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Panel II 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


Location: Washington, DC

Panel II 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. MATHESON: (Off mike.) We'll try this one. (Laughter.)

Thank you, Mr. Chairman.

REP. PALLONE: You're welcome.

REP. MATHESON: I have a whole bunch of questions.

Mr. Nicholson, in your testimony you mentioned that advocates of the Buyer-Matheson legislation are somehow implying that it would have stopped the heparin issue that took place.

I just want to make a statement: We're not naive. We don't think our legislation deals with tainted drug supply and I don't think we've ever said it deals with stopping tainted drug supply. And to set up an argument in your legislation to -- in your testimony to criticize legislation, it's a false argument. It's a straw man that you were able to knock back down, but we've never said that and that hasn't been part of why we've justified this legislation.

So just for the record, I don't think that part of your testimony really is germane to our bill. We would stipulate that our bill would not have prevented the heparin situation.

I have a whole bunch of questions, and again, I know you didn't like the yes or no before, but in terms of on page seven of your testimony where you mentioned that your organization's concerned with mandating use of any technology that is under development and premature -- let's try some yes-and-no questions on that.

Are you aware of the provisions in H.R.5839 which require the development of identifier and track-and-trace standards before anyone in the industry would be required to buy technology with such standards.

MR. NICHOLSON: Yes, sir.

REP. MATHESON: Are you also aware that the bill provides 18 months for identifiers to be placed on pharmaceuticals and at least 18 months for the supply chain to adopt track-and-trace, all after standards are announced by the FDA?


REP. MATHESON: Additionally, are you aware of the comment period currently under way at the FDA, as the FDA develops standards, for a unique identifier to be applied on all drug units?

MR. NICHOLSON: Yes. We are providing comments to the FDA.

REP. MATHESON: Are you aware of the rulemaking process written into the bill for stakeholders to provide input to the FDA as it forms standards for the track-and-trace system?

MR. NICHOLSON: We do support the FDA's initiative.

REP. MATHESON: It seems to me that the bill allows for pretty sufficient time for the supply chain as the FDA creates its standards for the track-and-trace system.


REP. MATHESON: I understand.

MR. NICHOLSON: My response to that would be that we've been talking about track-and-trace for many years now. And you know, various stakeholders had promised a state of Florida track-and-trace. Back in 2003 they promised we would have track-and-trace in 2006. We didn't.

California was promised track-and-trace in 2007.

REP. MATHESON: What I'm going to tell you, Mr. Nicholson, is our legislation puts in a buffer and it gives the FDA the time to develop these standards. We're not mandating a date specific in this legislation.

And you imply that we're trying to push premature technology. And what I'm telling you is, our legislation sets up a process by which the FDA, through a rulemaking process with input from stakeholders is going to come up with those standards.

So you can talk about Florida in 2003 all you want. That's not what our legislation does. We're not setting a date certain where it has to happen. Let me move on.

I understand that, actually, NACDS has been at the forefront of promoting use of track-and-trace technology. You sponsored annual summits on it right here in Washington for several years to promote the use of track-and-trace technology.

According to drugstore news, on December 10th 2007, your summit in 2007 drew nearly 500 attendees that came together to learn how RFID and track-and-trace can be tightened at pharmaceutical supply chain security and enhance business processes.

I also read an article in the 2007 RFID Track-and-Trace Health Care Industry Adoption Summit, which was hosted by your organization, that Walgreen's CEO, David Bernauer -- and I think Mr. Buyer mentioned this -- he called on supply chain executives to adopt a comprehensive uniform system of RFID and track-and-trace technology. And he further stated that RFID or other track-and-trace technologies, could usher in a far more efficient supply chain, reducing shrink, out-of-stocks and returns of out-of-date product and would improve order accuracy and reduce costly inventory levels.

Does your organization recognize those comments by one of your member companies at the summit that happened just last fall?

MR. NICHOLSON: Yes, sir. Yes, Mr. Matheson. We do recognize that.

We do support the -- as you'll notice in our testimony, we do not say that RFID or track-and-trace technology is bad. We say that it has much promise. We say that it should continue to be reviewed and to be researched. It does have much promise for creating efficiencies in the supply chain; however, we are not comfortable with any legislation that mandates track-and-trace technology.

REP. MATHESON: Did you know he noted in your 2005 summit that you hosted, that while it may mean supply chain improvements and heightened patient safety, the related events associated with the implementation of the new technology also includes increased customer retention. He thinks it's going to increase sales. That's what the chairman of Walgreen's said.

Did you note these benefits in your testimony? I don't think you did, actually. You've talked about the cost with the $30,000 amount, which Mr. Buyer has already brought into question, but one of your own member companies -- one of your significant ones -- has acknowledged that track-and-trace technology actually creates a lot of business opportunity and benefits for your industry as well.

MR. NICHOLSON: We don't dispute that.

REP. MATHESON: Thank you, Mr. Chairman.


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