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    40–874 PDF 2008






    MARCH 26, 2007

    Serial No. 110–43

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    Available via the World Wide Web:http://www.gpoaccess.gov/congress/index.htmlhttp://www.house.gov/reform

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    PHIL SCHILIRO, Chief of StaffPHIL BARNETT, Staff DirectorEARLEYGREEN, Chief Clerk

    DAVID MARIN, Minority Staff Director

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    C O N T E N T S

    PageHearing held on March 26, 2007............................................................................1Statement of:

    Allen, Geoffrey, Ph.D, president, chief executive officer,chairman of theboard, Insmed Inc.; Theresa Lee Gerrard, Ph.D,president, TLG Con-sulting, Inc. (Biopharmaceutical Consultantsformerly with Amgen andFDA’S Center for Biologics); BillSchwieterman, M.D., president,Tekgenics Corp. (BiopharmaceuticalConsultants formerly with FDA’SCenter for Biologics); IngerMollerup, vice president for regulatory af-fairs, Nova Nordisk A/S;and Ganesh Venkataraman, Ph.D, senior vicepresident, research,Momenta Pharmaceuticals, Inc. ................................57

    Allen, Geoffrey...........................................................................................57Gerrard, Theresa Lee................................................................................63Mollerup, Inger..........................................................................................84Schwieterman, Bill....................................................................................72Venkataraman, Ganesh............................................................................102

    Brown, Yvonne, for the National Multiple Sclerosis Society; MaryNa-than, for the National Organization for Rare Disorders [NORD];NeldaBarnett, board member, AARP; Priya Mathur, vice chair, healthbene-fits-Board of Administration, California Public Employees’RetirementSystem [CALPERS]; Scott D. McKibbin, special advocate forprescrip-tion drugs, State of Illinois; Henry Grabowski, Ph.D,professor of eco-nomics, director, Program in Pharmaceuticals andHealth Economics,Duke University; and Jonah Houts, senior analyst,Express Scripts,Inc..................................................................................................................127

    Barnett, Nelda...........................................................................................137Brown, Yvonne..........................................................................................127Grabowski, Henry.....................................................................................161Houts, Jonah..............................................................................................257Mathur, Priya............................................................................................146McKibbin, Scott D.....................................................................................154Nathan, Mary............................................................................................129

    Woodcock, Janet, M.D., Deputy Commissioner for Operations andChiefMedical Officer, Food and Drug Administration........................................ 19

    Letters, statements, etc., submitted for the record by:Allen,Geoffrey, Ph.D, president, chief executive officer, chairman ofthe

    board, Insmed Inc., prepared statement of................................................. 60Barnett, Nelda,board member, AARP, prepared statement of ....................139Cummings, Hon. Elijah E., a Representative in Congress from theState

    of Maryland, prepared statement of............................................................268Davis, Hon. Danny K., a Representative in Congress from theState

    of Illinois, information concerning biotech drugs....................................... 265Davis, Hon. Tom, aRepresentative in Congress from the State of Vir-

    ginia, prepared statement of........................................................................11Gerrard, Theresa Lee, Ph.D, president, TLG Consulting, Inc.(Biopharma-

    ceutical Consultants formerly with Amgen and FDA’S Center forBio-logics), prepared statement of......................................................................65

    Grabowski, Henry, Ph.D, professor of economics, director,Program inPharmaceuticals and Health Economics, Duke University,preparedstatement of...................................................................................................163

    Houts, Jonah, senior analyst, Express Scripts, Inc., preparedstatementof.....................................................................................................................259

    Issa, Hon. Darrell E., a Representative in Congress from theState ofCalifornia, prepared statement of................................................................16

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    Letters, statements, etc., submitted for the recordby—ContinuedMathur, Priya, vice chair, health benefits-Board ofAdministration, Cali-

    fornia Public Employees’ Retirement System [CALPERS],preparedstatement of...................................................................................................148

    McKibbin, Scott D., special advocate for prescription drugs,State of Illi-nois, prepared statement of..........................................................................157

    Mollerup, Inger, vice president for regulatory affairs, NovaNordisk A/S, prepared statement of..............................................................................86

    Nathan, Mary, for the National Organization for Rare Disorders[NORD],prepared statement of...................................................................................132

    Schwieterman, Bill, M.D., president, Tekgenics Corp.(BiopharmaceuticalConsultants formerly with FDA’S Center forBiologics), prepared state-ment of...........................................................................................................74

    Venkataraman, Ganesh, Ph.D, senior vice president, research,MomentaPharmaceuticals, Inc., prepared statement of............................................ 104

    Waxman, Chairman Henry A., a Representative in Congress fromtheState of California, prepared statement of................................................. 4

    Woodcock, Janet, M.D., Deputy Commissioner for Operations andChiefMedical Officer, Food and Drug Administration, preparedstatementof.....................................................................................................................22

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    MONDAY, MARCH 26, 2007


    Washington, DC.The committee met, pursuant to notice, at 10a.m., in room 2154,

    Rayburn House Office Building, Hon. Henry A. Waxman (chairmanofthe committee) presiding.

    Present: Representatives Waxman, Kucinich, Davis ofIllinois,Yarmuth, Norton, Van Hollen, Hodes, Welch, Davis ofVirginia,Burton, Issa, Bilbray, and Sali.

    Staff present: Phil Barnett, staff director and chief counsel;Kris-tin Amerling, general counsel; Karen Nelson, health policydirector;Karen Lightfoot, communications director and senior policyadvisor;Andy Schneider, chief health counsel; Sarah Despres, seniorhealthcounsel; Ann Witt, health counsel; Robin Appleberry andRachelSher, counsels; Earley Green, chief clerk; Teresa Coufal,deputyclerk; Caren Auchman, press assistant; Zhongrui ‘‘JR’’ Deng,chiefinformation officer; Leneal Scott, information systemsmanager;Robin Pam, staff assistant; David Marin, minority staffdirector;Larry Halloran, minority deputy staff director; JenniferSafavian,minority chief counsel for oversight and investigations;SusieSchulte, minority senior professional staff member; KristinaHusar,minority professional staff member; Patrick Lyden, minorityparlia-mentarian and member services coordinator; Brian McNicoll,mi-nority communications director; and Benjamin Chance,minorityclerk.

    Chairman WAXMAN. The meeting of the committee will pleasecome toorder.

    More than 20 years ago the Congress enacted the Hatch-Wax-manAct. That law has taught us three things: genetic drugs aregood forpatients, both medically and financially; with a little help,themarket works, generic competition lowers drug prices; and ge-nericcompetition does not bankrupt the brand name drug industryor slowinnovation.

    Maybe some big drug makers still dispute these lessons, butnoone else does. But there is still no generic competition for oneofthe fastest-growing and most expensive categories ofdrugs,biologicals, those drugs produced from living cell culturesratherthan from chemical synthesis.

    Some of these drugs are near miracles for people withcancer,metabolic diseases, and immune disorders. They can stopdisabilityand, in some cases, save lives. People need them. Butsome of these

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    drugs cost each patient tens of thousands of dollars a year.Somecan cost hundreds of thousands per year. Many people cannotgetaccess to these near miracles, and even when people can getthemthe prices drive up the cost of Medicare, Medicaid, and healthin-surance overall.

    Why isn’t the market helping? It is not because of the patentsys-tem that biologicals are protected from the competition thatmightlower prices. Biologicals, like other drugs, do enjoy patentprotec-tion. This allows manufacturers to enjoy a monopoly periodduringwhich they can get a significant return on their investments.Butpatents, or many of them, have already expired, and otherpatentsare just about to expire.

    And it is not the science of these drugs that protects themfromcompetition. The technology is already here to make a safe andef-fective copy of some biotech drugs. Moreover, the technology isget-ting better every year, and we can make progress even faster ifweallow companies to use it to make generics.

    Instead, the monopoly on each of these drugs is perpetuatedbythe lack of a clear pathway for FDA to approve competingversions.

    The Hatch-Waxman Act does not reach most of them. This costsallof us—taxpayers, insurance premium payers, and patients—bil-lionsof dollars. It also means that some very sick people simplycannotget the drugs they need.

    I know that the science of these drugs is not simple. I takethequestions of research, safety, and efficacy very seriously. Theonlyway we can succeed in establishing robust competition forbiotechdrugs is with drugs the doctors and patients know they cancounton, so we need to be sure that the FDA has the discretion tore-quire the studies that are needed to establish that a copy ofabiotech drug is equivalent to the brand name drug in safetyandeffectiveness. That is one of the things we hope to learn moreabouttoday.

    But the big brand name companies have gone beyondlegitimateconcern and have thrown up a defensive smoke screenaroundbiologicals. They say there will be problems of safety,decreased in-novation, and limited savings. When discussingcreating genericcompetition, they say things like, ‘‘Such actionmay also save con-sumers a few dollars here and there, althoughthat is by no meansassured, but whatever short-term savings may beachieved willcome at an enormous long-term cost to the public.Focusing solelyupon short-term, lower prices, a cheap drugs policywill inevitablyreduce research and hinder our public healthefforts.’’

    Well, these arguments have a familiar ring to them. That isbe-cause the words I just read were the formal testimony thatthePharmaceutical Manufacturers Association gave to the Housein1983 when they were opposing Hatch-Waxman, and now manufac-turersare using these same arguments again. But they were wrongthen.Hatch-Waxman has saved patients billions of dollars anddra-matically improved their access to drugs, and Hatch-Waxmandidnot reduce research or hinder public health.

    And they are wrong now. A new path for FDA to approvegenericbiologicals will save patients billions in the future andwill improveaccess to treatments and cures, and a new path willimprove com-

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    petition, while preserving the market’s strong incentive forre-search.

    For the sake of patients, their families, public and privatehealthinsurance, and taxpayers, we must find a way to introducecom-petition to this market. When a patent expires, we owe it tocon-sumers to find a way through competition to lower prices andstilldeliver a safe and effective product. When a patient expires,theyno longer need the product, so the price will make nodifference.

    I look forward to the testimony of the witnesses today andlearn-ing more about the scope of the problem, the science, and thepo-tential solutions.

    [The prepared statement of Chairman Henry A. Waxmanfol-lows:]

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    Chairman WAXMAN. Mr. Davis.Mr. DAVIS OF VIRGINIA. Thank you, Mr.Chairman, for holding

    today’s hearing to consider the implications of creating aregulatorypathway for approval of follow-on biologics. It is a veryimportantsubject, and certainly your leadership is appreciated andworthy ofthis committee’s consideration.

    Mr. Chairman, you have long been a leader in improving accesstopharmaceutical drugs. Indeed, there is near universal agreementthatthe Hatch-Waxman Act has been extremely effective in allow-inggeneric drugs to come to market and compete with brand namedrugs.This competition has benefited countless citizens, as well astheFederal Government, by using natural market economics tobring downthe price of prescription medicine. You are to be com-mended foryour leadership in improving access to theselife-savingmedications.

    It is my understanding you have recently introducedlegislationthat would, in fact, create a regulatory pathway for theFDA to ap-prove follow-on biologics. We have been reviewing thelegislationwith interest, and we expect it will inform today’sdiscussion.

    I look forward to exploring your proposal further. For now, letmejust offer a few preliminary thoughts on this very complexsubject.

    The first principle guiding this effort should be to fosterinnova-tion and the discovery of new cures. After all, there is nonewtherapeutic, by definition there can be no follow-on.Accordingly,we need to protect the intellectual property ofinnovative firms.Given the high cost of research, development,manufacturing, andregulatory approvals, IP protections are clearlya critical factor forbiotech startups when they are securingventure capital and pursu-ing partnerships with larger firms.

    Today we will hear from economist Henry Grabowski, whowillexplain that increased patent uncertainty and IP litigationwouldhave a significant negative effect on capital market decisionsforemerging private and public biotech firms. He will explain thatifthe Federal Government either weakens patent protections orin-creases the chance of litigation there will likely be acorrespondingdecrease in investment, and therefore less researchand develop-ment of biologics. It would be tragic if legislationintended to in-crease access to medicine would have the unintendedresult of sti-fling innovation, preventing the discovery of curesof presently ter-minal diseases.

    I hope you would agree with me, Mr. Chairman, about theimpor-tance of fostering a vibrant and innovative culture where ween-courage our brightest minds and daring entrepreneurs to do there-search, provide the investment so that we may some daydiscoverthe cure for cancer or Lou Gehrig’s disease.

    Reflecting on the Hatch-Waxman Act, you got it right whenyourecognized the importance of balancing the twin goals ofbringinggeneric drugs to market while at the same time leavingintact thefinancial incentive for research and development.

    One of the keys to this successful balance in that legislationwasthe guarantee of 5 years of market exclusivity for innovativecom-panies. Incidentally, European Union regulators currentlyprovide10 years of market exclusivity for European drugs forinnovative

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    drugs. Some amount of market exclusivity for the innovator isnec-essary under any regulatory pathway for follow-onbiologics.

    The second imperative is to provide a mechanism so the FDAisable to guarantee the safety and efficacy of follow-on biologics.Todo so we have to recognize the fundamental differencesbetweenbiologics and chemical-based pharmaceuticals. What hasproven tobe successful in the case of traditional drugs is notnecessarytransferrable to the science of biologics. For instance,it is currentlypossible to know the complete character of a smallmolecule drug.This knowledge enables the FDA to approve genericdrugs with thesame characteristics as the innovator drug withoutrequiring ge-neric companies to test and prove the drug’s efficacyand safetyagain. However, current science has not advancedsufficiently togive us the same confidence that a follow-onbiologic is identical toa previously approved biologic based onmolecular structure, alone.

    Unlike traditional drugs, which are chemically based,biologicsare made from living organisms. Even minor variations inmanu-facturing processes can have a significant impact on the finalchar-acter and consistency of the biologic and its effect on thehumanbody.

    This diagram on the board comparing a biologic used totreatanemia and a traditional drug that treats peptic ulcersdiseasedemonstrates the difference between traditional chemicaldrugsand biological therapies. As you can see, the biologic issignificantlymore complex than a traditional drug, having amolecular weightof 30,000 versus 351. This is a criticaldistinction between tradi-tional generic drugs and follow-onbiologics. Any regulatory path-way must take full account of thisdistinction, which for now seemsto point to the inescapableconclusion that clinical trials on somelevel will be essential toensure the safety and efficacy of follow-on biologicalproducts.

    Again I want to thank you, Mr. Chairman, for spurring adiscus-sion on this important subject. I look forward to hearingfrom ourdistinguished panel of witnesses.

    [The prepared statement of Hon. Tom Davis follows:]

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    Chairman WAXMAN. Thank you very much, Mr. Davis.Withoutobjection, all Members will be permitted to enter an

    opening statement in the record. Do any Members wish, however,tomake any comments before we hear from our 15 witnesses?Mr.Issa.

    Mr. ISSA. Thank you, Mr. Chairman. I will be brief. I will putmyformal statement in the record, particularly because it soundsanawful lot like Mr. Davis’. The view is somewhat the same, andthatis that it is very clear that we know a great deal aboutchemicalcompounds and we can say a chemical is a chemical, but, forexam-ple, Mr. Chairman, would you want to have these two orangessub-stituted as though there were no difference? Would you acceptthata Florida orange is the same as a California orange if you havetopeel it, Mr. Chairman? And, for Mr. Sali who is not here today,doyou really think that any Russett potato is an Idaho potatoandshould be interchanged and have no value, no second testingofwhether or not it makes a good french fry?

    Now, clearly we know how to make grain alcohol, and if Iambuying grain alcohol, Mr. Chairman, it is very clear that Iknowthat it is alcohol plus about 3 percent water that just gets inif youget the air to it. But, Mr. Chairman, do you really thinkthat a $90bottle of California wine that says Merlot is equal tothis fine boxedMerlot? And would you want to go to the dinner tableor the hos-pital and have them interchanged without your priorapproval, orperhaps a little taste?

    This is biologics. These are made by process. Mr. Chairman,theymay both be a Merlot, but as a Californian, I am sure thatyouwould not want them interchanged without your priorapproval.

    With that, I yield back.[The prepared statement of Hon. DarrellE. Issa follows:]

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    Chairman WAXMAN. Mr. Davis.Mr. DAVIS OF ILLINOIS. Yes, Mr.Chairman, I would like to make

    a brief statement.Chairman WAXMAN. Before I recognize you forthat purpose, I

    would like to inquire if you have any props. [Laughter.]Thegentleman is recognized.Mr. DAVIS OF ILLINOIS. Thank you very much,Mr. Chairman. I

    shall, indeed, be brief. But first of all let me thank you forcallingthis hearing.

    In 1984 the landmark Hatch-Waxman Act provided a cost-effec-tivealternative to branded drugs with the creation of atraditionalgeneric pharmaceutical industry. Today’s hearing marksyet an-other landmark as we are being called upon to addressescalatingbiopharmaceutical costs.

    This issue is near and dear to me, one, as a former healthadmin-istrator, but also because my congressional district has morehos-pitals and more hospital beds than any other congressionaldistrictin the country. Illinois has about 200 hospitals, most ofthem non-profit. State hospitals are losing money, and anotherthird arebarely breaking even, notwithstanding cuts in Medicare andMedic-aid.

    According to Crane’s Chicago Business, on February 13,2006,while the State of Illinois has implemented prescription drugas-sistance programs like the Senior Care PharmaceuticalProgram,State Pharmaceutical Assistance Plan, All Kids Program thatpro-vides health insurance coverage and prescription drugs tochildrenacross all socio-economic groups, they help to buffercosts.

    However, the sad reality is that cuts in Federal spending tendtoshift costs to insured patients and their employers. Bydefinition,health care is eating up a piece of our income, which isespeciallybad news for the 26 percent of Chicagoans, including164,203 withfull-time jobs and 43,876 with at least a collegeeducation who lackhealth insurance. These data are particularlydisturbing when youtake into consideration the median householdincome for Chicagois $38,625 a year.

    With this in mind, I welcome today’s distinguished panelistsandlook forward to their insight and recommendations on how wecanbuildupon the foundation of generic competition for ourconsumerslaid some 23 years ago under the Hatch-Waxman Act towardtheattainment of a pathway to safe and affordable biotechdrugs.

    I guess if I was to have any kind of prop, I’d just take thiswater,which is pretty pure, and be delighted to have it.

    Again, thank you, Mr. Chairman, for having this hearing.ChairmanWAXMAN. Thank you very much, Mr. Davis.Does any other Member wishto be recognized for an opening

    statement? Mr. Yarmuth.Mr. YARMUTH. Mr. Chairman, two thingsreal briefly. First of all,

    I hope that Mr. Issa would accept an amendment to his list insay-ing that no self-respecting Kentuckian would accept Tennesseesourmash whiskey for a Kentucky bourbon.

    Mr. ISSA. Now that is bipartisan if I ever saw it.Mr. YARMUTH.Thank you.

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    Also, I would like to say that I think the chairman and Mr.Davishave very accurately expressed and illuminated theconflictingissues that we have to deal with on this topic.

    I would also mention the fact that we have to recognize thatmuchof the research that leads to the development of these drugsandthese medications, both pharmaceutical and also these bio-logics,are funded by taxpayer dollars initially, so that we haveanoverriding mandate to do what is best for the taxpayer, who ispay-ing for most of this research at the very foundationallevels.

    Thank you, Mr. Chairman.Chairman WAXMAN. Thank you very much.Wewill now hear from our witnesses today. Our first witness I

    am pleased to welcome is Dr. Janet Woodcock. She is theDeputyCommissioner for Operations and Chief Medical Officer of theFoodand Drug Administration.

    Since you are standing, I will have you continue to standbecauseit is the practice of this committee to put all witnessesunder oath.

    [Witness sworn.]Chairman WAXMAN. The record will indicate thatyou answered

    in the affirmative.We are delighted to have you here. We willput your full state-

    ment in the record. If it is possible, we would like to ask youtokeep to around 5 minutes.


    Dr. WOODCOCK. Thank you. Mr. Chairman and members ofthecommittee, I am Janet Woodcock, Deputy Commissioner andChiefMedical Officer of the Food and Drug Administration. I thankyoufor the opportunity to testify about the scientific andregulatoryframework surrounding follow-on biologics.

    In considering the complex scientific issues at hand, I havereliednot only on my experience leading the Center for DrugEvaluationand Research for over a decade, but also on my 8 years ofexperi-ence working in the Center for Biologics Evaluation andResearch[CBER]. While in CBER I served as Acting Deputy CenterDirectorand as Director of the Office of Therapeutics, in whichcapacity Ioversaw the approval of biotechnology products to treatserious ill-nesses such as cancer, multiple sclerosis, and cysticfibrosis.

    The success of FDA’s generic drugs program has spurredinterestin considering abbreviated application pathways formore-complexmolecules. Currently there are over 9,000 approvedtherapeuticallyequivalent generic drugs on the market. Theyconstitute about 60percent of prescriptions written in the UnitedStates. FDA’s Officeof Generic Drugs currently approves generics atthe rate of morethan one per calendar day.

    The success of the program has stimulated competition. Forthelast decade, the rate of submission to the Office of GenericDrugshas rapidly increased. Submissions doubled between 2002and2006, to a current rate of about 793 applications per year.

    The office has implemented numerous process improvements,haveimproved increased efficiency of the review process, and re-cently,as part of FDA’s initiative on pharmaceutical quality for the

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    21st century, OGD instituted the question-based review.Eventu-ally it is hoped this change will decrease submission ofmanufactur-ing supplements by about 80 percent, and thus free upmore timeof the reviewers to deal with this increased submissionrate.

    While the generics program has been very successful forsmallmolecules, scientific challenges remain. We do not have goodbio-equivalents methods for inhaled or many topical medications,andmust require clinical trials to demonstrate equivalence. Thishasinhibited consumer access to generic versions of these typesofproducts.

    In addition, a number of drugs are made from complex mol-ecules.In these cases, it can be difficult to tell whether aproposedgeneric version is structurally identical to the innovatorproduct.

    Recently, as part of its critical path initiative, FDA hasbeenevaluating the science needed to address these issues forgenericdrugs and is planning to lay out the scientific researchthat isneeded to improve the process, as we did a number of yearsagofor innovator medical products.

    The topic for discussion today is variously referred to asfollow-on proteins, follow-on biologics, generic biologics, as wellas otherlabels. Many of these terms are very imprecise andconfusing, andI hope we can discuss terminology.

    Largely, these terms are intended to refer to biotechnologypro-duced protein products. In the United States, such productsareregulated either as drugs under the Food, Drug, and CosmeticAct,or as biologic products under the Public Health Service Act.Wheth-er regulated as drugs or biologic products, proteins fit intothe cat-egory of complex molecules that can be difficult to fullycharacter-ize.

    Copies of protection products that are regulated as drugs maybeconsidered for the abbreviated applications pathways thatexistunder section 505. The very simplest peptide products may beableto demonstrate that they contain the same active ingredient astheinnovator product, and thus may be considered under 505(j),whatis commonly regarded as the generic drug pathway.

    In contrast, copies of approved protein products that aredrugswould currently be considered for abbreviated applicationsunder505(b)(2), and the reason for this is that scientifictechniques arenot available to demonstrate sameness of these typesof molecules.

    The degree to which any abbreviated pathway could be used foranygiven protein depends on many factors, including itsphysicalcomplexity, the availability of functional assays tocharacterize it,and its clinical use.

    An abbreviated pathway does not exist for copies of proteinprod-ucts approved under the PHS Act. FDA has approved severalfol-low-on proteins under 505(b)(2), including a recombinanthyalu-ronidase and recombinant version of human growth hormone.

    We are currently preparing a guidance document on thegeneralscientific framework for preparation of abbreviatedapplications forfollow-on proteins under 505(b)(2). We expect tofollow this withguidance on technical issues such asimmunogenicity, dealing withimmunogenicity of proteins and physicalcharacterization methods.

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    I will be pleased to answer your questions regarding thesecom-plex issues.

    [The prepared statement of Dr. Woodcock follows:]

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    Chairman WAXMAN. Thank you very much, Dr. Woodcock.As youmention in your testimony, for over 10 years FDA has al-

    lowed brand name manufacturers of biotech drugs to makecertainchanges in the process by which they manufacture theirproducts,but without repeating all the original clinical trials,under some-thing called comparability protocols. I am interested inunderstand-ing the scientific rationale for allowing brand namemanufacturersto make process changes without new clinical trials. Iam also in-terested in its applicability to follow-on andbiogeneric products.

    What was the scientific basis for FDA’s conclusion thatclinicaloutcome trials are not necessary to assess the effects ofcertain bio-logical product changes?

    Dr. WOODCOCK. Manufacturing changes and process changesareundertaken for all pharmaceutical products, whether drugs orbio-logics. In each case we have to determine whether or notthechange could result in any clinically significant change in theprod-uct, whether it is a small molecule or whether it is a large,complexmolecule of some kind. FDA has a long history of qualityregula-tion, putting into place procedures, both physicalcharacterizationof the new product and comparing it to the oldproduct, functionalcharacterization of a new product compared tothe original product,and sometimes clinical characterization of anew product. It de-pends on, as I said in my oral testimony, howmuch science wehave available to assess these changes.

    If we can be sure, based on a structural characterization,whichwe often can for a drug, then that would be sufficient for asmallmolecule drug. If that structural characterization isn’tenough toassure that the new version is similar to the old version,then othertypes of tests might be necessary. And in some cases wemighteven require clinical tests.

    For example, with small molecule drugs, when the formulationischanged we may require new bioequivalent studies.

    Chairman WAXMAN. So that is completely within yourdiscretionbased on whether you think it is appropriate to havefurther eval-uations, further studies?

    Dr. WOODCOCK. Yes. There are multiple scientific issues thatcomeinto play in any given manufacturing change.

    Chairman WAXMAN. I know most of these comparabilitydecisionsinvolving biotech drugs or any other drugs areconfidential, butwith the biotech drug Avonex the information ispublic. I assumeyou are familiar with that case?

    Dr. WOODCOCK. Yes.Chairman WAXMAN. What kinds of process changesdid FDA per-

    mit in that case without repeating the original safety andeffective-ness trials?

    Dr. WOODCOCK. In that case the original cell line that hadbeenused to manufacture the product that was used in the clinicaltrialswas no longer available, so the manufacturer had to go backandredo all of that and duplicate the manufacturing process thathadbeen used for the original product. That is well describedpublicly.They made some original attempts. Those weren’tsuccessful.

    They made some subsequent attempts and then an extensivenumberof comparisons were made between the original productand the secondversion of the product, both the kinds I just de-

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    scribed, both physical/chemical comparisons, functionalcompari-sons, and so forth, so that at the end of the day it wasdecided thatthe products were similar enough that FDA couldextrapolate fromthe clinical data that was derived for the firstproduct to the newproduct.

    Chairman WAXMAN. Were the changes between the twoproductssignificant?

    Dr. WOODCOCK. The products were very similar, ended up beingverysimilar.

    Chairman WAXMAN. I meant the process changes. Were theysig-nificant?

    Dr. WOODCOCK. The manufacturer attempted to duplicate thesimilarprocess that was originally done with the first product, butit wasin a different site, in a different scale, and so forth, sotherewere differences. It was not the identical cell line. Itwasn’t theidentical product that had been made, and so forth.

    Chairman WAXMAN. Are these changes similar to the kindsofchanges that might be required to manufacture a follow-onprod-uct?

    Dr. WOODCOCK. The difference between that example and thein-stance where a new manufacturer would attempt to manufactureafollow-on product would be that in the Avonex case. Themanu-facturer had access to all the information about the processof man-ufacturing the first product. That is very importantinformation,because it has information on all the intermediatesteps and whathappens during the manufacturing and purificationprocess, and soon.

    Chairman WAXMAN. Thank you.Mr. Davis.Mr. DAVIS OF VIRGINIA. Wewill start with Mr. Issa.Chairman WAXMAN. Mr. Issa.Mr. ISSA. Thankyou. Thank you, Mr. Chairman, and thank you,

    Ranking Member Davis.Avonex appears to be an example sort of—Iwill use a different

    wine than the one here, but you are talking if the Rothschildstry-ing to duplicate after they have had to clear their grapes awayandput a new crop in. You have the same maker with the samewinemasters—in this case scientists—trying to duplicate what theyhadalready made. Is that roughly correct? You may not be aCaliforniawine drinker, so I know it can be challenging.

    Dr. WOODCOCK. I love California wine.Mr. ISSA. You won’t lovethe one here in this box. Trust me.Dr. WOODCOCK. Yes. As ananalogy, that is quite reasonable.Mr. ISSA. OK. So the next stepthat the chairman’s legislation or

    the legislation we are hearing here today would attempt to doisto say that, even though you had to sort of teach or go throughaprocess, a re-learning process, even with the original designer,youare going to try and transfer this to a different winery, andtheyare going to try to set up, but they are not going to have therightto every trade secret, if you will. Not every nuance of theprocessis, in fact, in the public domain. Is that correct?

    Dr. WOODCOCK. That is correct. We face that now with ourge-neric drug program.

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    Mr. ISSA. OK. And you mentioned earlier that you havehadchemical equivalents that didn’t work out so well when theywentgeneric, so to speak, even among name manufacturers. When anin-surance company does a formulary and says this is equal tothis,that is not always right, is it? There are side effects thatare unan-ticipated often?

    Dr. WOODCOCK. The generic drugs that we approve arefullyinterchangeable with the innovator drugs. They aretherapeuticallyequivalent.

    Mr. ISSA. You have never had a side effect?Dr. WOODCOCK. We havenumerous reports of side effects; how-

    ever, we investigate those and we have extraordinarily rarelyfoundany instance where there would be therapeutic inequivalencebe-tween a generic drug and an innovator drug.

    Mr. ISSA. Now, when we get to biological and follow-onimmuneproblems that occur, that is a different problem that you arenotpresently seeing as much in small cells but you do see it inbio-logics, don’t you?

    Dr. WOODCOCK. Yes. Proteins are what is called immunogenic.Theyproduce often an immune response in people when theyareadministered.

    Mr. ISSA. So if there are two otherwise the same biologies,theoriginal and the follow-on, one could very much have adifferentimmune response that would lead somebody who hadsuccessfullyfought a disease to somehow develop a resistance; isthat correct?

    Dr. WOODCOCK. The immune response to a protein can causemanythings. It can cause what you just said, which is neutralizingtheeffect, the beneficial effect of the protein.

    Mr. ISSA. And then you could find yourself unable to dealwitheither drug. In other words, you could make that change andfindyourself opted out of the cure or the treatment?

    Dr. WOODCOCK. That is true, and there are difficulties, forexam-ple, with insulin sometimes.

    Mr. ISSA. So, given that you have this history, wouldn’t, inthecase of follow-on biologics, at least until this problem can bequan-tified, wouldn’t you have a bias, an almost exclusive biastowardclinical trials, even if we gave you the jurisdiction and theright toshortcut those, limit those, eliminate them? From astandpoint ofunsettled science, wouldn’t it be proper to haveclinical trials to en-sure that is not happening when, in fact, itcan take someone whois surviving and put them in a position wherethey can no longersurvive?

    Dr. WOODCOCK. Currently—and, of course, I can only addresstheproteins that we are looking at under the 505, under theFD&CAct.

    Mr. ISSA. Right, and you admit those are, by definition, lesslike-ly to be unknowns than the ones we are going toward; isthatright?

    Dr. WOODCOCK. No. That is where the terminology I think isveryconfusing. We have approved proteins under the Food, DrugandCosmetic Act provisions under 505(b)(2), and in those cases,forthose recombinant proteins we have looked at theimmunogenicityin people.

    Mr. ISSA. OK, but you have looked at them?

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    Dr. WOODCOCK. Yes.Mr. ISSA. So, again, my one final exitquestion here in this short

    time: clinical trials are the only way to know whethersubstantiallysimilar, substantially identical follow-on biologicsare, in fact, goingto have differences in the immune response, orwhatever term isappropriate; is that right?

    Dr. WOODCOCK. Yes. We have a very limited understanding ofthebasis of an immune response, and we are not able to fully pre-dictimmunogenicity in humans right now from non-clinical data.

    Mr. ISSA. And this could be dangerous?Dr. WOODCOCK. Theimmunogenicity must be evaluated.Mr. ISSA. Thank you, Mr.Chairman.Chairman WAXMAN. Thank you, Mr. Issa.Mr. Yarmuth.Mr.YARMUTH. Thank you, Mr. Chairman.Dr. Woodcock, some in the brandname industry argue that any

    process for approving copies of biologics should follow theEuropeanUnion model. The EU’s governing directive, which iscomparable toa statute, is extremely flexible and gives regulatorsgreat discretionto set procedures and standards and so forth.

    The drug regulatory body there, the EMEA, has alsoestablishedvery particular procedures and approval standards toimplementthose directives. You are nodding, so you are obviouslyfamiliarwith that process or that model?

    Dr. WOODCOCK. Yes.Mr. YARMUTH. And the biotech industry seems tolike that public

    process that is used there for establishing and settingguidelinesthat contain the data requirements for biosimilarsbecause the datagathering process allows those companies to helpdictate what datatheir competitors must produce, and, of course,that would take alengthy period of time.

    Is the FDA required to undertake a public process forestablish-ing data requirements?

    Dr. WOODCOCK. No. We are not required to.Mr. YARMUTH. Do youthink it is scientifically necessary for FDA

    to engage in a public guideline process to establish the datare-quirements for a follow-on protein product?

    Dr. WOODCOCK. What FDA does currently is engage withthemanufacturer in discussions—of course, those are notpublic—toprovide advice on any manufacturer interested in pursuinga fol-low-on under the 505(b)(2) process. But we often writescientificguidance for manufacturers because it provides betterpredict-ability and it provides, as you said, transparency.

    We are in the process of writing overall guidance on theprocessof scientific approach to follow-on proteins under505(b)(2).

    Mr. YARMUTH. Do you think that the process the EuropeanUnionuses, if we adopted that system here, would have the effectoffreezing science at all? Is that a risk in doing that?

    Dr. WOODCOCK. I am really not able to comment on that.Mr.YARMUTH. Thank you, Mr. Chairman. I yield back.Chairman WAXMAN. Thegentleman has a couple minutes, would

    you yield your time to me?Mr. YARMUTH. I would be happy to yieldmy time to the distin-

    guished chairman.

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    Chairman WAXMAN. Thank you.I just wanted to point out that thequestioning by my colleague,

    Mr. Issa, about how you might need to have clinical trials tounder-stand possible concerns, that is legitimate. FDA does now atthepresent time allow some changes in the process withoutrequiringclinical trials, but I do want to point out that thelegislation thatI have introduced would allow FDA to decide, whenthey think clin-ical trials are appropriate, to require clinicaltrials.

    I do want to ask you this. In the use of comparabilityprotocolslimited to simple proteins, can the manufactures of morecomplexproteins make changes in their products without repeatingtheoriginal clinical trials?

    Dr. WOODCOCK. Yes, they can, if the science is there. It isverydesirable for manufacturers of pharmaceuticals of any kindtomake continuous improvements in their manufacturing processtomaintain the quality of the pharmaceuticals as soon aspossibleand the efficiency of the process as good as scientificallypossible.So FDA has adopted procedures, as I said, that allowmanufactur-ers to make changes to their manufacturing process orperhapsopen up new plants, say, if there is a demand for theproduct, andthe amount of data that has to be generated reallydepends on thecomplexity of the product, how well we can physicallycharacterizethe product, and how confident we are that physicalcharacteriza-tion will extrapolate to the same performance. But wemay requiremany additional steps, up to and including clinicalstudies now,particularly of immunogenicity.

    Chairman WAXMAN. Well, do you and other FDA scientistsfeelconfident that comparability assessments provide adequateprotec-tion to patients from unsafe or ineffective biotechdrugs?

    Dr. WOODCOCK. The comparability assessment puts the burdenon themanufacturer. The manufacturer must show to FDA’s satis-factionthat the change has not introduced anything that wouldbedetrimental to the clinical performance of the drug. So howmuchevidence is needed after a manufacturing change depends onhowwell the manufacturer can demonstrate that product is goingtoperform the exact same way as the original product did in theclini-cal testing.

    Chairman WAXMAN. And as science evolves, you will knowbetterwhether the comparability requires clinical tests or not; isthat cor-rect?

    Dr. WOODCOCK. The ability to physically characterizeproteinmolecules and other complex substances has evolved and iscon-tinuing to evolve, and so over time we are going to be able todoa better and better job of controlling the quality of theseproductsand allowing for continuous improvement.

    Chairman WAXMAN. Thank you very much.Mr. Davis.Mr. DAVIS OFVIRGINIA. I finally have my comparison up there.

    We talked before about how complex these are. This diagramupthere, as you see, compares a biologic used to treat anemia andatraditional drug that treats peptic ulcers. It demonstrates thedif-ference between the traditional chemical drugs andbiologicaltherapies.

    Dr. WOODCOCK. Yes.

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    Mr. DAVIS OF VIRGINIA. As you can note on this, the biologicissignificantly more complex than a traditional drug.

    Dr. Woodcock, you highlight in your testimony the importanceofensuring that facilitating the development of follow-onproductsthrough abbreviated pathways doesn’t discourage innovationandthe development of new biological products, and you refer toHatch-Waxman as a balanced approach. Do you think an extendedperiodof data exclusivity as well as certain patent protectionslike Hatch-Waxman would help encourage innovation and developmentwithbiological products?

    Dr. WOODCOCK. Sir, I am a doctor and a scientist, and thatisreally outside of my area of expertise.

    Mr. DAVIS OF VIRGINIA. OK, so you don’t want to make theeco-nomic or policy determinations on that?

    Dr. WOODCOCK. No.Mr. DAVIS OF VIRGINIA. OK. You also state inyour testimony

    that demonstrating the similarity of a follow-on protein producttoa reference product is more complex and would require newdata.Does this mean FDA would require clinical safety data forfollow-on biologics?

    Dr. WOODCOCK. There is a very large range of complexity.Allright? The erythropoietin molecule that you have here is aprettycomplex example. There are very, very small biologic drugs ofdif-ferent kinds. So the amount of assurance and the amount ofdatathat would be needed is really based on how complex somethingisand how well it can be characterized in different ways.

    Mr. DAVIS OF VIRGINIA. But a slight alteration could have,youknow, significant clinical manifestations, wouldn’t it?

    Dr. WOODCOCK. FDA would not approve a follow-on product orageneric drug that we were not confident would have thesameperformance as the innovator drug.

    Mr. DAVIS OF VIRGINIA. What level of clinical safety datawouldbe necessary for approval, ball park?

    Dr. WOODCOCK. Well, to talk about this we have to get intoter-minology a little bit. Please bear with me.

    The abbreviated application process for 505(b)(2), forexample,may rely on some fact of the approval of a prior product.All right?

    Mr. DAVIS OF VIRGINIA. Yes.Dr. WOODCOCK. But we may approve aproduct using an abbre-

    viated application where some of the data, maybe some of theclini-cal trials or animal studies do not have to be repeated.However,that resulting of proof product is not consideredsubstitutable forthe other product. In other words, each of themstand alone andthey can’t be switched at the pharmacy, or it is notrecommendedthey would be. That is one level.

    Another level would be for a manufacturer to seekinterchange-ability, full interchangeability. So far the proteinsthat we have ap-proved all stand on their own. They have hadabbreviated applica-tions but they are not consideredinterchangeable with any of theother proteins in that class. Forexample, human growth hormoneor hyaluronidase.

    Mr. DAVIS OF VIRGINIA. You testified that the science andtech-nology isn’t sufficiently advanced to allow for comparison ofcom-

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    plex protein products. How close are we to discovering thosetech-nology methods; 5 years; 10 years?

    Dr. WOODCOCK. It is going to be a continuum, and right now wearevery short peptides, which are as small as the ranidine mol-eculeyou are showing there, for example, or in the same ball park.We cando it now, but those are very, very small compared totheerythropoietin molecule, so it is going to be a step-wiseprogressionover a decade or so.

    Mr. DAVIS OF VIRGINIA. Are there any non-clinical tests ortech-nology that could fully substitute for studying the safety ofbiotechproducts in humans?

    Dr. WOODCOCK. As I said, right now we do not have thesciencearound the immune system to adequately predict the humanim-mune response fully to any given product.

    Mr. DAVIS OF VIRGINIA. You listed two examples, omnitropeand—Ican’t pronounce the other one. Hyaluronidase?

    Dr. WOODCOCK. That is pretty good.Mr. DAVIS OF VIRGINIA. Neitherwas rated by FDA as therapeuti-

    cally equivalent or substitutes for other biologics on themarket.Many believe interchangeability or substitution is where themostcost savings would occur. Of course, the balance here is safetyver-sus efficiency and speed to market.

    When do you think the FDA will be able to rate a biologicprod-uct as interchangeable? And do you think the FDA needs thisau-thority if the science isn’t developed yet?

    Dr. WOODCOCK. For the 505(b)(2) drugs, which is what Icancomment on, manufacturers would need to do additionalclinicalstudies that would demonstrate interchangeability, and thatis afurther step. That is a higher bar than simply getting on themar-ket, an abbreviated application. Does that make sense toyou?

    Chairman WAXMAN. Thank you, Mr. Davis.Mr. Welch.Mr. WELCH. Thankyou, Mr. Chairman.Some of the drug companies have said that when abiotech prod-

    uct is derived from a specific cell line, any copy of theproduct willhave to begin with a different cell line. They arearguing, as I un-derstand it, that this change is so significantthat all the clinicaltrials, all the clinical trials must berepeated to ensure that thechange has not altered safety andeffectiveness. Obviously, we areconcerned about safety, but we alsowant to get the benefit and nothave this argument about safety beused to deny us the benefit.

    My question to you is: is it true that a change in a cell linewillalways necessitate repeating the original clinical trials?

    Dr. WOODCOCK. No. We do not believe that. Again, anymanufac-turing change, whether the cell line, the DNA construct,the manu-facturing process, the way the drug is purified, any ofthese couldaffect safety and effectiveness, and therefore data hasto be submit-ted and a very careful look has to be taken to makesure that ithasn’t. The amount of data that we would need or thatanyonewould need to make that evaluation depends, again, on thecom-plexity of the product.

    Mr. WELCH. All right. So the bottom line here is that youbelievethat you do not need, for safety, to repeat the entireclinical trial?

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    Dr. WOODCOCK. In some instances the manufacturer may not beableto show enough similarity and they may have to repeat muchof theclinical program. In other instances they may be able toshow anextreme amount of similarity, a very great similarity topriorproduct, and therefore would have very much smaller clinicaltrialsneeded, perhaps of immunogenicity.

    Mr. WELCH. And that is an evaluation that you would feelcon-fident, based on the information that you had at hand, thatyoucould make?

    Dr. WOODCOCK. Yes. FDA has a long history, as I said, ofcontrol-ling the access to market after manufacturing changes for averywide number of products for all pharmaceuticals on themarket,and this is another example of that.

    Mr. WELCH. I was going to ask another question, but youarestarting to answer it. What scientific developments haveallowedFDA to feel that confidence you are describing, thatmanufacturersof existing biologics can change cell lines,manufacturing facilities,and/or the fermentation processes withouthaving it conduct thoseclinical trials?

    Dr. WOODCOCK. Yes. And, as I said, sometimes they doandsometimes they don’t. It really depends. The burden is on them,themanufacturer, to show through scientific data that theperformanceof the product after the change process is going to bethe same asthe performance of the product before the change.

    Mr. WELCH. And are clinical trials always the mostsensitivestudies for detecting changes in safety or effectivenessdue to proc-ess changes?

    Dr. WOODCOCK. No. No, I think that is a commonmisconception.Clinical trials may be insensitive to certain typesof changes, ad-verse effects, for example, that are rare oruncommon.

    Mr. WELCH. Yes.Dr. WOODCOCK. And we really need to use thescientific tool to

    assess the change in the product that is appropriate. It mightbephysical characterization or it might be a functional test. Itmightbe evaluation of the purity of the product.

    Mr. WELCH. Thank you. I yield the balance of my time.ChairmanWAXMAN. Thank you for yielding. You have another

    minute left on your time, so if the gentleman would permit Iwilltake that minute if he will yield to me.

    Dr. Woodcock, if FDA were given broad authority to requireanystudies necessary for approval of follow-on versions of PHS Actap-proved protein products, are you comfortable that the agencycoulduse its discretion to ensure that only safe and effectiveproductswere made available to patients? I think you have answeredthatquestion several times, but let me just put it veryclearly.

    Dr. WOODCOCK. I think that FDA must do that. All right? We donotcurrently approve generic products unless they have absolutelymetour standards and were follow-on products under 505(b)(2). Wemustmaintain the confidence in our program and also our own sci-entificintegrity.

    Chairman WAXMAN. Based on your experience with thecom-parability guidance, can you give the committee a perspectiveonhow often companies must do clinical outcome trials, not justPKor PD studies, to support a product or process change afterap-

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    proval of its BLA? Are large clinical outcome studiesscientificallyessential to support the approval 1 out of 10post-approval productchanges, 1 out of 20 post-approval changes, or1 out of 50 changes?

    Dr. WOODCOCK. I would say that the factor that is mostimpor-tant here is the magnitude of the change; however, it isprobablymore in the 1 in 50 range than the 1 in 10, or whatever.But don’tforget there are many different types of changes thatoccur all thetime to manufacturing processes. If you included allof those, thenrequiring clinical studies of outcomes would probablybe quite rare.

    Chairman WAXMAN. Thank you.Mr. Bilbray.Mr. BILBRAY. Mr.Chairman, I would like to yield my time to the

    gentleman from the Northwest Territory, but I would first liketoclarify that, as a native Californian as opposed to Mr. Issa whoisan immigrant, I was outraged at the concept of bringing abottleof Merlot to this table and having it chilled.[Laughter.]

    The only thing worse than that is to take it from the tableandtake it back to his office after he presented it.

    But at this time I would like to yield to Mr. Burton.Mr. BURTON.I thank the gentleman for yielding. I am from the

    Midwest, not the northwest.Mr. BILBRAY. Well, the NorthwestTerritory.Mr. BURTON. Ohio, the Northwest Territory. You are goingback

    a long way.First of all, let me preface my remarks by saying thepharma-

    ceutical industry and FDA working together has createdprobablythe highest quality of life in the history of mankind, andI appre-ciate that and I think everybody in America does. There aresomequestions, though, that I have to ask about the process.

    You said it is a judgment call on whether or not thisproductcomes to market. Who makes the judgment? Who makes thecall?

    Dr. WOODCOCK. The FDA.Mr. BURTON. Don’t they have advisorycommittees that review

    the process, review the product, review the results, and thentheymake a recommendation to the FDA?

    Dr. WOODCOCK. Yes. Advisory committees are frequentlyutilized,particularly on clinical decisions. Here we are talkingabout sci-entific characterization of the product in a wide varietyof ways.Most often, that is something that the FDA scientistsdo.

    Mr. BURTON. But the FDA does have advisory committees foral-most all of the products?

    Dr. WOODCOCK. Yes.Mr. BURTON. When I was chairman I asked—Idon’t believe it

    was you, but I asked one of your coworkers who was a leaderatthe FDA how many times has an advisory committee recommenda-tionbeen turned down by the FDA.

    Dr. WOODCOCK. You are asking me?Mr. BURTON. Yes.Dr. WOODCOCK. Idon’t know the answer to that.Mr. BURTON. I will tell you what itwas before. It was never. The

    advisory committee, I was told by the people who were doingtheinvestigation for my committee when I was chairman, was thattheadvisory committee recommendations were always accepted.

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    Now, the other thing I would like to know is: the people ontheadvisory committee, do they file financial disclosurereports?

    Dr. WOODCOCK. Yes, they do.Mr. BURTON. We looked at some of thefinancial disclosure re-

    ports when I was holding hearings on this when I was chairmanandwe found that many of the people in the advisory committeesdid notfile financial disclosure reports. And we found that some ontheadvisory committees had a conflict of interest. The RotoShieldviruswas one of those. The head of the advisory committee had aninterestin a company that was going to make a RotoShield virusvaccine,which was put on the market at his advisorycommittee’srecommendation, and FDA approved it based upon therec-ommendation. One or two children died and several people werein-jured and they pulled it off the market within 12 months.

    I bring this up because this is a very important issue wearetalking about today, and I would just like to ask that theseadvi-sory committees, when they make recommendation, that there isathorough judgment made after the advisory committee makesitsdetermination, and that the FDA does not always accept theirre-sults or their recommendations, and that there are completefinan-cial disclosure reports.

    The reason for that is pretty obvious. If a person is on anadvi-sory committee and their recommendation is accepted andtheyhave a financial interest in a pharmaceutical company that isgoingto manufacture a product like that or a like product, they areliableto have their judgment tainted just a little bit. It hashappened inthe past and I hope it doesn’t happen in the future.

    The cost of biotech drugs increased 17 percent from 2005 to2006,and that was compared to 5.4 percent increase for traditionalphar-maceuticals, which are much more expensive here than insomeother countries, in most cases. Why was that increase so much?Doyou know?

    Dr. WOODCOCK. My understanding is that some of the newbiotechproducts on the market that are very highly effective, youknow, arevery expensive to purchase, as some of the members al-ready alludedto. But I don’t have any complete analysis of this.

    Mr. BURTON. I have a couple more questions, but I willwait.Chairman WAXMAN. We will have another round.Mr. BURTON. I willcatch it next time.Dr. WOODCOCK. May I?Chairman WAXMAN. Yes.Dr.WOODCOCK. The FDA has recently published new guidance

    on advisory committee conflicts of interest, and it lays outvery ex-plicit and transparent guidance on how people will beevaluated fortheir conflicts of interest.

    Mr. BURTON. That is very good news. I appreciate hearingthat.That is a great step in the right direction. Thank you.

    Chairman WAXMAN. Thank you, Mr. Burton.Mr. Davis.Mr. DAVIS OFILLINOIS. Thank you very much, Mr. Chairman.Dr. Woodcock, I havealways tried to understand—and if you

    could enlighten me it would be very helpful to me—the realdif-ference between generic drugs and the brand name drugs. Iftheydo essentially the same thing or if the level of effectivenessis es-

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    sentially the same, why do we pay so much more for one asop-posed to the other? I have never been able to, in my own mind,feelthat I had a real understanding of that.

    Dr. WOODCOCK. Well, if I may, if you look at the diagram—itisgone now, but there was a diagram of the molecule up there,asmall molecule. We know exactly everything how that moleculeisstructured. We know everything about it. And so what we do inthegeneric drug program is we require an exact copy of thatmoleculeto be the generic drug and then we make sure that moleculegetsinto the body the exact same way that the innovator moleculegetsinto the body. So then we say if it does that it is going tohave thesame effect on the body because it is circulating around inthe bodythe same way as the innovator drug. So that is what ageneric drugis.

    The problem with the proteins is it is very difficult to saywehave the exact same molecule because it is such a complicatedmol-ecule.

    Mr. DAVIS OF ILLINOIS. The effectiveness or the impact, arewesaying that we would expect a different level of impact oreffective-ness using one as opposed to the other?

    Dr. WOODCOCK. For the generic drugs that FDA approves we ex-pectthe exact same performance. Now, that means the exact samegoodeffects and the exact same side effects as the drug it is acopyof.

    Mr. DAVIS OF ILLINOIS. Do you know then how the price orcostdifferential emerges or is determined?

    Dr. WOODCOCK. Well, while the innovator drug is patentpro-tected or protected by exclusivity, there are no other copiesavail-able to be prescribed. During that time the price is quitehigh.Once generic versions get in the market, the price of thevariousgeneric copies becomes only a fraction of what was chargedby theinnovator.

    Mr. DAVIS OF ILLINOIS. Are you aware or familiar with anycon-sumer studies that would indicate whether or not consumershavea greater level of confidence, for example, in the morepopularpharmaceuticals than the generics?

    Dr. WOODCOCK. Certainly the generics are not advertisedandcertainly there is some brand name loyalty that I have heardof.I have certainly talked to many, many consumers over mylifetimeabout this issue. There is some residual concern stillabout thegenerics and whether are they as good because they are notthebrand name product; however, I think in the last 10 or 12yearsof our generic drug program, confidence, both by the healthprofes-sionals—the pharmacists, the doctors—as well as theconsumershas really risen, and most people in this country are usedto takinggeneric versions.

    Mr. DAVIS OF ILLINOIS. And so then one could probablyreason-ably assume that marketing plays a great role in shaping ouratti-tudes and thoughts about the drugs that we would most likelypre-fer using?

    Dr. WOODCOCK. I can’t comment on that directly, but that isoneof the purposes of advertising.

    Mr. DAVIS OF ILLINOIS. And so I would assume that itprobablyworks fairly well and that it does, in fact, skew one’sthinking. And

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    if we are talking about having the most cost-effective healthcare,then it just seems to me that the more enlightened consumersbe-come, that will probably have as much impact on costeffectivenessin health care as anything that we are going toregulate or any-thing that we are going to do.

    I thank you very much for your answers.Dr. WOODCOCK. At therequest of Congress, we had an education

    program, outreach program, on the generic drug program. Ithasbeen very effective.

    Mr. DAVIS OF ILLINOIS. Thank you. Thank you very much.And thankyou, Mr. Chairman. I yield back.Chairman WAXMAN. Thank you, Mr.Davis.Mr. Burton was using Mr. Bilbray’s time, and he said he hada

    few more questions, so before we go to a second round I yieldtoyou your first-round 5 minutes.

    Mr. BURTON. Thank you. I just have a few more questions.Dr.Woodcock, I think you have been very helpful, some of your

    answers today. I really appreciate that.The pharmaceuticalindustry deserves to get some of their money

    back or all of their money back when they spend a lot of moneyonresearch and development, and that is why the patents arethere, andthen when it expires, of course, it can be a generic drugand theyshould have recovered their investment.

    Are other countries working to develop these biotech drugs?Dr.WOODCOCK. Yes. As was alluded to earlier, the European

    Union has published a directive and is implementing a programonwhat they call biosimilars. By that generally they meanbiotechdrugs.

    Mr. BURTON. If they produce a biotech drug and there is asimi-lar biotech drug that has been produced here in the UnitedStates,because of the differences, the scientific differences thatyou weretalking about when we saw the slide a while ago, the FDAprobablywould not allow that drug to be imported into the UnitedStatesuntil it was approved by the FDA, even though it did thesamething or pretty much the same thing?

    Dr. WOODCOCK. Yes. The law doesn’t allow drugs to be importedinthe United States unless they are approved.

    Mr. BURTON. Let me ask you one more question. If we hadre-importation or importation of the pharmaceuticals that areap-proved by the FDA, would the prices of those pharmaceuticalsbelower?

    Dr. WOODCOCK. Again, this is beyond my area of expertise.Iapologize.

    Mr. BURTON. I will just followup by saying that everybodywantsfree enterprise to succeed and they want the pharmaceuticalindus-try to make a lot of money so that they can do continuedresearch,but when my first wife had cancer—and I have talked aboutthisbefore—we went to have her chemotherapy and the tamoxifenthatone woman was taking, she was complaining about the costbeingabout $300 a month, and another lady said I’m getting thesamething from Canada for $50 a month, so it was six timesless.

    There are a number of us in Congress that would like to seetheFDA working with their counterparts in other countries andthepharmaceutical companies working with their counterparts inother

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    countries and the governments of other countries to find outsomeway to level the playing field so that Americans are paying acom-parable price for their pharmaceutical products as they do inothercountries. It just doesn’t seem fair to go to Germany orFrance orSpain or Canada and find that the very same product isbeing soldfor much less, and Americans are paying actually a greatdeal morefor the research and development and the advertising thanis beingpaid elsewhere.

    That is just a suggestion. I appreciate very much your candidan-swers.

    I yield to the chairman.Chairman WAXMAN. Thank you very much foryielding. The gen-

    tleman has a minute and a half, so I will be glad to take it.Ifa statute were passed giving FDA broad authority to review

    abbreviated applications for follow-on proteins, and ifcompanieswere ready to begin submitting applications as soon as thestatutebecame law, is it reasonable to assume that FDA would beable tobegin reviewing those applications as soon as they weresubmitted,assuming, for the purpose of this question, that thestatute did notrequire FDA to issue regulations or guidance as aprerequisite tothe review of applications?

    Dr. WOODCOCK. FDA is currently, as I said, reviewingapplica-tions and also inquiries from companies and so forth,providingguidance for drugs under the 505(b)(2) regimen. So we havethetechnical expertise to perform these functions.

    Chairman WAXMAN. Thank you.Mr. Hodes.Mr. HODES. Thank you, Mr.Chairman.Dr. Woodcock, I want to focus for a moment on the issue ofcom-

    parability.Dr. WOODCOCK. Yes.Mr. HODES. It is my understandingthat biologics as a group are

    so diverse and in some cases so incompletely understood thatthereis today no one-size-fits-all set of studies that candemonstratecomparability. Is that true?

    Dr. WOODCOCK. Absolutely. Biologics, as opposed to biotechpro-teins, range from everything from gene therapy to cells, livingcellsof different types, to tissues—a huge range of different kindofproducts.

    Mr. HODES. And am I correct that biopharmaceutical productsoftenundergo changes after approval and that pre-change andpost-changeproducts will be comparable, as opposed to identical?

    Dr. WOODCOCK. Yes. As we were discussing before, manufactur-ersneed to continue to improve their process or they may need toopenup new plants or increase the level of production, the scaleofproduction. There are a lot of changes that have to be made.Aftereach one of those changes, we must assess whether or nottheperformance of the product has changed.

    Mr. HODES. And the FDA establishes boundaries andbatches.Different batches have to fall within establishedboundaries forthat product?

    Dr. WOODCOCK. Yes. Any product, whether it is a small moleculeordrug, has slight variations lot to lot in any kind of testingpa-rameter that you would put on it, so the traditional approach isto

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    establish boundaries within which a product can vary, but itcan’tgo outside of those limits.

    Mr. HODES. Now, just as the science is evolving on themanufac-turing side—certainly from the FDA’s standpoint techniquesfor as-sessing the structure and activity of biologics are evolvingrapidly—and our understanding of biological structure and activityis im-proving all the time; is that correct?

    Dr. WOODCOCK. That is correct.Mr. HODES. If Congress were totell the FDA what specific types

    of clinical data must always be required for approval offollow-onbiologics based on today’s science, could such clinicaldata require-ments become obsolete?

    Dr. WOODCOCK. Certainly, from my point of view, flexibilityinenabling us to incorporate the new science into the regulatoryproc-ess as that science evolves and becomes available is in thebest in-terest of the public as well as the agency and theindustry.

    Mr. HODES. And if a follow-on statute required a clinical trialinevery case, could it end up requiring perhaps unnecessaryandtherefore potentially unethical trials in the future?

    Dr. WOODCOCK. Where trials aren’t needed, it is, you know,ofquestionable ethics to repeat them. So use of human subjectsfortrials that are not needed or done simply to check a box on aregu-latory requirement are not desirable.

    Mr. HODES. Let me ask you a question about the EU system. TheEUregulations, as I understand them—imperfectly, I might add—requirepost-market surveillance; is that correct?

    Dr. WOODCOCK. I can’t speak exactly. The Europeans havetheability to require post-marketing surveillance for anyapprovedpharmaceutical.

    Mr. HODES. Does the FDA currently have any requirementsforpost-market surveillance?

    Dr. WOODCOCK. We very frequently request post-marketing stud-iesbe performed at the time of approval, and those are agreed toby thefirms.

    Mr. HODES. So it is the manufacturers who are conductingthepost-market surveillance?

    Dr. WOODCOCK. Yes.Mr. HODES. The FDA relies on the manufacturersfor that post-

    market surveillance; the FDA doesn’t do any of its own?Dr.WOODCOCK. Right. The FDA conducts the adverse event re-

    porting system, which is an adverse event reports from doctorsandcompanies, and we do some limited studies, but in general wedonot have the capacity to do post-marketing surveillance as youaredescribing.

    Mr. HODES. Do you believe with biogenerics developing asrapidlyas the field is developing, there should be expandedrequirementsfor post-market surveillance?

    Dr. WOODCOCK. All pharmaceuticals when they are approved forthefirst time have a fair amount of uncertainty still surroundingthemabout their performance, and particularly, as we have dis-cussedalready, any protein product that would be approved wouldcontinueto have questions about immunogenicity and perhapsother sideeffects that would probably need to continue to be lookedat in thepost-marketing period.

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    Mr. HODES. Can the FDA require post-marketing studies?Dr.WOODCOCK. What we do is say to the company: you need to

    agree to conduct this study, and if you do then that is part oftheapproval the company agrees to do.

    Mr. HODES. So, if I understand your answer, the answer isyes,the FDA does have the authority to require post-marketstudies?

    Dr. WOODCOCK. At the time of approval.Mr. HODES. And whatproportion of post-market studies that you

    require are completed?Dr. WOODCOCK. That is a complicatedquestion. There are many

    different types of studies that are requested, and some of themgoon a long time, so there isn’t a really high proportion. I don’tknowthe exact number, because it depends on what analysis youaredoing, but many of these studies are not completed.

    Mr. HODES. And if you were the last word on this, thinkingaboutwhere the science is going with biogenerics, do you see a needforincreased requirements for post-market studies ofthesebiogenerics, none of which will ever be identical, either inbatch orin actual structure, to the original?

    Dr. WOODCOCK. I believe it would be likely in many cases, but,asI said, this is going to be case-by-case because of all thedif-ferences in the different products. In many cases FDA wouldneedto have post-marketing surveillance or post-marketing studiesdoneto resolve remaining uncertainties.

    Mr. HODES. And, last question, does the FDA have an enforce-mentmechanism to require completion of any post-marketing stud-ies thatyou have required of the manufacturers?

    Dr. WOODCOCK. We can publicize the fact that the studies havenotbeen done, and we could take the drug off the market.

    Mr. HODES. So the enforcement mechanism is the possible re-movalof the drug from the market for lack of completion?

    Dr. WOODCOCK. Yes.Mr. HODES. Has that ever been done?Dr.WOODCOCK. Not to my knowledge.Mr. HODES. Thank you.I yield back.Thank you, Mr. Chairman.Chairman WAXMAN. Thank you. That is calledthe guillotine, ex-

    cept it is never used.Dr. Woodcock, I understand that it isquite a bit more com-

    plicated to establish interchangeability of two proteinproductsthan to establish their comparable safety andeffectiveness. Wouldit be possible to demonstrate that a copy of awell-understood pro-tein is interchangeable with the brand namedrug if there are nolimits on what studies can be required?

    Dr. WOODCOCK. We believe so. The situation in health carerightnow is that products that are interchangeable, they may berepeat-edly switched back and forth. All right? And where you havea situ-ation where you have a number of similar products on themarket,the same indication, and they are very similar, it might bethatthey can be switched back and forth among one anothermultipletimes for a given patient, depending on the plan and whothey con-tract with and so on. In that situation either theinnovator productcould cause antibodies to the follow-on product orvice versa. We

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    think we would have to test that in people to make sure, butwethink it would be feasible to do those tests.

    Chairman WAXMAN. Is our understanding of protein structureandactivity likely to evolve in a way that will make it possibletoestablish interchangeability in the foreseeable future, at leastforsome of these proteins, that may not be obvious at thepresenttime?

    Dr. WOODCOCK. It may not be the protein, itself, that causestheimmune response, but it could be different contaminants thatareco-purified from the cell line or during the manufacturingprocess,or it can be changes that happen late in manufacturing orduringstorage or so forth, so it is really a very complicatedsituation.

    Chairman WAXMAN. For very simple, well-understood proteins,whatkinds of studies might be required to establishinterchange-ability?

    Dr. WOODCOCK. Well, a study that actually performs thatactiv-ity, which changes the patient back and forth from oneversion ofthe product to the next and follows the immuneresponse.

    Chairman WAXMAN. Would that be a difficult study?Dr. WOODCOCK.No. In some cases there might be ethical issues

    that we would have to address very carefully. We would notwantto set any patient up for harm.

    Chairman WAXMAN. Might the study requirements lessen overtime asthe molecules are better understood?

    Dr. WOODCOCK. Yes.Chairman WAXMAN. Do you think that the FDAwould ever de-

    clare a copy of a biotech drug regulated under Hatch-Waxman tobeinterchangeable if the agency had doubts about whether it couldbesafely substituted for the brand name product?

    Dr. WOODCOCK. No. I mean, we believe that our finding of anArating of interchangeability is our word. We are saying thatsci-entifically we believe those products would be interchangeable,andwe would not do that unless we believed that were the case anditwas substantiated with scientific data.

    Chairman WAXMAN. Do you think that the FDA could be trustedtomake appropriate interchangeability determinations forproteinproducts if the agency were given statutory authority toapprovecopies of biologics under the PHS Act?

    Dr. WOODCOCK. I believe that the FDA can be trusted to carryoutits mandate from Congress, whatever that might be.

    Chairman WAXMAN. And if we gave you an additional mandate,youfeel you would be able to live up to it?

    Dr. WOODCOCK. Yes. I believe we have scientific expertise. Aswehave already discussed, we have been managingmanufacturingchanges for all pharmaceuticals on the market for avery long time.

    Chairman WAXMAN. Thank you.Let me see if any Member wishesadditional time for questions?[No response.]Chairman WAXMAN. Ifnot, let me thank you very much for your

    presentation and your willingness to answer these questions.Ithink it has been very helpful for us in our understanding ofthisissue. Thank you very much.

    Dr. WOODCOCK. Thank you.

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    Chairman WAXMAN. The Chair would like to now call forwardoursecond panel.

    Dr. Geoffrey Allan is the president, CEO, and chairman oftheBoard of Insmed Incorporated located in Richmond, VA. Insmed isabiopharmaceutical company focused on the development andcom-mercialization of drugs for the treatment of metabolic diseasesandendocri

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