www.nami.org 
198 


78635.126

c H I CALIFORNIA HEALTHCARE 

INSTITUTE 

Statement of the 

California Healthcare Institute (CHI) 

House Energy & Commerce Committee 

Subcommittee on Health 

Legislative Hearing on 

"FDA User Fees 2012: How Innovation Helps Patients and Jobs" 

Wednesday, April 18, 2012 

The California Healthcare Institute (CHI), the statewide public policy association representing California's diverse 

life sciences research and development community, appreciates the opportunity to address the importance of FDA 

user fee reauthorization to improvements in Agency performance, biomedical investment and innovation, patient 

care and economic growth. 

The Food and Drug Administration (FDA) and its regulatory policies profoundly influence the current state and 

future strength of the U.S. biopharmaceutical and medical technology industries. Indeed, a strong, science-based 

Agency and efficient, predictable and transparent regulatory processes are essential elements of the biomedical 

innovation ecosystem, which today employs nearly 270,000 Californians across our state. 

In recent years, however, the environment for medical innovation has deteriorated. This is partly the result of the 

financial crisis and ensuing Great Recession, which sharply reduced investment capital. But the most critical factor 

has been the FDA's recent regulatory policies and activities, which have exemplified President Obama's critique of 

a system whose "rules have gotten out of balance, placing unreasonable burdens on business - burdens that have 

stifled innovation and have had a chilling effect on growth and jobs."\ 

That is why reauthorization of the Prescription Drug User Fee Act (PDUFA) and the Medical Device User Fee Act 

(MDUFA) is so important. Both agreements represent the next step in an ongoing partnership hetween the FDA 

and industry. And importantly, the agreements are highly focused, providing the FDA significant resources and 

improving processes and performance goals to re-center the Agency toward its primary missions of protecting and 

promoting public health. 

For example, both PDUFA and MDUFA: 

Improve FDA-Industry Communications Processes - Communication between the FDA and drug and 

device developers is critical. The earlier questions can be raised, and answers provided, the more likely 

that the review process won't be affected by late-breaking or unexpected complications. Both agreements 

1 "Toward a 21st-Century Regulatory System," Wall Street Journal, Jan. 18,2011. WWW.CHI.ORG 

HEADQUARTERS 831) Prospect ;-\rn:{'f. Sum: ::!20 La Jolla, C:\ 8SS.55L6(,77 8S8.5.11.6()8R 

SACRAMENTO 1215 K ;\treeL ~uire 9.+0 ;\;U:f~lll1(:nto, C.\ \))H!4 916.2.'1.1..1497 hx 9!6,233.3498 

WASHINGTON, D.C. 16(1) Rhode hhnd ;\vcflue, ~\\,', Ro<)m 238 \\;a~hinhrt()ll, f),{:, 20036 ,?,02.9/-4.63UU Fax 202.974.63JU 
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78635.127

include provisions to ensure the FDA communicates with new product sponsors at all stages of the 

development and review process, improving predictability and transparency. 

The PDUFA agreement: 

• Enhances the Agency's Benefit-Risk Assessment - Everyone the FDA, industry, patients and the public 

- would gain from an improved understanding and appreciation of the benefit-risk balance. No medicine or 

medical technology is risk-free, yet the expectation of the public and others is often just that. The PDUFA 

agreement will support the development of benefit-risk assessment tools to help reviewers better evaluate 

new medicines, including documentation of drug benefits -- such as if it meets an unmet medical need -- as 

part of the approval process. 

And the MDUFA agreement: 

• Strengthens FDA Performance and Accountability - Prior device review performance reports were based 

upon the "FDA clock," which often frustrated industry by allowing the Agency to "stop the clock" one or 

more times during product review while still meeting technical Agency performance requirements. Under 

the MDUFA agreement, performance will be reported more sensibly, improving efficiency, transparency 

and consistency, by measuring average total review time --from the time of submission to the time the 

Agency makes a decision. 

These and other provisions included in the Energy & Commerce Committee user fee reauthorization discussion 

draft demonstrate that, working together, Congress, the FDA, industry and other stakeholders can maintain the 

high standards of safety and effectiveness that physicians, patients and their families expect while also improving 

the consistency, predictability and transparency of FDA product review processes and management. The result 

will lead to an improved Agency, improvements in the care of patients in need, and improvements in the U.s. 

biomedical innovation ecosystem that help drive investment, growth and job creation in the increasingly 

competitive 21" century global economy. 
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DEPARTME"T OF HEAl TH &. HLJMA;\l SERViCES 

fhe Honorable Joseph R. Pitts 

Chairman 

Subcommittee on Health 

Committee on Energy and Commerce 

House of Representatives 

Washington. D.C. 20515-6115 

Dear Yfr. Chairman: 

Food and 

Silver Spring, 20993 

OCT 1 8 2012 

Thank you for providing the Food and Drug Administration (FDA or the Agency) the 

opportunity to testify at the April 18, 2012. hearing entitled "FDA User rees 2012: How 

Innovation Helps Patients and Jobs." at which Dr. Jeffrey Shuren. Director. Center for 

Devices and Radiological Health. and Dr. Janet Woodcock. Director, Cellter for Drug 

Evaluation and Research, testified. This Jetter provides responses for the record posed by 

certain Yfembers of the Committee, which we received on July 27, 20J 2. 

If you hayc further questions please let us know, 

cc' The Honorablc Frank Pallone, Jr. 

Ranking Memher 

Subcommittee on Health 

Committee on Energy and Commerce 

Sincerely, 

Jeanne Ireland 

Associate Commissioner 

for Legislation 
201 


78635.129

Page 2 The Honorable Joseph R. Pitts 

We have restated the questions below in bold, followed by our responses. 

The Honorable Brian Bilbray 

The Committee understands that the FDA's General and Plastic SurgeI)' De\ices 

Panel or tile MediealOevices Adyisory Committee convened a March 2010 hearing 

to review the classification of indoor tanning beds. The panel voted unanimously 

that a Class I designation did not reflect the risks associated with the device and 

recommended that the classification of tanning devices be changed. Please update 

the Committee on the actions taken by FOA on reclassiJying these devices since the 

panel vote. 

By way of background, FDA regulates sunlamps, tanning beds and booths. and portable 

home units for general use as Class I medical devices. Ultraviolet (UV) lamps for 

dermatologic purposes are regulated as Class II devices. FDA also regulates thesc 

products under the Electronic Product Radiation Control Act provisions. section 532 et 

seq .. of the Federal Food, Drug, and Cosmetic Act. In addition to complying with 

requirements applicable to medical devices, tanning devices must also comply vvith Title 

21 Code of FederaZ Regulations (CFR) section 1040.20-Sunlamp products and 

ultravioict lamps intended for use in sunlamp products (the sunlamp products 

performance standard). This regulation contains requirements for all UV tanning lamps. 

which include requirements regarding warning labels, limits on the ratio of UV -C to 

UV-B wavelengths, use of protective eye wear, and timer systems. 

FDA has been actively evaluating its regulation of indoor tanning devices amid rising 

concern by the Agency, the medical and scientific communities, the public. and 

Congress about the safety of their uses. At the same time, we have issued Warning 

Letters to manufacturers who have been in violation of existing regulatory requirements 

and \vorkcd with the Indoor Tanning Association to share helpful information with 

industry. 

As you note, FDA hcld an advisory committee meeting in March 2010 to seek 

independent professional expertise and advice on regulatory issues related to tanning 

devices. The panel discussed a variety of variables that would affcct the reasonable 

assurance of safety and elTectiveness for UV lamps for lanning, including user age. 

family history and education, user information prior to use, irradiance wavelength, FDA 

dcvice classification, registry programs funded by user fees, and training of tanning bed 

operators. The Agency reviewed all of the comments received at that meeting. as well as 

the information in the scientific literature. There was a unanimous conclusion by the 

panel that these products should not be Class I devices. The Panel was split, however, 

between recommending that tanning devices be Class III (acknowledging the 

impracticality of requiring premarket approval submissions) and recommending that 

these devices be Class II (citing age, skin type, and medications as potential special 

controls). 
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78635.130

Page 3 The Honorable Joseph R. Pitts 

FDA has evaluated the information relayed at this panel meeting and is working to ensure 

that any regulatory action taken by the Agency effectively addresses the risks associated 

with tanning devices. FDA convened an Agency expert group to draft regulations to 

addrcss the recommendations of the 2010 advisory committee in conjunction with 

consideration of information gleaned from the additional efforts mentioned below. The 

Agency currently is working on draft regulations and accompanying guidance. We 

recognize that this is an important issue, and \ve are working diligently to protect public 

health. 

In addition to FDA's work to address the 2010 advisory committce recommendations, the 

Agency has taken other actions to review the safety of these devices and educate 

consumers about the risks associated ,,,ith tauning. 

Prior to the March 2010 advisory panel meeting, FDA conducted consumer testing to 

evaluate the effectiveness of indoor tanning device warning labels. Based on this testing. 

FDA dctermined that changes to the language, format, and positioning of these labels 

may more effectively communicate the risks of these devices. 

FDA also cngaged injoint studies with the National Cancer Institute1

.

2

,3 and fmUld that 

UV exposures typically provided by sunlamp products are excessive, and that 

comparable cosmetic effects can be produced with exposurcs that are only one-third or 

cven onc-fourth the levels ofUV exposure cun·ently. FDA is considering whcther 

changes to the performance standard might be warranted for sunlamp products from these 

Jindings. 

Finally. FDA wants consumers to be aware of the health risks posed by llV radiation 

from tanning devices. FDA posts extensive information on the health risks of tanning on 

its "Tanning" webpage, located at http://www.jda.gov/Radiation-Emifting 

Produc/sJRadiationEmittingProductsandProcedures/Tanl1ingldefault.htm. The website 

includes links to related information posted by the Centers for Disease Control and 

Prevention. the National Institutes of Health, and the World Health Organization. FDA 

held a webinar in April 2012 on the risks ofllV radiation, posted a video, and published 

a lesson plan for health educators to help students understand the risks associated with 

tanning and UV exposure. 

'Reduction of the lJV burden to indoor tanners through new exposure schedules: a pilot study. Miller SA. 

Coelho SG. ZmlJdzka BZ. et al., PhofodermatoI.PholOimmunol.Ph%med. 2006; 22: 59·66. 

'Dynamics of pigmentation induction by repeated ultraviolet exposures: dose. dose interval and ultraviolet 

spectrum dependence. Miller SA, Coelho SG, Zmudzka SZ, Bushar HF, Yamaguchi Y, Hearing V 1. and 

Beer JZ, British Journal of Derma/ology, 2008; 159: 921-930. 

'Cyc!obulane pyrimidine dimer fonnation and p53 production in human skin after repeated UV irradiation. 

Yamaguchi Y. Coelho SG, Zmudzka BZ, el at .• Etp. Dermalol. 2008; 17: 916-24. 
203 


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Page 4 - The I Ionorable Joseph R. Pitts 

The Honorable Edolphus Towns 

1. Antibiotics are unique. We must both provide incentives to encourage R&D and 

discourage resistance which is inevitable. 

The Infectious Diseases Society of America and others have called for a new 

antibiotic pathway called the Limited Population Antibacterial Drug (LPAD) 

pathway. I understand this mechanism will allow FDA to approve high priority 

antibiotics that are studied in smaller, less expensive clinical trials than normally 

required, but would limit its marketing to patients with the most serious 

infections. The concept is similar to the Orphan Drug Program, which 

apparently does not apply to this type of anti-infective products. 

What are your thoughts regarding this proposal? Would it help get needed 

antibiotics to patients with serious life-threatening bacterial infections with no 

other options? 

The LPAD proposal from the Infectious Diseases Society of America (IDSA) seeks to 

provide an important new tool for the development of urgently needed antibacterial 

therapies to treat patients with serious infections who currently lack satisfactory 

treatment options. An LP AD development program is envisioned to be smaller than a 

traditional development program, with the intent to cncourage the rapid development 

of antibacterial products to meet pressing unmel medical needs in smaller populations 

(e.g .. those with serious infections duc to multidrug-resistant organisms). It is 

important to recognize that a smaller development program also would likely result in 

greater uncertainty at the time of marketing approval regarding the characterization of 

the safety and efficacy of an LPAD drug; however, the drug may have an acceptable 

benefit-risk profile in a limited population ,,\lith a serious disease. In addition. the 

LPAD designation could serve as an important signal to physicians, patients. and the 

health care community that, based on the available evidence, FDA considers the drug 

to be in a special category requiring more judiciolls and carefully managed use. That 

is. it should only be used in the patient popUlations where the risk-benctit profile is 

appropriate because the patients have a serious or life-threatening infection and 

limited altemative therapies, and should be used prudently to avoid accelerating the 

development of resistance to the LPAD drug. 

Thc Orphan Drug Act provides a different framework for encouraging the drug 

development oftreatmcnts for rare diseases and conditions. It provides financial 

incentives to reduce the costs and potentially increase the value of developing drugs 

for rare diseases and conditions. These orphan incentives include grants, tax credits. 

a waiver of marketing application user fee, and potential market exclusivity upon 

approval. To be eligible for the incentives, sponsors must request and obtain "orphan 

designation" for their products prior to submitting marketing applications for these 

products. Anti-infective products could also be eligible to receive orphan drug 

designation and these associated incentives if they meet the requirements set fortb in 
204 


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Page 5 The Honorable Joseph R. Pitts 

the Orphan Drug Act and its implementing regUlations; however, this is often not the 

case. 

2. I understand that tbe sarcoma patient community has submitted a petition to the 

FDA regarding the upcoming regulatory action for the therapy pazopanib, a 

treatment for metastatic sarcoma. For rare disease patient populations, tbere 

exists a unique risk/benefit balance that must be taken into account. 

Has tbe FDA taken into account the input, preferences, and needs oftbe 

sarcoma patient community? Has FDA engaged in a dialogue witb the affected 

patient population? 

In April 2012, FDA approved the oral medication Votrient (pazopanib hydwchloridc) 

for the treatment of patients with advanced soft tissue sarcoma who have received 

prior treatment with chemotherapy. 

FDA Office of Special Health Issues (OSHI) staff have been in contact with patient 

advocacy organizations that collectively represent patients with sarcoma to hear their 

concerns and assure them that FDA is aware of the need for effective therapies for 

this patient population. OSH! also has three patient representatives in their patient 

representative program who rcpresent the sarcoma patient community at advisory 

committee meetings. On March 20, 2012, the Oncologic Drugs Advisory Committee 

(ODAC) convened to discuss pazopanib, and one of the three patient representatives 

served on the pancl. FDA also receives input from the sarcoma advocacy community 

via Special Government Employees with expertise in sarcoma, who serve as 

tcmporary voting membcrs of the ODAC. 

FDA's Centcr for Drug Evaluation and Research's Office of Hematology and 

Oncology Products routinely engages the oncology community regarding the nceds of 

patients with sarcoma by presenting data at the American Society of Clinical 

Oneology's aJillual meetings. FDA staffalso attend annual scientific meetings. such 

as the Connective Tissue Oncology Society and the Children's Oncology Group. to 

stay up to date on new developments in the field. 

FDA has been developing an enhanced, structured approach to benet It-risk 

assessments that accurately and concisely describes the benefit and risk 

considerations in the Agency's drug regulatory decision-making. Part of FDA's 

decision-making lies in thinking about the context of the decision-an understanding 

of the condition treated and the unmet medical need. Patients who live with a disease 

have 3 direct stake in the outcome of drug review. The FDA drug rcvicw process 

could benefit from a more systematic and expansive approach to obtaining the paticnt 

perspective on disease severity and the potential gaps or limitations in available 

treatments in a therapeutic area. The most recent Prescription Drug User Fee Act 

enhancements include expanded implementation of FDA's benefit-risk framevvork in 

the drug review process, including holding public workshops to discuss the 
205 

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Page 6 - The Honorable Joseph R. Pitts 

application offrameworks for considering benefits and risks that are most appropriate 

1'01' the regulatory setting. 

Please be assured that FDA is very much aware of, and sympathetic to. the desperate 

situation of patients with illnesses such as sarcoma, for whom there are limited or no 

available alternative therapies. The Agency is committed to providing timely access 

to potentially useful medical treatments for seriously ill patients, as well as working 

for speedy approval of new drug and biological products while maintaining the 

scientifically based safety and efficacy standards mandated by Congress. 

Concerning your inquiry about the submission of a Citizen Petition regarding 

pazopanib hydrochloride, at this time, FDA does not have any evidence that a Citizen 

Petition was submitted and received by the Division of Dockets Management. Title 

21 CrR 10.20 (f) provides that all petitions are to be mailed or hand delivered in 

person to the Division of Dockets Management, Food and Drug Administration, 5630 

Fishers Lane, Rm. 1061, Rockville, MD 20852. If this process was not followed, it 

will cause a delay in the receipt of the petition by the Division of Dockets 

l'vlanagemcnt and the subsequent assignment of a docket number.