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REVIEW OF THE PROPOSED GENERIC DRUG AND 

BIOSIMILARS USER FEES AND FURTHER EXAMINATION OF DRUG SHORTAGES 

HEARING 

BEFORE THE

SUBCOMMITTEE ON HEALTH 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

FEBRUARY 9, 2012 

Serial No. 112–114 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 

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 

JAY INSLEE, Washington 

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 

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) 

(II) 

(III) 

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 .......................................................................................... 3 

Hon. Tim Murphy, a Representative in Congress from the Commonwealth 

of Pennsylvania, opening statement ................................................................... 4 

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

California, opening statement ............................................................................. 4 

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

Texas, opening statement .................................................................................... 5 

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

New Jersey, opening statement .......................................................................... 16 

Hon. John D. Dingell, a Representative in Congress from the State of Michigan, opening statement ....................................................................................... 17 

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

prepared statement .............................................................................................. 170 

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

Tennessee, prepared statement .......................................................................... 171 

Hon. Cathy McMorris Rodgers, a Representative in Congress from the State 

of West Virginia, prepared statement ................................................................ 172 

WITNESSES

Janet Woodcock, Director, Center for Drug Evaluation and Research, Food 

and Drug Administration .................................................................................... 18 

Prepared statement .......................................................................................... 20 

Answers to submitted questions ...................................................................... 173 

Theresa Mullin, Director, Office of Planning and Informatics, Center for Drug 

Evaluation and Research 1 ..................................................................................

Peter Beckerman, Senior Advisor, Office of Policy, Food and Drug Administration 1 ......................................................................................................................

Valerie Jensen, Associate Director, Center for Drug Evaluation and Research, 

Drug Shortage Program, Food and Drug Administration 1 ..............................

Heather Bresch, Chief Executive Officer, Mylan, Inc. .......................................... 97 

Prepared statement .......................................................................................... 100 

Answers to submitted questions ...................................................................... 189 

David Gaugh, Vice President, Regulatory Sciences, Generic Pharmaceutical 

Association ............................................................................................................ 120 

Prepared statement .......................................................................................... 122 

Answers to submitted questions ...................................................................... 191 

Bill Greene, Chief Pharmaceutical Officer, Pharmaceutical Services, Member, 

Pharmaceutical Sciences, St. Jude Children’s Research Hospital ................... 141 

Prepared statement .......................................................................................... 144 

Answers to submitted questions ...................................................................... 193 

SUBMITTED MATERIAL

Executive Summary of Society of Gynecologic Oncology’s Drug Shortage Survey, dated September 2011, submitted by Mr. Burgess ................................... 8 

Letter, dated January 6, 2012, from Dale P. Conner, Director, Division of 

Bioequivalence I, Office of Generic Drugs, Center for Drug Evaluation 

and Research, Food and Drug Administration, Department of Health & 

Human Services, to Michael Dwyer, Azaya Therapeutics, submitted by 

Mr. Burgess .......................................................................................................... 14 

Analysis, undated, of H.R. 1483, the Drug Safety Enhancement Act of 2011, 

submitted by Mr. Dingell .................................................................................... 46 

Page

IV 

Statement, dated February 9, 2012, of American Academy of Pediatrics, submitted by Mr. Pitts .............................................................................................. 63 

Statement, dated February 9, 2012, of American Society of Health-System 

Pharmacists, submitted by Mr. Pitts .................................................................. 69 

Statement, dated February 9, 2012, of National Community Pharmacists 

Association, submitted by Mr. Pitts ................................................................... 73 

Statement, dated February 7, 2012, of the Biotechnology Industry Organization, submitted by Mr. Pitts ................................................................................ 91 

1Ms. Mullin, Mr. Beckerman, and Ms. Jensen did not present statements 

for the record. 

(1) 

REVIEW OF THE PROPOSED GENERIC DRUG 

AND BIOSIMILARS USER FEES AND FURTHER EXAMINATION OF DRUG SHORTAGES 

THURSDAY, FEBRUARY 9, 2012 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON HEALTH, 

COMMITTEE ON ENERGY AND COMMERCE, 

Washington, DC. 

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

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

Members present: Representatives Pitts, Burgess, Shimkus, Murphy, Gingrey, Latta, Lance, Cassidy, Pallone, Dingell, Towns, 

Engel, Capps, DeGette, and Waxman (ex officio). 

Staff present: Clay Alspach, Counsel, Health; Michael 

Beckerman, Deputy 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; John O’Shea, Senior Health Policy 

Advisor; Chris Sarley, Policy Coordinator, Environment and Economy; Heidi Stirrup, Health Policy Coordinator; Phil Barnett, Democratic Staff Director; Alli Corr, Democratic Policy Analyst; Eric 

Flamm, FDA Detailee; Karen Nelson, Democratic Deputy Committee Staff Director for Health; Rachel Sher, Democratic Senior 

Counsel; and Elizabeth Letter, Democratic Assistant Press Secretary. 

Mr. PITTS. The subcommittee will come to order. The Chair recognizes himself for 5 minutes for an opening statement. 

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

OF PENNSYLVANIA 

Today, we will discuss two new user fee authorizations, one for 

generics and one for biosimilars, and also examine the worsening 

drug shortage problem facing our country. Under the terms of the 

Generic Drug User Fee agreement that industry and FDA have negotiated, industry will pay approximately $1.5 billion over the next 

5 years in exchange for more efficient and predictable review of generic drug applications and increased inspections of drug facilities. 

Currently, there are approximately 3,000 generic drug applications sitting in a backlog at FDA. One of the goals of the agreement is to eliminate this backlog within 5 years, speeding generic 

drugs to the patients who need them without sacrificing quality or 

2 

safety. Another goal of the agreement is to have FDA inspect all 

drug facilities at an increased frequency and to bring parity between inspections of foreign and domestic facilities. 

Industry and FDA have also negotiated a second user fee agreement for biosimilars—those products approved under the abbreviated approval pathway for biological products shown to be highly 

similar to an FDA-licensed biological product. This subcommittee 

has spent a great deal of time in the last few years trying to 

achieve a pathway to approval for biosimilars. This agreement authorizes four types of fees: application, product, establishment, and 

biosimilars product development, to make this a reality. 

Finally, every day we are hearing from providers in our districts 

about increased difficulties in acquiring the drugs necessary to 

treat their patients. As this subcommittee looks to develop a package of ways to alleviate drug shortages, I look forward to hearing 

from our witnesses and learning their views on the matter. 

Again, thank you to all of our witnesses on both panels and I will 

yield the balance of my time to Mr. Murphy from Pennsylvania for 

an opening statement. 

[The prepared statement of Mr. Pitts follows:] 

3 


81517.001

Rep. Joseph R. Pitts 

Opiming Statement 

Energy and Commerce Subcommittee on Health 

Hearing on "Review of the Proposed Generic Drug and Biosimilars User Fees 

and Further Examination of Drug Shortages" 

February 9, 2012 

Today we will discuss two new user fee authorizations, one for generics and one 

for biosimilars, and also examine the worsening drug shortage problem facing our 

country. 

Under the terms of the Gencric Drug User Fee agreement that industry and FDA 

have negotiated, industry will pay approximately $1.5 billion over the next five 

years, in exchange for more efficient and predictable review of generic drug 

applications and increased inspections of drug facilities. 

Currently, there are approximately 3,000 gencric drug applications sitting in a 

backlog at FDA. One of the goals of the agreement is to eliminate this backlog 

within five years, speeding generic drugs to the patients who need thcm, without 

sacrificing quality or safety. 

Another goal of the agreement is to have FDA inspect all drug facilities at an 

increased frequency, and to bring parity between inspections of foreign and 

domestic facilities. 

Industry and FDA have also negotiated a second user fee agreement, for 

biosimilars those products approved under the abbreviated approval pathway for 

biological products shown to be highly similar to an FDA-licensed biological 

product. 

This Subcommittee has spent a great deal of time in the last few years trying to 

achieve a pathway to approval for biosimilars. This agreement authorizes four 

types of fees: application. product, establishment, and biosimilars product 

development, to make this a reality. 

Finally, every day we are hearing from providers in our districts about increased 

difficulties in acquiring the drugs necessary to treat their patients. As this 

Subcommittee looks to develop a package of ways to alleviate drug shortages, I 

look forward to hearing from our witnesses and learning their views on the matter. 
4 

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

Mr. MURPHY. Thank you, Mr. Chairman. 

Brand name and generic medicines are simultaneously necessary 

and essential components of quality and cost-effective healthcare, 

but approximately 78 percent of prescriptions dispensed in the 

United States in 2010 were filled with generic drugs. It is estimated that over the last 10 years, the use of generic medications 

has saved our healthcare system nearly $1 trillion. However, in recent years, the backlog of generic drug applications at the Food and 

Drug Administration has dramatically increased. Today, there are 

over 2,500 applications awaiting review with an average review 

time of almost 31 months. At the same time, events like the 2007 

contamination of heparin manufactured in China have raised serious concerns about the security of the U.S. pharmaceutical supply 

chain. 

Today, 40 percent of all drugs sold in the U.S. are manufactured 

overseas and as much as 80 percent of the active pharmaceutical 

ingredients—called API—in those drugs come from foreign sources. 

According to the Government Accountability Office, FDA inspects 

U.S. pharmaceutical factories every 2 to 3 years but inspects overseas facilities on average only once every 9 years. 

In the face of these challenges, the FDA and the generic pharmaceutical industry have come together with other stakeholders to negotiate a historic 5-year agreement that will bring less expensive 

therapies to market faster. Less expensive drugs mean better access to care for patients; that means fewer costly complications 

from untreated chronic diseases, fewer hospitalizations. Industry 

has agreed to do their part by paying $1.5 billion in user fees to 

FDA over 5 years and in return FDA has pledged to review 90 percent of new applications within 10 months by year 5 of the agreement. The FDA has also agreed to work to address supply chain 

safety concerns while ensuring level playing fields for domestic and 

foreign manufacturers by achieving parity between domestic and 

foreign facility inspections. 

Yesterday, I introduced the Generic Drug and Biosimilar User 

Fee Act of 2012 based on this agreement with Representatives 

Pallone, Pitts, and Waxman. I look forward to working with my colleagues on this committee as we review to enact this critical piece 

of legislation. 

Finally, let me thank and commend Representative Dingell for 

his many years of leadership and work on the issue of drug safety. 

When we enact this legislation, it will be to a large extent because 

of his dedication and long-term efforts. 

And with that, I yield back. 

Mr. PITTS. The Chair thanks the gentleman and now yields to 

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. Thank you very much, Mr. Chairman. 

5 

Today, we begin the process of establishing two critically important programs at FDA that will help speed low-cost generic drugs 

and biosimilars to the market. Because these are new user fee programs that will now join the other long-existing programs, just yesterday, Representative Murphy, Pallone, Pitts, and I introduced the 

Generic Drug and Biosimilars User Fee Act which will give FDA 

the authority and resources it needs to review generic applications 

in a timely and effective manner. I am proud that we were able to 

work together in such a strong bipartisan fashion on this legislation. It reflects our shared commitment to ensuring that American 

patients have access to these life-saving medicines early and at a 

price they can afford. 

I also want to commend FDA and the biotech and generic drug 

industries for the hard work they put into negotiating these 

thoughtful and thorough proposals. These programs are long overdue. We have had a long history of success with the other user fee 

programs for brand name drugs and medical devices. In contrast, 

for some time now, FDA’s generic drug review program has been 

starved for resources, which resulted in a dramatic backlog of applications. That, of course, has meant fewer generic drugs on the 

market and consequently higher medication prices for American 

patients. At long last, this legislation will help us turn this untenable situation around. 

Likewise, FDA will also now have the resources it needs to review applications for biosimilar drugs. By most accounts, biotech 

drugs are the most promising medicines on the horizon. This law 

will permit FDA to fully implement the newly established 

biosimilars pathway and we will all begin to see its benefits. 

On a different note, I am encouraged that the subcommittee is 

taking another look at the very dire situation surrounding drug 

shortages. This is the kind of issue that can and should be tackled 

on a bipartisan basis. It is a complex and multifaceted problem but 

I feel confident that we will work together to find workable solutions. 

Thank you for holding this hearing today and I look forward to 

the testimony of our witnesses. I yield back my time. 

Mr. PITTS. The Chair thanks the gentleman and at this point recognizes the vice chairman of the Health Subcommittee, Dr. Burgess, for 5 minutes for an opening statement. 

OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS 

Mr. BURGESS. Thank you, Mr. Chairman, for the recognition. 

Dr. Woodcock, welcome to our committee. Certainly, you have always been very receptive to our questions and we appreciate the 

efforts that you provided to me and my staff on our visit to the 

FDA a few months ago. 

We are discussing two of the pending user fee agreements before 

the committee, but also today, I think many of us are interested 

in the issue of the drug shortages. When doctors lack the essential 

tools, they are extremely restricted as to what they can do for patients. It is a complex issue. You have stated that before. Your 

agency has stated that before. But make no mistake; the FDA has 

a role in helping us find a solution. 

6 

In calendar year 2010, over 240 drugs were identified as being 

in short supply or unavailable and more than 400 generic equivalents were backordered. Many generic lines operate at margins that 

are so tight that when production becomes difficult, they can’t afford to make the changes to revamp their machinery and make 

those compounds available. In an ideal free market, competitors 

would then move in and assume this market share, but now we are 

in a situation where some competitors cannot afford to ramp up to 

meet the resulting demand. We have to ask ourselves is this the 

result of hyper-competition? And if so, is that ultimately a good 

thing? So is approval of multiple competitors in a limited space 

leading to market forces that actually end up driving patients back 

to branded products at higher prices and increased spending? Is 

that good in the long run? 

And inevitably, we have to face the over 3,000 number of backlogs of generic applications and I am very interested in tracking 

the goals in this user fee agreement in regard to the one-time fee 

the industry has agreed to in order to clear that backlog. 

Finally, we have to look at the issue of bioequivalence and when 

the Food and Drug Administration chooses to exercise the flexibility they have in the approval process. In some instances, I believe this authority has been used questionably. In others, I question why it hasn’t been used at all. On January 6, in response to 

a request for flexibility on bioequivalent studies for a substitute for 

Doxil, a chemotherapeutic agent used in treating gynecologic cancer, Mr. Conner, the Director of Bioequivalence of the Office of Generic Drugs wrote, ‘‘the Food and Drug Administration may take 

steps to expedite regulatory reviews. However, the Agency has determined that it is necessary that bioequivalence or bioavailability 

study in patients be conducted.’’ 

Now, I don’t have any other information on the quality of this 

submission, but I do know this: Doxil is gone now to treat patients. 

The line is shut down. Any stockpile that was there went to treat 

the ill, and that is appropriate, but how do you conduct a bioequivalent study if you don’t have the product against which to 

test? When you are doing a randomized clinical trial, it requires 

that you have the product to test. You can’t do that, and yet the 

Food and Drug Administration just simply wants to say, ‘‘Well, you 

have got to do the bioequivalence study.’’ They are not telling us 

what we should do in this event where we have no product left 

against which to test. These are tools on which physicians rely 

every day, and what do we do when they are not there? 

Here are some other observations: ‘‘A 51-year-old patient with 

platinum-resistant ovarian cancer had already been treated with 

another chemotherapeutic agent. She has few choices for therapy 

and would likely die before the drug shortage is corrected. I have 

three promising clinical trials which are now on hold because of 

shortages. Please help us.’’ Another quote: ‘‘I cannot obtain Doxil 

for patients stabilized on therapy. I have switched to alternate 

drugs with more side effects.’’ Another quote: ‘‘We have encountered regimen changes, difficulties with patient insurance approval, 

and an increase in hospitalization due to side effects of older regimens.’’ I have 35 such testimonials as part of a survey conducted 

7 

by the Society of Gynecologic Oncology and the FDA letter, and I 

would ask that those be submitted for the record. 

Look, no physician wants to tell a patient that they cannot receive the care they need because there is no treatment but because 

the product is simply not available and we won’t provide alternatives is no solution at all. 

I will be glad to yield the remaining time to anyone one on my 

side who would request it. If not, I yield back to the chairman. 

Mr. PITTS. Without objection, those will be entered into the 

record. 

[The information follows:] 

8 


81517.002

I. Overview 

Executive Summary of SGO's Drug Shortage Survey 

September, 2011 

In July 2011, Janssen Products, LP announced the nationwide shortage of Its product 

doxorublcln HCI (Doxll) liposome injection - a common chemotherapy drug administered to 

patients with ovarian cancer. The Doxil shortage is one of more than 198 reported drug 

shortages as of August 25, 2011. According to the University of Utah Drug Information Service, 

there were 211 reported drug shortages for calendar year 201 O. If current trends continue, it is 

estimated that more than 300 drugs will be in short supply by the end of 2011, an Increase of 

approximately one-third. These shortages continue to cripple the country's healthcare system 

and physicians' ability to properly treat patients. It Is also having a negative impact on' current 

and future cancer clinical trials. 

As a part of SGO's ongoing advocacy efforts to encourage appropriate access to care, data 

regarding the impact of these drug shortages was collected from our members' 

practice/institutions. SGO members were asked to share personal anecdotes that articUlate the 

Impact the drug shortage has had on their pracUce and patients. The Information garnered from 

the survey will be used in SGO's messaging and grassroots efforts as well as in our work with 

fellow professional organizations and advocacy groups. 

Background 

The matter of medication supply shortages In this country continues to be a growing concernone that has received an Increasing level of Interest In the media and from the Food and Drug 

Administration and the National Cancer Institute. It Is estimated that an average of 150 new 

shortages occur annually, putting patients at serious risk -- especially those battling cancer. As 

part its advocacy and public policy efforts, SGO, along with members In the National Coalition 

for Cancer Research (including ASCO), is supporting two bills that address the Issue of FDA 

nctlflcation by a company of a Impending drug shortage. 

II. Methodology 

On Wednesday September 7, 2011, SGO launched a nlne-questlon survey via the online 

surveying tool, Zoomerang, to all members In an effort to gage how the national drug shortage 

has affected their ability to treat patients with gynecologic malignancies. The survey was 

available for a week, officially closing on Thursday, September 15, 2011. In an effort to Increase 

members' engagement In the survey, SGO's Corporate Communications department distributed 
9 


81517.003

various articles on the drug shortage and published weekly reminders within the Society's biweekly newslelter SGO Issues. 

The survey was sent electronically to all of SGO's 1,458 members for Input and additional 

feedback. The survey was viewed by 124 members or eight percent of SGO membership. 

Of those members: 

101 members completed the survey (7%) 

22 members clicked on the link and chose not to participate In the survey 

III. Results 

Below are the responses to the nine-question survey. Additionally, a summary afthe openended comments made by 35 of the survey respondents Is listed. (An Excel sheet of the results 

in Zoomerang Is also attached) 

1. Have you experienced a shortage andlor delay in obtaining the supply of chemotherapy 

drugs in your practice? 

Yes - 98% (94 members) 

No - 2% (2 members) 

2. How long was the delay? 

A day-1% (1 member) 

Less than a week - 5% (5 members) 

One to two weeks - 4% (4 members) 

More than two weeks -13% (12 members) 

A month or more 17% (73 members) 

3. Approximately how many of your patients have experienced a delay/disruption of treatmenl 

as a result of the drug shortage? 

Less than 10 - 43% (41 members) 

10- 20 - 41% (39 members) 

20-30 -13% (12 members) 

More than 30 - 3% (3 members) 

4. How long have your patients experienced a delay/disruption of treatment? 

Aday-O% 

Less than a week - 5% (5 members) 

A week - 4% (4 members) 

Two weeks - 9% (8 members) 

More than two weeks -18% (17 members) 

Continuing, have suspended treatment - 64% (60 members) 

5. Was there en alternative drug available? 

Yes - 63% (60 members) 

No - 37% (35 members) 
10 


81517.004

6. If No, please explain what course of treatment/options you selected? 

Suspended treatment for a week - 7% (3 members) 

Suspended treatment for two weeks - 16% (7 members) 

Suspended treatment Indefinitely - 33% (15 members) 

Other - 44% (20 members) 

7. Have the drug shortages Impacted your ability to foster patient participation in cllnlcallrials? 

If yes, how many? 

1-2 - 51% (28 members) 

3-6- 33% (18 members) 

7-10 - 9% (5 members 

10 or more patients-7% (4 members) 

8. Do you or your institution anticipate any future shortages of additional drugs In the next six 

months? 

Yes - 85% (81 members) 

No -15% (14 members) 

9. Please share any specific stories regarding Ihe shortage and its effects on your ability to treat 

your patients. (Verbatim comments listed below) 

• We haven't had Doxilin ages and this is devastating as It is the best 2'd 

line agent. Had to switch to other agents. Very difficult for our patients as 

they travel hours to get to our University practice and many of the other 

second line drugs are weekly, For patients off trial, we can sub docelaxel 

for paclitaxel but have had colossal problems with neutropenia and treatment delays. Also have had to suspend enrollment on multiple 

clinical trials as we have no guarantee for paclltaxel. HUGE Issue for both 

GOG and investigator Initiated trials. 

• Had to delay initiating a patient upon Doxll Indefinitely. 

• Had to delay treatment, skip a treatment or reduce dose because 

"pharmacy did not have enoughH • 

• I have patients calling around the country for drug supply of Doxll. One 

patient flew to Toronto for a treatment and also brought vials back for next 

months' treatment In hopes of having home care administer. 

• I had 20+ patients on Doxli and had to either suspend therapy of change 

drugs. Very disruptive to patient care. 

• Doxil shortage disrupted many patients' treatments. Many who were 

responding to Doxll had to be switched to another drug that hasn't worked 

as well. 

• Shortages of both paclitaxel and Doxii have adversely Impacted our 

practice. 
11 


81517.005

Patients are receiving multiple cycles of adrlamycin with more nausea and 

myelosuppression, as well as potential cardiac toxicity. We are unable to 

enroll on 252. We have industry trial using weekly paclitaxel on which we 

cannot enroll. We have changed therapy on at least 5 patients when they 

were having clinical responses to Doxil or paclltaxel. 

Patients can't get Doxil even though it was working well. 

Stopped enrolling in clinical trials requiring Doxil, substituted docetaxel on 

trials (even though data to do so is limited-- endometrial cancer pts, pt 

with hlo prior XRT). 

The drug Doxil, which Is a well-tolerated and very commonly used drug for 

women with recurrent ovarian cancer, abruptly became unavailable. 

There Is no equivalent (from a side effect point of view) alternative, and 

patients have been put on hold until the drug becomes available, while 

they are closely monitored for progression. Since one of our major trials 

requires progression on or after Doxil as an entry cnteria, patients hoping 

to go on this trial as an alternative may find the study is closed by the time 

they have had a chance to try Doxil. The sudden lack of availability of 

Doxil has caused much anxiety for the women affected. Many have heard 

that production was stopped by the FDA despite lack of safely concerns, 

and they are quite distressed that the system has failed them so (I do not 

know If the rumors are correct). The lack of clear explanation as to what 

happened to so dramatically affect the supply of this drug manufactured at 

only one plant in the US, the lack of information as to when the drug will 

again be available, as well as the fact that some drug has apparently been 

released on a '''first com~ first serve basis'" without explanation as to how 

the limited supply was distributed have also been causes of concern. 

• The shortage of Doxillimits enrollment on TRINOVA-2 and GOG9925 

i have had to delay treatment on several patients who were receiving 

Doxll salvage therapy who were responding to treatment- without good 

alternatives. I have been unable to accrue patients to a Doxil clinical trial 

or Initiate Doxil salvage chemotherapy and have had to use more 

schedule Intense regimens for patients with recurrent ovarian cancer. 

"I am retired so have no prescribing experience to pass on. However, I 

have had delays in delivery of personal prescriptions, none of which were 

rare, expensive or cancer-related. Is this a problem common to all drugs, 

not just cancer therapies?" 

Doxil is unavailable and I have had to change to topotecan In Its place 

'I have had patients with metastatic endometrial and ovarian cancer for 

months that I have had to switch to other drugs because of lack availability 

of Doxll after failed attempts to get them drug thru the ""Doxll Cares'" 

program. 

2-month delay on Doxil - POD in L groin. 

Higher expense of some drugs to the practice to SUbstitute for the drugs 

not available. 
12 


81517.006

Have been approached by a drug company to sign an agreement to 

receive drug for patients if agree to n'ot give more than 8 total cycles In a 

recurrent fashion for any patient who Is already in treatment and to start 

no new patients on drug, Also the patient has to sign agreement to give 

company medicallnfomnation, I have refused to sign any such agreement 

and have been told not to expect any drug in near future, Currently have 

44 year old patient who has failed all other chemo but has had incredible 

response and stable disease while receiving drug (DoxiJ) both on clinical 

exam and marker assay with a ZERO perfomnance status on drug, When 

have delayed treatment has rising titers but then responds when drug 

given, I think that there is ABSOLUTELY NO REASON that the drug 

company should have access to PHI of patientsl 

• Two patients on Doxll and One patient on carboplatinltaxol have had 

treatment suspension/delay more than three weeks, 

• Two patients with significant response to Doxil now wait-listed and unable 

to obtain the drug, Both will have to switch from a working therapy to new 

treatment This Is very difficult because they don't necessarily qualify for 

clinical trials in the absence of progressive disease and with more meds 

given off trial, may prevent them from being candidates for trials in the 

future," 

• "Cannot obtain Doxll for patients stabilized on therapy. Have switched to 

alternate drugs with more side effects. bleomycin, taxol and cisplatin 

shortages have come close to interupting curative therapy for patients with 

breast and germ cell tumors. Our pharmacists spend at least 25% of the 

time now managing drug shortages throughout the hospital." 

Doxil shortage has required changing regimens for several patients and it 

has prohibited our ability to enroll these patients on In house clinical trials. 

I just had a patient this morning, doing well on Carbo/Doxil for returrent 

ovarian CA, who we had to change to single-agent carbo because of no 

Doxll available. We are not starling anyone new on Doxil. I have a patient 

who I would like to refer to the PROCEED trial, but I do not know if they 

will take a new patient to lack of Doxl!. 

• We have had to develop an institutional policy whereby we declare 

whether a patient's chemotherapy is considered curative or not. If it is 

curative, the patient gets priority. If it is not, it is possible they may not 

receive drug. 

Patients moved to salvage regimens with increased toxicity due to lack of 

previously available regimans. 

Stili waiting on Doxll. 

18 patients on Doxil had to be switched to alternate treatment. Local 

hospitals having no taxol for inpatient treatment. 

Not knowing why there Is a shortage is disconcerting to the patients and 

providers. 
13 


81517.007

"We have encountered regimen changes, difficulties with patient 

Insurance approval with drugs not being on the approved formulary (I.e. 

Doxil) and an Increase In hospitalizations due to side effects related to 

MUolderlH' regimens" 

Some of our patients have elected to halt therapy while awaiting drug 

availability. 

"Shortages in bleomycin delayed treatment start. Shortage in doxll 

required changing regimens. Very concerned about shortages in taxol, 

cisplatin and methotrexate." 

"I had a patient who was willing to travel to foreign country to receive 

treatment. Just before leaving she Was informed that the drug, Doxll, was 

not going to be available in this foreign country. This patient will need a 

change in her treatment. I believe that her survival will be affected 

negatively. Another patient was will to give her Doxil to another patien!. 

She was will to make the sacrifice so someone younger than her would be 

treated. She was will to sacrifice her life for another's. " 

• "Patients and families concerned and upset, staff burdened with complex 

follow through" 

I have a 51 yo patient with platinum resistant ovarian cancer who has 

already been treated with (opotecan. She has few choices for therapy and 

will likely die before the drug shortage is corrected! I have three promising 

clinical trials which are now on hold because of shortages of paclitaxel 

and pegylated liposomal doxorubicln. Please help us 

I have completed the drug shortage survey as requested. At Vanderbilt we 

have experienced some severe chemotherapy shortages but anticipation 

by our pharmacy staff and working together with the whole oncology 

group to prioritize treatment needs hes mitigated any significant patient 

problems .... thus far. I attach the most recent drug list which shows a great 

concern about Mesna at this point. 

IV. Conclusion 

Based on the high response rates to the questions asked above and survey participants openended comments; SGO members and their patients have clearly been affected by the national 

drug shortage. SGO members and health care providers across the country are concerned 

about their patients' survival rates and quality of life due to the lack of these medications. 

SGO plans to use these results, along with members' personal stories to create a position 

statement on thiS Issue. The Statement will then be shared with the SGO membership, affiliated 

advocacy groups, and national policymakers. 
14 


81517.008

«' .. ~ DEPARTMENT OlillEALTH & HUMAN SERVICES 

(~~L. 

Azaya Therapeutics 

Attention: Michael Dwyer 

12500 Network Blvd" 

Suite 207 

San Antonio, TX 78249 

Reference Number: OOD 1111·0821 

Dear Mr, mvyer: 

Food and Drug 1\d:roiniatra!;:ion 

Rockville, MD 20aS1 

JMI 0 a 2011 

Tills letter is ill response to your correspondcnce dated October 31, 2011. You inquired 

wbether the Office of Generic Drugs (OGD) would consider granting l\ waiver of the In 

vivo and in vilm hioequivnlencc (BE) studies for your test product, Doxorubicin 

Hydrochloride Llposomal Ituectioll, due to shortages oftbe reference product. The OGD 

has the following recommendations: 

I, You state that for the past six months you have been unable to procure DOXlr,® 

to conduct BE studies due to' a sbOl'tagc of this drug product on the market. 

2. The agency has carefully evaluated the information provided regarding the 

shortage of the reference product, DOXIL OJ (Doxorubicin Hydrochloride 

Liposoma! Injection), and has verified the shortage from ollicisl somees. The 

FJ.?A continues to explore approaches to help prevent and mitigate shortages 

under existing stuMM), autborilics, Consistent with the statutory responsibility to 

ensure the safety and effectiveness of the drug supply, the FDA llllly take steps to 

expedite the regUlatory reviews, including reviews of new drug suppllers, 

manufoetlU'ing sites, and manufacturing cha!lges, whenever it determines that 

expedited review would help to avoid or tnitigate existing or potential drug 

sh011ages, The }<'DA muy also exercise flexlbility tllIotlgh regulatory discretion by 

working with 1ll!ltlufacturers to identifY ll1eans \0 mitigate tho dangers of products 

with. quality issues. Howevel" thc Agency has determined that it Is necessary tbat 

a bioequivalcnce or bioavailability study in patients be conducted for this dmg 

product in order to assess its safety und efficacy priot to approval. Therefore, 

yout request fur the 'waivers of in vivo and In vitro BE studies for your test 

proctuct, Doxorubicin Hydrochloride Liposomal Il\iection, can not be granted at 

this.timc. 
15 


81517.009

Tfyon have any questions, please call TUfesa Rumson, Pharm.D., Project Mallager, 

Division ofBioequivalcncc at 240·276·8782. In future correspondence regarding this 

issue, please include a copy ofthis lcltel'. 

(lGD U 11·0821 

Sincerely YOllrs, 

;€;{~~ Director 

Division ofBioequivalence I 

Office of Gelieric D1'IIgs 

CenteJ' foJ' D1'IIg Evaluation and Research 
16 

Mr. PITTS. And the Chair now recognizes the ranking member of 

the Subcommittee on Health, Mr. Pallone, for 5 minutes for an 

opening statement. 

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

Mr. PALLONE. Thank you, Chairman Pitts. 

This hearing is the second in a series of important hearings that 

this subcommittee will hold in relation to the FDA User Fee Agreements, and I welcome everyone for joining us. And as I noted last 

week, I am encouraged by the bipartisan nature of these efforts, 

and I look forward to working with my colleagues. 

Today’s topics will cover two brand new user fee programs that 

the subcommittee will authorize. The first is a Generic Drug User 

Fee Agreement, also known as GDUFA. That will create a program 

at the FDA in order to help expedite review of their applications 

similar to the way brand name drug manufacturers pay user fees. 

Primarily, the agreement will help address the significant backlog 

of generic applications currently at the FDA. Unfortunately, over 

the last several years, this backlog has continued to grow at an 

alarming rate. In fact, the median time for a generic drug approval 

has doubled to 32 months, and that means all these generic drug 

products are kept off the market and out of the hands of consumers, which is a waste and simply too long. 

Generic drugs, as we know, have proven to help lower healthcare 

costs. In the last decade alone, generic drugs have provided more 

than $824 billion in savings to the Nation’s healthcare system. 

Clearly, bringing generic drugs to market faster should be a priority, and luckily, the generic industry was able to recognize that 

we must provide the Office of Generic Drugs with adequate resources to do their job effectively. As much as I advocate for increased government funding for the FDA, that simply has become 

too difficult a battle to overcome, and so I appreciate the industry’s 

ability to work with the FDA and move forward on a strong agreement and I commend your efforts. 

The second user fee program is the Biosimilars User Fee Agreement, also known as BsUFA, which is the product of the Biologics 

Price Competition Innovation Act, the law that created a pathway 

for biogeneric medicine onto the marketplace. This agreement came 

together through a collection of brand and generic companies and 

FDA. Now, I know it is difficult for many to comment on the 

strength and robustness of the agreement because of the law’s infancy, but it is a step forward in providing FDA the necessary resources to bring promising medicines to patients at a lower cost 

and I am supportive of its passage. I think that both Mr. Waxman 

and Mr. Murphy mentioned that last night, the two of us, as well 

as Chairman Pitts—the four of us I should say—introduced a 

standalone measure that covers both these agreements and shows 

that they have bipartisan support and that we are going to move 

forward with them. 

Another issue under discussion today is the current drug shortage of vital medications that are impacting clinicians, hospitals, 

and patients who have depended upon these medications for years. 

17 

It is alarming the drugs that have been around for so long would 

suddenly be the most difficult to keep hospitals, pharmacies, and 

doctors’ offices supplied with. I strongly believe this committee has 

the responsibility to address this sudden increase in drug shortages. We had a hearing last September that brought light to some 

important inadequacies of the system and I know there is a strong 

bipartisan appetite to work out a solution and I hope that we can 

get there. It is not a simple task but there are strong ideas that 

we have to consider and flesh out. 

Lastly, Ms. DeGette has a bill that focuses on industry reporting 

as a worthy objective. I am also aware the generic industry has a 

proposal that we will be discussing today about a voluntary selfregulatory system. While I welcome their advocacy on addressing 

the problem, self-regulation always raises some critical questions. 

So I look forward to hearing more about that and I trust the FDA 

and our other witnesses can give specific insight into some of these 

proposals. 

I wanted now to yield what time I have 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, as I have brought to the committee’s attention in the past, drug supply chain safety is critical to 

the issue of health and safety to the American people. This hearing 

is going to reinforce how imperative it is to provide FDA with appropriate authorities and resources to secure our medicines. This 

committee has a long bipartisan history of working on this issue 

and looking into drug safety. It is now time for us to act. Our 

friends in the Senate have put together a bipartisan working group 

on this matter and we in the House should follow suit. Time is 

short. If we don’t work together in good faith on this issue, we will 

not be finding a solution and the situation will continue deteriorating with death and hurt occurring throughout the American 

population by reason of our failure to address the difficulty. The 

American public deserves a solution. 

As we proceed today, I am asking my colleagues to join me in 

working on this vital issue and to demonstrate to the American 

people that Congress does indeed work for them and that we follow 

on the steps that we took in the last Congress to see to it that we 

made foods much safer than they were by following on and addressing now questions relative to the safety of pharmaceuticals, 

appliances, and devices, and ultimately, cosmetics. 

And I thank you, Mr. Chairman. 

Mr. PITTS. The Chair thanks the gentleman. That concludes the 

opening statements for the members. We are now voting on the 

floor. So we have two votes. We will take a recess until the end of 

the second vote at which time we will reconvene. 

The subcommittee stands in recess. 

[Recess.] 

Mr. PITTS. The subcommittee will come to order. 

Our first panel will have just one witness, Dr. Janet Woodcock, 

the Director of the Center for Drug Evaluation and Research at 

18 

FDA. We are happy to have you with us today, Dr. Woodcock, and 

your written testimony will be made part of the record and you are 

recognized for 5 minutes to summarize. 

STATEMENT OF JANET WOODCOCK, DIRECTOR, CENTER FOR 

DRUG EVALUATION AND RESEARCH, FOOD AND DRUG ADMINISTRATION; ACCOMPANIED BY THERESA MULLIN, DIRECTOR, OFFICE OF PLANNING AND INFORMATICS, CENTER 

FOR DRUG EVALUATION AND RESEARCH; PETER 

BECKERMAN, SENIOR ADVISOR, OFFICE OF POLICY, FOOD 

AND DRUG ADMINISTRATION; AND VALERIE JENSEN, ASSOCIATE DIRECTOR, CENTER FOR DRUG EVALUATION AND RESEARCH, DRUG SHORTAGE PROGRAM, FOOD AND DRUG ADMINISTRATION 

Ms. WOODCOCK. Thank you very much and good morning. 

Mr. Chairman and members of the subcommittee, I would really 

like to thank you for the opportunity to testify about three important issues: the United States Generic Drug Program and user fees 

that would support it, the new Biosimilars Program and proposed 

user fee, and the ongoing crisis of shortage of essential drugs in the 

United States. 

I am joined today by Dr. Theresa Mullin on my right, who is the 

director of the Office of Planning and Informatics at the Center for 

Drugs. Dr. Mullin was the lead negotiator on Prescription Drug 

User Fee Program and on the Biosimilars Program. And to my left 

is Mr. Peter Beckerman, who is the senior advisor for policy in the 

Office of Policy at FDA. And he was one of the lead negotiators on 

the Generic Drug User Fee Program. 

Since enacted by Congress in 1984, the current generic drug program has been a stunning success by most accounts. Today, over 

3/4 of prescriptions dispensed are for high quality, affordable 

generics, as the members have said, saving Americans billions of 

dollars literally. But this program has been the victim of its unprecedented success. Applications to the program have skyrocketed 

and the program has not been able to keep up. Times to approval 

have lengthened and are prolonged, and over 2,000 applications are 

in a so-called backlog at the Office of Generic Drugs. 

At the same time, globalization of the industry has challenged 

FDA to assure the same level of inspectional coverage that is carried out domestically for the foreign facilities. The new user fee 

program proposed to Congress addresses both these problems head 

on. The program would bring timelines and predictability to the review process, eliminate the backlogs. It would also provide a level 

playing field for inspections to ensure that the same quality standards are maintained wherever in the world the generic drug is 

made. These changes will ensure that U.S. consumers continue to 

have access to safe, effective, high quality, and affordable generic 

drugs. 

The proposed Biosimilar User Fee Program is intended to support a new emerging industry. Biologics drugs developed over the 

past 20 years have provided new and effective treatment options 

for patients with serious diseases such as rheumatoid arthritis and 

cancer, but the generic drug program that existed did not apply to 

and was not really appropriate for these complex biological molVerDate Aug 31 2005 15:22 Jul 01, 2013 Jkt 037690 PO 00000 Frm 00022 Fmt 6633 Sfmt 6633 F:\112-11~1\112-11~1 WAYNE
19 

ecules. In 2007, Congress created a new pathway for biosimilar biologics and instructed FDA to develop a user fee proposal, which we 

have done. This program is intended to support an emerging industry and I will be very pleased to be able to discuss it. 

I would like to thank the members—Mr. Murphy and Mr. Pitts 

and the additional members—for introducing legislation. We are 

really happy to hear that there is bipartisan support and we look 

forward to working with you. 

I am also pleased to announce that, later today, FDA will introduce three draft guidances for industry on biosimilars. These contain technical information that will help the industry as they develop these new products for the U.S. market. 

The third topic, drug shortages, is a very important issue. Millions of Americans rely on medicines to support or sustain their 

health, as we heard from Dr. Burgess. The recent shortages of sterile injectable drugs, many of which are essential in cancer treatment or in seriously ill patients, have brought a spotlight on this 

problem. The causes of drug shortage are multi-factorial, but in 

this case, a perfect storm came together to create the current situation of shortages. FDA does everything possible to both prevent and 

ameliorate shortages, including stimulating the production of other 

manufacturers, allowing risk mitigation strategies for products that 

have manufacturing difficulties, moving up the queue of applications so we could get additional products onto the market to alleviate shortages, and even arranging for temporary importation of 

similar products from other countries. For the current shortages, 

this has not been enough and hospitals and clinicians are facing 

and have been facing significant shortages. 

We look forward to working with you to ensure that Americans 

have continued, uninterrupted access to effective, safe, high quality, and affordable drugs to sustain their health. Thank you very 

much. 

[The prepared statement of Ms. Woodcock follows:] 

20 


81517.010

~"U'l41 

( ~-1-"" DEPARTMENT OF HEALTH AND HUMAN SERVICES 

'-. ..........:! 

<q.~l'1.l:. _ _ 

STATEMENT 

OF 

Food and Drug Administration 

Silver Spring, MD 20993 

JANET WOODCOCK, M.D. 

DIRECTOR, CENTER FOR DRUG EVALUATION AND RESEARCH 

FOOD AND DRUG ADMINISTRATION 

DEPARTMENT OF HEALTH AND HIJMAN SERVICES 

BEFORE THE 

SUBCOMMITTEE ON HEALTH 

COMMITTEE ON ENERGY AND COMMERCE 

U.S. HOUSE OF REPRESENTATIVES 

"REVIEW OF THE PROPOSED GENERIC DRUG AND B10SIMILARS 

USER FEES AND FURTHER EXAMINATION OF DRUG 

SHORTAGES" 

February 9, 2012 

RELEASE ONLY UPON DELIVERY 
21 


81517.011

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 negotiated recommendations felr 

a generic drug user fee and a biosimi lar user fee program, as well as to update you on actions 

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

The proposed user fee programs for generic drugs and biosimilars are modeled on the 

successful Prescription Drug User Fee Act (PDUFA) program which, over the past 20 years 

has ensured a more predictable, consistent, and streamlined prcmarket program for industry 

and helped speed access to new safe and effective prescription drugs for patients. Under a 

user fcc program, industry agrecs to pay fees to help fund a portion of FDA's drug review 

activities while FDA agrees to overall perfommnce goals, such as reviewing a certain 

pcrcentage of applications within a particular time frame. As a result of the continued 

investment of PDUFA resources, FDA has dramatically reduced the review time for new 

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

efficacy, and quality of new drugs prior to approvaL New legislation is needed to allow FDA 

to establish similar programs for generic drugs and biosimilar drug products. 

2 
22 


81517.012

Generic Drug USCI' 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. 

This Sliccess, however. also has come to represent a significant regulatory challenge, 

and delays in approvals of generic drugs have emergcd as a major concern for the generics 

industry, FDA, consumers, and payers alike. Unlike thc brand manufacturers who pay fees 

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

to its 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 kcpt pace with an increasing number of 

Abbreviated New Drug Applications (ANDA) and other submissions related to gcneric 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 Filcs 2 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 

! "All Economic Analysis ofCklll'ric 

hap: "gp/woflline,org,'silcs de/ault.Jl!es 

2 Drug Master Files are widely used to provide fDA with inrormatiun nhout tht: drug subslance. also known as the active 

ph;;mna<.:(:utical ingredient (API). 

3 
23 


81517.013

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)} manufacturers ext'eeds the number found in the Unitcd 

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 rcquire 

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 I 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. 

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

excipient", 

4 
24 


81517.014

Overview (Jllhe Proposed Generic Drug User Fee Program 

To develop recommendations for a generic drug user fee effective beginning ry 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 linal 

agreement and the goals FDA and industry have agreed to were transmitted to Congress on 

January 13,2012. 

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

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

resources necessary to ensure timely access to safe. high-quality. affordable generic drugs. 

The proposal tocuses 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 high-quality standards and that their facilities arc 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 offacilities 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. 

5 
25 


81517.015

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 \vill benefit significantly from the certainty associated with 

pertormance review metrics that otTer the potential to dramatically reduce the time needed to 

commercialize a generic drug, when compared to pre-GDUFA review times. 

In addition. the variety of funding sources for thc program wi II ensure that participants 

in the generic drug industry, whether FDF manufacturers or APl 4 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 (han associated branded drug fees, 

Program Funding and l'vfetrics 

If enacted as negotiated, as noted above, the program would provide FDA with 

additional funding for all aspects of the generic drug program in the amount of $299 million 

per year. for five years, adjusted annually for inflation. With those additional user fce funds, 

FDA agrees to undertake a series of immediate program enhancements and performance 

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

witb excipients to produce the FDF aspirin tablet). 

6 
26 


81517.016

goals. Many performance metrics and efficiency enhancements are set forth in the negotiated 

documents. The proposed goals, which will, in most cases. be phased in, include: 

1. New Applications: FDA will review and act on 90 percent of complete electronic 

AN DAs within 10 months after the date of submission; 

2. Backlog: FDA will review and act on 90 percent of all ANDAs, ANDA amendments, 

and ANDA prior-approval supplements pending on October 1,2012, by the end of FY 

2017: and 

3. Inspections: FDA will conduct risk-adjusted biennial Current Good Manufacturing 

Practice (CGMP) inspections of generic API and generic FDF manufacturers with the 

goal of achieving parity of inspection frcquency between foreign and domestic firms 

inFY2017. 

Under the program, fees would derive from two primary sources: generic drug-related 

submissions and generic drug-related facilities. In the first year of the program, there would 

also be a fec assessed for appl ications that arc pending on October I, 2012, the so-called 

·'backlog." Like PDUFA. individual fee amounts would be set annually, with the total annual 

user fee revenue target specified in statute. Overall, 70 percent of the user fee revenue would 

be generated by facility fees and 30 percent by application submission and Drug Master File 

fees. In the first year that ratio will be slightly different because of the one-time backlog fee. 

The revenue from facilities is split, with 80 percent provided by the FDF manut:1clurers and 

20 percent by API manufacturers, a ratio determined and recommended by the generics 

industry. 

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

generic drug user fee program, uscr fce funding would supplement appropriated funding to 

7 
27 


81517.017

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 (BPCI Act) 01'2009, which was enacted as part of the 

Affordable Care Act of20 10, established a new abbreviated approval pathway for biological 

products shown to be "biosimilar to" or "interchangeable with" an FDA-licenscd 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 reference product. This program will provide significant benefits tor 

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 grov,th. 

Background 

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

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

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

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

8 
28 


81517.018

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

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

are the same, regardless of whether the biologics license application (BLA) is submitted undcr 

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 recommcndations 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 carc 

professionals. and scientific and academic experts, as directed by Congress. The final 

recommendations were transmitted to Congress on January 13,2012. 

Program Funding and lvfetrics 

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

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

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

PDUr 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 ncar-term and to enable sponsors to have meetings with FDA early in the development 

of biosimilar biological product candidates. 

9 
29 


81517.019

As in all of FDA's medical product user fec 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 

(INDs), It would also include development of the seientific, regulatory, and policy 

infrastructure necessary for review ofbiosimilar biological product applications, such as 

regulation and policy development, related to the review of biosimilar 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 postmarketing studies (hat 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 ofbiosimilar biological product establishments and other 

facilities unde!iaken as part of FDA's revievv 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 

10 
30 


81517.020

the post-approval stage, such as post-marketing safety activities, with respect to biologics 

approved under biosimilar biological product applications or supplements. 

Proposed Fees 

The proposed biosimilars user fcc program includes biosimilar product development. 

marketing application, establishment, and product fees. The initial and annual biosimilar 

product development fees for biosimilar biological products in development would be equal 

(0 I () percent of the fee established for a human drug application under PDUFA for that liseal 

year. The sponsor would pay biosimilar product development fees each year until the sponsor 

submits a marketing application f()r the product that is accepted for filing, or discontinues 

participation in the biosimilar product devclopmt~nt program for the product. The proposed 

marketing application fee for a biosimilar biological product is equal to the fee established for 

a human drug application under PDUFA, minus the cumulative amount of any biosimilar 

product development fees paid for the product that is the subject of the application. 

Finally, the proposed establishment and product fees are equal to the establishment 

and product fees under PDUF A for any fiscal year because thc level of effort required for 

FDA oversight of manufacturing and post-marketing safety activities is expected to be 

comparable for biosil11ijars and biological products under PDUFA. FDA anticipates a modest 

level offunding frol11 these sources, initially because only biosil11ilar biological products that 

arc approved for marketing would be subject to these fees. 

II 
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81517.021

Proposed Perlormance Goals and Procedures 

The proposed performance goals include new types of development-phase meetings 

with associated time frames for timely review of data and feedback. In addition, the proposed 

performance goals include application review, first-cycle review. proprietary name review, 

major dispute resolution. clinical holds, and special protocol assessment performance goals. 

The proposed application performance goals for biosimilars arc similar to the PDUFA 

performance goals and include the following: 

1. Review and act on original biosimilar biological product application submissions 

within 10 months of receipt. Performance targets phase-in staI1ing from 70 

percent in FY 2013 to 90 percent in FY 2017. 

2. Review and act on resubmitted original biosirnilar biological product applications 

within 6 months ofreccipt. Performance targets phase-in starting from 70 percent 

in FY 2013 to 90 percent in FY 2017. 

3. Review and act on 90 percent of original supplements with clinical data within 10 

months of receipt. 

4. Review and act on 90 percent of resubmitted supplements with clinical data within 

six months of receipt. 

5. Review and act on 90 percent of manufacturing supplements within six months of 

receipt. 

12 
32 


81517.022

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 it11pact 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 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. 1'v1anufacturers can also help to 

minimize drug shortages and decrease the impacl 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 

13 
33 


81517.023

submissions by the manufacturer that may alleviate the drug ShOtiage while continuing (0 

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, if the 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 paticnts. 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 

successttdly be removed with a filter. FDA then exercised enforcement discretion for the 

drug to be shipped with a letter to notify health care professionals that the filter needed to be 

used with the drug. This resulted in the drug being avai lable tor patients in a sate manner 

while the firm addressed the particulate issue for future production. 

In addition to working with the atTected manufacturer, FDA also works with third 

panics 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 sholiages. In certain situations, when a shortage 

cannot be resolved immediately, we will use our regulatory discretion for the temporary 

import of non-FDA-approved versions of critical drugs after ensuring there are no signiticant 

safety or efticacy risks for U.S. patients. 

14 
34 


81517.024

Although our work has enabled the Agency to successfully prevent more th1m 250 

potential shortages since the beginning of 20 10, drug shortages arc 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. patient advocates. industry, researchers. pharmacists, 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 3 L 20 II, the President issued an Executive Order,5 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 usc 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. Cnder 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 

5 htlp:. ·,www.",hilehol/sc.govlhe-press-otJice·2()II. 10/3/ mc-cal1-l-wail-oham(,-adminisfralion-takcs-actiol1-

J'educe-prescriptionwdrug. 

15 
35 


81517.025

mcdications or pricing drugs cxorbitantly, so that the Department of Justice can determine 

whether these actions arc consistcnt with applicable law. Since the issuance of the Exccutive 

Order, FDA has successfully prevented 114 drug shortages. 

On the same day the President signed the Executive Order, the Administration 

announced its support for bipartisan bills (S. 296 and l-l.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, 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 lettcr to pharmaceutical manufacturers, reminding them of 

their current legal obligations to report certain discontinuances to the Agency, and urging 

them to voluntarily notify FDA of all potential disruptions of the prescription drug supply to 

the U.S. markct, even where disclosure is not currently required by law, The letters to 

manut~lcturcrs 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 20 I I), the Agency received an average of approximately I () 

notifications per month. In the four weeks following the letters to the manufacturers and 

issuance of the Executive Order, we received 61 notitlcations, a six-fold increase. This 

16 
36 


81517.026

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 (lFR) amending 

regulations relating to provisions orthe Federal Food, Drug, and Cosmetic Act requiring 

manufacturers who are the sole source of certain drug products to notify FDA at least six 

months benxe discontinuance of manufacture of the products. The IFR modifies the term 

"discontinuance" to include both permanent and temporary disruptions in the manufacturing 

ofa drug product and clarities 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 inj()fInation to physician and patient organiz.ations 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. 

Since the Exccutivc 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 

17 
37 


81517.027

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 ofJustice, 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 lorward to working with the Suhcommittee on this important issue. 

CO~CLUSION 

Human drug user fees have revolutionized the drug review process in the United 

States since they were adopted 20 years ago, allowing FDA to speed the application review 

process without compromising the Agcncy's high standards. Final recommcndations for 

generic drug user fees and biosimilars user fees offer a strong example of what can be 

achieved when FDA. industry and other stakeholders work together on the same goal. User 

fees provide a critical way fer leveraging appropriated dollars. ensuring that FDA has the 

18 
38 


81517.028

resources needed to conduct reviews in a timely fashion. The passage of a generic drug user 

fec and a new biosimilars user fec would allow FDA to build upon the success of PDUFA. 

Drug shortages present a challenge that we must work collaboratively to solve. FDA 

has taken a number of impOliant steps and will continue to work with industry, health care 

professionals, and patients to address this issue. We welcome the opportunity to discuss this 

important topic with you both today and moving forward. 

Thank you lor your contributions to the mission of FDA. I am happy to answer 

questions you may have. 

19 
39 

Mr. PITTS. The Chair thanks the gentlelady and now begins the 

questioning and I will recognize myself for 5 minutes for that purpose. 

Dr. Woodcock, how many applications are in the generic backlog 

at FDA? 

Ms. WOODCOCK. We count what you might consider a backlog to 

have about 2,000 applications. 

Mr. PITTS. Two thousand. 

Ms. WOODCOCK. That includes some drugs that couldn’t be approved now because the patents haven’t expired on the innovators. 

You can send in your application beforehand and then you have to 

wait. But there are many in that backlog that could be approved 

if we had time to get to them or had the inspectional resources to 

do the inspection. 

Mr. PITTS. And how will the Generic Drug User Agreement help 

clear out this backlog? 

Ms. WOODCOCK. The agreement has several parts and one is specifically directed at the backlog. What we have recommended to 

Congress is that there be a one-time backlog fee paid at the start 

of the program of $50 million. That would go toward us beginning 

to work on the backlog. One of the goals of the program that we 

would be held to is clearing up the backlog by the end of the 5- 

year user fee program. So by that time, we would be in steady 

state—applications in the door, applications out the door with predictability in that process and timelines. So we would expect with 

the backlog fee and our commitments and timelines that the backlog would be eliminated. 

Mr. PITTS. Can you be a little more specific on what kind of generic drug applications are in this backlog and how will clearing 

this backlog save patients in our healthcare system money? 

Ms. WOODCOCK. Most of the drugs in the backlog are additional 

copies of a drug where there is already a generic because we expedite the first generic out the door to try and get patients that initial savings so that additional copies of a generic have been shown 

to further lower the cost of the drug, the price due to competition. 

So this is important for lower cost drugs and also to have a robust 

supply. I think we are learning and we know from the shortage situation it is important to have multiple manufacturers of important 

drugs. 

Mr. PITTS. Now, in your testimony you talk about FDA’s efforts 

to expedite review of manufacturer submissions to help alleviate 

drug shortages, and currently, it takes FDA 31 months to review 

these submissions. Can you give us more background on what expedite means? On average, how long does it take to expedite those 

submissions that can help alleviate drug shortages? 

Ms. WOODCOCK. I can’t give you an exact number but we have 

a queue, and so everything is waiting and usually generic drugs 

are reviewed first in and they are reviewed first. So if you are the 

third in, you are reviewed third and so forth for fairness purposes. 

What we do if there is a shortage drug where that application 

might help ameliorate the shortage, we pull it out of the queue and 

review it as quickly as possible. So much of that 30 months can be 

gone. If the application is good, we can review that rapidly and get 

that drug on the market. So we have very few drugs waiting in the 

40 

queue that actually would address shortages. We have identified 

any of those drugs and we have expedited review of the applications. 

Mr. PITTS. Now, how will the Biosimilars User Fee Program provide predictability and consistency regarding the review of 

biosimilars applications, and how will the Biosimilars User Fee 

Program help this burgeoning industry? 

Ms. WOODCOCK. The Biosimilars User Fee Program will provide 

predictability of timelines and review and process to this industry 

similar to what the Prescription Drug User Fee does for innovator 

products. To some extent, the biosimilars program was modeled on 

the GDUFA program. However, it has a development piece in it to 

recognize the emerging nature of this industry and that development piece, they pay fees and they get a series of development 

meetings so we can give them extensive advice on how to develop 

their products. And then when the final application comes in, there 

are timelines and goals associated with those timelines. So FDA, 

in exchange for having this user fee program, will be expected to 

meet those timeliness goals on review. 

Mr. PITTS. All right, thank you. 

My time has expired. I will recognize the ranking member of the 

subcommittee, Mr. Pallone, for 5 minutes for questions. 

Mr. PALLONE. Thank you, Mr. Chairman. 

Dr. Woodcock, we have heard these statistics about the drug production overseas that 40 percent of drugs and 80 percent of the active pharmaceutical ingredients come from abroad. That is my concern. As you know, Mr. Dingell, Ms. DeGette, myself, and Mr. Waxman have introduced the Drug Safety Enhancement Act that gives 

the FDA authorities and resource to address the problem of these 

ingredients and drugs from overseas. You mention in your testimony the challenge represented by foreign inspections, but my understanding is that current law requires FDA to inspect domestic 

drug facilities every 2 years but is silent with respect to foreign facilities. That seems to be an uneven playing field obviously, and I 

know resources are always going to be an issue, but I still think 

that the bifurcation doesn’t make sense. 

You know, so assuming you have unlimited resources, which of 

course is absurd, but assuming you have unlimited resources, do 

you agree that inspecting foreign and domestic facilities at the 

same frequency would make sense? 

Ms. WOODCOCK. Yes, I believe that what we need to do is a riskbased approach, and some facilities in the United States and some 

facilities overseas may need very close FDA supervision because of 

the problems they are having. Other facilities may be on a different 

schedule based on the risks that they pose but I don’t believe—— 

Mr. PALLONE. They are not based on whether they are domestic 

versus overseas? 

Ms. WOODCOCK. That is exactly right. 

Mr. PALLONE. Now, would you need new authority to permit you 

to do that, which, you know, to make sure that it is not different 

foreign versus domestic and to do the risk assessment? Would you 

need new authority for that? 

Ms. WOODCOCK. We primarily lack the resources to perform this 

inspectional program and one of the principal goals of the new GeVerDate Aug 31 2005 15:22 Jul 01, 2013 Jkt 037690 PO 00000 Frm 00044 Fmt 6633 Sfmt 6633 F:\112-11~1\112-11~1 WAYNE
41 

neric Drug User Fee Program is to level that playing field of inspection. And one of the proposals there is that we conduct riskbased surveillance inspections around the world and achieve parity 

or a level playing field on—— 

Mr. PALLONE. So it is more a question of the resources than new 

authority then? 

Ms. WOODCOCK. Yes, I believe that. Of course the law sort of 

sends a message that you are supposed to do the domestic every 

2 years and is silent on the foreign, but from what we are doing, 

we are trying to ensure the quality of drugs for our patients, and 

where the drug is produced should not be taken into account. 

Mr. PALLONE. Thank you. Now, would it be helpful to have additional resources to conduct more foreign inspections of brand facilities? I mean this isn’t confined to just generic, correct? 

Ms. WOODCOCK. We need to inspect all facilities producing drugs 

of any kind, including over-the-counter drugs and so on at the appropriate intensity for the risk that they bear. 

Mr. PALLONE. OK. Now, what about the responsibility of U.S. 

companies? You know, for example, you know, we have the heparin 

situation illustrated the importance of raising expectations of pharmaceutical companies to be familiar with their own suppliers, you 

know, coming from abroad. Do you think that U.S. companies 

should have to be able to ensure that the products they sell meet 

U.S. requirements even though those ingredients are coming from 

abroad? Are there any new authorities that would help the FDA in 

making sure that companies meet those responsibilities? 

Ms. WOODCOCK. Yes. As we have said repeatedly, we feel that 

our authorities at the border in particular are somewhat limited 

and there are additional authorities that have been discussed that 

would aid in keeping foreign products that don’t meet our standards out of this country. 

Mr. PALLONE. All right, let me just ask—I have a minute left— 

with regard to BsUFA and the BsUFA negotiations. Both you and 

the FDA Commissioner Hamburg gave assurances to the generic 

industry that the Biosimilar User Fee Program would receive 20 

million in funding. Now, I understand we are talking about, you 

know, money that would be shifted around within the Agency. 

What steps are being taken to make sure that that happens? 

Ms. WOODCOCK. Well, we have made a commitment. Dr. Mullin, 

who is here, we have been just discussing our time reporting and 

other tracking mechanisms. We keep very close track of how we 

spend both our BA money and our user fee money. 

Mr. PALLONE. But is this something that you are going to move 

around within the Agency, is it going to be in the budget, or is it 

a new $20 million that we have to come up with? I assumed it was 

within the Agency. That is what I am trying to find out. 

Ms. WOODCOCK. Of course we would appreciate, you know, having resources to conduct this program. However, we do have $1.8 

million right now in appropriated dollars for the biosimilars program and we would make up the money. If we don’t receive appropriated money, we would use BA funds that are existing within the 

Center for Drugs. 

Mr. PALLONE. All right. Thank you so much. 

42 

Mr. PITTS. The Chair thanks the gentleman and recognizes the 

gentleman from Pennsylvania, Dr. Murphy, for 5 minutes for questions. 

Mr. MURPHY. Thank you, Mr. Chairman, and thank you, doctor, 

for being here, appreciate your candid and informed comments on 

this. 

Let me start off by asking—I want to make sure I understand 

FDA rules with regard to these medications. The Federal Food and 

Drug Cosmetic Act assumes that a drug is adulterated unless the 

methods used for manufacture of drug products conform to good 

manufacturing practice. Am I right that it works under that assumption? 

Ms. WOODCOCK. That is correct. 

Mr. MURPHY. Can you explain the role and importance of these 

good manufacturing practices in terms of helping to ensure the 

safety and integrity of FDA-approved products? Can you explain 

how that works? 

Ms. WOODCOCK. Certainly. When drugs are produced in mass 

production in a factory, all right, there are many procedures. The 

modern term would be quality management, oK, to make sure that 

each time the drug is produced adequately and of adequate quality 

and that no errors have occurred. And it would be amazing if you 

go in a factory as we do all the time to see how many times something can go wrong. And so you must check and you must observe 

and you must test and you must improve and do all that. And 

those are embodied in regulations called the current good manufacturing practices regulations. And we also have international agreements on a lot of this, how it should look, that we have worked out 

through the International Conference on Harmonization. 

Mr. MURPHY. So the assumption is unless you have actually seen 

what they do and given your seal of approval to that, we are assuming it has not met that standard. Is that a fair statement? 

Ms. WOODCOCK. Well, we have set standards for what the quality 

management should be like, and also we review the drug, make 

sure the testing and so forth will control the drug adequately, but 

until we go in there, we don’t know if they are actually following 

those procedures. And they may follow them at one time and then 

later slip from that and get into problems and not produce a quality drug. 

Mr. MURPHY. Hence the importance of inspecting plants on a regular or a tighter basis and you sometimes do a surprise visit and 

they occur in a short period and show up again. 

I know we have had hearings in the past where there is no such 

thing as a surprise visit to a foreign country and they know you 

are coming—— 

Ms. WOODCOCK. That is correct. 

Mr. MURPHY [continuing]. And when you are going. So do these 

practices differ in the United States versus other countries then in 

terms of how medications are manufactured? 

Ms. WOODCOCK. You mean by the manufacturers themselves? 

Mr. MURPHY. Yes, by the manufacturers themselves. 

Ms. WOODCOCK. Well, there is a wide range of capacity and 

functionality in different countries, all right. In the United States 

there has been a long history of FDA inspections and underVerDate Aug 31 2005 15:22 Jul 01, 2013 Jkt 037690 PO 00000 Frm 00046 Fmt 6633 Sfmt 6633 F:\112-11~1\112-11~1 WAYNE
43 

standing of what the standards are. Nevertheless, I will point out 

over the past year or so we have had multiple recalls and some of 

the drug shortage problems are due to U.S. manufacturers who are 

not being able to manufacture their product. So it requires vigilance and continued attention to be able to manufacture these 

products right. That said, in other parts of the world, it is much 

more uneven. They may have extremely modern factories and be 

right on top of their game, and there may be many factories that 

may be substandard in many areas. 

Mr. MURPHY. So given all that, what is preventing the FDA from 

updating good manufacturing practices right now that require companies to verify their suppliers are complying? And associated with 

that, do you think the bills before us here sufficiently address your 

concerns, and either way, will you be able to offer the recommendations or cleaning up these bills if you feel that is necessary? 

Ms. WOODCOCK. Yes, well, we would be happy to work with you. 

I believe that the user fee bills are not about policy or regulation. 

They are about providing extra resources to perform activities. The 

regulations or law around drug safety and quality have not been 

really modified for a long time and are probably not totally congruent with modern understanding. So there has been discussion 

by this committee and others about are there additional standards 

that could be put into place that bolster and bring these up to modern understanding of what is needed. 

For example, I am always surprised and I am sure most Americans would be to hear that we can’t really—there is a presumption 

that anything that is being imported to our country, a drug, is OK. 

And we have to prove that there is something wrong with it rather 

than the opposite. Most other countries that is not the case. 

Mr. MURPHY. I want to make sure I hear what you are saying. 

You are saying you have to prove something is wrong with the imported drug? So what you told me before is with companies here 

there, there is an assumption that it is adulterated unless they can 

prove they have gone through inspection. But you are saying when 

a foreign drug comes over, the assumption is everything is fine unless you prove otherwise? 

Ms. WOODCOCK. Yes, that—— 

Mr. MURPHY. It is two different standards. 

Ms. WOODCOCK. Now, I am not a lawyer, all right, but that is 

how I understand the legal framework is set up. So we have to look 

at that and prove some way that it is not adequate for entry into 

the United States. 

Mr. MURPHY. I appreciate it. I think that would come as a shock 

to most Americans to understand that that is how things are going. 

Thank you so much. 

Ms. WOODCOCK. And I would tell you that is not the case in 

other countries where they can hold things at the border if they 

even feel that they may not meet the standards. 

Mr. MURPHY. Thank you. 

I yield back. Thank you, Mr. Chairman. 

Mr. PITTS. The Chair thanks the gentleman and recognizes the 

gentleman from Michigan, Mr. Dingell, for 5 minutes for questions. 

Mr. DINGELL. Mr. Chairman, I thank you for your courtesy. 

44 

Welcome, Dr. Woodcock. I am sponsor of H.R. 1483, which I hope 

this committee will give some strong consideration to. My questions 

today are going to require only yes or no answers due to the fact 

that I have so many. Starting, over 70 percent of prescriptions 

filled today are for generic drugs. Considering the fact that 40 percent of all drugs come from overseas and 80 percent of pharmaceutical ingredients are also from overseas, it is critical that we be 

able to protect American consumers by ensuring the safety of the 

drug supply chain. In order to do this, FDA must clearly have the 

proper authorities in place. 

Dr. Woodcock, yes or no if you please. Does the Federal Food and 

Drug Cosmetic Act require FDA to complete GMP inspections of domestic drug manufacturers every 2 years? Yes or no? 

Ms. WOODCOCK. Yes. 

Mr. DINGELL. Does the Federal Food Drug and Cosmetic Act require FDA to complete GMP inspections of foreign drug manufacturers on a comparable basis? Yes or no? 

Ms. WOODCOCK. No. 

Mr. DINGELL. Would you have the resources to do it if they did? 

Ms. WOODCOCK. Not currently. 

Mr. DINGELL. Is it accurate to say that current law is silent on 

the frequency with which FDA must inspect foreign facilities? Yes 

or no? 

Ms. WOODCOCK. Yes. 

Mr. DINGELL. Does FDA generally meet the biennial inspection 

requirement for domestic drug facilities currently? Yes or no? 

Ms. WOODCOCK. Yes. 

Mr. DINGELL. Is it true that FDA does not inspect foreign facilities at the same frequency as domestic facilities? Yes or no? 

Ms. WOODCOCK. Yes. 

Mr. DINGELL. Is it true that a lack of financial and personnel resources are contributing to factors not for inspecting foreign drug 

facilities more frequently? Yes or no? 

Ms. WOODCOCK. I am sorry. Could you repeat that a little more 

slowly? 

Mr. DINGELL. I will give it again. Is it true that a lack of financial and personnel resources are contributing factors to not inspecting foreign drug facilities more frequently? Yes or no? 

Ms. WOODCOCK. Yes. 

Mr. DINGELL. Do you agree that conducting inspections of domestic and foreign drug facilities at comparable frequency is as important to ensuring a level playing field for drug manufacturers? Yes 

or no? 

Ms. WOODCOCK. Yes. 

Mr. DINGELL. Sometime the playing field gets slanted against 

United States manufacturers because of our inability to inspect foreign manufacturers and suppliers of different kinds, isn’t that so? 

Ms. WOODCOCK. Yes. 

Mr. DINGELL. Can our goal be achieved by using risk-based inspection systems? Yes or no? 

Ms. WOODCOCK. Yes. 

Mr. DINGELL. Yes or no? 

Ms. WOODCOCK. Yes. 

45 

Mr. DINGELL. Do you agree that a risk-based inspection schedule 

for domestic and foreign drug facilities based, for example, on the 

compliance history, time since last inspection, volume and type of 

product would allow FDA to better target their resources? Yes or 

no? 

Ms. WOODCOCK. Yes. 

Mr. DINGELL. Do you agree that conducting comparable inspections of domestic and foreign facilities is important to public 

health? Yes or no? 

Ms. WOODCOCK. Yes. 

Mr. DINGELL. Do you agree that FDA needs adequate resources, 

both financial and personnel, to conduct comparable inspections of 

domestic and foreign drug manufacturers? Yes or no? 

Ms. WOODCOCK. Yes. 

Mr. DINGELL. Does the Prescription Drug User Fee Agreement 

currently provide resources for preapproval inspection? Yes or no? 

Ms. WOODCOCK. Yes. 

Mr. DINGELL. Does the Prescription Drug User Fee Agreement 

currently provide resources for any inspections beyond preapproval 

inspection? Yes or no? 

Ms. WOODCOCK. No. 

Mr. DINGELL. As you know, the Generic Drug User Fee Agreement provides additional resources for FDA to conduct GMP inspections of both domestic and foreign drug facilities. Now, does 

FDA need similar resources for inspections of facilities manufacturing innovator drugs? Yes or no? 

Ms. WOODCOCK. Yes, we need similar resources. 

Mr. DINGELL. Now, one obstacle for ensuring comparable inspections of domestic and foreign facilities is a lack of complete and accurate information that FDA has on generic drug manufacturing 

establishments. Will the Generic Drug User Fee Act help FDA to 

identify all domestic and foreign drug and active pharmaceutical 

ingredient facilities involved in the making of generic drugs 

through registration? Yes or no? 

Ms. WOODCOCK. Yes, as proposed. 

Mr. DINGELL. And I am assuming that that is a very badly needed authority at Food and Drug. Is that yes or no? 

Ms. WOODCOCK. Absolutely. 

Mr. DINGELL. Mr. Chairman, I have completed my business and 

with 9 seconds to spare. I yield back the balance of my time. 

Mr. BURGESS. [Presiding] The Chair thanks the gentleman for 

his gracious—— 

Mr. DINGELL. Mr. Chairman, I ask unanimous consent that the 

record will include an analysis of H.R. 1483, the Drug Safety Enforcement Act of 2011, of which I am a sponsor. Thank you, Mr. 

Chairman. 

Mr. BURGESS. Without objection, so ordered. 

[The information follows:] 

46 


81517.029

H.R. 1483, the Drug Safety Enhancement Act of2011 

Forty percent of pharmaceuticals and 80 percent of active pharmaceutical ingredients for the US 

market are now produced in foreign countries, oHen China and India. Such facilities often operate 

under lower standards than US manufacturers, creating safcty risks and an uneven playing field. 

The Drug Safety and Enhancement Act seeks to hold manufacturers responsible for the safety of 

pharmaceuticals manufactured in foreign countries for the US market and ensuring that the FDA 

provides oversight of foreign manufacturers equivalent to that exercised on domestic companies. 

This bill will: 

Require manufacturers to implement improved quality and safety standards, including 

stronger supply chain management 

Require manufacturers to notify FDA of counterfeits or safety concerns and to list 

country of origin of drugs and drug components 

• Strengthen oversight of importers and customs brokers 

• Give FDA needed authorities including mandatory recall authority, subpoena power, 

and clear extraterritorial jurisdiction. 

Strengthen criminal and civil penalties to better deter crime 

Increase FDA inspections of foreign manufacturing to put it on par with domestic 

facilities 

Create new funding mechanisms for FHA inspectional activities, so globalization 

doesn't create burden on US taxpayers 

Require all mallufacturers to implement basic quality and safety standards, including stronger 

supply chain management 

Companies selling drugs in the US market must implement quality system to ensure the safety 

and integrity of their products, including drug ingredients manufactured by a contractor or 

supplier. Quality systems should include management responsibilities, quality responsibilities, 

risk management, and supply chain management. 

Companies must be able to document their supply chains, and demonstrate quality control 

Companies must perform on~site audits of suppliers before beginning to purchase product from 

that supplier, and must implement quality agreements with suppliers 

Require manufacturers to notify FDA of concerns about counterfeits or manufacturing defects 

that put Americans at risk, and to list country of origin of drugs and drug components 

Companies must notify the FDA when use of or exposure to drug may result in illness or injury 

to humans or animals; significant loss or theft: reasonable probability that a drug has been or is 

being counterfeited; repeated failures by a component manufacturer to ensure compliance with 

quality systems: any incident causing a drug to be mistaken for, or its labeling applied to, 

another drug; and any contamination or significant chemical or physical change or deterioration 

after distribution, or any failure of a distributed lot to meet established specifications, 
47 


81517.030

Require manufacturers of finished drug products to list on their websitcs the countries of origin 

f()f their finished drugs as and the aClive ingredients in those drugs, 

Strengthen oversight of importers and customs brokers 

Require importers and ClIstoms brokers to register with the FDA, and permit FDA to r~quire 

additional documentation at importation. Create an importer registration fce to support 

oversight activities 

Require the Secretary to create good importer practice regulations 

Give FDA needed authorities including mandatory recall authority, subpoena pmycr, and clear 

extraterritorial jurisdiction. 

Give FDA the power to order a drug recall. allowing for an industry appeals process (as exists 

for rood and medica! devices) 

Give FDA power of subpoena lor documents and witnesses. as with other regulator)-' agencies 

Allow FDA to destroy imported drugs at the border valued less than $2.000 that pose a hcahh 

threat (so they don't get turned away. only to come back in through another port) 

Create protections to allow FDA to exchange information with other regulators and receive 

information from whistleblowers 

Allt)\\' the FDA to exchange confidential information in a protected manner with other agencies 

and foreign governments. and to the public \vhere warranted, 

Create protections for industry \vhistleblowers that wish to alert FDA to violations of tile 

FFDCA and the Public Health Service Act. 

Strengthen penalties to better deter crime and noncompliance 

Increase criminal penalties for know"ing violations of the Federal Food, Drug, and Cosmetic 

Act to up to 10 years in prison and fines in accordance with title 18 of US Code, Knowing 

violations should include adulteration, misbranding. refusal of inspection. and counterfeiting 

Create civil penalties of S500.000 per violation per day for drug-related violations (lfthe 

FFDCA. Cap penalties at $10.000.000 for a single proceeding that envers a number of 

violations 

Add asset I'Jrfeiture as a punitive measure Ii'r drug-related violations of the FFDCA 

Increase FDA inspections of foreign manufacturing sites and improve oversight systems 

Require that all plants making finished drugs or active ingredients be inspected once every two 

years (or every f()lJr years if appropriate) - a standard more !ike that llsed inside the tJS 

Make delay or refusal of an inspection a prohibited act 

To facilitate tracking and oversight. require submission of unique ID numbers by 

manufacturing establishments, importers, and clistoms brokers. 

Create a dedicated ftJreign inspectorate within FDA 

Create new industry registration fees to support FDA inspcctional activities 

Fees \vi!! he set at the amount necessary to support increased drug safety activities and ensure 

that the added costs of manufacturing moving to low·cost countries does not create extra 

burden for taxpayers. 
48 

Mr. BURGESS. I now recognize myself for 5 minutes for questions. 

And again, Dr. Woodcock, welcome to our humble little hearing 

room here at the Energy and Commerce Committee. We welcome 

you back. Let me ask you a couple of questions that deal with the 

issue of conflicts and the exclusion of people from the FDA advisory 

panels because of conflicts of interest. Have there been instances 

where experts have been disqualified from serving on advisory committees because they served as an investigator for the product 

under consideration? 

Ms. WOODCOCK. Yes. 

Mr. BURGESS. Have there ever been instances where someone is 

disqualified because they have been in a clinical trial as an investigator for an unrelated product? 

Ms. WOODCOCK. Yes. 

Mr. BURGESS. So I think I have an accurate quote from you 

where you say it is difficult finding highly experienced people who 

do not have conflicts? 

Ms. WOODCOCK. That is correct. 

Mr. BURGESS. And we have delays in the panels because of this 

policy. And in fact your commissioner, Margaret Hamburg, Dr. 

Hamburg has said some meetings require expertise that is limited 

to a handful of experts who can often have conflicts of interest. So 

tell us what the real world consequences of this are. Most of us 

have never been in an FDA advisory panel meeting so what are the 

implications of having people that have to exclude themselves or be 

excluded because they either have knowledge of the product under 

consideration or they have been involved in an unrelated investigation? 

Ms. WOODCOCK. We are asking the committee for advice on very 

complicated scientific questions. Our scientists are very well versed 

on the topic and will have gone over all the information in the application and any related literature. So they really want people at 

the table who can help them grapple with these complex questions 

and they would really like experts, trialists or disease experts who 

can shed additional light on the problem they are trying to deal 

with. 

Mr. BURGESS. Just as someone from the outside, is the converse 

of that universe also true that the people who are involved may not 

have the knowledge set or skills to make some of the decisions they 

are required to make and in some cases maybe even lack the basic 

fund of knowledge to deal with the clinical question at hand? 

Ms. WOODCOCK. Yes. 

Mr. BURGESS. Thank you for that succinct and concise answer. 

Let me ask you this since you have given me the benefit of some 

time. I have been in a ping pong match for the past couple of 

weeks, couple of months, since the first of January when the EPA 

banned the sale of over-the-counter asthma inhalers. I am an asthma patient myself and I will just tell you all across this country 

people are going to be going to the CVS pharmacy at midnight because they have had an asthma attack and they are out of all of 

their other options and they are used to being able to buy for $16 

Primatene inhaler and now they cannot. And we as Members of 

Congress are going to start hearing about that. It is not going to 

happen all at once but it is slowly going to start rolling out into 

49 

the American landscape such that by the time of the August recess, 

I suspect there will be a number of people who show up in each 

Member’s town halls complaining about this policy. 

Now, we have heard from the EPA and the EPA says it is your 

fault, and Commissioner Hamburg said no, it is the EPA. Can you 

help us? Primatene has been on the market for a long time and the 

only thing that has changed is the propellant, CFC changed to 

HFA. I would argue that HFA is not as efficient a dispersant at 

CFC but that being aside, there really is no difference in the active 

pharmaceutical ingredient in the over-the-counter inhaler 

Primatene, but for whatever reason, it is held up somewhere. Can 

you help us get that done? 

Ms. WOODCOCK. The switching of all the asthma inhalers was 

triggered by the Montreal Protocol that was agreed to by the 

United States to eliminate CFCs to help with the problem of the 

ozone layer. And FDA has gone through a very long process to inform the manufacturers, work with the community, prepare them, 

and then execute the switches. For the prescription albuterol inhalers, which are really a preferred standard of care, as you know, for 

asthma—— 

Mr. BURGESS. Yes, but I always don’t plan ahead. 

Ms. WOODCOCK. Right. 

Mr. BURGESS. You know, I am the world’s worst asthma patient 

and I will forget—— 

Ms. WOODCOCK. Right. 

Mr. BURGESS [continuing]. And then something happens that 

triggers an attack at two o’clock in the morning and now the only 

option is to go to the emergency room and get a treatment and that 

is $1,500. 

Ms. WOODCOCK. I understand. 

Mr. BURGESS. It was $16, $16.00 before, and this is what we 

have visited upon people. I do want to enlist your aid in getting 

this problem solved. I have asked the EPA to allow the sale of existing Primatene inhalers with CFC until those markets are exhausted, but we really do have to—that is why we have an approval rating of 8 percent because people look at this and say well, 

this is a simple problem. The stuff was for sale before, it has got 

a different propellant, sell it again. Or did you really think that 

asthma patients were blowing a hole in the ozone layer. I don’t 

think so and you will never convince me otherwise. But my time 

has expired and I am going to yield to—who am I going to yield 

to? No one on your side. I will yield to Dr. Gingrey. Oh, I beg your 

pardon. OK, Dr. Gingrey, you are recognized for 5 minutes for 

questions, sir. 

Ms. DEGETTE. I just want to welcome Dr. Woodcock. 

Ms. WOODCOCK. Thank you. 

Ms. DEGETTE. Thanks. 

Mr. GINGREY. Mr. Chairman, thank you. 

Dr. Woodcock, much has been made over the past months and 

years about drug and medical production moving overseas to countries like China and many reasons for this migration have been put 

forward. In a study that ran in Health Affairs—this is November 

2011—entitled ‘‘Evolving Brand Name and Generic Drug Competition’’ may warrant a revision of the Hatch-Waxman Act. The auVerDate Aug 31 2005 15:22 Jul 01, 2013 Jkt 037690 PO 00000 Frm 00053 Fmt 6633 Sfmt 6633 F:\112-11~1\112-11~1 WAYNE
50 

thors state that ‘‘the Hatch-Waxman Act in 1984 raises questions 

about whether the Act’s intended balance of incentives for cost savings and continued innovation has been achieved. Generic drug 

usage and challenges to brand name drugs’ patents have increased 

markedly, resulting in greatly increased cost savings but also potentially reduced incentives for innovators, new drug application, 

brand name. Congress should review whether Hatch-Waxman is 

achieving its intended purpose of balancing incentives of generics 

and innovation. It also should consider whether the law should be 

amended so that some of its provisions are brought more in line 

with recently enacted legislation governing approval of so-called 

biosimilars.’’ 

Dr. Woodcock, do you believe that Congress should review the 

current Hatch-Waxman paradigm to ensure that the intended balance of incentives for cost savings and innovation continues to have 

been achieved? 

Ms. WOODCOCK. I would say that deciding on those tradeoffs between innovation and cost saving for the American public is one of 

the jobs of Congress, and FDA will execute the provisions as they 

are laid out by the Congress. It is clear that there have been tremendous cost savings as many of the Members have indicated from 

the generics program. We also know that the innovator industry is 

struggling right now, and that again is multi-factorial and would 

have to be the subject of a different discussion. But the innovator 

industry overall is in a crisis. 

Despite that, they have put forth many innovative drugs which 

we have been able to approve over the past year. We approved 30 

new entities last year, many of them very innovative drugs. So 

whether that is the correct balance I think is a very complicated 

economic issue that I am not able to opine on, and it involves many 

societal tradeoffs to decide—— 

Mr. GINGREY. Well, I thank you and I know you can’t state exactly, but your answer certainly suggests that you have some concerns that maybe the balance that we are trying to achieve is not 

there. Is that a fair statement or—— 

Ms. WOODCOCK. I think many of us are concerned about the 

health of the innovator industry which is what brings new products 

and treatments and cures to people who lack therapies right now. 

However, whether or not Hatch-Waxman is the way to deal with 

that is beyond my purview. 

Mr. GINGREY. Yes. Thank you, Dr. Woodcock. I want to commend 

the FDA on its concern for U.S. patients in light of our current 

drug shortage crisis. As you know, this is an issue that is important to this committee and this Congress and I want to commend 

my colleague, Representative DeGette, for her leadership in this 

area. As a medical provider, I believe that proper notification can 

play a critical role in ensuring patients get the best care possible, 

especially those with life-threatening conditions such as cancer. In 

your testimony, you state that ‘‘although many of the root causes 

of drug shortages are beyond our control, we are committed to addressing this important issue and look forward to working with the 

subcommittee on this issue. Tell me, Dr. Woodcock, what are the 

root causes of drug shortages and which ones are beyond our control? 

51 

Ms. WOODCOCK. Well, I would refer you to the excellent document that was written at HHS, the Assistant Secretary for Planning and Evaluation, I believe, at HHS, that discussed this because 

many of them are economic issues. What we saw with the sterile 

injectables, which are the drugs that are in great shortage right 

now, was a surge in capacity over the past 10 years but with a very 

limited number of manufacturers, most of whom are in the United 

States. And with that capacity surge, they took on a large inventory of sterile injectables that they were producing, each of these 

manufacturers, and then when they developed problems in their 

manufacturing ability where they were getting particulates or 

endotoxin or other potential bacterial contamination, so forth, 

which I will add these things are hard to avoid and they take a 

lot of diligence to keep sterile manufacturing, you know, at a high 

quality level. But when they encountered these problems, then we 

lapsed into a shortage situation with a few alternatives or maybe 

no alternatives. 

Mr. GINGREY. I see my time has expired and as I yield back, 

would you be sure and get that report to me? I would appreciate 

it. 

Ms. WOODCOCK. Happy to do so. 

Mr. GINGREY. Thank you. Mr. Chairman, I yield back. 

Mr. BURGESS. I thank the gentleman for yielding. The Chair now 

recognizes Mr. Towns of New York for 5 minutes for the purpose 

of questioning the witness. 

Mr. TOWNS. Thank you very much, Mr. Chairman. Thank you for 

having this hearing. 

Dr. Woodcock, I am concerned about the large backlog of generic 

drug applications. What can be done about that? 

Ms. WOODCOCK. Well, I am concerned about it, too, and the proposal that we have given to Congress for the Generic Drug User 

Fee Program has a specific provision to eliminate the backlog over 

the first course of that program. 

Mr. TOWNS. Right. Is there cooperation across the board, you 

know, in terms of the pharmaceutical companies and all that? Everybody is on board with this agreement? 

Ms. WOODCOCK. Yes, I think it is in everyone’s best interest to 

eliminate this backlog and to have a predictable and efficient generic drug process. 

Mr. TOWNS. Right. Once this goes into place, what will the turnaround time be approximately? 

Ms. WOODCOCK. The goal time for any generic drug application 

is a first review, a complete response within 10 months of the submission of the application. 

Mr. TOWNS. All right. 

Ms. WOODCOCK. So the goal would be every generic drug applicant would get an answer back in 10 months and we would then 

look at how many of those could get right on the market or what 

were the problems that would keep them going into another cycle. 

Mr. TOWNS. Right. Mr. Chairman, I am going to do something we 

don’t do around here. I am going to yield back. 

Mr. BURGESS. The Chair recognizes the gentleman’s generosity 

and recognizes the gentleman from Ohio, Mr. Latta, for 5 minutes 

for questions. 

52 

Mr. LATTA. I thank the chairman. 

And Dr. Woodcock, thanks very much for being with us today. I 

would like to kind of go back to what Dr. Gingrey was talking 

about at the very end in regards to drug shortages, and I have 

been working with several other members in the past few months 

on this issue. And first of all, you said in your opening statement 

that, especially on drug shortages, that we had a perfect storm. 

Could you describe what that perfect storm is or was? 

Ms. WOODCOCK. Well, it was the enhanced utilization of the older 

sterile injectable drugs, OK, so the demand went up for them. At 

the same time, new sterile injectable drugs went generic, and so 

then firms took those on as well so then the demand on their 

lines—they have a limited number of manufacturing lines that can 

make sterile injectables, all right, because it is very hard to do 

that. So the demand went up, both for the existing drugs and the 

new generic drugs that were sterile injectables. At the same time, 

it takes a while to expand the capacity and bring up new facilities. 

So that did not happen. 

And then manufacturing problems occurred within many of those 

lines, thus making them have to perhaps shut down the line and 

precipitate a sudden shortage. The other manufacturers who might 

take up the slack were also having capacity problems of their own 

and/or having manufacturing problems. So all these factors came 

together to create really an unprecedented amount of shortages 

that we are trying to deal with and shortages of drugs that Americans cannot do without. 

Mr. LATTA. Let me ask, then, over the past year, what have you 

all done to alleviate that problem? 

Ms. WOODCOCK. In 2011, 175 drug shortages were alleviated by 

our actions. Now, 86 of those I think were from one firm where we 

were able to do interventions, but we have multiple interventions 

as I describe but we can alleviate those. Nevertheless, there are 

several hundred shortages that are ongoing. 

Mr. LATTA. Are there additional items that you can do then? 

Ms. WOODCOCK. Pardon me? 

Mr. LATTA. Are there additional items that you could work on to 

help on that issue? 

Ms. WOODCOCK. Yes. Well, since the executive order by the President that asked firms to notify us of any kind of shortage and we 

have also put in a database that we are tracking these very carefully. We have added staff to the drug shortage program that we 

have at FDA. But we do feel that if there were legislation that requested companies or required companies to notify us, that would 

help us in perhaps averting more shortages. 

Mr. LATTA. And also is there a disease area where there are 

more significant drug shortages than others? 

Ms. WOODCOCK. Right now, we are hearing from the cancer community and that is because many of the cancer drugs are 

injectables. But the injectable drug shortage affects many other 

kinds of disease areas and over the years, historically, you couldn’t 

predict where the shortages would arise. They have been in all 

sorts of disease areas. 

Mr. LATTA. And also, will the generic drug user fee help with the 

drug shortage issue do you believe? 

53 

Ms. WOODCOCK. I believe that having a robust industry that has 

predictable timelines for its applications and can get applications 

through and also having an inspectional force that we can get out 

there quickly and do the inspections in the appropriate time will 

help with shortages because one of the things we need for shortages is we need more than one manufacturer that is able to make 

that drug. So if something happens at one plant, then there is 

somebody else who can ramp up production. 

Mr. LATTA. OK. And some of the committee hearings and the 

press have suggested the key characteristic of the drugs in shortage older physician-administered drugs underscore failure in the 

older generic market and that incentives in this market are critical 

in solving the crisis. Do you agree with that assessment? 

Ms. WOODCOCK. I am sorry. Could you repeat that? 

Mr. LATTA. Yes. There has been in some of the committee hearings and also out in the press have suggested that the key characteristics of drugs in shortage older physician-administered drugs 

underscore a failure in the older generic market and that incentives in this market are critical to solving that crisis. And do you 

agree with that assessment? 

Ms. WOODCOCK. I am not qualified to make a judgment on that 

being a physician and not an economist. The HHS report felt that 

it was a multiple number of factors and it wasn’t simply an incentives problem. Theresa, do you have—— 

Ms. MULLIN. Yes, I think that that report would probably have 

the best description of all the kinds of factors. A number of them 

are economic and factors that are not within our ability to control 

and there may be other ways to address those but we have limited 

ability to address those factors. 

Mr. LATTA. OK. 

Ms. MULLIN. No ability in some cases. 

Mr. LATTA. Thank you very much. 

Mr. Chairman, I see my time has expired and I yield back. 

Mr. PITTS. The Chair thanks the gentleman and recognizes the 

gentlelady from California, Mrs. Capps, for 5 minutes for questions. 

Mrs. CAPPS. Thank you, Chairman, for recognizing me. 

And Dr. Woodcock, thank you for your testimony today. I am actually going to just make a statement to add onto the list of reasons why the topic at hand, the drug shortages, is a very real issue. 

I would ask a question following but it has already been asked and 

you supplied the answer that I know you would answer to me. But 

it is such a prevalent problem plaguing manufacturers, hospitals, 

doctors, and patients alike. So this is a story of one of my constituents who reached out to our office. She is a pharmacy buyer at a 

nonprofit organization in my district which works with cancer patients. So right now, her organization is not able to purchase lifesaving critical care drugs, and for some of them, they have been 

waiting more than 4 months. I know this isn’t a new story to you 

either, but it is one more story. And the only route available for 

this organization because they are nonprofit is to get these drugs 

from the black market, who is essentially auctioning them off, often 

charging three times more than what they ought to cost. As a nonprofit, you can imagine they never are successful in their bids, and 

54 

instead, the treatments for their patients they are representing are 

delayed. This is hard to believe in this country at this moment. 

So let me turn to something a little different—— 

Ms. WOODCOCK. May I say something? 

Mrs. CAPPS. Of course, please. 

Ms. WOODCOCK. We are accepting reports from outside parties 

where they have encountered excessive pricing behavior and other 

behaviors that we can refer to the Department of Justice. 

Mrs. CAPPS. I appreciate that and actually will take that back to 

this constituent and to others who will let our district offices know 

when they hear these stories there is a path that can be followed. 

You don’t just have to say I am so sorry. We can say, well, there 

is a path and there could be some recompense that is made in that 

area. 

Another mechanism for helping to address drug shortages is notifying the FDA of impending shortages. I know that in the next 

panel, you are going to hear testimony discussing the Accelerated 

Recovery Initiative that the industry is putting forward to help address and prevent shortage, anticipating that might come up in 

their discussion. What do you think of this proposal, and in particular, do you think it should be implemented, in what ways would 

it obviate the need for legislation, and how is this going to help us 

so we can focus on things that would make a difference for you and 

that are going to come up with a solution? 

Ms. WOODCOCK. Yes, we haven’t had the opportunity to examine 

the proposal in detail and we look forward to working with the industry on the proposal as well as with Congress. 

Mrs. CAPPS. OK. So you are going to be listening carefully to the 

next panel as well. 

And then finally, with the rest of my time, we have heard a lot 

of discussion today about the increasingly globalized drug supply 

chain and the challenges it poses. I want to ask you about a couple 

of problems I have heard about in particular. First, I understand 

the FDA has had problems conducting or completing inspections of 

facilities overseas or abroad. Would you be willing to describe some 

of these problems such as if a foreign manufacturer doesn’t allow 

you in to inspect its plant or unduly delays you for an inspection, 

what recourse do you now have and what additional authority 

would be helpful? 

Ms. WOODCOCK. Mr. Beckerman will address that. 

Mrs. CAPPS. Yes. 

Mr. BECKERMAN. Sure. Currently, FDA has to show that a drug 

appears to be adulterated or misbranded to keep it out of the country, and if FDA inspectors are delayed, limited, or denied in the inspection, there is no immediate recourse that the Agency can take. 

And so having an explicit authority to allow us to exclude a drug 

if our inspectors have been impeded would be extremely helpful. 

Mrs. CAPPS. So these companies know very well that if they 

delay or deny that nothing is going to happen anyway? 

Mr. BECKERMAN. There are very different incentives depending 

on the type of inspections being done. Firms have an obvious incentive to let FDA investigators in for a preapproval inspection because that is a condition precedent to getting their drug on the 

55 

market. Once a drug is on the market, that incentive no longer exists and it would be helpful for FDA to have a tool. 

Mrs. CAPPS. So having a tool would be useful to you to have? 

Mr. BECKERMAN. That is right. 

Mrs. CAPPS. I also understand that information sharing with foreign regulatory partners has posed some challenges. Could you describe a couple of these challenges—there are a few more seconds 

left—and also the role of importers in the supply chain that has become a more prominent one in recent years? 

Mr. BECKERMAN. On the information sharing question, in particular the Food, Drug, and Cosmetic Act has a provision that prevents FDA from sharing what is called trade secret information, 

and this is not typically the sort of thing that we think about as, 

you know, the secret formula for Coke, but it is information related 

to the manufacturing process. It is critical to be able to share that 

information with regulatory partners if we want to take advantage 

of their regulatory reach and be as efficient as possible. So addressing the inability to share that sort of information would be very 

helpful. 

Mrs. CAPPS. Would that require legislation? 

Mr. BECKERMAN. It would. 

Mrs. CAPPS. OK. Thank you very much. I yield back. 

Mr. PITTS. The Chair thanks the gentlelady and recognizes the 

gentleman from Louisiana, Dr. Cassidy, for 5 minutes for questions. 

Mr. CASSIDY. Thank you, Dr. Woodcock. I am always impressed 

at how well you answer questions. 

The gray market—I am speaking of course about drug shortages—what is the volume of drug on the—5–FU is in a shortage, 

do we have a sense of how much the gray market will arise to fill 

that need? 

Ms. WOODCOCK. Well, I would ask Captain Valerie Jensen, who 

is our head of drug shortages. Do you have any insight into that? 

Ms. JENSEN. Yes. I am Val Jensen, Associate Director of Drug 

Shortage Program, and we don’t think there is a large supply in 

the gray market from what we understand about the gray market. 

FDA doesn’t receive a lot of information about the gray market, but 

we do know that from what we hear, it is a very small volume that 

is in the gray market right now. 

Mr. CASSIDY. Now, but I am concerned in this report of HHS, 

they speak about if there is early notification of shortages, there 

may be hoarding. That almost seems like you are throwing gasoline 

upon the potential of a gray market. Would you agree with that? 

Ms. JENSEN. We would agree with that. 

Mr. CASSIDY. And so it is good to have early notification or not? 

Ms. JENSEN. So if we received the early notification, what we do 

with that is try to work with the company, whatever company is 

having the problem on addressing that issue as soon as possible. 

Hopefully, we can prevent the shortage before it even occurs. That 

is our goal. 

Mr. CASSIDY. Now, I am also concerned, and I don’t know this; 

I am just asking—do some people make it a practice to hoard in 

anticipation and therefore step in? It clearly would be a nice way 

to make some money. You mentioned there could be a referral to 

56 

DOJ, but this is kind of a late development. Have people done that 

in the past? Have we looked at the ordering patterns of companies? 

Do they order here, then they suddenly order there sort of thing? 

Ms. JENSEN. FDA doesn’t normally get that type of information, 

the ordering information. 

Mr. CASSIDY. Would that be HRSA? 

Ms. JENSEN. The manufacturers would know what is being ordered. When there is a potential shortage, sometimes companies 

do—— 

Mr. CASSIDY. But let me ask because I think here last time—and 

people have mentioned they don’t know the source of drugs on the 

gray market—it seems logical to look at wait, who is ordering? Is 

there a difference in ordering pattern relative to a particular entity’s patient base? Does that make sense? Now, that just occurs to 

me and frankly I have looked at that, and when you look at that, 

you think that is kind of interesting, small little hospital ordering 

a lot of drugs. Now, has anybody pursued that more than just kind 

of looking at it? 

Ms. JENSEN. It is just not data that FDA has access to as far as 

hospital ordering patterns. 

Mr. CASSIDY. I could give it to you. I mean I just made a phone 

call and got it and it actually just kind of raises questions frankly. 

Ms. WOODCOCK. Right. Well, I think those are the types of things 

that law enforcement might be interested in. Also, I would say if 

we have early notification process, we would not plan to make it 

public unless we had failed to avert the shortage and the shortage 

was imminent. 

Mr. CASSIDY. And again, as you were describing the means by 

which you averted shortage, there seems to be somewhat of an ad 

hoc basis to it. You got a call, you rushed in, you started making 

it. In my life I have learned that it is better to have a system as 

opposed to an ad hoc. Now, do you systemize that or is it still somewhat ad hoc? 

Ms. WOODCOCK. I think we have systematized it to the extent it 

is possible. The problem is that the manufacturers cannot predict 

when they are going to run into shortage. Many of these shortages 

are precipitated by manufacturing failures. They make the drug, 

they are going along making the drug, everything is fine, and then 

they discover particulates, they have mixed up the drug—— 

Mr. CASSIDY. Presumably there is quality control that on a regular basis they are going to pull up and say, OK, every 6 weeks 

we are going to, you know, run a sample and make sure it doesn’t 

have sporacide or something in it. 

Ms. WOODCOCK. Well, it is much more than that actually. There 

is a very tight system of controls. You were talking about the good 

manufacturing processes call for very tight controls—— 

Mr. CASSIDY. I only have 53 seconds. By the way, just to go back, 

if you don’t have access to the ordering pattern of the hospitals, 

who does have that data? 

Ms. JENSEN. Yes, I think we would have to look into that. 

Mr. CASSIDY. Could you let me know that? I would be really interested in that. 

Let me ask one more thing. Going back, Mr. Dingell had a line 

of questions about whether or not you need more resources. I think 

57 

it was our previous conversation you mentioned that union contracts would limit the ability to send people overseas. Dr. Hamburg 

was here and she really kind of rope-a-doped me on that, so let me 

just ask a yes or no. Do you have the ability under your union contract to send somebody overseas to inspect a plant if they otherwise 

object? Yes or no? 

Ms. WOODCOCK. I don’t know the answer to that. I don’t supervise the field staff. And I imagine it depends on the circumstances. 

So I can get back to you but I can’t answer that straight out. 

Mr. CASSIDY. Does anybody on the panel know that? OK, if you 

could, I would appreciate that. 

Ms. WOODCOCK. Certainly. 

Mr. CASSIDY. Thank you. I yield back. 

Mr. PITTS. The Chair thanks the gentleman. That concludes the 

members of the subcommittee questioning. 

Without objection, we will go to the members of the full committee. Ms. DeGette of Colorado is recognized for 5 minutes for 

questions. 

Ms. DEGETTE. Thank you, Mr. Chairman. 

I just want to ask a follow-up question about the drug shortages 

and I appreciate my colleagues on both sides of the aisle working 

with me on this issue because it is something that sort of hit and 

escalated, and we are all hearing about it from our hospitals. And, 

you know, we are all concerned about the stories we hear, particularly with these generic injectables, about the shortages that hospitals are having. A lot of them are pediatric cancer patients and 

other patients like that. But I am hearing from my pharmacist at 

the hospital that this is now expanding to many other drugs. They 

told me that they have a drug shortage a day at some of these hospitals, some place where they are trying to make these value judgments about what they treat the patients with. And so I also am 

concerned about the hoarding issues and the other issues, but I 

guess I would ask you, any of the witnesses, to talk about under 

the current voluntary program that you have, do you see a lot of 

problem with hoarding right now? 

Ms. JENSEN. We do receive reports from pharmacists, mostly 

faxes and emails that they have received from gray marketers, 

from companies advertising these drugs at very high prices, and we 

do forward all of those reports to the Department of Justice. 

Ms. DEGETTE. And have you seen a large incidence of that? 

Ms. JENSEN. We have—— 

Ms. DEGETTE. OK. 

Ms. JENSEN [continuing]. Over the past—— 

Ms. DEGETTE. And do you think there are some ways we can 

write legislation so we don’t experience a lot of hoarding if we 

make a mandatory reporting program? 

Ms. JENSEN. So with notifications of mandatory reporting, we 

would not post a shortage until we know that shortage is going to 

occur, absolutely going to occur, or has already occurred. We would 

want to hold off because our goal is to try to prevent all shortages. 

If we can do that through working with the manufacturers, 

through working with alternate manufacturers to ramp up, as well 

as sometimes having to temporarily import product, that is what 

we are doing. 

58 

Ms. DEGETTE. So your process would be if you got notification of 

a shortage to contact the manufacturers to see if it could be resolved internally—— 

Ms. JENSEN. Absolutely. 

Ms. DEGETTE. It is a little bit of a waiting game, isn’t it, because 

if you don’t notify the hospitals and the physicians quickly enough, 

then having any kind of a notification system is pointless, right? 

Ms. JENSEN. Right. 

Ms. DEGETTE. So you are going to have to figure out how to do 

that. 

Ms. JENSEN. We need a good way to get information out when 

we know there is going to be a shortage, get it out as quickly as 

possible so that hospitals can make decisions. 

Ms. DEGETTE. And what would happen if you did have a system 

where you could get that notification out? What would the hospitals then do with that information? 

Ms. JENSEN. Well, they could plan accordingly. Sometimes treatments can be reserved for certain types of patients where there is 

an alternative for other patients. They can use those alternatives. 

Sometimes it helps hospitals make those decisions. 

Ms. DEGETTE. OK. Dr. Woodcock, in your written testimony, you 

had said that the FDA sent a letter to the pharmaceutical manufacturers reminding them of their current legal obligations to report certain discontinuances to the Agency and urging them to voluntarily notify the FDA of all potential disruptions of the prescription drug supply to the U.S. market even when disclosure is not 

currently required by law. After you did that, you said that there 

has been a significant increase in the number of potential shortages reported to the FDA. So my question is, is it your sense that 

manufacturers were not complying with current law before they got 

that letter? 

Ms. WOODCOCK. Our sense is I think that manufacturers were 

complying with current law, but the current law only has a limited 

universe of things that have to be reported. And we asked for voluntary reporting of a much wider universe. 

Ms. DEGETTE. So as I understand it, the Agency cannot expand 

the reporting, cannot require more reporting without authorization 

from Congress, is that right? 

Ms. WOODCOCK. Not more mandatory reporting. 

Ms. DEGETTE. Without authorization from Congress, right? OK. 

Thank you very much. 

Thank you, Mr. Chairman. I yield back. 

Mr. PITTS. The Chair thanks the gentlelady. The Chair recognizes the gentleman from Illinois, Mr. Shimkus, for 5 minutes for 

questions. 

Mr. SHIMKUS. Yes, I am sorry, Dr. Woodcock. I know you have 

been here for a while. I had to go speak on Yucca Mountain, so I 

had my different jobs I have to do. 

So I just really wanted to focus on Generic User Fee Act issues 

and the proposal to develop better science for new bioequivalent 

methods for locally acting drugs. So how do we know what the 

promises are? So what types of metrics do you think there will be 

for Congress and the American people to judge whether we are getting our best return on investment with this? 

59 

Ms. WOODCOCK. Well, similar with the user fee program, you 

know, there are interim goals throughout this Generic Drug User 

Fee Program that have been devised, and we will report on those 

goals and you will know exactly what our performance is against 

the goals. So there are many metrics that are put into place for 

performance of the program. We intend to meet those metrics, but 

right from the beginning, we will have to do things in the first 

year, and we can report on those actions. 

Mr. SHIMKUS. Yes, and I appreciate that. I think Congress would 

like to see I think the folks who are working with you collaboratively would like to make sure that is transparent, there is predictability. A lot of our concern is the length of time without it. So 

I mean there is just hope that in paying for an expedited, clear, 

safe system, that we are going to get what is going to be paid for. 

Ms. WOODCOCK. Well, I hope you can feel some confidence because of our track record of the Prescription Drug User Fee Program where we have exceeded or met our goals up through almost 

the entire program. 

Mr. SHIMKUS. And I mentioned this numerous times in various 

hearings and I applaud it; I think focusing on the risk-based approach in the recent reports is right on. I mean if good actors are 

good actors and they have been good actors, they continue to be 

good actors, then there may be a time to revisit but annually 

may—we can make that determination. Obviously, when we are 

not inspecting, we would much rather have inspections of facilities 

we haven’t even visited versus continually re-inspecting the good 

actors. So I find that a positive and I look forward to that. 

Utilizing prediction information from companies, foreign governments, and third parties could help us, obviously, to do this riskbased system. Can you describe the importance of the risk-based 

approach in ensuring the safety of imported drugs? 

Ms. WOODCOCK. Certainly. What we know about facilities is that 

if they are having problems, they may not correct them and the 

problems may get worse. So we go into a plant initially, we discover problems, if we don’t go and return and verify that they are 

on an improvement trajectory, we may be seeing a situation where 

the production methods may be deteriorating. And so it is very important for us to go sort of where the money is, where the risk is 

and to be able to follow up on those facilities that are subpar, all 

right, and also to follow up more closely on those facilities that are 

producing riskier products such as the sterile injectables to make 

sure they are continuing to meet their obligations. 

Mr. SHIMKUS. And I appreciate that. And my last question is how 

can we leverage the third party actors or foreign governments? 

Help me talk through how do we get a little more buy-in or can 

get them to understand the importance of what we are trying to 

do. 

Ms. WOODCOCK. The foreign governments? 

Mr. SHIMKUS. Right, or other third party entities that may be involved. 

Ms. WOODCOCK. Other third parties, um-hum. As Mr. Beckerman 

said, we would like to have better ability to exchange information 

with foreign countries who have inspectorates. Many countries now 

are developing pharmaceutical inspectorates. They go to the facVerDate Aug 31 2005 15:22 Jul 01, 2013 Jkt 037690 PO 00000 Frm 00063 Fmt 6633 Sfmt 6633 F:\112-11~1\112-11~1 WAYNE
60 

tories; they have information. We do get heads up from them when 

there are problems, but we would like to have a much better global 

safety net so that all the regulators are working together and any 

other inspectorates that might be out there, third party 

inspectorates. So we share information and we make sure around 

the world that that safety net exists. 

Mr. SHIMKUS. Yes, historically, I think we have all believed that 

FDA has been really the gold standard. I think the EU is because 

of their timeliness is getting into a competitive arena with us. We 

would like to continue the gold standard and maybe push those 

values but also a timely process so we don’t lose that leverage. 

Thank you, Mr. Chairman, and I yield back. 

Thank you, Dr. Woodcock. 

Mr. PITTS. The Chair thanks the gentleman. And that concludes 

panel one. Do we have another one? I am sorry. I didn’t see you. 

The Chair recognizes the gentleman from New York for 5 minutes for questions. 

Mr. ENGEL. Thank you, Mr. Chairman. It is hard to see on the 

side, I know. Thank you. 

Dr. Woodcock, several of the witnesses in the second panel in 

their written testimony mention that the user fees included in 

GDUFA and BsUFA are meant to be in addition to a solid base of 

annually appropriated funds for the FDA. So I was pleased to see 

that for the fiscal year 2012 the FDA received a 50 million increase 

in funding over fiscal year 2011 funding levels. But this was a 

hard-fought victory given that the first proposal was a 285 million 

cut in FDA funding. So could you elaborate on why it is so important that the FDA be adequately funded and how cuts to the FDA 

could impact the Center for Drug Evaluation and researchers’ ability to meet the review time frames and inspection standards outlined in the GDUFA and BsUFA user fee agreements? 

Ms. WOODCOCK. Yes. All of the user fee programs assume that 

there is an appropriated base funding that we build on and that 

is augmented by the user fees. As I think the discussion on drug 

shortage has illustrated, FDA has many other jobs, and the drug 

program has many other jobs other than simply review. And for the 

health and safety of our population, we need to do all those activities well and we do need resources to do them. So the Generic Drug 

User Fee Program that is being proposed is built upon a platform 

of appropriated dollars and is additive. The Prescription Drug User 

Fee Program has always had a trigger and is of appropriated funds 

and the fees are additive that allow us to meet the goals and accomplish all that ambitious program. And similarly, for biosimilars 

it will be built on an appropriated base. 

Mr. ENGEL. Well, thank you. You mentioned the drug shortages. 

The largest employer in my district is Montefiore Medical Center 

in Bronx, New York. They are, as you know, a premier academic 

medical center with centers of excellence in cancer care, cardiovascular services, pediatrics, transplantation, and neurosciences, 

and my constituents have really come to rely on them. All three of 

my children were born there and they are really, really a treasure. 

When I asked them about the impact of drug shortages on 

Montefiore, they estimated to me that members of their staff, including pharmacists and physicians, spent more than 110 hours a 

61 

week addressing issues directly related to drug shortages. So clearly this issue, dealing with this, requires a significant amount of 

people power and labor costs in order to track down medications. 

Can you describe the steps the FDA is taking to assist our hospitals like Montefiore in staying on top of current and anticipated 

drug shortages? 

Ms. WOODCOCK. Certainly. We sent a letter out to all manufacturers reminding them of their statutory obligations and asking 

them to voluntarily notify us in advance of potential shortages so 

that we can do what we do to mitigate them. We work with manufacturers to mitigate. We have even allowed drugs to be shipped 

with filters, with instructions to filter the drug because it had particulates if we were sure that the filter wouldn’t take out the agent 

as well and we had verified that. So we do those risk mitigation 

efforts. We even allow importation of unapproved drugs from other 

countries temporarily to fill the gap for our patients. And we have 

a web page and we work with the associations and with the physician community to try and figure out how to mitigate these shortages. But at the end of the day, if there is no drug there that can 

be had, we are all in trouble. 

Mr. ENGEL. I agree. Let me ask you this final question which 

also ties in with the drug shortage problem. I have heard from 

healthcare providers and patients that there is an added layer of 

difficulty in addressing shortages in this area because they say 

that the DEA limits the amount of active pharmaceutical ingredient a company can purchase and manufacture. I have also heard 

from parents who are frustrated when they have struggled to obtain generic forms of their children’s ADHD medications in recent 

months. So I do recognize that the DEA has to do its part to ensure 

that controlled substances are not being abused, but how can DEA 

and FDA work together to ensure that the shortages of controlled 

substances such as the ADHD medications or pain medications like 

fentanyl are quickly addressed and access to these to patients with 

a clear need? 

Ms. WOODCOCK. Yes, we worked very closely with the DEA, and 

my understanding is that the manufacturers have received their 

2012 quotas for the ADHD drugs and we expect that situation to 

be ameliorated very rapidly. But we do work very closely with 

them. We provide information to them every year that is very relevant to them setting the quotas of these various drugs, how much 

we expect will be needed. So we have a very close relationship. 

Mr. ENGEL. OK, thank you. 

Thank you, Mr. Chairman. 

Mr. PITTS. The Chair thanks the gentleman. 

OK, I think that concludes panel one. The Chair would like to 

thank Dr. Woodcock and her panel for your excellent testimony. 

Ms. WOODCOCK. Thank you. 

Mr. PITTS. And excuse panel one and call panel two to the witness table. And while they are coming, without objection, the chair 

would like to enter into the record four documents: a statement by 

the American Academy of Pediatrics, one by the American Society 

of Health System Pharmacists, another by the National Community Pharmacists Association, and one by the Biotechnology IndusVerDate Aug 31 2005 15:22 Jul 01, 2013 Jkt 037690 PO 00000 Frm 00065 Fmt 6633 Sfmt 6633 F:\112-11~1\112-11~1 WAYNE
62 

try Organization. And it has been shared with minority. Without 

objection, they will be entered into the record. 

[The information follows:] 

63 


81517.031

Testimony for the record 

On behalf of the 

American Academy of Pediatrics 

Before the 

Energy and Commerce Committee 

Health Subcommittee 

February 9,2012 

American Academy 

of Pediatrics 

DEDICATED TO THE HEALTH OF ALL CHILDREN" 

American Academv of Pediatrics • Department of Federal Affairs 

601 13th Street NW, Suite 400 North • Washington, DC 20005 

Tel: 800.336.5475 • E-mail: kids1st@aap.org 
64 


81517.032

American Academy of Pediatrics 

CDER Drug Shortage Workshop 

February 9, 2012 

Mr. Chairman, members of the subcommittee, the American Academy of Pediatrics (AAP), a 

non-profit professional organization of 62,000 primary care pediatricians, pediatric 

medical subspecialists, and pediatric surgical specialists, thanks you for the opportunity to 

submit testimony for the record on the issue of drug shortages. 

Pediatricians throughout the country are experiencing firsthand the impact of drug 

shortages on the practice of pediatrics. Shortages, discontinuances, or interruptions in the 

pediatric drug supply have and will continue to put our patients at risk. Past and current 

shortages have forced pediatricians to rely on alternative therapies, if they exist. In many 

cases, these alternatives may be less than ideal for our patient populations and their safety 

and efficacy in pediatrics may not be known. 

The AAP has worked for decades to ensure that medicines used in children are studied in 

children. The physiology of children is different than that of adults and this changes how 

they absorb, metabolize, eliminate, and respond to medications. It is because of these 

significant differences that it is important to remember that children are not just little 

adults, and that they must, wherever possible, have the benefit of age-specific therapeutic 

safety and efficacy data. 

We thank the subcommittee and the leadership of Representative Anna Eshoo for their 

support for two laws, the Best Pharmaceuticals for Children Act CBPCA) and the Pediatric 

Research Equity Act (PREA), that have taken giant strides towards achieving this goal. 

Since BPCA was enacted in 1997,426 drug labels have been updated with pediatric 

information under BPCA and PREA. With this new pediatric information, off-label use of 

drugs has gone down. However, because half of drugs used in children still lack pediatric 

labeling, off-label use remains an unfortunate but necessary practice. The AAP looks 

forward to working with the subcommittee to renew and strengthen these laws before they 

expire on October 1 of this year. 

Impact on Pediatrics 

In recent years, many of the drug shortages have directly impacted children. More than 

two years ago, there was a widespread national shortage of 0.5% erythromycin ophthalmic 

ointment due to manufacturing changes. Four million children each year need 

erythromycin ophthalmic ointment for prophylaxis of ophthalmia neonatorum due to 

Neisseria gonorrhoeae and Chlamydia trachomatis, If left untreated, it can cause blindness. 

Some states mandate this treatment. 

At the time of the shortage, the two other products with efficacy against N. gonorrhoeae 

were no longer available in the U.S. The government did not appear to have anticipated the 

shortage and it took pressure from the AAP and others for federal agencies to develop and 

Page 2 of 6 
65 


81517.033

American Academy of Pediatrics 

CDER Drug Shortage Workshop 

February 9,2012 

release recommendations for an alternative prophylaxis regimen. However, at that time, 

there were no safety and efficacy data for the alternative products. 

The AAP is closely monitoring the ongoing shortage of parenteral vitamin K. Recently, 

many hospitals have begun to face a declining supply of parenteral vitamin K which is 

routinely administered to nearly all newborns. The injectable form is the recommended 

method of administration to newborns. Due to the developing shortage, some hospitals 

have begun to conserve their supply by giving the vitamin K injections only to those infants 

in the neonatal intensive care units and using an oral preparation for healthy newborns. 

We are aware of at least one example where providers were forced to dilute an adult 

preparation. With dilution, errors can and do occur. 

Additionally, pediatricians, especially neonatologists, have experienced shortages of 

component ingredients for a life-saving treatment for neonates, total parenteral nutrition 

(TPN), which is used in babies who cannot yet eat and have no alternative nutrition source. 

Last spring, the manufacturer of component ingredients ofTPN announced a nationwide 

voluntary recall. In some cases, they were the only manufacturer in the U.S. marketplace 

resulting in prolonged periods of no new supply. Among the ingredients in short supply 

are sodium chloride, calcium gluconate, phosphate (sodium and potassium), selenium, 

magnesium sulfate injections, and others. To date, supply is still not what it was prior to 

the voluntary recall. For newborns that rely on TPN intravenously as their source of 

nutrition, availability of these component ingredients is truly a matter of life or death, 

Drug shortages impact general pediatricians and subspecialists alike. At present, pediatric 

rheumatologists are reporting shortages nationally of injectable methotrexate. Pediatric 

oncologists have been facing shortages of cytarabine, daunorubicin and other critical 

products where there are limited or no alternatives. Pediatric anesthesiologists are 

reporting significant shortages of fentanyl and sufentanil which has the potential to have a 

huge impact on the ability to provide safe and effective anesthesia and postoperative 

sedation for pediatric cardiac patients and sedation for intensive care unit patients. The 

lack of viable alternatives can pose a huge risk to these patients. 

The Academy is also receiving regular reports from its members on nationwide shortages 

of medications to treat children with attention deficit hyperactivity disorder. Unlike other 

shortages, this one is made additionally complex by the overlapping authorities of FDA and 

the Drug Enforcement Agency. The AAP is interested in trying to find relief to this shortage 

and all others that are currently ongoing. 

But whether it is the propofol shortages that have had a profound impact on pediatric 

anesthesiology or persistent shortages of antibiotics such as intravenous preparations of 

trimethoprim/sulfamethoxazole or amikacin, drug shortages are increasingly more 

Page 3 of 6 
66 


81517.034

American Academy of Pediatrics 

CDER Drug Shortage Workshop 

February 9, 2012 

common. Among pediatric products that are in short supply, the intravenous preparations 

appear to be disproportionately over-represented. 

The AAP welcomes the opportunity to explore with the FDA and others the causes behind 

these shortages as well as solutions for preventing and addressing them. 

Prevention 

The AAP believes that a comprehensive solution to drug shortages must include provisions 

that prevent the shortage from occurring in the first place. Notification of physicians and 

pharmacists of drug shortages after the fact, as is all too often the case, frequently 

compromises care and puts patients at risk. We urge FDA to develop and maintain a list of 

critical medications that should specifically include medications used in pediatric 

populations. For pediatrics, such a list should not be limited to the labeled indication of the 

product since so many products used in children, especially neonates, are not labeled for 

their use. Among the products that should be included in the critical drugs list are those 

which come from a sole manufacturer. 

Once this critical medications list is developed, FDA, working with other federal partners, 

should determine how much of the product is necessary to have on hand to meet demand 

in advance of a potential shortage, discontinuance or interruption. This list should be 

informed by the current rate of use of these drugs and by the time required to replenish the 

supply, allowing extra time for both. Then FDA and its partners should establish a 

mechanism for the purchase and storage of advance supplies of the critical medications on 

this list. AAP recommends FDA and its federal partners consider the creation of a National 

Critical Medication Stockpile, using the Strategic National Stockpile as a model. 

FDA should develop and maintain a database containing information about the domestic 

and foreign manufacturers for all of the items on the critical medications list, regardless of 

whether their products are approved in the U.S. Over time, FDA should take steps to work 

with manufacturers so they can meet U.S. standards for safety and efficacy. Other efforts to 

increase supply should be explored especially since unanticipated natural or man-made 

disasters can and do happen in the U.S. and around the world, and these disasters can have 

a significant impact on the supply of component ingredients or finished products. 

Distribution 

The AAP is concerned about inconsistent distribution or maldistribution of products that 

are in short supply. We urge the FDA and its federal partners to establish a process to 

ensure fair and equitable distribution of products that are experiencing a shortage, 

discontinuance, or interruption. We also hope there will be strong national safeguards in 

Page 4 of 6 
67 


81517.035

American Academy of Pediatrics 

CDER Drug Shortage Workshop 

February 9, 2012 

place to protect against hoarding or price gouging, For products on FDA's critical 

medications list, it may be helpful for FDA or one of its federal partners to maintain a realtime map allowing purchasers to know where products can be found and in what quantity. 

Communication 

The AAP is deeply concerned about FDA's current system for alerting pediatricians to 

potential or actual shortages, discontinuances, or interruptions in supply of pediatric 

products. The current system is simply too passive, We urge the development of a system 

for real-time, bi-directional exchange of information between federal agencies and 

providers because in some cases health care providers are the first to learn about a change 

in supply. The critical medications list should be used to then develop a network of health 

care providers for each class of products that would be contacted immediately about a 

potential supply shortage, discontinuance, or interruption. Communication about 

shortages to the FDA by manufacturers and from the FDA to providers should not be 

limited to on-labeled indications since half of all drug used in pediatric patients are used 

off-label. In neonatology, almost 90% of the agents that are routinely administered to 

neonates (babies from birth to 1 month) have never been adequately studied and labeled 

for safety, dosing, and efficacy. 

Addressing the Shortage 

Once the shortage, discontinuance, or interruption in supply has occurred, we urge the FDA 

to work more quickly with companies to restore their ability to manufacture safe and 

effective products, Special attention and urgency should be paid to the products on FDA's 

critical medications list Because the lack of supply for certain critical products can 

represent a threat to the public health, we recommend FDA explore the use of authorities 

such as Emergency Use Authorization or personal importation provisions to allow for 

additional supply to enter the u.s. market from other manufacturers under time- and 

quantity-limited circumstances. 

There have been instances where no new supply is available and no alternative 

manufacturer exists in the u.s. Therefore, FDA and its federal partners should work much 

faster to identify recommended alternative therapies and communicate them broadly to 

the public, especially the provider community. Wherever possible, the FDA and its federal 

partners should utilize outside subject matter experts when developing these 

recommendations or guidance for alternative therapies. For products on FDA's critical 

medications list, alternatives should be identified by the federal government prior to onset 

of a shortage, discontinuance, or interruption, 

Page 5 of 6 
68 


81517.036

American Academy of Pediatrics 

CDER Drug Shortage Workshop 

February 9, 2012 

The AAP looks forward to working with the subcommittee on this important issue that has 

greatly impacted the care we give our patients. 

Page 6 of 6 
69 


81517.037

House Energy and Commerce Subcommittee on 

Health 

Hearing to 

Review of the Proposed Generic Drug and 

Biosimilars User Fees and Further Examination of 

Drug Shortages 

February 9, 2012 

Statement for the Record 

Submitted by the 

American Society of Health-System Pharmacists 

7272 Wisconsin Avenue 

Bethesda, MD 20814 

Email: gad@ashp.org 

Phone: 301-664-8710 
70 


81517.038

The American Society of Health-System Pharmacists (ASHP) respectfully submits the 

following statement for the record to the House Energy and Commercc Committce's 

Subcommittee on Health hearing to review proposed generic drug and biosimilar user 

fees and further examination of drug shortages. 

As the national professional association representing over 35,000 pharmacists who 

practice in hospitals and health systems, ASHP can offer unique and vital feedback on 

this important health care issue. Pharmacists in hospitals and hcalth systems are cxperts 

in medication use who serve on interdisciplinary paticnt-care teams. Thcy work with 

physicians. nurses, and other health care professionals to ensure that medicines are used 

safely, effectively. and in a cost-consciolls manner. 

Thc scope and severity of drug shortages is well known and its impact has been felt by 

patients, caregivers and others throughollt the supply chain. ASHP has commented 

extensively on the causes of drug shortages, their impact on patient care, and potential 

policy options to address the problem to both Houses of Congress and the FDA. 

Therefore, we are not including the background information stated in prior written and 

oral testimony but would refer you to our web site as a reference for additional 

background information if you need it: 

httr:l/www.ashp.or£/DocLibrarv/Advocacv/SenateFinanceComm-on-Dm£-

Shortl\£-es.aspx. 

Instead, we are providing direct examples of policy options we believe Congress can 

enact now to begin to alleviate drug shortages. Furthermore, given the scope and 

complexity of the ongoing Prescription Drug User Fee Act (PDUFA) negotiations, we 

strongly urge Congress to act now on the issue of drug shortages, even if it means 

moving legislation independently of PDUFA, as patient safety and public health concerns 

continue to worscn. 

The causes of drug shortages arc multifactorial, and solutions will likely involve not only 

Congressional action, but also action by FDA and the market itself. However. there are 

policies that we believe Congress can and should pursue to help address this ongoing 

crisis. 

First, we urge Congress to enact the early warning system as described in H.R. 2245, the 

Preserving Access to Life-Saving Medications Act. It has bcen well documented by FDA 

thaI when the agency has information about production interruptions and product 

discontinuations in advance, it can work to prevent shortages. Further, we believe the 

provision requiring manufacturers to work with FDA on developing contingency plans to 

ensure supply of medications is a critical piece that may help to prevent shortages from 

OCCUlTing in the future. 

Second, Congress should examine the current quota system in place by the Drug 

Enforcement Administration (DEA) as a potential factor in shortages of controlled drugs. 
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While we have no specific data to suggest that DEA qllotas arc causing shottages, other 

members of the supply chain have identified this as a potential barrier. We commend 

Congresswoman DeGette and Congressmen Waxman. Pallone and Van Hollen for their 

recent lettcr to DEA asking the agency to provide more detail on how it. determines 

quotas, how often quotas are adjusted and the associated regulatory burden for industry, 

and potential impacts quotas have on patient care. 

Likewise, we commend those same members for their letter to Shire Pharmaceuticals 

asking the company to shed light on how it allocates the production quotas set forth by 

DEA in the manufacturing of its various ADHD products. Given that there appears to be 

two conflicting points of view on the impact the quota system has on drug shortages, 

ASHP is greatly interested in the responses of both DBA and Shire Pharmaceuticals to 

those specific questions. 

Third, a newly-introduced bi-partisan bill (H.R. 3839) by Congressmen Carney and 

Buschon, would direct FDA to establish a national critical drug list and a national critical 

drug shortage list. The national critical drug shortage list would be communicated to the 

public with information on the severity and duration of the shortage, reason for the 

shottage, identification of alternate therapies and specific regions of the country impacted 

by shortages. ASHP is generally supportive of this approach; however, fDA does not 

provide information on any unlabeled medication indication or unapproved medications. 

as some medically necessary drugs are unapproved. and unlabeled Of unapproved lise of 

medically necessary drugs is common (for example pediatrics), therefore, FDA cannot 

provide this information. In addition, FDA may be constrained in providing 

recommendations for alternative therapies due to potential conflict of interest. The 

University of Utah Drug Information Service does provide the public with information on 

alternate therapies for drugs in short. supply. Given this fact, ASHP and the University of 

Utah maintain close communication with fDA on our efforts to track shOltages. We 

believe that this would likely continue if this provision was enacted due to our clinical 

expertise, and FDA's ability to obtain information about duration and severity of 

sholtages. 

ASHP also supports the provisions in the bill which creates a feasibility study on 

stockpiling and directs the Attorney General to increase controlled substance quotas if 

\varranted. While we believe a national stockpile for anticipated drug shortages is 

difficult to achieve, it may be worth further investigation as a study may shed light on 

alternatives to a stockpile that were not previollsly conceived. 

fourth, the inclusion of a generic user fee program in the upcoming PDUFA 

reauthorization may allow FDA to leverage these user fees as economic incentives for 

manufacturers. For example, the agency could offer reduced application fees for 

products in short snpply, or discounted fees if a company demonstrates that its 

contingency plans are sufficient to reduce the risk of a shortage if production is halted. 

While this policy option does rest within the PDUFA reauthorization process, we believe 

a generic user fee program can provide a crucial economic tool for FDA to provide 

incentives to manufacturcrs. 
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Conclusion 

ASHP remains pleased by the high level of attention Congress and the subcommittee has 

given to the drug shortage crisis. The hard work of your staff and the input provided by 

those most atTected by these shortages has given us a blueprint to move forward. and we 

urge Congrcss to do so as quickly as possible. We fully recognize that the options 

outlined above are not a complete solution. However, they represent initial policy 

options that can be enacted immediately while we further examine additional solutions. 
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United States House of Representatives 

Committee on alld Commerce 

Subcommittee on Healtb 

Hearing on "Review oCt he Proposed Generic Drug and Biosimilars User Fees 

alld Further Examiuatiou Shortages" 

"e.Huan 9,2012 

Effect or Urug Sbortages Oil Cm1Hllultily Pbarmacy lind Paticllts 
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81517.042

Both out-patient and ambulatory 

to treat ADlID, 

NCPA survey stated that 

as a result of the shortage, if there arc alternative 

will not always for these alternative 

How Community Phllrmllcies Respond to Shortages 

reSpOll(lents to 

ii'om a primary wholesaler, but also 

as a for product out-ot:stocks, recall 

alternatives, deliveries, and other unique items not carried by large 

wholesalers, In the event of a drug in their options 

as the last link in the supply chain to in a manneL Pharmacies may 

stmi by calling near-by compctitors, checking with their back-up wr.{)"""'"Ct·s. or back-ordering 

the Pharmacies that are located near a distribution center may also request to pick up 

the center. 

In addition, community pharmacists may be able to provide compounded products, dcpending on 

the nalure of the In some cases, the raw materials to manufacture a scare product arc 

not available meaning pharmacies will not be able to the needed drug. 

\."c'mlpOl.lllellng pharmacies may able to patients when 

raw are available and they compounding from 

manufacturing. 

nn,'np'Mcnr community pharmacies can provide valuable services to their patients in times of 

Results of the NCPA reveal that 63%, or respondents contact a 

distributor 58% call a competitor, and 13% 

Significant Cost increases to Patients, Payers, and Pharmacies 

The cause of shortages is attributed issues that arise 

manufacturing marketplace 

consolidation the projected increase in brand 

to 5 years signal the potential for supply issues 

as pharmaceutical 

losing their patents within the next 

signiticant price nucluations. 

In order to remain viable. more generic manufacturers are merging, which may result in fe\ver 

producers of essential slowed production, and increases in pricing due to fewer 

cOlnp,etitor's in the market. could lead to substantial increases in pharmacy acquisition costs, 

deterrent for access to the medications. 

Comm('nts: 1 k:llth Review of the Proposed Generic Drug and 

Biosimilars User Fees and Further Examination of Drug Shortages 

9, 
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Proj}osals to I'n'Serve Generic Dispensing Rates ill the Face of SllOrtllgeI'rice inereases 
76 


81517.044

COllciosioll 
77 


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NCPA Results 

,January 2012 
78 


81517.046

L 

Survey Response Rate State 

Percent experienced Drug 5hllrt:~I!'@ 
79 


81517.047

six Number of Pharmacies Experiencing 

Shortages by Type of Medication 

How Often Experienced Drug 

Shortage 
80 


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Average length Orug Shortage 
81 


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Drug Shortage: Market Place Dynamic 
82 


81517.050
83 


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ADHD Drug Shortage: Brand vs. Generic 

ADHD Shortages: How 

Customers Cope 
84 


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Customer 

ADHD 
85 


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NCPA Results 

Highlights 
86 


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Survey Results 
87 


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Drug Shortage 
88 


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7. Which or the 

during ~l drug $h~)rtag~ 

marketplace dYllamlc,;'! 

Cha,Hitle 
89 


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90 


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91 


81517.059

Bio 

RIOTECHNOlOGY 

INDUSTRY ORGANIZATION 

STA TEMENT OF THE BIOTECHNOLOGY INDUSTRY ORGANIZATION (BIO) 

HOUSE COMMITTEE ON ENERGY & COMMERCE, SUBCOMMITTEE ON HEALTH 

HEARING ON, "THE REVIEW OF THE PROPOSED GENERIC DRUG AND 

BIOSJMILARS USER FEES AND FURTHER EXAMINATION OF DRUG SHORTAGES." 

FEBRUARY 7. 2012 

Chairmen Upton and Pitts, and Ranking Members Waxman and Pallone, the Biotechnology 

Industry Organization (BIO) thanks you for the opportunity to submit testimony for the record on 

the House Energy and Commerce, Subcommittee on Health hearing on ''The Review of the 

Proposed Generic Drug and Biosimilars User Fees and Further Examination of Drug Shortages." 

B10 SUPPORTS PASSAGE OFTHE BIOSIMTLARS USER FEE PROGRAM 

BIO supports FDA's ongoing implementation ofa well-constructed, science-based pathway for 

the approval of biosimilar 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 of biosimilars products, while also continuing to prioritize the 

review of innovative drugs and biologics so that safe and effective new treatments -many for 

currently untreatable and serious diseases - can be made readily available to patients. 

810 represents more than I, I 00 biotechnology companies, academic institutions, state 

biotechnology centers and related organizations across the United States and in more than 30 

other nations. BIO members arc involved in the research and development of innovative 

healthcare, agricultural, industrial and environmental biotechnology products. thereby expanding 

the boundaries of science to benefit humanity by providing better healthcare, enhanced 

agriculture. and a cleaner and safer environment. 

Throughout both the legislative consideration ofthc Biologics Price Competition and Innovation 

Act of2009 (BPCIA) and ongoing FDA implementation of the pathway, BIO has articulated 

several key principles that will promote the developmcnt of an effcctive regulatory framework 

for biosimilar products: 

~ Ensuring Patient Safety 

~ Recognizing Scientific Differenccs Between Drugs and Biologics 

~ Maintaining the Physician-Patient Relationship 

~ Preserving Incentives for Innovation 
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» 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 authorization of the program. 

FDA's Biosimilars Activities Should bc Supported by a Dedicated and Independent Source 

of User Fees 

The establishment of a stand-alone, independent biosimilars user fcc program is consistent with 

Congressional intent and precedent established under other USCI' fee programs. BIO recognizes 

that 351 (k) applications will raise novel and complex questions of science and law, requiring 

substantial time, expertise, and additional resources to ensure a thorough regulatory review. BIO 

believes that one of the principal goals of this new uscI' fec program must be to ensure that 

workload associated with biosimilar applications docs not harm the Agency's ability to 

efficiently review innovative drugs and biologics, and that new treatments continue to have the 

highest review priority. Accordingly. we agree with FDA's principle that the Agency needs 

sufficient revicw capacity and dedicated user fcc resources for 351 (k) applications to assure that 

resources arc not redirected from innovator reviews. 

Uscr Fees should be Complemented by a Sound Base of Appropriations 

Additionally, BIO recognizes that, historically, most FDA user tcc programs have been 

established on a pre-existing base of appropriations. However, given the recent establishmcnt of 

the biosimilars program at FDA. only modest appropriations are currently allocated to the 

program, which are inadequate to meet the anticipated workload demands. To facilitate an 

equitable balance of fees and appropriations, FDA and industry support a trigger provision -

similar to the established appropriations triggers in other USCI' fcc programs - that would ensure 

that FDA allocatcs at least $20 million per year to the program. BIO encourages Congress to 

recognize the importance of a well-resourced and viable biosilllilars pathway at FDA and we 

request that adequate new funding be appropriated ft)r the program. 

Biosimilar Product Development Fees are a Necessary, but Provisional Measure: 

The biosimilars USCI' fce program also establishes a unique biosimilar product development fcc, 

which is ultimately deducted from the sponsor's application fee. Since there is no established 

biosimilars industry, facility base, and product base to form a stable funding source for activities 

that occur before submission of applications, it is important to "Ifont-load" the fees tbrough the 

product development Ice so that the agency has available resources to meet with sponsors during 

development to provide scientific advice and feedback. It should be noted, however, that the 

assessment of a product development fce is unique to this situation with respect to biosimilar 

products and should not establish any precedent for IND fees under the Prescription Drug User 
93 


81517.061

Fee Act (PDUFA) program. Additionally. any IND-associated fee should sunset permanently in 

FY 2018 when both PDUFA and this new user fee program would sunset. 

In conclusion. BIO supports enactment of the proposed biosimilars user fee program, which will 

provide FDA with adequate resources and promote predictability in FDA's biosimilars review 

process, while continuing to promote the development and evaluation of innovative therapies for 

un met medical needs. 

DRUG SHORT AGES 

In recent years, the FDA has documented a significant increase in the prevalence of prescription 

drug shortages. These shortages can create significant concerns for patients seeking to maintain 

a treatment regime f,x their disease or condition and can even delay or halt clinical trials 

necessary to bring new therapies to market. The biotechnology industry is committed to the 

discovery and development of new, novel treatments for serious and lite-threatening diseases, 

and the premise that drug shortages are preventing patient access to needed treatments stands 

counter to our driving mission to extend and enhance the lives of patients. 

1. The Multi-Faceted Factors Contributing to Drug Shortage 

The factors contributing to drug shortages are complex and lnulti-faceted, and the economic, 

logistical, and scientitic factors can vary significantly among different sectors of the 

pharmaceutical industry, including branded and generic manufacturers. Consequently. there is 

no one-size-fits all solution to this issue and each individual contributing t:1ctor must be critically 

evaluated. Recent studies and public workshops have cited a number of contributing factors to 

drug shortages, including: I

,2,3 

>- Unanticipated shifts in market demand, clinical guidelines, or the practice of medicine 

, Manufacturing production and quality problems 

J;> Limited manufacturing capacity 

, Delays in site consolidation and facility modernization 

J;> Disruptions in ingredient supplies 

, Regulatory actions. including recalls. inspections and changes in compliance 

requirements, delayed new drug approvals, and delays in approval of tacility upgrades 

J;> Industry consolidation. product discontinuations, and economic factors 

J;> Just-in time supply chain with short inventory management 

I Hill and Reilly, American Society of Health System Pharl11acists. Can the UnitedSta!es Ensure an Adequate 

Supply o/Critical flledica!iu"s? Food and Drug Law Institute Policy Forum. Volume I, Issue 16, August 24. 2011. 

http://v/\vw,rdli.org/puhs/policyft)rum/. 

2 Food and Drug Administration (FDA), ('enter tor Drug Evaluation and Research (CDER). Approach 10 Addressing 

Drug Shortage: Public tVorkshop. September 26~ 20 11, http:/'\vw\v.fda.gov/Drugs/l\ewsEventsiucm132703.htm . 

3 L'.S. Government Accountability omcc. (2011. September). Manl!laclurer Discounts inlhe J408 Program Offer 

fJl!neJirs. hlli Federal Oversight :Veed.s'/mprorement. Publication No. GAO-l1-836. 

http://\V\\'w.gao,gov/llCw,itc!l1:Jd! !836.pdf 
94 


81517.062

According to FDA, sterile injectables accounted for 74% of the drug shortages reported to the 

Agency in 20 I O. Critical shortages are most acute for off-patent sterile injectable products, 

including certain chemothcrapy agents, total parenteral nutrition (TPN) electrolytes, and 

anesthetics. Of the sterile injectables reported in short supply in 2010,54% of the shortages 

were caused by product quality or current Good Manufacturing Practice (cGMP) issues, 21 % 

were caused by manufacturing capacity issues or delays, and 11 % were caused by product 

discontinuations.4 

n. Approaches to Resolve Drug Shortages 

In the experience of many biotechnology companies, FDA staff work constructively and 

collaboratively with the manufacturer in the event of a sholiage to help resolve the problem and 

restore patient access to needed therapies as soon as possible. However, there are several steps 

that Congress can take to help further bolster the capacity of FDA and manufacturers to prevent 

and respond to drug shortages. We recognize that FDA has limited staff and resources to direct 

to these activities, and BIO has long supported the efforts of the Alliance/or a Stronger FDA to 

secure additional appropriated funding to help mitigate drug shortages and implement the 

proposals below. 

" Expedited FDA Review of Manufaeturing Supplements: Some shortages may be 

caused when manufacturers are upgrading manufacturing facilities, hut the supplement 

requesting approval from FDA has not been approved in a timely manner or has 

undergone multiple review cycles. Expedited review of these regulatory suhmissions 

may contribute to resolving the shortage. 

" Prioritized Reinspections of Facilities: To the extent that a reinspection can help to 

resolve a prior adverse inspectional finding and bring a facility back online, FDA should 

strive to prioritize reinspections for facilities related to a shortage. It is extremely 

important that the FDA is adequately resourced to be able to prioritize post-market drug 

shortage related reinspections while at the same time continuing to meet its pre-market 

PDUF A inspectional commitments. 

> Joint and Harmonized Inspections: Leveraging resources among established 

regulatory authorities to conduct joint inspections may also help to expedite inspections. 

We also encourage regulatory authorities to internationally harmonize standards for 

compliance inspections to minimize inconsistency between inspectorates. and even 

between individual inspectors. 

" Faster Review of New Drugs: Occasionally, a new drug or efficacy supplement can 

help to resolve an existing drug shortage. However, FDA has not consistently met its 

drug and biologic review goals in the recent past. Swift passage of PDUF A V - which 

establishes a new review process for new molecular entities (NMEs) aimed at facilitating 

timely availability of new drugs - will help to alleviate drug shol1ages in celiain 

situations. 

" FDA Guidance on Continuity of Supply Chains and Risk Mitigation: To help ensure 

that all manufacturers have firm knowledge of suppliers and adopt best practices to help 

, Food and Drug Administration. "Webinar on Prescription Drug Shortages", September 30. 20 II, 

http:i,'ww\v.fda.gov.idownloads/Aboutr:DAiTransparencyr'l3asics/UCMJ73360.pdf. 
95 


81517.063

mitigate the risk in the upstream supply chain, \ve suggest that FDA issue guidance for 

industry. Voluntary and coordinated information sharing between stakeholders regarding 

the quality and authenticity of supply and suppliers and information on counterfeits, 

cargo thefts and adulterated product can hclp to identify and mitigate potcntial supply 

chain disruptions and vulnerabilities before they manifest into a drug shortage. 

BIO looks iorward to working with the Committee to find practical ways to resolve the drug 

shortage issue. Thank you. 
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References: 

i Food and Drug Administration, "Wcbinar on Prescription Drug Shortages", September 30, 

20 I I, http://www.fda.gov/downloads/ AbolltFDA/Transparcl1cylHasics/UCM273360.pdf. 

ii Hill and Reilly, American Society of Health System Pharmacists, Can the United Srates 

Ensure an Adequate Suppl,v ofCriticai Medications". Food and Drug Law Institute Policy 

Forum, Volume I, Issue 16, August 24, 2011, http://www.fdli.org/pubs/policyforllm/. 

iii Food and Drug Administration (FDA), Center for Drug Evaluation and Research (COER). 

Approach to Addressing Drug Shortage; Public Workshop, September 26.2011. 

http://www. fda.gov/[)rugs!~ewsEvcnts/ucm I 32703.l1tm . 

iv U.S. Government Accountability Office. (20 II, September) . .Iv1anufacturcr Discounts in the 

340B Program Offer Benefits. but Federal Oversight Needl' Improvement. Publication No. GAO11-836. 

http://www.gao.gov/new.items/dl 1836.pdf 

v Food and Drug Administration, "Webinar on Prescription Drug Shortages", September 30, 

20 I I. hup:!/\\ wvv. fCla.gov/downloads/A bOlltFDA/Transparency/13asics/lJCM273360.pdf. 

vi FDA Center for Drug Evaluation and Research, Current Drug Shortages, 

http://\vww.fda.gov/Drugs!DrugSafctylDrugShortagcs/ucmOS0792.htm, (accessed October 17, 

2(11) 

vii FDA Center for Biologies Evaluation and Research, Biologic Drug Shortages, 

http://www.fda.gclVlI3iologicsBloodVaccincs/SaletyAvailability/Shortages/default.htm. 

(accessed October 17,2011 ) 

viii Tufts Center for the Study o!,Drug Development, "Average Cost to Develop a ~ew 

l3iotechnology Product Is $1.2 Billion. According to the Tults Center for the Study of Drug 

Development," November 9. 2006. www.csdd.tlIlis.edu. 

Notification Requirements: Reasonable, clear, and collaborative processes for Sponsors to 

notify FDA ofa drug shortage may help to mitigate the shortage and restore patient access to 

therapies. 
97 

Mr. PITTS. All right. The Chair will call panel two to the table 

and would like to thank you all for agreeing to testify before the 

subcommittee today. And I would like to quickly introduce our 

panel. First, Ms. Heather Bresch is the CEO of Mylan, Inc; second, 

Mr. David Gaugh is the vice president of regulatory sciences at the 

Generic Pharmaceutical Association; and Dr. Bill Greene is the 

chief pharmaceutical officer at St. Jude Children’s Research Hospital. Again, thank you all for coming. We have your prepared 

statements which will be entered in the record and we ask you to 

summarize your opening statement 5 minutes. 

Ms. Bresch, we will begin with you. You are recognized for 5 

minutes to summarize your testimony. 

STATEMENTS OF HEATHER BRESCH, CHIEF EXECUTIVE OFFICER, MYLAN, INC.; DAVID GAUGH, VICE PRESIDENT, REGULATORY SCIENCES, GENERIC PHARMACEUTICAL ASSOCIATION; AND BILL GREENE, PHARM.D, BCPS, FASHP, CHIEF 

PHARMACEUTICAL OFFICER, PHARMACEUTICAL SERVICES, 

MEMBER, PHARMACEUTICAL SCIENCES, ST. JUDE CHILDREN’S RESEARCH HOSPITAL 

STATEMENT OF HEATHER BRESCH 

Ms. BRESCH. Thank you and good morning, Chairman Pitts and 

Ranking Member Pallone and members of the subcommittee, and 

thank you for the opportunity to testify today. 

I am Heather Bresch, CEO of Mylan, Inc., the largest global 

generics company in the world headquartered in the United States. 

Mylan was founded 50 years ago in West Virginia, and for the first 

45 years of our history, Mylan was a domestic company that served 

the U.S. market. In 2007, we transformed into a global company. 

Today, we provide products in more than 150 countries, have a 

global workforce of more than 18,000, including more than 5,000 

employees in the United States. Our largest drug manufacturing 

facility is located in Morgantown, West Virginia, where we produce 

nearly 20 billion doses of medicine each year. We also have multiple facilities outside of the U.S. that produce drugs that are distributed in this country and which are inspected by the FDA. 

Today, 1 out of every 11 prescriptions dispensed in the United 

States is a Mylan product. In light of our success in the global market, Mylan is adding manufacturing jobs around the globe, and we 

would like to not only maintain what we already have here in the 

United States, but we would also like to expand our U.S. presence. 

As we transform from a domestic to a global company, we were 

surprised to discover that FDA is still operating as a domestic 

agency and is not equipped with the resources or legal authority 

to regulate the now global drug industry that serves the United 

States. In fact, FDA is governed by a 1938 law, which has been 

largely unchanged since its initial passage and does not give FDA 

the full authority it needs to oversee the global industry. 

Unfortunately, the 1938 law also creates an unlevel playing field 

for American manufacturers by requiring U.S. manufacturers to be 

inspected every 2 years while the law is silent on foreign drug 

manufacturers. As a result, two standards are created—one for the 

United States’ manufacturers and one for foreign. U.S. manufacturVerDate Aug 31 2005 15:22 Jul 01, 2013 Jkt 037690 PO 00000 Frm 00101 Fmt 6633 Sfmt 6633 F:\112-11~1\112-11~1 WAYNE
98 

ers actually have a perverse incentive to move existing U.S. jobs 

abroad where they will face less regulatory scrutiny and also can 

avoid the second-highest combined Federal/State corporate tax rate 

of 39 percent. 

As the Pew Health Group reported to this subcommittee last 

week, complying with quality systems and FDA regulations represents approximately 25 percent of a drug manufacturer’s operating cost. This disparity in standards raises very real and profound questions about the integrity and quality of the drug supply 

in the U.S. Clearly, every consumer should have the peace of mind 

of knowing that every drug product dispensed in the U.S. is held 

to the same standard of quality regardless of whether the product 

originated in the United States or outside of its borders. 

Over the last several years, the number of foreign facilities supplying the U.S. has grown by 185 percent, while at the same time, 

FDA inspection rates have decreased by nearly 57 percent according to the FDA. FDA estimates that up to 40 percent of drugs now 

consumed by U.S. patients are manufactured abroad and 80 percent of the active ingredients used in drugs come from foreign 

countries. 

The growth in the number of foreign facilities coupled with a significant increase in generic drug application has caused FDA’s 

workload to be far outpaced by its resources, and as a result, the 

time it takes to get a generic drug approved has nearly doubled 

with more than 2,700 generic applications awaiting approval from 

FDA today. Now more than ever Americans need more timely access to more affordable generic medicine which has saved patients 

and the government more than 930 billion in the last decade alone. 

With a 50-year history of working closely with Congress and the 

FDA, Mylan is pleased that the generic industry has stepped up 

first and addressed an industry-wide issue impacting brand and 

generics to help address FDA’s challenge of carrying out its mission 

within a global industry, especially given the current scarcity of 

government resources. 

The landmark and novel user fee program is aimed at three critical components: safety, access, and transparency. Through 

GDUFA, FDA will receive approximately 1.5 billion in new funding 

over the next 5 years, and in return, FDA has agreed to more timely reviews of generic drug applications, increased transparency, 

and by any old good manufacturing practice surveillance inspections of all generic finish dosage form and active pharmaceutical 

ingredient manufacturers, foreign and domestic, on a risk-adjusted 

basis, among other benefits outlined in a negotiated goals letter. 

Strengthening the supply chain, a key aim of GDUFA through 

routine GMP inspections for all facilities, as well as transparency 

initiatives that require the identification and registration of facilities involved in the supply chain will also provide a more holistic 

solution to current drug shortages. Additionally, decreased review 

times will ensure more timely access to new generic products, including those that addressed an unmet medical need or those in 

short supply. 

While the generic industry and API industries will help provide 

the financial resources to globalize the FDA, it is imperative for 

Congress to update the 1938 law to ensure the integrity of the supVerDate Aug 31 2005 15:22 Jul 01, 2013 Jkt 037690 PO 00000 Frm 00102 Fmt 6633 Sfmt 6633 F:\112-11~1\112-11~1 WAYNE
99 

ply chain and a level playing field so companies like Mylan are not 

disadvantaged to grow American manufacturing jobs. A level playing field will also benefit foreign facilities as well as small and 

first-time entrants who are currently disadvantaged by delays in 

new product approvals because of a lack of a recent inspection. 

We urge Congress to adopt GDUFA as negotiated and move forward in updating the 1938 law. Only by taking these steps can we 

provide more timely access to more affordable generics, ensure 

competitiveness by leveling the playing field for American manufacturers, and equip FDA with the authority it needs to become a 

global agency to ensure the integrity of the global drug supply 

chain. 

Thank you. And I would be happy to address any questions of 

the committee. 

[The prepared statement of Ms. Bresch follows:] 

100 


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TESTIMONY OF 

HEATHER BRESCH 

CHIEF EXECUTIVE OFFICER 

MYLAN INC. 

REVIEW OF THE PROPOSED GENERIC DRUG AND BIOSIMILARS USER FEES AND 

FURTHER EXAMINATION OF DRUG SHORTAGES 

BEFORE THE 

COMMITTEE ON ENERGY & COMMERCE 

SUBCOMMITTEE ON HEALTH 

UNITED STATES HOUSE OF REPRESENTATIVES 

FEBRUARY 9, 2012 
101 


81517.066

"Review of the Proposed Generic Drug and Biosimilars User Fees 

and Further Examination of Drug Shortages" - February 9, 2012 

Summary of Testimony before the House Energy and Commerce Committee. Subcommittee on Health 

Heather Bresch, CEO, Mylan Inc, 

When FDA was essentially created through the FDCA of 1938, FDA was equipped as a domestic agency charged with 

overseeing a domestic industry Today, the drug ;ndustry supplying the u.s, is a global one, but FDA still remains domestic" 

Congress should update the FDCA of 1938 to equip FDA as a global agency to strengthen the integrity of the supply chain 

and ensure a level playing field for manufacturers, 

• Current Landscape For Generic Drugs. Now more than ever, Americans and the government need more 

timely access to low cost, high quality medicine. The generic drug industry has saved the government, patients and 

payors more than $931 billion over the last decade alone by reliably providing low cost, safe and effective generic drugs 

Recent years have seen a significant increase in the number of applications for generic products, as well as substantial 

growth in the foreign facilities that support the U,S, drug supply, Unfortunately, FDA's resources have not kept up with 

this increased workload, and, as a result, the time it takes to get a generic drug approved has nearly doubled in recent 

years and more than 2,700 applications are currently awaiting FDA approval. Because a recent inspection history is 

required prior to product approval, the inspection backlog is likewise adding to the long delays in generic approvals. 

• Landmark Generic Drug User Fee Program. To help provide FDA with supplemental resources to address the challenges 

caused by globalization of the drug supply chain and the related increase in the agency's workload, the generic drug 

industry negotiated a landmark generic user fee program ("GOUFA") that provides $299 million annually and is focused 

on three key aims: 1) Safety - ensuring that both foreign and domestic industry participants in the U.S. generic drug 

system are held to the same, consistent, high quality standards and are GMP inspected by FDA biennially using a riskbased approach; 2) Access - expediting the availability of generic drugs through more timely reviews; and 3) 

Transparency - Enhancing FDA's ability to require the identification and registration of all facilities involved in the 

manufacture of generic drugs 

• More timely access to Generics Expected to Increase Savings and Lower Health Care Spend. Generics currently 

save the government and consumers more than $3 billion each week, GDUFA will provide more timely access to more 

affordable generics, which is expected to even further lower government and consumer health care spending 

• Supply Chain Integrity. One of the key ways FDA oversees continued compliance with the quality standards required of 

all prescription drugs sold in the U,S. (branded and generic) is by conducting on-site GMP facility inspections, These 

critical surveillance inspections (known as GMP inspections) ensure that facilities are continuing to meet their obligation 

of producing safe products in accordance with rigorous current good manufacturing practices and are intended, among 

other things, to identify potential concerns or observations before an issue emerges or increases in severity so as to later 

interrupt or impact the safety or efficacy of the drug supply 

• Pressing Need to Globalize FDA Authority. Today, 40% of all drugs Americans take afe imported and up to 80% of the 

active pharmaceutical ingredients in those drugs come from foreign facilities, FDA's GMP inspections have not kept pace 

with the exponential growth in foreign facilities that supply the U,S, pharmaceutical market According to FDA, foreign 

facilities supporting the U,S, drug supply have grown by 185% while at the same time FDA inspection rates have 

decreased by nearly 57%. Moreover, the Federal Food, Drug and Cosmetic Act of 1938 ("FDCA") requires American 

manufacturers associated with pharmaceutical production to undergo a GMP inspection every two years but the law does 

not require the same of foreign manufacturers, which are inspected every nine years on average. 

• Unlevel Playing Field Decreases Competiveness. The inspection disparity between foreign and domestic manufacturers 

disadvantages U.S, companies by creating an unlevel playing field that encourages the export of U,S, jobs and holds U,S 

manufacturers to higher standards with associated higher costs. Pew reports that it costs 25% more to maintain facilities 

in compliance with GMP. 

• Delayed Entry of New Generic Drugs. The infrequency of foreign facility inspections delays approval of new medicines, 

including generics. The inspection disparity also disadvantages generic drug apphcants, particularly foreign applicants as 

well as small and first time entrants who are delayed in obtaining approvals for new products due to a lack of a recent 

inspection history which is required for approval. 

• Authority Needed to Modernize FDCA. The generic drug industry, which represents 78% of the U.S, drug supply, will 

provide FDA with most of the supplemental resources it needs to conduct biennial GMP inspections on a risk-adjusted 

basis under GDUFA, We urge Congress to update the FDCA to give FDA the legal authority it needs to level the playing 

field for inspection parity and ensure FDA is eqUipped by law to carry out its mission in overseeing a global drug supply 

chain. 

• Drug Shortages, An important benefit of GDUFA is that potential weak links in the supply chain can be identified and 

addressed as early as possible through routine GMP surveillance inspection to prevent supply disruptions, GDUFA's 

decreased review times WIll ensure more timely access to new generic products, including those that address an unmet 

medica! need or those in short supply. 

• Biosimilal' User Fees. User fees for biogenerics have been developed in accordance with the mandate provided under the 

Affordable Care Act. However, much work beyond user fees remains to be done to develop a workable pathway that 

generates the expected savings to Americans and provides access to more affordable generics, 
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I. INTRODUCTION 

Good morning Chairman Pitts, Ranking Member Pallone, and members of 

the Subcommittee. Thank you for the opportunity to testify today on the Generic 

Drug User Fee Act program ("GDUFA"), which is jointly proposed by the U.S. 

Food and Drug Administration ("FDA") and industry, the Biosimilars User Fee Act 

("BsUFA"), and the committee's examination of the issues surrounding drug 

shortages. 

I am Heather Bresch, CEO of Mylan Inc., the world's third larg~st generic 

and specialty pharmaceutical company and the largest global generics company 

headquartered in the United States. I also serve on Mylan's board of directors. I 

have spent 20 years at Mylan, holding numerous positions across more than 15 

areas of our business. Prior to becoming CEO, I served as president, where I 

was responsible for the day-to-day operations of the company. Before that, I 

served as Mylan's chief operating officer and chief integration officer, leading the 

successful integration of two transformational international acquisitions - Matrix 

Laboratories and Merck KGaA's generics business. In addition, I served as head 

of Mylan's North America operations. I also served two consecutive terms as 

chairman of the Generic Pharmaceutical Association and one term as its vice 

chairman. Over the course of my career, I have been a strong advocate of 

initiatives and policy changes aimed at removing barriers that hinder patient 

access to high-quality medicine. 

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II. BACKGROUND 

Mylan was founded 50 years ago in White Sulphur Springs, West Virginia 

and for the first 45 years of our history, Mylan only served the U.S. market. 

Realizing that we would need to expand our footprint to produce the needed 

scale and reliable quantities of high quality medicine to compete in our now 

global drug industry, Mylan has now transformed from a purely domestic 

company into a global one over the last five years. 

Today, we provide products to customers in more than 150 countries and 

territories and have a global workforce of more than 18,000, including over 5,000 

employees in the U.S. We maintain one of the industry's broadest. and highest 

quality product portfolios, with more than 1,000 separate products across more 

than 20 disease states, supported by a robust product pipeline. 

We also operate one of the world's largest active pharmaceutical 

ingredient manufacturers, and run a specialty pharmaceuticals business focused 

on respiratory, allergy and psychiatric therapies. Today, one out of every 11 

prescriptions dispensed in the United States, brand or generic, is a Mylan 

product. In addition to our multiple U.S. facilities, including our largest facility in 

Morgantown, West Virginia which produces nearly 20 billion doses of medicine 

on average each year, Mylan now has multiple facilities outside the U.S. that 

supply the U.S. market. All of our facilities that supply the US market have been 

inspected and measured by the same high quality standards of FDA. 

We are proud of the investments we make in all of our facilities around the 

world to deliver quality products. We also are proud of our role in providing 

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patients with access to more affordable medicine, particularly here in the United 

States, where the generic drug industry has collectively provided more than $931 

billion of savings over the last decade as a result of the use of high quality 

generic prescription drugs in place of brand name counterparts. 1 Today, 78% of 

all prescriptions dispensed in the United States are generics. 

As we have expanded our domestic based structure to reflect our now 

global footprint, Mylan quickly discovered that while we and much of our industry 

are now global, FDA is still effectively operating as a domestic agency that is not 

equipped with the resources or legal authority to regulate the global drug supply 

that now serves the U.S. market. Indeed, FDA is govemed by an antiquated law, 

the Federal Food. Drug and Cosmetic Act ("FDCA"), key sections of which have 

not been updated since its passage in 1938 when the U.S. operated almost 

entirely as a domestic pharmaceutical market. As currently written, the FDCA 

does not properly equip FDA with the authority it needs to carry out its mission in 

the now globalized U.S. pharmaceutical supply chain. For example, current law 

requires that U.S.-based manufacturers be inspected by FDA every two years, 

but does not require the same of foreign manufacturers. 

We also discovered that FDA resources have been far outpaced by a 

significant increase in workload, generated by a dramatic increase in abbreviated 

new drug applications and exponential growth in foreign facilities supplying the 

U.S. pharmaceutical market. Given that FDA operates under a legal requirement 

to inspect U.S. facilities bi-annually and that the law is silent on foreign facilities, 

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

Sept. 2011. 

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FDA has deployed the vast majority of its resources domestically. The end result 

is an unlevel playing field for U.S. manufacturers, different quality standards for 

products sold in the U.S. based on where they were manufactured, and a 

significant delay in FDA review times of generic drug applications, with a backlog 

of more than 2,700 abbreviated new drug applications, and many awaiting a 

recent inspection history before approval can be granted. 

Just as the pharmaceutical industry has transformed into a global one, in 

order to meet its mission, so too must FDA. To that end, with a 50-year history of 

working closely with the FDA, Mylan is pleased to have played a leading role in 

developing and negotiating a comprehensive user fee program for generic drugs, 

along with our colleagues across the generic and API industries. 2 The GDUFA 

program helps address FDA's challenge of carrying out its mission in the face of 

a global drug supply chain and providing patients with more timely access to 

more affordable, safe and effective medicine. 

GDUFA recognizes that while providing earlier access to effective 

medicines is critical (the key aim of all other existing user fee programs), an 

equally important pillar of FDA's mission is ensuring the safety and integrity of 

the drug supply. As a result, in addition to expediting access to more affordable, 

high quality generic drugs, the key goals of the Generic Drug User Fee Program 

described further below include holding all industry partiCipants contributing to 

2 See Mylan Inc. Submissions to Docket No. FDA-2010-N-0381 proposing a holistic user fee 

program dated October 17,2010 and Testimony before FDA to discuss generic drug user fees, 

September 17,2010. See also Matrix Laboratories Limited (subsidiary of Mylan Inc.) Submission 

to Docket No. FDA-2010-N-0381 dated March 30, 2011. 

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the U.S. generic drug system, foreign and domestic, to the same rigorous GMP 

inspection standards and enhancing FDA's ability to identify, track and register all 

facilities involved in each generic drug sold in the U.S. 3 

Through GDUFA, the generic industry, which as I noted represents more 

than three fourths of all prescriptions dispensed in the U.S., will provide FDA with 

approximately $1.5 billion in new funding over the next five years. In return, FDA 

has agreed to more timely review of generic drug applications (Le., by year 5 of 

the program, 90% of abbreviated new drug applications CANDAs") will be at 10-

month complete review times), increased transparency, and biennial GMP 

surveillance inspections of all generic finished dosage form ("FDF") and active 

pharmaceutical ingredient manufacturers ("API") - foreign and domestic - on a 

risk adjusted basis.4 

However, while this funding will help FDA make significant progress in 

addressing critical industry-wide issues, there is more that Congress can do to 

help address the issue of supply chain integrity. In order to truly eliminate the 

disparity between foreign and domestic facility inspection rates, create a more 

level playing field for U.S. manufacturers, and better ensure the safety of the 

global supply chain, we join the Generic Pharmaceutical Association ("GPhA") in 

3 Although GDUFA requires FDF and API manufacturers to both pay respective fees and register 

as part of the generic drug user fee program, GOUFA requires all other generic drug program 

partiCipants to register even though such partiCipants are not responsible for a fee through Sept. 

31,2017 under GDUFA. 

4 See GOUFA goals letter for further explanation of risk basis. See a/so GPhA's testimony before 

the Senate HELP Committee, dated Sept. 17,2011. (A "risk-based" model for inspections 

prioritizes inspections according to a company's safety and compliance track record. This system 

would ensure that questionable or problematic facilities receive a comprehensive review and 

evaluation sooner. Facilities with strong records of compliance and positive inspections would be 

placed further down on the inspection schedule, allowing the agency to prioritize its immediate 

attention on companies that have never had an inspection or that have a history of compliance 

issues.) 

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urging Congress to amend the FDCA to reflect the inspection model being 

established by GDUFA, thus modernizing FDA's existing authority to reflect the 

needs of the current 21 st century global drug supply. 

As part of a Special Report issued by FDA in July 2011, entitled Pathway 

to Global Product Safety and Quality, FDA outlined its plan to "transform itself 

from a domestic agency operating in a globalized world to a truly global agency 

fully prepared for a regulatory environment in which product safety and quality 

know no borders." In this report, FDA likewise acknowledged that to..carry out its 

mission in the globalized pharmaceutical market, the agency is "looking to 

Congress to modernize its antiquated authorities so that FDA's legal tools keep 

pace with globalization.,,5 

III. KEY ISSUES THAT A DOMESTICALLY FOCUSED FDA FACES IN CARRYING OUT 

ITS MISSION IN A GLOBAL DRUG SUPPLY 

A. Challenges caused by global drug supply chain 

With a mission to protect and promote the public health, FDA has a critical 

responsibility, along with industry, to ensure the safety, efficacy and security of 

the U.S. drug supply. Fulfilling this responsibility today is much more challenging 

than it was in 1938, when the FDCA was enacted. Back then, most of the 

pharmaceutical products consumed in the U.S. were produced in the U.S. 

Today's U.S. pharmaceutical industry is global, highly complex and growing 

rapidly, considerably outstripping the agency's operating capacity. 

Drug products, both branded and generic, originate in factories all over the 

world, moving into the American marketplace through supply chains that can 

5 FDA, Special Report, Pathway to Global Product Safety and Quality, page 4. (July 2011) 

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involve numerous processing plants, manufacturers, suppliers, brokers, 

packagers and distributors. The agency estimates that up to 40 percent of 

finished drugs consumed by U.S. patients are manufactured abroad and 80 

percent of the active ingredients and bulk chemicals used in drugs come from 

foreign countries. 6 According to FDA, the number of foreign drug facilities 

supplying the U.S. has grown by 185 percent between 2001 and 2008 while at 

the same time FDA inspection rates have decreased by nearly 57 percent. 7 

Further, the number of FDA-regulated products arriving from abroad has grown 

substantially. In 2010, nearly 20 million shipments of food, drugs and cosmetics 

arrived at U.S. ports of entry. 8 A decade earlier, that number was closer to 6 

million, and a decade before, just a fraction of that figure 9 Today, 20 to 25 cents 

of every consumer dollar spent in the U.S. is spent on an FDA-regulated 

product, 10 

Despite the globalization of the pharmaceutical supply chain, the U.S. has 

not modernized the laws governing supply chain integrity or the scope of its 

regulatory oversight to reflect the reality of the global marketplace. As a 

consequence, FDA currently has limited de facto oversight of imported drugs, 

making it effectively impossible to ensure the quality of the nation's drug supply. 

In addition, FDA's lack of resources threatens the availability of drugs. 

G U.S. Government Accountability Office. Drug Safety: FDA Has Conducted More Foreign 

Inspections and Begun to Improve Its Information on Foreign Establishments, but More Progress 

Is Needed (Publication No. GAO-l0-961). (September 2010). 

7 Deborah M. Autor, Deputy Commissioner, U.S. Food and Drug Administration, Ensuring tile 

Safety, Efficacy, and Quality of Drugs, A Roundtable on Ensuring the Safety of the U.S, Drug 

Supply, Mar 14-15,2011. 

8 Remarks of Margaret A. Hamburg, M.D., Commissioner of Food And Drugs at Center for 

Strategic and International Studies (February 4, 2010) 9 1d. 

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Importantly, American manufacturers are being disadvantaged versus foreign 

competitors who do not face the same stringent - and costly - manufacturing 

and quality standards applied to U.S. companies. 11 In order to compete in the 

global marketplace, some U.S. pharmaceutical manufacturers actually have a 

perverse incentive to move existing U.S. jobs abroad, where they will face less 

regulatory scrutiny than those manufacturing in the US. These issues will only 

be addressed through modernization of U.S. law and the provision of resources 

necessary 10 fully fund Ihe FDA's oversight of loday's complex and global drug 

supply. 

IV. THE GENERIC DRUG INDUSTRY HAS STEPPED UP TO THE PLATE TO 

ADDRESS INDUSTRY WIDE ISSUE 

A. Generic Drug User Fee Act (uGDUFA") 

Given the significant challenges FDA faces in carrying out its responsibility, 

the substantial growth in applications and facilities requiring FDA review and 

oversight, as well as the need for a recent inspection history before a new 

product can be approved, the generic user fee program is focused on helping the 

agency holistically achieve the following key aims: 

Safety - Ensuring that generic industry participants, foreign or domestic, 

who participate in the U.S. generic supply are held to consistent high quality 

standards and are GMP inspected every two years, using a risk-based approach, 

with foreign and domestic parity. 

11 See generally Pew Health Group, After Heparin: Protecting Consumers from the Risks of 

Substandard and Counterfeit Drugs. 

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Access - Expediting consumer access to generic products by improving 

timeliness in the review process and providing greater predictability to the 

application review process to encourage additional innovation. 

Transparency - Enhancing FDA's ability to protect Americans in the 

complex global supply environment by identifying and requiring the registration of 

all facilities involved in each generic product in the U.S., and improving FDA's 

communications and feedback with industry in order to expedite product access. 

Historically, the generic industry has not used a fee program to provide 

funding to the FDA review process, as the brand drug and medical device 

industries have. However, as I described, FDA's current resources have not 

been adequate to manage the expanding workload caused by an increase in 

both the number of ANDAs and the number of facilities, with the most growth 

coming from foreign facilities supporting those applications. The FDA has 

acknowledged that delays in foreign inspections have contributed to delays in 

generic drug approval times because facilities listed in applications lack a recent 

inspection history, which is required before a new generic drug application may 

be approved. Over the last several years, the review and approval time for an 

ANDA has nearly dOUbled. Currently, it is estimated that over 2,700 ANDAs are 

now awaiting FDA review and the average review time for an ANDA is nearing 32 

months. 

The delay in approval time also undermines the iSO-day exclusivity 

Congress provided under the Hatch-Waxman Act to incentivize companies to 

take on the substantial litigation risk associated with such patent challenges in 

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order to get more affordable prescription drugs into the hands of consumers 

before patents expire. Under current law. if an applicant does not obtain 

tentative approval of its ANDA within 30 months of filing. that applicant will lose 

this vital 180-day exclusivity. The original intent of the forfeiture provision, which 

was written when the average ANDA approval time was at 16 months, was to 

ensure that ANDA applicants actively worked toward approval. With the average 

review time now 32 months, the 180-day exclusivity incentive is significantly 

threatened through no fault of the ANDA filer. 12 

The generic drug user fee program calls for a broad range of participants 

in the generic drug industry to contribute $299 million, adjusted annually for 

inflation, for each of the five years of the program starting October 1, 2012, which 

will supplement appropriated funds. In order to ensure that patients, payors and 

the government continue to benefit from the significant savings offered by 

generic drugs, representing an average of $3 billion in savings each week, it was 

imperative to the industry and FDA to design a program that would keep the 

individual fee amounts as low as possible. 13 The total amount of funding from 

the generic industry will be drawn from a broad funding source, including an 

estimated 2,000 FDF and API manufacturers supporting ANDAs, prior approval 

supplements (PASs), and drug master files (DMFs) as well as application fees 

which cover ANDAs, PASs and DMFs. 

12 GDUFA includes an expedited review of first to file Paragraph IV ANDAs during the first two 

years of the program (before reportable review metrics apply starting in year 3) in an effort to 

minimize inadvertent forfeiture risk for failure to obtain a tentative approval within 30 months of 

submission, 

13 "An Economic Analysis of Generic Drug Usage in the U,S," Independent Analysis by IMS 

Health, Sept. 2011, 

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The fee package is structured so that 80 percent of the total will be 

derived from the FDF industry and 20 percent from the API industry. The variety 

of funding sources for the program will assure that participants in the generic 

drug industry, whether FDF or API manufacturers, appropriately share the 

financial expense and benefits of the program. Of the majority of the total 

generic drug user fee package, 70 percent will be derived from facility fees, while 

the remaining 30 percent shall be derived from application fees. Both FDF and 

API manufacturing facilities listed or referenced in a pending or approved ANDA 

will pay a facility fee. Foreign facilities will include a modest fee differential to 

reflect the average additional costs of foreign inspections based on data 

determined by the agency.14 The remaining 30 percent of the total generic drug 

user fee package will be derived from application fees. Application fees include 

an ANDA, PAS, and DMF application fee. In addition, in the first year of the 

program there will be a one time backlog fee for ANDAs that are pending on 

October 1, 2012, and have not received tentative approval. 

In return for the fees, the industry and FDA have agreed upon a number of 

additional goals, metrics, and efficiencies set forth in detail in a negotiated goals 

letter. Importantly, with these resources, FDA has committed to, among other 

metrics: (1) review and act on 90 percent of new ANDAs within 10 months from 

submission; (2) act on 90 percent of all ANDAs and PASs that are pending in the 

backlog (an estimated 2,700 applications); and (3) achieve parity of GMP 

14 According to FDA's Pathway to Global Product Safety and Quality Special Report, Exhibit 10, 

published in 2011, the average cost of foreign inspections ($52,000) is two times the average 

cost of a domestic inspection ($23,000). 

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inspections for foreign and domestic facilities by the fifth year of the user fee 

program. 

Notably, given that many facilities make both brand and generic products, 

it is expected that the generic drug program will pay for biennial, risk-based GMP 

inspections of FDF and API facilities representing more than 78% of the total U.S. 

pharmaceutical market, including both brand and generic products. 

Mylan is proud of all that GDUFA will accomplish, and the historic 

paradigm shift that it establishes. The generic industry, which accounts for 78 

percent of all prescription dispensed in the U,S. has stepped up to the plate to 

help provide FDA with resources to address the industry-wide, both branded and 

generic challenges caused by the global drug supply and the corresponding 

increase in FDA's workload, However, for it to truly be successful, and to 

achieve the lasting change that I believe we all wish to see, the currently 

outdated U.S. law must also be amended to reflect the 21 st century needs of the 

FDA in regulating the nation's global drug supply. 

B. FDA's governing law on drug oversight is reflective of the 1938 

Pharmaceutical Industry, not today's climate 

Every consumer should have the peace of mind in knowing that every 

prescription, brand or generic, dispensed in the United States, is held to the 

same standard of quality regardless of whether the product or its ingredients 

originated in the U.S. or outside its borders, Unfortunately, the current provisions 

of U.S. law, based largely on FDCA, were passed in 1938 when the source of our 

drug supply looked quite different than today. 

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One of the key ways FDA carries out its oversight responsibilities of 

ensuring continued compliance with the quality standards required of all 

prescription drugs sold in the U.S. (branded and generic) is by conducting on-site 

facility inspections. Unlike pre-approval inspections which occur prior to a 

specific product approval, routine surveillance inspections (known as GMP 

inspections) ensure that facilities are continuing to meet their obligation of 

producing safe products after approval in accordance with rigorous good 

manufacturing practices and are intended to identify potential concerns or 

observations before an issue emerges that may later interrupt or impact the 

safety or efficacy of the drug supply. The FDCA requires American 

manufacturers associated with pharmaceutical production to undergo a routine 

GMP inspection every two years to ensure that these facilities are complying with 

rigorous GMP standards. 15 However, the FDCA does not impose the same 

biennial inspection requirement on foreign facilities. The average GMP facility 

inspection of foreign facilities occurs every nine years compared to every two 

years for a U.S.-based facility. 16 According to a 2010 GAO report, the FDA 

inspected just 11 percent of the 3,765 foreign establishments in its database in 

2009. GAO estimates that some foreign facilities supplying the U.S. market may 

have never undergone a GMP inspection. 17 

C. Unlevel Playing Field that Threatens American 

Competitiveness 

15 See 21 U.S.C. § 360. 

16 U.S. Government Accountability Office. Drug Safety: FDA Has Conducted More Foreign 

Inspections and Begun to Improve Its Information on Foreign Establishments, but More Progress 

Is Needed (Publication No. GAO-10-961). (September 2010). 

17 Id. 

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The significant disparity in the degree of FDA oversight experienced by 

domestic facilities compared to foreign facilities creates an un level playing field, 

reducing the ability of American businesses, which have built in costs for regular 

. GMP compliance, to compete. The U.S. already has the second-highest 

combined federal-state corporate tax rate, 39.2 percent, and according to a 

recent report by Pew Health Group, complying with quality systems and FDA 

regulations represents approximately 25 percent of a drug manufacturers' 

operating costS.18 U.S.-based facilities participating in both the U.S. and global 

pharmaceutical market should not be competitively disadvantaged and effectively 

encouraged to move jobs to outside of the U.S. as a result of an antiquated law 

that is impeding FDA from carrying out its oversight responsibilities over all 

players supplying the U.S. pharmaceutical market. 

Mandating FDA risk-based biennial GMP inspections of all facilities, 

foreign and domestic, will improve quality and create a level playing field for all 

pharmaceutical manufacturers. Inspection parity will also benefit foreign facilities, 

as well as small and first time entrants to the industry, which are currently 

disadvantaged by delays in gaining approval for new products due to a lack of a 

recent inspection history, which is required before a new product can be 

approved. 

Congress recently updated the FDCA to help equip the FDA to carry out 

its mission of ensuring food safety in an increasingly globalized food supply.19 

With respect to the global drug supply, however, FDA still effectively operates 

18 Pew Health Group, After Heparin: Protecting Consurners frornthe Risks of Substandard and 

Counterfeit Drugs, at 27. 

19 FDA Food Safety Modernization Act, Public Law 111-353, 

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81517.081

within the constraints of the FDCA of 1938, the scope and provisions of which 

are largely domestic. The agency recently acknowledged that when it comes to 

drug oversight, FDA is "looking to Congress to modernize its antiquated 

authorities so that FDA's legal tools keep pace with globalization.,,2o Without 

changes to laws governing the U.S. drug supply necessary to fully fund FDA's 

oversight of today's complex and global drug supply, the significant challenges to 

the U.S. pharmaceutical marketplace will continue and likely increase. 

Ensuring that all contributors to the U.S. drug system, both foreign and 

domestic, are held to the same quality standard is a critical issue for the entire 

pharmaceutical industry - brand and generic alike. Amending the FDCA of 1938, 

and in particular, mandating risk-based routine FDA GMP inspections of all 

domestic and foreign pharmaceutical facilities every two years, will improve the 

quality, consistency and availability of finished product and active ingredients 

within the drug supply chain. 

Additionally, the lack of routine surveillance GMP inspections of foreign 

facilities has allowed weak links to enter the supply chain, resulting in potential 

market disruptions or other adverse events. GMP inspections are intended to, 

among other things, detect and address such quality concerns early in the 

manufacturing process. 

The backlog in routine foreign GMP surveillance inspections also causes 

notable delays in introducing new prescription drugs to consumers, including 

delays in approving products that serve unmet medical needs and offer more 

affordable options such as generic drugs. As I described previously, approval of 

20 FDA, Special Report, Pathway to Global Product Safety and Quality, pg 4. (July 2011) 

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a drug requires a recent inspection history of the relevant manufacturing facility. 

Many of the facilities producing new drugs are based abroad and are therefore 

waiting years to be inspected. 

Globalizing FDA by enhancing the law authorizing FDA to oversee today's 

complex and global drug supply to reflect the significant challenges to the U.S. 

pharmaceutical marketplace, will allow FDA to respond to the increasing 

challenges it faces in regulating the nation's drug supply. We urge Congress to 

move forward in updating the 1938 law and adopting the Generic Drug User Fee 

Program as negotiated with the FDA and industry. 

V. DRUG SHORTAGES 

As noted above, an important benefit of the generic drug user fee program 

is to identify and address potential weak links in the supply chain as early as 

possible. By conducting routine, on-site surveillance inspections (GMP 

inspections) of facilities located in the U.S. and abroad to ensure that they 

comply with rigorous GMP standards, FDA will be pOSitioned to detect market 

disruptions before they occur. GMP inspections are critical to the Agency's 

ability to identify potential concerns before an issue emerges that may later 

interrupt or impact the safety or efficacy of the supply chain. We believe drug 

shortages could be reduced as FDA achieves parity in GMP inspections of 

foreign and domestic facilities using a risk based approach. Additionally, the 

additional resources under GDUFA will decrease review times and ensure more 

timely access to new generic products, including those that address an un met 

medical need or those in short supply. Strengthening the supply chain - a key 

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aim of GDUFA through routine, GMP inspections as well as transparency 

initiatives that require the identification and registration of facilities involved in the 

supply chain - will provide a more holistic solution. To make lasting change, we 

urge Congress to make the necessary updates to the FDCA of 1938 to give FDA 

the authority it needs to carry out its mission in today's global drug supply. 

VI. BIOSIMILARS USER FEE 

The Affordable Care Act of 2010 directed FDA to develop a user fee 

program for review of biosimilar and interchangeable biological products in an 

effort to expedite access to biogenerics. Unlike GDUFA, the Biosimilars User Fee 

Act proposal before you was based on the Biologics Price Competition and 

Innovation Act (BPCIA), which was passed into law in March 2010 as part of the 

Patient Protection and Affordable Care Act (PPACA). Therefore, the opportunity 

to take a holistic approach to this user fee proposal, as the generic industry was 

able to do with GDUFA, was not available. While user fees were mandated and 

shaped by the Affordable Care Act in order to help expedite access to more 

affordable biogenerics, achieving the true savings Americans deserve through 

more affordable biogenerics will require much additional work and resources 

from Congress. It is telling that nearly two years have passed since the 

biogenerics approval pathway was enacted into law, and to date, no biogeneric 

has been approved by FDA nor has FDA released any meaningful g~idance to 

promote a workable pathway to deliver access to safe and effective biogenerics. 

This was clearly not the result Congress intended when it was estimated that the 

biogenerics pathway would save American taxpayers and the federal 

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government billions of dollars over the 10 years following its passage in 201021 

Mylan looks forward to working with Congress, GPhA and other stakeholders in 

ensuring a workable pathway to make available safe, effective and affordable 

biogenerics. 

VII. CONCLUSION 

In conclusion, Mr. Chairman, Mylan urges Congress to pass the Generic 

Drug User Fee Program as unanimously ratified by industry and update the 

Federal Food Drug and Cosmetic of 1938. Only by taking these steps can we 

further reduce government and taxpayer healthcare spending through more 

timely access to affordable generic medicine; ensure American competitiveness 

by addressing the unlevel playing field currently faced by U.S. manufacturers 

through inspection rates that are four times that of foreign competitors; and equip 

FDA with the authority it needs to carry out its mission of protecting the drug 

supply chain in today's highly globalized industry. 

Thank you. I would be happy to address any questions of the committee. 

### 

21 See, e.g., CSO, H.R. 4872, Reconciliation Act Of 2010 (Final Health Care Legislation), Cost 

Estimate For The Amendment In The Nature Of A Substitute For H.R. 4872, Incorporating A 

Proposed Manager's Amendment Made Public On March 20,2010, available at 

http://www. cbo.govlftpdocs!113xx/doc 11379/AmendReconProp.pdf 

19 
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Mr. PITTS. Thank you. Mr. Gaugh, you are recognized for 5 minutes to summarize your opening statement. 

STATEMENT OF DAVID GAUGH 

Mr. GAUGH. Thank you. Good morning, Chairman Pitts, Ranking 

Member Pallone, and members of the subcommittee. Thank you for 

inviting me to testify on these very timely and important issues. 

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 finisheddose generic pharmaceuticals, bulk pharmaceutical chemicals, and 

suppliers to the generic industry. Generic pharmaceuticals fill 78 

percent of all prescriptions dispensed in the United States but consume just 25 percent of the spending for prescription medicines. 

I would like to begin by commending the committee for your continued focus on these most important issues that you are examining today. Though I have just begun my time with GPhA, I have 

been working in and around the generic industry for more than 2 

decades and have witnessed firsthand the industry’s remarkable 

growth and the vital role it plays in the lives of Americans every 

day. This growth of the generic industry has also served to underscore the critical importance and the role of the Food and Drug Administration. As shown by these two historic user fee agreements 

and our continued efforts to address drug shortages, the level of cooperation between the industry and the FDA has never been greater. It is our hope this collaboration will continue and even extend 

throughout the interactions for future activities with the Agencies. 

However, the Agency remains underfunded and the responsibilities of ensuring safe and effective access for affordable medications 

is shared with the entire pharmaceutical industry, not just with 

the FDA. This is why the generic industry has stepped up to the 

plate, and I would be pleased to provide some examples. 

Currently, well more than 2,000 generic drug applications are 

awaiting approval for the FDA Office of Generic Drugs and average 

approval time for these applications is now stretched to 32 months. 

Unfortunately, the backlog keeps growing for these generic drugs, 

keeps off market competitors, and prevents the prices from continuing to go down further. The proposed Generic Drug User Fee, 

or GDUFA, that we are discussing today will provide the FDA with 

nearly $1.5 billion over the next 5 years to help alleviate this backlog and expedite consumers to new generic drugs. It will also take 

the historic step of holding all players contributing to the U.S. generic drug system, both foreign and domestic, to the same inspection standards and enhance FDA’s ability to identify and require 

the registration of active pharmaceutical ingredients and finish 

dosage from manufacturers involved in the production of the products being sold in the U.S. 

It is paramount that as we work and save the future of our country’s generic industry, we also work with the FDA to bring them 

into the 21st Century and ensure that the Agency’s authority to 

achieve its mission and the goals are kept up to date. This is exemplified by the user fee program we are discussing today, both 

GDUFA and the biosimilar fee structure. 

121 

During the biosimilar fee negotiations, GPhA expressed its support for user fee funding to provide FDA with adequate resources 

to apply consistent regulatory standards to all biologics. Both industry and patients will benefit from this user fee program by gaining a higher degree of certainty in the timeliness of the applications, the review, and their approval. It is important to emphasize 

that the funding provided by these user fee programs is in addition 

to and not a substitute for congressional appropriations. 

And while the programs provide an excellent framework for the 

industry to help support the growing global needs of the FDA, they 

do not completely solve the problems. For example, some manufacturers are using the REMS program as a way to delay generic competition. For products that require a full REMS and distribution in 

accordance with restricted systems, REMS manufacturers are making it difficult for the generic manufacturers to acquire samples of 

products so that they can actually run the tests on the products to 

be able to produce the exact bioequivalent product in a generic 

form. GPhA also supports the adoption of a Federal drug tracking 

system with uniformed standards across all States to prevent a 

patchwork by state law. 

Now, let me address the drug shortage crisis. The generic pharmaceutical industry has spearheaded the development of an unprecedented multi-stakeholder collaboration, which we believe will 

accelerate the recovery of certain critical drugs in short supply that 

are in patient need. This private sector solution, which we have labeled as the Accelerated Recovery Initiative, is designed to provide 

a more accurate, timely, and comprehensive view of the critical 

drugs and drug shortage, provide greater visibility to potential 

shortages of those critical drugs that are established for potential 

loss, and voluntary production adjustments to lessen and even 

eliminate certain current drug shortages. This initiative is predicated on voluntary communication between an independent third 

party and all key stakeholders involved in the approval, the manufacturing, and the distribution of drugs that are in shortage. 

In conclusion, Mr. Chairman, it is our hope that Congress will 

act on these historic user fee proposals as an expeditious process. 

Nothing is more important to our industry than ensuring patients 

have access to life saving generic medications they require, and 

with a joint effort among all involved, we believe we can continue 

to make significant steps towards accomplishing this goal. 

Thank you, and I look forward to your questions. 

[The prepared statement of Mr. Gaugh follows:] 

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SUMMARY OF THE GENERIC PHARMACEUTICAL ASSOCIATION TESTIMONY 

BEFORE TilE ENERGY AND COMMERCE SUBCOMMITTEE ON HEA L Til 

UNITED STATES HOI'SE Of REPRESENTATIYES - FEBRUARY 9, 2012 

"REVIEW OF THE PROPOSEI) GENERIC D1WG AI,1) BIOSI\IILARS USER FEES ANI) FURTHER 

EXA\IINATION OF DRr<; SHORTAGES" 

I am David Gaugh. Vice President for Regulatory Sciences at the Generic Pharmaceutical Association 

and a licensed pharmacist, GPhA represents [he manufacturers and distributors of linished dose generic 

pharmaceuticals, manufacturers and distributors of bulk pharmaceutical chemicals and suppliers of other 

goods and services to the generic industry, Generic pharmaceuticals fill 78 percent of the prescriptions 

dispensed in the U,S. but consume just 25 percent of the total drug spending. 

Lalldmllrk User Fee Programs Will Provide Additionlll Resources 

Currently, more than 2.000 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, The Generic Drug User Fcc Act (GDUFA) will hclp alleviate the backlog and expedite consumer 

access to generic drugs, while also enhancing drug quality and safety. FDA will receive $299 million per 

year over the five-year GDUFA program, or about $1,5 billion in total. The new user fee program will 

also establish performance goals for the rDA, The agreement's peri<lrInance goals call j()r FDA to 

complete, by the end of year five. the rcview 01'90 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 calls on the FDA to review 90 percent of ANDAs within 10 months after they arc 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 identify and require the registration of API and 

t1nished dosage form manufacturers involved in each generic drug product sold in the U,S, 

The Biosimilars User Fee Act 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 t1fth year. to review 90 pereent ofthe original biosimilar applications it receives within ]0 

months of their submission, 

A tldressing the Drug Shortage Crisis 

GPhA is committed to working with the FDA and all stakeholders to minimize current drug shOliages and 

prevent future shortages from occurring, Causal factors of drug shortages are numerous and do not apply 

in every case, They include everything from an insufficient supply of available raw materials, to 

increasing consumer demand, to decreasing available capacity, to inadequate and delayed 

communications about shortages - all within the supply chain and also within and among the FDA's 

enforcement and drug shortages personnel. The manufacturing community has been extremely visible in 

working with all stakeholders, especially the rDA, to find suitable solutions that accelerate the 

availability of critical drugs in Sh011 supply, A group of generic manufacturers, including both GPhA and 

non·GPhA members, that represent approximately 80 percent of the generic sterile injectable products 

sold in the U,S, today. are proposing the Accelerated Recovery Initiative (ARI), whi,h is a private 

see tor solution that is predicated on voluntary communication betwecn stakeholders in the manufacture 

and distribution of generic injectable drugs in shortage. 

Sllpp~r Chaill Security 

GPhA strongly supports 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 prioritizes inspections according to a company's safety 

and compliance track record, GPhA recommends that Congress adopt a federal drug tracking system with 

uniform standards across all states. As a member of the Pharmaceutical Distribution Security Alliance 

(PDSA), GPhA. in consensus with other supply chain partners. supports the RxTEC model, which ,viii 

increase palieni safety and help to achieve the goals we share with the FDA, 
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TESTIMONY O}<' DAVID '-"ftV""LI, R.PU. 

VICE PRESIDENT FOR REGULA TORY SCIENCES 

GENERIC PHARMACEUTICAL ASSOC]A TlON 

OF THE PROPOSED GENERIC DRUG AND BIOSIMILARS 

USER AND FURTHER EXAMINATION OF DRUG 

SHORTAGES 

BEFORE THE ENERGY AND COMMERCE SUBCOMMITTEE ON HEALTH 

UNITED STATES HOUSE OF REPRESENTATIVES 

FEBRUARY 9, 2012 
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Good morning Chairmen Pitts and Upton, Ranking Members Pallone and Waxman and 

Members of the House Energy and Commerce Subcommittee on Health. Thank you for 

inviting me to testify before your subcommittee on these very timely and important 

subjects. 

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, manufacturers 

and distributors of bulk pharmaceutical chemicals and suppliers of other goods and 

services to the generic industry. Generic pharmaceuticals now fill 78 percent of all 

prescriptions dispensed in the U.S., but consume just 25 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 

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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. 

Introduction 

I would like to begin today by commending the Committee for your continued focus on 

the important issues we will examine today. Though I am just beginning my time at 

GPhA, I have worked in and around the generic industry for more than two decades and 

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. 

This growth in the generic industry 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 and continual efforts to address drug shortages we are discussing 

today, represents only a small measure of our ongoing collaboration. 

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 safety 

and access to 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 the plate to help provide the FDA with resources to address the ongoing 

challenges caused by an increasingly global drug supply, the increase in the agency's 

workload and the regulation of new and complex technologies, 

Throughout much of the last 12 months, GPhA and our member companies worked 

closely with the FDA to negotiate two separate user fee programs designed to help the 

agency obtain additional resources in this global age and 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 programs will make certain that 

all Americans receive timely access to safe, effective and affordable generic drugs, Let 

me provide some more details, 

Landmark User Fee Programs Will Provide Additional Resources 

Currently, more than 2,000 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, low4 
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cost generic drugs off the market and reduces competition that may drive down drug 

prices further. 

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. Finished dose facilities that manufacture both generic and brand 

medications will be required to pay both a Prescription Drug User Fee Act facility fee 

and a GDUFA facility fee. 

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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 - commonly referred to as 

Abbreviated New Drug Applications, or ANDAs - that are pending on October 1, 2012 

- the proposed start date for the program. By achieving this goal, the GDUFA 

agreement will effectively eliminate the current application backlog. 

In addition, also by the end of the program's fifth year, GDUFA 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. 

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. But 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 

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was in 1938 due to the increasing globalization of drug manufacturing, supply and 

testing and an increase in FDA-regulated drug products. 

GPhA has long-maintained that, in light of this 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 i3DUFA 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 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. 

It is important to emphasize that the funding provided by GDUFA is in addition to, not a 

substitute for, Congressional appropriations. And while the program provides an 

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excellent framework for industry to help support the growing global needs of FDA, it 

does not completely solve the problem. 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 2.1 51 

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. 

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 

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 

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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 

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, albeit with a portion of the application fee paid during the biosimilar development 

phase 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. 

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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. 

Through both of these user fee agreements, the generic industry has truly stepped up to 

the plate 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 programs to spread fees across multiple stakeholders and sources to 

keep individual amounts as low as possible, the programs 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, 

Addressing the Drug Shortage Crisis 

GPhA believes strongly that the collaboration between industry, the FDA and other 

stakeholders shown during the development of the user fee programs should serve as a 

model for other areas, in particular as we work to eliminate existing short,ages of critical 

drugs and minimize the potential for future shortages, 

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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. 

Before examining how best to respond to drug shortages it is important to understand 

why they are occurring. Contrary to some media reports, drug shortages are typically 

not caused by a manufacturer's decision to voluntarily discontinue supplying the 

product, and manufacturers do not - and would never - deliberately reduce the 

supply of essential medicines to push prices up. There can be no question that generic 

manufacturers are in the business of supplying quality medicines and assuring that 

consumers and patients have access to the drugs they need. 

Causal factors of drug shortages, rather, are numerous and do not apply in every case. 

They include everything from an insufficient supply of available raw materials, to 

increasing consumer demand, to decreasing available capacity, to inadequate and 

delayed communications about shortages - all within the supply chain and also within 

and among the FDA's enforcement and drug shortages personnel. 

GPhA also acknowledges that while factors contributing to drug shortages are many 

and complex, roughly half of the reported shortages have been attributed to difficulties 

associated with the manufacturing and release of generic sterile injectable products. 

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The manufacturing community has been responsive to this issue and has been 

extremely active in working with all stakeholders, and especially the FDA, to find 

suitable solutions that accelerate the availability of critical drugs in short supply. 

Collaboration Among Stakeholders is Needed 

GPhA also believes it is critical that generic manufacturers, and all stakeholders, 

continue to work together in an effort to solve the problem. As an industry whose entire 

business model is to make quality medicines available and affordable to all, we are 

acutely aware that a lack of supply of a critical drug can be devastating, even if it 

impacts only one patient. 

With this in mind, the generic pharmaceutical industry has spearheaded the 

development of an unprecedented multi-stakeholder tool, which we believe will 

accelerate the recovery of certain critical drugs in short supply to patients in need. This 

proposal, which we have labeled the Accelerated Recovery Initiative, or ARI, can be 

utilized by all stakeholders involved in the manufacturing and distribution of vulnerable 

drugs in shortage - including, but not limited to manufacturers, wholesalers, 

distributors, Group Purchasing Organizations (GPO's) and the FDA - in order to 

accelerate the recovery of critical drugs in short supply to patients in need. In addition, 

this multi-stakeholder approach will provide additional information to focus on decisions 

and actions proposed by regulatory agencies and their potential impact on critical 

supply. 

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Accelerated Recovery Initiative (ARI) 

The goal of ARI is to put in place industry practices that provide a more accurate, timely 

and comprehensive view of the current drug shortage situation, provide greater visibility 

to potential shortages solutions and establish practices that allow for potential, voluntary 

production adjustments to lessen or eliminate the impact of a current shortage. Given 

that over 200 products are currently identified by the FDA Drug Shortage staff, the initial 

scope of the initiative will focus only on those products deemed most critical, sterile 

generic injectable products. We will continue to fine tune the inclusion criteria with a 

focus on products that have few manufacturing options and no therapeutic alternative. 

As I noted, this initiative is predicated on voluntary communication between an 

independent third party and stakeholders involved in the manufacturing and distribution 

of generic injectable drugs in shortage. In addition, this multi-stakeholder approach will 

provide additional information focusing on real time decisions and actions proposed by 

regulatory agencies and their potential impact on critical supply. 

In order for this type of initiative to work, each stakeholder involved in the manufacture, 

supply and distribution of critical drugs in shortage that is willing to participate will 

communicate necessary information to the independent third party and the FDA Drug 

Shortage staff. Safeguards will be put in place to ensure that market and manufacturing 

information is treated with appropriate care. 

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Further, this initiative will not limit or restrict competition, and will not in any way deal 

with pricing information. It will also require prior approval by the Federal Trade 

Commission and the Department of Health and Human Services. 

The primary focus of the ARI is to gather the current and future supply information from 

stakeholders for those products identified as meeting the critical criteria. This will then 

be used to determine current and potential supply gaps, with a focus on those products 

where a shortage is expected to last longer than 90 days. This type of information will 

increase early visibility and communication between the FDA and industry relating to 

current and potential drug shortages. 

Under the ARI, the impartial third party will gather and disseminate the supply 

information in compliance with all current market regulations and under terms of strict 

confidentiality. This independent third party will be supplied with data from 

manufacturers related to drugs currently in shortage or expected to go into shortage, 

including the name of the drug, the expected duration of the shortage and internal 

reviews of a product's production and release data to identify production capabilities 

that will allow us to respond to any market shortage. Wholesalers and distributers will 

also supply current product availability data to assure a complete review of all available 

inventories in their pipelines. 

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The independent third party will then aggregate the data to provide an overall view of 

the projected available supply by product, as defined by critical product criteria, 

compared to the total market need. If the data reveals gaps in market supply that 

require FDA intervention, the information will be provided by the independent third party 

to the FDA Drug Shortage staff so that they may help to develop solutions with the 

manufacturers. 

In addition, GPO's also have an important role to play. Their focus will be to assure that 

timely and accurate information is readily available between all affiliated members, 

institutions and customers, and the independent third party. 

The last step of ARI focuses on FDA. The agency deserves tremendous credit for the 

work it is currently doing to expedite regulatory reviews and work closely with 

manufacturers. However, there is still more that must be done, and manufacturers 

would be aided by a formal process specifically designed to facilitate communications 

related to drug shortage regulatory issues. 

The formation of a FDA drug shortage management team could more effectively 

address current drug shortages and minimize future shortage events. The industry 

strongly encourages the establishment of this high-level FDA drug shortage 

management team, which would include representation from key agency offices; the 

FDA's Center for Drug Evaluation and Research medical staff, Office of Compliance, 

Drug Shortage staff and Office of Regulatory Affairs. 

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This team would provide an avenue for timely access to FDA decision makers by the 

pharmaceutical industry to review strategies for addressing or averting cfrug shortages. 

This high-level FDA team could provide the expertise and the appropriate level of 

authority to effectuate rapid decisions on steps to address drug shortages by being 

empowered to evaluate issues such as expediting reviews of pending supplements, 

which enable industry to address shortages of critical drug products. 

Our industry is currently working with FDA and other stakeholders to implement the ARI 

in parallel with our other recommendations in order to increase the channels of 

communication and strengthen our collective ability to supply patients with the 

medicines they critically need. 

Supply Chain Security 

Finally, as we work to resolve these shortages of critical drugs and prevent future 

shortages from occurring, I would also like to mention briefly the vital importance of 

securing the supply chain that patients rely on to provide them with these medications. 

GPhA and our member companies are committed to doing everything possible to work 

with Congress and the FDA to ensure that adequate oversight of the nation's drug 

supply is in place to ensure its safety. The generic pharmaceutical industry is among 

the most highly regulated in the world, with strict rules governing the dev,elopment, 

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manufacture, approval, packaging, marketing and post-marketing surveillance of 

prescription drugs by the FDA. 

As noted previously, GPhA strongly supports 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 prioritizes inspections 

according to a company's safety and compliance track record. 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 positive inspections would be 

placed further down on the inspection schedule, 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 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. 

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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. 

Conclusion 

In conclusion, Mr. Chairman, this truly is a historic time for GPhA. The two user fee 

proposals now before the Committee will shape the future of our industry for years to 

come. And the unprecedented level of collaboration between industry, the FDA and 

other stakeholders that it took to reach these agreements will continue to serve us well 

as we work to minimize current drug shortages and prevent future shortages from 

occurring. Nothing is more important to our industry than ensuring patients have access 

to the lifesaving generic medications they require, and with a joint effort among all 

involved, we believe we can continue to make significant steps toward accomplishing 

this goal. Thank you. 

18 
141 

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

Dr. Greene for 5 minutes to summarize your opening statement. 

STATEMENT OF BILL GREENE 

Mr. GREENE. Chairman Pitts and other members of the committee, I am grateful for the opportunity to address you today as 

a representative of St. Jude’s Children’s Research Hospital and also 

a representative of colleagues at children’s hospitals throughout 

the United States. As you know, I am chief pharmaceutical officer 

at St. Jude and at St. Jude we are committed to developing research that leads to new cures for children with catastrophic diseases. We are also committed to providing unsurpassed clinical 

care for those patients. I am really grateful that you would offer 

me time to share some comments. 

My short testimony—if we can have some slides here—I would 

like to share three ways Congress can help alleviate drug shortages 

for the pediatric community. But first, I would like to begin by putting a face to my discussion, and it doesn’t look like the face will 

be able to be displayed. 

I can tell the story of Lucy, who is a 5-year-old from Covington, 

Tennessee. Lucy and her family have given me permission to share 

her story as a way of illustrating the challenges that drug shortages pose for patient care and for the caregivers that are providing 

that care. She is being treated for medulla blastoma, which is a 

type of brain cancer. She has been doing well, and last spring she 

was being treated in her prescribed course of treatment and was 

being supported by intravenous nutritional support. She began to 

develop symptoms, rapid eye movements, blurred vision, other visual changes, some gait changes that caused her care team to suspect that her cancer was relapsing. So she was admitted to the hospital and worked up. Fortunately, during that time, she was treated with intravenous thiamin. She experienced a dramatic recovery 

and was able to continue with her treatment course. 

The interesting background on this issue is that the cause of the 

thiamin deficiency was very simple. We were simply unable to secure intravenous preparations of multivitamins to add to her intravenous nutritional support. That caused the thiamin deficiency, the 

thiamin deficiency caused the symptoms, the symptoms resulted in 

a hospital admission. This was a preventable admission and it 

should not have happened. 

You are aware that the number of drug shortages occurring in 

the United States has increased dramatically in recent years. 

While not all of these shortages have directly affected St. Jude, the 

number of shortages affecting us have increased dramatically. If I 

were able to show my second slide, I would be able to illustrate to 

you that we have experienced a 10-fold increase in the number of 

shortages requiring action at our organization since 2008. In the 

last 2 months alone, January and December, I have had to issue 

communications to our clinical staff on 14 separate occasions. Now, 

once that requires my action, those are important drug shortages 

that impact patient care—14 times in the last 2 months. 

Our drug shortages threaten our Nation’s healthcare system and 

especially children in three distinct ways. First, we know that we 

cannot always provide the best care for these patients. Second, we 

142 

know that shortages do affect research that cause modifications for 

protocols, sometimes delays in research and terminations. We know 

that at least 85 children’s oncology group protocols that have been 

affected by shortages. And third, we know that all of these shortages definitely add real cost to the system. I know the subcommittee has previously heard testimony of this type. Much data 

has been shared. Many of the comments today have been very interesting and helpful. It is now time for immediate action. 

I have three points I would like to make about what Congress 

can do to help. First, I urge Congress immediately to pass legislation to give the Food and Drug Administration the tools that it 

needs to prevent and minimize the impact these shortages have on 

pediatric care and research. The FDA has been effective in minimizing the impact of shortages when appropriate communication is 

made to the Agency. Their efforts have avoided almost 200 shortages in 2011. Congress can strengthen their reporting system by 

enacting H.R. 2245, Senate Bill 296, to give the FDA more complete knowledge of permanent and temporary supply chain disruptions in advance and allowing the FDA to facilitate its communications with caregivers like me. 

Second, I urge Congress to give the FDA the resources and authority it needs to combat drug shortages in a proactive manner. 

While the FDA’s efforts have been laudable, these efforts have been 

largely reactive. Once a shortage has evolved, we know patients are 

going to be affected. The Agency must have what it needs to develop proactive approaches to predict and prevent shortages and 

the FDA should have sophisticated systems in place facilitating 

forecasting, prediction, and enabling proactive work with suppliers 

and purchasers to prevent shortages from ever occurring. Further, 

other relevant agencies such as the DEA must work closely, collaboratively, with the FDA to combat these shortages. 

Third, Congress must ensure that in any solution it develops, pediatric protections are built in and pediatric experts are broadly engaged. Children require medications in special strengths, packaged 

in smaller dose sizes, dye-free and preservative-free when possible. 

Hospitalized children frequently require intravenous medications, 

and in many cases, fewer alternatives exist for them when a drug 

is in short supply. For these reasons, the expertise of pediatric 

practitioners who are familiar with the nuances and intricacies of 

the care of children must be included in developing solutions for 

shortages. 

Finally, I would like to conclude by recognizing that the underlying causes of drug shortages are complex. Solutions offered today 

will not solve the many reasons drug shortages exist and continue 

to increase in frequency. Before enacting legislation focused on addressing these underlying factors, I urge you to carefully and comprehensively study and understand these factors and the downstream impact of any proposed solutions with input from 

healthcare professionals and other stakeholders. We must return to 

a state that used to exist when I was a younger practitioner, a 

state when we had a consistent, reliable, and safe supply chain of 

needed pharmaceutical products. Nothing less is acceptable. 

Thank you for your dedication to this issue and for allowing me 

minutes to speak as a provider and caregiver representing children 

143 

throughout this country who have been affected by these shortages. 

Thank you. 

[The prepared statement of Mr. Greene follows:] 

144 


81517.104

Summary of Testimonv: 

Drug Shortages & the Need for Action 

February 9, 2012 

Bill Greene, PharmD. BCPS, FASHP 

Chief Pharmaceutical Ofliccr 

St Jude Children's Research Hospital 

Memphis. TN 

The challenges that drug shortages arc causing for patients and caregivers at St Jude and 

throughout the country are described 

The case of Lucy, a 5-year old brain tumor patient from Covington TN, is described to 

illustrate the patient impact of shortages 

The frequency of shortages has increased dramatically. From August 2008 to January 2012, 

St. lude experienced a 10-fold increase in the number of shOitages which required action 

Drug shortages make it difficult to provide the best possible patient care. Shortages cause 

delays or termination or research in important fields like pediatric oncology, including at 

least 85 Children's Oncology Group (COG) clinical trials. Shortages add real costs to the 

health care delivery system. 

Congress is urged to pass legislation (RR. 2245 and S. 296) immediately to give the Food 

and Drug Administration (FDA) the tools it needs to prevent and minimize the impact these 

drug shortages have on pediatric care and research. 

Congress must give the FDA the resources and authority it needs to combat drug shortages in 

a proactive manner. Other relevant federal agencies, such as the DEA must collaborate with 

(he FDA to combat drug shortages. 

Congress must ensure that ill any solution it develops, pediatric protections arc built in and 

pediatric experts arc broadly engaged. 

The underlying causes of drug shortages are complex. Before enacting legislation to address 

those factors, Congress should carefully study and understand these factors and implications 

of proposed solutions 
145 


81517.105

Chairman Pills and other members of the Committee. ( am grateful for the opportunity to speak 

before you- not only as a representative ofSt Jude Children's Research Hospital, but as a 

representative of caregivers at children's hospitals throughout the country. As you know. I am 

Chief Pharmaceutical Officer at my organization. St Jude is committed to devcloping research 

that leads to new cures for children with catastrophic diseases, and to providing unsurpassed 

clinical care of these patients. Thank you for letting me address you today. 

St. Jude, located in Memphis, Tennessee, is internationally recognized for its pioneering research 

and treatment of children with cancer and other life-threatening diseases. The hospital's research 

has helped push overall survival rates for childhood cancer from less than 20 percent when the 

institution opened in 1962 to almost 80 percent today. It is the first and only National Cancer 

Institute-designated Comprehensive Cancer Center devoted solely to children, and no family 

ever pays St. Jude for care. 

[n my sllort testimony today, I'd like to share 3 ways Congress can alleviate drug shortages for 

the pediatric community, but first I would like to begin by putting a face to my discussion. This 

is Lucy a 5 year-old from Covington, TN. She and her family have given me permission to 

describe her case as a way of illustrating the challenges that drug shortages are causing for 

patients and caregivers at St Jude and throughout the country. Lucy is being treated for 

mcdu lIoblastoma - a type of brain cancer. and today she is doing well. Last spring, she was 

going through her prescribed course of therapy - supported through her treatment by the 

administration of intravenous nutrition. She began to deteriorate with blurred vision, random eye 

movements. and some visual changes: her family and physicians worried that her cancer was 

relapsing. She was admitted back into the hospital for evaluation. During this workup. her 
146 


81517.106

physicians considered whether all of her new symptoms might be due to a simple vitamin 

insufticiency. She was treated with intravenous thiamine. and experienced a dramatic recovery 

and was able to continue treatment. 

What was the cause of Lucy's thiamine deficiency that resulted in admission to the hospital? 

Due to a drug shortage. her care team had been unable to add multivitamins to her nutrition 

solution for weeks -multivitamins containing thiamine. Despite all our efforts. there simply was 

no multivitamin solution available to be purchased. As a result. Lucy and her fiJmily worried 

about a relapse of her cancer. and she had to be readmitted to the hospital. This is unacceptable. 

and this is only one of many shortages that St Jude and other pediatric hospitals around the 

country have experienced in recent years. 

You are aware that the number of drug shortages occurring in the United States has increased 

dramatically in recent years. A total of267 shortages were noted in 2011 by the University of 

Utah Drug Information Service. LIp from 211 in 20 I 0, which was dramatically higher than in 

previous years. While not all of these shortages have directly affected St Jude. our hospital has 

experienced a dramatic increase. Figure 1 illustrates the number of drug shortages that have 

affected us since 2008; you will notice a 10-fold increase in the number of shortages which 

required action at St Jude. In the last 2 months alone, I have had to issue 14 difTerent 

communications to clinical statTregarding shortages alTeeting our patients, and all of these 

notifications involved injectable sterile products. While chemotherapy drugs constitute a 

significant proportion of the affected drugs, many other types have been affected, including 

nutritionals. lV electrolytes. antibiotics, anesthesia drugs, and many others. 
147 


81517.107

Drug shortages threaten our nation's hcalthcare system in three distinct ways. First, we know that 

we cannot always provide the best possible patient care, especially pediatric care for our most 

vulnerable patients like Lucy, who was depcndent on injectable nutrition. Second, we know that 

shortages cause delays or termination of research in important fields like pediatric oncology, 

including at least 8S Children's Oncology Group (COG) clinical trials. And third. we know that 

all this adds real costs to the health care dclivery systcm, as it did when I ,uey had to be admitted 

for an extra stay at the hospital. 

Patient care is affected because patients cannot receive medications that are necessary to most 

effectively treat their disorders. Chemotherapy shortages arc a particular concern for St. Jude, 

and otten alternative chemotherapy may not exist, or there may be little or no evidence that 

alternative drug therapies will be effective in pediatric cancer patients. The most common 

childhood cancer is acute lymphoblastic leukemia ("ALL"), with about 3,000 cases per year. 

Approximately 90 percent of patients with ALl. can be cured using a combination of up to 10 

drugs. Over the last decade, however. eight of these to drugs have become difficult, and at 

times impossible, to obtain. These frequent shortages insert additional and unnecessary 

complexity to curing children with ALL and other cancers. 

While chemotherapy drug shortages have been an area of focus for St. Jude, shortages of other 

drugs important to pediatric patients have equally important implications. Drug shortages have 

most frequently occurred with sterile injectable drugs. which are often among the most complex 

and high risk therapies used in the hospital setting. Shortages of these products only add further 
148 


81517.108

complexity to the use of these therapies and put patients at risk for a new source of medication 

errors and patient harm. For example, drug shortages otten cause frequent shifts to alternate 

therapies and switching between available drugs, which can lead to errors and adverse patient 

outcomes. 

When St. Jude opened in 1962, only 4% of children with ALL survived. About 90% of children 

with ALL arc cured today due to discoveries made through basic and clinical research. Clinical 

research at St. Jude and across the country is negatively impacted by drug sholiages.' At least 85 

Children's Oncology Group ("COG") and 150 National Cancer Institute ("NCl") clinical trials 

ftx cancer havc been affected hy drug shortages. In some cases, clinical trials tor cancer patients 

have been suspended due to drug shortages. At SL Jude, we have not had to discontinue any of 

our clinical trials due to drug shortages, but there have been times when \ve have had to carefully 

consider whether we could continue to enroll patients for certain protocols. Besides limiting 

clinical trial enrollment, drug shortages have added complexity and additional work to the 

conduct of clinical trials. St. .Tude developed guidance tor our investigators about how to handle 

the impact of drug shortages on existing trials. and in some cases, investigators were forced to 

make substantial protocol amendments. 

Drug shortages add costs to the system in many ways. Selection of alternative therapy may 

result in use of drugs that are more expensive than the originally selected drug. Errors may 

require additional hospital stay or require unplanned admissions. At the very minimum, busy 

clinicians devote literally thousands of hours to gather information on shortages. assess the 

organization's specific situation, create and plan, and communicate this to colleagues. 
149 


81517.109

Obviously, this work docs little to improve health care and diverts etTort away from important 

patient care and research at,tivities. 

Now, I know that the Subcommittee has likely heard similar testimony before from others. Much 

data on drug shortages has been shared, and many hearings have been conducted. It is now time 

for immediate action. So I have 3 points I'd like to make about what Congress can do to help. 

First, I urge Congress to pass legislation immediately to give the Food and Drug Administration 

(FDA) the tools it needs to prevent and minimize the impact these drug shortages have on 

pediatric care and research. Despite extremely limited resources, the FDA has been effective in 

minimizing the impact of drug shortages when appropriate communication is made to the 

agency. Despite a largely voluntary reporting system FDA's efforts avoided almost 200 

shortages in 20 I J., Congress can strengthen the reporting system by enacting H.R. 2245 and S. 

296, to give the FDA more complete knowledge of penn anent and temporary supply chain 

disruptions in advance. Once that early-warning system is in place, the FDA can streamline its 

communication with pharmacists like me so that 1 can more effectively work to mitigate the 

impact of drug shortages on patients like Lucy at St. Jude. 

These resources should specifically include: 

• Manufacturer notification when a company is leaving the market or curtailing 

production. While manufacturer notification to FDA would not be a permanent solution 

to the current drug shortage crisis, FDA has demonstrated that it has the ability to help 

avoid shortages when it is notified of conditions that tend to lead to-or at least 
150 


81517.110

exacerbate-shortages. FDA has proven its ability to avoid shortages in recent years. In 

2010, FDA averted 38 shortages when manufacturers voluntarily communicated potential 

issues, and as already noted FDA avoided nearly 200 shortages in 20 II. In a September 

20 II FDA Public Workshop on drug shortages. FDA ot1icials noted that additional 

information from manufacturers has been critical to their improved efforts to prevent 

sho rtages. JI 

Mandatory manufacturer notification to FDA of conditions that could result in a 

drug shortage. Notification should occur when there is a single provider of the active 

pharmaceutical ingredient ("API"), which indicates a drug is at a higher risk of shortage 

and that FDA should monitor it more closely. St. Jude further supports notification to 

FDA when therc is any interruption in the supply of raw materials, API or manufacturing 

processes. Increasing manufacturer and FDA communication will provide FDA more 

tools to manage and prevent drugs shortages. The October 20 II Executive Order on drug 

shortages'" enhances FDA's ability to prevent and mitigate drug shortages, consistent 

with current law, but legislation is necessary to codify and formalize FDA's authority to 

take action to prevent drug shortages. 

Second, I urge Congress to give the FDA the resources and authority it needs to combat drug 

shortages in a proactive manner. While the FDA's efforts have becn laudable, these efforts have 

been largely reactive and once a shortage has evolved, patients will be affected. The agency 

must have what it needs to develop proactive approaches to predict and prevent shortages before 

they affect organizations like S1. Jude and patients like Lucy. The FDA should have sophisticated 

systems in place. such as a database of all foreign and domestic manufacturers producing critical 
151 


81517.111

medications, and should develop the ability to forecast supply and demand levels. This 

technology exists in the private sector and should be expanded nationwide to enable the FDA to 

work more proactively with suppliers and purchasers to prevent shortages from ever occurring." 

Further, other relevant federal agencies such as the DEA must collaborate with the FDA to 

combat drug shortages. At the end of calendar year 20 I I. St. Jude experienced serious drug 

shortages of controlled substances such as intravenous fentanyl, and concerns have been 

expressed that the DEA quota system may be inflexible and contribute to drug shortages. 

Third, Congress must ensure that in any solution it develops, pediatric protections are built in 

and pediatric experts are broadly engaged. Children are not just small adults; rather they need 

specialized care and medications. Children require medications in special strengths, packaged in 

smaller dose sizes, dye-frce and preservative-free when possible. Hospitalized children 

frequently require intravenous medications, and as you know the majority of drug shortages have 

been sterile injectable medications. In many cases, fewer alternatives exist for children when a 

drug is in short supply. For these reasons, the expertise of pediatric practitioners who are 

fam iliar with the nuances and intricacies of pediatric care must be included in developing 

solutions for drug shortages. 

Finally, I'd like to conclude by recognizing that the underlying causes of drug shortages are 

complex. I have offered three possible solutions today that will help address this growing public 

health crisis in the United States. These solutions alone will not solve the many reasons drug 

shortages exist and continue to increase. Before enacting legislation to address those factors. I 

urge Congress to carefully and comprehensively study and understand all the underlying factors 
152 


81517.112

and implications of proposed solutions. with input from health care professionals and other 

stakeholders. Remember that data from the FDA and other sources point to two major factors as 

the most common underlying contributors to shortages: manufacturing issues. and quality issues 

resulting in temporary closure of production facilities. 

We must return to a state where a consistent, rei iable, and safe supply chain of needed 

pharmaceutical products exists to protect patients like I,uey. Nothing less is acceptable. Thank 

you for your dedication to this issue and for allowing me these few minutes to speak as a 

provider and caregiver, representing children throughout this country who have been affected by 

these shortages. 

References 

I Ledford H. Drug shortages slow clinical trials. Nature. October 3, 2011. available 01: 

http://www.naturc.com/news/20111111003/tilillnews.2011.570.ht011. 

1 See Food and Drug Administration Center for Drug Evaluation and Research) "Approach to Addressing Drug 

Shortage; Public \Vorkshop."availahle at http.'f/H'H'w,/dagov,'Drllgs·:VelvsEvents/ucm265968,htm 

I Executive Order 13588; Reducing Prescription Drug Shonages, Oct. 31, 2011, availah": al 

b1!.u;H~y.ww, whitehouse ,uov/the~press~oftic('/20 I I" I Oi~ I lexecutive-order-I ]588-redtH:ing-PL~~jption-drllg: 

illQrt-illL~· 

I "Drug shortages: a closer look at products, suppliers. and volume volatility:' IMS Institute for Healthcare 

Informatics (November 20 II). availahle al 

http:/(wwIV.imshealth,com/portal/siteiims!menuitem.cdb2b8 I 823 fi'i 7dab41 d84b90 3 208e22at'vgnextoid=a6 fbecO f6 8 

f733 I OVgnVCM IOOOOOed I 52ca2RCRD. 
153 


81517.113

Figu re 1: Drug Shortages Affecting St.1 ude Patient Care 

40 

35 

30 

.. 

.. '" 25 III 

t 

0 20 .c 

VI 

'0 15 .. 10 

0 

<§' 

~ '?-'" 

Number of Drug Shortages at St Jude in Selected 

Months 

Aug 08 to Jan 12 

31 30 28 28 2626 26 

23 22 22 21 20 

17 1515 13 

<§' <§' <J' <J' ",,0, ","" .$' .$' .$' 0' ",'" 0' ,;;. 0' 

36 35 

",'" ,,- v ~~. "'- "'- ",- "C 0" Q'" § <-,,,,Q. ,<'" '?-" 0(;-' v Q'" 

OC>- ~~. <1; 

§ "C '?-'" dY <i Q'" ,?-Q. " ,<'" ,?-Q. " 
154 

Mr. PITTS. The Chair thanks the panel for your opening statements. We will now go to questioning, and I will recognize myself 

for 5 minutes for that purpose. 

Ms. Bresch, how will the Generic Drug User Fee Agreement 

bring predictability and efficiency to FDA’s review of generic drugs? 

Ms. BRESCH. Thank you. As I think you have heard this morning, 

especially through Dr. Woodcock’s testimony, the need for the resources to truly globalize the FDA is of upmost importance. So as 

I mentioned, the fact that the generic industry stepped up to provide those resources, the fees are split primarily in two buckets, 

about 70 percent going towards the inspection and fees for facilities 

and about 30 percent for the applications. So we believe that with 

the goals and the metrics laid out in GDUFA that that parity, not 

just from a timing perspective but also the rigor at how inspections 

are performed because, you know, I can tell you as having facilities 

around the world inspected by many regulatory agencies, the FDA 

does have the gold standard and I think it is very important to 

raise the bar for the rest of the world, not let the United States’ 

bar come down. 

Mr. PITTS. Will this predictability and efficiency bring down the 

cost of generic drugs and what are the metrics that are included 

in the goals letter to ensure that progress is made on the review 

of generic applications? 

Ms. BRESCH. So as we have noted, that approval time today for 

generic drugs is about 31 months, almost double that in recent 

years. So the goals the metrics laid out bring that back down to 

about 10 months within 5 years. So it certainly keeps the competitive nature of our industry very much at the forefront while, as we 

level that playing field, making sure that it is not just competition 

at any cost. I think what is important to remember is that the competition is important if everybody is held to the same standard. So 

the certainty comes with the reduction of approval time but making 

sure that we are having good competition, not just any competition. 

Mr. PITTS. Mr. Gaugh, why is the new Biosimilars User Fee Program important to the generic industry and to patients and what 

are the metrics included in the goals letter to ensure that progress 

is made in that regard? 

Mr. GAUGH. Well, it is extremely important to the American public to have access to the biosimilar pathway of products. As you 

heard Dr. Woodcock say today, today is the first day that they have 

announced that they are going to release the guidelines for the 

biosimilars. So unfortunately, until we see those guidelines, it is 

going to be hard for me to answer the rest of the question. But it 

extremely important to have that affordable access to the American 

public. And you will find that many of the companies that GPhA 

represents already have these products produced and approved in 

foreign countries, both Europe and other markets. 

Mr. PITTS. Thank you. 

Dr. Greene, talk a little bit about how drug shortages affect St. 

Jude and how many drugs used at your hospitals regularly go into 

shortage. 

Mr. GREENE. Thank you for that question. We deal with shortages on a continual basis. I believe Mr. Engel referred to 

Montefiore and the number of hours that they have dedicated to 

155 

managing drug shortages. I believe you have mentioned 100 or 120 

hours per week of total personnel time. That is not a gross exaggeration in any form or fashion. As I mentioned, I am continually 

engaged in interacting with my clinical staff on what are the shortages, what are the alternatives, when we have fentanyl, when we 

don’t have fentanyl, when we have Zofran, when we don’t have 

Zofran, when we have multivitamins, when we have mannitol, 

what are we doing when it goes away. It has a dramatic impact 

and it diverts significant resources away from actually taking care 

of the patients because we are focusing on one of the most basic 

elements of care and that is simply do we have the product available for us? So it is a very dramatic impact on us on a day-in, dayout basis. Some days are better than others but some days are simply very traumatic in trying to provide that care. 

Mr. PITTS. Can you walk us through, Dr. Greene, what happens 

from your perspective when there is a drug shortage? Who notifies 

you? How much warning do you get? What do you need to do to 

notify people in your organization? Is there any way at present to 

anticipate a shortage and what preparations do you need to put in 

place at the hospital level? 

Mr. GREENE. You know, I made reference in my testimony the 

need to support the proposed legislation that effectively builds the 

tools to allow for early warning types of systems. Historically, we 

are not aware of a drug shortage evolving until we simply place an 

order, we check our inventory when it comes in, and we realize 

after 1 day, 2 days, or 3 days, we keep getting shorted on the order. 

We don’t know about it. Nobody tells us the shortage is there. So 

effectively, you place an order, you get the drug or you don’t, and 

of course, the shortage is recognized when we don’t get it the day 

after we order it. We place another order, again we are shorted in 

it, and then finally you begin to realize there is something going 

on here. 

Now, fortunately, at the University of Utah Drug Information 

Center and American Society of Health System Pharmacists now 

have a very useful tool that allows organizations to become aware 

of the experience of other organizations healthcare systems that 

have experienced shortages so that, for example, I might report to 

that system that we are having trouble getting methotrexate and 

that might be the first notification that we are beginning to see 

problems with methotrexate in the country. And that way other organizations become aware of that. So there is no warning in too 

many cases and we simply have to be reactive in dealing with 

those problems. 

Mr. PITTS. OK. The Chair thanks the gentleman and now recognizes the ranking member for 5 minutes for questions. Mr. Pallone? 

Mr. PALLONE. Thank you, Mr. Chairman. 

I wanted to ask a question, Ms. Bresch first, if I could. In your 

testimony, you emphasized that the imbalance of inspection requirements between U.S. and foreign manufacturing facilities creates an uneven playing field for pharmaceutical plants in the U.S., 

and certainly one way to help level the playing field, which was 

mentioned by our previous panel, is to apply a risk-based oversight 

system to all manufacturing facilities, both foreign and domestic. 

However, my question is to ensure real parity for all manufacVerDate Aug 31 2005 15:22 Jul 01, 2013 Jkt 037690 PO 00000 Frm 00159 Fmt 6633 Sfmt 6633 F:\112-11~1\112-11~1 WAYNE
156 

turing locations, do you think that a minimum inspection frequency 

is also necessary and should that be defined in the statute that we 

would pass. 

Ms. BRESCH. I believe that risk-based is appropriate but I do believe that defining how that risk-based works is incredibly important. I mean if I give the example—I talk about our facility in Morgantown, West Virginia. There are two full-time employees by the 

FDA who live in Morgantown, West Virginia, for just our facility. 

So if the risk-based is not defined properly, our concern is that it 

will be easy to go to where FDA has been going and that compliance-based will be extremely important to define that formula. So 

I believe that the legislation needs to have a very well defined formula and that there should be some minimum that a facility would 

need to have been inspected by. 

Mr. PALLONE. OK. Thank you. 

Let me ask Mr. Gaugh, I am interested in this Accelerated Recovery Initiative, or ARI—I mentioned it previously also, I think 

before the last panel—that you described in your testimony. It 

sounds like a promising effort that would help industry address or 

prevent shortages, and I am interested in hearing exactly how it 

would interface with the FDA. Could you explain what the role of 

the FDA would be in that initiative and particularly I would like 

to learn what the third party would be able to do that the FDA 

does not do and whether you see this initiative as potentially complementary to legislation that would mandate FDA notification? Or 

is it your hope that it would be instead of legislation? 

Mr. GAUGH. Thank you. From the standpoint of pulling this together, as I said earlier in my verbal testimony but also in the 

written testimony, this will be a multi-stakeholder event. And 

there are many questions that were asked of Dr. Woodcock that 

would be addressed by the ARI. For example, as we were talking 

about the gray market and I can’t remember—I think it was Mr. 

Cassidy that asked about how we know how much product different 

organizations, a hospital can get when they order or how much is 

available to them. That would mean that in this ARI, the key 

stakeholders would be the manufacturers, the wholesalers and distributors, purchasing organizations, the FDA most importantly, 

and then the third party, as you mentioned, which would be an 

independent third party. 

The issues that we have addressed in the small group that is 

pulling the ARI together is that this is a very competitive marketplace, of course, and it would be fraught with some FTC potential 

issues if not handled in an appropriate fashion. So the appropriate 

fashion that we have come up with to this point is an independent 

third party that will be a blinding party if you will so they are the 

only party that sees all information coming from all the competitive 

companies. 

To answer your question about why the FDA couldn’t perform 

this, there are multiple reasons. One, it isn’t currently in their responsibility of duties as you see the responsibilities. Number two, 

Dr. Woodcock talked about the limited resources they currently 

have, which is very true. The drug shortage was only four or five 

people up until a few months ago. It has now been doubled, I believe, to seven or eight people. So that would be a limiting factor. 

157 

The other piece is the third party is going to have to be somebody 

who really understands production planning extremely well and 

can take production planning reports from the multiple different 

companies to make determinations and decisions on who could or 

who could not produce products to help alleviate this drug shortage. That is not something that currently exists within the—— 

Mr. PALLONE. Just because I am running out of time, it sounds 

to me that in terms of the question I asked that you are saying 

that the initiative, the ARI is complementary to legislation that we 

would initiate. In other words, not that it would be instead of, but 

because of the need to work together and certain things that can’t 

be done, this would have to be something that we would have to 

work out in terms of the legislation. Is that accurate? 

Mr. GAUGH. That is correct. That is accurate. 

Mr. PALLONE. OK. All right. Thanks so much. 

Mr. GAUGH. You are welcome. 

Mr. PITTS. The Chair thanks the gentleman, recognizes the vice 

chairman of the committee, Dr. Burgess, for 5 minutes for questions. 

Mr. BURGESS. Thank you, Mr. Chairman. 

And Mr. Gaugh, if I could stay with you for a moment. And let 

me just ask you and I know this is a wide-ranging question so I 

am going to ask you to be as brief as you can, but in your opinion, 

what are the reasons that a drug goes into shortage? 

Mr. GAUGH. I am sorry. Can you repeat—— 

Mr. BURGESS. What are the reasons that a drug goes into shortage? 

Mr. GAUGH. Dr. Woodcock described the overall situation with 

drug shortage, so it really is a demand versus supply situation 

right now. So the demand continues to increase in the United 

States with the graying of America, et cetera. So demand continues 

to go up. The currently available supply is going down, so as she 

talked about in the injectable industry in particular, there is a defined quantity of production capability in the U.S. Currently, most 

of the companies that are under the production capability piece are 

in remediation efforts due to their compliance or their lack of compliance situation. So the available capacity today is less than it was 

about a year and a half ago. 

Mr. BURGESS. And here is the thing. The manufacturing processes in many of these drugs are not new. They have been around 

for a long time. The FDA has been doing inspections for years. The 

companies have had to get the raw materials for years. They have 

been making injectables for years. So why the acceleration in the 

last 5 years? 

Mr. GAUGH. If we are still just talking about sterile generic 

injectables, the basic five companies that have the majority of the 

production capability, these are aged facilities. So as the manufacturing lines are becoming older, they need to be replaced, refurbished, upgraded. Specifically, also, the specifications, the criteria 

that need to be met are changing year after year. Those have to 

be implemented. Sterile injectable production is a very complex 

process. It takes time to upgrade those systems, and when you do 

upgrade them, you have to take them down for a period of time. 

158 

Mr. BURGESS. Right. But don’t you find it odd that it really has 

been a snowball effect? I can remember in the 2004 presidential 

election, in one of the debates that fall, flu vaccine had been contaminated with serratia. We got it from an overseas source and 

President Bush was just pummeled for this flu vaccine shortage. 

And now the shortages are happening all the time. That level of 

scrutiny doesn’t seem to be being applied to the fact that more and 

more drugs are drifting off into a shortage situation. Why is that? 

Mr. GAUGH. Because I would say the level of scrutiny that is 

upon those companies by the FDA has increased over the last 3 to 

4 years, and that level of scrutiny is what—— 

Mr. BURGESS. But the shortages are going to be manifested by 

the clinicians not having the compound to deliver to their patients, 

not the Food and Drug Administration saying aha, we have identified a shortage in your line. It is because at the end of the line, 

the doctor and the patient are saying I can’t get this stuff. So let 

me ask you this. There are some new branded drugs that are complex molecules, difficult to manufacture, and there are 10 to 15 generic oncology drugs that have been around forever and are quite 

basic in their formulation, and those are the ones that are in shortage, not the complex new molecules. So why is it that the complex 

branded drugs are readily available and the basic generic drugs are 

in short supply? 

Mr. GAUGH. Typically, the complex brand molecules you are talking about are manufactured in one facility, one line for that particular product. Or do you look at the generic injectables. Those 

companies produce anywhere from 50 to 120 different molecules on 

their different lines. So it is a supply-and-demand issue again within that facility of the number of products that are made. 

Mr. BURGESS. I brought this up in my opening statement. Do you 

think there is the possibility that we have perhaps made things a 

little too tight, made the margins a little too tight where it is difficult for companies to justify continued manufacture if they have 

a difficulty in their manufacturing process or for other companies 

to step in and fill the gap if a company has to withdraw from the 

manufacturing? 

Mr. GAUGH. In the market—— 

Mr. BURGESS. We just don’t have the profit margins built in 

under current constraints? 

Mr. GAUGH. Profit margin could be one of the causative effects, 

but it is not one of the major causative effects, no. 

Mr. BURGESS. OK. 

Mr. GAUGH. It is still a demanding market in the U.S. and you 

can change the price as needed. 

Mr. BURGESS. Very well. Dr. Greene, let me just ask you a question. You heard Dr. Cassidy on our side, you heard Lois Capps on 

the other side of the dais reference what they suspect was a problem in the gray market where some hospitals might be buying up 

a compound that is going into shortage and then reselling it at a 

much higher markup. I mean Dr. Cassidy has some specific questions. You deal in hospital purchasing all the time. Was he on the 

mark there or was that off? 

Mr. GREENE. Someone certainly is getting product somewhere 

and, you know, maybe it is an entrepreneurial way, but they are 

159 

taking advantage of shortages to make dramatic markups. Now, 

how they get the product, I don’t know. I would be very, very surprised if any hospital is actually purchasing it for the purpose of 

diverting it to the gray market. We know that it happens; we just 

don’t know where these individuals get their drug. And that is one 

of the reasons why St. Jude, we do not purchase off of a gray market. 

Mr. BURGESS. Well, where would be a more likely place to look, 

then, if it is not the hospital purchasing? 

Mr. GREENE. I wish I could explain that. I don’t know. I know 

that there are thefts. There are reports of tractor-trailer loads of 

drugs that have been simply stolen and you don’t ever know where 

those go and how they get into the marketplace and so I simply do 

not know where those drugs come from. 

Mr. BURGESS. You agree that it is a problem? 

Mr. GREENE. I don’t know that it contributes dramatically to 

shortages. I think it is a problem in the context that it provides potentially very expensive and potentially harmful products for use in 

patients. 

Mr. BURGESS. All right. Thank you for your time. 

I yield back, Mr. Chairman. 

Mr. PITTS. The Chair thanks the gentleman and yields to the 

ranking member emeritus, Mr. Dingell, for 5 minutes for questions. 

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

These questions go to Ms. Bresch. First I want to welcome you 

to the committee. Thank you. And second, I want to thank you for 

your leadership in this matter and tell you how much it has meant 

to me. These questions will be all yes or no. Do you agree that both 

FDA and the industry have a responsibility to ensure the security 

of our drug supply chain? Yes or no? 

Ms. BRESCH. Yes. 

Mr. DINGELL. Do you agree that the knowledge of your suppliers 

is important? Yes or no? 

Ms. BRESCH. Yes. 

Mr. DINGELL. Does Mylan have systems in place to know their 

suppliers and monitor manufacturing quality? Yes or no? 

Ms. BRESCH. Yes. 

Mr. DINGELL. It would be nice if you had more assistance in this, 

however, from FDA, would it not? 

Ms. BRESCH. Yes. 

Mr. DINGELL. Does Mylan have systems in place to demonstrate 

quality control? Yes or no? 

Ms. BRESCH. Yes. 

Mr. DINGELL. Should all companies making drugs for the United 

States know their suppliers and have quality systems in place? 

Ms. BRESCH. Yes. 

Mr. DINGELL. Should all companies making drugs for the U.S. be 

able to demonstrate quality control? Yes or no? 

Ms. BRESCH. Yes. 

Mr. DINGELL. Should companies be using risk analysis to target 

safety risks? Yes or no? 

Ms. BRESCH. Yes. 

160 

Mr. DINGELL. Do you need to have the same kind of attention 

given to the supplies and the commodities and the other things 

that go into the pharmaceuticals that you sell as finished products? 

Ms. BRESCH. Yes. 

Mr. DINGELL. Do you agree that strong quality management systems and risk analysis will help companies to ensure the safety 

and quality of the finished drug product? 

Ms. BRESCH. Yes. 

Mr. DINGELL. I want to turn now to inspections. The brand industry has noted that its user fees go to pay for a preapproval inspection which could include an inspection of a foreign facility. Is 

preapproval inspection the same as a GMP inspection? Yes or no? 

Ms. BRESCH. No. 

Mr. DINGELL. Please explain the difference. 

Ms. BRESCH. The way PDUFA was written and is implemented 

is really focused on the speed for an individual product. So a 

preapproval inspection is on a certain product which could be made 

on one line in a facility, and once that product is approved, it would 

never require the FDA to come back and inspect that line. GMP 

inspection covers the entire facility and ensures that that facility 

is complying to good manufacturing practices. 

Mr. DINGELL. And you do desperate need Food and Drug to come 

back for that purpose to ensure that good manufacturing processes 

are being carried out at the plant being inspected. Is that right? 

Ms. BRESCH. Absolutely. I think as we have heard a lot today, 

the vigilance that is required is on an ongoing basis. Just because 

you meet GMP inspection or are GMP compliant, that does not 

mean you are GMP compliant for the rest of that facility’s life. And 

that is why earlier when asked about a risk-based approach to inspections and that we still believe that there would be a minimum 

number of years that the FDA would need to be back in that facility because it requires ongoing constant vigilance. 

Mr. DINGELL. Now, you stated in your testimony that the Federal 

Food and Drug and Cosmetic Act should be updated to require parity of inspections for domestic and foreign facilities. Why does Congress need to change the statutory language when FDA has already agreed to do on a voluntary basis in the Generic Drug User 

Fee Act? 

Ms. BRESCH. Well, and I want to thank you for your leadership 

in this area for many years. I think to have an agency as important 

as the FDA to be governed by a 1938 law that was written from 

a very domestic standpoint and yet we are needing and demanding 

the FDA to govern a global industry. So if we are not going to have 

the global industry return to a domestic one, we have no choice but 

to have the 1938 law be representative of the world that the FDA 

needs to operate in today. I think we heard Dr. Woodcock speak 

about the fact that there is just a different standard. For products 

manufactured in the United States, it is assumed to be adulterated 

unless proven that it has been made to GMP, yet if we are importing drugs, the standard that we hold those imports to are we have 

to show and prove that they are not up to GMP or we have to let 

them in. So I believe that that 1938 law desperately needs—— 

Mr. DINGELL. To be changed. 

161 

Ms. BRESCH [continuing]. To be updated so that the FDA has all 

the ability to make all the decisions and necessary demands to ensure the safety in the supply chain integrity on a global basis. 

Mr. DINGELL. Now, it is also grossly unfair to surround American 

manufacturers with all these requirements while literally FDA is 

able to surround foreign manufacturers with virtually none, isn’t 

that right? 

Ms. BRESCH. Absolutely. Again, we talk about the competitive 

nature of this industry, so we are forced to compete really at any 

cost. So we are competing every day from competition and companies around the globe that perhaps don’t hold their facility to the 

same standard as we do. We have facilities all over the world, as 

I mentioned, that make product for the United States and we hold 

all of our companies to the same GMP whether that facility is in 

the United States or outside of the United States. So the need for 

the competitiveness as a U.S. manufacturer is very unlevel at the 

moment, and unfortunately, as a manufacturer who employs many 

American jobs, like I said, we would like to not only maintain those 

but to increase them. And right now we are disincentivized to do 

so. 

Mr. DINGELL. Mr. Chairman, I have used all my time but could 

I have one more question? 

Mr. PITTS. You may proceed. 

Mr. DINGELL. Ma’am, the Generic Drug User Fee Act Agreement 

is unique in that it recognizes that FDA needs new resources and 

new authorities to properly oversee what is now a globalized industry as you have been pointing out to us. I happen to believe that 

the Food, Drug, and Cosmetic Act should and needs to be updated 

to reflect the global nature of our drug supply, again as you were 

pointing out, and to adequately equip FDA with the authority to 

properly ensure the safety of our drug supply, and that would include the commodities that go in an unfinished state. This committee has worked in a bipartisan manner to secure the safety of 

consumer products in our food supply, and I hope that we can do 

so for pharmaceuticals. 

I want to commend you for what it is you have done today and 

for your guidance and counsel in these matters. It has been most 

helpful and you go with my thanks and I think the thanks of the 

committee. 

Mr. Chairman, thank you for your courtesy. 

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. Again, I do appreciate 

the panel and your time today. 

Ms. Bresch, you are from West Virginia, is that correct? I mean 

the facility is in West Virginia, is that what you said? 

Ms. BRESCH. That is where our largest facility is. We have facilities all over the United States. 

Mr. SHIMKUS. OK. Do you know how many drug manufacturing 

facilities are in the State of West Virginia? 

Ms. BRESCH. I don’t know of any other. 

Mr. SHIMKUS. At the West Virginia facility, there are two FDA 

inspectors 24/7? 

Ms. BRESCH. They live in Morgantown, yes. 

162 

Mr. SHIMKUS. And they are dedicated solely to your facility? 

Ms. BRESCH. I can’t speak to what they are dedicated to but I 

can tell you that they live in Morgantown, West Virginia, and like 

I said, we are the only pharmaceutical company—— 

Mr. SHIMKUS. I mean, do they come in every day to your facility? 

Ms. BRESCH. They are not necessarily in our facility every day 

so that is why I am saying I am sure the FDA can utilize them 

in other manners. My point is being that we have countries that 

don’t have an FDA employee, so when you think about Morgantown having two, it can just demonstrate the unlevel playing field. 

Mr. SHIMKUS. Yes, I would like to have two in China maybe. 

Ms. BRESCH. Or maybe 200, but yes. 

Mr. SHIMKUS. Yes, at least two would be a start. 

Ms. BRESCH. Exactly. 

Mr. SHIMKUS. But I think that raises an issue and I do appreciate your comments. I have been focused on this risk-based system 

for a long time and it is not to walk away from U.S. facilities but 

it is to recognize the fact that as Chairman Emeritus Dingell said, 

I mean you had an inspector onsite, you have got programs and 

plans and systems to obviously check that yourself. We also have 

a pretty good litigious environment that also keeps U.S. Manufacturing facilities somewhat cognizant of the safety and efficacy of 

what they are doing in the facility. So I think there would be, if 

we did aggressively move in a risk-based approach, there would be 

a return. It is not like they are never going to come back to Morgantown, West Virginia, and check in on you. 

Ms. BRESCH. And we want them to. And I think that is the point 

of the vigilance that I spoke about. It is that need, you know, we 

say all the time there are good actors out there and bad actors everywhere, United States included. It is just the rigor that the FDA 

has to inspect the U.S., we find those quicker or perhaps never in 

some other countries. 

Mr. SHIMKUS. Thank you. Dr. Greene, I apologize for you not getting your charts and stuff up on the overhead because we were able 

to pull it from your testimony. And this is pretty stark. And I 

would guess you are pretty concerned that trend line is not changing any time soon, is that correct? 

Mr. GREENE. It doesn’t portend good things for the future if it 

continues in the same direction. 

Mr. SHIMKUS. And so from the other members in this discussion, 

it seems like we kind of mealy-mouth around trying to really identify the problem. We talked about this in the last hearing and I 

was just asking a basic question because I am a conservative competitive market corporate Republican, believer in supply-and-demand principles. Why is that not working here? Why isn’t there a 

signal being sent to manufacturers, hey, there is a demand that is 

not being filled. Can you not send a price signal—— 

Mr. GREENE. Right. 

Mr. SHIMKUS [continuing]. That would then generate an interest, 

especially as Dr. Burgess said. Some of this stuff isn’t really the 

high-tech type stuff. I mean when the mention of saline solution 

with vitamins inside of it you are thinking he is telling me that, 

that stuff we do all the time. For that to be a limited availability, 

that is crazy talk. 

163 

Mr. GREENE. Yes, I am not qualified to really comment on whether the economics are dramatically a part of this or not. I would 

leave that to the economists. It would seem to me that—— 

Mr. SHIMKUS. Well, let me ask if anyone else can talk—I mean 

part of hearings is trying to find an answer. So go ahead, Mr. 

Gaugh. 

Mr. GAUGH. So economics can be a piece of it, absolutely, but are 

they the driving factor? They are not the driving factor. 

Mr. SHIMKUS. OK, when you say the economics could be, so drill 

down a little bit. 

Mr. GAUGH. So in drilling down a little bit, the economics, yes, 

if a product in the competitive market space went down so far that 

there was no more margin, you would make a decision potentially 

to get out of that market, but this is a free market environment 

and you can raise that price back up and get—— 

Mr. SHIMKUS. That is what I would assume but it doesn’t seem 

that the market signals are being sent when there is a limit that 

the price is going up to encourage people that are in the market. 

Mr. GAUGH. Right. And the issue we are talking about now is 

sterile generic injectables. When you look at that line on the graph 

that he had, the majority are those. It is purely a capacity limitation to be able to produce those products. 

Mr. SHIMKUS. So the market signal would send if they can get 

a return on investment, it would send a signal to the manufacturers, expand to meet the demand, but the signal is not being sent. 

Mr. GAUGH. It is being sent but expand is a 7-year proposition 

typically from the day that you—— 

Mr. SHIMKUS. OK. But why is that? 

Mr. GAUGH. The day you break ground until you are approved 

by—— 

Mr. SHIMKUS. Rules, regulations, siting, permitting, all this other 

junk? 

Mr. GAUGH. The FDA approval is an 18-month process—— 

Mr. SHIMKUS. There is a—OK. 

Mr. GAUGH [continuing]. And that is just to get the site approved 

and then to move the products into that site is an additional—— 

Mr. SHIMKUS. Well, and that is a great—and my time has expired, Mr. Chairman, and I appreciate it, but I think that is where 

some of this debate needs to be. How do we move aggressively, 

safely to allow expansion to meet these shortages? Because this is 

ridiculous and we shouldn’t put up with it. And I yield back my 

time. 

Mr. PITTS. The Chair thanks the gentleman and recognizes the 

gentleman from New York, Mr. Engel, for 5 minutes for questions. 

Mr. ENGEL. Well, thank you. Thank you, Mr. Chairman. 

Mr. Gaugh, I want to follow up on something that Dr. Burgess 

mentioned before. In your written testimony, you stated that your 

trade association acknowledged that roughly half of all reported 

shortages are associated with manufacturing problems. Why do you 

believe that there has been such a significant increase in manufacturing-related issues in recent years and can you please elaborate 

on what steps the manufacturers of generic medications are taking 

to address this problem? Obviously, we cannot neglect patients’ 

safety and so it is a matter of great concern. 

164 

Mr. GAUGH. So if I understand your question correctly, you look 

at the environment today—and again I am going to focus on the 

sterile generic injectables—roughly 25 to 30 percent of the currently available capacity is not available for production due to remediation efforts. So if you take that 30 percent roughly out of production, that is the majority cause of these drug shortage situations. 

Mr. ENGEL. All right, thank you. Dr. Greene, you had commented 

on a comment I had made involving Montefiore Medical Center 

having to take hours to, you know, make sure the things are ameliorated. I want to give you a chance to elaborate on that a little 

more. 

Mr. GREENE. Specific to St. Jude I presume? 

Mr. ENGEL. Yes. 

Mr. GREENE. Yes, one of the things we have simply developed is 

a standard practice every week is one of the questions we do in our 

routine administrative discussion is what is our latest state of drug 

supply issues? What are they? What is their acuity? Do we move 

them out into the clinical discussion realm or is this one that we 

work within the pharmacy? I have literally three individuals that 

are routinely engaged in the discussion and evaluation and follow 

up to me every day. That is not all that they do but they spend 

a significant amount of their time dealing with these issues. And 

part of the problem from my point of view is the volatility in the 

supply. I have fentanyl today; no, I don’t have fentanyl tomorrow. 

It is back. I only have large-volume files. I don’t have small volume. Well, I have got single-dose vials this week but I don’t have 

the vials that I need to use to make PCAs. So those are the kinds 

of issues that we are dealing with at any given time. 

Mr. ENGEL. Thank you. I mentioned to Dr. Woodcock, I had 

asked her this question that many of you mention in your written 

testimony that the user fees included in GDUFA and BsUFA are 

meant to be in addition to a solid base of annually appropriated 

funds of the FDA. In fiscal year 2012, the FDA received a 50 million increase in funding, which was a very big victory for those of 

us who felt that happen because the first proposal was a $285 million cut in FDA funding for fiscal year 2012. So would any of you 

care to elaborate on why it is so important that the FDA be adequately funded and how cuts to the FDA could impact your industry or the patients your associations serve? 

Ms. BRESCH. I will speak to that. I think that as Dr. Woodcock 

mentioned the premise has always been the FDA would have the 

appropriations and that they would never solely rely on user fees 

for any particular industry. And that is why I think as you see the 

GDUFA being, you know, a very novel and landmark user fee, the 

Agency has obviously funded the Office of Generic Drugs since 

1984 and has been very successful. Hopefully, the user fee is now 

complementing that. I think that when you look at the need for the 

Generic Biologics Program, the same does not hold true and I think 

that is where we run some risk of having it being way too weighted 

on strictly user fees and not having the appropriate appropriations 

from the Agency perspective to carry out their mission. 

Mr. ENGEL. Thank you. I agree with you. 

165 

Anybody else care to—oK, well, then thank you, Mr. Chairman. 

I yield back the balance of my time. 

Mr. PITTS. The Chair thanks the gentleman and recognizes the 

gentleman from Louisiana, Dr. Cassidy, for 5 minutes for questions. 

Mr. CASSIDY. If I seem in a hurry, I am missing a lunch with the 

greatest chefs in Louisiana, so—oh, my gosh, I am tasting the food. 

Now, Mr. Gaugh, you mentioned, though, that there is no reason 

a price signal could not be sent, but there actually are constraints 

on how 340B will allow a company to raise its pricing. And you will 

know more about 340B than I but I am struck that this price signal Shimkus is after is dampened by the 340B process. 

Now, Dr. Greene, you are St. Jude’s? 

Mr. GREENE. That is correct. 

Mr. CASSIDY. Now, I think I know but correct me if I am wrong 

that pediatric IV immunoglobulin, because of a shortage, was taken 

out of the 340B program. One, is that correct? And two, if correct, 

how has that affected supply? 

Mr. GREENE. Well, it is my understanding that that is correct. 

We have not to my knowledge in the time that we have been engaged in the 340B program, it has only been about a year and a 

half now I suppose, not quite that long. I don’t think we have ever 

been able to purchase any consistent supplies of IV IG in the 340B 

program, and yes, I would say that that is true. The supply has 

been available to us; it is just that we have had to pay the regular 

market rate defined through our group purchasing organization. 

Mr. CASSIDY. So that is interesting. And again, I think IV IG was 

taken off of 340B pricing. I think that is true. So now the supply 

is there and it was absolutely taken off because it was never available before. I think I know that but I am a little rusty on my 

thought. 

Mr. Gaugh, you are nodding your head yes. Is that a correct—— 

Mr. GAUGH. That is correct. 

Mr. CASSIDY. I remember that correctly? 

So if you will, the restoration of a price signal restored supply. 

I will just point that out. Now, Dr. Greene, you also mentioned St. 

Jude’s—everybody knows St. Jude’s—that you have had a hard 

time at times in your testimony you said you could not get 

chemotherapeutic agents. But you all are big so I presume you obtained them someplace. I was kind of interested in the gray market. Do you get them from other hospitals, do you buy them from 

third parties, do you go into the gray market? I am not asking you 

to indict yourself but I am trying to understand what do companies 

do when they can’t get this drug? 

Mr. GREENE. I can think of two specific examples in the last 

year, one was cytarabine—we use a lot of that for treatment of our 

ALL patients—and it got to the point where we had to consider seriously whether we could accept new patients for treatment of ALL. 

Mr. CASSIDY. I knew it at the time so if you could cut to the 

chase, how did you supplement your supply? 

Mr. GREENE. Well, we were diligent first on the marketplace to 

try to find any source but also communicated with colleagues at 

other organizations. I had other hospitals in the region—— 

Mr. CASSIDY. Did you ever go on the gray market? 

166 

Mr. GREENE. Oh, no. No, we do not buy from gray market. 

Mr. CASSIDY. OK. Ms. Bresch, I am struck when I asked in a previous time why don’t you just backtrack? OK, here is a hospital 

that buys on the gray market. Why don’t you just take this all the 

way back and find out where the source of the gray market was? 

Because different hearing but same topic, oh, we don’t know where 

it is coming from. You don’t know where it is coming from? Why 

don’t you just call up hospital X and say who did you buy it from? 

Now, you are on this end, not that end, but how would you comment upon how we are tracking drugs? 

Ms. BRESCH. I think you perhaps just answered your question. 

We don’t track drugs and the FDA does not track drugs and in fact 

one of the premises of GDUFA, the generic industry proposal was 

the fact that this has led to a very weak supply chain. So I know 

there has been a lot of discussion today on drug shortages about 

is there a price point, what is really the cause of it? And I would 

contend that one of the issues that we are seeing as a result is this 

very weak supply chain we have today. So not only do we not 

track—I mean I believe the FDA would tell you they have no idea 

where some products are manufactured throughout the world, they 

have no even idea where the facility is—— 

Mr. CASSIDY. So when people buy online from oversea pharmacies, we have no clue whether that pharmacy is doing GMP, the 

manufacturers, or even whether it is counterfeit drug, correct? 

Ms. BRESCH. You don’t have any idea if you walk into your corner pharmacy here in Washington, D.C. You don’t even have to go 

online. Today, you have no idea where the product you are buying 

comes from. 

Mr. CASSIDY. My jaw drops. 

Ms. BRESCH. I couldn’t agree more, and that is why sterilization 

which has been a topic, I know of some other hearings, and the 

need for us to be able to track and trace, we highly agree that that 

needs to happen—— 

Mr. CASSIDY. Now, let me stop just because we have 18 seconds 

left before I return to my Louisiana seafood, how would you all define the gray market? I am just curious what is a working definition in your mind? 

Mr. GAUGH. Entrepreneurial America is how we define it. 

Mr. CASSIDY. So you wouldn’t see a problem with it or you would 

just say that—— 

Mr. GAUGH. Oh, I do see a problem with it, absolutely, but it is 

not illegal that we are aware of. It is a brokerage firm if you will 

so it is people—— 

Mr. CASSIDY. So it is not a black market in the sense that it is 

legal. On the other hand, it is a gray market created by price distortions and shortages? 

Mr. GAUGH. Exactly. 

Mr. CASSIDY. Would you agree with that, Dr. Greene? 

Mr. GREENE. I would. And there is no pedigree that runs through 

the gray market process and that is why you can’t trace it back 

through the gray market. 

Mr. CASSIDY. OK. 

167 

Mr. GREENE. You can trace it to a certain level but not completely because the pedigree doesn’t exist in a gray market environment. 

Mr. CASSIDY. OK. Thank you all. I yield back. 

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

the gentlelady from Colorado, Ms. DeGette, for 5 minutes. 

Ms. DEGETTE. Thank you very much, Mr. Chairman. And thank 

you for the comity that you have given to allow me to question as 

a member of the full committee. 

Dr. Greene, I wanted to ask you what would you be able to do 

with these patients if you were informed in a timely fashion of an 

impending drug shortage? 

Mr. GREENE. Well, of course, it would depend upon the severity 

and the shortage and what details would come out of that, but the 

first step we would assess is the number of patients that would be 

dependent upon that drug, the number of patients affected, the alternatives that we would have to consider and their relative riskbenefit compared to the first drug of choice that would—— 

Ms. DEGETTE. Let me ask you this because you said that you 

were supporting House Bill 2245—— 

Mr. GREENE. Yes. 

Ms. DEGETTE [continuing]. Which gratified me because I am the 

prime sponsor of that bill—— 

Mr. GREENE. We are grateful for that, too. 

Ms. DEGETTE [continuing]. Along with Congressman Rooney. It 

is a bipartisan bill that has Democratic and Republican cosponsors, 

so what that does is it basically expands the current FDA voluntary reporting program and makes it—— 

Mr. GREENE. Right. 

Ms. DEGETTE [continuing]. Mandatory. Who would that help you 

be able to do your job better in treating these patients? 

Mr. GREENE. In short, it would alert us to situations that we 

could do something about before it reached us. We could modify our 

dosing approaches; we could take additional steps to minimize 

waste. You know, there are sometimes alternatives depending on 

the drug that we could easily switch to before we deplete our onhand supply. There are a number of on-hand things we could do. 

Ms. DEGETTE. Now, you would agree with all of us that this legislation and just doing reporting, that doesn’t solve the underlying 

problems. It just mainly helps you deal with that chart that some 

folks were showing where you have these terrible shortages and it 

impacts patient treatment, right? 

Mr. GREENE. That is correct. 

Ms. DEGETTE. Now, Ms. Bresch, I am going to assume you don’t 

like the idea of drug shortages either, do you? 

Ms. BRESCH. No. 

Ms. DEGETTE. And I would assume, Mr. Gaugh, you don’t like 

them either, right? 

Mr. GAUGH. Do no. 

Ms. DEGETTE. And I know, Ms. Bresch, your company right now 

in fact participates in the voluntary FDA reporting program right 

now. You have got four drugs, largely injectables, that are right 

now on the shortage list, right? 

168 

Ms. BRESCH. But to my knowledge, our shortage is because we 

have helped fill the capacity because another manufacturer—— 

Ms. DEGETTE. Right. No, I am just saying you participated in 

that program, right? 

Ms. BRESCH. Yes, absolutely. 

Ms. DEGETTE. And it has worked for you, right? 

Ms. BRESCH. Yes, for years. 

Ms. DEGETTE. And for years. And what you are suggesting I 

think is really important, which is if we modified some of the underlying laws that have been on the books for decades and decades, 

that might help solve the underlying problem of drug shortages, 

right? 

Ms. BRESCH. Absolutely. I believe strengthening the supply 

chain—— 

Ms. DEGETTE. Right. 

Ms. BRESCH [continuing]. Would go a long way. 

Ms. DEGETTE. Right, and expediting the approval process and everything else—— 

Ms. BRESCH. Absolutely. 

Ms. DEGETTE [continuing]. Right? And Mr. Gaugh, you are nodding, too. You think so, too, right? 

Mr. GAUGH. Yes, I would agree. 

Ms. DEGETTE. But, you know, it is time to start fixing the underlying problems even if we pass legislation right away, which I 

would support doing that, that is not going to solve the drug shortage issues that Dr. Greene and all the other hospitals are dealing 

with right now, correct? 

Mr. GREENE. That is correct. 

Ms. DEGETTE. Yes. And so I know Mr. Gaugh, your association 

has proposed this Accelerated Recovery Initiative, which would be 

a voluntary collaboration for the industry to work on some reporting issues, correct? 

Mr. GAUGH. Yes. 

Ms. DEGETTE. And you are not moving forward with that until 

you make sure that the FTC has addressed your antitrust issues, 

right? 

Mr. GAUGH. We are moving forward in a parallel path if you will, 

yes. 

Ms. DEGETTE. Right, but if there is antitrust issues, you are 

going to have to address those. Now, that particular program, it is 

not either/or with the FDA reporting program, right? You could 

have both the industry program and the FDA program, right? 

Mr. GAUGH. Yes, and it would be in support of it. We have already presented to the FDA and they are in agreement in concept 

with the process. 

Ms. DEGETTE. Yes. And by the way, I am in agreement with the 

concept, too. I like the concept of having industry having a reporting process but also having the FDA have a reporting process. 

Now, has your association taken a position on House Bill 2245? 

That is the legislation that I talked about. 

Mr. GAUGH. Not the notification process. We agree with notification; it is the details that would be in that. And—— 

Ms. DEGETTE. Have you looked at my bill? 

Mr. GAUGH. Oh, absolutely, yes. 

169 

Ms. DEGETTE. And what is your position on my bill? 

Mr. GAUGH. And have spoken with your staffers as well. 

Ms. DEGETTE. Sorry? 

Mr. GAUGH. And have spoken with your staffers as well, yes. 

Ms. DEGETTE. I heard that rumor. And what is your position on 

my bill? 

Mr. GAUGH. We support the communication process as far as industry communicating to the FDA when drug shortages are known. 

The devil, as I said, is in the details on—— 

Ms. DEGETTE. What details do you have a concern about? 

Mr. GAUGH. The mandatory timing of those, so, you know, the 6- 

month or the 1-year notification process as long as we are aware 

of that is appropriate, but in many cases we are not aware—— 

Ms. DEGETTE. So it is just some technical language that you 

think we could work out? 

Mr. GAUGH. Technical, yes, absolutely. 

Ms. DEGETTE. And we look forward to working with you. 

Thank you very much, Mr. Chairman. 

Mr. GAUGH. Thank you. 

Mr. PITTS. The Chair thanks the gentlelady. The Chair thanks 

panel two for your testimony, excellent information. 

That concludes our second panel. And I would like to thank all 

of the witnesses and members for participating in today’s hearing 

and remind members that they have 10 business days to submit 

questions for the record, and I ask the witnesses to respond 

promptly to the questions. Members should submit their questions 

by the close of business on Friday, February the 24th. 

Without objection, the subcommittee is adjourned. 

[Whereupon, at 1:09 p.m., the subcommittee was adjourned.] 

[Material submitted for inclusion in the record follows:] 

170 


81517.114

Opening Statement 

Chairman Fred Upton 

Subcommittee on Health Ht'aring 

Thursday, February 9,2012 

Today's hearing on the proposed generic drug and biosimilars user fees and drug 

shortages is an important part of our broader etTort to address FDA drug and device approvals as 

we work to extend and expand user fee programs well before the September deadline. 

The new generic drug uscr fee and biosimilars user fcc would bring resources to FDA to 

help the predictability, consistency, and transparency of FDA regulation. 

Currently. there are approximately 2,500 applications in the generic drug backlog. and it 

takes about 31 months to get a generic drug application in that backlog reviewed. This backlog 

is preventing important generics from getting to the market, putting additional financial strain on 

our nation's patients. Under this proposed user fee agreement. the generic backlog would be 

efTectively eliminated in five years and future applications will bc revievved on a timcly basis. 

bclieve the proposed generic drug user fee and associated goals would bring tremendolls 

improvements. and the generic drug industry and FDA deserve credit for their hard work in 

coming to this agreement. 

The biosimilars user fcc would bring resources the agency needs to help bring 

predictability to FDA's review of biosimilars applications. This predictability will help 

innovation in this burgeoning area. 

This hearing also will focus on drug shortages, and I appreciate the chairman '$ continued 

leadership on this issue. Building on the hearing this subcommittee had in September. the 

discussion today will bring additional ideas on how Congress can help. Drug shortages are 

hurting patients across the country. and I look forward to working on a bipartisan basis to help 

alleviate the problem. Mr. Walden, Dr. Gingrey, Mr. Bass and Mr. Latta have been particularly 

engaged on our side of the aisle. and I know Ms. DcGette and others have been active as well. 
171 


81517.115

Congressman Mal'sha Blackburn 

Opening Statement for Energy and Commerce 

Health Subcommittee Hearing 

"Review of the Proposed Generic nrug and Biosimilars User Fees and Further 

Examination ofHrug Shortages" 

February 9, 2012 

Thank you, Mr. Chairman. 

I look forward to hearing from Dr. Woodcock and our panelists on these two new user 

fee agreements. 

! am extremely eager to continue our exploration of the drug shortage issue and how we 

can help FDA focus their resources where they can be best used. 

! am also honored today to have with LIS a Tennessean - William Greene from St. Jude 

Children's Research Hospital in Memphis, TN. 

This year, St. Jude celebrates 50 years of leadership in the areas of pediatric treatment 

and research. Their discoveries have completely changed how the world treats children with 

cancer and other catastrophic diseases. 

We are grateful to Mr. Greene for joining us today and! look tl)fward to his testimony. 

I yield back. 
172 


81517.116

Opening Statement 

Congresswoman Cathy McMorris Rodgers 

Febrnary 9, 2012 

Snbcommittee on Health 

Hearing on The Review of the I)roposed Generic ()rug and Biosimilars User Fees and 

Further "Examination of Drug Shortages 

Mr. Chairman: 

I would like to take this opportunity to clarify aspects of the hearing that imply that the 340B 

program may have a role in drug shortages, in particular. statements concerning IVIG and its role 

in the 340B drug discount program. 

IVIG is considered a covered outpatient drug under the 3408 program, and, therdore, 

manufacturers are required by law to sell IVIG at 3408 prices to safety-net providers. It should 

also be noted that the Food and Drug Administration has issued a statement that there is "no 

evidence of an overall shortage of [IVIGl at present. or indicators of an impending shortage." 

Concerns have been expressed over the availability of IVIG. 3408 hospitals have long been 

vocal in alerting officials about manufacturers that either decline to seillVIG at,340B prices or 

limit the quantity of 340B-priccd IVIG or then compel the hospitals to buy the rest of their IVIG 

outpatient supply at higher, non-340B prices, which violates 3408 program guidelines. not to 

mention the spirit of the 340B program. 

In response (0 providers' concerns about IVIG access. HRSA confirmed in 2005 that 

manufacturers cannot allocate a drug based on a provider's 340B status. Moreover, Congress 

created a "must-sell" provision that requires manufacturers to after each covered entity a drug at 

or below the applicable ceiling price if that drug is madc available to any other purchaser at any 

price. 

Unfortunately. even this clarification has not ameliorated the situation. A 20 II Government 

Accountability Office report on (he 340B program noted that many stakeholders reported 

continued problems when trying to access IVIG at 340B prices. To address this. HRSA clarified 

that manufacturers' limited distribution plans must be reviewed by IIRSA before the plans are 

implemented. 

I look forward to working with my colleagues. safety-net providers in the 3408 program, and 

IVIG manufacturers and distributors to ensure patient access to this critical treatment. 
173 


81517.117

FRED UPTON, MICHIGAN 

CHAIRMAN 

ONE HUNDRED TWELFTH CONGRESS 

HENRY A. WAXMAN, CALIFORNIA 

RANKING MEMBER 

\!l:ongreS'S' ot tbe mtniteb ~tateS' 

J!)oll~e of l\epre~elttntil.le~ 

COMMITTEE ON ENERGY AND COMMERCE 

2125 RAYBURN HOUSE OFFICE BUILDING 

WASHINGTON, DC 20515-6115 

Dr. Janet Woodcock 

Director 

Center for Dl'lIg Evaluation and Research 

U.S. Food and Drug Administration 

10903 New Hampshire Avenue 

Silver Spring, MD 20993 

Dear Dr. Woodcock: 

Majority {202) 225-2927 

Minorityi2021225-3641 

March 19,2012 

Thank you for appearing before the Subcommittee on Health hearing entitled "Review of the 

Proposed Generic Drug anJ Biosimilars User Fees and Further Examination of Drug Sh0l1ages" on 

February 9, 2012. 

Pursuant to the Rules of the Committee on Energy and Commerce, the hearing record 

remains open for 10 business days to permit Members to submit additional questions to witnesses, 

which arc attached. The formal of your responses to these questions should be as follows: (I) the 

name of the Member whose question you arc addressing, (2) the complete text of tile question you 

are addressing in bold, and (3) your answer to that question in plain text. 

To facilitate the printing of the hearing record, please e-mail your responses, in Word or PDF 

format, to carly.mcwiliiams@mail.house.govbythecloseorbusiness on Monday, April 2, 2012. 

Thank you again for your time and eff(,rt preparing and delivering testimony before the 

Subcommittee. 

:;~trt Joseph R. Pitts 

Chairman 

Subcommittee on Health 

cc: The Honorable Frank Pallone, Jr., Ranking Member, Subcommittee on Health 

Attachment 
174 


81517.118

/J# t "".~",.1? DEPARTMENT OF HEALTH" HUMAN S._E_R_V_IC_'E_S_' ____ . ____ ._. _____ _ 

~.,,~li[- Food and Drug Administration 

Silver Spring, MO 20993 

The Honorable Joseph R. Pitts 

Chainnan 

Subcommittee on Health 

Committee on Energy and Commerce 

House of Representatives 

Washington, D.C. 20515-6115 

Dear Mr. Chainnan: 

APR 172013 

Thank you for providing the opporttmity for the Food and Drug Administration (FDA or the 

Agency) to testify at the February 9, 2012, hearing before the Subcommittee on Health, 

Committee on Energy and Commerce, entitled "Review of the Proposed Generic Drug and 

Biosimilars User Fees and Further Examination of Drug Shortages." This letter provides 

responses for the record to questions posed by certain Members of the Committee, which we 

received on March 19,2012. 

Thank you, again, for contacting us concerning this matter, If you have further questions, please 

let us know. 

cc: The Honorable Frank Pallone, Jr. 

Ranking Member 

Subcommittee on Health 

Sincerely, 

Michele Mital 

Acting Associate Commissioner 

for Legislation 
175 


81517.119

Page 2 - The Honorable Joseph R. Pitts 

We have restated each Member's questions below in bold, followed by our responses. 

The Honorable John Shimkus 

1. As part of the Generic Drug User Fee Act goals, FDA proposes to develop better 

science for new bioequivalence methods for locally-acting drugs, but does not 

address the process for developing these methods. Please explain what FDA will do 

to ensure a transparent process for the development of these methods and utilization 

of the user fee funds. 

The Generic Drug User Fee Act (GDUFA) program performance goals, which were agreed to by 

industry representatives, include a regulatory science plan for FYI3. The plan includes 

developing bioequivalence (BE) of local-acting, orally inhaled, topical dermatological and 

gastrointestinal drug products. In the future, FDA will convene a working group and consider 

suggestions from industry and other stakeholders to develop an annual list ofregulatory science 

initiatives for review by the Center for Drug Evaluation and Research (CDER) Director. 

The Agency intends to fund studies through a granting system or contracts that are open to the 

public. When the results of these studies become available, they will be published on FDA's 

publically available website and presented in public venues and, if it is appropriate to base future 

guidance on the results, these guidance documents will be published in draft form for public 

comment in accordance \'1ith our Good Guidance Practices. Ibe current system for 

disseminating BE recommendations to the public ensures transparency by allowing an 

opportunity for interested parties to provide feedback to FDA. The web posting of these draft 

recommendations is preceded by a Federal Register Notice announcing the availability of the 

newly posted recommendations on FDA's website. 

All BE recommendations are posted to the lndividual Product Bioequivalence Recommendation 

page for public comment: 

http://wwwjda.gov/Drugs/GuidanceComplianceRegulatoryln!ormation/Guidanceslucm075207.h 

tm. 

FDA considers all comments and has revised BE recommendations based on public comments. 

FDA also discusses complex issues related to BE at the public meetings of the Advisory 

Committee for Pharmaceutical Science and Clinical Pharmacology, when appropriate. The 

results of FDA-funded research projects that support BE method development are generally 

published in the peer-reviewed scientific literature. These processes ensure transparency, 

consistency, and scientific rigor ofthe~~BE recommendations~ 

The Honorable Marsha Blackburn 

1. Do you believe that FDA is doing enough to speed life-saving treatments to 

seriously ill patients? 
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81517.120

Page 3 - The Honorable Joseph R. Pitts 

FDA has had a lot of success in expediting the development and approval of lifesaving drugs, 

particularly drugs for cancer and HIV/AIDS, using existing mechanisms. In fact, a recent New 

England Journal of Medicine article reported that for novel therapeutic agents approved between 

2001 and 2010, FDA reviewed applications involving novel therapeutics more quickly, on 

average, than did the European Medicines Agency (EMA) and Health Canada, and the vast 

majority of these new therapeutic agents were first approved for use in the United States. For 

example, among the unique novel therapeutic agents that were approved both by FDA and EMA, 

63.7 percent were first approved by FDA. I Similarly, the Friends of Cancer Research published 

a study in Health Affairs confirming that new cancer drugs reach patients sooner in the United 

States than in Europe. The study made a direct drug-to-drug comparison between FDA and 

EMA approvals of new oncology drugs. The median time for approval for new cancer medicines 

in the United States was just six months.2 

We recognize that we must do more to help expedite drug development and approval in other 

serious disease settings. FDA has used and continues to use mUltiple mechanisms to help 

expedite development and review of important new therapies for serious illnesses. The 

Accelerated Approval Program and the Fast Track Drug Development Program are examples of 

these mechanisms, and we continue to consider opportunities to further expand the use of these 

mechanisms, primarily the accelerated approval mechanism, in other serious disease settings. 

2. What are you specifically doing to change the culture at FDA to help these patients? 

FDA has a vital role in fostering the application of scientific advances to the treatment of disease 

through drug development. As such, the culture at FDA is very supportive oflooking for new 

ways to make the drug development system more efficient at developing the evidence necessary 

to support drug approval, and is actively engaged in those efforts. FDA is developing a series of 

regulatory policies to further these goals, including drafting guidance on the following: 

development of two or more novel agents for use in combination, use of adaptive clinical trial 

designs, non-inferiority clinical trial designs, development of a diagnostic test for use with a 

drug, use of pathologic complete response as a surrogate endpoint for cancer therapies for use in 

the neoadjuvant setting (intended to expedite development of new therapies for high-risk, earlystage breast cancer patients), and use ofpharmacogenomic analysis in early drug development to 

better understand variations in clinical response to a drug and to improve the efficiency of 

subsequent development. 

FDA is also engaged in efforts to revise existing guidance, fmalized in 1998, on providing 

clinical evidence of effectiveness to better reflect current clinical and regulatory science and 

improve the efficiency of drug development. Through efforts such as these, and collaborative 

efforts such as the recently armounced Medical Policy Council, FDA leadership strives to ensure 

that all FDA staff fully embrace these forward-looking and innovative processes and ideas. 

1 "Regulatory Review of Novel Therapeutics-Comparison of Three Regulatory Agencies," Nicholas S. Downing, 

A.B, et aI., New EnglandJournal afMedicine, 366:24, June 24, 2012. 

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

Than In Europe," Samantha A. Roberts, letfD. Allen, and Ellen V. Sigal, Health Affairs, June 2011. 
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Page 4 - The Honorable Joseph R. Pitts 

3. Why has the current FDA seemingly rejected the accelerated approval regulations 

that the Agency had been following for over a decade? 

Accelerated Approval is a vital and increasingly important mechanism for providing patients 

with serious and life-threatening conditions access to promising new therapies as soon as 

possible and, as noted above, is seeking to expand its use. For example, in an effort to foster 

development of new therapies for breast cancer, FDA published a draft guidance in May 2012 

recommending use of a new surrogate endpoint (an endpoint that has not been previously used 

as a surrogate in this disease setting) to support accelerated approval of drugs for use in earlystage breast cancer (see Guidance for Industry, "Pathologic Complete Response in Neoadjuvant 

Treatment of High-Risk Early-Stage Breast Cancer: Use as an Endpoint to Support Accelerated 

Approval," at 

http://www.jda.gov/downloads/Drugs/GuidanceComplianceRegulatorylnformationiGuidancesl 

UCM305501.pdj). 

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

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

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

Since 1995, there have been 49 new indications for 37 oncology products using Accelerated 

Approval. 

4. Do you believe the 1992 accelerated approval regulations and regulatory approach 

to fast-track approval adopted by the Clinton Administration was not in the best 

interest of patients? 

On the contrary, these regulations are in the best interest of patients, because these programs 

strike the right balance between providing patients with timely access to important FDAapproved new drugs and protecting patients from being exposed to drugs that are not safe or 

effective. FDA administers a number of existing programs to expedite the approval of certaln 

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, including Accelerated 

Approval and Fast Track. 

In 1992, FDA instituted the Accelerated Approval process, which allows earlier approval of 

drugs that treat serious or life-threatening diseases and that provide meaningful therapeutic 

benefit over existing treatments 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 lifethreatening diseases. Accelerated Approval is given on the condition that sponsors conduct postmarketing clinical trials to verify the anticipated clinical benefit. The Food and Drug 

Administration Safety and Innovation Act (FDASIA) of2012, P.L. 112-144, codifies in law and 
178 


81517.122

Page 5 The Honorable Joseph R. Pitts 

clarifies the Accelerated Approval pathway, including listing the types of evidence upon which 

FDA can rely when determining whether a surrogate or clinical endpoint is valid. 

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 Zelboraf in 2011 to treat 

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

5. Do you agree that additional legislative authority is needed to address FDA's 

reluctance to utilize the fast-track authority first adopted over a decade ago, or to 

provide the FDA with additional flexibility or incentive to approve drugs for serious 

and life-threatening illnesses? 

As noted in response to questions 3 and 4, we remain committed to using existing programs, 

such as Accelerated Approval and Fast Track, to speed therapies to patients while protecting 

patients from being exposed to therapies that are not safe or effective. 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. Section 902 ofFDASIA establishes a new pathway 

for breakthrough therapies, which are defined as drugs that are intended to treat a serious or lifethreatening disease or condition and for which preliminary clinical evidence demonstrates 

substantial improvement over existing therapies. Drugs that receive this designation are eligible 

for additional consultation with the Agency to design an expedited drug development pathway. 

The Honorable Tim Murphy 

1. What is the current level of Agency prioritization for biosimilars? How many 

reviewers has the Agency trained on review of biosimilars? How many reviewers does 

the Agency believe are needed to review biosimilars? Will the same reviewers also 

review the originator products? What does the Agency plan on doing to make sure 

that there is no conflict of interest? Has the Agency thought about creating a separate 

dedicated office for biosimilars? If no, why not? 

FDA considers the review ofbiosimilar biological products-which offer the potential for a safe 

and effective and more affordable alternative to iunovator biologics-to be a high priority. 

Following the March 23,2010, enactment of the Biologics Price Competition and Iunovation Act 

(BPeIA) as part of the Patient Protection and Affordable Care Act, PL. 111-148, FDA began 

developing regulatory policies and guidance on the new biosimilar approval pathway and 

training reviewers in an effort to help build review capacity and ensure consistent advice to 
179 


81517.123

Page 6 - The Honorable Joseph R. Pitts 

sponsors concerning biosimilars biological product development. Because an approval pathway 

for biosimilar biological products was established only three years ago, the volume of 

submissions in connection with biosimilar biological product development is still small. 

Nonetheless, FDA has devoted an increasing amount of resources to biosimilars since March 

2010. By September 2010, FDA was devoting the equivalent of]5 Full Time Equivalents 

(FTEs) to biosimilars work that included a significant amount of policy development to 

implement the program. In May 2010, FDA began meeting with sponsors ofbiosimilar 

applications. This activity increased and by the spring of2011, FDA had devoted 26 FTEs to 

biosimilars work. The biosimilars industry and regulatory program are relatively new, leading to 

uncertainty regarding future program size. Under the Biosimilar User Fee Act (BsUFA), enacted 

on July 9, 2012, as part ofFDASIA, FDA would allocate at least the inflation adjusted value of 

$20 million in non-user-fee money for biosimilar review activities, plus biosimilar user fee 

collections. 

Characterizing biological products for the purpose of determining biosimilarity or 

interchangeability differs from work with small-molecule drugs because the molecules of 

biological products tend to be much larger and have a far more complex spatial structure than 

small-molecule drugs. To ensure the highest level of clinical and technical expertise in 

biosimilar review, and the greatest efficiency and consistency in review program operations, 

FDA does not plan to create a separate office for biosimilars review. Familiarity with the 

innovator product will be important in,conducting an efficient and informed assessment of the 

biosimilar product. FDA also notes that the Public Health Service Act (PHS Act), as amended 

by the BPCIA, requires that an application for a proposed biosimilar or interchangeable product 

be reviewed by the division within FDA that is responsible for the review and approval of the 

application under which the reference product is licensed (see section 35 1 (k)(5)(B) of the PHS 

Act). 

FDA does not consider additional steps, beyond the extensive conflict-of-interest screening and 

management that apply to all regulated product reviews, to be necessary for biosimilar biologics. 

BsUF A will further ensure that distinct and adequate resources are available to support rapid 

review of both 351(k) applications and 351(a) applications. 

2. What is the internal process for biosimilar applicant meetings? Is it accurate that the 

FDA has bad four internal meetings before every meeting with sponsors for PreIND 

meetings? Does the FDA plan to keep the number of meetings flexible and not 

mandatory? 

It is FDA's long-standing practice to conduct internal meetings prior to meeting with sponsors to 

discuss the submitted content and to develop responses to the sponsor's questions. For the 

biosimilar development program proposals, CDER has, in practice, found that, based on the 

complexity of the proposals and the breadth of the advice sought, several internal meetings, 

including the internal Biosimilar Review Committee meeting, are typically necessary to 

adequately discuss the scientific and policy issues and to develop meaningful and consistent 

advice to sponsors. The number of internal meetings is not mandatory and is flexible based on 

the scope of the meeting and the stage of product development. 
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Page 7 - The Honorable Joseph R. Pitts 

3. Is it accurate that the FDA is proposing 4 pre-filing meetings (Types 1 through 4)? 

Does this mean that a 351(k) applicant will be prohibited from meeting with the 

Agency after they have had 4 pre-filing meetings? 

FDA proposed five meeting types consisting of a Biosimilar Initial Advisory Meeting, and 

Biosimilar Biological Product Development (BPD) Meeting Types 1 through 4. These meetings 

are not mandatory. Sponsors can choose the meeting or the combination of meetings to match 

their development needs, and there is no limit on the number ofBPD meetings. FDA will grant a 

meeting request if the Agency concurs that the meeting will serve a useful purpose (i.e., it is not 

premature or clearly unnecessary). Requests for BPD Type 2, 3 and 4 meetings will be honored, 

except in the most unusual circumstances. 

4. What is the average waiting period for sponsors following a request for a meeting 

under PDUFA versus a meeting to discuss a biosimilar application? 

As agreed to with industry, the proposed performance goals for BsUFA include goals related to 

meetings with sponsors on biosimilar biological product applications. These goals are similar in 

structure to the current PDUFA meeting goals in that they include commitments for scheduling 

meetings vvithin target time frames that depend on the type of meeting requested. The proposed 

BsUFA performance goals for scheduling meetings within the target time frames start at the 70 

percent performance level in the first year of the program and increase to the 90 percent 

performance level in the fifth year ofthe program. The current PDUF A performance goals for 

scheduling meetings are set at the 90 percent performance level. A comparison of the target time 

frames for the different PDUF A and BsUFA meeting types is provided below: 

I Meeting PDUFA PDUFA PDUFA BsUFA I BsUFA BsUFA BsUFA BsUFA 

Goals (in Type A TypeB TypeC Initial BPD1 I BPD2 BPD3 BPD4 

calendar Meeting Meeting Meeting Advisory : Meeting Meeting Meeting Meeting 

days) Meeting I 

Meeting I 14 days 21 days 21 days 21 days 14 days 21 days 21 days 21 days 

Requests 

Scheduling 30 days i 60 days ! 75 days 90 days 30 days 75 days 120 days 60 days 

Meetings I 

i 

I 

I 

Meeting 30 days 30 days 30 days 30 days 30 days 30 days 30 days 30 days -' Minutes -

The Biosimilar Initial Advisory Meeting is an initial assessment limited to a general discussion 

regarding whether the biosimilar licensure pathway may be feasible for a particular product, and, 

if so, general advice on the expected content of the development program. Such meetings will 

typically involve the review of a comprehensive development proposal. There is no meeting 

type that is comparable to a Biosimilar Initial Advisory Meeting under PDUF A. The Type A 

meeting under PDUF A and BPD Type 1 meeting under BsUF A are identical in intent. These 

meetings have short target time frames because they are held to discuss at risk clinical 

development programs and other imminent issues. The BPD Type 2 meeting under BsUFA is 

similar in intent to a Type B meeting under PDUF A and will involve the review of study 

summaries and discussion of milestones in product development. The BPD Type 3 meeting will 

involve the review of full-study reports, rather than summaries, which necessitates an in-depth 

data review. FDA will provide advice regarding the similarity between the proposed biosimilar 
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biological product and the reference product, and advice regarding additional studies, including 

design and analysis. This type of review and assessment requires more preparation time by the 

Agency than for other meeting types. There is no meeting type under PDUFA that is comparable 

to a BPD Type 3 meeting. The BPD Type 4 meeting under BsUFA is identical in intent and 

content to a certain kind of Type B meeting under PDUFA, where the content and format ofa 

planned NDA or BLA application is discussed. There is no meeting type under BsUFA that is 

comparable to the Type C meeting under PDUF A, which serves as a general meeting category to 

include meetings that are not considered Type A or B. 

With the combined resources of at least the inflation-adjusted value of $20 million in non-userfee funds, plus biosimilar-user-fee collections, FDA expects to be able to achieve these meeting 

performance goals in the first five years of the BsUFA program. 

5. What is FDA's rationale for requesting an upfront fee from biosimilar applicants 

under BsUFA and not from sponsors ofBLAs undcr PDUFA? 

Because of the nascent state of the biosimilars industry in the United States, there are no 

currently marketed biosimilar biological products. Accordingly, BsUFA, as agreed to by 

industry, includes fees for products in the development phase ("biosimilar biological product 

development fees") to generate fee revenue in the near-term and ensure that FDA has the 

increased review staff capacity to enable sponsors to have timely meetings with FDA early in 

and throughout the development ofbiosimHar biological product candidates. Under the 

proposed program, the application fee amount for a biosimilar biological product is set equal to 

the application fee amount established under PDUFA for that fiscal year. However, when a 

biological product application is submitted, the cumulative amount of any biosimilar biological 

product development fees paid for that product is subtracted from the amount of the application 

fee that otherwise would be due. 

6. FDA granted interchangeability to a very complex glycosylated molecule. Although 

not a biologic, the Enoxaparin approval demonstrates the FDA's level of comfort with 

state-of-the-art characterization technology as an appropriate basis to grant 

interchangeability between a generic and tbe reference product. Isn't this the same 

standard that will be used for biosimilar products irrespective of interchangeability? 

If so, why does the Agency not believe that interchangeability is possible today? 

As a preliminary matter, we note that the term "interchangeability" is defined by statute to refer 

to a biological product shown to meet the standards described in section 351(k)(4) of the PHS 

Act and this statutory definition does not apply to a drug product, such as enoxaparin, that has 

been approved under the Federal Food, Drug, and Cosmetic Act (FD&C Act). 

FDA has approved abbreviated new drug applications (AND As) for enoxaparin under section 

505(i) ofthe FD&C Act, based on the applicant's submission of sufficient information to show 

that its proposed product is bioequivalent to and has the "same" active ingredient, route of 

administration, dosage form, strength,_previously approved conditions of use, and (with certain 

exceptions) labeling as the reference listed drug (RLD). The underlying premise of the ANDA 
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approval requirements is that the generic drug product and the RLD can be substituted for each 

other with the full expectation that they will have the same clinical effect and safety profile. 

FDA scientists established a scientific approach for demonstrating active ingredient sameness 

that takes into consideration the complexity of enoxaparin. This scientific approach is reflected 

in five criteria, which involve: (1) the physical and chemical characteristics of enoxaparin: (2) 

the nature of the heparin material and the chemical process used to break up heparin chains into 

smaller pieces; (3) the nature and arrangement of components that constitute enoxaparin: (4) 

certain laboratory measurements of the product's anticoagulant activity; and (5) certain aspects 

of the drug's effect in humans. These five criteria ensure that a generic enoxaparin drug product 

will have the same active ingredient as the brand-name product. This requirement, together with 

other requircments for ANDA approval, will ensure that the generic enoxaparin drug product 

will have the same effects as the brand-name drug product when injected into a patient. (By 

contrast, a biological product proposed in a 351(k) application must show, among other things, 

that the biological product is "highly similar" to the reference product, notwithstanding minor 

differences in clinically inactive components.) 

Protein products differ from enoxaparin in important ways. Enoxaparin is a complex 

carbohydrate that lacks the types of3-dimensional structural characteristics found in proteins. 

Enoxaparin is also relatively stable and is produced via a specific chemical cleavage of heparin. 

In contrast, proteins are relatively labile molecules and can be manufactured in a variety of ways 

that can impact structural features. Thus different scientific expectations are appropriate for 

proteins. 

If a sponsor is interested in developing a biological product that meets the requirements for 

interchangeability as described under 35 1 (k)(4) of the PHS Act, the Agency is interested in 

discussing such a development plan with the sponsor. 

7. Does the Agency believe the current law prohibits a biosimilar product from 

automatically being deemed interchangeable? 

To receive a determination of "interchangeability," the applicant needs to provide information 

sufficient to show that the proposed product meets the requirements in section 351 (k)(4) of the 

PHS Act. 

8. If a 351(k) applicant is seeking an interchangeable determination, but plans on 

marketing the product after a biosimilar determination, do they have to submit a 

pediatric study plan? If so, when? 

Section 505B(n) ofthe FD&C Act provides that a biosimilar product that has not been 

determined to be interchangeable with the reference product is considered to have a "new active 

ingredient" for purposes of the Pediatric Research Equity Act (PREA), and a pediatric 

assessment is required unless waived or deft!rred. FDA encourages prospective biosimilar 

applicants to discuss their proposed approach to addressing this requirement, or requesting a 

waiver or deferral if appropriate, during the investigational new drug (IND) stage of product 

development. 
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9. Although use of a foreign reference product is allowed in a biogeneric development 

program, the regulatory burden of utilizing a foreign comparator is considerably 

higher, and use of a foreign reference product is effectively precluded for an 

interchangeable biogeneric. Clln you expand on the biosimilars guidance regarding 

this from a scientific standpoint? 

Section 351 (i)(4) of the PHS Act, as amended by the BPCIA, defines the "reference product" for 

a proposed biosimilar product to mean the single biological product licensed under section 

351(a) of the PHS Act, against which a biological product is evaluated in a 351(k) application. 

Accordingly, a non-U.S.-licensed product cannot be a "reference product." 

A sponsor may use a non-U.S.-licensed comparator product in certain studies to support a 

demonstration that the proposed biological product is biosimilar to the U.S,-licensed reference 

product. However, as a scientific matter, analytical studies and at least one clinical 

pharmacokinetic (PK) study and, if appropriate, at least one pharmacodynamic (PD) study, 

intended to support a demonstration of biosimiJarity must include an adequate comparison of the 

proposed biosimilar product directly with the U.S.-licensed reference product. We note, 

however, that for certain complex biological products, a modified approach may be needed. 

If a sponsor seeks to use data from an animal study or a clinical study comparing its proposed 

biosimilar product to a non-U.S.-Iicensed product to address, in part, the requirements under 

section 35 1 (k)(2)(A) of the PHS Act, the sponsor should provide adequate data or information to 

scientifically justify the relevance of these comparative data to an assessment ofbiosimilarity 

and to establish an acceptable bridge to the U.S.-licensed reference product. The type of 

bridging data needed likely would include a clinical PK andior PD study conducted with the 

U.S.-licensed reference product. 

Issues that a sponsor may need to address to use a non-U.S.-licensed comparator product in a 

biosimilar development program include, but are not limited to, the following: 

the relevance of the design of the clinical program to support a demonstration of 

biosimilarity to the U.S.-licensed reference product for the condition(s) of use and patient 

population( s) for which licensure is sought; 

the relationship between the license holder for the non-U.S.-licensed product and BLA 

holder for the U,S.-licensed reference product, including whether the non-U.S.-licensed 

product, and/or any components thereof, are manufactured in the same facility(ies) as the 

U.S.-licensed reference product during the relevant time period; 

whether the non-U.S.-Iicensed product was manufactured in a facility(ies) licensed and 

inspected by a regulatory authority that has similar scientific and regulatory standards as 

FDA (e.g., International Conference on Harmonisation (ICH) countries); 

whether the non-U.S.-licensed product was licensed by a regulatory authority that has 

similar scientific and regulatory standards as FDA (e.g., ICH countries) and the duration 

and extent to which the product has been marketed; and 

the scientific bridge between the non-U.S.-licensed product and the U.S.-licensed 

reference product, including comparative physico-chemical characterization, 
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bioassays/functional assays, and comparative clinical andlor nonclinical PK andlor PD 

data, as appropriate, and data to address any differences in fonnulation or primary 

packaging. 

A sponsor also should address any other factors that may affect the relevance of comparative 

data with the non-U.S.-licensed product to an assessment ofbiosimilarity with the U.S.-licensed 

reference product. 

A sponsor may submit publicly available infonnation regarding the non-U.S.-licensed product to 

justi-JY the extent of comparative data needed to establish a bridge to the U.S.-licensed reference 

product. Sponsors are encouraged to discuss with FDA during the development program the 

adequacy of the scientific justification and bridge to the U.S.-licensed reference product. A final 

decision about the adequacy of this scientific justification and bridge will be made by FDA 

during review of the 35I(k) application. 

At this time, as a scientific matter, it is unlikely that clinical comparisons with a non-U.S.-

licensed product would be an adequate basis to support the additional criteria required for a 

detennination of interchangeability with the U.S.-licensed reference product. 

10. Do you agree with the statement that there is intrinsic variation seen in biologic 

products today for the originator's products and that their sponsors provide 

assurances as to the limits of the variation that is allowed to the FDA to evaluate postapproval changes in originator biologic products? And would you agree that this has 

been the case for well over 15 years to determine that the revised originator product 

(due to the Originator making a manufacturing or process changes after market 

entry) is interchangeable with the original approved originator biologic? 

The observation that some structural differences may be found in biological products over time is 

not unexpected. Such differences are most often associated with manufacturing changes 

intended to improve the process. Under FDA regulations, manufacturers of licensed biological 

products are required to report to FDA all post-approval manufacturing or process changes (postapproval changes). 3 In some cases, manufacturers must also seek prior approval before 

implementing a particular post-approval change. As part of the reporting requirement, license 

holders are also required to assess the effect of any post-approval change on the identity, 

strength, quality, purity, and potency of a licensed biological product as it may relate to the 

safety or efficacy of the product (comparability assessment). 

Manufacturers report post-approval changes under one of several reporting categories described 

in Agency regulations, based on the results of the comparability assessment Before distributing 

a product manufactured after a post-approval change, license holders are required to 

demonstrate, through appropriate validation andlor other clinical or non-clinical laboratory 

studies, the lack of adverse effect of the change on the identity, strength, quality, purity, or 

potency as it may relate to the safety or effectiveness of the product. 

321 CFR § 601.12 
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Page 12 - The Honorable Joseph R. Pitts 

For major manufacturing changes that have a substantial potential to impact the safety andlor 

effectiveness of the product, data supporting the changes are submitted to the Agency in a prior 

approval supplement for review and approval. If structural differences andlor the nature of the 

manufacturing change are of concern to FDA, appropriate additional studies, including 

analytical, biological, non-clinical and clinical studies, are requested and evaluated by the 

Agency. 

It should be noted that although different pre- and post-change versions of originator products 

may overlap on the market for a short period of time, the newer version generally becomes the 

only marketed version after that time and repeated switches between pre- and post-change 

versions are less likely. 

11. Then, given that the science is the science, shouldn't that same standard apply for 

interchangeable biogeneric products? If the biogeneric manufacturer can 

demonstrate that its product falls within the limits oCthe variation shown by the 

originator product and that the product is comparable in all other respects and can be 

expected to produce the same clinical result, then shouldn't the FDA deem it 

interchangeable? 

Under section 351(k)(4) of the PHS Act, as added by the BPCIA, FDA shall determine the 

biological product to be "interchangeable" with the reference product ifthe information 

submitted in the 351(k) application (or supplement to such application) is sufficient to show that 

the product is biosimilar to the reference product and can be expected to produce the same 

clinical result as the reference product in any given patient. If the biological product is 

administered more than once to an individual, the information in the application must also show 

that the risk, in terms of safety or diminished efficacy of alternating or switching between use of 

the biological product and the reference product, is not greater than the risk of using the 

reference product without such alternation or switch. 

The Honorable Leonard Lance 

1. In GDUFA FDA proposes to develop better science for new bioequivalence methods 

for locally- acting drugs, but does not address the process for developing these 

methods. Bioequivalence is key to ensuring that generic drugs are the same. But 

the level of evidence, process, and transparency for these methods has varied 

greatly, What will FDA do differently to ensure a transparent, open process going 

forward, and what can be done about current methods that have lacked 

transparency to ensure that these methods are scientifically sound and protect the 

public health now and in the future? 

The GDUFA Program performance goals, which were agreed to by industry representatives, 

include a regulatory science plan for FYI3. The plan includes developing BE oflocal-acting, 

orally inhaled, topical dennatological and gastrointestinal drug products. In the future, FDA will 

convene a working group and consider suggestions from industry and other stakeholders to 
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develop an annual list of regulatory science initiatives for review by the Center for Drug 

Evaluation and Research CCDER) Director. 

The Agency intends to utilize generic drug user fee funds to fund studies through a granting 

system or contracts that are open to the public. When the results of these studies become 

available, they will be published on FDA's publically available website and presented in public 

venues and, if it is appropriate to base future guidance on the results, these guidance documents 

will be published in draft form for public comment in accordance with our Good Guidance 

Practices. The current system for disseminating BE recommendations to the public ensures 

transparency by allowing an opportunity for interested parties to provide feedback to FDA. The 

web posting of these draft recommendations is preceded by a Federal Register Notice 

annotmcing the availability of the newly posted recommendations on the FDA's website. 

All BE recommendations are posted to the Individual Product Bioequivalence Recommendation 

page for public comment: 

http://wwwfda.gov/Drugs/GuidanceComplianceRegulatorylnformationiGuidanceslucmO 75207. h 

1m. 

FDA considers all comments and has changed BE recommendations based on public comments. 

FDA also discusses complex issues related to BE at the public meetings of the Advisory 

Committee for Pharmaceutical Science and Clinical Pharmacology, when appropriate. The 

results of FDA-funded research projects that support BE method development are generally 

published in the peer-reviewed scientific literature. These processes ensure transparency, 

consistency, and scientific rigor of the BE recommendations. 

2. The public expects that a generic drug will work the same as the brand drug. Yet, in 

some of your speeches you have highlighted quality issues with generic drugs. 

Generic drugs are a critically important component of our health care system and 

helps control costs but bow can I assure my constituents that generic drugs are the 

same as the brand products when the data relied on, and the rationale are not 

publicly discussed especially in dosage forms where the bioequivalence methods are 

not straight forward such as locally-acting drugs? 

FDA approves a generic drug only after it has determined that it is the same as a brand-name 

drug in dosage, safety, strength, quality, the way it works, the way it is taken and the way it 

should be used. In her testimony before this Committee in support of generic drug user fees, Dr. 

Woodcock did note 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." With enactment of the 

Food and Drug Administration Safety and Innovation Act, P.L. 112-144, which includes a 

provision for generic drug user fees, FDA expects the backlog of generic drug applications to be 

reduced, and for generic drugs to get to market faster. 
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Page 14 - The Honorable Joseph R. Pitts 

Regarding the issue ofbioequivalence, as stated above, all BE recommendations are posted to 

the Individual Product Bioequivalence Recommendation page for public comment: 

http://wwwjda.gov/Drugs/GuidanceComplianceRegulatolylnJormatianiGuidanceslucm075207.h 

tm. FDA considers all comments and has changed BE recommendations based on public 

comments. FDA also discusses complex issues related to BE at the public meetings ofilie 

Advisory Committee for Pharmaceutical Science and Clinical Pharmacology, when appropriate. 

The results of FDA-funded research projects iliat support BE method development are generally 

published in the peer-reviewed scientific literature. These processes ensure transparency, 

consistency, and scientific rigor of the BE recommendations 

3. Please have your staff follow up with the Committee's staff on some specific 

questions about certain bioequivalence methods that FDA's Office of Generic 

Drugs has proposed. 

FDA's Office of Legislation has contacted your staff to further discuss your Committee' s 

specific questions about BE methods. 

4. Has FDA's pharmacokinetic bioequivalence method for generic lidocaine patches 

been validated with data showing it is sensitive enough both to weed out generic 

products that risk inadvertent trauma by blocking sensation in the skin, and also 

detect whether generics deliver enough active ingredient to achieve pain relief? I am 

concerned that if not, patients accustomed to the brand product's analgesia without 

complete sensory block may injure themselves, or continue to experience pain. For 

the first topical patch used to treat a skin disorder where FDA (or at least the Office 

of Generic Drugs) has decided that clinical bioequivalence stndies are not needed, I 

am concerned FDA has not made public or discussed the data it relied on for this 

significant change in standards of generic sameness. 

The Agency addressed these issues in responding to a Citizen Petition on August 22,2012. Our 

response letter is available in docket number FDA-2006-P-0346, available at 

http://www.regulations.govl#!documentDetail;D=FDA-2006-P-0346-0017. 

5. Has FDA reassessed the efficacy of generic antibiotics in light of last year's study by 

Vesga et al., showing "Generic Vancomycin Products Fail In Vivo despite Being 

Pharmaceutical Equivalents of the Innovator"? Is FDA certain, despite this work 

showing FDA's standard tests for generic equivalence failed to detect ineffective 

generic versions of this life-saving antibiotic sold overseas, that vancomycin generics 

in the US actually work as well as the brand? Can you assure me that FDA will not 

approve generic vancomycin capsule products without an in vivo demonstration of 

efficacy or at least an in vitro test that has been correlated with in vivo data in 

actual patients? 

These issues were the subject of a Citizen Petition filed by ViroPharma, Inc" the sponsor of the 

innovator products. The Agency issued a response to this petition on April 9, 2012. As 

addressed in detail in the citizen petition response, the Vesga articles, which concern injectable 

vancomycin and not the capsule solid oral dosage form, provided no basis in support of the position 
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Page 15 The Honorable Joseph R. Pitts 

that either generic vancomycin injectable products or capsules approved by FDA are less effective 

than the innovator product Vancocin. ViroPharma filed a lawsuit challenging FDA's response on 

April 13, 2012, but did not challenge the agency's conclusions with respect to the Vesga 

articles. On January 9, 2013, the Court granted FDA summary judgment, and ViroPharma did 

not appeal the court's decision. We would be happy to provide a copy of the petition response to 

your office, and the response is available publicly on wWlV.regulatiol1s.gov. 

6. For eacb oftbese examples, did tbe NIH, NSF, NIST or otber outside experts assess 

tbe data on which FDA relies and agree they are sufficient to ensure FDA's proposed 

bioequivalence metbods for these products will only allow approval of generics that 

produce identical results in patients? Have tbese assessments of data sufficiency for 

tbese bioequivalence metbods been made available for public review? lfnot, why 

not? Can you assure me tbat FDA will not expose American patients to unproven 

generic versions of these drugs until tbese steps bave been taken? 

FDA's process for obtaining external scientific input is through the Advisory Committee process 

(which could involve experts from these and other organizations) and through public comments 

submitted to the individual product recommendation docket. FDA has no current plans for 

assessments of BE methods outside of the public advisory committee processes. 
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Subcommittee on Health hearing entitled "Review o/the Proposed Generic Drug and 

Biosimilars User Fees and Further Examination o/Drug Shortages 

April 2.2012 

Additional Questions/or the Record 

Responses of Heather Bresch 

The Honorable Marsha Blackburn 

1. We are hearing from our community pharmacies in Tennessee, and 

overwhelmingly - in fact 96% of them - they are experiencing shortages in 

the past 6 months. 

a. What are you currently doing about the massive shortages 

experienced outside of hospitals - in chemical drugs, in our 

commullities and especially for patients in Ileed of ADHD drugs? 

Mylan does not currently manufacturc the oral solid and tnmsdcrrnal dmgs 

presently listcd on the FDA's dmg shortage list, including ADHD dmgs. 

H.owevcr, we continue to work closely with thc FDA in an attempt to 

addrcss dmg shortages in areas where wc are in a position to help provide 

relief. These include injectables in short supply due to manufacturing 

issues at other suppliers, such as preservative-free Methotrexate Injection 

for the treatment of patients with cancer, particularly the pediatric 

population. In that instance, Mylan's subsidiary. Mylan Institutional, has 

ramped up production and reallocated resources in order to try to address 

the reduced supply and cnable thc manufacture of as much 

preservative-free Methotrexate Injection as possible. Mylan Institutional is 

also aggressively working on both the manufacturing and regulatory fronts 

in an effort to help expedite the FDA regulatory approvals necessary to 

further increase capacity. 

b. 'What ideas can help alleviate these concerns? 

The issues associated with dmg shortages and how to solve them are 

eomplex and varied, and multiple stakeholders have a part to play in 

addressing them, including manufacturers, aetive pharmaceutical 

ingredient (API) suppliers, FDA, group purchasing organizations (GPOs), 

distributors, wholesalers, retailers, and end-users. 

It is also our view that prevention is extremely important. That is why we 

believe the historic Generic Drug liser Fee Act (GDUFA), which is 

foellsed on securing the integrity of the global supply chain by ensuring 

that all participants in the l:.S. dmg system - domestic and foreign -
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81517.134

comply with u.s. quality standards, and decreasing the FDA;s average 

review times, which will expedite the availability to consumers oflow cost, 

high quality generic drugs, will playa key part in addressing drug 

shortages going forward. For example, shortages are sometimes linked to a 

problem in the manufacturing process that could possibly have been 

addressed through the inspection process. In addition, aceelerating the 

market entry of new manufacturers of drugs currently in short supply and 

improving quality, consistency and availability within thc supply chain, 

also will help to mitigate drug shortages eaused by interrupted access to 

raw materials, sueh as active pharmaceutical ingredients. 

Additionally, the Generic Pharmaceutical Association (GPhA) is 

developing a multi-stakeholder tool, known as the Accelerated Recovery 

Initiative (ARl), with the intent of accelerating the recovery of certain 

critical drugs in short supply. 

Wc are also supportive of the Expedited Review and Quota sections of the 

Energy and Commerce Committee's recently released discussion draft 

document and hclieve that, if passed by Congress, this particular language 

would also help industry and FDA better respond to drug shortages. 

c. Should thc DEA ease its rules on production of this class of drugs to 

allow larger lots to be produced? 

As we all work to address drug shortages, it is important that the FDA and 

DEA arc coordinating closely, so that flexibility with regard to quotas can 

be granted if needed. It is t()r this reason that we are supportive of the 

Quota section of the Energy and Commerce Committee's recently released 

diseussion draft documcnt. 
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81517.135

Mr. David Gaugh, Vice President Regulatory Affairs 

Response to Questions for the Record 

February 9, 2012 

Energy and Commerce Subcommittee on Health 

"Review of the Proposed Generic Drug and Biosimilars User Fees and Further 

Examination of Drug Shortages" 

The Honorable Marsha Blackburn 

We are hearing from our community pharmacics in Tennessee, and overwhelmingly-in fact 96% of 

them-they arc experiencing shortages in the last 6 months. 

a. What are you currently doing about the massive shOltages experiences o.utside of hospitals-in 

chemical drugs, in our communities and especially for patients in need of ADHD drugs? 

b. What ideas can help alleviate these concerns'? 

GPhA and our members take the health and safety of patients very seriously. We are proud of our 

record of expanding access to high quality, affordable medications to all Americans. 

Drug shortages result from a variety of reasons. Causal factors of drug shortages, rather, are numerous 

and do not apply in every casco They include everything from an insumcient supply of availahle raw 

materials, to increasing consumer demand, to decreasing available capacity due to quality and/or 

compliance issues, to inadequate and delayed communications about shortages. For example, raw 

materials used to manufacture certain drugs can suddenly he in short supply, and consumer demand can 

increase. Moreover, in certain situations, manufacturers have had to temporarily halt production due to 

suspected quality concerns with raw materials or manufacturing processes. In our view, safety of supply 

is paramount .. Finally, perceived shOltages, or reports of shortages, can result in medication 

stockpiling, unintentionally exacerbating drug shortages in the system. 

In regards to drug shortages, specifically shortages of ADHD drugs, GPhA feels that the issue is best 

handled by FDA and DEA. The two agencies have agreed to work together to address this specific 

situation. FDA's Valerie Jensen said "FDA is doing everything within its regulatory authority to 

address these shortages when they occur.'" GPhA continues to work with hoth the FDA and DEA to 

find solutions that address the core issues causing drug sholtages. All prescriptions, including ADHD 

drugs, are vital to consumers who rely on them every day. Our members are attempting to meet the 

market demand while working closely with the agencies to ensure proper patient access. 

GPhA hopes the agcncies work together to create an appropriate regulatory environment to address the 

concerns of patients, Congress, and manufacturers, 

I I. ':.11' SPill IitI \\ \--;ltiM;j()~_ 20001 
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81517.136

c. Should the DEA ease its rules on production ofthis class of drugs to allow larger lots to be 

produced? 

GPhA believes that decisions on matters sllch as these, which are largely regulatory and/or science 

based, should be made by the FDA and the drug cumpany that produces ADIID drugs. 

, FDA Website, "FDA Works to Lessen 

!{ lC PI fAR.\1 '\( 'L ! r I K ',-\L ASSOCl '\ no!\" • 
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81517.137

Responses for the Record 

Health Subcommittee of the House Energy & Commerce Committee 

February 9, 2012; Responses provide March 26, 2012 

William Greene, PharmD, BCPS, FASHP 

Responses to Questions Offered by Congressman Blackburn 

1) We are hearing from our community pharmacies in Tennessee, and overwhelmingly - in fact 96% 

of them - they are experiencing shortages in the past 6 months. 

a) What are you currently doing about the massive shortages experienced outside of hospitals -

in chemical drugs, in our communities and especially for patients in need of ADHD drugs? 

Response: 

Drug shortages are impacting pharmacies in all practice settings. At 5t Jude, Y-fe provide 

medications to inpatients and to outpatients. The shortages experienced by community 

pharmacists are also impacting St Jude. We handle these shortages in much the same way as 

other pharmacies: we pursue supplies through our various wholesaler relationships, we exert 

extra personnel time to the effort of inventory control and being sure that we identify and 

secure drug supplies, we collaborate with other health care providers in order to define 

alternative therapy when needed, and we educate families and prescribers regarding all the 

different challenges presented by drug shortages. We do have a policy of strictly avoiding 

products which are offered through the so-called "Gray Market," because of the inability to be 

sure of the integrity of drugs purchased through these avenues and because we do not want to 

contribute to the efforts of unscrupulous vendors. 

b) What ideas can help alleviate these concerns? 

Response: 

As suggested during my testimony, there are several steps that would be helpful today: 

- give the FDA tools that it needs to prevent and minimize the impact of drug shortages 

including manufacturer notification to the FDA when a company is leaving the market or 

curtailing production, and mandatory notification to the FDA of conditions that could result in 

drug shortages 

give the FDA adequate resources to be able to develop relevant databases and forecasting 

approaches 

- give providers notice of upcoming shortages to mitigate patient impact as much as possible 

- engage pediatric practitioners in crafting any proposed solutions 

before enacting legislation directed at correcting underlying factors contributing to shortages, 

be very careful to fully understand the implications and impact of the legislative action 

cl Should the DEA ease its rules on production of this class of drugs to allow larger lots to be 

produced? 

Response: 

It is generally perceived that the inflexibility of the DEA has contributed to difficulties in 

manufacturers' ability to modify production in response to production changes by other 

manufacturers. If this is the case, DEA should work more collaboratively with the FDA in 

developing appropriate plans to address real or pending drug shortages. 
194 

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Responses to Questions Offered by Congressman Pallone 

1) Dr. Greene, an exchange during the hearing, between you and Dr. Cassidy (R-tA) seemed to 

confuse the issue of whether the 340B Drug Discount Program contributed to a recent IVIG 

shortage. Dr. Cassidy suggested during the exchange that IVIG's removal from the 340B alleviated 

the shortage. 

a) However, isn't it true that IVIG remains 340B eligible today and, in fact, has never been 

removed from the 340B program? 

Response: 

I have practiced pharmacy for more than 30 years, and have served as a pharmacy leader in two 

different health care organizations since 1991. Although St Jude has participated in the 340B 

Discount Program only since January 2010, I had some experience with the program at the 

institution where I was formerly employed through 2007. Based on my experience and on 

information from colleagues and pharmacy professional groups, it is my understanding that IVIG 

has never been granted an exemption from the 340B program or removed from the program, 

and it remains available at 340B prices today. 

b) Furthermore, and separate from any specific issues with IVIG supply, isn't it also true that 

there is little evidence linking the longstanding 340B program to the recent upswing in drug 

shortages? 

Response: 

This is true. I am aware of no evidence that links the increase in drug shortages to the 340B 

program.