New Tobacco Products: FDA Needs to Set Time Frames for Its Review Process
Released: 2013-10-21T00:00:00

Letter

Background

FDA’s authority to regulate tobacco products under a public health standard is unique among its regulatory responsibilities. CTP is the FDA center with primary responsibility for executing this regulatory responsibility, and its offices conduct work in several areas, including reviewing submissions for new tobacco products to determine if such products can be legally marketed in the United States, and responding to meeting requests from manufacturers and other entities. All of CTP’s activities are funded through tobacco manufacturer user fees, as required by the Tobacco Control Act.

FDA Oversight of Tobacco Products

FDA—primarily through CTP—undertakes four broad categories of activities in carrying out its responsibilities and authorities under the (1) reviewing submissions for marketing new Tobacco Control Act:tobacco products and setting scientific standards for tobacco products; (2) enforcing statutory and regulatory requirements prohibiting the sale, marketing, and distribution of certain tobacco products; (3) developing and issuing regulations and guidance, conducting compliance checks, and removing violative products from the market pursuant to the Tobacco Control Act; and (4) engaging in public education and outreach activities about the risks associated with tobacco product use, and promoting awareness of and compliance with the Tobacco Control Act. CTP is organized into seven offices. (See table 1.) Within CTP, OS is the office primarily responsible for conducting reviews of new tobacco product submissions; however, OS staff duties are not limited to reviewing new tobacco product submissions.

Under the Tobacco Control Act, a manufacturer may make a submission to FDA for CTP’s determination of whether the manufacturer may introduce a new tobacco product to the market in the United States. CTP reviews submissions made by manufacturers through one of three pathways:

Substantial Equivalence (SE) pathway: Manufacturers make a submission under the SE pathway if either (1) a new tobacco product has the same characteristics as a predicate tobacco product—that is, a product commercially marketed in the United States on February 15, 2007, or a product previously found by CTP to be substantially equivalent; or (2) the new tobacco product has different characteristics from a predicate tobacco product, but does not raise different questions of public health. There are two types of submissions made under the SE pathway—provisional and regular— that are defined by the date that the product came on the market and when the manufacturer made the submission. For provisional SE submissions, a manufacturer may market the new product that is the subject of the submission while CTP conducts its review of the submission, but for regular SE submissions, a manufacturer may not market the new product until CTP completes its review and determines that the product meets the SE requirements. (See table 2.)

Exemption from SE pathway: Manufacturers make a submission under the Exemption from SE pathway if (1) the new product is a minor modification (adding, deleting, or changing the quantity of an additive) of another tobacco product marketed by the same manufacturer; (2) an SE submission is not necessary to ensure that permitting the tobacco product to be marketed would be appropriate for the protection of public health; and (3) an Exemption from SE is otherwise appropriate.

Premarket Tobacco Product Application (PMTA) pathway: Manufacturers make a submission under the PMTA pathway if the new tobacco product does not meet the criteria of the SE or Exemption from SE pathways—that is, the new tobacco product is not substantially equivalent to a predicate product or is not a minor modification of an appropriate product for modification. The PMTA submission must include, among other things, full reports of investigations of health risks, and must meet the public health standard described under the Tobacco Control Act (that is, would be appropriate for the protection of public health).

The Tobacco Control Act does not mandate a time frame for CTP’s review of new tobacco product submissions with the exception of PMTA submissions. For PMTA submissions, the act requires CTP to issue an order stating whether the product may be marketed as promptly as possible, but not later than 180 days after FDA’s receipt of a submission.

CTP reviews of SE submissions—primarily conducted by OS—include three key steps: (1) jurisdiction review to determine if the product is regulated by FDA, (2) completeness review to determine if the submission is missing information, and (3) scientific review to determine if the product is substantially equivalent or not (see fig.1).

According to CTP officials, project managers determine whether the product (including any component, part, or accessory of the product) is made or derived from tobacco; whether it is a drug or medical device; and whether it meets established definitions for any type of FDA-regulated tobacco product. respond to administrative AI letters, but in April 2012, CTP began giving manufacturers 30 days to respond to an administrative AI letter.

After OS finishes these initial two steps in the SE review process, the next step is a scientific review, which involves an assessment of the product by scientists in different disciplines (such as chemistry and toxicology). These scientists work to determine whether the product is substantially equivalent to a product already on the market—that is, has the same characteristics as a predicate tobacco product, or has different characteristics but does not raise different questions of public health. During scientific review, OS may issue scientific AI letters to request additional information that the scientists determine is needed to make a final determination (such as clarification of ingredients and additional testing results). In these letters, CTP officials told us that OS requests that manufacturers respond within 60 days. If OS determines that the SE criteria have been met, then CTP will issue an SE order, and the product may continue being marketed by the manufacturer (if it was a provisional SE submission) or may be legally introduced into the U.S. market (if it was a regular SE submission). If neither of these criteria is met, then CTP will issue an order that the product is not substantially equivalent and the manufacturer must remove the product from the market (if it was a provisional SE submission) or cannot introduce the product into the market under the SE pathway (if it was a regular SE submission).

According to CTP officials, reviews of Exemption from SE and PMTA submissions also include jurisdiction, completeness, and scientific review steps. However, the specific activities within each review step for those pathways may differ from the specific activities involved in review steps for SE submissions.

Requests for Meetings with CTP Offices

The Tobacco Control Act does not require CTP to conduct meetings with outside entities, but CTP officials reported that they are valuable because they increase knowledge of tobacco regulation among public health groups, promote compliance among manufacturers, and clarify information needed for new tobacco product submissions. However, each CTP office follows different processes for receiving and processing meeting requests. In the event that an outside entity—for instance, a manufacturer or a public health advocacy organization—wants to meet with CTP officials, it can request a meeting in various ways. For example, manufacturers can submit written requests to the Director of OS by mail, courier, or electronically to FDA’s document center. Manufacturers have requested meetings with OS to discuss their new tobacco product submissions, as well as study protocols and other scientific issues. Manufacturers, tobacco trade associations, and other entities have also proposed meetings with OS, OCD, OCE, and OP to educate CTP on tobacco industry operations (for example, current practices in tobacco product manufacturing), and to discuss industry’s views on FDA’s approaches to tobacco regulation (for example, industry feedback on published guidance documents). State, local, and tribal governments, as well as academic and scientific organizations, have requested meetings in order to coordinate public health efforts or share relevant knowledge. CTP officials told us that CTP follows FDA’s practice not to grant meetings for which the topic of discussion is in draft guidance. Additionally, according to officials, one office within CTP may transfer a meeting request to another office within CTP in order to provide the most knowledgeable and appropriate agency officials at the meeting. However, a request may not result in a scheduled meeting.

Tobacco User Fees

The Tobacco Control Act requires FDA to assess user fees on manufacturers of FDA-regulated tobacco products based on their market share and specifies that the tobacco user fees can only be applied toward FDA activities that relate to the regulation of tobacco products. FDA bills and collects tobacco user fees from manufacturers on a quarterly basis and fees are generally collected the quarter after they are billed. For example, fees billed in the fourth quarter of fiscal year 2011 were collected in the first quarter of fiscal year 2012. The Tobacco Control Act specified the total amount of user fees authorized to be collected for each fiscal year beginning with fiscal year 2009, and authorized user fees to remain available until expended (which means that FDA may carry over user fees to subsequent fiscal years if they are not obligated by the end of the fiscal year in which they were collected). (See table 3.)

CTP Finished Initial, but Not Final, Review Steps for Most Submissions, and Lacks Time Frames for its Review Process

As of January 7, 2013, the vast majority of new tobacco product submissions FDA received from manufacturers were made under the SE pathway. CTP has finished initial review steps (jurisdiction and completeness reviews) for most SE submissions, but CTP has not made final decisions for most submissions. For the majority of provisional SE submissions, CTP took over a year and a half to complete these initial review steps. In late June 2013, CTP made a final decision on 6 of the 3,788 SE submissions, finding that 2 of the products were substantially equivalent and that 4 were not; the remaining submissions were still undergoing CTP review. Several factors contributed to the significant amount of time it took for review of new tobacco product submissions, according to officials from CTP and tobacco manufacturers. CTP officials reported taking steps to address factors that contributed to the length of time the center has taken to review submissions, but the center has not established review time frames by which to assess progress.

Almost All New Tobacco Product Submissions Have Been under the SE Pathway

As of January 7, 2013, nearly all new tobacco product submissions FDA received from manufacturers (99 percent) were SE submissions, most of which were provisional SE submissions. FDA received a total of 3,788 SE submissions and 23 Exemption from SE submissions from manufacturers. FDA did not receive any PMTA submissions. (See fig. 2.)

As shown in figure 2, of the 3,788 SE submissions received by FDA as of January 7, 2013, 3,165 (84 percent) were provisional SE submissions Almost all of the and 623 (16 percent) were regular SE submissions.provisional SE submissions were received in the second quarter of fiscal year 2011—3,115 of the provisional SE submissions were received within the 3 weeks prior to the statutory deadline of March 22, 2011. The number of regular SE submissions received in a quarter ranged from 19 (in the third quarter of fiscal year 2011) to 192 (in the third quarter of fiscal year 2012). (See fig. 3.)

In addition to the 3,788 SE submissions, FDA received 23 Exemption from SE submissions from manufacturers as of January 7, 2013. Eligibility for the Exemption from SE pathway is limited to new tobacco products that are minor modifications of an existing tobacco product (adding, deleting, or changing the quantity of an additive) already marketed by the same manufacturer. According to CTP officials, a key factor contributing to the relatively small number of submissions is that it is not common for a manufacturer to change only additives when making a change to an existing tobacco product. According to industry representatives, a key reason for the relatively small number of submissions under this pathway is insufficient guidance from CTP about what exactly constitutes a minor modification of another commercially marketed tobacco product. FDA did not include a definition of the term “minor modification” in its final rule to establish procedures for the Exemption from SE pathway because the agency did not have the In the rule, FDA stated experience needed to provide a useful definition.that as it gains experience in evaluating Exemption from SE submissions, it will consider establishing a definition for minor modifications.

CTP officials also reported that no submissions were received by FDA from January 8, 2013, through June 25, 2013. that current tobacco users will stop using tobacco products. According to industry representatives, meeting the standards under the PMTA pathway may not be feasible for some manufacturers—in particular, for small manufacturers (which are manufacturers that have fewer than 350 employees). Industry representatives reported that small manufacturers do not have the research and development resources to design or initiate clinical trials that would be needed to support a PMTA submission.

CTP Finished Initial Review Steps for Most SE Submissions

As of January 7, 2013, CTP finished jurisdiction and completeness reviews for over two thirds of the provisional and regular SE submissions received since June 2010, but had not made a final decision on any of the 3,788 SE submissions. CTP finished both jurisdiction and completeness reviews for about 69 percent of provisional SE submissions (2,191 out of 3,165), and about 67 percent of regular SE submissions (415 out of 623). Almost all of the remaining 974 provisional SE submissions and about half of the remaining 208 regular SE submissions were through jurisdiction review but not completeness review. (See fig. 4.) Provisional SE submissions and regular SE submissions were pending in completeness review for as long about 1.5 years and 1 year, respectively.review for any of the SE submissions.

As of January 7, 2013, CTP had not finished scientific According to CTP officials, prioritization of provisional SE On June 25, 2013—about 3 years after FDA’s receipt of the first SE submission—CTP made a final decision on 6 of the 3,788 SE submissions. CTP concluded that the new tobacco products in two of the submissions were substantially equivalent and that the products in the four other submissions were not. These six submissions were regular SE submissions received by FDA in fall 2011 (about 1 year and 8 months prior to CTP’s final decisions). For each of the two substantially equivalent products, CTP found that the new product had different characteristics than the predicate tobacco product but did not raise different questions of public health. CTP found that four new tobacco products were not substantially equivalent to predicate tobacco products due to factors such as inadequate evidence that the products to which the new products were being compared were valid predicate products and lack of complete information on tobacco product characteristics.

CTP Took Over a Year and Half for Initial Review Steps for the Majority of Provisional SE Submissions

CTP took over a year and a half from FDA’s receipt of a submission through the end of initial review steps for more than half of provisional SE submissions, and 6 months for more than half of the regular SE submissions. As of January 7, 2013, the median length of time to finish initial review steps—from FDA’s receipt of a submission through the end of completeness review—for provisional SE submissions was about 1 year and 9 months, and the length of time ranged from about 9 months to about 2.5 years (see fig.5). The median length of time to finish initial review steps for regular SE submissions was about 6 months, ranging from about 1 month to about 2 years (see fig. 6).

Several factors have contributed to the significant amount of time it took for review of SE submissions, according to CTP officials and industry representatives. These officials identified factors such as insufficient information provided by manufacturers in submissions; the prioritization of regular SE submission reviews over provisional SE submissions; and other factors.

CTP officials told us that insufficient information from manufacturers in SE submissions has had the most significant impact on review times for those submissions. According to CTP officials, the majority of SE submissions were incomplete and required follow-up with manufacturers to obtain additional information, such as a full description of both the new tobacco product and the predicate tobacco product. CTP officials reported that they spent significant time sending out AI letters requesting missing information from manufacturers and awaiting the manufacturers’ responses. Our analysis found that administrative AI letters were associated with 2,559 SE submissions, and CTP officials told us that some submissions had more than one administrative AI letter. In these letters, CTP officials requested that manufacturers respond to requests within 60 days or 30 days. In addition, our analysis found that scientific AI letters were associated with 81 SE submissions. In these letters, CTP requested that manufacturers respond to requests within 60 days, but CTP officials reported that it had granted extensions of up to 4 months.

Industry representatives agreed that the lack of completeness of submissions had an impact on reviews, but they told us that guidance provided by CTP was neither timely nor adequate for manufacturers to provide what CTP would consider SE submissions with sufficient information. Manufacturers we interviewed said they were not able to include all information indicated in CTP guidance that was issued on January 5, 2011, for provisional SE submissions, which needed to be submitted by March 22, 2011, in order for those products to remain on the Some industry representatives indicated that the market provisionally.time it took to prepare a submission was more than CTP estimated, and that the deadline for provisional SE submissions was not enough time to incorporate all of the requirements in the guidance in their submissions. Additionally, industry representatives we interviewed reported that the January 2011 guidance did not direct manufacturers to include some information by the March 22, 2011, submission deadline that CTP later requested in its September 2011 draft guidance or AI letters, such as an environmental assessment.

CTP placed a higher priority on its review of regular SE submissions than on its review of provisional SE submissions, which contributed to longer review times for provisional SE submissions when compared to regular SE submissions. Specifically, according to OS officials, in the summer of 2011 CTP prioritized completeness reviews for regular SE submissions over provisional SE submissions, so resources were shifted away from provisional SE submissions. As a result of this decision—coupled with the fact that provisional SE submissions were received earlier than regular SE submissions—completeness review times for provisional SE submissions were longer than for regular SE submissions. CTP officials said that there were three reasons for placing a higher priority on its review of regular SE submissions over provisional SE submissions: (1) tobacco products in provisional SE submissions could remain on the market legally (unless and until CTP issued an order of not substantially equivalent), (2) FDA received a large number of provisional SE submissions on March 21, 2011 (the day before the statutory deadline for submitting provisional SE submissions), making it impractical to prioritize reviews by the date the submission was received, and (3) CTP required time to assess which approach to reviewing provisional submissions would be the most effective at addressing the public health burden of tobacco use.

Two more factors that had a significant impact on review times were a shortage of experienced tobacco product review staff and slow IT systems, according to CTP officials. These officials reported that when they started reviews of SE submissions the center had a shortage of experienced staff and that finding qualified staff was challenging. Additionally, CTP officials said that initial training of review staff contributed to review times as new staff were unable to review submissions until receiving the necessary training. CTP officials also told us that a slow IT system impacted the rate at which project managers could enter data during jurisdiction and completeness reviews of SE submissions, which slowed down those review times.

CTP Has Worked to Address Factors That Contributed to Review Times, but Has Not Established Time Frames by Which to Assess Progress

CTP has taken action to address the factors CTP officials identified as contributing to the significant amount of time the center has taken to review submissions. CTP has provided additional direction to manufacturers in an attempt to decrease delays due to agency requests for more information through AI letters. Specifically, it has held webinars and published frequently asked questions to provide more guidance to manufacturers that prepare submissions. Additionally, CTP officials told us that in November 2012 CTP began alerting manufacturers of upcoming scientific review of their submissions by issuing a notification to manufacturers 45 days prior to starting scientific review. According to CTP officials, this notification reminds manufacturers of the option to amend their submissions as needed prior to the start of scientific review, to facilitate higher quality submissions, and potentially avoid delays in scientific review due to the issuance of scientific AI letters. CTP also noted that it is working on a standardized form for manufacturers to use when submitting new tobacco product information for review. According to CTP officials, this form may take time to develop as it will require FDA to issue regulations, but CTP officials anticipate that, when implemented, a standardized form should improve review times. To address the shortage of staff available for reviews, CTP officials told us they have increased OS staff from 12 staff in June 2010 to more than 100 staff in January 2013, including scientists and project managers involved in submission reviews. Also in 2012, CTP drafted a reviewers’ guide to help train staff on aspects of the SE review process. According to CTP officials, the center plans to continue to revise its draft reviewer’s guide as it further refines its new tobacco product review process. CTP officials also reported that CTP had upgraded its IT system as of early 2013, which has improved the time taken for data entry on SE submissions. They also reported that CTP plans to transition to a new IT system in late 2013.

Our analysis of data provided by CTP found that for regular SE submissions the length of time from the end of jurisdiction review through the end of completeness review improved over time. Among regular SE submissions received by FDA in fiscal year 2011 and for which CTP had finished completeness review as of January 7, 2013, the length of time from the end of jurisdiction review to the end of completeness review ranged from about 3 months to 1.5 years, with a median length of time of about 8 months. In contrast, the length of time for these steps for regular SE submissions received in fiscal year 2012 ranged from less than 1 day to 11 months, with a median of about 2 months. CTP officials reported that actions such as hiring review staff and providing training for review staff have resulted in improved review times.

While CTP is moving forward with its reviews of SE submissions and efforts to improve review times, CTP does not have time frames for reaching a final decision on submissions. Time frames would allow CTP to evaluate its efficiency and effectiveness and help it make appropriate adjustments. Under federal standards for internal control, control activities that establish performance measures, such as time frames, and the monitoring of actual performance against measures are an integral part of operating efficiently, achieving effective results, and planning appropriately. There are no time frames set by statute for the SE pathway, and CTP has not established performance measures that include time frames for making final decisions on the review of SE submissions. Although CTP officials agreed that establishing time frames would be useful for performance evaluation, CTP has not identified specific plans to establish such time frames. According to CTP officials, they have not yet established time frames because they first need to collect and analyze information about how long each review step should take. Yet without time frames, CTP is limited in its ability to evaluate policies, procedures, and staffing resources in relation to its review process and this, in turn, limits CTP’s ability to reasonably assure efficiency and effectiveness. As a result, CTP is limited in its ability to determine the adjustments needed to make improvements. For example, CTP is limited in its ability to evaluate whether OS staff are performing efficiently and effectively in relation to specific review steps, and as a result, CTP may not appropriately make adjustments such as changing an individual staff member’s responsibilities or increasing the number of available staff.

CTP Granted Most Meeting Requests, but the Time from Request to Date Held Varied Widely

As of January 7, 2013, CTP granted more meetings than it denied. The number of calendar days from the date a meeting request was received to the date a meeting was held varied widely, and CTP officials reported that logistics and subject matter contributed to these variations.

CTP Granted More Meetings Than It Denied

As of January 7, 2013, CTP’s offices had responded—granted, denied, or transferred—to over 93 percent of the meeting requests they received through January 7, 2013. Based on the data provided by CTP officials from the four offices that received meeting requests from outside entities, CTP’s offices responded to 108 of the 116 meeting requests received as of January 7, 2013 (see table 4). Of these 108 responses, 72 of the meeting requests were granted, 22 were denied, and 14 were transferred According to CTP officials, in some cases, to another office within CTP.the CTP office denied a meeting request because the office was able to address the entity’s questions by telephone and a formal meeting was no longer necessary. The remaining eight meeting requests were pending or withdrawn as of January 7, 2013. CTP officials told us that since January 7, 2013, they responded to three of the five pending meetings by granting two meetings and denying one. According to CTP officials, as of July 2013, the other two meetings were still pending because the meeting requester had not responded to CTP.

Of the 116 meeting requests from outside entities, most (74) were requested by tobacco manufacturers. Public health advocacy organizations had the second highest number with 19 meeting requests (see fig. 7).

The data compiled by the CTP offices did not include data on whether the transferred meeting requests were either granted or denied by the office receiving the transferred request. As a result, a transferred meeting request may also be counted as granted or denied in the office that received the transferred request. requested meetings in order to provide information to CTP that may be useful for CTP’s work.

The Time Taken from Meeting Request to Date Held Varied Widely; CTP Reported That Logistics and Subject Matter Contributed to Variations

The number of calendar days taken from the date a CTP office received a meeting request to the date the meeting was held varied widely. For example, in OP, the number of days from the date a meeting request was received to the date a meeting was held ranged from 3 days to almost five months, with half of the responses to meeting requests taking more than about 1.5 months. Further, for OCD, the number of days from the date a meeting request was received to the date a meeting was held ranged from 9 days to more than 8 months with at least half of the responses to meeting requests taking over 2.5 months. (See table 5.)

For tobacco manufacturers, the type of entity with the most meeting requests, the amount of time taken from the date the meeting request was received to the date the meeting was held also varied by office. For example, the minimum number of days from a meeting request to the date the meeting was held for OS was about a month, and the maximum was about 5 months, with half of the responses to meeting requests taking more than about 3 months. The minimum number of days from a meeting request to the date the meeting was held for OP was 3 days, and the maximum was almost 4 months, with half of the responses to meeting requests taking more than about 1.5 months.

According to CTP officials, logistics for scheduling meetings and the subject of the request contributed to the wide variation in time taken from the date of the request to the date the meeting was held. For example, OP officials said that the entity requesting the meeting may have to coordinate travel for several people across many locations in order to schedule a meeting and this coordination may contribute to a longer period of time before the meeting will take place. In addition, the subject matter of the request was another factor that CTP officials reported as contributing to the time taken by CTP offices to hold a meeting. For example, officials from OS said that CTP is a new regulatory agency and, as a result, it sometimes receives meeting requests on subject matters with which the center is unfamiliar and officials must involve many entities within both CTP and FDA to determine several things, including which office within CTP should host the meeting and what information the requested entity should prepare.

FDA Spent Less than Half of the $1.1 Billion in User Fees Collected

As of the end of fiscal year 2012, FDA had spent less than half of the tobacco user fees collected and CTP had spent less than planned. CTP officials reported that issues related to contracting contributed to lower than expected spending.

FDA Spent Less than Half of the User Fees Collected and CTP Spent Less than Planned

As of the end of fiscal year 2012, FDA had spent less than half of the $1.1 billion in tobacco user fee funds collected (46 percent) from fiscal year 2009 through fiscal year 2012, leaving more than $603 million (54 percent) unspent. (See fig. 8.) Of the almost $513 million spent during this time, CTP spent almost $468 million. The remaining funds were spent by other FDA entities, such as the Office of Regulatory Affairs.

In fiscal years 2011 and 2012, CTP spent less than the amounts it identified in its spend plan—that is, spent less than planned. According to CTP officials, the center’s spend plan identifies plans for spending CTP’s user fee funds on staffing, acquisitions, and operational needs. The spend plan is based on user fee funds anticipated to be collected by FDA and user fee funds that CTP did not spend in the previous fiscal year. Based on the spend plan for fiscal year 2011, all seven CTP offices had planned on spending a total of $225.4 million for fiscal year 2011, and these offices spent $106.4 million for that year. CTP continued to spend less than planned for fiscal year 2012. (See table 6.) CTP officials reported that based on spending through the third quarter of fiscal year 2013, the difference between the amount of planned spending and the amount of actual spending in fiscal year 2013 will be less than the differences between planned and actual spending in previous years. CTP planned to spend more than $810 million in fiscal year 2013, and as of June 30, 2013, CTP has spent or is committed to spend over $712 million.

Specifically, six of the seven CTP offices spent less user fee funding than CTP planned for fiscal years 2011 and 2012. For example, for fiscal year 2011, CTP’s Office of Health Communication and Education, OCE, and OS planned to spend about $30 million more than they actually spent; and the Office of Management was the only CTP office that planned to spend less than it actually spent—it planned to spend about $1 million less than it spent. (See fig. 9.)

CTP officials told us that issues related to contracting accounted for most of the difference between the amounts spent and planned spending. Specifically, they reported that the time it took to award contracts resulted in CTP not spending the funds that the center planned to spend for a given fiscal year. For example, according to CTP officials, CTP’s Office of Health Communication and Education had planned to award a $55 million contract for communications support services for part of its public education campaign for fiscal year 2011. This office also planned to award a related $145 million contract in fiscal year 2012 for a public health education campaign. However, most of the planned $200 million total was not awarded until the first quarter of fiscal year 2013.officials told us that both contracts were not awarded at these amounts in fiscal year 2011 or 2012 as planned because CTP and FDA spent significant amounts of time to determine the structure of the contract as FDA had never conducted a public education campaign of this magnitude.

Spending for other contracts for both fiscal years 2011 and 2012 was lower than expected for a number of reasons, according to CTP officials: fewer than expected contracts were awarded, the scope of a contract changed, or CTP was short of staff to support the work of the contract.

For fiscal year 2011, CTP’s OCE had planned to award $55 million in contracts with states to ensure compliance with tobacco regulations, but CTP awarded a total of $24 million for that fiscal year because fewer states participated than expected.

For fiscal year 2012, CTP’s OS entered into an interagency agreement with the Centers for Disease Control and Prevention to develop analytical methods and establish baseline levels of harmful or potentially harmful constituents in tobacco products for $20 million less than planned because of a change in scope of the activities for this contract.

For fiscal year 2011, CTP’s Office of Health Communication and Education entered into an interagency agreement with the National Institutes of Health to support regulatory communications activities. The agreement was $3.5 million less than initially planned because the Office of Health Communication and Education was just being established at the time and it did not have enough staff to support this joint effort. As a result, the office reduced the scope of the contract.

In addition to issues related to contracting, CTP officials said that plans to hire more staff than it did and planned management related activities that were not undertaken were other reasons why the amounts spent were lower than planned. According to CTP officials, for fiscal years 2011 and 2012, CTP had planned to hire more staff than it did and this accounted for $6 million and $10 million of the differences between amounts planned to be spent and spent, respectively. Further, according to CTP officials, lower than planned spending for other management activities (such as computer updates and planning potential reorganization) is another reason why the amounts spent by CTP were lower than planned. For example, for fiscal year 2011, the CTP spend plan included $35 million for planning associated with establishing two new offices within CTP. According to CTP officials, this amount was expected to cover contingencies, such as computer updates or management development, if they were needed. However, the officials reported that this reserve was not used because funds were available in the Office of Management to handle any issues related to the addition of these new offices.

Conclusions

Four years after the Tobacco Control Act established CTP and about 3 years after the first new tobacco product submission, FDA has received about 4,000 submissions and collected over $1.1 billion in tobacco user fee funds. Although CTP has finished initial review steps for most of these submissions, as of June 2013, the center made a final decision on only 6 submissions and the time taken on reviews has been significant. Certainly, insufficient information provided by manufacturers in submissions, the prioritization of regular SE submission reviews over provisional SE submissions, and other factors have contributed to the time CTP has taken in its reviews. Yet, as CTP moves forward with its work, the lack of performance measures like time frames for reviews of SE submissions will limit CTP’s ability to evaluate policies, procedures, and staffing resources in relation to CTP’s submission review process and, in turn, limit CTP’s ability to reasonably assure efficient operations and effective results. An entity that is limited in its ability to evaluate its performance will be hard-pressed to determine what adjustments it should make to its operations or how to plan for the future.

Recommendations for Executive Action

To improve CTP’s ability to operate efficiently, achieve effective results, and plan appropriately, we recommend that the Secretary of Health and Human Services direct the Commissioner of FDA to establish performance measures that include time frames for making final decisions on SE submissions and Exemption from SE submissions, and monitor FDA’s performance relative to those time frames, such as evaluating whether staff are performing reviews of these submissions efficiently and effectively.

Agency Comments

We provided a draft of this report to HHS for comment. In its written comments, reproduced in appendix II, HHS agreed with our recommendations. Specifically, HHS stated that FDA will identify performance measures and time frames for regular SE and Exemption from SE review processes within 6 months of our report’s publication and that FDA will monitor its progress to determine if subsequent SE reviews meet the identified time frames. In addition, HHS commented that FDA will identify performance measures and time frames for the provisional SE review process as FDA gains more experience reviewing these SE submissions. HHS further stated that based on the actual performance of meeting the identified time frames, FDA will make modifications to the review process, if appropriate, in order to meet agency objectives.

HHS also provided additional information on CTP activities in its comments. For example, HHS stated that CTP is working to reach determinations on SE and Exemption from SE submissions as expeditiously as possible, and that CTP has continued to make progress on conducting product reviews and in its process and timeliness for responding to requests for meetings with CTP offices. Regarding tobacco user fee funds, HHS commented that CTP is projecting that it will decrease the amount of unspent tobacco user fee funds to carry over at the end of fiscal year 2013 to the mid-$200 millions, which is less than half of the amount carried over at the end of fiscal year 2012. HHS also suggested that our report should include information on all user fee spending, including spending by FDA entities other than CTP. We do report total user fees spent and not spent by FDA, including spending by both CTP and other FDA entities, through fiscal year 2012. In comparing spend plans with actual spending, we reported on spending by CTP, which comprised more than 90 percent of the $513 million spent by FDA through fiscal year 2012. In reporting on CTP spending, we clearly note that other FDA entities, including the Office of Regulatory Affairs, Headquarters, and the Office of the Commissioner, spend tobacco user fee funds, and that these entities spent $11 million in fiscal year 2011 and $24 million in fiscal year 2012.

HHS also provided technical comments that were incorporated, as appropriate.

As agreed with your office, unless you publicly announce the contents of this report earlier, we plan no further distribution until 30 days from the report date. At that time, we will send copies of this report to the Secretary of Health and Human Services, the Commissioner of FDA, and other interested parties. In addition, the report will be available at no charge on GAO’s Web site at http://www.gao.gov.

If you or your staff have any questions about this report, please contact me at (202) 512-7114 or at crossem@gao.gov. Contact points for our Office of Congressional Relations and Office of Public Affairs can be found on the last page of this report. Other major contributors to this report are listed in appendix III.

Appendix I: Staffing Resources for Conducting Reviews of New Tobacco Product Submissions

As of January 7, 2013, the Office of Science (OS)—the only Center for Tobacco Products (CTP) office involved in all steps of reviewing new tobacco product submissions—had 124 staff members on board, and the majority of the staff (102 or 82 percent) reported spending some portion of their time reviewing new tobacco product submissions. OS has other responsibilities in addition to reviewing new tobacco product submissions, including research to meet regulatory science needs and to evaluate the population and public health impact of tobacco products. According to OS officials, of the 102 staff who reported spending time on reviewing submissions, 60 percent or 61 staff reported that in general they spent at least half of their time working on reviews of new tobacco product submissions. The remaining 41 staff reported generally spending less half of their time on reviews of new tobacco product submissions. (See fig. 10.)

The amount of time an OS staff person reported spending on new tobacco product submissions varied by job title. Specifically, the 23 project managers, the OS officials responsible for coordinating the reviews of new tobacco product submissions, and 17 scientists (such as chemists and toxicologists) reported spending at least half of their time working on reviews of new tobacco product submissions. Meanwhile, the Deputy Director for Research and the Special Assistant to the Director reported spending less than half of their time on the review of new tobacco product submissions. (See table 7.)

Appendix II: Comments from the Department of Health and Human Services

Appendix III: GAO Contact and Staff Acknowledgments

GAO Contact

Staff Acknowledgments

In addition to the contact named above, Kim Yamane, Assistant Director; Danielle Bernstein; Hernán Bozzolo; Britt Carlson; Cathleen Hamann; Richard Lipinski; and Lisa Motley made key contributions to this report.