Remarks by:

Linda Suydam, D.P.A.

Senior Associate Commissioner

Food and Drug Law Institute Educational Conference

Washington, D.C.

December 17, 1999

[SLIDE 1] (Linda Suydam, D.P.A.)

Good afternoon.

Thank you for the opportunity to be here today to discuss the Agency's implementation of this very special law.

[SLIDE 2] (Protecting Consumers, Promoting Public Health)

FDAMA, as we call the FDA Modernization Act of 1997, is more than an exceptionally comprehensive collection of mandates and programs: it is a law that changes the mission of the Agency to include promoting public health and enhances FDA's operations so tht our efficiency and effectiveness is elevated to unprecedented levels.

[SLIDE 3] (FDA Modernization Act of 1997)

In many ways, FDAMA embodies our agency's highest aspirations for public health protection; but it also brings us face to face with many obstacles and concerns we have been unable to overcome in the past.

Implementation of FDAMA therefore tests not only FDA's flexibility and capacity to innovate, but also the outer limits of performance that are attainable by hard work and adherence to the highest scientific standards.

The agency's record in Fiscal Year 1999 -- which ended on September 30 -- provides demonstrable indications that FDA is meeting FDAMA's expectations for outstanding effort and bold new thinking.

FDAMA directs FDA to accomplish three major tasks:

[SLIDE 4] (Three Major Tasks)

• to continue for another five years the highly successful user fee program that was established by the Prescription Drug User Fee Act of 1992;
• to formulate policies and conduct operations in close consultation and collaboration with the agency's stakeholders and foreign counterparts; and
• to use the leveraging potential of these close ties and other efficiencies to meet all statutory timeframes and eliminate all backlogs.

Today, I will give you the highlights of FDA's performance in all three areas, starting with the FY99 results of PDUFA II, as we call the reauthorized user fee program for drugs and biologics.

I am proud to report that once again, FDA has met or exceeded practically all performance goals of the program.

This was the seventh year in a row that FDA has demonstrated that if we are provided adequate resources, we meet or exceed performance goals.

In the early years of the PDUFA program, submissions of new product applications increased at the average rate of more than 6% a year.

The recent trend in new application filings, however, has been relatively flat.

Priority filings have dropped somewhat from their peak in FY 98, but on the whole they have increased at an average annual rate of 9%.

The percentage of filed applications that were ultimately approved increased from 60% before PDUFA to 80%-83% for submissions from FY93 through FY95.

We expect that the rate of median approval times to continue at 12 months for FY98 submissions, but if the current rate of first review approvals is sustained, FY2001 or FY2002 median approval times will probably go down to 10 months.

Median approval times for priority applications submitted in FY98 last year dropped to 6 months, which is more than twice as fast as the corresponding times before PDUFA.

[SLIDE 5] (New Products Applications)

This slide shows what's happened to the reviews of New Drug Applications and Biologic License Applications.

Fiscal year percentages are given for 94-98.

PDUFA II goals for the review of these standard products in FY99 was 90% within 12 months and 30% within 10 months.

The goal for priority drug reviews was 90% within 6 months.

All 120 FY98 submissions have been reviewed on time.

All 26 priority and standard FY99 submissions that have been reviewed were on time, and the early indicator performance for 18 priority NDAs received during the first six months of the last fiscal year is also 100 percent on time.

[SLIDE 6] (Resubmitted New Product Applications)

As you can see on these slides, we've also met all PDUFA goals for resubmitted New Product Applications --

[SLIDE 7] (Efficacy Supplements)

...barely missed the goal for Efficacy Supplements by one review --

[SLIDE 8] (Manufacturing Supplements)

...and met the goal for Manufacturing Supplements.

For the Manufacturing Supplements submitted in FY98, the combined on-time performance by FDA's drug and biologic Centers was 99 percent.

The new PDUFA II goals for meeting management and clinical holds have also been met or exceeded in all cases.

[SLIDE 9] (Impact Report --Tufts U. study of drug development)

Moreover, we now have evidence that total drug development times began declining even before PDUFA II:

• A report released in summer by the Tufts University Center for the Study of Drug Development shows that clinical development times for new drugs in 1996-1998 dropped 18% from the period of 1993-1995.
• May I remind all of you that this shortening of development times results in incredible savings to the pharmaceutical industry.

[SLIDE 10] (Mean Clinical and Approval Phases: 1984-1998)

This slide shows that the mean clinical phase for all 108 New Chemical Entities approved in the 1996-98 period was 5.9 years, and the shortest clinical phase was just 1.5 years.

[SLIDE 11]

The PDUFA II results are not the only expression of the culture of excellence to which the FDA has always aspired.

Last year, Commissioner Henney's emphasis on the strengthening of FDA's science advanced several important research projects, one of which produced preliminary evidence that mothers of children with Down syndrome have impaired folate metabolism.

FDA's Office of Generic Drugs received the Vice President's Hammer Award for greatly increasing its efficiency, and the agency's Center for Veterinary Medicine was similarly honored for helping to protect the United States against the bovine spongiform encephalopathy that had ravaged meat production in Europe.

FDA's Center for Food Safety and Applied Nutrition and Office of Regulatory Affairs played a key role in the implementation of the President's Food Safety Initiative, and FDA's Center for devices evaluated 44 new products, many of which represent technological breakthroughs and a new dimension in complexity.

Our agency also took important steps to meet another important requirement of FDAMA by holding another round of stakeholder consultations, and taking unprecedented steps to work closer with FDA's constituencies.

[SLIDE 12]

FDAMA's requirement for FDA's consultations and collaboration with constituents did not present our agency with a new doctrine: FDA has been forming meaningful partnerships with those who share our goals of public health promotion and protection for many years.

FDAMA, however, made the collaborative principle so central to the agency's operations that its implementation required a lot of new thinking and a fresh look at some of our long-standing premises.

One of the ways we are promoting that new thinking is the establishment of a special group of senior FDA staff and managers to examine all aspects of leveraging -- the process of using resources outside FDA to help us accomplish the agency's mission.

The group's task is to enhance our current system that enables FDA to identify projects suitable for collaborative action; find appropriate partners who would share FDA's interest in performing the necessary work; and then, by combining FDA's and the partner's efforts, achieve synergy toward reaching the public health objectives.

I can't give you the final conclusions of our leveraging think tank because we still have a lot of ground to cover.

But some of the basic principles that guide us are that for FDA, leveraging is not the means of last resort, but a primary strategy; that our focus has to be on public health aims rather than mere resource-savings or operational economies; and that preferably, leverging has to target areas that offer multiple benefits.

Another challenging aspect of leveraging is that we'll have to learn how to function effectively as regulators and partners at the same time.

But we are not merely charting a novel course toward our unchanged goal of protecting the public health, we are already following it.

This fall, FDA launched at Dr. Henney's request a new training program focused on emerging technologies of relevance to the the agency.

The training is conducted together with the regulated industry.

The first of these courses brought more than 30 FDA field investigators, Center scientists and field lab analysts to a Merck manufacturing plant in Pennsylvania for a tour of the facility, a turtorial and a discussion on the latest in barrier isolation sterilization methodology.

Preparations for a second course are already underway for January at a General Mills facility.

The course will deal with regulatory applications of rapid screening methods for allergens and microbiological hazards.

We have plans for similar advanced courses in the device, drugs and biotechnology areas.

Dr. Henney also described yesterday other examples of important leveraging such as PQRI and JIFSAN.

Also in the last fiscal year, our agency began implementing the pharmaceutical and medical device annexes of the Mutual Recognition Agreement between the United States and the European Union.

The implementation of this agreement, one of many such international work-sharing projects that are strongly urged by the FDA Modernization Act, will take at least three years.

When it is fully in force, the MRA will enable FDA and its counterparts in the 15 countries of the European Union to carry out each other's inspections of export facilities, and accept third-party evaluation of low-risk medical devices manufactured for export.

[SLIDE 13][SLIDE 14][SLIDE 15][SLIDE 16] (Pediatric Exclusivity)

Pediatric Exclusivity is also a major concern of many of you, and I want to point out how well we are doing on this provision of FDAMA.

Unfortunately, there are limits to what we can accomplish with inventiveness, without the added energy that comes from an adequate budget.

[SLIDE 17]

In contrast to the excellent performance of FDA's user fee and other specially financed priority programs, some of our programs that depend on FDA's budget did not achieve their mandated goals.

One important reason is that our agency is shrinking like Alice when she fell into the well.

[SLIDE 18] (The Shrinking FDA)

This slide shows what's been happening to our budgets in the last seven years.

In constant dollars, the agency's total resources increased only slightly over $100 million, while the cost of the priority programs -- the implementation of PDUFA, the Mammography Quality Standards Act, the tobacco rule and the Presidential Food Safety Initiative -- has almost tripled, from $138 million in 1993 to $363 million in FY 2000.

As a result, what's left for everything else that FDA does is $552 million, $119 million less than in 1993.

[SLIDE 19] (FDA FTEs)

One of the effects of the declining resources is shown on this graph.

After subtracting the additional employees who are paid for by the drug user fees and work solely on PDUFA issues, FDA now has almost 1,000 fewer employees than it had in 1994.

[SLIDE 20] (Growth of Import Line Entries)

At the same time, import line entries of regulated products have gone up from about 1.5 million to 5.5 million.

We are surveying these imports with just about the same number of personnel we had in 1990.

[SLIDE 21] (Responsibilities Grow Faster than FDA)

This slide demonstrates the tremendous expansion of FDA responsibilities and the slight increase of FDA's budget authority -- which, remember, is not adjusted for inflation and includes the funds earmarked for the priority programs I mentioned.

As a result there are many things we are unable to accomplish.

[SLIDE 22]

For years, we've tried to emulate the Queen of Hearts' optimism and find a way of meeting FDA's expanding responsibilities despite the diminishing resources.

Today, we have to admit the sobering fact that it can't be done. We're still behind the statutory requirements for facility inspections.

Our review times for many products not supported by user fees are longer than specified by the law.

Some of our laboratories are in a deplorable condition.

And we are increasingly hard-put to monitor adverse events reports, which for drugs alone have tripled in the last 8-9 years.

Moreover, the future that's practically upon us will present FDA with still more challenges, for which we need to start preparing.

[SLIDE 23]

• Our agency is the gatekeeper for the multitude of future products of genetic engineering, microprocessing and miniaturization technologies, and new techniques in the production of food additives and food packaging.
• Consumers want and need these products, and we must have the ability to understand and evaluate them.
• The fast-advancing globalization of trade and regulation will impose on FDA the staggering task of harmonizing its rules while maintaining the highest public health standards and protecting the U.S. interests.
• Increased prescribing and sales over the Internet will require a major upgrading of FDA's surveillance capacity to safeguard consumers against potentially serious public health hazards.
• And the greater complexity of new medical products will present FDA with more intricate risk management environment in which to make its increasingly difficult regulatory decisions.
• We're excited by these challenges, but we've learned during the last decade that FDA cannot keep in step with the future if its capacities don't measure up.

[SLIDE 24]

To achieve all of the inspiring goals of FDAMA, our progress must be grounded in realistic resources and realistic expectations.

Thank you.