Carl Feldbaum by UdE9fJ

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     TCBDEPARTMENT OF HEALTH AND HUMAN SERVICES

                    PUBLIC HEALTH SERVICE

                 FOOD AND DRUG ADMINISTRATION




                PRESCRIPTION DRUG USER FEE ACT

             FDA AND STAKEHOLDERS PUBLIC MEETING




                  Friday, September 15, 2000

                           9:05 a.m.




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          Department of Labor
     200 Constitution Avenue, N.W.
            Washington, D.C.




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                           C O N T E N T S

     AGENDA ITEM                      PAGE


     Welcome - Mark Barnett, Moderator                          4


     Opening Remarks - Jane Henney, M.D.                        6


     Panel I - Presentations by FDA

       - Linda Suydam, D.P.A., Senior Associate Commissioner,
         FDA   13
       - Janet Woodcock, M.D., Director, Center for Drug
         Evaluation and Research, FDA                           25
       - Kathy Zoon, Ph.D., Director, Center for Biologics
         Evaluation and Research   31


     Panel II - Presentations by Patient Advocacy Groups

       - Abbey Meyers, President, The National Organization
         for Rare Disorders        37
       - Jeff Bloom, Patient Representative                     45
       - Carl Dixon, Executive Director, Kidney Cancer
         Association               54
       - Myrl Weinberg, CAE, President, National Health
         Council                   59


     Panel III - Presentations by Consumer Protection Groups

       - Cindy Pearson, Executive Director, National Women's
         Health Network            67
       - Larry Sasich, Pharm.D., M.P.H., FASHP, Pharmacist,
         Public Citizen            73
       - Brett Kay, Program Associate, National Consumer
         League                    71
       - Arthur Levin, M.P.H., Director, Center for Medical
         Consumers                 86


     Panel IV - Presentations by Industry Groups

       - Carl Feldbaum, President, Biotechnology Industry
         Organization              97
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     - Larry Versteegh, Ph.D., Vice President, Procter and
       Gamble Pharmaceuticals    102
     - Robert Milanese, President, National Association of
       Pharmaceutical Manufacturers                          109
     - Christopher Pelloni, Vice President of Research and
       Development, Teva Pharmaceuticals USA                 115




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                     C O N T E N T S (Continued)

     AGENDA ITEM                    PAGE


     Panel V - Presentations by Health Professional Groups and
     Academic Research

       - Joe Cranston, Ph.D., Director of Science, Research
         and Technology, American Medical Association            119
       - Kenneth Kaitin, Ph.D., Director, Tufts Center
         for the Study of Drug Development                       122
       - Stuart Walker, Ph.D., Director, Centre for
         Medicines Research International                        130
       - John Gans, Pharm.D., Executive Vice President,
         American Pharmaceutical Association                     140


     Open Public Comment Period     149




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                          P R O C E E D I N G S

                MR. BARNETT:   Well, it's 9 o'clock.       I'd like to get

     started with this meeting.     I'd like to welcome you to this

     public meeting on the Prescription Drug User Fee Act, or PDUFA,

     as we lovingly call it.   I'm Mark Barnett with the FDA, and I'll

     be serving as your moderator for this meeting.

                Let's do a little hearing check first.      Can everybody

     in the back hear me okay?     Good.   That's fine.      And another

     check:   Is there anyone here who will need the services of a

     sign interpreter?   If so, would you raise your hand?         And it

     looks like I see no--I see no hand raised.

                Well, as we all know, PDUFA authorizes the FDA to

     collect fees from manufacturers to help offset the cost of

     reviewing applications for new drugs and biologics, and you know

     PDUFA is scheduled to expire in September of 2002.       That sounds

     like a long time from now, but in point of fact, well below that

     happens, the FDA is going to have to decide on what approach

     it takes in discussing the renewal of PDUFA with the Congress

     and the industry.   And in making that decision, of course, the

     agency wants to be sure to take into account the views of its

     stakeholders, that is, the people and the organizations who are

     going to be affected by this legislation.         And that includes

     manufacturers, health professionals, academic researchers,

     patients, consumer groups.
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                  Of course, that's where this public meeting comes in.

     For the FDA, this session is basically a listening session in

     which we'll hear your views on PDUFA, how you think it's worked

     so far, and what you think we should be doing in the future.

     And we're going to do that through a series today of five panel

     sessions, each one of them with three to five speakers.       And

     the panels are going to represent the FDA and patients, consumer

     protection groups, the industry, and health professionals and

     academics.

                  What you hear today from the panelists will reflect

     the views of the various organizations and constituencies that

     they represent.

                  After the panel session, we're going to hear comments

     from those of you who registered to speak from the floor.      In

     order to give some structure to the discussion, we asked the

     panelists to consider four key questions in particular, and

     those are laid out in detail in the handout material.     But let

     me just summarize by saying they cover the perceived benefits

     and drawbacks of PDUFA, how it can be strengthened, whether it

     should continue to include performance goals, what percentage

     of the cost of new product review should be covered by fees,

     and whether or not these fees could be used to pay for FDA

     expenses and doing consumer protection activities beyond the

     review of new products.


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               Now, the folks up here on the panel from the FDA will

     stay for the whole time listening to the various panels speak,

     and they'll be listening carefully to what the panelists say.

     I think one of the questions on people's minds sometimes that

     isn't articulated in a meeting like this is you'll listen, but

     what will you do with the information?       And so I want to assure

     you, in fact, that the FDA will carefully consider what it hears

     today in formulating an approach to take in discussing the

     renewal of PDUFA.   And on that positive note, let me introduce

     our first panel, and these are the folks from the FDA.

               As I do this all during the day, I'm going to ask the

     panelists to raise a finger so that folks in the back can

     identify a body with a voice.     Dr. Jane Henney is Commissioner

     of the FDA.   Dr. Linda Suydam is Senior Associate Commissioner.

     Dr. Janet Woodcock is Director of FDA's Center for Drug

     Evaluation and Research, and Dr. Kathryn Zoon is Director of

     FDA's Center for Biologics Evaluation and Research.

               I think I'll first ask Dr. Henney to sort of set the

     stage for us today.

               DR. HENNEY:     Well, thank you, Mark.       Good morning.

     And on behalf of the Food and Drug Administration, I want to

     thank each of you for taking time from your busy lives to join

     us today to hear about the agency's experience and to share your

     own views regarding the Prescription Drug User Fee Program.


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                The origins of the Prescription Drug User Fee Act

     began in 1992.    Congress authorized a five-year program that

     provided FDA with additional resources to hire more medical and

     scientific reviewers to conduct premarket reviews as well as

     support staff and field investigators to do pre-approval

     inspections.

                The increased funding also enabled FDA to actively

     upgrade the agency's information system.         All these changes

     were intended to accelerate the application review process for

     certain human prescription drugs and biologic process, a

     process that before that had been quite slow, unpredictable,

     and didn't serve either the agency or the public well.

                FDA was bound by this legislation to meet a set of

     review goals under this first Prescription Drug User Fee Act

     that would become more stringent each and every year.        But it

     enabled FDA to collect user fee resources from the industry to

     make achievement of these goals possible.        FDA agreed to meet

     drug review performance goals that emphasized timeliness and

     predictability.    There was not then and never has been a

     guarantee of approval.    FDA was and is expected to apply the

     same high standards--indeed, the gold standard for the

     world--for safety and efficacy evaluation for those products

     that would enter the marketplace.

                The results of this initial experiment were reviewed

     in 1997.   The results demonstrated clearly that, when
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     adequately resourced, FDA is capable of meeting the most

     demanding of performance standards.       Thus, Congress renewed

     the Prescription Drug User Fee Act for another five years.

               With this renewal came additional resources, but

     higher expectations for reviews and additional goals related

     to FDA's responsiveness to industry during the early periods

     of drug development.   Once again, in the first three years of

     this second Prescription Drug User Fee Act, the agency has met,

     with rare exception, all of the performance goals expected.     We

     can now confidently state that the outcome results show that

     we are no longer in an experiment or in a testing phase for this

     kind of program.   Nevertheless, under the sunset provisions of

     the congressional authorization, further legislative action

     will be necessary if FDA is to maintain the authority to collect

     user fee revenues beyond 2002.

               We have set this time aside, as Mark said, to pause

     and reflect on the benefits and accomplishments of this effort,

     but also to raise some fundamental issues and questions.      It's

     clear that user fees have brought many benefits.      Patients and

     health care providers are able to obtain drugs faster.        The

     act's goals specify review times or the time it takes FDA to

     make a decision, and not approval times.      Nevertheless, we have

     seen both review and approval times decrease dramatically.

               Approval time has dropped from a pre-PDUFA median of

     23 months to 12 months.    Approval time for priority products
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     has dropped from a median of more than 12 months in the early

     PDUFA years to 6 months.     The quality of submission has

     improved, too.    Now approximately 80 percent of applications

     submitted are ultimately approved.        Before PDUFA, only about

     60 percent were eventually approved.

                  At FDA, drugs and biologics are now being reviewed

     as fast or faster than anywhere in the world, without

     compromising the very stringent standards Americans have come

     to expect.    This high-quality performance by the agency and

     predictability in its review functions has been an asset for

     the industry as well.     Because our reviews are more timely,

     nearly 18 months has been shaved off industry's drug development

     time, resulting in a savings of nearly $2 billion per year for

     industry.    Predictability by the agency also means industry can

     better plan and manage its own internal affairs as they relate

     to drug development.

                  However, from the agency's perspective, premarket

     review is a critical piece in the risk assessment and management

     of a new medical product, but it cannot and should not be seen

     in isolation.    FDA is expected to be and is committed to the

     lifetime of the product, not just from the early stages of drug

     development to the review and approval, but also to monitoring

     the products once they reach the marketplace.

                  The public expects and deserves to have safety

     assurance throughout a product's lifetime, including the time
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     it reaches the marketplace and is used by the health

     professional and the patient.        While the results of the

     Prescription Drug User Fee Act have generally been positive in

     our premarket review function for drugs and biologics, there

     has also been a significant impact on the agency's other

     functions.     Let me first address the postmarket arena.

                  The postmarket areas are just as critical to assuring

     the safety of the product over its lifetime of use.          One such

     area is adverse event reporting, a process that allow us to

     discover previously undetected and unexpected adverse

     reactions to products after marketing.        This is a key area since

     prior to approval for marketing, most drugs are exposed only

     to a relatively small population in a controlled environment.

                  Another area involves our surveillance and

     investigational work in the field.        FDA maintains its presence

     in inspectional programs by taking samples and conducting tests

     to assure that drugs continue to be manufactured with adequate

     quality control.     The inspection process is a critical part of

     our risk management strategy, ensuring that products are

     manufactured according to appropriate standards to assure their

     reliability.     When this function is not adequately funded, one

     of the critical safeguards for American consumers who need and

     want these medications is undermined.

                  These postmarket functions and now other important

     premarket programs, such as over-the-counter drugs, medical
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     devices, and blood, are becoming seriously underfunded because

     these components are outside the user fee-supported drug review

     process.   The additive provisions of the user fee legislation

     have forced them to absorb over $200 million of mandatory pay

     raise and inflation costs since 1992.       These equally vital

     programs are lacking in terms of staff and operating dollars,

     while drug review activities have grown substantially.          What

     simply has emerged is a system of haves and have-nots.

                I would be remiss if I didn't also mention another

     issue we on occasion hear about the Prescription Drug User Fee

     Program.   There is a perception by some that having the

     regulated industry provide funding for review may compromise

     the agency's independence and objectivity.      We have no evidence

     for this, but even the perception threatens consumers having

     confidence in our ability to conduct our job.

                As we began the user fee program in 1993, 7 percent

     of drug review funding came from user fees.          This percentage

     has increased each and every year.     In this fiscal year, drug

     review funding from user fees will nearly equal the funding

     received from appropriations.     Dr. Suydam will address this

     issue in more detail in a moment.

                It should be noted that our country isn't the only

     one that has experience with industry funding for drug review.

     Other countries use industry funding to pay for the review

     function and in some cases for the entire drug regulation
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     process.   We'd like to take this opportunity today to hear your

     opinions and perspectives about our current funding arrangement

     and deal with concerns, both real and perceived.

                What you'll hear from our panelists this morning are

     FDA's experience with the Prescription Drug User Fee Act, our

     lessons learned, and we'll hear from many of our stakeholder

     groups that are affected by user fees.        What works?   What

     doesn't work?   Which aspects of the User Fee Act should be kept?

     Which should be changed or eliminated?

                This is really your change to tell us what you think

     and help us design the best possible program for the future,

     one that will be of most benefit to all concerned, but maintain

     the support and confidence of the American people.

                We are here to listen, and I do thank you for your

     interest and your attendance here today.         I look forward to

     hearing your views and listening to your concerns and

     perspectives.

                Thank you very much.

                MR. BARNETT:    Thank you very much, Dr. Henney.

                With that overview in mind, let me ask Dr. Suydam to

     talk about the history of PDUFA, how it's affected the agency,

     and how it compares with some of the programs in other parts

     of the world that Dr. Henney just spoke about.

                DR. SUYDAM:    Okay.   Thank you, Mark.    Good morning.


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                 Today my job is to provide you with a brief overview

     of the Prescription Drug User Fee Act.         PDUFA wa originally

     enacted in 1992, reauthorized in 1997 for another five years,

     and will expire on October 1, 2002.        When I use the acronym

     PDUFA, I'm usually referring to both PDUFA I and II, covering

     the years 1992 through 2002.    We believe it's important to begin

     now to assess the needs that we have for the next negotiations

     for PDUFA, and this public meeting is a very important first

     step in the agency's preparation.

                 My talk today will cover the following points:     I am

     going to discuss the purpose of PDUFA; I'm going to briefly

     describe the fee structure; I'm going to explain the statutory

     triggers that must be met before we may collect and spend user

     fees.    Briefly, I am going to talk about performance goals,

     describe how other countries conduct their user fee programs,

     and hopefully set the stage for our discussions later in the

     day.

                 PDUFA was enacted to supplement the agency's

     resources for the review of human drug and biologic

     applications.    It was not intended to replace appropriated

     funds for these activities.      In exchange for the authority to

     assess and use the fees, FDA agreed to certain performance

     goals.   The additional resources provided to FDA as a result

     of PDUFA are devoted to the process of reviewing human drug and

     biologic applications.     As a result of hiring new reviewers,
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     streamlining processes, and providing guidances, we have been

     able to reduce overall review time for these applications and

     supplements and, as a result, have helped reduce overall drug

     development time.    We have achieved this without changing our

     rigorous scientific standards.      The American public now has

     greater, faster access to new and important therapies than in

     the past.

                 Under PDUFA, we assess three types of fees:

     application fees, product fees, and establishment fees.       The

     statute requires that we receive one-third of user fee funds

     from applications, one-third from product fees, and one-third

     from establishment fees.

                 Application fees are assessed when human drug and

     biologic applications and supplements are submitted to the

     agency for review.   The amount due for each of these submissions

     is established in PDUFA, as I'll explain later.       The funds we

     receive from application fees fluctuates from year to year

     because it depends on the number of fee-paying applications that

     we receive.   As a result, application fees are not a stable

     source of revenue.

                 In fiscal year 2000, the fee for an application

     requiring clinical data for approval is $285,740.      The fee for

     an application that does not need clinical data is $142,000.

     The fee for a supplement is also $142,000.


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                 Product fees are assessed annually for each

     prescription drug that is marketed during the year.      This year,

     an annual fee of $19,959 was paid for each of the 2,262 marketed

     prescription products.

                 Establishment fees are assessed for each

     establishment where prescription drugs are manufactured.           In

     fiscal year 2000, each of about 318 establishments that

     manufacture prescription drugs paid an establishment fee of

     $141,971.

                 When PDUFA was originally enacted, it was decided

     that no fees would be charged when investigational new drug

     applications were submitted.     This was done to be sure that the

     fees did not appear as and did not, in fact, become a barrier

     to innovation.    Revenue from all of the three fee types,

     however, is used by FDA to cover expenses incurred in the process

     of reviewing new drug applications and the investigational

     stage.   This includes all of FDA's costs from the moment an

     exemption for investigational new drugs is submitted, including

     the cost FDA incurs in reviewing the IND and the research design,

     meetings to evaluate the IND and respond to sponsors' concerns,

     all costs in evaluating NDAs and BLAs once they are submitted,

     and pre-approval inspection of the firm prior to issuing an NDA

     or BLA approval letter.

                 PDUFA exempts specific submissions from application

     fees, and this is an important provision.         This exemption
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     includes applications and supplements for designated orphan

     products or orphan drugs or indications, supplements for

     pediatric indications, applications that are withdrawn before

     any substantial review work is done, and the first application

     submitted by a small business.

               FDA may waive or reduce fees when it is necessary to

     protect the public health, when it is determined that the fees

     present a barrier to innovation, when the fees paid exceed costs

     incurred reviewing an applicant's submission, and when the fee

     is deemed inequitable in certain circumstances.         Since 1997,

     on average, 22 percent of all applications have either been

     exempted from user fees or the fees have been waived to a certain

     extent.

               PDUFA specifies the amount of application and

     supplement fees for each fiscal year.        This fee amount is

     adjusted each year for inflation.     As directed by the statute,

     we adjust by the higher of either the Consumer Price Index or

     the rate of pay change for federal employees in the D.C. area.

     For the past few years, the rate of pay change has been what

     we have used.   And in fiscal year 2000, the rate of pay change

     was 4.94 percent.

               Our calculations do not end there.          Since the

     reauthorization of PDUFA in 1997, the adjustments must be made

     on a compounded basis.    Due to this compounding, the

     application fee specified in PDUFA for 2000 was adjusted by
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     11.47 percent, resulting in the final application fee that I

     mentioned earlier.   Each December, FDA issues a notice in the

     Federal Register announcing the fee for that year.

                As I noted earlier, application fees, product fees,

     and establishment fees each account for an equal amount,

     one-third of our total user fee revenue.         Once fees are set,

     we need to determine how much total revenue we expect to receive

     from applications and supplements.       This in turn allows us to

     determine how much revenue we need to receive from product fees

     and establishment fees.

                Product and establishment fees are set annually to

     generate the same amount of revenue we expect to collect from

     application fees.    As you can see, embedded in the mechanics

     of PDUFA is a workload adjuster.      Total revenue each year may

     go up or down depending on the number of fee-paying applications

     we expect to receive.

                This graph displays the amount of user fees FDA has

     collected and spent each year since the first year we collected

     fees.   The green bar shows the amount of fees we've collected.

     The yellow or beige bar shows the amount of fees we spent each

     year.   Except for fiscal year 2000, these numbers are the actual

     collections and spending.    The final figures for 2000 will not

     be available until the end of the fiscal year, which is September

     30th.


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               As you can see, in a number of year we collected more

     than we spent.   Revenue collected in a prior year that is not

     spent remains available for our use for drug review costs in

     subsequent years.   These fees collected thus far represent less

     than half of our total spending on drug review.         The remainder

     comes from appropriated dollars.

               PDUFA revenues may only be used to fund the process

     of reviewing human drug and biologic applications.          This

     process includes many activities that I mentioned earlier:

     evaluating applications as they're submitted, inspecting firms

     prior to approving applications, and reviewing IND and research

     design and meeting with sponsors to evaluate and discuss the

     IND.

               Other important agency activities related to the

     review process may not be funded from PDUFA revenues.          For

     example, we may not use PDUFA money to pay for monitoring adverse

     drug reactions after a product is marketed.           We may not use

     PDUFA money for reviewing of drug advertising for marketed drugs

     or for performing routine inspections and surveillance.         Most

     of the funds have been spent to hire additional staff to review

     applications and to support those who do review the

     applications.

               Prior to PDUFA, we had only 1,147 staff years

     dedicated to drug review in CDER, CBER, and ORA.          This year,


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     we expect to use 2,029 staff years on drug review and will

     anticipate that this will increase to 2,122 next year.

                Total FDA staff dedicated to the review process will

     have almost doubled, thanks to the resources provided by fees.

     Fee revenue has also enabled us to provide reviewers computer

     technology to assist and support the review work and to develop

     systems to facilitate paperless applications and reviews.

                FDA may collect and spend under PDUFA only when three

     specific conditions or triggers are met.        This feature causes

     concern in some instances and injects an element of instability

     in the program.

                Under the first trigger, our annual appropriation

     from Congress must be equal to or greater than our 1997

     appropriation plus the adjustment factor.         This requirement

     was meant to ensure that FDA's overall appropriation grows at

     the same rate as the rest of the government.      And, indeed, FDA's

     appropriation has grown to meet the requirements of the first

     trigger.

                Almost all of those increases, however, have been

     earmarked for specific initiatives, creating some problems that

     I'll mention shortly.

                Under the second trigger, we may not collect and spend

     fees in any year in which our spending on drug review from

     appropriations is less than what we spent in 1997.       As a result

     of very constrained budgets, this has become a problem for us.
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                  The third trigger requires our annual appropriation

     act provide for our user fees in specific amounts.       This

     maintains congressional oversight of both fee revenue and our

     appropriated dollars.

                  I'm going to spend a little time right now talking

     about the second trigger because it has an important purpose.

     This ensures that fee resources add personnel and support for

     the review program, assuring that fee revenues supplement

     appropriations.     The fact that the amount we must spend from

     appropriations on drug review must grow with inflation also has

     had a substantial negative impact over the past decade when FDA

     core programs have been forced to absorb mandatory pay

     increases.     Not only has FDA had to absorb about $200 million

     in pay increases since 1993, to meet the trigger requirement

     we have had to divert another $34 million of appropriated funds

     to drug review just to assure that this trigger was met.

                  The trigger specifies the bare minimum that FDA must

     spend from appropriated money.        We must allow ourselves some

     leeway in meeting this minimum, which means in practice that

     even more appropriations than specified in the bare minimum are

     spent in drug review.

                  The net effect of almost a decade of steadily

     increasing spending from appropriations for drug review work

     while FDA's core programs are not getting increased in funding

     has resulted in steadily reduced staffing and resources for FDA
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     core programs.   As a result, staffing for almost all of these

     programs--blood safety, medical device regulation,

     over-the-counter drugs, veterinary drug medicine review, core

     food programs not funded under food safety, and others--have

     shrunk.

                The green bar on this chart shows the amount of drug

     and biologic review spending from appropriations each year,

     driven higher each year by the second trigger.              But

     appropriated funds have remained relatively flat over the same

     period.   The beige bar shows the amount of drug review spending

     from fees each year.     These figures represent actual spending

     except for fiscal year 2000, as I mentioned before.

                As you can see from the slide, the amount of spending

     from fees continues to grow each year as workload increases.

     Total human and biologics drug review spending in fiscal year

     2000 is expected to be over $300 million in fiscal year 2000,

     with almost half of it supplied by user fees.           Funding from fees

     is likely to make up more than 50 percent of total drug review

     spending by fiscal year 2002.

                In the negotiations that led to the enactment of PDUFA

     I, the Congress wanted both FDA and the industry to support the

     imposition of user fees.      Industry agreed to support PDUFA if

     FDA would commit to speedier reviews.        At the time, the meeting

     review time was 23 months.     The average was about 3 years.        FDA

     would only agree to speedier reviews only if it was assured
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     adequate resources to allow it to meet tougher review goals.

     PDUFA I was enacted only after FDA and industry reps agreed on

     a set of ambitious performance goals and additional offsetting

     FDA resources.     FDA made it clear that it was accepting a

     commitment to review its products more quickly, whether or not

     the review ended in a decision to approve.          This would not be

     a lessening of our review standards and/or our rigor.

                  When PDUFA I expired, the performance goals were

     renegotiated between industry and the FDA.        They were tightened

     further and new goals for components of the review process were

     added:     dispute resolution, convening meetings requested by

     drug sponsors, reviewing special protocols, and paperless

     applications.

                  Dr. Woodcock and Dr. Zoon will talk more about these

     performance goals and their impact in their remarks shortly.

                  Now I'd like to compare our program with programs in

     other countries.     We think it's useful to look at how others

     are conducting their programs, and we've selected three other

     countries that have programs very similar to the FDA, somewhat

     similar to the FDA, all of which are relatively diverse

     geographically but we relate to.       One is Australia, Canada, and

     the U.K.    All of these countries collect fees to fund some or

     all of their costs in reviewing drug applications.

                  Australia and the U.K. collect fees for full cost

     recovery.     In fact, for these countries, fees capture 100
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     percent of the full costs of all aspects of drug regulation.

     Both of these programs initially began with the purpose of

     recovering part of government's cost and changed over the past

     10 years to recover all of their costs.

                  Canada's system is one of partial cost recovery.

     Seventy percent of the costs of the drug application review are

     funded from user fees.      Other activities, including adverse

     experience monitoring and postmarket review, are also funded

     from fees.    In Canada, this partial cost recovery is consistent

     in all components of government, premised on the belief that

     those who benefit from government should pay.

                  In the United States, PDUFA's purpose has been solely

     to provide additional resources to enhance and expedite drug

     review while maintaining review quality.           We capture less of

     the costs of drug review than any of the other countries we

     talked to, and we are the only country that did not charge fees

     to recover other drug regulation costs.

                  Finally, we compared whether user fees have been

     linked to performance goals in any of these countries.          In

     Australia, there is a direct link.        Times for reviews are set

     in legislation, and if reviews are not completed within

     specified time frames, up to 25 percent of the application fee

     may be forfeited.

                  Canada and the U.K. set target completion times for

     completion of application review, but fees are not linked to
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     performance goals.    An attempt was made to link performance

     targets and fees in Canada in 1997 but was rejected.

               In the U.S., we link negotiated performance measures

     with the receipt of user fees.       PDUFA was enacted and

     reauthorized only if we achieved agreement on performance

     goals.

               In conclusion, I briefly discussed how PDUFA worked

     and noted some of my perceptions of its strengths and

     weaknesses.    The single most important reality of PDUFA is that

     our increased revenue from fees has become essential to

     maintaining our drug review activities.        Revenue at this level

     must be maintained for the agency to continue to perform at our

     current level.

               To prepare for the next round of negotiations, we

     should address the problems that we and you perceive in the

     current law.

               Next we'll hear from Janet Woodcock and Kathy Zoon

     on their perceptions of strengths and weaknesses, and after

     their remarks, we'll turn to the expert panels to hear their

     perceptions.

               Thank you.

               MR. BARNETT:     Thank you, Dr. Suydam.

               Dr. Woodcock?

               DR. WOODCOCK:     Thank you and good morning.      I was

     asked to talk about the impact of prescription drug user fees
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     on the human drugs program from the perspective of the Center

     for Drugs, but I'm really talking about our perspective on the

     impact on all the stakeholders, not just on us.

                I think the overall assessment, which is my first

     slide, our overall assessment is that this program has been very

     successful in achieving its original goals.           If you recall, at

     the time this program was first negotiated, there was widespread

     disbelief that FDA would be able to meet these review goals and

     have a timely performance of review.        And this program has

     succeeded in eliminating backlogs in the program.            They are

     completely a thing of the past.    We have decreased review time,

     as has already been covered.      And we have also shortened time

     to approval, probably as a function of both decreased review

     time and the improvement in the quality of the applications.

     So this program overall, I think we have to remember, has not

     only met, it has really exceeded the original expectations for

     the program.

                Next slide, please?

                Now, the public has received benefits from this

     program.   There is faster access to new therapies, as shown by

     when we look at actual time to approval, not just review times.

     And I can say as a rheumatologist I believe that there is

     increased industry incentive to direct attention into new

     therapeutic areas by the timeliness and the predictability of

     this program.   And people in my field, in rheumatology, and in
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     a number of other subspecialty fields are now having drugs

     available to us for previously intractable conditions.          So

     there is really hope out there in the community.          There's a

     feeling that we have new tools to treat especially chronic

     diseases that were really very severely undertreated in the

     past.   And so this is really good news for those patient groups

     who have been waiting a long time for new therapies.          And I

     think--of course, these therapies have been in the pipeline,

     but the predictability of the process, the timeliness of the

     process, really does provide an incentive to the industry.

                There's greater openness in the process, and I don't

     believe this should be discounted either.         The discussing of

     the goals, the discussing of the time frames, and many things

     have flowed from that to really make the drug review process

     a more open and public process with more public participation.

     This is a positive for the public as well, I believe.

                Finally, the second round of the PDUFA program, as

     you heard, had a lot of goals within it, embedded within it,

     that were intended to improve drug development by improving the

     dialogue between the FDA and the industry, getting earlier

     agreement on the safety studies that would be done, on the

     effectiveness endpoints in the design of the clinical trials,

     and many other aspects of drug development.           This kind of

     built-in efficiency and early agreement benefits everyone in


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     the process.   So those are benefits, I think, that have accrued

     to the public from this.

               Next slide?

               For the FDA itself, obviously, as you've just heard,

     we've benefited from improved resources, and this is not only

     just more reviewers, more inspectors doing pre-approval

     inspections out in the field, more computer staff, we have

     really upgraded our infrastructure.      When I came to the agency

     in 1986, my group at the time that reviewed all the biological

     INDs, all investigations of biologics, did not have a computer.

     That was the infrastructure that we were facing at the time.

     And we're really in a different place now, and I think this also

     probably benefits the public.    We are able to keep up with these

     studies and we have tracking and we have a very good

     infrastructure that we're continuing to improve.

               We have also--and this is another benefit--been able

     to recruit highly skilled staff, and as you all know, with the

     economy booming, we are in a very competitive time for

     attracting people.   But with the PDUFA program, with the better

     infrastructure and support that we have, we're able to attract

     at least, and sometimes retain, the people with the new

     scientific skills that we need to review these applications.

               There are better industry applications, and, of

     course, this benefits everyone, but really, from an FDA point

     of view, it really benefits us, because we have worked out with
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     the industry what we want.    There's much more clarity.   We

     refuse to file--we have a deal that we refuse to file

     applications, we send them back, if they don't meet the grade.

     And that's very important for our effectiveness, that we're not

     constantly looking at substandard applications.

               Finally, we have used this opportunity and the goals

     that exist to streamline our processes using modern management

     techniques, and I believe this has really helped the FDA.

               Next slide?

               Now, I know the pharmaceutical industry will be here

     and will speak, but from our point of view, we feel the

     pharmaceutical industry has benefited not just by speed but

     really by having a predictable process that can be followed,

     that we have a faster process and that also benefits because

     there aren't really prolonged times where no one knows what's

     happening within the agency.

               There's greater openness between the FDA and the

     pharmaceutical industry, as I said, on trial design, on what

     our standards are, on what the goalposts of approval, what

     they're aiming at, and this helps predictability and also helps

     drug development.

               And, finally--and I can tell you, this wouldn't have

     been something people would really have asked for in general

     at the start of this program, but now the idea that industry


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     has access to agency advice and input is seen as a positive,

     I think, on the side of the pharmaceutical industry.

                 Next one?

                 That all said, that the program has met its original

     goals and there are many sort of spin-off benefits to many

     parties, there are challenges, and Dr. Suydam has covered some

     of them.    Of course, PDUFA covers a limited part of the drug

     life cycle, just the premarket review part, and it doesn't

     support drug safety surveillance after approval, adverse

     reactions and other activities that we carry out to make sure

     that drugs maintain their safety profile.           It doesn't support

     drug advertising regulation.        Drug advertising is something

     that can have a large impact on the safe use and effective use

     of pharmaceuticals out in the market.        It doesn't cover the good

     manufacturing practices and manufacturing surveillance that

     keep drug quality up to the desired standards.

                 In addition, the existence of this program I think

     was well outlined by Dr. Suydam and really does limit our

     flexibility to move our resources around and manage our

     resources against the needs, the needs of our programs.           And

     a lot of this program brings us great benefits.           We have lost

     some flexibility there in our ability to respond to emerging

     problems.

                 In addition, and this is a minor point, but I think

     some of the subsidiary goals--there were many, many subsidiary
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     goals developed during PDUFA II, the second part of the program,

     of tracking our performance against meeting management and all

     sorts of minor goals, and this is an administrative burden for

     us that I don't believe is really providing a tremendous benefit

     to any of the parties I just mentioned.

                So that's a view from the Center for Drugs.          Thank

     you.

                MR. BARNETT:     Thank you, Dr. Woodcock.

                Let's ask Dr. Zoon to talk about something parallel

     with biologics.

                DR. ZOON:    Thank you.     May I have the first slide?

                What I'd like to do this morning is just take a few

     minutes to describe CBER's possible and lessons learned and

     future challenges as we enter the third phase of PDUFA.        Having

     had the experience of PDUFA I, PDUFA II, and now the future of

     PDUFA III, I think I have some perspectives that I would like

     to share that may be valuable for consideration in terms of the

     future to making this a well-balanced program.

                What's working well is that the agency, in this case

     CBER, is meeting or exceeding PDUFA performance goals.           This

     is very important, and the impact here is the availability of

     safe and effectiveness new medicines to the public in a timely

     manner.   And I think this benefits all.

                With respect to the center, I think it has led to clear

     expectations regarding the review of products.          Likewise, this
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     has had a predictability for the industry and in some cases the

     public with access to new medicines.

                 Third, it's increased the resources that were

     available to meet the PDUFA goals, and as Dr. Henney said, when

     the agency is funded appropriately, we can meet the challenges

     of performance that are important both to industry and the

     public at large.

                 In looking at our performance, the next slide just

     gives you an example of that performance goal, and as you can

     see, CBER has met those goals.       Likewise, for the year FY99,

     we are also--next slide?--in the process of exceeding our

     performance goals for this coming year.

                 In addition, there are other areas where I think PDUFA

     has worked very well.     Next slide?

                 One is improving the information management

     technology in the agency.      This includes both hardware and

     software.    It has allowed us to do our jobs more efficiently

     and look at new opportunities to streamline our business

     processes and overlay that with a very reliable information

     system.

                 It has also given us the opportunity to create better

     databases, which will then interface in the future with various

     aspects to the review process to provide even greater

     information and efficiency and reliability to our processes.


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                As Dr. Woodcock mentioned, we have seen increases in

     the quality of submissions.     This benefits all.     It benefits

     the agency and making us more efficient.        I think it benefits

     the industry and their having a more predictable, timely outcome

     from that review process.    And it benefits the public because

     they have the ability to receive new medicines in a more

     predictable fashion.

                The other piece of PDUFA has been, I believe, the

     success and the harmonization of regulatory requirements, not

     only within the FDA but also in the external world.        And I

     believe the additional resources provided by the PDUFA program

     have given FDA leadership not only in the U.S. but on an

     international level with review standards and review

     performance.

                Well, for everything that's good, there's also some

     things for improvement, and that's what the next few slides will

     address.

                What's not working well?      Well, you have heard

     already--and I will also have this theme for CBER--it has had

     a decrease in resources for non-PDUFA activities, and for our

     center, blood and tissues, devices, which are also regulated

     by CBER, have been negatively impacted.        In addition,

     regulatory research dealing with product safety and standard

     setting has also declined.


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               Again, postmarketing surveillance, adverse event

     reporting, as well as inspections and compliance activities

     have also declined in terms of the resources provided.       I think

     this is in many ways very important to point out.         For an

     effective FDA, there must be a very balanced and even

     distribution of resources across these programs in order for

     the public to remain confident in our system.

               In addition, what I would just show in the next slide

     is just an example of how this impacts.        This is the operating

     allotment for CBER over time, and this goes from 1995 to this

     current fiscal year.    And what you can see most dramatically

     is the decline in the operating dollars for the center for

     non-PDUFA-related activities.

               This is important to point out.          It points out

     actually several things.     One, because we need to maintain the

     pay scale of our employees, it has actually crunched our

     operating dollars even more dramatically than is sometimes seen

     with the overall numbers in the program.

               The next slide outlines a few more issues that I think

     need to be raised.   The proliferation of time frames has created

     almost a sweatshop environment.       This is not unique to the

     Center for Biologics but is a characteristic in this program.

     This has resulted in an increased number of staff turnover.

     While we have the opportunity to recruit very good scientists


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     and reviewers coming into the agency, they are not staying as

     long as I would like them to be here.

                  The PDUFA meeting management goals, as Dr. Woodcock

     has pointed out, has created a very bureaucratic and

     administratively time-consuming process and, in my opinion is

     not dollars well spent.      In addition, particularly for the

     Center for Biologics, it has led to a loss of scientific research

     expertise.     Part of this was because of a transition between

     PDUFA I and PDUFA II, where dollars were allowed to support PDUFA

     research in PDUFA I, but that was eliminated during PDUFA II.

                  Some of our challenges for the future:     one, I think,

     is to ensure the quality of the review under short time frames

     that have been negotiated in the review of new drugs and

     biologics; two, maintaining and enhancing the scientific

     expertise needed for review; three, developing the appropriate

     scientific infrastructure for the products for tomorrow.        This

     is very important in the context for biologics where we have

     new cutting-edge technology that requires the ability to come

     up with new standards and new ways of managing the regulatory

     environment for these products.        And, finally, a challenge is

     the adequate funding for non-PDUFA mission activities.

                  In conclusion, I think PDUFA has been a very

     successful program, successful in the context of the agency,

     the industry, and the consumers.       However, I would like to sum

     up a quote that I think reflects one of my outcomes and
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     assessments from the PDUFA program, and it's a quote by Albert

     Einstein.   Albert said, "Not everything that can be counted

     counts, and not everything that counts can be counted."

                 Thank you.

                 MR. BARNETT:   Thank you, Dr. Zoon, and thank you,

     Albert Einstein.

                 [Laughter.]

                 MR. BARNETT:   It's time now to bring up our second

     panel made up of representatives of patient advocacy groups.

     I'll ask those folks to come on up here.     And while they're doing

     that, let me give you some instructions--and this applies not

     only to this panel, but to the ones that are coming--about the

     time for the presentations.      In order to get everybody in and

     make sure we can all speak and also make sure that we have time

     for our comments from the floor afterwards, I'm going to have

     to limit each speaker to no more than 12 minutes.         And after

     10 minutes have gone by, I'll issue a reminder, and then when

     the 12 minutes have elapsed, there will be a clear halt.

                 Dr. Henney asked me before whether I was going to

     administer this as an FDA guidance or an FDA regulation, and

     I think it will be a firmly administered guidance.        I did not

     bring any 483 warning letters with me, so we don't do that.

                 Okay.   Again, I will introduce the panelists and ask

     them to raise a hand when I introduce them so you can identify


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     who they are.    We should have four people up there, and I only

     see three--oh, okay.

                  Okay.   We'll begin at one end of the table.   Abbey

     Meyers is president of the National Organization for Rare

     Disorders.     That's a coalition of national voluntary health

     agencies, and it's a clearinghouse for information about

     little-known illnesses.

                  Jeff Bloom is a patient representative.    He's a

     long-time AIDS advocate and a volunteer at several of the

     nation's leading AIDS advocacy organizations.

                  Carl Dixon is president and executive director of the

     Kidney Cancer Association.

                  And Myrl Weinberg is president of the National Health

     Council, an umbrella organization representing over 115

     national voluntary health organizations.

                  Let's begin with Ms. Meyers.

                  MS. MEYERS:   I apologize for reading my

     presentation, but I just want to make sure that everything is

     absolutely perfect.

                  We are very pleased that the patient advocacy groups

     have been invited to participate in the discussions about

     reauthorization of PDUFA.      Given this historic opportunity to

     impact the future of PDUFA is profoundly important because,

     until today, consumers and patient organizations have really

     been excluded from the previous discussions about PDUFA I and
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     II, and that generated an atmosphere of distrust and skepticism

     about the actual intent of the legislation.

                While the goal of PDUFA was aimed at giving FDA

     adequate resources to speed the approval of new drugs, we

     question who the real beneficiaries are.       Was the objective to

     help consumers gain speedier access to important therapeutic

     advancements?   Or was it aimed at helping the most profitable

     industry in the United States for the past 20 years?        The

     perception among many patient and consumer groups is the latter.

                Granted, since the enactment of PDUFA, user fees have

     provided the FDA with the resources needed to process drug and

     biologic applications quicker than the agency was able to do

     in previous years.   But we really doubt the law's true intent.

     The legislation was passed to ensure rapid access to new and

     innovative therapies to treat debilitating and

     life-threatening diseases.     Yet, according to the National

     Institute of Health Care Management, nearly one-half of the

     drugs approved by the FDA during the 1990s were new formulations

     or new combinations of existing drugs.       And so, once again, we

     ask:   Who are the true beneficiaries of PDUFA--consumers or

     pharmaceutical companies?

                In a perfect world, the answer to this question would

     be the authorization of adequate federal funding for the entire

     agency and, thus, no economic need for user fees at all.

     However, realizing that in all probability such a remedy may
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     not be politically practicable, we suggest that FDA implement

     user fees and set annual performance targets for other programs

     and products, including medical devices, generic drugs, foods,

     laboratory inspections, et cetera.      This increased funding for

     the agency could then be used to support vital programs within

     the agency, such as marketing surveillance and adverse event

     monitoring.    User fees, if renewed, should not be restricted

     to the new drug approval process.

               The public expects the FDA to be the primary consumer

     protection agency of the American Government.         But there is the

     conviction among many that the agency is far more responsive

     to the needs of companies and not to the safety and welfare of

     the American consumer.    PDUFA raises the specter of conflict

     of interest.   Is the agency more responsive to companies

     because they're the primary customers of the FDA?           To many

     consumer and patient groups, this appears to be the case.

               Is there a way to alter the perception without

     sacrificing consumers' speedy access to life-saving drugs?            If

     PDUFA is reauthorized, we believe the answer is yes, and these

     are the solutions.

               First, the agency must prioritize speedy reviews so

     that significant therapeutic advancements for serious and

     life-threatening diseases are reviewed quicker than products

     that have little or no therapeutic superiority over existing

     drugs or medicines for currently treatable health conditions.
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                The approval of products that do not treat serious

     or chronic diseases--for example, lifestyle drugs such as the

     recent approved Vaniqua, which is a topical application for the

     removal of facial hair, or the blockbuster Viagra, a treatment

     for erectile dysfunction--should not be approved over the

     innovative drugs that reduce suffering, promote healing, and

     improve health.   Important new life-saving therapies such as

     anti-cancer agents or an enzyme replacement therapy for a

     genetic disease must take precedence over the third or fourth

     COX-2 inhibitor or any other me-too or lifestyle drug.

                Under current policy, the public health importance

     of each potential new drug does not seem to be a major factor

     in choosing which products will be rushed to market and which

     will require more intensive review.       I would like to suggest,

     therefore, that consideration of priority applications be

     reviewed in some manner by a committee that includes consumer

     representation to ensure that truly innovative therapies come

     to market prior to me-too and lifestyle drugs.

                Second, PDUFA should not be restricted to new product

     reviews.

                As I mentioned, the ideal alternative to PDUFA would

     be adequate federal funding for the entire agency appropriated

     by Congress every year.    However, if the act is to be

     reauthorized, the FDA should not be forced to focus its

     resources on the approval of new drugs and biologics only.
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                  The FDA is a consumer protection agency, not a new

     drug development agency, and so it must protect and serve the

     interests of the public health beyond the NDA process.         Other

     agencies and departments within FDA are currently understaffed

     and overworked simply because PDUFA has drained the resources

     needed to adequately complete critically important public

     health responsibilities.

                  User fees should be implemented for other programs

     and products including medical devices, generic drugs, and

     laboratory inspections, et cetera, as well as the policing of

     advertising enforcement and adverse event monitoring.         Like

     the performance goals established under the current PDUFA,

     flexible objectives and targets should be implemented across

     the board.

                  The agency's success should be based on the

     completeness of its work to ensure that safe and effective

     therapies are approved rather than set inflexible performance

     goals based solely on stringently defined time frames.

                  Third, FDA should reform its "gag rule" to allow

     personnel to honestly respond to consumer inquiries about

     delays in new drug approvals.

                  Currently, the FDA considers most information about

     investigational products to be trade secrets.          As a result,

     there is often political pressure applied on the agency to

     approve specific drugs even though the agency knows there are
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     significant problems with the product.        Because the FDA is not

     permitted to explain its delays to the public, it leaves itself

     open to intense criticism and consumers are left in the dark.

     FDA must have the authority to respond truthfully to consumers'

     questions about investigational drugs.

                And, fourth, user fees should be waived under

     specific and limited circumstances.

                There are many start-up companies, including orphan

     drug manufacturers and humanitarian device companies, that are

     not yet profitable.    Accommodations should be made to waive

     user fees for these products, facilities, and application fees

     for eligible start-up and not yet profitable companies.         The

     agency cannot be perceived as favoring some companies and

     products over others simply because more money changes hands.

                While adoption of these proposals will be an

     important first step to resolve the problems and concerns we

     have about the user fee program, there are a number of

     significant shortcomings the FDA must take immediate action to

     resolve.

                For example, the performance goals of the current

     PDUFA legislation are measured in time without adequate

     safeguards in place to quantify safety and effectiveness.

     There have been too many recent withdrawals of marketed drugs

     that have maimed and killed people.        Although the FDA argues

     that "it has made the drug and biologics review process more
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     efficient without lowering drug review standards," we suspect

     that the large number of market withdrawals since PDUFA was

     implemented tends to indicate that increases speed of NDA and

     PLA reviews may not be the wisest public health policy.

               No matter how fervently the FDA may continue to argue

     that the system in place guarantees the safety and welfare of

     the American consumer, the fact remains that it is perceived

     that the public's best interests are not being considered in

     the PDUFA program.

               Second, the FDA and Congress must not take the "one

     size fits all" approach to drug approval.         It is wrong to

     require the agency to spend the same amount of time it takes

     to review a promising drug that will save lives with me-too or

     lifestyle drugs.   People are suffering and dying every day from

     horrific diseases, but to our knowledge, no one has yet died

     from an excess of facial hair or erectile dysfunction.

               And, third, since the 1980s, the FDA has had adequate

     tools in place to enable patients to obtain drugs quickly and

     before they're approved for marketing called the treatment IND,

     thus providing desperately ill patients with access to

     potentially important medicines.     There's absolutely no public

     health benefit to rushing me-too anti-inflammatories or

     antihypertensives through the approval system.

               Again, thank you for allowing the patient and

     consumer organizations to participate in this meeting.        The
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     National Organization for Rare Disorders looks forward to

     additional opportunities to impact these negotiations.

               MR. BARNETT:      Thank you, Ms. Meyers.

               And now let's hear from Mr. Bloom.

               MR. BLOOM:     Thank you very much.       It's a pleasure to

     be here today, and it's a pleasure to appear with Abbey Meyers.

     I always enjoy her comments.

               Thank you for the opportunity to appear today and to

     speak about the impact and the future of PDUFA.          Let me first

     say from the outset that as a 15-year survivor of AIDS, I'm

     deeply grateful for the opportunity the pharmaceutical industry

     has given me in extending my life.       On the other hand, I'm also

     keenly aware of the downside of ingesting drugs for years and

     the potentially dangerous side effects with very little

     required information and understanding up front about the

     potential complications and consequences of these drugs over

     long periods of time.

               As an aside, I did recently get to serve on a new drug

     advisory committee for an AIDS drug, and it was a very sad

     experience for me in that I think it was the first time a patient

     representative voted against a new AIDS drug because the company

     chose to do such little data that the drug is now out on the

     market and within the new PDUFA guidelines it certainly meets

     what's necessary for approval, but we absolutely have no idea

     how to use the drug in relation to the other drugs on the market,
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     how doctors should best use it, and we have a drug out there

     now that is really quite understandable in how to use in relation

     to other drugs.   And I imagine that's the case not only with

     AIDS but with many other illnesses because of this.

               PDUFA in its true sense represents the Federal

     Government's and particularly Congress' abdication of their

     legal responsibility and solemn commitment to the public health

     of the American people to provide adequate funding to the FDA

     to fully perform their vital role in protecting the public

     health and ensuring independently that drugs are safe and

     effective for their heavily promised and promoted purpose.

               PDUFA, when first proposed and instituted, was not

     to supplant FDA's regular federal appropriations but

     supplementing them, adding resources to hire additional people

     to process new drug applications more quickly and efficiently.

     PDUFA was to be added money that would assure increased

     efficiency in processing NDAs.

               Over the years PDUFA has become a large part of the

     resources for accomplishing approvals, but the FDA's

     appropriations have not kept pace with the other activities or

     the demands of the marketplace.      New areas of development,

     particularly in the biotechnology, new drug delivery systems,

     new technologies which FDA needs to keep pace with, if not ahead

     of, in order to meaningfully regulate these advances.


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               Because of faster approvals with much less data, the

     FDA must work to continue improving postmarketing surveillance

     and monitoring and ensuring companies meet their Phase IV

     commitments, which are vital in this streamlined process.

               FDAMA has put increased new demands on the FDA in

     terms of approval time lines, holding meetings, engaging

     stakeholders, and other additional commitments which cost

     considerable increased resources and has not been reflected in

     increases in FDA's annual appropriations.

               Congress, with PDUFA, has been increasingly shifting

     their responsibility for funding the FDA to the private sector

     by allowing PDUFA to become an increasing share of the basic

     funding stream for the FDA and the inherent conflict of interest

     that represents.   PDUFA hearings are a prime opportunity to

     remind Congress of the basic responsibilities that the FDA

     carries out and the important added value FDA provides to the

     quality of life for every American citizen.           Congress should

     fully recognize and fund the important aspects of FDA

     responsibility in addition to new drug approvals.          These

     responsibilities include:     supporting FDA's critical role in

     drug surveillance, quality control, recalls, education, food

     safety, veterinary medicine, drug advertising, particularly

     including greatly increased direct-to-consumer and television

     advertising thanks to FDAMA, setting and enforcing standards

     for medical and radiation-emitting devices, pesticide residue
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     monitoring, and many other vital responsibilities that the FDA

     is mandated to accomplish on what amounts to a minuscule amount

     of resources in relation to the industries it regulates.

               In fact, I probably can't think of a more

     disproportionate amount of a budget for an agency that regulates

     an industry.   If you look at the total dollars, it's

     mind-boggling.

               PDUFA exists currently for several reasons.

     Originally, PDUFA was to represent added value to the FDA budget

     and the new drug approval process.      Instead, PDUFA has become

     and continues to be an excuse for stagnating and diminishing

     congressional appropriations.      The pharmaceutical industry's

     multimillion dollar lobbying efforts on Capitol Hill, along

     with millions of dollars of campaign contributions and

     extraordinary support, including a loan of corporate jets to

     support of politicians, gives the drug industry a unique and

     unequal relationship with politicians.        And many of you

     probably read in the Washington Post it's even gone so far as

     companies now funding fake patient organizations to promote

     their drugs.   You have to admire their chutzpah, if nothing

     else.

               Additionally, the FDA traditionally has been and

     continues to be--another reason PDUFA exists is the FDA

     traditionally has been and continues to be an ineffective

     advocate for touting their accomplishments and the vital role
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     the FDA plays in both protecting the public health and assisting

     the regulated industries.    Unlike NIH or the CDC, the FDA just

     never has seemed to have gotten the concept of public relations.

                PDUFA fees represent just a small part of the FDA's

     true work and value on behalf of industry and America's

     patients, and I think that's one of the most compelling points

     here, is that it really does represent such a small part of the

     work that the FDA does.

                Completely overwhelmed by pharmaceutical industry

     money as well as industry-funded sham consumer groups, such as,

     for example, Citizens for a Sound Economy, patient and consumer

     groups' interest in messages are drowned out in a deluge of

     industry cash and advertising.     A regulatory agency like FDA's

     appropriations should not be contingent on the financial

     connections with the pharmaceutical industry's ability to file

     and review new drug applications under industry-favored time

     lines.   There should be no financial relationship between the

     regulators and the regulated, especially if it's limited to fees

     collected only for new drug applications.

                Congress should live up to their responsibility to

     fully fund the FDA just like any other government regulatory

     agency, like NIH, like the CDC.     There should not be a hint of

     conflict of interest, especially when that interest is the

     health and safety of all Americans.


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                 Most of understand what PDUFA does pay for, but let's

     for a moment explore other benefits the FDA provides for both

     the public and regulated industries that are not compensated.

     In particular, the uncompensated assistance FDA provides to

     facilitate pharmaceutical manufacturers' drug development

     efforts were saving drug companies millions of dollars in drug

     development costs by helping identify ineffective compounds

     early in the development process before the NDA, essentially

     the last step in the drug approval process.            I seem to recall

     I've never heard that said publicly by PharMA in any setting

     that the FDA saves millions of dollars.         They just seem to be

     a block to drug approvals.

                 FDA assists sponsors of INDs, particularly issuing

     dozens of guidance documents and providing extensive targeted

     technical guidance to individual sponsors to facilitate their

     drug development-related activities.         These guidances and

     documents significantly contribute to the development of new

     drugs, bringing important new treatments to patients sooner and

     with more extensive directions for use than would otherwise be

     the case.    Data generated by these means in turn facilitates

     drug companies' efforts to encourage and promote acceptance of

     newly marketed products by physicians, patients, managed care

     organizations, hospitals and others.

                 In a large portion of new drugs tested, with

     assistance from the FDA, disappointing from mid- or late-stage
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     trials leads the manufacturer to suspend further development

     of their new drug, saving the drug company potentially millions

     of wasted dollars.     I can't say I've heard that in public

     before.   No marketing application is filed, and the FDA

     receives no financial support from the manufacturer after

     providing very substantial man-hours and assistance.

                 Under PDUFA II, FDA is placed in the position of

     assuming a substantial portion of the financial risk related

     to the development of new drugs by investing this extensive

     technical assistance during the drug development process.

     Unfortunately, FDA receives no financial support from the

     manufacturers for this activity.        Only in the relative rare

     cases more often than not where the product eventually is the

     subject of a new drug application, pharmaceutical manufacturers

     can justify such assumption of financial risk on the basis of

     substantial profits realized from those products that do reach

     the market.    FDA does not receive a share of those profits and

     may, therefore, be unable to justify assuming a share of a

     manufacturer's financial risk related to drug development.

     Certainly if they were a real business, they wouldn't do this.

                 Safety of new drugs is not fully

     characterized--another thing PDUFA doesn't provide for, safety

     of new drugs is not fully characterized at the time of drug

     approval.     With FDA evaluation of adverse event reports, often

     leading to the discovery of rare but very serious adverse events
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     for newly marketed drugs, these findings frequently lead to

     important changes in the directions of use of new drugs that

     can meaningfully reduce risks related to drug treatment.            In

     rare cases, these findings lead to new drugs being removed from

     the market because overall risks exceed benefits related to

     their use.    Drug manufacturers contribute little to this

     process beyond forwarding to FDA reports of individual adverse

     drug events they become aware of.

                  As an aside, I would say that in the world of

     liability, pharmaceutical companies probably have one of the

     least liabilities for their products of any product marketed

     in the United States today, and they certainly gladly use the

     FDA's shield any time they can for litigation.         Just think about

     Firestone tires.

                  FDA postmarket safety activities meaningfully

     protect the public from adverse events related to the use of

     prescription drugs, enabling new drugs to be marketed with less

     clinical testing than would otherwise be needed.            FDA

     postmarket safety evaluation can also limit manufacturers'

     exposure to legal claims related to injury from adverse drug

     events by limiting exposure to drugs that are injuring patients.

     These activities are not meaningfully support by current user

     fees.

                  FDA regulates promotion of prescription drug

     products, limiting false and misleading promotional claims that
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     could harm patients and place manufacturers of competing

     products at a competitive disadvantage.         With these

     activities--

                 MR. BARNETT:   Two more minutes.

                 MR. BLOOM:   FDA maintains a level playing field in

     the pharmaceutical marketplace where manufacturers are able to

     compete by promoting the proven objective merits of their

     products.    This activity is of a meaningful value to firms

     seeking to market new drugs and also benefits patients.      This

     activity is not meaningfully supported by user fees.

                 The National Institutes of Health is the lead driver

     of medical innovation, conducting the basic medical research

     that eventually leads to important new treatments for serious

     and life-threatening diseases.       NIH realizes substantial

     annual increases in their federal appropriations, and those

     increased appropriations represent a wise investment for the

     American people.    FDA is at the other end of the medical

     innovation pipeline, facilitating applied medical research

     that leads to treatment advances as well as conducting the

     review work that leads to objective discussions of these new

     advances.    FDA funding has been essentially flat-lined for

     years, and the FDA needs increased funding to keep pace with

     the new advances, treatments, and technologies that similarly

     benefit the American people.


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                The level of FDA funding in comparison to the

     multibillion-dollar industry that the FDA regulates is

     undoubtedly one of the most disproportionate relationships in

     business today.   Congress must increase funding and live up to

     its responsibility to FDA to fulfill its mission for the

     American people and not rely on funding from the industry it

     regulates to objectively get the job done.               The inherent

     conflict of interest is appalling.

                Thank you.

                MR. BARNETT:      Thank you, Mr. Bloom.

                Mr. Dixon?

                MR. DIXON:     Thank you for allowing me to speak to you

     today.   I am Carl Dixon, the president and executive director

     of the Kidney Cancer Association, which is a voluntary patient

     organization, which for over a decade has been dedicated to

     helping kidney cancer patients and their families deal with the

     physical, emotional, and social impact of kidney cancer.

                As the only national kidney cancer patient

     organization directed by patients for patients, the association

     realizes the importance of a national policy that encourages

     the efficient development of new drugs and therapies.              The

     association commends the FDA for holding this important hearing

     of the public stakeholders prior to the development of new

     legislation relating to prescription drug user fees.              The

     association believes that it's important for the voices of
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     patients and their advocates to be heard at the beginning of

     this process.

               Kidney cancer is an uncured disease.         There are

     approximately 200,000 Americans who have kidney cancer.      About

     30,000 new cases are diagnosed each year, and each year about

     12,000 Americans die from kidney cancer.         The incidence of

     kidney cancer in the nation is increasing at a rate of 3 percent.

     It's one of only three types of cancer with an increasing

     incidence, and the average age of a kidney cancer patient is

     62.5 years.

               The association is available to assist the FDA with

     needed information as it continues to develop PDUFA III, and

     once again I want to commend the agency for assessing and

     reviewing the complex subject of user fees and their

     relationship to the improved development and review of human

     drug and biological products.

               An important part of the association's mission is

     encouraging research so that kidney cancer ceases to be an

     uncured disease.   Private sector research and development

     provides the best hope for finding new cures for kidney and other

     types of cancer.   At the same time, research and development

     is the riskiest form of investment, offering at best a very long

     term payback.

               The two earlier user fee statutes have provided badly

     needed funding for the FDA.    The association was and continues
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     to be concerned that funding agency activities through PDUFA

     fees will diminish congressional willingness to appropriate the

     funds the FDA needs to fulfill its obligation.        As others have

     mentioned, the association has been concerned about the

     appropriateness of the regulated funding the regulator.

               There have been attempts to address this concern.

     For example, the present legislation mandates that more than

     50 percent of the agency's budget for INDs must come from

     appropriations other than PDUFA, but this is, again, a troubling

     area and one that much attention needs to be paid to in this

     next round of negotiation.

               Again, while this requirement has served to protect

     the agency's congressional funding, it appears at times that

     the FDA has had to juggle programs and timing of its activities

     to comply with this requirement.      Such actions are a waste of

     valuable time and effort by the agency.        Congress should not

     abdicate its responsibility to provide funding for the FDA

     because of PDUFA.

               Having said that and raised that concern, the

     association does believe that PDUFA serves as a blueprint for

     public-private partnerships.     The association is interested in

     seeing that the performance metrics provided for by PDUFA II,

     which are not yet available.

               The association believes that it is important to

     maintain a balance on funding the agency's activities and
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     looking at nations where a much larger share of the regulator's

     budget comes from user fees, such as Canada, the United Kingdom,

     and Australia, suggests to the association that increasing

     reliance on such user fees for the agency would be a big step

     backwards.

                  Rather, the association supports the idea of patient

     advocates working with the FDA to secure adequate funding from

     Congress.     This would, of course, require the agency to have

     a more transparent budgeting process.

                  The association believes that some revisions to the

     PDUFA blueprint should be considered in connection with PDUFA

     III.   We are concerned that adequate funding be provided to

     conduct appropriate advertising review.          Nor is it clear that

     the funds needed to appropriately follow up adverse incident

     reports are available.     PDUFA III funds should not be used for

     these purposes, we believe.       We believe Congress needs to

     appropriate for these purposes.

                  PDUFA II and the related FDA Modernization Act

     created a national listing of clinical trials in a public access

     database.     This database was a replacement for the PDQ system.

     The legislation was passed with an unfunded mandate.          This

     database needs the full support of the agency to make sure that

     patients and their advocates are fully aware of the experimental

     treatments for serious or life-threatening diseases and

     conditions.     Making the public aware of these trials will also
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     assist the research pharmaceutical industry by making patient

     accrual to trials more expeditious.

                Under Section 113 of FDAMA, the sponsor of each FDA

     clinical trial is to submit "such information...not later than

     21 days after approval [by the FDA] of the protocol."    The

     agency must have the responsibility for making sure that this

     information is submitted as required.

                Therefore, the association believes that PDUFA III

     should provide for such things as the following:

                The agency should implement the recommendations of

     the Armitage Report and create a Center for Cancer Drug

     Development.   At the present time its cancer-related

     activities are spread among several different centers and

     offices.   These should be combined into one so that all the

     personnel working in the area of cancer are collocated.

                Two, specific line-item funding that can be used for

     nothing else and represents new funding to the federal budget

     is necessary to make sure that the wonderful public access

     database mandated by FDAMA is fully complied with by the

     research pharmaceutical companies.

                And, finally, the pediatric exclusivity provision

     contained in PDUFA II should be continued in PDUFA III.    The

     benefits of this approach are just now beginning to be seen.

     It is a useful concept that should be continued.

                Thank you.
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                MR. BARNETT:    Thank you, Mr. Dixon.

                And now let's hear from Ms. Weinberg.

                MS. WEINBERG:   Good morning.     I want to just correct

     one thing in the introduction of the National Health Council,

     and we do have--I think it's about 116 national health-related

     organizations as members.     Of those, there are 49, to be

     accurate, of the large and smaller, as well, patient

     organizations like American Diabetes Association, American

     Heart Association, Multiple Sclerosis, Lupus, and so on.     These

     groups that are members represent approximately 100 million

     people with chronic diseases or disabilities.

                First, let me say that the council considers the

     Prescription Drug User Fee Program to be a success for patients

     and for the pharmaceutical and biotechnology industries and,

     we believe, for the Food and Drug Administration.        As we've

     seen, we have an increase in the availability of the new

     medicines for treatment of diseases such as Parkinson's

     disease, cancer, diabetes, osteoarthritis and so on.

                Because of the obvious benefits of PDUFA, the council

     was very active in helping to secure the reauthorization of the

     program in 1997.   So today we are once again encouraging the

     continuation of PDUFA.

                I want to focus my comments this morning on the

     specific issues raised by FDA in its announcement of this

     meeting.   The first question was:      Do you view faster drug
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     review times as a benefit of the user fee program that should

     be maintained in the future?

               The council considers the user fee program an

     illustration of what can be achieved when government and

     industry work together for the benefit of all stakeholders.

     For some patients, having access to the latest treatment

     improves their quality of life.    For others, it literally means

     the difference between life and death.

               As we know and you've heard, PDUFA has cut overall

     drug review times almost in half compared with pre-PDUFA rates,

     and this success has been absolutely critical to patient care.

     The purpose of the user fee program originally was to accelerate

     the review times for drugs.    Setting higher goals and focusing

     on continuing to improve the system are key components, we

     believe, for future PDUFA reauthorization.

               While drug review times are one way to gauge the

     success of the program and the improve drug review times should

     be maintained, the council recommends that the FDA continue to

     find ways to better utilize technology to help reduce the

     administrative burdens both on FDA staff as well as

     manufacturers.

               The next question was:      How can the program be

     strengthened?

               We believe that the PDUFA has been successful because

     it provided enough resources and staff to implement a program
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     specifically designed with clear goals and effective evaluation

     measures.     The drug development process can still benefit from

     the program by focusing on other measures of success in addition

     to drug review times.      To maintain FDA's pattern of success,

     the council recommends additional effort be made to increase

     access to and use of technology and, where possible, to continue

     to streamline other procedures without sacrificing

     high-quality review.

                  The next question is:    What do you see as the downside

     of a regulatory agency like FDA collecting user fees and what

     remedies would you propose for the future?

                  One problem that you've heard about, we've all heard

     about all morning, that has continued within FDA, we believe

     not because of PDUFA, is the lack of overall appropriations

     provided to the agency from Congress on an annual basis.          In

     our view, this problem cannot be remedied by revising the PDUFA

     program, but has to come from policymakers who decide what

     priorities should be given to the FDA and its mission.

                  Inadequate appropriations for FDA combined with the

     requirement that FDA direct inflation-adjusted funds to the

     user fee program have had a detrimental effect on other FDA

     functions.     While user fees are intended to augment funding for

     the agency, they were never meant to supplant federal

     appropriations.     The council suggests that we all work together

     much harder than we have in the past to seek higher
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     appropriations for FDA.    We would like to see the agency given

     higher priority by policymakers to avoid potentially

     jeopardizing public health and safety.

               Question 2:     Should we continue to have performance

     goals for the drug and biological review process?           And if so,

     how should the goals be determined?

               We believe performance goals are necessary to track

     the successes and failures of any program.            Due to the

     performance goals created in PDUFA, the agency was able to

     demonstrate its great success and secure PDUFA reauthorization.

     Currently, it is our understanding that FDA is meeting the goals

     specified in PDUFA II.    The PDUFA performance goals have been

     an important factor in monitoring its success and have not

     appeared to be--although I know some would disagree with

     this--unduly burdensome, thus our recommendations to attempt

     to streamline and use technology in new and unique ways to try

     to relieve some of the burdens we do know exist.

               In 1997, the council supported the legislative intent

     of PDUFA II reforms to expedite not just the drug review process

     but the overall drug development process.        In the future, FDA

     may wish to continue to focus on such areas as more efficient

     methods of receiving applications and better coordination with

     manufacturers.

               One of the benefits that we perceive is that there

     has been tremendous improvements in the communications between
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     FDA and manufacturers, and this has improved the development

     process significantly.

               Number 3:    If user fee funds fund FDA's drug and

     biological review process, what percentage of the program's

     costs should be covered by fees, and how should these fees be

     used?

               While user fees are accounting for an ever increasing

     percentage of overall drug review funds, the solution to any

     perceived conflict of interest can be found and should be found

     outside the parameters of the program.      The reality is that user

     fees are being spent to fund the activities that they were

     proposed to cover.    An increase in appropriations to FDA would

     allow the agency to increase its own spending on all areas,

     including drug review activities, and offset the rising

     percentage of activities funded by the private sector.

               Without appropriate budget increases for FDA, the

     alternative may be to limit resources for drug review and

     jeopardize the success of the PDUFA program, and in turn

     decrease patient access to treatments.

               Number 4:    Should fees collected from the industry

     be used to pay for other costs FDA incurs to assure that drugs

     in the American marketplace are safe and effective?

               As other functions of FDA experience budget

     restrictions, one obvious potential reaction is to tap into the

     resources provided by the user fee program.            While on its face
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     this approach may appear logical, there are several reasons that

     the council cautions FDA from pursuing this strategy.

                First, it was made quite clear in the original

     drafting of the PDUFA statute that user fees would not supplant

     federal appropriations.    The user fees are providing a valuable

     resource to the agency to fund restricted activities of the

     agency.   The user fees are tied to performance of the agency

     so that the success of the program can be determined.

                Second, the activities FDA is considering be funded

     by user fees are not activities that we believe are appropriate

     for user fees.   Congress never intended, as we said, that these

     fees be used for activities other than enhancing the drug review

     or the drug development process.      While the public benefits

     from the withdrawal of unsafe products, it is not the purpose

     of user fees to fund inspections or postmarketing monitoring

     activities.   We believe these funds must come from increased

     congressional appropriations.

                Finally, the council agrees that the need for

     monitoring adverse events is as great as ever and important to

     protecting public health.     The good news is that there is no

     evidence that the withdrawal rate of drugs from the marketplace

     has increased since the enactment of PDUFA in 1992, and you will

     hear more about that later on another panel.

                The council recommends that any additional funding

     for activities related to postmarketing monitoring should come
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     from increased appropriations.         Redirecting a portion of user

     fees outside the program could reduce the program's

     effectiveness and result in funding for activities for which

     there are not as clear and specific metrics to gauge success.

                 I would like to thank the FDA for allowing the

     National Health Council to share our comments regarding the

     PDUFA program, and I also want to pledge to continue and

     certainly enhance our efforts with you and with the industry

     to increase appropriations for the agency.

                 Thank you very much.

                 MR. BARNETT:    Thank you, Ms. Weinberg, and thanks to

     all the members of the panel.

                 It's now time to take a 15-minute break.         I'm told

     to tell you that food or drink is not allowed in the auditorium,

     but there's a cafeteria in the building.           I'm looking forward

     to the break not because these weren't fascinating talks--they

     really were--but these are the most uncomfortable hard little

     chairs.

                 [Laughter.]

                 MR. BARNETT:     I want to use PDUFA money to buy

     cushions.    I really do.

                 We'll see you back here in 15 minutes.

                 [Recess.]

                 MR. BARNETT:     Okay.   We're about ready to begin, so

     please have a seat.
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               It's time now to--have we got our four folks up there?

     One, two, three, four.   Good.   Thank you.    I count better each

     time we do this.

               And now for our third panel consisting of

     representatives of consumer protection groups, and, again, I'll

     ask the panelists to kind of raise their hand as we go through.

               Cindy Pearson is executive director of the National

     Women's Health Network, a health group that speaks for women

     in decisions that affect their health.

               Dr. Larry Sasich is a pharmacist who's representing

     the Health Research Group, which is connected with the consumer

     advocacy group called Public Citizen.

               Brett Kay is program associate for health policy with

     the National Consumers League.

               And Arthur Levin is director of the Center for Medical

     Consumers, which provides consumers with the tools to make

     informed decisions about their health care.

               We'll start with Ms. Pearson, please.

               MS. PEARSON:   Thank you.     Good morning.   I'm very

     pleased to have the opportunity to provide input from the

     consumer advocacy community about the future of the

     Prescription Drug User Fee Act.     As you heard, I am the

     executive director of the National Women's Health Network,

     which is a national non-profit women's health advocacy

     organization.   The network is supported by 10,000 individual
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     members and 300 organizational members.        The network takes no

     contributions from pharmaceutical companies or other entities

     with a financial stake in women's health care decisionmaking.

               A lot of you know that the network always begins its

     statements at the Food and Drug Administration meetings by

     announcing that policy that we do not receive any financial

     support from the pharmaceutical industry.        So many of you who

     have heard us speak over the years at these meetings may take

     it for granted that I would begin that way today.       Usually we

     open with these statements to comply with the disclosure

     requirement at advisory committee and panel meetings, but today

     I made that statement for another reason.

               The network's policy, which establishes our

     organization's financial autonomy from the companies and

     products on which we comment, reflects an important

     philosophical commitment.     We believe that our independent

     decisionmaking as well as the high level of public confidence

     in the network's integrity and in the reliability of our

     analysis grow in large part from the clear line that we're able

     to draw between ourselves and those entities which stand to

     profit or lose money from drugs and devices and other procedures

     marketed to women.

               Our greatest concerns about the PDUFA program relate

     to the ways in which we believe it has blurred that line for

     the FDA, undermining both the agency's independence and,
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     importantly, the public's confidence in the quality of consumer

     protection that it offers.      Both the financial relationship

     that the use of PDUFA fees creates between industry and the

     agency and the consultative influence over the agency's

     decisionmaking process, which the PDUFA legislation conferred

     to the industry, both of these have fundamentally changed the

     nature of the relationship between the FDA and the industry it

     is intended to regulate.

               The PDUFA program has provided FDA with the funds

     which have made it possible to review human drug and biological

     products more quickly.     If this could be done without

     compromising the quality and integrity of the agency's work,

     faster review would clearly be a benefit to consumers as well

     as to industry.

               The structure of the PDUFA program, however, creates

     an inherent financial conflict of interest that, at a minimum,

     undermines public confidence in the agency and that appears to

     have, in fact, negatively affected the quality of the FDA drug

     review process.    The increasing dependence on fees paid by the

     regulated industry, which FDA itself describes in the Federal

     Register notice announcing this meeting, is very troubling to

     us, those of us in the consumer advocacy community.

               Even while we serve as gadflies and critics of the

     FDA, we also view ourselves as colleagues and allies of the

     agency staff.     The FDA is charged with safeguarding the
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     public's health by ensuring public access to safe and effective

     drugs.   We view our charge as monitoring and supporting the

     agency's efforts to achieve that goal.

                We are very interested in expanding the resources

     available to the agency to accomplish its work.        Funds which

     make the agency--but we believe that funds which make the agency

     dependent on the industry it is regulating and which come with

     strings attached do not truly expand the resources available

     for the kind of independent regulatory action that the public

     expects and needs from the FDA.

                Under the PDUFA program, the FDA agreed to meet a set

     of performance goals which were established in consultation

     with industry and without consultation with consumers.       These

     goals bound the agency to a specific time line for review of

     drug and biologic product applications.        As consumer

     advocates, we have several concerns about this situation.

                First, the establishment of time lines to be applied

     to all drugs and biologics, regardless of the varying review

     needs associated with a specific project, diminishes the

     agency's ability to conduct appropriate and sufficient reviews.

                Second, the inflexibility of deadlines creates an

     opening for sponsors to use time pressure to limit the

     thoroughness of the agency's review.

                Are you testing to see how far along I am in

     age-related eyesight decline?
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                 [Laughter.]

                 MS. PEARSON:   I think I can still see.

                 By waiting until late in the process to provide the

     agency with required data, sponsors have been able to restrict

     the amount of time FDA staff has to review information.   We are

     aware of one case in particular, a drug that concerned us very

     much, which was the approval of Tamoxifen for the reduction of

     breast cancer risk in healthy women, and from publicly available

     information, it appears that the sponsor provided some data so

     late that FDA staff were not able to conduct a full analysis

     of the data prior to the advisory committee meeting.

                 Additionally, there were some data that had been

     requested that still had not been provided by the time of the

     meeting, at which time a recommendation was made to the agency.

     This meant that the agency went forward with a public process

     that is part of a decision based on a recommendation that was

     made without all the information that the agency believed was

     needed and without even a full analysis of the time the agency

     staff would like to spend of the data that were available at

     the time.

                 Finally, we strongly object to the consultative role

     in establishing the performance goal which PDUFA conferred on

     industry.    We believe that it is inappropriate and counter to

     the goals of consumer protection to accord a regulated industry

     the authority to establish performance goals for its regulator.
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               FDA's oversight of drug safety and effectiveness

     cannot help but be undermined by industry's influence over the

     regulatory process.

               On the other hand, we believe it would be entirely

     appropriate to consult with consumers in establishing

     performance goals for an agency charged with consumer

     protection, and yet this is not required under PDUFA.

               In summary, the National Women's Health Network

     believes that the financial conflict of interest and industry

     influence over the drug and biological approval process created

     by PDUFA have had a detrimental effect on the quality of the

     FDA review and approval process.      Funding the FDA fully through

     federal revenue would be preferable since it would eliminate

     the conflict and inappropriate influence.

               However, if industry fees are going to continue to

     be a revenue source for the agency, we urge the FDA to advocate

     for amendments which will address these problems:       first, the

     financial conflict of interest must be addressed by

     disassociating the fees from any particular function of the

     agency; and, second, any performance goals must be established

     in consultation with consumers independent of influence by the

     regulated agency.

               Thank you.

               MR. BARNETT:     Thank you, Ms. Pearson.

               And now Dr. Sasich.
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                DR. SASICH:   Thank you very much.

                Public Citizen appreciates this opportunity to

     comment on PDUFA and what we hope will be its

     non-reauthorization in September 2002.       When first proposed in

     1992, PDUFA appeared to be a reasonable attempt to improve a

     drug review process reeling under chronic, imprudent

     underfunding of the Food and Drug Administration by Congress.

     PDUFA's reauthorization in 1997 opened the door for the passage

     of the Food and Drug Administration Modernization Act, or FDAMA.

     This ill-advised law included such anticonsumer protection

     provisions as the off-label promotion of drugs and its dangerous

     pharmacy compounding provisions, neither of which remotely

     relate to FDA's drug review process, which is the subject of

     PDUFA.   This highlights the dangers to the public of reopening

     the Food, Drug and Cosmetic Act every five years, giving the

     industry and its paid advocates in Congress the opportunity to

     play mischief with the act.

                The toxic duo of PDUFA-FDAMA has weakened the FDA and

     for the first time rolled back consumer protection laws that

     had become progressively stronger during the last century.

                By law, PDUFA fees can only be used for drug review;

     however, PDUFA-FDAMA mandated additional unfunded burdens upon

     the agency such as those mentioned above.         Moreover,

     PDUFA-FDAMA requires that the amount the FDA must spend from

     public appropriations and the drug review process has increased
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     by an inflation factor every year.        With flat appropriations,

     funds for other vital FDA functions must be funneled into the

     new drug review process to meet PDUFA-FDAMA requirements for

     drug review funding.     Consequently, resources for programs

     such as postmarketing safety surveillance, monitoring of

     prescription drug advertising, and manufacturing and import

     inspections have dwindled.

                  PDUFA via FDAMA also resulted in a legislated mission

     for the agency that has, in effect, recast the Food and Drug

     Administration as industry's partner rather than its monitor

     in new drug development, with the intent to speed up the entire

     process, a role that benefits the industry economically.      This

     new industry-FDA culture of collegiality is not necessarily in

     the interest of the public health.

                  During Public Citizen's 29 years of observing the

     FDA, the essential policy issues have remained largely

     unchanged.     Primary among these is the relationship between the

     pharmaceutical industry and the FDA and the extent that the

     industry by itself or through Congress can influence drug

     regulation and the drug approval process for its own gain.

                  Forty years ago, Judge Lee Loevinger, then head of

     the Antitrust Division of the Department of Justice during the

     Kefauver hearings that produced the legal requirement that

     drugs be proved both safe and effective before marketing,

     remarked that, and I quote:       "Unfortunately, the history of
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     every regulatory agency in the government is that it comes to

     represent the industry or group it is supposed to control."

     Judge Loevinger's perspective is depressing, but we believe it

     is possible for the public rather than the industry to once again

     become the FDA's primary customer.

                  When the president and chief executive officer of the

     industry's major lobbying group, the Pharmaceutical Research

     and Manufacturers of America, gives the FDA high marks for

     implementation of FDAMA, consumers should be concerned.

     Consumers will not continue to have confidence in the

     credibility of an agency that has even the appearance of

     representing the interest of the industry over its own.       The

     obvious solution is adequate public funding of what the FDA

     itself calls the nation's foremost consumer protection agency.

     Keeping the FDA adequately funded and independent is a goal that

     is clearly possible in an era of trillion-dollar budget

     surpluses.

                  I will now briefly respond to those aspects of the

     questions which I have not already addressed.

                  The agency asks about the speed of approval of new

     drugs and the benefits.    A distinction must be made between four

     categories of drugs:      one, those for serious or

     life-threatening conditions for which there is no adequate

     treatment; two, drugs for rare disorders; three, the majority

     of new drugs that are approved which are redundant chemical
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     modifications of drugs already marketed; and, four, drugs that

     are granted priority to review because they work in some new

     way.

                  Public Citizen supports early access to experimental

     drugs for patients with serious or life-threatening illnesses

     or for those with rare disorders that have no effective

     treatment.     Even prior to FDAMA, the FDA had a policy of

     expediting access to experimental drugs through a compassionate

     release program and then through the creation of treatment

     investigational new drug applications.

                  For example, the FDA expedited review and approval

     of early AIDS drugs before the advent of user fees, and these

     drugs came on the market in the U.S. before they did in any other

     country.   Clearly, PDUFA was not necessary to hasten the

     approval of these important drugs.

                  In contrast, the effect of PDUFA on the last two

     categories of drugs is very troubling.          Public Citizen is as

     concerned about what we perceive as a pressure to approve new

     drugs that would not have been approved before PDUFA by lowering

     drug approval standards as it is about the speed at which drugs

     are now being cleared for marketing since the advent of user

     fees.

                  Our survey of the attitudes of FDA medical officers,

     completed in December 1998, revealed disturbing opinions about

     both the pressure and the speed to approve new drugs.
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     Thirty-four medical officers stated that the pressure on them

     to approve new drugs was somewhat greater or much greater

     compared to the period prior to 1995.

               Three recent examples of category three drugs where

     there was an apparent pressure to approve are the heart drug

     Posicor; Durac, an anti-inflammatory painkiller; and the

     antibiotic Raxar.   These drugs were approved between June and

     November 1997, just prior to the reauthorization of PDUFA.         All

     had known safety problems prior to approval.            All were

     redundant, and there were multiple options available to

     patients and physicians for the indications for which these

     drugs were approved.     All received standard reviews and all

     killed and injured before they were withdrawn from the market

     be June 1998 and October 1999.        We do not believe that these

     drugs would have been approved in a pre-user fee era.

               With respect to the speed of approval, priority

     reviews are now being inappropriately granted for drugs with,

     at best, modest effectiveness simply because they work by a new

     mechanism of action.    Recent examples of drugs in category four

     are the Type II diabetes drug Rezulin, the flu drug Relenza,

     and Lotronex, approved for the treatment of irritable bowel

     syndrome and women with diarrhea as the main symptom.         Rezulin

     has been banned, and the other two drugs have required

     significant changes in their safety labeling.


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                  Twelve medical officers in our survey identified 25

     new drugs that they reviewed in the past three years that, in

     their opinion, had been approved too fast.              The recent

     experiences with these drugs suggest that priority reviews are

     now being abused and drugs with new mechanisms of action raise

     the possibility of new mechanisms of toxicity.

                  In respect to the question about performance goals,

     PDUFA-FDAMA performance goals are, in fact, legislated

     deadlines that leave the agency with little flexibility.

     Reviewing new drug research is not a cookie-cutter affair.              It

     is a process that is too important to the health and safety of

     the public to be constrained by time lines dictated by industry

     and enforced by the possibilities that these funds will be cut

     off.   This places enormous pressure on FDA's reviewer whose

     decision may affect the safety of millions.              Dr. Woodcock

     recently remarked that the intense PDUFA-FDAMA schedules

     "create a sweatshop environment that's causing high staff

     turnover."

                  Companies can now game the system knowing that

     reviewers are under a deadline by procrastinating and producing

     information requested by reviewers.        This is a phenomenon that

     we refer to as PDUFA compression.         Reviewers may not have

     adequate time to analyze important data before the final

     decision must be made to approve or not to approve an

     application.     I'd like to expand just a moment little bit more
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     detail on what Cindy mentioned about the review of the cancer

     drug Tamoxifen.

               This application was submitted on April 30, 1998,

     creating a PDUFA deadline of October 31, 1998.        The draft

     medical officer review had to be completed on August 18, 1998,

     for distribution to the advisory committee, a period of three

     and a half months after submission.     The medical officer review

     for this drug chronicles repeated requests for information from

     the company and reveals the medical officer's frustration in

     not receiving the information in a timely manner.       And I would

     like to quote from her review, and this is from a section called

     Administrative Correspondence.

               "It documents the lack of a complete set of primary

     data for review until August 4, 1998.        Despite an initial

     agreement to provide the data and repeated requests for

     submission, data submission was not complete until August 4,

     1998, one and a half weeks before the deadline for review

     submission to the Oncology Drugs Advisory Committee.        Until

     July 16, 1998, response times to FDA requests for information

     ranged from two weeks to one month, representing a significant

     delay in a highly compressed time frame for the review of this

     application."

               Public Citizen believes that the drug review clock

     must be in the hands of an independent FDA.       Performance goals

     are an important managerial tool as long as they serve the
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     public's interest and are flexible enough to accommodate the

     requirements of the FDA's review staff.         The PDUFA-FDAMA time

     lines lack flexibility, placing additional pressures on

     reviewers.

                  The third question that I will address has to do with

     other areas within the agency where user fees might be used,

     and I would like to speak specifically about postmarketing

     safety surveillance.

                  We can only imagine what strings industry would have

     Congress attach to user fees for postmarket adverse drug

     reaction surveillance.      Would there be a legislated

     requirement for industry-FDA meetings to resolve disputes about

     drug safety before the agency could warn doctors about potential

     problems through professional product labeling changes?        Could

     the industry be granted deference in deciding whether or not

     an injury or a death was drug-induced?          Might the FDA be

     required to allow the industry final editorial approval before

     any advisory statements about drug safety were released to the

     public?

                  The solution is clear:    To prevent further incursion

     into the FDA's ability to effectively regulate prescription

     drugs requires public funding of the FDA.          PDUFA and FDAMA is

     an unmistakable warning that users fees collected to finance

     the review of new drugs are bad public policy and that this


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     scheme for funding the FDA must be regarded as a failed

     experiment.

               Thank you very much for this opportunity.

               MR. BARNETT:     Thank you, Dr. Sasich, and next is Mr.

     Kay.

               MR. KAY:    Good morning.     I'm very pleased to comment

     on the Prescription Drug User Fee Act today on behalf of the

     National Consumers League, where I serve as the health policy

     associate for the league.

               The National Consumers League is America's oldest

     nonprofit consumer advocacy organization and has been working

     to protect the public's health and safety for over 100 years.

     From the first pure food and drug laws passed in 1906 and the

     Food, Drug and Cosmetic Act of 1938 to the recent FDA

     Modernization Act, FDA has been instrumental in ensuring that

     the public's well-being is adequately protected and

     represented.

               NCL is concerned that PDUFA is not adequately

     protecting the public's interest and instead serves the

     regulated industry.    We are concerned about the conflict of

     interest inherent in industry funding of government operations,

     particularly when the industry is allowed to set the goals,

     direct the funds, and make demands about how the agency conducts

     its regulatory functions.


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               We are also concerned that while industry has input

     into these decisions, the public does not.            When PDUFA was

     created, FDA consulted with Congress and the industry, leaving

     consumers, who are FDA's real customers, out of the loop.       Since

     drug approval decisions have a direct impact on consumers, who

     are the end users, public input is an absolute necessity.

               NCL fully supports the ideal that enhanced drug

     approval processes benefit everyone.      However, faster approval

     does not always mean better.    With review goals shortening and

     becoming more stringent, there is increased pressure for FDA

     to meet them by hurrying the drug approval process, possibly

     to the detriment of the public.      Safety, effectiveness, and

     necessity should be the stated goals of drug approval and

     review, not speed.

               Another concern about the current review goals is

     that they do not sufficiently discriminate between true

     priority drugs, treatments for severe or life-threatening

     illness and pain, rare disorders, conditions where no current

     treatment exists, or for new drugs that confer significant

     safety and efficacy benefits over current drugs and the

     so-called lifestyle and me-too drugs, which may be the fifth,

     eighth, or tenth drug in their class, offering little or any

     added benefits in safety or efficacy.

               Under PDUFA II, FDA is becoming too close to industry,

     with procedural goals established to increase the FDA's
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     responsiveness to and communications with industry sponsors.

     While it is necessary for FDA and industry to have open channels

     of communication and dialogue to ensure that the proper

     information and data are submitted and evaluated, these goals

     give the appearance that FDA serves in the industry as its

     primary customer, not the American public.            FDA should serve

     the public first and foremost and be responsible for protecting

     the public's health and well-being, not the industry's.

               PDUFA has had a dramatic effect on the drug review

     process, with FDA resources more than doubling since its

     enactment in 1992 and staff increasing nearly 100 percent.         But

     at what expenses does this revenue stream come?           According to

     an FDA background information paper available on FDA's website,

     and I quote, "Assuring that enough appropriated funds are spent

     on the process for the review of human drug applications to meet

     requirements of PDUFA and at the same time spending our

     resources in a way that best protects the health and safety of

     the American people is becoming increasingly difficult."

               Since 1992, FDA has not received increased

     appropriations to cover the costs of the across-the-board pay

     increases that must be given to all employees.           The result is

     that our workforce and real resources for most programs, other

     than PDUFA, have contracted each year since 1992, while we

     struggle to assure that enough funds are spent on the drug review

     process to meet this PDUFA requirement."
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                 Thus, PDUFA costs the agency more than it gives,

     robbing badly needed resources from other important program

     areas that are vital to protecting the public's health.         As a

     result, the agency is in jeopardy of losing the support and

     confidence of the American people, something it cannot afford

     to do.

                 One prime example of how FDA priorities are affecting

     public health, I'd like to make the analogy as to the food safety

     inspection programs at FDA.      Food processing plants are

     inspected an average of once every ten years.          There are 700

     inspectors for nearly 55,000 plants, and only 2 percent of all

     imported foods are inspected currently.       As a result, foodborne

     illnesses and outbreaks are on the rise, the majority of which

     involve FDA-inspected products.

                 Because Congress and the industry continue to focus

     on the drug approval side of the FDA, the food protection

     operations continue to decline and put American consumers at

     risk.    Congress must fund the FDA fully for all its activities

     and should not rely on industry to supplement or even supplant

     government resources.

                 Further, adverse events reporting and postmarket

     surveillance, along with the review and monitoring of

     direct-to-consumer advertisements and off-label promotion of

     prescription drugs, are also suffering because of a lack of

     sufficient resources.    This comes at a time when prescription
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     drug use is on the rise and is expected to grow dramatically

     in upcoming years.

                  With more and more drugs being approved and

     increasing numbers of Americans using them, many on multiple

     drug therapies, and the growing trend toward self-medication

     with dietary supplements and over-the-counter drugs, the risk

     for adverse events and dangerous interactions will increase,

     making drug monitoring and reporting functions by FDA more vital

     than ever.     Without proper funding, however, FDA will not be

     able to keep pace.

                  FDA should not have to rely on industry to fund its

     operations.     Congress must adequately fund FDA in all program

     areas.   All the focus and attention are placed on drug approval,

     partly financed by industry user fees.       What will happen to the

     other programs FDA oversees?      And what will become of the

     public's health and safety?

                  While the budgets for PDUFA-funded operations

     continue to grow, many programs of equal importance and weight,

     particularly to the public's health and well-being, continue

     to languish.    Congress cannot let the industry finance the FDA

     and dictate how the money is to be spent.          There is too much

     at stake and too many lives at risk.

                  Finally, if FDA budgets continue to diminish at the

     expense of PDUFA-related program and review goals, FDA's


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     ability to protect the public's health will diminish, as will

     the public's trust in FDA.

               I'd like to thank the FDA for this opportunity, and

     NCL looks forward to working with FDA on this important matter

     in the future.   Thank you.

               MR. BARNETT:    Thank you, Mr. Kay.

               And now Mr. Levin, please.

               MR. LEVIN:   I am here this morning representing the

     Center for Medical Consumers.      As a point of information, I

     would just like to point out that Cindy, Brett, and my

     organization, along with the Consumer Federation of America,

     the National Organization for Rare Disorders, and the UAW have

     sent a letter to the Commissioner regarding this issue, and I

     have some copies.   Travis Plunkett, who is in the audience

     there, has some copies.    They weren't available earlier this

     morning, so if you'd like to see letter, please see one of us.

               I'm in the unenviable position of being between you

     and lunch, and at the end of eight very articulate speakers who

     have said most, if not all, and more than I have to say about

     the matter, but at the risk of boring you, I will go through

     it again because I think this is really an important philosophic

     issue that bears some reflection before we get down to sort of

     the work in the future of the nitty-gritty of what regulation

     might look like.


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                I will try to sort of cobble together my prepared

     remarks and some responses to some of the things that were said

     by the FDA panel this morning and others on other panels this

     morning.

                Of course, I'd like to thank the FDA for giving me

     the opportunity to appear, for giving the opportunity to all

     of us to appear, to talk about this important issue.

                In the Federal Register notice, the FDA posed a series

     of questions for the panelists to address today, and I'd like

     to suggest that the most important question posed for discussion

     is somewhat buried in the last sentence of Question 1, which

     reads as follows:   In addition, what do you see as the downside

     of a regulatory agency like FDA collecting user fees, and what

     remedies would you suggest for the future?

                The FDA has said it very politely.         I would rephrase

     the question to ask whether we think that PDUFA has created an

     irreconcilable tension between the agency's responsibility to

     protect the public health through regulation and oversight and

     its need to satisfy the demands of the regulated industry that

     increasingly pays the piper.

                The FDA maintains that while the shortening of the

     traditional arm's-length relationship between the agency and

     the industry it regulates may create the perception of a

     conflict of interest, there is no evidence to support an actual


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     conflict of interest.    I would like to respond to that in two

     ways.

               First, I am not sure that in the world of public

     policy, especially where we're talking about an agency charged

     with protecting the public health by means of industry

     regulation and oversight, public perception is not as important

     as the reality.    The public needs to have confidence that the

     FDA is meeting its statutory responsibilities to assure the

     safety and efficacy of new drugs prior to their marketing, and

     a perceived conflict could undermine that public confidence.

     Such a loss of confidence could have significant public health

     consequences.     It could also have considerable political

     consequences, playing into the hands of those who would like

     to privatize the drug approval process or at least further

     reduce the burden of regulation.

               Second, given the recent history of drug withdrawals

     and new warnings related to new products, the withdrawal of

     Propulsid and Rezulin being the most recent examples of the

     former, and the first ever mandated medication guide for

     Lotronex, an example of the latter, I'm not sure we can be as

     confident as the FDA that a pressured and rushed agency approval

     process has not been, at least in part, responsible for a seeming

     increase in postmarketing problems with newly marketed drugs.

               I'd like to suggest that the growing dependence of

     the agency on user fees to carry out its statutory
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     responsibilities is fraught with danger.       As the percent of the

     agency's budget that is funded by the industry increases at a

     rapid rate, while at the same time Congress continues to

     underfund the agency out of general revenues, the opportunity

     for industry to use leverage in ways that may not be in the public

     interest grows exponentially.     The FDA's own estimate is that

     half of the $325 million it allocates to assuring the safety

     and efficacy of new drugs in the approval process will be derived

     from user fees by the year 2002; $162.5 million is a nice bit

     of leverage for use by an industry very skilled at getting its

     way.

                 I'd like to also follow up on Larry's comments that

     it seems to me that PDUFA is a lever that is very--that can be

     used by industry to renegotiate the entire spectrum of FDA

     policy.    As Larry has pointed out, in 1997, we've had to live

     now with FDAMA's provisions, some of which are clearly not in

     the public interest, I would argue because there was this lever

     of PDUFA that the industry could use.

                 The principle of an arm's-length, conflict-free

     regulator is critical when trying to oversee an industry which

     is staggeringly profitable and as a result has a big incentive

     to use its wealth-derived power to influence the political

     process.    The industry's antiregulatory agenda has also been

     well served by a decade in which government-bashing is popular

     and free-marketers drive public policy.
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                 The FDA's approval process is the lone shield that

     the public must rely on for protection from the unbridled

     enthusiasm of industry for bringing new products to market, and

     that shield must be constructed by processes which embody the

     highest degree of scientific integrity possible.             It is my

     belief that to extend PDUFA after 2002 would not be in the public

     interest.

                 If PDUFA does not continue past 2002, it will then

     be the responsibility of Congress to provide sufficient support

     of all of FDA's regulatory activities through the regular budget

     process and to do so at levels that assure that the public health

     is well served when new drugs come to market.          If Congress fails

     to assure that the public is protected from new drugs that are

     not safe, not efficacious, or both, then it needs to be held

     accountable for the harm it's caused.

                 Embedded in all of the questions posed by the FDA in

     some of its comments today are some fundamental assumptions that

     I might characterize as having little or no evidence for

     support.    Foremost is the implicit assumption that making new

     drugs available more quickly is by definition in the public

     interest.    While the public health benefits may be clear when

     a new drug is indicated for a serious or life-threatening

     condition which has previously been refractory to treatment,

     or when the available treatments are so toxic as to be of little

     value, that kind of clarity is clear but it disappears when a
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     new drug is a me-too or a me-too-like product or is for a less

     serious condition.    Unfortunately, many of the newly approved

     drugs we've been talking about fall into the latter category.

               Question 2 and part of Question 1 posed today are

     concerned with the FDA's management improvements as a result

     of user fees and their effect on the factor of time in the new

     drug approval process.    Those who argue that PDUFA is a success

     story point to the evidence that review times and time to market

     have been substantially decreased under PDUFA, and no one would

     question that fact, I presume.     I would suggest that the larger

     question is whether we have any evidence that shorter times in

     negotiating the drug approval process and quicker times to

     market have produced public health benefits that clearly

     outweigh the risks.

               The FDA has defined its performance goals solely

     using the indicator of time, and it has had to do that in its

     Faustian bargain with industry.       But I would argue that even

     though they were not required by Congress to talk about

     qualitative data, the absence of qualitative data in its reports

     to Congress on the success of PDUFA is disturbing.      I suggest

     that the ease with which many, including many in the agency,

     have embraced the "more are better" philosophy when it comes

     to new drugs is in part the result of some historic assumptions

     and politics.


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                 In the post-Kefauver-Harris Amendment era, industry

     and others opposed to FDA regulation began to vigorously argue

     that the regulatory burden had created a "drug lag" in the United

     States.    That is, the U.S. was depriving the sick of wondrous

     new drugs that were available much earlier by those fortunate

     enough to be residing in Europe.       In the mid-1970s, Senator

     Kennedy held hearings on the subject and his committee issued

     a report which concluded that the drug lag was a myth.   And that

     conclusion has been replicated several times over by other

     studies.    But like any good myth, it doesn't disappear easily,

     and it has continued to surface as the rationale for any proposed

     reduction in the regulatory burden imposed on industry.      The

     drug lag argument was used to paint an emotional picture of the

     FDA as the "bad guys" whose bureaucratic ineptitude was

     responsible for the deaths of patients whose only mistake was

     they weren't living in Europe.

                 It's easy to understand why the agency, after decades

     of such criticism, might embrace PDUFA as a palliative solution

     to their pain and be content with success as defined by meeting

     internally set performance goals measured by the time it takes

     to get new drugs through the review process and to market.

                 I would argue that the performance goals by which we

     measure the success or failure of PDUFA must be radically

     altered.    Speedier drug approval clearly benefits industry; in

     some cases it may benefit patients or specific populations, but
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     in most cases there is no such evidence.          It is, therefore,

     inappropriate for the agency to so narrowly define the objective

     of PDUFA.

                 The objective should be to improve the public health

     through the oversight and regulation of prescription drugs,

     biologics, and devices.    Its self-evaluation and how it defines

     performance measures should focus on how well its activities

     improve the well-being of those who are sick and disabled.        The

     agency must resist the easy but risky solutions to its

     longstanding problem of budgetary shortfalls.          It must work to

     establish in the mind of Congress and the public the

     understanding that no matter how much money is allocated to NIH

     and to other research efforts, in the final analysis a therapy

     must make its way to the marketplace before people will benefit.

     Not to adequately fund and support the process through which

     new discoveries make their way to patients with an assurance

     they are safe and effective does not serve the public health

     well.

                 I'd just like to make a couple of other comments.      We

     have a current debate going on about the role of prescription

     drugs in the inflation of health care.         We have a very

     contentious debate about coverage for prescription drugs for

     patients with Medicare.     And I think I would be remiss not to

     point out that there may be some connection here.          By getting

     lots of new drugs to market more quickly that may not have any
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     great or any public health benefit, we have in FDAMA a process

     which allows industry to market very aggressively these drugs

     directly to the public.     They have always marketed them

     directly to prescribers and dispensers, and I would ask that

     we might want to think about that possible relationship.          And

     I think we would be remiss not to think that it hasn't had some

     effect on prescription drug inflation.

                I am also concerned about the limits of inflexibility

     which the FDA has admitted occurred with PDUFA.         I am a member

     of the Committee on the Quality of Health Care in America of

     the IOM, and one of the things we pointed out in our errors report

     was the need for the FDA to take some immediate steps to reduce

     medication error.   So I would certainly be concerned that that

     problem of medication error and adverse outcomes with

     medications that kill, by different estimates, up to 100,000

     people a year needs immediate attention.         But if we have an

     agency which doesn't have flexibility, that can be a problem.

                And I guess I'll concluded there.          Thank you very

     much.

                MR. BARNETT:   Thank you, Mr. Levin, and thanks to the

     whole panel.   It amazes me how close everybody is getting to

     the 12-minute guideline.     It's really remarkable, and I'm

     gratified by it.

                Anyway, it's time for lunch now, and we said that we'd

     do a hour and 15 minutes.    I have 11:35, so 12:35, 10 minutes
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     to 1:00 would be our goal for getting back here.      So we'll see

     you then.

                 [Luncheon recess.]




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                            AFTERNOON SESSION

                                                           [12:58 p.m.]

                MR. BARNETT:   Okay.   If you'll have a seat, please,

     we'll get underway again.

                I wanted to mention first off that Dr. Woodcock had

     to leave, but I want to reassure you that Mac Lumpkin and Jane

     Axelrod and other senior members of the Drug Center are here

     and will be listening carefully and taking notes so that you

     remarks will not go unnoticed.

                It's time now to introduce our fourth panel, and

     that's the one that consists of representatives of the industry

     that's directly affected by PDUFA.       And, again, I'll ask the

     panelists to raise a hand as I call their names.

                Carl Feldbaum is president of the Biotechnology

     Industry Organization, which represents more than 900

     companies, academic institutions, and state biotechnology

     centers.

                Dr. Larry Versteegh is vice president of Procter and

     Gamble Pharmaceuticals, but he's here today representing

     PharMA, an organization of pharmaceutical manufacturers.

                Christopher Pelloni is vice president of Generic

     Research and Development at Teva Pharmaceuticals USA, and he's

     also Chair of the Science Committee of the Generic

     Pharmaceutical Association.
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                  And Robert Milanese is president of the National

     Association of Pharmaceutical Manufacturers, which represents

     the U.S. generic drug industry.

                  And we'll start with Mr. Feldbaum, please.

                  MR. FELDBAUM:   Thank you.     I feel like I'm wearing

     two hats today.     I'm president of BIO, the Biotechnology

     Industry Organization, but I'm also a cancer survivor.         And if

     it were not for a diagnostic test developed by a biotech company

     and approved by the FDA, my cancer might have gone undetected

     for years.    Instead, it was caught early and now I'm just fine.

                  Getting more and more effective diagnostics and drugs

     to patients is what the biotech industry is all about.          To

     accomplish that, our industry works in a rather rare

     professional relationship and environment with the FDA.          I

     understand from this morning's testimony a lot of questions were

     raised about the nature of that relationship, and let me take

     a shot at better defining it.

                  First let me say what it is not.      It is not, as some

     have called it, a partnership nor is it necessarily even

     congenial or even neighborly.      But it is also not antagonistic,

     spiteful, or hierarchical.      What it is, I believe, my personal

     view, is a relationship essentially between peers, strictly

     professional, arm's length, civil, but also attentive,

     approachable, and responsive where appropriate, cordial but

     hardly companionable.
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               During the 1997 negotiations over the FDA

     Modernization Act, BIO worked closely with Congress and the FDA

     to implement meaningful reforms that, to the amazement of many,

     passed the Congress in unanimous votes.        At that time we

     defended the agency's critical role in the drug development

     process from some real radicals who said we don't need an FDA,

     let the market decide what works.       What rubbish.   No other

     nation, despite some of the things you may have heard this

     morning, no other nation, in my opinion, in my observation, has

     an agency that compares to the FDA and no other consumers in

     the world have quite the confidence in the safety and efficacy

     of its food and drugs as citizens of the United States.

               Right now there's a furor in the U.K. and continental

     Europe over biotech foods or, as they call them, GMO foods.

     That is in some part attributable to the fact that while in the

     U.S. citizens are skeptical about the government in general,

     but specifically they tend to trust the FDA to protect the public

     health, that is a long and hard-earned trust.

               Most European citizens from my own experience and

     observation, however government centric they may be, do not

     share such trust in any government agency devoted to protecting

     their public health, and they have been unnerved by their

     experience with tainted blood supplies and widely perceived

     government bungling over mad-cow disease.


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                  Our rather strict relationship, the strict

     FDA-biotech relationship, has resulted by now in the

     development of nearly 100 biotech drugs and vaccines over the

     last 20 years.    These have now helped over 250 million people

     worldwide.     And in the next couple of years, working together

     and apart, we can do even better.

                  Because of flat federal appropriations over the past

     several years, the true operating budget, as you've heard, the

     operating budget of the FDA has shrunk dramatically and done

     so just as biotech companies are coming online with a virtual

     tsunami of new treatments for formerly intractable diseases,

     many diseases suffered by the Medicare population.      The agency,

     as you probably heard, actually has less money now than it had

     in 1993 for activities, other than those funded by user fees

     or covered by tobacco and food safety programs.

                  Of necessity, because so many of our young companies

     have products in the pipeline up for review, one of BIO's first

     orders of business this year was to lead the charge for greater

     FDA appropriations.     The effort was largely successful, with

     both the House and Senate appropriating much needed increases

     in funding.

                  BIO has also consistently defended the FDA's role as

     the primary regulator in all drug development areas, including

     gene therapy and stem cell research.


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                  Regarding PDUFA, the main subject of today's open

     session--PDUFA, by the way, is the worst Washington acronym

     since CREEP, President Nixon's Committee to Re-Elect the

     President.

                  [Laughter.]

                  MR. FELDBAUM:   But regarding PDUFA, BIO hopes to use

     the next reauthorization cycle of negotiations as another

     springboard to explain to Congress why the agency needs more

     appropriated resources.      Biotechnology is a very highly

     regulated industry, perhaps one of the most highly regulated

     ever.   And we tell Congress that a highly competent,

     science-proficient FDA is essential to the future development

     of the U.S. biotech industry.    We want a rigorous review process

     that is science-based and is predictable.          Predictability is

     particularly important for many of our small companies whose

     value and ability to continue to fund their research--since they

     often have no revenues, certainly no profits since their first

     products often have not yet come on the market--their ability

     to raise money to fund their research frequently hangs on every

     nuance, indeed every syllable the FDA utters publicly.

                  We at BIO are currently developing our

     recommendations for the potential reauthorization of the User

     Fee Act.    Based on initial feedback from our mostly small

     biotech companies, I can tell you that we have a few main

     concerns.
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               First, our companies, as I have mentioned, need a more

     predictable review process that includes much better

     communications and more timely interaction with FDA reviewers.

               Second, our members report that FDA has been

     unwilling to agree to protocol specifications in writing.    We

     believe this is important and contrary to the spirit of FDAMA,

     which requires collaboration in protocol development between

     our companies and the agency.

               Third, action should be taken on what are widely

     perceived as slow, indeed glacial, implementation by the FDA

     of FDAMA provisions designed to guide our companies as they

     disseminate health care economic information and certain

     scientific information.

               At BIO, we look forward to working with the FDA, with

     consumer groups, others, all stakeholders, in our usual,

     plain-spoken way, always thoroughly, carefully dealing with our

     shared responsibilities:   first, and above all, to ensure the

     safety and efficacy of our products; and, second, to borrow an

     expression from the Supreme Court of the United States in their

     landmark case, Brown v. Board of Education, to make sure we all

     work together "with all deliberate speed" to get our new

     medicines to the patients who need them the most.

               Thank you very much.




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                  MR. BARNETT:    I noticed you were the only speaker to

     have the courage to face PDUFA as an acronym.           You notice Dr.

     Henney did not use it even one time during her talk.

                  Actually, PDUFA has kind of a homey ring to it.     It's

     like a little town, PDUFA, Iowa, a few miles from Ottumwa.

                  MR. FELDBAUM:    To us it sounds like a form of

     expectoration.

                  [Laughter.]

                  MR. BARNETT:    Okay.   With that, we'll call on Dr.

     Versteegh.

                  DR. VERSTEEGH:    I'm from Newton, Iowa, by the way.

                  [Laughter.]

                  DR. VERSTEEGH:    An often-maligned state.

                  The Prescription Drug User Fee Act, or PDUFA, was

     passed by Congress in 1992 for a period of five years as a means

     of improving one aspect of FDA performance, and that's the

     review time for biologics and drugs.         It's important to note,

     as we heard, that Congress authorized the collection of user

     fees by FDA in exchange for the establishment of FDA performance

     goals.

                  Now, these funds were in addition to regular

     congressional appropriations, or were to be, and were dependent

     upon FDA's satisfying performance goals as set forth in letters

     between the Secretary of HHS and congressional leadership.


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                  PDUFA, in our opinion, has realized nearly all the

     benefits envisioned for it when it was originally enacted by

     Congress in 1992.     To date, all participants have benefited.

     Patients are getting medicines faster and, as a result, have

     improved health and greater quality of life.            Pharmaceutical

     companies are able to develop new medicines more quickly because

     of greater consistency and predictability in the regulatory

     review process.     FDA has been able to use the additional funds

     from PDUFA to increase the number of scientific review staff,

     to refine its processes, and to make major critical improvements

     in its information technology infrastructure.

                  All of these benefits have been achieved while

     maintaining FDA's highest standards of safety and quality, the

     highest in the world.      It is important to remember that the

     original framers of PDUFA were very careful to establish this

     supplemental funding program on the principle of paying for the

     review of applications, not the approval of applications, thus

     protecting FDA's complete independence in making approval

     decisions.

                  I have personally been involved in the responsibility

     of getting applications approved by FDA for over 20 years.          I

     can tell you it hasn't gotten any easier.

                  PDUFA II, as the reauthorization of PDUFA has come

     to be known, was implemented in 1997, also with a term of five

     years.   Goals were established that were based upon
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     year-by-year improvement, culminating in 2002 with the

     achievement of all of the anticipated goals.

               In addition to the continued improvements in review

     time, we also had provisions that were aimed at approving

     pharmaceutical total development time.      It was understood that

     FDA and industry would work together continuously and gain

     experience throughout this period, and although we are only in

     the third year of the program, we can see many successes and,

     of course, there are some areas where the promise is yet to be

     met.

               Now, sustained commitment and support for PDUFA by

     both government and industry are absolutely essential if the

     significant progress made to date and the promise of further

     continuous improvement of the FDA review as well as the

     pharmaceutical development process are to be secured for the

     future.

               Industry needs the assurance of an unambiguous,

     consistent, predictable set of processes and standards in

     developing the new medicines of the future.          FDA needs the

     assurance of adequate staffing and resources so the best

     regulatory practices identified through its continuous

     improvement processes will continue to promote the benefits of

     efficiency in the review process.

               This assurance is essential if FDA is to recruit the

     brightest minds to fulfill its mission.       And without the
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     continuous assurance of PDUFA funds, there is an uncertain

     future for these talented people as they look at a career with

     FDA.   Without a continuous assurance of PDUFA goals, there's

     an uncertain future for the pharmaceutical industry as it enters

     this new millennium full of the promise afforded by the

     scientific breakthroughs that occur every day.          Without a

     continuous assurance of PDUFA funds, the patients who are

     anxiously awaiting new medicines emerging from these scientific

     breakthroughs will simply have to wait longer.

                The spirit of continuous improvement instilled in the

     FDA as a result of PDUFA should continue to be evident as we

     prepare to renew the program.     We should continue to look for

     opportunities for improvement in both the FDA and industry.

     There are many opportunities, not because PDUFA is flawed but,

     rather, because it has given FDA resources to implement new

     ideas and to envision others.

                PDUFA was a bold step forward in 1992.         It was

     improved significantly and enhanced in 1997, and it can be

     further improved in 2002.

                Now, while we are focused today on PDUFA renewal, we'd

     also like to underscore a major feature of a related landmark

     piece of legislation enacted in '97, and that's the pediatric

     exclusivity provision incorporated in FDAMA.          An extension of

     the pediatric exclusivity provision should be enacted before

     it sunset at the end of 2001.    This has proven to be one of the
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     most significant measurable legislative initiatives in

     decades, with potential for a profound positive impact on health

     care in this country.    It established pediatric drug

     development as a priority for both FDA and for industry.

                Pharmaceutical companies have at last had the

     difficult task of developing medicines for pediatric patients

     acknowledged by providing an inducement to encourage and reward

     their efforts.   FDA and industry have both benefited by having

     been forced to reconsider the policies, programs, and

     organizations to manage the development of medicines for these

     pediatric populations.

                The medical and academic communities have benefited

     by having attention focused on this important area, bringing

     new funds for specific training in pediatric drug development.

     These industry funds have allowed the number of pediatric

     pharmacology units to increase significantly, and it has

     spanned efforts in Congress to expand pediatric training in this

     country.   Most important, children will be the beneficiaries

     of this surge of interest and resource.        I say will be rather

     than are because much is yet to be done in this area.       Many of

     the results of this incentive are still in the laboratories and

     the clinics, and until these studies are finished, much of the

     pediatric exclusivity provision is a promise yet to be achieved.

                As the accomplishments of PDUFA are evaluated and

     celebrated, this program can be, of course, compared to user
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     fee-based systems around the world, as we heard earlier today.

     The FDA has directed our attention to Canada, Australia, and

     the U.K. as examples of some countries that rely on user fees

     for most or all of their health authority medicines review

     budget.    None of these systems have the same level of success,

     achievement, or safety that the FDA has achieved.

                 The fact is there have been no significant

     disadvantages associated with PDUFA per se.            Many challenges

     have been faced and successfully resolved.             Yet additional

     opportunities for performance improvement have been identified

     that can and should be addressed in the future.            For example,

     the FDA has commented today that the performance metrics

     collection is a time-consuming process, utilizing resources

     that perhaps could be more wisely used in the review of

     applications, preparation of guidance documents, formulation

     of policy, compliance activities and more.             While FDA's

     concerns are understandable, it has only been through the

     accountability requirement associated with goal setting and

     measurement of performance against these goals that the

     advances of the past several years have been accomplished.

     Goal setting enhances performance, and every good manager knows

     you get what you measure.

                 The challenge of the future should be to minimize the

     work necessary to document the achievements, not reduce goal

     setting.    It is entirely within our capabilities to establish
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     a means whereby FDA can maintain their performance-based

     environment, yet collect data on performance against these

     objectives in a less time-consuming manner.      This is consistent

     with the goal that FDA has of being able to receive all

     submission electronically in 2002.      Certainly the electronic

     submission requirement can be married to an easier electronic

     recordkeeping capability.

               There are certainly additional goals that should be

     considered as we go forward, goals that continue to build upon

     PDUFA's enhancement of the pharmaceutical development and

     review process.   Industry believes there is still much to be

     gained by looking at ways to improve the efficiency of all

     aspects of pharmaceutical development, and this should be

     consistent with the spirit of PDUFA.

               PDUFA funds are user fees, specified for

     pharmaceutical development and review activities.        They are

     not taxes and, therefore, cannot be used to directly fund other

     government obligations and functions.      However, there are many

     efficiencies to be gained from enhancements and refinements of

     existing operational systems, especially the use of the

     electronic environment.   Implicit in these gained efficiencies

     are savings in resources, manpower, and funds that could then

     be used to expand FDA's activities in other areas.

               In conclusion, I would like to emphasize that the

     PDUFA program was established with certain bedrock safeguards
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     to assure that user fees would be additive to FDA's base budget

     and that the fees would be dedicated to the review of new drugs

     and biologics.   These are reasonable and sound principles that

     must be maintained.    Of course, it is critical that Congress

     provide adequate base funding for FDA's non-PDUFA activities.

     The pharmaceutical industry strongly supports renewal of user

     fee funding and also full funding by Congress of other FDA

     program requirements.

               Thank you.

               MR. BARNETT:     Thank you, Dr. Versteegh.

               And now Dr. Milanese.

               DR. MILANESE:     I appreciate the opportunity to

     comment on the FDA's deliberation on whether or not what

     provisions should be in any new PDUFA legislation.

               Since PDUFA was enacted, the time it takes FDA to

     review and approve an application for a new drug or biologic

     has increased dramatically.      As the agency said in its notice

     of this public meeting, PDUFA has provided FDA with additional

     revenue to "hire more reviewers and support staff and upgrade

     its information technology to speed up the application review

     process for human drug and biological products without

     compromising review quality."       The success of PDUFA

     demonstrates the importance of consistent and stable funding

     for product application reviews.


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               Manufacturers of brand-name drugs and biologics have

     realized dramatic reductions in the time it takes to get a

     product application approved.       However, generic drug

     manufacturers--that segment of the pharmaceutical industry

     that makes pharmaceuticals more affordable to consumers and

     lowers health care costs--have watched their review times for

     their product applications increase.       Ironically, it now takes

     FDA nearly twice as long to approve the far less complicated

     abbreviated new drug application for a generic drug product than

     it takes to review a far more complex new drug application.

     Untreated, this problem likely would worsen over time.          Over

     the next five years, the patents on many blockbuster and other

     brand-name drugs are set to expire, which will result in a

     dramatic increase in the number of ANDAs filed with the agency.

               Long ANDA review times have a significant impact on

     public health.   It is no secret that American consumers are

     becoming increasingly concerned about the rising cost of

     prescription drugs.    A day does not go by without a news article

     or television story touching on these health issues.          In many

     cases, the lack of a safe, effective, low-cost generic

     alternative to a brand-name drug forces consumers to choose

     between essential medicines and food, housing, or heating oil.

     Generic drugs typically enter the market at 25 to 30 percent

     below the market price for brand-name drugs.           This savings


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     typically increases to 60 to 70 percent after two years of

     generic competition.

               NAPM believes that a user fee program for generic

     drugs is the best answer for ensuring adequate and appropriate

     FDA resources to prevent delays in generic competition caused

     by the inefficient and slow reviews of generic drug

     applications.   We believe that such a user program should

     mirror PDUFA.   The objective of a generic drug user fee program

     should be to reduce the time it takes to review and approve

     applications for generic drug products to the statutory

     requirement of six months.    If FDA can complete its review and

     approval of a complex NDA in 12 months, with additional

     resources it should be able to complete the review process of

     the much simple ANDA within six months, if not less.

               NAPM also believes that any funds collected through

     a generic drug user fee program must, like PDUFA, be in addition

     to and not a replacement for appropriated funds.      Generic drug

     manufacturers should not be called upon to make up for cuts in

     the amounts Congress appropriates to FDA generally or to FDA's

     Office of Generic Drugs specifically.        Therefore, before any

     user fees are assessed, Congress should be required to

     appropriate an inflation-adjusted portion of generic drug

     review costs to ensure that generic drug user fees are only used

     to fund those activities directly related to ANDA reviews.

     Fees paid by generic drug manufacturers should be used only to
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     hire and train more reviewers and update computer and other

     technological systems.

                  Now I would like to comment briefly on the four

     questions posed by the FDA.

                  First, significant reductions in the time it takes

     FDA to review and approve an application for a new drug or

     biologic are proof positive that PDUFA has been a success.          The

     improvements FDA has made under PDUFA have not only benefited

     new drug and biologic manufacturers but also patients in

     desperate need for new and better medicines to treat their

     diseases or other medical conditions.          NAPM believes that

     creating a generic drug user fee program would also benefit

     consumers by addressing another important public health issue:

     assuring all consumers have access to affordable prescription

     drugs.   As we all know, a drug that is too costly to purchase

     is, by definition, ineffective.

                  Second, the performance goals agreed upon by FDA and

     Congress have worked well in setting a course for FDA to meet

     its objective of reducing its review times for new drugs and

     biologics.     As previously mentioned, NAPM believes that with

     additional resources from generic drug user fees, FDA could meet

     if not exceed its six-month statutory deadline for review and

     approval of all generic drug applications.        NAPM, however, also

     appreciates that FDA will not be able to reduce the backlog of

     pending ANDAs and review new ANDAs within the six-month
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     statutory time frame overnight.        Therefore, we would support

     a phased-in approach and believe that the performance goals are

     the best method for ensuring agency progress towards meeting

     and exceeding the six-month statutory time frame for ANDA

     reviews.

                  Third, user fees should not be used to supplant

     appropriated funds.     We support the provision in PDUFA that

     requires Congress to appropriate a certain amount of funds for

     new drugs, adjusted for inflation, before collecting user fees

     for new drug reviews.    NAPM believes that such a program should

     also be included in legislation authorizing FDA to collect user

     fees for generic drugs.

                  Fourth, NAPM does not believe that PDUFA fees, or any

     fees paid through a generic drug user fee program, should be

     used to pay other costs FDA incurs to ensure drugs in the

     marketplace are safe and effective.        Protecting public health

     and safety is FDA's primary mission.          FDA enforcement and

     inspection activities should be funded with public monies, not

     industry cash, in order to eliminate even the appearance of a

     conflict of interest.      As previously mentioned, the primary

     purpose of PDUFA has been to speed NDA reviews.         We believe that

     monies collected from any generic drug user fee program should

     be devoted solely to making the ANDA review process more

     efficient.


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                 PDUFA has been a success and should be expanded to

     include generic drugs.     NAPM respectfully requests that when

     FDA discusses PDUFA reauthorization with Congress, it propose

     to create a generic drug user fee program.         NAPM is committed

     to working with the FDA and the Congress on this legislative

     effort.    PDUFA has been instrumental in bringing new

     life-saving drugs to market quicker.         But those drugs are of

     no help when consumers cannot afford them.             It is time to

     improve consumer access to safe, effective, low-cost generic

     drugs.    It is time to establish a generic drug user fee program.

                 Thank you.

                 MR. BARNETT:   Thank you, Mr. Milanese.

                 And now Mr. Pelloni.

                 MR. PELLONI:   Good afternoon.      My name is Chris

     Pelloni.    I am the vice president for Generic Research and

     Development at TevaUSA.     I am also a co-chair of the Science

     Committee of the General Pharmaceutical Association, GPhA,

     which was recently formed from the unification of the General

     Pharmaceutical Industry Association and the National

     Pharmaceutical Alliance.     GPhA members provide the products

     with which 90 percent of all generic prescriptions, new and

     refills, are filled.     On behalf of GPhA, I want to thank FDA

     for the opportunity to participate on this panel and to provide

     a generic industry perspective on the collection of user fees

     to fund FDA review activities.
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                  As a non-participant in the current user fee program,

     the generic industry is not qualified to comment on the details

     of the PDUFA program as outlined in the questions which the

     agency has posed.     However, I would like to provide GPhA's

     perspective on the impact of the program on non-PDUFA-funded

     activities, specifically the review and approval of generic

     drug applications.     I will then briefly address the position

     of GPhA members on the very controversial subject of generic

     user fees.

                  Although little, if any, hard data is available to

     us, certain information, anecdotal and otherwise, indicates

     that resources are sometimes allocated or reallocated within

     CDER to facilitate achievement of PDUFA goals at the expense

     of non-PDUFA activities, such as the review of ANDAs and related

     supplements.     For example, in 1993, when the PDUFA program went

     into effect, a total of 448 FTEs were allocated to the generic

     drug program.     In the year 2000, that number had dropped by 16

     percent to 372 FTEs.     During this same period, however,

     appropriated non-PDUFA dollars for salaries and expenses

     increased by 39 percent.

                  Where did this increase in appropriated S&E funds go?

     Might it be that these funds were disproportionately allocated

     to the new drug program to supplement PDUFA dollars at the

     expense of non-PDUFA activities, such as the generic drug

     program?   Did PDUFA funds fully cover the close to 50 percent
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     increase in FTEs for new drugs that occurred between 1993 and

     the year 2000?

                There have been reports of pre-approval inspections

     for NDAs receiving priority over those for ANDAs when both types

     of applications compete for resources.        There has been concern

     that even those funds appropriated by Congress specifically for

     the Office of Generic Drugs are being diverted to some extent

     as a consequence of PDUFA demands.

                Often we in the generic industry are told that the

     answer to all of our problems are user fees.           It is sometimes

     tempting to naively start down this path when we are frustrated

     with delays in review and approval far beyond statutory mandate,

     when we take a back seat to PDUFA-funded activities, or when

     we see funds diverted because of PDUFA demands on the regulatory

     system.   Review times, in fact, are significantly longer, on

     average, for ANDAs than for NDAs.     However, the benefits of user

     fees for the generic industry are not as clear-cut as they may

     be for the brand industry.    The success of the user fee program

     for the brand industry cannot a priori be extrapolated to the

     generic industry.

                Why not?   While the focus of user fees is on the

     reduction of review/approval times for product applications,

     "reduction in review/approval time" is simply a surrogate for

     the desired endpoint, "reduction in time to market."           In the

     case of new drugs, the surrogate marker closely approximates
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     the desired endpoint.    This is often not so for generic drugs.

     For generic drugs, application review or even approval is not

     necessarily the rate-limiting step for getting to market.

     Hatch-Waxman provisions for paragraph IV certification and

     related 30-month stay, for 180-day exclusivity, for patent

     extensions, for exclusivities, et cetera, are more often the

     determinants of time to market.      Achieving the

     statutory-mandated time--six months--for approval is not a

     sufficient outcome for generics.      Can user fees address the

     non-review delays in time to approval of generics or the launch

     of generics?   Can we expect that user fees will preclude delays

     caused by citizen petitions, last-minute patent extensions,

     11th-hour pediatric exclusivities, and a never-ending listing

     of new patents?   What is the value of a six-month review if

     launch is routinely delayed another two or three years because

     of other factors?

               What has the sponsor bought with his fee?      Brand

     products, by definition, reap the benefits of a monopoly when

     they enter the market.   For generics, what is a meaningful fee

     versus expected margin when 10 or 12 ANDAs for the same product

     are approved at the same time?     Clearly, user fees for generic

     drugs is a very complex issue.      An in-depth analysis of the

     entire review, approval, and launch processes and their related

     statutory, regulatory, and legal constraints would be required

     before any attempt is made to develop a meaningful proposal,
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     if indeed a user fee program which will achieve the desired

     outcome--timely access for consumers to affordable generic

     drugs products--is feasible.

                  Any drug user fee program, whether for the brand

     industry or the generic industry, should have clear, measurable

     goals and objectives, directly related to the review, approval,

     and launch of drug product only.           User fee-funded activities

     should be the exception not the rule.             The allocation within

     the agency of appropriated funds as well as all user fees should

     be fully transparent to all stakeholders and the continuation

     of user fee programs contingent on the appropriateness of this

     allocation.

                  Thank you.

                  MR. BARNETT:      Thank you, Mr. Pelloni, and thanks to

     the panel.

                  Because we're running a little bit ahead of time, I

     think we're going to do away with the break we were going to

     have now, and I'll call up the final panel right now.           That's

     the fifth panel representing the health professional groups and

     academic research.

                  I will introduce three of our panelists and we'll

     begin with them, and then the others are on their way.

                  Let's see.     Dr. Joe Cranston is director of Science,

     Research, and Technology at the American Medical Association.


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                Dr. Kenneth Kaitin is director of the Tufts Center

     for the Study of Drug Development.

                And Dr. Stuart Walker is director of the Centre for

     Medicines Research in the United Kingdom.

                Let's begin with Dr. Cranston.

                DR. CRANSTON:   Thank you and good afternoon.       I'm a

     pharmacologist by training and serve as the director of the

     Division of Science, Research, and Technology at the American

     Medical Association.

                The AMA is a national professional association

     representing approximately 300,000 physicians and physicians

     in training, and I am speaking on behalf of the AMA at this public

     meeting.

                Current AMA policy states, and I quote, "a strong and

     adequately funded FDA is essential to ensuring that safe and

     effective medical products are made available to the American

     publicly as efficiently as possible."        Thus, the AMA has a

     strong interest in the future of PDUFA, and the AMA is pleased

     to present its views at this meeting.

                Prior to the passage of PDUFA I in 1992, the AMA was

     one of the more vocal critics of FDA's slow review times for

     human drug and biological products applications.          However,

     with the success of PDUFA I in speeding up the application review

     process, the AMA was an ardent supporter of PDUFA II as a

     component of the FDA Modernization Act of 1997.       And in a letter
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     to Senator Jeffords in 1997, the AMA stated, and I again quote,

     "The reauthorization of the Prescription Drug User Fee Act is,

     we believe, critical to sustaining the improved performance of

     the FDA in expediting new drugs and biologics to patients."

               The AMA has reviewed the FDA's FY99 performance

     report to Congress on PDUFA, and it is clear that PDUFA I and

     PDUFA II have been highly successful in reducing application

     review times for drugs and biological products.       Moreover, the

     increase in actual approval rate and the decrease in the

     clinical development phase of drug development suggests the

     PDUFA program is now having positive impacts on the quality of

     applications and overall drug development times.

               Critics of the PDUFA program have argued that the

     increased speed of FDA review and approval has led to less safe

     drugs on the market with an increased number of market

     withdrawals.   However, there does not appear to be evidence to

     support this argument.    To the contrary, an FDA review of the

     circumstances of five drug withdrawals within a 12-month period

     between September '97 and September '98 found no relationship

     to reduced FDA review times.    This review was published in the

     Journal of the American Medical Association last year.

               Because of its past success, the AMA strongly

     supports the reauthorization of PDUFA in 2002.        As the AMA

     stated in 1997, the AMA believes PDUFA reauthorization is

     critical to sustaining the improved performance of the FDA in
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     expediting new drug and biological products to patients.      These

     user fees should continue to be tied to specific performance

     goals negotiated with the pharmaceutical industry and should

     not be considered as an offset for any proposed funding cuts

     for the agency or be mixed with general operating funds.

               The AMA recommends that the FDA and the

     pharmaceutical industry, in collaboration with Congress,

     negotiate PDUFA III with the goals of maintaining rapid FDA

     review times of applications and continuing to shorten overall

     drug development times.    This must be done without compromising

     on the quality of the drug development and review processes so

     that physicians and their patients can maintain a high level

     of confidence in the safety and efficacy of FDA-approved drugs

     and biological products.

               While the AMA believes that prescription drug user

     fees should supplement FDA appropriations and be dedicated to

     the drug development and approval process, we are concerned with

     the FDA's comments in the Federal Register notice that

     appropriations to cover other critical FDA activities, and I

     quote, "have contracted each year since 1993."        If this is the

     case--and this has been heard time and again today--then the

     Congress has the responsibility to adequately fund the FDA to

     meet its responsibilities in these other areas.       Otherwise, the

     FDA will be unable to meet all of its mandated obligations to


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     effectively regulate medical products and to protect the public

     health.

                Thank you.

                MR. BARNETT:     Thank you, Dr. Cranston.

                Dr. Kaitin?

                [Pause.]

                DR. KAITIN:    You're not starting the timing, are you?

                MR. BARNETT:     No.

                [Pause.]

                DR. KAITIN:    Good afternoon and thank you to the FDA

     for inviting me to participate in this, I think, important

     hearing.   As an academic group that's data-driven, I've decided

     to limit my commentary and opinion and focus more on data, fact,

     and analyses that we provide.

                To be sure, the FDA--next slide, please?--has had

     initiatives and tools required to address the needs of providing

     drugs for life-threatening and severely debilitating diseases

     to patients rapidly.     These include the Subpart (E) procedures,

     accelerated approval, and cancer initiatives.

                Next slide?

                These initiatives have been successful, for the large

     part, in bringing products more quickly through the

     development, clinical development and review process.      As you

     can see here, compared to all other new chemical entities,

     Subpart (E) and accelerated approval drugs have gone through
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     the process approximately 40 percent faster in development

     phase and 67 percent faster in the approval phase.

               Next slide, please?

               I might mention at this point that I've taken the

     liberty, being in the last panel, to make some adjustments to

     my presentation, so you don't have this slide.        The

     beneficiaries of these initiatives have been drugs, for

     example, for AIDS.   At the bottom of this chart are AIDS

     antivirals, and as you can see here, the combined clinical

     development and approval time for these compounds is less than

     four years, an extraordinary effort and an extraordinary

     accomplishment demonstrating and highlighting, I believe, the

     impact when there's a uniform effort on the part of patient

     groups, the public, Congress, the FDA, and the industry to move

     a class of compounds through the process quickly.

               On the other hand, the large number of categories that

     are above the AIDS antivirals still demonstrate the lengthy time

     involved in bringing these products through the process and the

     lengthy effort and the large amount of effort required to bring

     these products to consumers.

               The User Fee Act in 1992 was meant to address one part

     of this lengthy process, and that's the review time.        And as

     you all heard, this has been largely successful in having a huge

     accomplishment in that area.    I will share some information to

     give you the extent of that accomplishment.
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               Next slide, please?

               As we can see, here comparing the amount of products

     approved from 1990 through 1999 that took long periods of time

     to go through the FDA approval process--and by that I mean two

     years or more--has gone from 63 percent in 1990 down to a low

     of 2 percent in 1998.    At the same time, for those products

     approved in one year or less, it's gone from a low of 10 percent

     in 1991 to a high of 64 percent in 1999.         In a category that

     several years ago wouldn't even be worth graphing, those

     products approved in six months or less have gone from 0 percent

     in 1991, typically less than 5 percent in the early 1990s and

     before that, to a high of 28 percent in 1999.         So the User Fee

     Act has been certainly significant in terms of reducing overall

     approval times.

               If we look at the next slide, we can look at the

     approval phases for new chemical entities versus

     biopharmaceuticals, and we see a similar reduction in time

     periods in the amount of time taken by the agency to approve

     these compounds, from a high in the early 1980s of 33.8 months

     to a low of 12 months, on average, for new chemical entities,

     a reduction of 65 percent, and for biopharmaceuticals a similar

     reduction of 66 percent.

               Next slide?

               Providing some more information on cohorts, these are

     each of the fiscal year cohorts since the User Fee Act was
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     implemented in 1993.   We can see the time to first action has

     declined steadily except for a small jump in 1997; and,

     similarly, the total approval phase, which wasn't specifically

     designated in the User Fee Act but nonetheless remains an

     important measure of the ability of the FDA to get drugs to the

     public more quickly, has also shown a significant decline.

               If we go to the next slide, we see the same type of

     data for biopharmaceuticals.     Here we see less of a consistent

     trend, but certainly from the 1995 period on, a consistent

     reduction in overall time to go to time to first action for

     biopharmaceuticals, as well as a reduction to the lowest time

     seen so far in the approval phase, the time to reach approval

     for biopharmaceutical products.

               Now, in 1997 and 1998 is when the difference between

     priority and standard drugs had to be demonstrated, and the next

     slide shows that in 1997 on this slide we see standard and

     priority for 1997, time to first action, followed by standard

     and priority for 1998, and we can see the sought-after

     differential, 12 months for standard, six months for priority

     drugs, the FDA has clearly achieved that, and the same thing

     for total approval time, a significant reduction in

     differential between standard and priority drugs.

               Clearly, the effects of PDUFA have been significant.

     One of the achievements of PDUFA is to create an environment

     in the United States in combination with the fact that the United
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     States happens to be the world's largest pharmaceutical market,

     for marketing products in the United States before marketing

     in other countries.    The next slide demonstrates that the

     United States in more recent years, the most recent years, has

     become the first market for 47 percent of the products that have

     been recently approved.    If we just take the smallest two slices

     of the pie there, we can see that the average number of products,

     the number of products that were available six or more years

     in foreign markets before they were available in the United

     States was 9 percent.

               To provide some perspective on that, the next pie

     chart gives the period just prior to this period and shows

     numbers that are similar to what we've seen for numbers dating

     back all the way to the early 1980s.         Only about a third of

     products are first approved in the United States versus 47

     percent now, and 19 percent were available six or more years

     in other countries.

               Now, to be sure, many of these countries don't have

     the same type of medical and technical standards that we have

     in the United States, but a country with a market like the United

     States and the strongest infrastructure and the strongest

     regulatory agency, I believe, in the world for getting these

     products through, certainly one would expect a large number of

     these products to be approved first in the United States.


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                 Now, the issue of drug safety inevitably comes up and

     has been addressed a few times.       We have been tracking drug

     safety dating back to the early 1970s, and as has been alluded

     to, there is no particular evidence to demonstrate that there

     has been a greater number of safety issues that have been the

     direct result of the user fee requirements.

                 What we see on this slide--the next slide please?

     What we see on this slide are the number of approvals each year

     in the red bars, and in the blue bars we see the years that those

     products were approved, not the year that they were withdrawn

     but the year that they were approved, because it was the year

     of approval that will designate whether this was a user fee drug

     or not.    Obviously, anything prior to 1992 or '93 would not be

     a user fee drug.

                 What this indicates is that the year of approval of

     the compounds that have been recently withdrawn spreads evenly

     more or less across the last two decades, demonstrating that

     the average rate of withdrawals due to safety reasons of these

     products averages around 3 percent, which is not significantly

     different than the rates that we've seen for the past three

     decades.

                 How would you classify the current status--can I have

     the next slide, please?--the current status of innovation in

     the United States as a result, I believe, of the User Fee Act?

     There has been an establishment of a collegial FDA-sponsor
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     relationship.    A partnership is not something that we may be

     looking for in the United States, but certainly the ability of

     the FDA and the industry to work together, to talk together,

     to share information and try to move these products through the

     process in the most efficient way possible is to the public's

     advantage.    We're seeing a large number of new chemical entity

     approvals.    We're seeing much faster approval times.        We're

     seeing a focus, especially after the FDA Modernization Act, on

     development times both within the agency and the industry, and

     we're certainly seeing more drugs approved first in the United

     States.

                  Can I have the last slide, please?

                  In conclusion, I think it's fair to say that the

     Prescription Drug User Fee Act was the most significant piece

     of drug legislation since the 1962 amendments.          I think the

     overwhelming success in speeding the drug review process and

     changing the relationship between the agency and sponsors has

     resulted in a public benefit that ultimately results in the

     public getting access to important new drugs more quickly.

                  I might make a comment, one additional comment in

     terms of the drug lag.    To be sure, I think there should be no

     mistake.   The drug lag was not a myth.       The drug lag did exist

     in the 1970s and 1980s, in the early 1980s.      I think that through

     PDUFA what we have achieved is what David Kessler, former

     Commissioner David Kessler said was the final end of the drug
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     lag in the mid-1990s.    I think this is something that benefits

     public health, and I would hope that nothing would happen in

     the next set of reauthorization hearings that would turn back

     the clock on regulatory reform.

               Thank you.

               MR. BARNETT:    Thank you, Dr. Kaitin.

               Dr. Walker?

               DR. WALKER:    Thank you very much.         I feel extremely

     honored to have been invited to this hearing, particularly as

     I find myself as the only speaker outside the United States.

     And I welcome the opportunity to talk about the issues that we've

     been discussing today.

               I think I've probably been invited in order to put

     perhaps the PDUFA Act and the FDA into a global perspective and

     to compare the achievements that have been so radical over the

     past ten years by the FDA and compare those with other major

     countries of the world.

               Next slide, please?

               Like Ken, I'd like to start perhaps with just

     reminding you that over the past decade we've seen, on average,

     about 40 new active substances come onto the world market, and

     this particular slide illustrates the point that Ken made so

     well in his pie diagrams:     that if you look at certain times

     in the history of the last ten years, you might see here Europe

     being maybe the first market where a new drug would be introduced
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     as opposed to other markets, here it might be Japan, but in the

     last three years in particular, particularly in 1998, the

     FDA--the effect of improving the review process, the fact that

     this is the largest market in the world and the freedom of

     pricing has made this the country of first choice for the

     introduction of new products.

               Next slide, please?

               Let's just remind ourselves about the development

     time overall from discovery through to the first market.     This

     is data where we have all information at these various time

     points for '94 to '98, and what you see here is that the drug

     discovery process occupies about three years and then the

     clinical development program, Phase I, Phase II, and Phase III,

     occupies about seven years.     And here time from first

     submission to first launch is about a year for this period at

     about 11 percent.   And I put this slide up just so that you might

     reflect on what this would have looked like for the early 1990s

     when the situation was still about 11 to 12 years for developing

     a new chemical entity, but the review time in many countries

     was about two and a half to three years, which would have been

     in excess of 25 percent of that overall drug development time.

               Now, over that period, the industry haven't been as

     successful in reducing their time scale, but I can assure you

     from data that we have of products in the pipeline that this

     will change, and in the next few years we'll see, I think, a
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     radical reduction in the overall development time for these

     products.

                  Next slide, please?

                  Now, we're considering performance today, and

     performance for me is two parts:       efficiency, which obviously

     relates to the amount of work being completed within a

     particular time scale, and also quality, which is important to

     maintain.    And I want to just look at these two aspects, and

     I'll start by looking at the quality issue.

                  Next slide?

                  The reason I've chosen to do that is that CMR

     International, who worked closely not only with the leading

     pharmaceutical companies around the world, not only in America,

     Europe, and Japan, but also with the major regulatory

     authorities in Europe and the United States, Australia, Canada,

     and Japan, and this particular study which we conducted in 1999

     was a questionnaire survey of some nine regulatory

     authorities--and there they're listed--asking them some key

     questions, both qualitative and quantitative, with regard to

     how they build quality into the regulatory review process.

                  Next slide?

                  And I'm just going to give two or three slides to

     demonstrate what this particular survey has shown.      It was the

     subject of a workshop in May, and it will be published later

     this year.    Here are some of the indicators that I believe and
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     so the regulatory authorities also believe are relative to

     building quality into the review process:         validation of

     submitted dossier, using standard operating procedures for both

     reviewers and for advisory boards, the use of review templates,

     and, of course, the implementation of some system of good

     regulatory review practice.     And here you see, although I

     haven't identified these agencies because we don't yet have that

     agreement, I have identified here the FDA, which is saying yes

     to all these aspects that incorporates into the regulatory

     review process, which is an indication of building quality into

     that process.

               Next slide?

               Another factor which is considered very important

     both by the industry and the regulators, of course, is the level

     of contact between reviewers and the industry, both during the

     development period and also during the review period.       And here

     you can see that we are looking with some authorities that have

     no contact at all during this period, some who have what is

     described as moderate, and the rest extensive.        And, again, the

     FDA is amongst those group of four to five regulatory

     authorities that has extensive discussions with the industry

     both in development and in the review period.

               Next slide?

               What we're looking at here is the information that's

     put into the public domain, and I think all of us, whether from
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     academia or from the authorities or from industry, would welcome

     more transparency.     And we've certainly seen that in the last

     few years.    Here is some of the data that's put into the public

     domain by some of those nine regulatory authorities:

     application dates, approval dates, advisory committee meeting

     dates, the summary of grounds of approval, and the time taken

     by the company to provide new information.              And here, again,

     we see the FDA is providing this information, putting it into

     the public domain, not as yet the time taken as downtime by the

     companies, only one agency provides that information, and I

     would strongly support the idea that maybe more of this data

     should be in the public domain to allow these type of

     comparisons.

                  I'm delighted that, in fact, not only the FDA but also

     the agency in Canada and Australia and in Europe are working

     closely now with the center to actually benchmark the whole of

     the review process, identifying some of the critical stages in

     that review process, sharing the information with my

     organization, which means that ultimately we'll be able to make

     those sort of comparisons in the future.

                  Next slide, please?

                  Of course, we must be aware, as a result of today's

     discussion, that the standard fee for a new active substance

     is higher in the United States than in the other agencies of

     the world, and that--next slide?--combined with the fact that,
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     if we look at the next slide, the resources that are available

     to various authorities--this is, again, part of our survey, and

     I haven't as yet identified those authorities until I have their

     permission, but here is data just from CDER and earlier this

     morning about the numbers of reviewers across the whole of the

     agency, both CBER and CDER, and you can, again, a larger number

     of reviewers and that means, of course, greater resources

     available to that agency.

               Next slide?

               Just to remind you, of course, as to where we stand

     with regard to the proportion of total annual budget derived

     from the fees, here we see Australia, Netherlands to virtually

     100 percent, also Sweden and the U.K. have now been stand-alone

     agencies totally dependent on the user fees, whereas other

     agencies like Canada and France, 60 to 70 percent, and the United

     States, as we know, moving towards 50 percent.

               Next slide?

               With that sort of background, having talked about

     quality--could you press the button again, please?--we can see

     that we should now be looking specifically at the time factors,

     and I've got just two or three slides to illustrate how the FDA's

     stack up against the rest of the world.

               Next slide, please?

               I use this slide to look at the proportion of

     approvals granted in 1998 and 1999 and the proportion of those
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     approvals that were granted within a particular time frame.         So

     on this axis, we're looking at the percentage of the compounds

     approved, here we're looking at the time scale, six months, nine

     months, 12 months, right out to 24 months.            And what you see

     immediately here in the yellow bar is that the United States

     FDA lead the way in terms of the percentage of compounds approved

     in this particular period with almost 30 percent within six

     months, coming up to 60 percent in 12 months, and in the 15-month

     period or 18-month period perhaps we should look at, some 80

     percent.   And it is only at this stage that other agencies like

     the centralized procedure in Europe starts to actually compete.

     At the earlier time scales, the FDA is doing considerably

     better.    And then you can see right at the end, the outside,

     in terms of 24 months, where the agencies stack up against one

     another in terms of a ranking, and at the moment, obviously,

     with disappointment, the MHW in Japan is lagging behind, but

     there, again, they promise that this year they will reduce their

     review time down to 12 months, and we wait to see whether that

     is the situation.

                 Next slide?

                 This, I suppose, is the definitive slide which is

     looking at Australia, Canada, Japan, the United States, the EU

     in terms of the centralized procedure, and, of course, the

     mutual recognize procedure, which procedures have only been

     introduced in the last five years.     Let's start just by looking
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     in general at the trends, what you've seen also from Ken Kaitin's

     work focusing on the FDA, and you can see with all these agencies

     there's been a dramatic reduction in review times.        And here

     particularly looking at the United States, where in the early

     1990s review time was two to two and a half years, reducing to

     this on median level here of one year.     And, in fact, apart from

     Japan, all the agencies have reduced their review times, some

     with the use of user fees, down to this period of one to one

     and a half years, including the EU centralized and mutual

     recognition procedures, although, as you know, MR is not working

     quite so well in Europe.

               Next slide?

               Of course, none of the other agencies have a priority

     review as the FDA does, and if we, therefore, look at the

     comparison of approval times here, the priority review, 90

     percent within six months as being the target, and here we see

     six months as the median value.      This is a standard Box &

     Whiskers approach, and here for the standard review, median time

     about one and a quarter years.   So not quite meeting the targets

     here, but in general, a major difference.      And, of course, this

     emphasizes the fact of the priority review being used for those

     products that are life-saving and are important to patients.

               Next slide, please?

               This is my final data slide which looks at the EU

     centralized procedure in days and the FDA approval times, and
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     this is the line that relates the fact that if the approval was

     equal in both areas, that it would be on the line.      These are

     products that have been submitted within one month, so we make

     the assumption that it's the same data set.

               If you look at the data in terms of the nonpriority

     compounds or where the status is unknown by this data that we've

     been provided with, you can see they lie evenly about the line.

     The major difference is with regard to the priority compounds

     which are reviewed much more rapidly in the United States

     compared within the EU, which has no priority status.

               And my last slide really tries to draw some

     conclusions.   The FDA have certainly put in place, as I showed

     in my earlier slides, appropriate systems to ensure a high

     quality regulatory review process.       We also accept that they

     have a higher level of resources than in any other countries,

     and I suppose the challenge is could they actually continue to

     maintain this impetus in terms of review times and quality with

     less resources, and that would be a challenge, of course.

               There's the fact of the user fees having had a

     significant impact on review times in other countries as well

     as in the United States, and any further increase, of course,

     must be associated with improving patient access to medicines.

               Finally, we see the significant decrease in review

     times with the FDA now currently ranked as the leading agency

     of the world, according to our data, and this is obviously driven
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     by the performance goals.       And my argument, therefore, is that

     these must be continued and they must be determined by agreement

     between the FDA and the stakeholders.

                 What I would hope, in conclusion, is that the FDA

     would become the benchmark for other agencies around the world

     so that ultimately the review that we need on a worldwide basis

     makes patient access to medicines better for all concerns.

                 Thank you very much.

                 MR. BARNETT:     Thank you, Dr. Walker.

                 We have a message from Dr. Levinson of the American

     Public Health Association.        He will not be able to make it

     today, but he will submit his comments in writing.

                 We do have with us Dr. John Gans, who is executive

     vice president of the American Pharmaceutical Association.

     Dr. Gans?

                 DR. GANS:    Thank you.     It's a pleasure to be here

     this afternoon, and it's always nice to be on a panel and be

     the last speaker on a Friday in a wonderful weather day in

     Washington, which doesn't happen that often.

                 I'd like to make a couple of points this morning, but

     my perspective is going to come from observations that our

     members are making based upon what's going on in reality today

     and how patients use medicines.

                 To give you some perspective on where I come from,

     I've been in this position for 12 years.          I came to Washington
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     in 1989 right about at the height of the generic drug scandal,

     the FDA and all of that, and we worked very closely with Congress

     and the FDA to try to move forward.      And, of course, we've had

     to deal with this speeding up of the process.

                We want to make a couple of points today I think that

     are important.   The process has been speeded up.      There are

     more drug products out on the market today than there were

     before.   We thoroughly support that.       But we're also seeing

     some other challenges.    Direct-to-consumer advertising is

     expanding rapidly.   Twelve years ago, when I came to

     Washington, I didn't know what an herbal product was.      I'm not

     sure I know today what dietary supplements are, but I sure see

     the advertisements on all of the media.

                We have seen a rapid expansion of drugs going from

     prescription status to nonprescription status.        We have seen

     articles written as to why safer antihistamines are on

     prescription and products that seem to be less safe, although

     in lower dosages, are nonprescription.

                All of these products--dietary supplements,

     nonprescription drugs, and prescription drugs--cross in only

     one place in our society, and that's in America's pharmacies.

     So my attention this afternoon is going to focus on three issues.

                One, we believe that there needs to be some balance

     in the user fees, that the Federal Government needs to step up


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     the pace of its contribution, and it shouldn't all fall on the

     pharmaceutical industry.

                We do feel that there should be a capping of the

     percentage that's used to approve drugs, and we think the rest

     of that money should be used to look at a couple of areas:    one,

     direct-to-consumer advertising and the impact that it's having

     on consumers and how they view medications, be they dietary

     supplements, prescription drugs primarily.        We think there is

     a casualness and a decrease in vigilance that's occurring in

     society as they see advertisements for prescription drugs

     alongside of other consumer advertisements for soap products

     or automobiles or whatever else is out there.

                The second are we believe that needs to be looked at

     is we think there needs to be increasing postmarketing

     surveillance.   Last year there were several high-profile

     products removed from the market because--and I don't have a

     direct quote on this, but the head of CDER was reported as saying

     that the physicians are not--or prescribers, I should broaden

     that--are not reading the literature, they're not reading the

     black boxes, they're not doing liver function tests at two

     months.   And is there some impact of the greater speed, the more

     therapeutic moieties, the more drug products on the market

     today, faster and quicker, more rapidly, is that affecting our

     ability as pharmacists, dispensers, prescribers, patient

     educators on the effectiveness and the use of these medications?
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                  Pharmacists look to the FDA for two important

     functions:    one, the review and approval of medications used

     in their practices.    Pharmacists know, however, that the FDA

     approval does not mean that medications are risk-free, but we're

     not sure what the public thinks of that.        Medications are safe

     and effective when used properly.

                  I raise this caveat because it is important to our

     discussion.    The FDA review process does not yield risk-free

     products, regardless of the question of PDUFA funding.         The

     nation's drug approval process is based on a system of reviewing

     clinical trial evaluation and extrapolation of those results

     to the population at large.     Inherent in this extrapolation is

     the reality that some problems--and benefits--of products will

     not be discovered in clinical testing and in clinical trials.

     This requires ongoing vigilance by pharmacists and other health

     care professionals and consumers to detect and report adverse

     events, new uses, and requires the FDA to take appropriate

     action.

                  Evaluation of the impact of PDUFA funding, then,

     cannot be based on the assumption that approved drugs will never

     be withdrawn from the market because of problems detected in

     broad use.    While such withdrawals should factor into the

     assessment, other considerations include the benefits of

     shortened review time, the comfort level of staff with the

     process, and the evidence that the shortened review time is
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     compromising data review.       Shortening the review time is not

     necessarily correlated directly with a poorer quality of

     review.   The quality of the review should turn on the data

     developed and submitted.

                  As the percentage of funding for drug and biological

     review processes from user fees increases, however, the risk

     for undue focus on speed of review rather than quality of review

     increases.     To diminish this risk, APhA recommends that a cap

     on the percentage of review program costs covered by fees be

     considered seriously.     Importantly, overall funding for these

     processes, from fees and appropriations, should be increased

     to keep pace with the expected expansion of new molecular

     entities and the emergence of pharmacogenetic drug modifiers

     and products.     It is unacceptable that, according to the

     Federal Register's announcement for this meeting, funding for

     a program as important as our drug review process, approval

     process was insufficient to keep pace with mandatory

     across-the-board pay increases for FDA staff.

                  The scope of activities funded by PDUFA fees is

     another important question, and APhA recommends that the scope

     be expanded to address two important areas:             oversight of

     direct-to-consumer advertising and improved efforts in

     postmarketing surveillance.

                  Oversight of direct-to-consumer advertising should

     be added to PDUFA activities.       The prevalence, as I mentioned
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     earlier, is increasing significantly.      Has the explosion of DTC

     advertising yielded an improvement in medication use, either

     through improved compliance or by stimulating consumers to seek

     medical care for untreated conditions?        Or, by contrast, has

     the DTC explosion yielded an increase in the casualness and

     decreased vigilance with which our society perceives

     medications--that there is a tablet for everything and that

     there are no risks or no adverse effects to these?    Just another

     commodity today in society.

               Our House of Delegates has debated this issue

     frequently, most recently in 1999.     At that time the House urged

     APhA to work with FDA to ensure that advertising includes

     complete, comprehensible, understandable information and

     informs consumers about the benefits and risks of products.

     I'm not even sure personally if society understands the

     difference between dietary supplements, prescription drugs, or

     nonprescription drugs today.

               We believe that there is a growing lack of respect

     for medicines and that society today does not see medicines as

     being special elements of health care.        An assessment of the

     impact of advertising on medication use, patient attitudes,

     including prescribing, patient compliance, et cetera, is

     essential and should be a component of PDUFA-funded activities.

     This is worthy of your attention because there is evidence that

     these ads do work.
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               We completed a study right before the FDA expanded

     the way advertisements could be done and would be willing to

     work with the FDA on developing a new survey of consumers and

     prescribers.

               In the area of postmarketing surveillance, APhA

     supports the expansion of PDUFA-funded activity to include

     enhancements in postmarketing surveillance.          As I mentioned

     previously, an inherent component of our drug approval process

     is that some problems--and benefits--of products will not be

     discovered in clinical trials.    Medication use in real life is

     far different from the controlled environment of clinical

     trials, with concurrent use of other medicines, OTC products

     and dietary supplements, as well as personal activities

     impacting whether medications work or not.       It is important to

     expand this activity.

               Second, current reporting is insufficient as a

     strategy to identify adverse effects and problems with

     appropriate prescribing and use.     FDA's current system of

     identifying unknown adverse effects of prescription drugs

     suffers from a lack of resources to analyze and respond to

     reports received by the agency.    Use of PDUFA funds to improve

     this activity is vital to maintain the integrity of our drug

     review system, a system that relies on surveillance to identify

     new uses as well as adverse effects of products in real life.

     Pharmacists have demonstrated that their active participation
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     in Phase IV studies produces valuable information on the safety

     and effectiveness of products, and we stand willing to work with

     the agency to expand this mechanism and information flow.

                An additional component of postmarketing

     surveillance is a new classification scheme, we believe, for

     prescription pharmaceuticals.      All of us are aware of the

     steady mounting evidence of morbidity and mortality

     attributable to underuse as well as misuse of prescription

     drugs.   This evidence has spilled over from its historical

     confinement in the medical journals to play out in the lay media.

     One only needs to look at the Institute of Medicine's report,

     "To Err Is Human."   The media, with the public not far behind,

     are demanding more accountability, as they should, from

     manufacturers, physicians, and pharmacists.

                Part of the problem is that economic pressures and

     the increasing speed of review and approval is pushing health

     professionals to spending less time and knowing less about the

     products which they are handling.     In addition, the ubiquitous

     use of formularies puts prescribers in particular in a position

     to being pressed to use products that they are not familiar with

     because they are cheaper or they are on the formulary.     These

     marketplace trends make it difficult for prescribers and

     pharmacists alike to remain alert to the risks of every drug

     that they prescribe and dispense.     These factors contribute to

     the problems in identifying adverse effects of medications.
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               The FDA could help this situation considerably by

     creating a new classification scheme for prescription drugs

     under which higher risk products would be identified as

     belonging to a category that demands special attention from

     clinicians and patients.     This new risk classification or

     stratification schedule would be analogous to the schedules

     defined in the Controlled Substances Act.              Health

     professionals would know that a drug in the high-risk category

     bears special or unusual risks that require close monitoring.

     Drugs in the highest-risk category might be subject to special

     distribution mechanisms, such as the system that was developed

     for thalidomide recently.     Similarly, narrow therapeutic range

     drugs might be placed in a higher risk category based on the

     FDA conclusion that such drugs require closer professional

     monitoring than other drug products.         This would help

     prescribers--

               MR. BARNETT:     Two more minutes.

               DR. GANS:    Thank you.     This would help prescribers

     and pharmacists know that such drugs--that the FDA believes that

     such drugs are deserving of more attention.

               Let me clarify that APhA is not supporting restricted

     distribution requirements imposed most recently on several

     approved products.    The association has significant concern

     with arbitrarily restricting products to certain care

     providers, as in the case of the availability of Tiksoyn in the
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     ambulatory care setting to only one pharmacy.             Such

     requirements pose substantial risks for consumers, including

     problems with drug interaction checking, product availability,

     and other interactions with the pharmacist that they usually

     work with.    APhA supports programs that limit medication access

     to those pharmacists and other providers willing to meet the

     legitimate requirements that the FDA has, but in systems where

     all pharmacists may choose whether or not to participate, not

     just one group.

                  Thank you for the opportunity to present our

     observations and views.        We look forward to your questions.

     Thank you very much.

                  MR. BARNETT:     Thank you, Dr. Gans, and thanks to the

     panel.

                  It's time now to open the floor to comments or

     questions from anyone out here who wants to make one.            Is that

     Mr. Benson?     No, it's not.      It looks like Mr. Benson.      Who's

     going to be first up?

                  The panel can feel free to join the audience now as

     opposed to staying up here.

                  Yes, sir?

                  FLOOR QUESTION:     My comment will focus on Blue Cross

     and Blue Shield Association's recommendation to expand the

     definition of user fee-funded activities to include

     postmarketing surveillance and the monitoring of the risk and
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     benefit information contained within direct-to-consumer

     advertising campaigns as a user fee-funded activity.

               Given the critical consumer safety functions that the

     FDA performs, increased congressional appropriations are

     necessary, and BCBSA believes that such additional funding will

     serve the public well.    BCBSA recommends that Congress amend

     PDUFA to include postmarketing surveillance in the statutory

     definition of "processes for the review of human drug

     applications."

               By expanding the definition of user fee-funded

     activities to include postmarketing surveillance activities,

     including Phase IV safety studies, Congress will help ensure

     that consumers receive safe and effective prescription drugs

     and have complete and accurate information about the risks and

     benefits associated with their use.

               In addition, we believe Congress should require the

     FDA to develop a protocol to monitor adverse reactions related

     to drugs that carry a relatively high risk.           Although the

     introduction of new drug therapies is exciting for physicians

     and patients, not all of the drugs' potential side effects and

     interactions are known at the time of market injury.         Instead,

     these manifest themselves gradually as the drug is accepted into

     common practice and used in a large universe of patient

     population.


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               As new products flood the market under PDUFA, the

     volume of adverse events reports has grown substantially.      I'm

     sure we all know that the number of adverse events reported at

     258,000 in 1999 are almost four times as high as they were in

     1989.

               The Blue Cross/Blue Shield Association believes that

     an integral part of delivering new drug therapies to physicians

     and consumers is the postmarketing monitoring of adverse events

     associated with the consumers' use of these drugs.       As the FDA

     conceded in announcing this meeting, the agency lacks

     sufficient resources to adequately monitor reports of adverse

     events and conduct timely, safe interventions.

               By expanding the definition of user fee-funded

     activities to include this critical regulatory responsibility

     associated with review and approval, Congress will certainly

     help ensure consumers receive safe and effective prescription

     drugs.

               With respect to DTC advertising, the association

     believes that consumers, faced with a barrage of advertisements

     for new drugs entering the market as a result of user fee-funded

     reviews, must receive clear and understandable information

     about the benefits and risks of new drugs.        As such, the Blue

     Cross and Blue Shield Association recommends Congress amend

     PDUFA--I don't have [inaudible]--

               [Laughter.]
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                FLOOR QUESTION:     Thank you.    Goodness.

                MR. BARNETT:    And, by the way, I'm glad we had this

     little interruption.      We're going to limit speakers to five

     minutes.   So about three minutes more would be suitable.

                FLOOR QUESTION:     Then let's cut to the chase here.

                When we look at the results of direct-to-consumer

     advertising on the population, we know that half of respondents

     thought that television ads do just a fair or poor job in

     communicating serious warnings, and most physicians are also

     skeptical of the quality and objectivity of the information

     presented in such ads.     In our 1998 survey of 3,000 doctors,

     Scott Levin found that more than half of the doctors disagreed

     with the statement that direct-to-consumer advertising is a

     reliable source of information.

                So by expanding the definition of user fee-funded

     activities to include this critical regulatory responsibility,

     Congress will help and assure that consumers have more complete

     and accurate information about the risks and benefits

     associated with prescription drugs.       This action should be

     supported by the FDA development of criteria for the level and

     type of information that consumers need to have.

                Value is the bottom line.     We recommend that the FDA

     review PDUFA's role in ensuring that the rapid flow of new drugs

     to market on the front end is accompanied by adequate resources


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     on the back end to monitor their impact through either

     advertising and/or adverse reactions as they accumulate.

                 Some of these drugs will be truly breakthrough

     products offering treatment where no effective therapy

     currently exists.    These drugs will likely be the treatment of

     choice by physicians and their patients and will bring valuable

     benefits to individuals and to their families.

                 BCBSA is very concerned that accelerated drug reviews

     under PDUFA have not been accompanied by comparable funding for

     consumer safety initiatives.      We believe that as user fees

     speed new therapies to consumers, there is a comparable need

     to ensure that these drugs are safe and effective and that

     consumers receive complete and accurate information about their

     risks and benefits.

                 BCBSA applauds the Food and Drug Administration for

     addressing this critical health care issue, and we support the

     agency in this endeavor.

                 Thank you.

                 MR. BARNETT:    Thank you for your comments.

                 Is there anyone else that--yes, over here.         Identify

     yourself, please.

                 MR. PLUNKETT:    Good afternoon.      I'm Travis

     Plunkett.    I'm the legislative director with the Consumer

     Federation of America, and I'd like to thank the FDA for holding

     a very balanced discussion today on FDAMA.
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               The Consumer Federation is one of the coordinating

     organizations of the Patients and Consumers Coalition.     You

     heard about earlier a letter that we have sent to the

     Commissioner outlining our concerns with FDAMA, and I'm just

     going to summarize them because they will repeat much of what

     you've heard from patient and consumer representatives today.

     But I think it will serve as a useful summary of the concerns

     of many of these organizations.     Our coalition represents a

     broad array of consumer and patient organizations, and we have

     unanimous concerns on four points.

               First, the growing financial dependence of the FDA

     on PDUFA user fees represents a conflict of interest that could

     compromise drug safety.

               Secondly, the fact that FDAMA is draining resources

     from other crucial FDA functions must be rectified.

               Third, the FDAMA performance goals are

     inappropriately determined, inappropriately implemented, and

     open to manipulation by the regulated industry.      We now have

     a situation where the industry has a dominant voice in setting

     the performance goals.    They have a dominant voice in

     controlling funding for FDAMA, the time line, of course, by

     which these performance goals are implemented, and also,

     through the performance goals, the measures of what is success

     or failure.


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                Fourth, funding for key pre- and postmarketing

     activities must be increased.      The coalition, Patients and

     Consumers Coalition, will be broadening our outreach to the FDA,

     Congress, the media, and others as expiration of PDUFA draws

     near, and we look forward to working with the FDA on this issue.

                Thank you.

                MR. BARNETT:    Thank you for your comments.

                Yes?

                MS. RULLO:   Hi.   Good afternoon.         I'm Mary Rullo

     with the United Auto Workers.      Thank you for the opportunity

     to be here today.

                The UAW has joined with other members of the Patient

     and Consumer Coalition in responding to the user fee-related

     questions posted for today as reflected in the group letter to

     which Travis just referred.     The UAW, for reasons stated in

     earlier testimony here, does not support expansion of user fees.

     We fear the industry would lobby Congress to put a straitjacket

     on the agency about the allowed use of such fees.

                By this time in the day, about everything that can

     be said about user fees has been said, so I would like to focus

     on what we believe to be the real heart of this docket, and that's

     safety.

                The concerns about safety noted in the docket notice

     are taken directly from the fiscal year 1999 PDUFA financial

     report, and I'm quoting:   "The FDA workforce and real resources
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     for most programs, other than PDUFA, have contracted each year

     since 1992, while we struggle to assure that enough funds are

     spent on the drug review process to meet the PDUFA trigger.          The

     FDA is less able to manage the resources available in a way that

     best protects the public health and merits public confidence.

     Examples of areas we have not been able to fund adequately

     include responding to reports of adverse events related to the

     use of prescription drugs."

               It is both appropriate and important for the FDA to

     express safety concerns.    We do not understand the relative

     lack of attention to this issue by the Congress.          If a similar

     pronouncement was made by the FAA, we have no doubt that hearings

     would be called immediately.    And it's not going to get better.

     There are increased stresses on the surveillance system,

     including a larger, older population taking more drugs in

     combination and the mass marketing phenomenon where drugs, in

     part due to DTC, reach a mass audience quickly.

               This past April, the UAW joined a dozen consumer,

     patient, labor, and religious organizations in asking the

     Congress for an increase in FDA funding specifically targeted

     for postmarketing surveillance activities.            But where is

     PharMA, acknowledged to be one of the most influential players

     on the Hill?

               If you go to the PharMA website, there are several

     background papers on drug safety, and PharMA says, and I'm
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     quoting:   "Patients can have confidence that the current system

     is working to protect the public health and that the FDA and

     pharmaceutical companies constantly monitor medicines after

     approval to assure they remain safe."        FDA funding for such

     programs, or lack thereof, is not mentioned and, further, to

     our knowledge, PharMA has not lobbies the Agriculture

     Appropriations Committee for increased funding for postmarket

     surveillance programs.

                Now, PharMA has shown that it is very capable of

     quickly mounting a high-visibility safety campaign.        It is

     currently blanketing the Hill with ads and letters from former

     Commissioners about safety issues associated with the

     reimportation of prescription drugs.        This, of course, is in

     response to the recent House and Senate amendments aimed at the

     pricing crisis experienced by millions of Americans.      And it's

     not that PharMA shouldn't raise genuine safety issues where it

     finds them, but its safety field of vision, so to speak, seems

     to be quite limited and intimately connected to the bottom line.

                So we hope that Congress will pay increased attention

     to this funding issue and that PharMA will help us bring it to

     its attention.

                Thank you.

                MR. BARNETT:   Thank you.

                Is there anyone else here who would like to make a

     comment or a statement to use?
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               [No response.]

               MR. BARNETT:   If not, let me mention that you, if you

     do have comments, can submit them to our website where we will

     see them and consider them.     I thank all the panelists today

     and all of you for coming.    I think the result of this meeting

     is that the FDA has a better picture of what you think about

     PDUFA, where it's been and where it should be going.

               Before we close, let me mention that a record of this

     meeting is going to be found on our FDA website, and also copies

     of the presentations can be found in the back of the room, and

     you can pick those up on your way out.

               Dr. Henney, do you want to say a word of good-bye?

               DR. HENNEY:    Well, Mark gave me and the other panel

     members probably the most difficult task that we've ever had,

     and that was:   Don't talk.   Listen.    We have tried to.     We have

     all been taking extensive notes.        I think your comments have

     been quite comprehensive, very thorough and informative, and

     will certainly help shape us as we look forward to the next round

     of discussions on the Prescription Drug User Fee Act.

               I must say I am not as erudite as my good Center

     Director Kathy Zoon, who can quote Einstein.          I was instructed

     by a former Assistant Secretary of Health that the most

     important messages in life are really contained within the

     titles of country-western songs.        And within that, they can

     really speak to the heart of what's wrong with life when you're
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      down and out or very up and about, or however.        And I think some

      of this conversation reminds me of that country-western song

      that says they're putting in a nickel and they want a dollar

      song.

                [Laughter.]

                DR. HENNEY:    Thank you again for coming.

                MR. BARNETT:    Thank you.     Bye-bye.

                [Whereupon, at 2:31 p.m., the meeting was adjourned.]
     - - -




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