Panel I of a Hearing of the Health Subcommittee of the House Energy and Commerce Committee - Drug Safety Provisions of the Food and Drug Administration Globalization Act Discussion Draft Legislation
REP. PALLONE: The hearing of the subcommittee is called to order. And today we're having a second hearing on the Food and Drug Administration Globalization Act, today specifically with regard to the drug provisions. As I think you know, last week we discussed the food-related provisions, and today we'll be focusing on the drug- related provisions only.
I recognize myself for an opening statement. In recent years there have been a number of revelations about drug safety that have shaken public confidence in the FDA's ability to ensure that consumers are using safe and effective drugs. Tens of thousands of patients have been placed in harm's way due to the failings of our current drug safety system. And while we boast that America has the safest drug supply in the world, clearly more needs to be done. The American people must be able to trust that the drugs they take to save their lives will not cause additional harm.
Earlier this week the Subcommittee on Oversight and Investigations held a hearing to examine the events of the recent tainted heparin tragedy. The heparin case resulted in the deaths of at least 81 Americans, caused 785 severe allergic reactions in the United States, and affected patients in 10 other countries as well. The ONI findings revealed that not only are FDA's inspection policies inadequate, but worse, they actually could have contributed to the heparin-related deaths.
This is simply unacceptable. And I have to say that I'm outraged by the fact that this type of situation could have occurred, and I'd like to express my sympathy to the individuals and families affected by the incidents. But what worries me is that without congressional intervention, this could happen again. We have an obligation to the American people to ensure that the FDA has the resources it needs to protect them from these types of situations.
We've heard from a number of sources, including the GAO, the FDA Science Board and other stakeholders, that the FDA is woefully underfunded and that this underfunding is the driving force behind the agency's inadequacies. And finally, the agency itself, during the hearing on Tuesday, confirmed this fact. They cited that they need $100 million more for domestic inspection and regulation activity and 225 million additional dollars to adequately inspect and regulate foreign manufacturers.
Clearly the paltry $11 million budget for foreign inspections in 2008 doesn't even come close to being enough to enable the FDA to ensure a safe drug supply. At present, 80 percent of all active ingredients in drugs sold in the U.S. are made in other countries, and yet the FDA only inspects foreign facilities in countries such as China and India once every 30 years.
The draft we're discussing today would change that. As with the food companies, it would require all facilities, foreign and domestic, to register annually with the FDA, providing the agency with an up-to- date list of all drug manufacturing facilities and active ingredient manufacturing facilities as well.
It will generate the revenue needed to allow the FDA to conduct frequent inspections of all facilities by charging an annual fee that we are fully intending to specify in the final bill. It establishes new and stronger enforcement tools that the FDA can use against bad actors and requires manufacturers of drugs and biologics to test their products carefully for contaminants. And I do also want to point out that the funding proposed in this discussion draft is intended to supplement, not supplant, current FDA appropriations.
I feel confident that we'll be able to put together a strong bill, and I'm pleased that the industry, pharmaceutical companies, biologic companies, and generic companies have been so far willing to cooperate and assist in our endeavors. We've even received letters of support for this bill from leading drug manufacturing companies. I know there are still areas that we need to work on and details we need to iron out, and I look forward to hearing your testimony today highlighting those areas from the witnesses.
I also wanted to mention that my colleagues, Mr. Buyer and Mr. Matheson, are particularly concerned about the surge in counterfeit drugs in the marketplace, and I welcome a discussion of their proposed legislation, H.R. 5839, Safeguarding America's Pharmaceuticals Act, during today's hearing.
Particularly I'm looking forward to a discussion around the issue of leveraging information technology to protect our nation's drug supply. It has been identified in multiple GAO reports that the FDA is currently operating with a severely under-equipped information technology system, which actually also may have played a role in the heparin case.
While I applaud the initial progress that has been made on FDA's part by hiring a new chief information officer and centralizing the existing systems, more can be done to support the agency in their IT investments, which I believe will not only benefit the patients but will also enable the agency to be more efficient and effective in carrying out the required tasks.
Finally, patients and their health providers have to have confidence that the medicines they take to treat diagnosed illnesses meet the highest standards of safety and efficacy. And again I look forward to hearing from today's witnesses and the discussion around some of these issues. I understand Mr. Deal is not here today, so Mr. Buyer is going to act as the ranking member. And I yield to the gentleman five minutes for his opening statement.
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REP. PALLONE: Thank you, Doctor Woodcock. And I'm going to recognize myself for five minutes to begin the questioning. And I want to thank you not only for being here today, but also for being at the O&I hearing on Tuesday. Everyone was talking about your candor there, and we certainly appreciate that, you know, with regard to this discussion draft that we're circulating.
I wanted to ask some questions that, I think, probably were asked Tuesday as well. But, I want this subcommittee to have the benefit of hearing your response. As you stated in Tuesday's testimony before O&I, where you said, then, that the FDA needs $225 million annually to inspect foreign drug facilities at the same rate that is required currently for domestic facilities. Is that correct?
MS. WOODCOCK: That is what I stated. I wasn't given the chance to explain the assumptions behind that --
REP. PALLONE: Well, I'm probably going to get into some of those with these additional questions, if that's okay.
According to the FDA budget documents reviewed by GAO for its testimony last week, FDA estimates that it will dedicate a total of 13 million (dollars) in fiscal year 2009 to conduct foreign inspections. But you stated that an additional 100 million (dollars) would be needed to meet the current statutory requirement to inspect domestic facilities every two years. So is that correct -- this additional money for domestic?
MS. WOODCOCK: Yes. If I can explain how we -- I arrived at those figures.
REP. PALLONE: Yeah, you can explain it to me by probably answering this, whether that estimate includes the cost of compliance, the staff needed to review the reports, the inspectors. Does it include costs for a information technology infrastructure to ensure that the FDA can access these reports? I wanted to know if those things are part of that.
MS. WOODCOCK: The estimates that I gave were based on a 2011 projection of the inventory, based on the current rate of change of the domestic and foreign inventory. And they were based on the current productivity rate of inspectors, both domestic and foreign, and was based on what we call a fully-loaded cost of an inspector per annum, which would include overhead costs, processing, enforcement and so on, but would not include information technology improvements. So that estimate did not include any estimates for improving the drug registration enlisting or oasis and so forth. And obviously, we can't send our inspectors over there unless they know where to go.
REP. PALLONE: Okay. Now, is it your view that FDA should have the ability to deny entry to imports if the facilities in which they were produced refuse, delay or impede an inspection?
MS. WOODCOCK: Yes. And I believe that is reflected in the import safety action plan that I referred to as well.
REP. PALLONE: And now, what about drug facilities? Should they be subject to an initial inspection before they can begin shipping products or ingredients?
MS. WOODCOCK: We try, now, to make sure that an inspection is accomplished for any new facility that we haven't seen. However, some facilities make multiple products, they may add another product in a line of products, and we would like to preserve the ability to have flexibility to send our inspectors to what we deem to be the highest risk plants.
REP. PALLONE: So does that mean you would -- you don't think that every facility should be subject to an initial inspection?
MS. WOODCOCK: Yes. We believe -- let me explain again. Every facility should be subject to an initial inspection, however, a facility that is making multiple products and adds a product that's very similar to its product line, it might make me a lower risk than another facility that, perhaps, added an injectable product to its existing line. So we believe it would be best for FDA to have its flexibility preserved to put our resources, whatever they are, against the highest risks.
That said --
REP. PALLONE: Alright. Now what about -- okay, what about requiring the drug facilities to register and pay a fee on an annual basis to help clean up FDA's databases and provide a more accurate accounting of firms providing drugs to American consumers?
MS. WOODCOCK: Well, this puts the finger on one of our major problems, which has already been alluded to by the members. Right now, we don't have a means of assuring an accurate inventory of what firms are producing drugs that are imported into the United States around the world. We believe we need a unique identifier in addition to having an annual registration and listing of all products that are produced. The mechanism by ensuring that firms do this is -- there are probably several options for that.
REP. PALLONE: That was my next question; you already answered it. Now, in your view, would it be helpful to have additional enforcement tools to use against bad actors? For example, strong civil money penalties, mandatory recall, the ability to destroy contaminated imports when they're discovered so they can't just be shopped to a new point of entry?
MS. WOODCOCK: As I said, the administration is evaluating the provisions in the bill, but in my testimony on Tuesday, I stated that I believe that it would be helpful for FDA to have additional authorities to go after those who are performing improper acts, misrepresenting imports and so forth.
REP. PALLONE: Well, would you include those additional enforcement tools, the civil money penalties, mandatory recall, the ability to destroy contaminated imports? Would you suggest that those be included?
MS. WOODCOCK: My personal opinion is that those would improve our efficiency of being able to accomplish our operations. For example, if the products that we're not letting in have to sit at the port, and we have to deal with them, that creates great efficiency problems for us and, actually, for Customs as well. So we need mechanisms that enable us to efficiently deal with products that are violative or that should not get into this country.
REP. PALLONE: Okay. Thank you. My time is up. Mr. Buyer?
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REP. PALLONE: Thank you.
Thank you Mr. Chairman. And that concludes our questions but I want to thank those of you for being here today. It was very helpful, as was your testimony the other day before the O&I subcommittee. We appreciate it.
REP. : Mr. Chairman?
MS. WOODCOCK: Thank you.
REP. PALLONE: Yes?
REP. : I will have additional questions to submit for the record for the FDA.
REP. PALLONE: Absolutely. Any member that would like to submit additional questions to Dr. Woodcock or Dr. Bernstein, feel free to do so. Thank you very much.