Supplemental Appropriations

Floor Speech

SUPPLEMENTAL APPROPRIATIONS -- (Senate - May 01, 2007)

BREAK IN TRANSCRIPT

Mr. HATCH. Mr. President, I rise in support of S. 1082, the Food and Drug Administration Revitalization Act.

This legislation addresses many critical issues, including the need for provide proper incentives and support for the development and review of pharmaceuticals and medical devices, including products for children, and the need for heightened efforts to assure the safety of medications.

As we debate this legislation, let us remember we all have the same goals in mind.

We want Americans to benefit from life-saving, life-enhancing drug and device products.

We want Americans to have access to drugs that are safe and effective.

We want Americans to have all the relevant safety information available on their drugs.

And, indeed, we want Americans to know that the Food and Drug Administration, the agency responsible for ensuring drug and device safety, has the resources to do its job.

That is what this bill is all about protecting Americans and giving the FDA the tools to do its job.

The legislation before us reauthorizes both the Prescription Drug User Fee Act, better known as PDUFA, and the Medical Device User Modernization Fee Act, better known as MDUFMA.

It is of critical importance that both programs be authorized by the end of the fiscal year. This legislation embodies the agreements reached by both industries and the FDA, along with refinements added by the Congress.

Let me make clear that I am supportive of these reauthorizations. It is fair to say that I had reservations about PDUFA when it was enacted in 1992, questioning the wisdom of whether an industry should be required to support a governmental function. To a certain extent, I still have those reservations. That being said, it has become abundantly clear that there are not the resources in the Agriculture Appropriations bill to support these review functions absent a user fee, and thus I recognize their necessity.

With regard to MDUFMA, I have been particularly concerned about the impact that user fees could have on small medical device manufacturers, many of which are located in Utah. Indeed, I am proud that there are over 100 medical device companies in Utah, companies that represent the best in American innovation. They are true world leaders in their industry.

The changes made in the last reauthorization at my request, along with the new structure of the user fee in FDARA and the improved trigger provision satisfy me that the manufacturers are being fairly treated by the user fee program in this bill. And, indeed, this is a serious concern.

In February of 2006, the Lewin Group prepared a report for the FDA entitled ``Medical Device Industry Perspectives on MDUFMA. That report revealed that senior industry experts felt FDA is generally doing an excellent job in premarket regulation of medical devices and that the industry was generally supportive of the purpose and goals of MDUFMA. However, key among the findings was the fact that the industry perceived little or no evidence of attaining the main intent of the program or in realizing a favorable return on investment from user fees. In fact, whenever I return to Utah to meet with medical device executives, I hear the same concern. And it is a concern I share.

Indicative of that concern is the astounding fact that 70 percent of responding device manufacturers perceived that MDUFMA goals have not resulted in meaningful improvements in either the predictability or timeliness of reviews. In fact, when I reviewed the device approval times, I understood those concerns. For some classes of devices, FDA had made great progress. For others not. This was disturbing to me, since we would all hope that progress would have been made across the board.

It is my hope with the new fee structure embodied in S. 1082, we will make better progress in achieving the approval time goals. I am pleased that Chairman Kennedy and Senator Enzi included provisions at my request which make certain the fees for smaller companies are affordable.

Let me turn to the issue of direct-to-consumer advertising, or DTC. This is an issue on which our colleague, the senior Senator from Kansas, Mr. PAT ROBERTS, has shown great leadership, both in the HELP Committee, and here in the Senate Chamber. Senator Roberts has led the charge to eliminate the 2-year moratorium on prescription advertising for newly approved drugs. He has expressed constitutional concerns about such a moratorium. I share those concerns. He is right to bring this up.

In general, I believe we should be guided by a very simple rule. Advertising about products the FDA regulates should be truthful and not misleading.

I do understand the arguments that some in this body make with respect to pharmaceutical advertising. Some nights, when I watch television, those ads do become tiresome. But I could say that about a lot of ads.

Some have argued we need to be particularly careful about what pharmaceutical advertising is allowed, because we have limited knowledge about drugs, especially when they come on the market.

Those who make such arguments fail to recognize that FDARA will guarantee that consumers have access to greater clinical and safety information about medications because it gives the FDA more authority to review and react to drug safety data. User fees created by S. 1082 will bolster the FDA office responsible for reviewing drug advertisements.

The FDA has told my office and others that drug manufacturers cooperate fully with the FDA when a concern is raised about an advertisement. That would be my preference for how these ads should be handled.

I am hopeful we will be able to address this issue and I am encouraged by recent discussions involving the Senator from Kansas and others members of the Senate HELP Committee.

The bill's drug safety provisions are probably its most important component. Indeed, shortly after the Institute of Medicine issued its report on this issue, we all began to see a floor of letters in support of efforts to improve the drug safety program.

Members of the HELP Committee undertook serious discussions on how to address the problems that have been identified, and the result is this legislation developed by Senator Enzi and Chairman Kennedy. The Enzi-Kennedy bill has benefited from the guidance of our colleagues, former Chairman GREGG and Senator Burr, who have pointed out the necessity for more flexibility in determining when a risk evaluation mitigation plan--or REMS--is needed. Senator Coburn added greatly to the discussion by raising issues relating to the access of our constituents in rural areas to needed pharmaceuticals.

I believe the product of these discussions strikes the appropriate balance. It requires, for example, that determining whether the FDA should further assess the safety of a drug should be based on scientific evidence. To me, that is probably the most integral part of this bill--when concerns are raised about drugs, these concerns must be based on scientific evidence and not on innuendos or hearsay. This approach allows proper evaluation of relevant information and gives the FDA greater authority to warn consumers when there are problems.

In addition, the drug safety title strengthens the FDA's existing authority to monitor drugs once they have been approved by making it clear that evaluation must occur before and after approval. One of the most important components of this legislation is that more drug safety information will be made more available to the public. I believe that is an important victory for the American consumer.

I also want to take a few minutes to talk about the pediatric testing and research provisions included in this bill. I have supported both the Best Pharmaceuticals for Children Act and the Pediatric Research Improvement Act. In fact, I have supported these efforts since our former colleague from Ohio, Senator MIKE DEWINE, brought the need for additional pediatric testing of prescription drugs to our attention during consideration of the FDA Modernization Act of 1997. He fought long and hard to encourage drug companies to conduct clinical trials on pediatric uses of their drugs. His efforts paid off and this program has been extremely successful.

My good friend and colleague from Connecticut, subcommittee Chairman CHRIS DODD, has also shown great leadership on this issue when FDAMA was being considered in 1997. He held a hearing on this issue earlier this year with his ranking Republican member, Senator LAMAR ALEXANDER. That hearing was very insightful and I believe that many of us are trying to do the right thing as we reauthorize both programs.

I urge my colleagues not to lose sight of the purpose of these two programs as we make decisions on this part of the bill. We want good, solid information about the safest way to prescribe drugs for children. And by giving companies market exclusivity to conduct clinical trials, we will know the safest dosage levels for children. So let us not lose sight of the original propose of these programs--to help children have the safest dosages for prescriptions. I am hopeful that we will be able to work out our differences on these provisions on these very important issues.

Food safety is another issue that is on nearly everyone's mind these days. When I was a kid, we were always told to eat our spinach so we could grow muscles like Popeye. Peanut butter is almost a staple for most Americans. And yet these ordinary, common foods have harmed rather than helped. Pets are getting sick and we have discovered that their food has been contaminated. Something needs to be done.

I have worked with Senators KENNEDY, ENZI, DURBIN and ALLARD to figure out a constructive approach to these important issues. I think that we have made a lot of progress and I look forward continuing those discussions as the bill progresses toward enactment.

One factor that is not discussed enough is the need to appropriate more funding for inspectors and inspector training, especially abroad. I can recall over a decade though when Jim Phillips, a former investigator for the FDA, brought to our attention the woefully lacking FDA resources for foreign inspections. We were shocked then, and unfortunately, we are shocked now.

Today, only one percent of imported food is inspected. I believe this issue needs to be carefully reviewed by Congress so people no longer have to worry about whether food for them or their pets is safe.

I offered and withdrew an amendment during the HELP Committee consideration of this bill that would address another important issue. My amendment had several provisions which encouraged innovation and development of safe antibiotics, required the FDA to convene a meeting to determine how the Orphan Drug Act should be applied to antibiotics, and reauthorized the grant programs for the Orphan Drug Act. Finally, my amendment provided for a 5-year exclusivity for enantiomers of previously approved racemic drugs if and only if, one, they are approved for new therapeutic uses and, two, a completely new data set has been created for approval of this enantiomer. It is my expectation that our current discussions on these provisions will lead toward their adoption later in the week.

I also want to point out that there have been many discussions on ways to ensure that citizens' petitions do not unfairly delay generic drug approvals. I believe this is a problem, although I do not believe it is of a magnitude as some would suggest. I do not oppose making changes to ensure that any abuses in this area are stopped, as long as FDA still has the ability to do the appropriate scientific and legal review of abbreviated new drug approval applications in the timeframe it desires.

Let me turn now to one provision which is not in the bill: language authorizing a pathway for the Food and Drug Administration to approve copies of biologics. This is commonly referred to as the ``biosimilars,'' ``biogenerics,'' or ``follow-on biologics'' legislation. Senator Gregg spoke so well about this subject just a few minutes ago.

While language on this issue is not included in the bill we consider today, I want to make perfectly clear that it is my intention to work toward development of an acceptable compromise that can be included in the final version of FDARA and signed into law. It is my hope Senators will refrain from offering any amendments on this issue until we have time to develop consensus. And I do believe consensus can be developed without delay. It is my intention to do so.

As my colleagues are aware, I am the Hatch of Hatch-Waxman. I have a serious interest in making certain the law Chairman Waxman and I developed in 1984, the Drug Price Competition and Patent Term Restoration Act, is used as the basis for development of legislation to provide an abbreviated pathway for approval of follow-on biological products. In so doing, we must make certain we include the appropriate incentives for development of those products. Indeed, that is my high priority.

By any estimate, the Hatch-Waxman law has done consumers tremendous good by fostering today's modern generic drug industry. It has saved patients literally billions of dollars. Similarly, using it as a basis for development of a pathway for follow-on biologics will help consumers with access to the innovative, life-affirming biologic products. But in so doing, we must be mindful of the fact that we need to encourage and nurture the innovation that provides the biologics that the generic companies seek to copy. This is a tremendously complicated task, but it is one worth doing.

In 1984, when Chairman Waxman and I undertook a series of negotiations that led to approval of the Drug Price Competition and Patent Term Restoration Act, it was a very different time.

There were no cell phones, no DVDs, almost no one had a personal computer, and a stamp cost 20 cents.

It was a much less complicated time. Generic drugs were a small, struggling industry, with no discernible footprint in the pharmaceutical world. The innovators had yet to respond to their first paragraph IV certification. In 1984, brands versus generics largely an American endeavor. Today, the pharmaceutical market--both innovator and generic--is an international marker--for research, development and marketing.

Biological products were not an issue in 1984. Today, they are becoming an increasingly larger part of pharmaceutical spending.

It is my strong belief that we can learn from this experience and build another solid law that will help consumers--both by supporting the incentive to discover and develop new biologics, and by fostering a climate that will lead to lower prices. This is a classic win-win situation.

And why is that so important?

A February report by the Center for Medicare and Medicaid Services paints the picture very well: America's health care spending in the next 10 years will double to $4.1 trillion. Or, to look at it another way, that is 20 cents out of every dollar spent. We spend about $7,500 per capita on health care in the U.S. Yet in 2016, that will rise to an astounding $12,800 per person. Greater spending for pharmaceuticals is expected to fuel much of the increase, the report's authors concluded.

And there it is in a nutshell. The good news and the bad news.

Not much worries Congress more than the costs of medical care--both from the perspective of a balanced budget, and from the view of our constituents' pocketbooks.

In many ways, it is an embarrassment of riches.

We have exciting new therapies to treat our medical ills--new drugs, new devices, stem cell treatments. Their potential to improve human health and well-being is almost limitless.

And yet the cost of those treatments, the impact they have on the budget, at times seems equally limitless. In fact, in 2005, prescription drug spending was estimated at $214 billion, a healthy amount by anyone's measure. That same year, spending on biologics was estimated at $32 billion.

Since biologicals are generally more expensive products, ways to reduce their costs interest policymakers and other stakeholders in expenditure of the health care dollar, foremost among them employers, insurers, pharmacy benefits managers, and of course, the government.

Comes now the generic drug industry, which has been proven to provide alternative, safe and effective therapies in a much more cost beneficial manner. We look to them to be part of the solution to this problem. And they, in turn, look to us to help them be part of that solution.

It is no secret that several senators have been meeting to develop a bill that would establish a pathway for biosimilar products to be approved by the Food and Drug Administration. We had hoped to have it ready for inclusion in FDARA, but it was not, despite the talks of the four Senators. I am referring to Health, Education, Labor, and Pensions Committee Chairman Ted Kennedy, the committee's ranking Republican, Mike Enzi, Senator Hillary Clinton, and me. All members of the HELP Committee, we have worked to develop consensus on what legislation would include.

Senator Kennedy and I began these talks several months ago. He is committed to developing a bill on a priority basis. Our staffs literally have been working night and day.

Our work has been aided immeasurably by the leadership of Chairman Waxman, and in the Senate, Senator Chuck Schumer and Senator Clinton, who have introduced the companion to the Waxman bill. Their legislation, the Access to Life-Saving Medicine Act, H.R. 1038/S. 623, provides a solid starting point for discussions. It is an important work that has added immeasurably to the congressional dialogue.

It is my hope that our discussions will also be informed by the work of Representatives Jay Inslee, Gene Green and Tammy Baldwin, who recently introduced the Patient Protection and Innovative Biologic Medicines Act of 2007, H.R. 1956, and by the views of the many, many stakeholders in this legislative effort.

The time to develop a pathway for approval of biosimilar products is long past overdue. It should be our priority, and it should be our high priority, to get it done this year. But, we should get it done right. Our deliberations must be based on science. The original balance of the law must be maintained, but we must also recognize the emerging realities of this new world.

And what are those realities? First, biotechnology products are not drugs; they are very complicated molecules that are not easily reproduced. An inadvertent change in the structure of that molecule can lead to very devastating consequences.

Second, today, it is unlikely that any follow-on company will be able to produce an exact copy of a biotech molecule, a generic biologic if you will, at least at first.

Third, because science advances, and because American researchers are very good at advancing science--stem cell research is one example that comes readily to mind--we must hold open the possibility that one day there will be true biogenerics.

And we must also develop a pathway so that biosimilar products can be approved without a full biologics license application, a time-consuming and expensive process.

But whatever policy we develop, it must be based on soundness of science, rather than the practicalities of politics.

Fourth, we must take into account the unique nature of today's industry. This is so much more than an exercise between big Pharma and the generics, or even between big bio and the generics.

Indeed, there are about 1,400 biotech companies in the United States. How many of them are profitable? Astoundingly, only 20.

Many of these companies are small, with revenues of under a million dollars per year. Many do not even have a product on the market.

We must examine closely the issue of who will be making biosimilars? Will it be the Barr Labs and Tevas of the world? Undoubtedly.

But it may also be generic subsidiaries of innovator companies.

It is also very likely to be companies in India and China. As we have seen with the recent concerns over pet food, inspecting foreign manufacturing plants has historically been a problem for the resource-constrained Food and Drug Administration.

Fifth, we must use the framework of Hatch-Waxman where we can, but we must recognize there may be ways to improve it.

There are obvious differences between regulating a pathway for biosimilars and for copies of chemical drugs. For example, as I mentioned, today's science will probably not allow identical copies of today's biologics. So, the concept of bioequivalence cannot be imported into this debate. Instead, we must work carefully to define biosimilarity.

Another difference today is the fact that process patents are much more integrally tied to the manufacture of biologics. Current law does not require listing of process patents in the orange book.

Waxman-Hatch is inherently a litigious process. But its framework--the patent holder or drug manufacturer--v. the generic--does not easily translate to a system in which multiple patent holders may exist, including, for example, major universities and research centers.

Sixth, the incentives for development of biotech products must be maintained, enhanced where it advances public policy. But at the same time, we cannot seed a new generation of roadblocks that preclude biosimilar entry. This is the nub of the key, crucial balance.

Seventh, the role of the FDA must be carefully evaluated. We must empower the agency to evaluate pure, safe and potent copies of biotech products, but we must all recognize that there must be a bright line that separates a safe copy from a new product which should be subject to a full biologic license application.

We need to free the agency and provide it with the flexibility to evaluate the adequacy of a biosimilar submission based on good science, but we must also recognize that, as Commissioner von Eschenbach has said, there may be some products which cannot be copied safely with today's science.

Eighth, we must make certain the resources are there for the FDA to do the job right. I must note that negotiations between the agency and the pharmaceutical industry on the Prescription Drug User Fee Act reauthorization, or PDUFA, took over one year. Every indication I have is that review of a biosimilar application is very likely to be more complex and time consuming than that for a new biologics license application.

There must be authority for a fee to be collected that reflects this complex workload. If we do not provide adequate resources to the FDA, then review of new products could suffer at the expense of cheaper copies as reviewers become siphoned off from new products to the biosimilars. We should not design a system in which this occurs.

And I must digress at this point to underscore that the FDA is already cash-strapped and that situation simply must be corrected. The dire FDA resources issue appears to have manifested iself in such recent revelations as to the inadequacy of food inspections for some of the most ubiquitous products in American life, including pet food and peanut butter.

Federal policymakers must take this into account when legislating, and the Food and Drug Administration Revitalization Act is a good place to start.

Enacting follow-on biologics legislation is a top priority for me. I want us to finalize a bill on a priority basis, and it is my hope it can be included in the final version of FDARA that emerges from the conference committee.

Before I close, I want to talk about one other issue that is often debated when FDA-related legislation is considered on the floor: importation of prescription drugs. This morning, I listened to our colleague, the Senator from North Dakota, Mr. Dorgan, talk about his legislation which allows prescription drugs from other countries to be imported into the United States from other countries. My colleague refers to this as drug reimportation which I believe gives people the false impression that these drugs are originally manufactured in the United States, exported to another country and then imported back to the United States. I just want to clarify that is not typically the case.

In addition, I saw the Senator from North Dakota hold up two bottles of Lipitor and say that there is no difference between a drug manufactured in Ireland and a drug manufactured in the United States. He suggested that the pills may be different colors but the bottles are the same and the medicine in the bottle is the same.

That may be true for the two bottles of drugs that he had on the Senate floor. But how could we be assured that is always the case? Can we always guarantee that pills in a bottle labeled from Ireland are actually manufactured in Ireland? I don't think so.

This issue is the crux of the problem--unless the FDA has approved these medications, we have no way of knowing what is actually in the bottle. In fact, when I served as chairman of the Senate Judiciary Committee, I held a hearing on drug importation and this issue was raised by one of the members of the committee. At that July 14, 2004, hearing, one Senator specifically asked about a prescription drug bottle labeled as being from Canada. William Hubbard, the Associate Commissioner for Policy and Planning for the FDA, told her that even though the label said the bottle was from Canada, the FDA had no idea where that bottle had originated.

In fact, at that hearing, Mr. Hubbard said:

Although some purchasers of drugs from foreign sources may receive genuine product, others may unknowingly buy counterfeit copies that contain only inert ingredients, legitimate drugs that are outdated and have been diverted to unscrupulous resellers, or dangerous sub-potent or super-potent products that were improperly manufactured. Furthermore, in the case of foreign-based sources, if a consumer has an adverse drug reaction or any other problem, the consumer may have little or no recourse either because the operator of the pharmacy often is not known, or the physical location of the seller is unknown or beyond the consumer's reach. FDA has only limited ability to take action against these foreign operators.

On a related issue, I would like to share Mr. Hubbard's insights on the safety of drugs that have been imported from other countries.

FDA remains concerned about the public health implications of unapproved prescription drugs from entities seeking to profit by getting around U.S. legal standards for drug safety and effectiveness. Many drugs obtained from foreign sources that either purport to be or appear to be the same as U.S.-approved prescription drugs are, in fact, of unknown quality. Consumers are exposed to a number of potential risks when they purchase drugs from foreign sources or from sources that are not operated by pharmacies properly licensed under state pharmacy laws. These outlets may dispense expired, subpotent, contaminated or counterfeit product, the wrong or a contraindicated product, an incorrect dose, or medication unaccompanied by adequate directions for use. The labeling of the drug may not be in English and therefore important information regarding dosage, warnings and side effects may not be available to the consumer. The drugs may not have been packaged and stored under appropriate conditions to prevent degradation, and there is no assurance that these products were manufactured under current good manufacturing practice (cGMP) standards. When consumers take such medications, they face risks of dangerous drug interactions and/or of suffering adverse events, some of which can be life-threatening. More commonly, if the drugs are subpotent or ineffective, they may suffer complications from the illnesses that their prescriptions were intended to treat, without ever knowing the true cause.

Mr. President, this was a sobering hearing and I urge my colleagues, especially those who support the importation of prescription drugs into this country, to take the time to review the testimony from the July 14, 2004, hearing. We had many witnesses who provided valuable insights on this issue.

To address Senator Dorgan's other point regarding the cost of prescription drugs, I want to make one thing perfectly clear--I want Americans to have access to affordable drugs, but I also want these drugs to be safe and effective. As one of the authors of Hatch-Waxman, I understand the problem of pharmaceutical costs, and I have a record of working to find solutions. But bringing potentially unsafe medicines, medicines uncertified by the FDA, into the United States is not a solution.

In conclusion, I ask my colleagues who are skeptical about this bill to reserve judgment and listen carefully to the debate. While I supported this bill when it was considered by the Senate HELP Committee 2 weeks ago, I honestly believe that members of the HELP Committee have worked hard together to make the reported bill even better. So I urge my colleagues to take the time to review the bill because there are a lot of good provisions in it.

I would like to take this opportunity to recognize the hard work of the staffs of both our committee chairman, Senator Kennedy, and our ranking minority member, Senator Enzi. I would specifically like to thank Amy Muhlberg and David Dorsey for their dedication and hard work on this issue--they have been working on drug safety legislation for over 2 years and I want both of them to know how much all of us appreciate their efforts. I also want to recognize Shana Christrup and David Bowen for their leadership in helping their bosses get this bill to the floor under very difficult time constraints. All of the HELP Committee members' staff have worked long hours and many weekend hours and I just want you to know how much I appreciate all of you.

Mr. President, I yield the floor.

BREAK IN TRANSCRIPT

Mr. HATCH. As usual, my dear friend from North Dakota is articulate, and he deserves to be listened to, but I disagree with him.

The Dorgan amendment allows individuals to import a qualifying drug, and this will pose an overwhelming set of resource burdens for the FDA, Customs, and other agencies, especially the FDA. It would, as I have mentioned before, create very significant safety concerns.

This amendment establishes a complicated system for the regulation of imported drugs. Now this system that he suggests is so vast, it would take and require a lot of money, more than all of the proposed fees could support.

Where would an already strapped Federal agency such as FDA get these additional dollars? So far we have not given it to them. There have been estimates that these dollars would amount to so much that there is no way that we could give them enough money.

This amendment allows foreign-imported products to be approved for distribution in the United States even when they may not be bioequivalent to the FDA-approved products. Now the reason I cite that is because the letter from the FDA, this letter was sent to the Honorable BYRON L. DORGAN, Senator Dorgan. This letter was sent April 10, 2007.

I ask unanimous consent that this letter be printed at the conclusion of my remarks.

The PRESIDING OFFICER. Without objection, it is so ordered.

(See exhibit 1.)

Mr. HATCH. In that letter, just to mention a couple of things, the Acting Deputy Commissioner for Policy, Randall W. Lutter, Ph.D.--let me just mention a couple of sentences.

He said:

Nevertheless, the Agency continues to have concerns with enacting such a sweeping importation program and fears that intermediaries would likely swallow the bulk of cost-savings, preventing the American consumers from enjoying much, if any, practical benefit from such a program.

On safety concerns, he said:

We have safety concerns related to both the identification of unsafe or non-complaint drug products and about the substitutability for domestic products.

On identifying unsafe/noncompliant drug products, he said:

The section of the bill that would allow individuals to import a qualifying drug from a registered exporter would likely pose an overwhelming resource burden for the Agency and create significant safety concerns.

Just reading at random:

S.242 would establish a complicated system for the regulation of imported drugs. This complex system is so vast that it would be enormously resource-intensive, likely much greater than the proposed registration fees and inspection fees could support.

On a lack of substitutability, he said:

The proposed bill provides a mechanism for foreign imported products to be approved for distribution in the U.S. even though these products may not be bioequivalent to the FDA-approved product.

This letter is a serious letter. I don't think we should ignore letters such as these in our zeal to resolve problems. I believe the distinguished Senator from North Dakota is very well intentioned. I have a tremendous regard for him and for his ability to explain things on the floor of the Senate.

I also ask unanimous consent to have printed in the Record excerpts of the testimony before the Senate Judiciary Committee on July 14, 2004, entitled ``Examining the Implications of Drug Importation,'' of Mr. William Hubbard, Associate Commissioner for Policy and Planning of the U.S. FDA.

There being no objection, the material was ordered to be printed in the RECORD, as follows:

BREAK IN TRANSCRIPT

Mr. HATCH. These are serious statements by serious people. I don't think we should ignore them. It is one thing to argue that you don't like the pharmaceutical companies, and many don't. It is another thing to argue that these drugs that are going to be imported or reimported are absolute identical copies of what they represent. I would pay attention to what these people are saying.

I also ask unanimous consent to print in the Record the statement of a Customs officer who came and testified on the 14th.

There being no objection, the material was ordered to be printed in the RECORD, as follows:

BREAK IN TRANSCRIPT

Mr. HATCH. It was a startling statement. I know at least one Democratic Senator, who takes matters very seriously and who was for importation or reimportation of drugs, was shocked at some of the testimony because she did not believe things could be as bad as they represented and was kind of shocked that they made a pretty darn good case that these matters are much more serious than some are taking them.

I don't have anything more to say at this time, but I hope we will think this through before we saddle the American people with something that can be disastrous in their lives. I am familiar with how some of these drugs that people think are good drugs that come into this country are adulterated. Some are made with contaminated water, do not have any efficacy in them at all. Yet they look identical to what our U.S. manufacturers are making or what other qualified manufacturers are doing. We can't ignore these things. I think even if we could give FDA all the money--and it would amount to trillions of dollars, certainly hundreds of billions of dollars but I think trillions of dollars--to handle this, there is still no way FDA can take care of all the problems that would come up.

We have a pretty good system here. I have to admit, I wish we could get drug prices down. As the author of the Hatch-Waxman Act, we worked hard to get the generic business into action. At the time we did Hatch-Waxman, generics were no more than 17 or 18 percent of the total marketplace. Today they are over 50 percent. Hatch-Waxman is the reason they are there. In every case, every year we have saved at least $10 billion for the consumers. What many in this body seem to ignore is that it costs these innovator companies upwards of $1 billion to create one of these drugs. Most of them go through at least 6,000 failed experiments before they arrive at one of these drugs. We can't ignore that fact. The only way they can recoup that money is within the few years that are left of their patent life.

This is the only industry I know of--there may be others, but I can't think of any--where if you create a widget, you have 20 years of patent life, market exclusivity. In this industry, a lot of that is eaten up by the FDA process. It means that the innovator companies have very few years in which to recoup that billion dollars, upwards of a billion dollars. A few years ago, it was $800 million, which was astounding to me. Now it is approaching a billion; in some cases, maybe even more.

It is one thing to throttle the pharmaceutical companies in the interest of politics. It is another thing to ignore reality and ignore what happens here.

One reason for Hatch-Waxman was because one side wanted all drug price competition. They wanted 100 percent generics if they could get them. The problem is, there would not be any generics if you don't have the innovator companies doing the innovative drugs.

Mr. DORGAN. Will the Senator yield for a question?

Mr. HATCH. Sure.

Mr. DORGAN. My friend from Utah did not mean to suggest those of us who are offering this amendment on a bipartisan basis are doing so for the purpose of politics, as he said. My expectation is, he would think this would be a serious and thoughtful amendment that he disagrees strongly with, but I hope he would not suggest the motive is politics. CBO has suggested this bill will save $50 billion for the American consumer, $5 billion of which is for the Federal Government. This is a serious issue and a thoughtful issue. One might disagree, but I hope that one would not ascribe motives of politics to those of us on a bipartisan basis who are offering this amendment.

Mr. HATCH. I have heard some who I believe are using it politically in the Congress. But I would never ascribe that type of attitude to the distinguished Senator from North Dakota. I believe he is very sincere. I believe he is truly trying to represent the consumers in the best possible way. I just believe he is ignoring some of these comments and statements made under oath before committees of the Senate that fly in the face of what is being said here. I would like to see drug prices reduced. There is no question about it. I worked hard to get them reduced. That is what Hatch-Waxman is all about. But there are two sides to that. One was drug price competition, to make sure we could get drugs in generic form immediately, once they come off patent, which we did. The other, of course, is the patent term restoration so that we could give innovator companies some restoration of patent life or market exclusivity so they could recoup the moneys, the extraordinary costs that are involved.

When I say I have heard some in the Congress who I think have exploited this for political purposes, I would never say that about my friend from North Dakota. I don't particularly want to disparage anybody else, but I can say this: There have been some who have used this issue politically, and there is no doubt about it. I believe the Senator from North Dakota is articulate and means what he says and is doing so for the right reasons. Having said that, I don't think we should ignore the testimony of these top people in the administration who say this could be a disaster for the American consuming public. I don't think you can ignore those comments. I am suggesting that I hope people will read these comments, and I will put more into the record before we are through with this debate. We are all interested in getting drug prices down. There is no question about it. I don't think there is anybody in this Congress who has done more to bring drug prices down than I have, through Hatch-Waxman and my friend HENRY WAXMAN over in the House and others who supported that bill. There is no question about it. I am as interested as anybody in making sure the consumer public is not ripped off.

On the other hand, these innovative drugs cost a lot of money to develop. When we get into follow-on biologics, it apparently costs even more for these large-molecule drugs that may not be readily duplicated. In fact, under current science, they are not readily duplicated. I am very concerned about this whole issue. I am very concerned about making sure that the record shows that we have brought out how serious this issue is and how serious the consequences are if people are wrong, if they happen to get this type of legislation through.

Let me add one other thing. I would suggest to my friend from North Dakota that the President has already said that if this language is in this bill, he is going to veto it. I believe that veto would be sustained. I think it should be sustained. It is one thing to come out and argue for something such as this, but I would hope that he will withdraw his amendment because I would hate to see a bill as important to our country as this drug safety bill, a bill that has brought together Democrats and Republicans from the left to the right, a bill that would help to save as many lives as this bill will do, a bill that will help bring to the forefront the FDA in a way that it should be brought, a bill that has the MDUFA and PDUFA moneys in, a bill that has children's programs in, I would hate to see this bill vetoed, but I would not blame the President one bit if he vetoes it based upon the testimony of scientists who have testified before our committees.

Frankly, I would think he would be right if he vetoed it. But be that as it may, I am only one Senator, and I think most people know I am very sincere in this area. I work very hard in these areas. I have a record of accomplishment in these areas. I just want to make sure that our consuming public has every protection they possibly can. Unfortunately, it costs a lot of money to give them that protection. I wish there was some way we could bring those prices down.

Having said that, back in the early 1990s, I helped put through this body the FDA Revitalization Act. Among the purposes of that act was to create a unitary campus for FDA rather than have over 30 different locations in the greater metropolitan area around the District of Columbia, to have a central campus, state-of-the-art equipment, the highest technology we can, with an incentive to bring the very best scientific minds we can into FDA. We all know the White Oak complex is being built now. It didn't start until about 5 or 6 years ago. It is going to take another 10 years and probably cost a lot more than it would have had we done what that bill said we could do immediately. It was only an authorizing bill. The appropriators did not appropriate the funds to develop that campus. But we have to find a way of helping FDA. The sooner we get that campus and they have all of the integral online services and equipment and top-of-the-line approaches that they can bring to bear, we should be able to bring drug prices down through that. But we are a long way from the completion of White Oak, as we stand here today.

Frankly, at least we are doing it. At least we are going somewhere. I wish to attribute some of that to the distinguished Senator from Maryland, BARBARA MIKULSKI, and others in the House who have worked very hard to make sure that the FDA revitalization approach finally comes to fruition.

One of the biggest problems we have in Government today is to get top scientists at FDA. We can't pay them commensurate with scientists at the major pharmaceuticals or even the major generic companies. In fact, they can start at three times or more what we pay at FDA. So we have a very difficult time continuously getting top scientists to come and work at FDA. That is a big problem. It is a blessing that we do have some of the best scientists in the world working there who are willing to sacrifice to do what they consider to be the important work of the Food and Drug Administration. This bill will help the Food and Drug Administration to do a better job, to go forward with more backing from the Congress and, in the end, benefit all of us who benefit so much from the work of the Food and Drug Administration.

I yield the floor.

Source