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  1. Prescription Drug User Fee Amendments

Open Public Comment Prescription Drug User Fee Act Public Meeting November 14, 2005

Panel VI - Presentations by Health Professional Groups

MS. HENDERSON: It is now time for the open public comment period. And because I don't know how many people want to comment, I'm going to ask those of you who wish to provide public comment to come up to the first couple of rows and sit in the reserved seats so we'll know that you wish to make public comment.

I'm going to ask the FDA panel to please return to the stage so that you can sit and listen to the public comment.

And I will simply call you in the order in which you are sitting in the rows. So be careful which seat you take, or you may have to go first.

We're going to ask the public commenters-- other than someone who has asked to please use her laptop, who will sit at the table up here--to use either one of the mikes on either side of the room so you can address the FDA panel, if that's okay; and to please introduce yourselves so the FDA panel, as well as the panel knows who you are.

So, with that having been said, why don't I start with you, since you wish to come up.

MS. ALLINA: Thank you for the opportunity to speak today. My name is Amy Allina. Unlike the previous speakers, I'm not used to going at the end of the day. But I'm happy to have the chance to speak anyway.

I am the program director at the National Women's Health Network, which is a member-supported advocacy organization that works to improve the health of all women through influencing policy and supporting informed individual decision-making in health care. And we do a lot of work with the FDA, including having worked on the last round of PDUFA reauthorization, working with many of the patient and consumer advocacy organizations who have already spoken today.

At the time of the last reauthorization we raised several concerns about the effects that the PDUFA had had on the Agency and on the public health. We were especially concerned that in order to fund the quicker review that PDUFA was designed to bring about, the Agency had been required to drain resources from other essential activities like post-market research and surveillance, and inspections, and regulation of medical devices. And we were also concerned that the shorter review times put a strain on the review staff that was causing problems as staff were leaving and the Agency was losing experience and expertise.

Now, raising those concerns did not mean that we were opposed to faster approval of products. We represent consumers, we represent patients, and we also feel those concerns. But we were worried that speed was coming at the expense of safety. And we were worried that the Agency's review staff didn't have the opportunity to raise questions about safety; that when they did, such questions were being disregarded because the Agency was more concerned with meeting PDUFA deadlines; and that following approval, the parts of the Agency responsible for ensuring post-market safety had been starved by the PDUFA financing structure in such a way that meant that they weren't able to fill the gap and clean up the problems that were being created by flawed reviews. So, taken together, we saw this as something that would really undermine the FDA's ability to ensure safe drugs and devices, and to play its critical role in protecting the public health.

So we raised those concerns. They were heard to some degree, but I think probably not given the weight that they would be given today. In September 2002 the GAO issued a report, that's already been mentioned today, that confirmed many of the concerns that we articulated.

I'm not going to go through all the findings of the report, but it did include findings that funds for activities other than review of drugs and biologics had become a smaller part of FDA's budget since the enactment of PDUFA; that the number of FTEs for drug and biologic review had increased, while FTEs for other activities had declined. And I think we saw that trend continuing today.

The GAO report also found that these shifts had serious consequences. At the time the report was published, the data showed that in FY '02, inspection of medical devices had decreased, and there were 1,000 fewer FTEs allocated to programs like food safety and monitoring of devices after they were on the market. And the report also confirmed some of the concerns that we had raised about how implementation of the PDUFA program was leading to both an increased workload and very high turnover rate in the review staff at FDA; a turnover rate that was higher than that at other Federal public health agencies.

So, as the FDA presenters and some others have noted, PDUFA III gave the Agency some flexibility to spend limited PDUFA funds on some safety activities, but I think it's also pretty well established at this point that there have been developments since the time of PDUFA III that have demonstrated that the safety concerns that were raised at the time of that last reauthorization are still an issue. The patient safety problems with Vioxx and SSRIs are just the highest profile examples.

And there have been Congressional hearings to look this, and there is a much more widespread understanding today of the serious problems facing FDA. The New York Times, just last December, after reporting on some of those problems, actually editorialized specifically on PDUFA, and said that the program has "grievously distorted the Agency's drug safety program;" that the Agency has had to cannibalize programs to monitor the safety of drugs after they're on the market to keep up its review of new drugs before they're allowed on the market.

So today, as the FDA prepares for the next reauthorization of PDUFA, the context is fundamentally different than it's been in any of the previous rounds. Public concern and policy makers' understanding of the need to strengthen the FDA's ability to address drug safety problems is very strong. This creates a real opportunity for change that I hope we'll see the Agency embrace.

I do believe that the user fee program as it exists detracts from the FDA's ability to address safety problems, both because of how it directs the Agency resources, and because of the client-funder role that it establishes for the industry that FDA is supposed to be regulating--that FDA is regulating. I don't mean to say that you're not.

Given that, given the way the program affects that relationship, it's essential for the public health that we establish an FDA structure that protects the independence of the Agency's decision-making. So structural changes are needed to protect FDA's independence and its integrity, and to enhance drug safety and enhance the public health.

The establishment of the PDUFA performance and management goals has focused evaluations of the programs on process. We're talking about time to approval, number of meetings, and things like that, rather than on what should be our real goals: increasing the number of people helped by FDA-approved products, and decreasing the number of people who are harmed by them.

Toward that end, the National Women's Health Network encourages both the FDA and the Congress to incorporate some of the excellent suggestions we have heard today from our colleagues on the consumer advocates panel, and a number of suggestions we heard from other panels, including patient advocates, and the health care professionals who spoke just before me.

We want to express our support for research to evaluate comparative effectiveness data on products approved for the same indication, and making that information available to consumers so that we'll have the information that we need to choose the products that best meet our needs; legislative reforms to dealing PDUFA revenues from industry-designated priorities; drug safety initiatives like those included in the Grassley-Dodd legislation; enhanced authority to enable the FDA to take decisive and timely action when safety concerns are identified; explicit authority to limit general marketing, and specifically DTCA of new drugs that have been approved based on studies of carefully limited study populations, where there are outstanding safety questions about use in the broader, more diverse general population; proactive monitoring of post-market safety, using safety data bases from both the public and private sectors.

And then, finally, I want to echo the plea that's been made by a number of other speakers that both patients and consumer advocates should be included in PDUFA negotiations, and not be relegated to a pro forma consultative stakeholder role.

Thank you.

MS. HENDERSON: Thank you very much.

The gentleman in the front row.

MR. ROSEN: Good afternoon. My name is Bill Rosen, and I'm here to read a statement on behalf of CDISC, the Clinical Data Interchange Standards Consortium.

Patient health is related to the ability of the pharmaceutical industry to produce safe, effective products. Likewise, delivery of new medicines to waiting patients is related to the expeditious submission and review of data generated during product development by the FDA. Standardization of the format and content of the clinical data submitted within an application will ultimately lead to improved efficiencies in the submission and review process. This, in turn, will enhance pharmacovigilance by providing a clearer safety picture for new products.

Therefore, CDISC proposes to use a portion of PDUFA fees for the purpose of implementation and training on the use of CDISC data standard currently included in the Electronic Common Technical Document Draft Guidance. The Clinical Data Interchange Standards Consortium is a not-for-profit pharma industry group whose mission is to develop and support global platform-independent data standards that enable information system interoperability to improve medical research and related areas of health care.

CDISC has published a comprehensive data standard known as "The Submission Data Tabulation Model"--SDTM--for the submission of all clinical data from pharmaceutical and biotech companies to the FDA. Once received by FDA, the data is to be loaded into the Janus data warehouse for use by medical reviewers and, at a future time, statisticians during the application review process.

Process change, computer infrastructure, software tools and training are necessary to realize the efficiencies that the CDISC standard offers to a new review process, and is consistent with the original intent of PDUFA, which states: "Fees authorized by amendments made in this subtitle will be dedicated towards expediting the drug development process and the process for the review of human drug applications."

Given that the application review process will change as a result of implementation of the CDISC standard, it is imperative that this change be managed properly and implemented efficiently.

We recommended the following areas receive dedicated funding from PDUFA to ensure successful implementation so efficiencies can be realized: dedicate a program director and implementation team during the phased roll-out of the new process, computer infrastructure, new tools, data standard and training across all review divisions; develop and implement a change of management process improvement plan with metrics; develop and implement an Agency-wide communication plan to provide ongoing information and feedback on program progress; develop specific training plans for the data standard tools, best practices, as well as whatever information needs to be discussed with sponsors to ensure a successful submission and application review; create and maintain a help desk to answer all questions regarding the new process, during and after implementation, for both agencyand industry.

We also recommend the following performance goals. All applications to the agency will use the CDISC standard by the year 2010. Basic tools, infrastructure and training to support submissions using the standard will be in place consistently across all divisions by second quarter 2008, or two years after this funded project starts. Eliminate the need to submit patient listings, profiles and annotated CRFs by third quarter 2008, or 2.5 years after the funded project starts.

Application review time will be reduced by a minimum of 10 percent when using CDISC standards to submit data within an application 2.5 years after this funded project starts. Application review time will be reduced by a minimum of 20 percent when using CDISC standards within an application five years after the funded project starts.

Dedication of a portion of the PDUFA fees for this vital project is a natural use of PDUFA monies, and will allow for the successful adoption of a new, improved, more effective and efficient review process.

Signed: Dr. Rebecca Kush, founder and president of CDISC; and Dr. Steven Ruberg, chairman of the board of CDISC.

Thank you.

MS. HENDERSON: Thank you very much.

The gentleman in the front row. Wherever you're most comfortable.

MR. KIRSCHENBAUM: My name is Alan Kirschenbaum. I'm with the law firm of Heimenfeltz and McNamarra in Washington, D.C.. And I'm here to present a statement on behalf of the Council on Radionuclides and Radiopharmaceuticals, more conveniently known as CORAR.

CORAR is an association of 17 companies that manufacture and distribute radiopharmaceuticals and radionuclides, primarily for use in medicine and life-science research.

Unlike many of the other speakers here, today I am not going to talk about problems and issues that have arisen in the user fee program to date. Instead, I'd like to talk about a problem that will arise down the road in two or three years if steps are not taken to avoid it.

CORAR submitted a citizen petition on August 31st of this year requesting that FDA establish a class waiver under which manufacturers of positron-emission-tomography drugs--or so-called PET drugs--would be exempt from multiple establishment fees, and would have to pay, at most, a single establishment fee for each NDA.

For those in the room who don't know what PET drugs are, these are not animal drugs as the acronym would suggest. They're human radioactive drugs that are produced by tagging a substrate compound with a positron-emitting isotope. After they're injected, the isotope is distributed to certain tissues in the body, and using a PET camera, nuclear physicians produce computerized images of biochemical processes and tissue structures based on measurements of the different rates at which the isotope emits positrons.

Physicians then use these images to diagnose, stage and monitor diseases such as focal epilepsy, certain cardiac diseases, dementias, and certain cancers.

One of the distinguishing features of PET drugs is their extremely short half-life. They have a radioactive half-life that's measured in minutes or hours. So they have to be used very soon after they're produced. For this reason, PET drugs are prepared by facilities only as needed, and they have to be in close proximity to the medical facilities where they're used.

Because of the short half-life of these drugs, a commercial manufacturer that supplies PET drugs nationally, or even regionally, has to have multiple manufacturing establishments located throughout the U.S. or throughout the region. And NDA that's sponsored by a commercial PET manufacturer might specify 10, 20 or even more manufacturing establishments. At this years establishment-fee rate of $264,000, you can see that a sponsor with 10 facilities would have to pay $2.7 million approximately; one with 20 facilities would have to pay over $5 million, and so forth.

And this is in contrast to conventional drugs, both diagnostic and therapeutic drugs, where one or a small number of establishments is sufficient to supply the whole country.

The reason this has not been a problem to date is because of another unique feature of PET drugs, which is their unusual regulatory status. There is now, as a result of the Food and Drug Administration Modernization Act of 1997, there is a moratorium on the regulation of PET products as new drugs. And this moratorium lasts until FDA establishes procedures by which PET drugs are approved under the new drug approval process, and also establishes good manufacturing practices for PET drugs. FDA just recently proposed a rule for CGMPs for PET drugs, and the moratorium will last until two years after that rule is finalized.

During the interim, manufacturers of PET drugs can voluntarily submit NDAs, but after the moratorium is over, they will be required to submit NDAs, and therefore required to also pay user fees. And that's when the establishment fee problem will become acute.

We think that establishment fees should be reduced or waived for commercial manufacturers of PET drugs. When Congress enacted the FDAMA provisions that established the moratorium, it asked FDA to establish special procedures for marketing applications and CGMPs and, in doing so, to take into account the--quote--"special characteristics of PET drugs and the special techniques and processes required to produce these drugs."

We think that these special characteristics and processes also ought to be taken into account in the user fee program in the next PDUFA period also. We think that, as a class, PET drugs qualify for either the barrier-to-innovation waiver or public health waiver provisions.

They are innovative. PET imaging is an extremely sensitive technique that produces images of biochemical processes, not just the structure of tissues and organs, so that it can detect diseases before significant changes in body structure are evident. And, of course, earlier and more specific detection increases the changes of effective treatment.

Clinical PET is rapidly growing for use in cancers, heart disease, neurological disorders. I think just last week Dr. Gottlieb, I think in a speech, at least as reported by the trade press, made reference to a new collaboration between the FDA and the NCI to use PET scans as a development endpoint in cancer trials.

And we think that large annual fee, multiple annual establishment fee assessments could create a disincentive to the development and the supply of PET imaging agents. We also believe that it's in the interest of public health not to discourage commercial PET manufacturers from making PET drugs readily available at numerous facilities throughout the U.S.

Without a lot of PET centers in close proximity to medical centers, patients would have to travel, in some cases, hundreds of miles to the nearest medical facility that offers PET drugs.

So, we think it would prudent and fair to determine that human drug applications for PET drugs would, under a class waiver, be subject just to a single establishment fee. And I would add that there's precedent, dating just from this year, for class waivers for certain classes of drugs. In April, there was a guidance document providing for a class waiver for certain fees for HIV drugs proposed for use in the President's Emergency Plan for AIDS Relief. And also this year the FDA decided to extend this barrier-to-innovation waiver to certain combination products so that they didn't have to pay duplicate application fees for an NDA in a PMA. So there is precedent for this.

And I'd just conclude by saying: here's one area where we have ample chance to avoid a problem before it arises, and we urge the FDA to provide a class waiver so that PET drug companies who supply these products nationally, or over a large region, are not subject to multiple establishment fees annually.

Thank you very much. I appreciate the opportunity to present that statement.

MS. HENDERSON: Thank you, Mr. Kirschenbaum.

Oh, I was going to say "the gentleman in the red tie," but that would be any one of you down there, wouldn't it?

The gentleman in the paisley tie.

MR. ELLIS: Good afternoon. My name is Milton Ellis, and my company is Rare Disease Therapeutics, located in Nashville, Tennessee.

My company was founded in 1991, and the goal was to create a company that focused on the development of orphan drugs, and take advantage of the incentives that the Orphan Drug Act provided. To my knowledge, we're the only biopharmaceutical company in the United States that is exclusively devoted to the development, registration and distribution of orphan products.

We do it because we know that large pharmaceutical companies can't do it. It's not practical for them to do it, and otherwise this patient population would go untreated.

My goal today is to provide you a picture of what it is like to develop orphan drugs, either by ourselves or through licensing.

We have all the same obligations as large pharmaceutical companies, with just a bare fraction of the resources. As a matter of fact, today 25 percent of my company is here, and that would be me.

We also have to pay user fees, which have become a barrier to innovation in meeting the needs of these rare disease patients. So far we have one marketed orphan drug, and four other orphan drugs that are in development. All of these drugs are for conditions that affect fewer than 500 people in the United States. One of these products is an anti-venom for scorpion envenomation, solely for the State of Arizona. And that's because of the Sonoran Desert and the species located there. It will probably produce less than a million dollars in revenue for that condition, and we'll have to pay over $350,000 in user fees.

And had we known that we would not get a waiver for this very small ultra-orphan product, we would probably not have ever started the development of it for the United States market.

We have one marketed product right now called Offiden [ph] and it treats hereditary tyrosinemia Type I. It's a condition that affects fewer than 500 children worldwide, and less than 100 in the United States. This condition is a genetic disorder, and it manifests itself as the infant fails to thrive within weeks or months after birth. If untreated, the disorder is fatal in the first year of life, and the only other option is an orthotic liver transplant.

Currently, we have 78 patients in the United States that are being treated with Offiden. This means that every patient is being assessed what I'd like to call a "pass-through tax" more than $5,000 a year, just to offset the user fees. The large-selling, large-volume drugs, patients are paying pennies per year to cover the same user fees that we have to cover.

You hear Diane Dorman speak earlier, and gave the comparison of the DayPro patient that would be paying 33 cents as a pass-through per year, where we're paying $5,000.

Offiden was originally developed as a herbicide at AstraZeneca, and it was found to have utility in treating this disease. And they put it on the shelf. That's another example of big pharmaceutical companies' not wanting to take responsibility for developing these small products.

It was licensed then to Swedish Orphan International, and we licensed it from Swedish Orphan International for United States, Canada and South America.

We were not able to acquire the NDA rights owned by Swedish Orphan, and this is understandable, because a lot of companies want licensees to handle their products, but they don't want to lose the ownership of their intellectual property. So that meant we were responsible for maintaining the product in the United States. This is quite common with the license for the U.S. market.

There also came the responsibility for meeting all the regulatory requirements in the United States. This includes having to pay user fees on our approved products in all of its dosage forms, and also pay user fees on the facility in which it's manufactured. This became problematic for us, because the 1992 FDA Draft Interim Guidance on User Fees considers waiver requests only from the NDA holder, not from the entity responsible for paying the user fee.

Further, that same interim guidance provides waivers only to small businesses, defined as those with less than $10 million in gross revenue. This is much too low, as well as wrongly focused on how big the business is. It's much more relevant to ask how much revenue is generated by the orphan product itself. I would add that neither of these FDA interpretations is required by the terms of the PDUFA statute; only by the definitions put in the draft interim guidance 13 years ago.

For three years we've had to pay user fees on Offiden; fees that now amount to $389,000 a year. We are responsible for these fees, but not the NDA holder. We are small enough, but the NDA holder is not.

Further, when we have two and three orphan products on the market, we are likely to exceed $10 million in gross revenue. This same amount of money--$389,000--could fund an additional clinical trial on an orphan drug or a new indication. It could support more educational information for prevention and treatment; or become the seed money for another orphan drug that we might license.

Waiver of these user fees might also allow us to stabilize the price of our orphan drug even when our costs are rising.

Rare disease patients benefit under all of these scenarios. In fact, if Offiden user fees had been waived, these monies would have been used to pay part of the cost of new post-marketing requirements imposed by the FDA. Ironically, now that these children on Offiden face full and long

lives rather than early deaths, we must go back and do reproductive toxicology studies on the compound. The cost of these studies could exceed $1 million, and that's for 78 patients.

AS you can see, we are caught between the public policy goals of the Orphan Drug Act, designed to make it a little easier to develop products for small populations, and the Prescription Drug User Fee Act, which has the worthy goal of funding a bigger and stronger FDA.

Simply put, when these two laws collide, we get smashed.

Earlier today Ms. Dorman outlined the NORD position on how to fix PDUFA. NORD wants to help small company with truly worthy goals who want to develop orphan drugs for rare diseases. We support the NORD position, and feel that any orphan drug with revenues less than $25 million should be exempt from waiver fees.

Thank you very much.

MS. HENDERSON: Thank you very much, Mr. Ellis.

Last, the gentleman standing with his laptop.

MR. HENCH: Hello. My name is Milt Hench. I'm the technical services director for Regent Medical, a company down in Norcross, Georgia. We're a mid-size medical company that sells a well-known antiseptic, and we've come here today to talk about the PDUFA.

While user fees under the PDUFA for prescription drugs might seem reasonable, for some non-prescription OTCs, such as we have, that fall under PDUFA, the fees are excessive. In addition, recent large increases in PDUFA user fees have made an already bad situation much worse for us.

Last year we submitted a PS change for the way our product is applied to the hands, which required a user fee in excess of more than a quarter of a million dollars. The user fee for the review of the submission that filled one one-and-a-half inch notebook.

In addition, we paid almost $200,000 for the studies that were submitted. So we paid close to a half a million dollars to simply change the way an antiseptic is applied to the hands; the majority of which was PDUFA fee.

This year, the PDUFA fee has been increased, from more than a quarter of a million dollars to more than a third of a million dollars.

The Prescription Drug User Fee Act was intended for prescription drugs. And user fees were initiated to speed up the review times. And we understand and appreciate that. In addition, they were based upon the complexity of prescription drug applications. However, some non-prescription OTC drugs fall under PDUFA and are subjected to the same fees as prescription drugs, with simpler submissions, simpler applications, simpler products.

While it's government's job to regulate, it's also government's job to provide an economic climate that stimulates business. These jobs must be kept in balance. And at this time, things seem to be out of balance for us.

User fees are hurting our company's ability to innovate, compete and grow our product. Money that could be spent for research and development is going for user fees.

We believe that the current situation needs to be changed to separate the fees and regulations that are applied to prescription drugs which often sell for hundreds of millions to billions of dollars, at very high margins, and are called "big pharma," as we heard today.

From some OTC products, non-prescription such as ours, which often sell in the millions of dollars, at much lower margins, and should be called "small pharma"--and I'd like to call them "orphan drugs," like the previous speaker--they currently fall under the PDUFA Act.

To help separate prescription drug user fees from OTC product user fees, we would like to see the FDA solicit comments about OTC user fees via the Federal Register. In addition, a gradient user-fee structure for clinical data should be included in the Federal Register solicitation for comments.

User fees should be based upon the scope of the clinical study and its complexity, proportional to the size, complexity and nature of the clinical study, not just because it's a submission.

We therefore petition for a solicitation of comments by the Federal Register regarding separating user fees for some OTC products from prescription drugs; making user fees proportional to the scope of the clinical study to be reviewed--the larger the study and the more complex the submission, the larger the user fee.

Thank you.

MS. HENDERSON: Thank you, Mr. Hench.

Do we have any additional comments from the audience?

[No response.]

If not, then I'd like to thank our FDA panel, thank our audience very much for your participation and your patience.

Good night.

[Whereupon, at 4:11 p.m. the meeting was adjourned.]

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