Remarks at the GPhA Annual Meeting

Remarks as Delivered of Margaret A. Hamburg, M.D.
Commissioner of Food and Drugs
GPhA Annual Meeting
Orlando, Florida
Friday, February 18, 2011

Good morning—and thank you for that kind introduction and warm welcome. I know you’ve had a busy and productive few days, and I appreciate your staying until the very end to hear me speak.

I must say, it certainly doesn’t feel like it has been a year since I traveled to Florida to speak at your last meeting. But it has indeed been that long and for both of us—the FDA and GPhA—it has been a busy time.

A lot has happened and most of it has been good. Being here this morning, I can tell that this is an engaged and energized group—and I don’t think it’s just the Orlando sun that has revitalized you! Together in this room, you represent the depth and breadth of the generics industry and can speak not only for yourselves and your products—but also for the millions of people in this country and all over the world who benefit from what you do.

It is heartening on many levels that you have come back together as a unified organization. That is very important for all of you and your industry—and I hope it will mean enhanced collaboration, communication, and commitment between your group and the FDA.

As for my agency, I think we accomplished a great deal in 2010. Since I saw you last, we have grown, evolved, renewed, and refined our commitment to serving the American people and promoting and protecting their health. And we focused on key priority areas—themes that will resonate throughout my remarks this morning as well: integrity, the importance of science, and the challenges of a globalized world.

For example, we worked to regain the trust and confidence of the American people by putting in place a rigorous initiative to promote transparency for the public and accountability within the agency.

We recommitted ourselves to tough yet fair enforcement policies.

We took on new responsibilities and new authorities to support our public health mission, most recently with the passage of the Food Safety Modernization Act, as well as the implementation of the new tobacco legislation.

We strengthened science at the FDA and promoted, more broadly, the field of regulatory science to support the development of the knowledge and tools needed for the effective and efficient review of product safety, efficacy, potency, quality and performance. This is an under-developed area of science, yet key to facilitating innovation and finding new, better, and faster ways to get patients the products and therapies they need, as well as an important foundation for vital efforts to improve safety and respond to emerging concerns throughout a products lifecycle.

And we worked to shift the paradigm of how we interact and partner with the international community—our regulatory counterparts, the scientific community, stakeholders, and industry—as we strive to ensure the safety of imports and meet the demands of our modern, globalized world.

Today, the products our consumers use are no longer simply American products—they are global commodities. And that makes protecting American consumers a global endeavor. Of course, we share this challenge with our counterparts in other nations. And so we are working to build a public health safety net for consumers around the world that is created, supported, and maintained by a global alliance of regulators.

This is just a snapshot of our work at FDA over the past year. Our scope and responsibility are enormous, and we have a lot left to do…a full plate for 2011. Our increased responsibilities will, frankly, be a challenge in light of the current budget situation. Almost certainly, FDA will be once again asked to do more with less.

But I intend to be a strong advocate for what FDA needs. Rising to this challenge is critical, because history has shown that everyone—consumers and industry alike—benefits from a strong, productive FDA that is fully equipped to carry out our important functions. Our mission is to promote and protect health and it is something we will never walk away from. So we are committed to moving ahead, regardless of budgetary hurdles.

And that includes working more closely than ever before with your industry…and building our capacity to inspect, review, and approve generic drugs, as well as to provide appropriate oversight once they are on the market.

So we have reached a critical moment in our relationship. You have spent the last several decades carving out your niche in the pharmaceutical, medical, scientific, and public health communities—and you have been quite successful in doing so.

And FDA has been very supportive of generics. Since the passage of the Hatch Waxman Act, our office of Generic Drugs has approved thousands of affordable, high-quality generics and contributed to the overall success of the industry. And we will continue to do so.

We approve generics because they are safe and bioequivalent to innovator drugs—but they also, importantly, increase the availability of vital drugs for treatment and care. We believe in generic products, and we believe in your industry…going forward, we want to continue to support your efforts, but do it better by being more efficient and accessible, and by improving communication, transparency, and reliability. But to be successful, we will need your help.

It is time for us to move forward together…to agree on ways to best serve the American people. And to find common, productive ground on key issues like the Generic Drug User Fee and a user fee for review of biosimilars, while continuing to build confidence in generic products.

We must be forward-thinking, but we must also remain anchored in our core mission to help make sure that people get the products that they need and count on.

We know how important generics are for patients and for health care in America. The facts really do speak for themselves. As you all probably already know, but it is still worth emphasizing, more than 70 percent of the prescriptions in this country are filled by generics, and—because reduced drug costs lead to lower costs for consumers—they have come to represent affordable access to treatment for many Americans. In the past decade alone, the American public collectively saved $824 billion because of generic drugs. That number certainly focuses the mind.

But it is also important to recognize—as we do—that your industry is different from the innovator industry…and has a different—and distinct—set of issues that must be addressed.

Among these are the volume of generic drug applications relative to innovator drug applications and their increased complexity. ANDA submissions have been between 800 and 900 per year for several years—as opposed to the roughly 100 NDA submissions that FDA receives annually. Because a complete review of an ANDA includes actions by agency components outside the Office of Generic Drugs, such as consults to other divisions within CDER and inspections by CDER’s Office of Compliance or FDA’s field inspection force in the Office of Regulatory Affairs, this volume of applications can be a challenge.

Adding to this challenge is the fact that each application can require many inspections around the world—including inspections of the firms that supply ingredients as well as those that help to manufacture or test the drug.

But the rising number of applications pending at FDA is not the only driver of increased workload. We are also seeing an increase in the number of new and foreign ANDA applicants—as well as more complex dosage forms.

I am proud that FDA has enabled thousands of generic drugs to come to market. But an increasing queue of pending applications and an increase in the median review time for generic applications is not the direction we want to head. We do not want to find ourselves in a situation in which FDA is unable to ensure that generic versions of drugs are ready to be distributed to American consumers on the first day that they may legally be marketed.

We know that we at FDA can and must do a better job and we are considering some possible changes in our generic drug review procedures to make that happen. Our goal is to avoid the circumstance where safe and affordable drugs—drugs that could enhance and potentially save American lives—cannot reach the people who need them when they need them simply because we lack the resources to approve them quickly enough.

We are at something of a tipping point. You heard my colleague Deb Autor speak yesterday about the resource challenges we face for generics as we try to keep up with manufacturing inspections and with bioequivalence inspections. Our resources are already stretched too thin. And, as Deb mentioned, the Government Accountability Office has criticized FDA for conducting relatively few foreign GMP surveillance inspections as compared to pre-approval inspections.

Clearly, FDA needs to prioritize its Congressionally-funded inspections based on public health risk. This means trying harder to get surveillance inspections done, which will make it even more difficult for us to do generic pre-approval inspections in a timely manner.

Looking ahead, it is clear that FDA will not be able to make ends meet with our current resourcing, and more approvals will be delayed because of a lack of inspectional resources.

This is why it is so important that this year—right now—we begin to constructively address the Generic Drug User Fee.

No one benefits from a pending-application queue of 2,000-plus products. Uncertainty and delays are costly to consumers, costly to industry—and hurtful to the public.

We are using the $10 million that Congress allotted to our agency to support 50 additional scientists to address the generics-application backlog. But without a fair system of user fees, we simply cannot achieve for the public what we otherwise could.

The user fee model has seen major successes with other FDA-regulated items, including innovator prescription drugs, medical devices, animal drugs, and generic animal drugs, to name a few. This is the only major medical product industry in which FDA provides marketing review that doesn’t have a program.

So why is a user fee program so important for the generic drug industry?

An effective user fee program negotiated between FDA and industry would reduce review time, make funding more stable and flexible, and make the review process more predictable and transparent.

And it would help FDA bolster the regulatory science and research base that is needed to provide additional guidance and standards for your industry.

In some key areas, American consumers currently have limited access to low cost versions of widely used, medically important drugs—for example, inhalation products—because the science to evaluate their bioequivalence is not available. To get to market, generic manufacturers would have to do costly, time-consuming clinical trials to demonstrate bioequivalence. Not an irresistible prospect, but this kind of information—and these products—hold vital promise. So we need to make sure that such work can get done. FDA needs to conduct or help stimulate the research needed, in key areas, such as to establish bioequivalence standards for novel dosage forms.

And, importantly, a user fee program would help us increase our ability to conduct thorough inspections of generic manufacturers as often as we do for brands—which is a critical part of the review process…and essential for approval.

Right now, resources limit the speed with which we review establishments involved in the manufacture of generic drugs, but a user fee would allow us to be in these facilities on a regular inspection schedule. Ironically, if the review process is streamlined, the time it will take FDA to plan and conduct an inspection for your products could easily outstrip the time it will take for FDA to review that application. On the other hand, if we are funded to conduct surveillance inspection of manufacturing and bioequivalence facilities on a regular basis, we may not need to conduct a separate inspection when an ANDA is pending.

We may already know what we need to know about the facilities at that time, making another look unnecessary and allowing the application to proceed to review without delay.

Of course, this matters even more now that your industry is increasingly global—and so many of the facilities involved in all aspects of generic drug manufacture are overseas. In those cases, it is even harder for FDA to meet its inspectional obligations, and there are increased threats to industry and to patients from complex, penetrable supply chains and bad actors who may intentionally adulterate drugs.

The bottom line is that a user fee program will provide additional resources to help FDA fulfill our common mission to ensure safety and quality, and inspire the trust and confidence of the public. And we must work together, because the user fee program developed for the generics industry must be just that—tailored to your industry. Simply replicating the Prescription Drug User Fee is not the answer. We need a user fee that recognizes the significant differences between your work and the work of the innovator industries.

So where do we stand now? Well, we held a very successful public meeting in September, during which we heard from stakeholders across the spectrum—patient groups, consumer groups, and of course members of the industry. And we have invited groups that presented or commented the first time around to a stakeholder-updating meeting next Wednesday (February 23).

Then, the following Monday (February 28), we are holding our first meeting on the user fee with representatives of your organization and other trade groups in your industry.

This is a great start, and we look forward to speaking with you and finding the common ground that will lead to truly important, transformative steps forward. We have a real opportunity here—and, if we come together, we can seize it.

Now let me turn to another critical issue: biosimilars, an issue that shows just how far we’ve all come this year. Last February, we were asking the most basic of questions: how will we regulate them—and what framework will we use?

A year later, we are discussing the long-awaited Biologics Price Competition and Innovation Act, which outlines a regulatory pathway for the development of biosimilar biologics. The Act gives biosimilar and interchangeable biologic the sort of opportunities that the Hatch-Waxman Act provided for generic drugs.

I want to note that while the legislation as enacted provides for a 12-year market exclusivity period, you may have heard that there is a new legislative proposal in the President’s FY 2012 budget which would decrease the period of market exclusivity for the original innovator brand biologic products from 12 to seven years. Who knows what will happen with this legislative proposal—it is still way too early in this new Congress for me to want to make any predictions. Frankly, we are still waiting just to hear if we are going to get a budget for 2011.

In any case, under the abbreviated approval pathway that is now authorized by statute, biosimilar drugs can be legally approved due to their similarity to already-approved reference products. This is a huge step forward.

Still, there is substantial work to be done. Thankfully, the law leaves the critical details up to FDA and its cadre of scientists, drawing on expertise from many quarters, to set the scientific parameters of determining just how similar is similar enough when it comes to complex biologic products, and how to establish the data requirements in different specific instances. Clearly we want to rely on what is known to the greatest degree possible, and avoid any unnecessary animal or human testing. Especially in the beginning, there will be questions, but we will all benefit by having science be our guide. It is among our highest priorities at FDA to move forward on this as quickly and effectively as possible.

We all recognize that this pathway presents challenges. Because of the complex structure of biological products, the process by which they are manufactured, and the need to develop a framework for appropriate pharmacovigilance, they require a more intensive review process and substantial resources.

And in recognition of the need for resources, the BPCI Act also requires the establishment of a user fee program for biosimilar biologics. In coming months, FDA will begin the process of engaging stakeholders to develop the first user fee program for the nascent biosimilars industry.

As we negotiate the parameters of such a program with stakeholders, FDA will aim to secure the funding needed to support timely development-phase consultation to biosimilar sponsors and timely determination of biosimilarity and interchangeability.

We will also propose a program that provides strong support for the development of biosimilars, while not diverting attention or support from the review of innovator drugs. Both of these goals are consistent with the comments we received from industry and other stakeholders following our Part 15 Hearing on Biosimilar Biologics last November.

So what else do we have to do moving forward?

Let me start with FDA. In addition to working hard on the issues of user fees and biosimilars, we are taking some steps to improve our internal operation with respect to generics.

We are in the midst of a search for a new director for the Office of Generic Drugs. That search is being led by CDER’s Office of Pharmaceutical Sciences: we are interviewing people now and expect to have a new director this year, someone who knows a lot about generics-related issues and who can ensure the efficiency and scientific soundness of generic drug regulation.

We are taking a serious look at our ANDA review procedures and are planning improvements to business processes internally and communications to stakeholders externally. Particularly with all of you and your companies, I know that we can all benefit by opening up our channels of communication: more communication in general and earlier communication when there are problems or emerging concerns. But I recognize that we aren’t presently organized as well as possible to support this important goal.

Related to this, but slightly different, we are moving forward with the implementation of the Quality by Design initiative for generics, which will enhance the Agency’s assessment of product design and manufacturing processes and will incentivize industry to implement state-of-the-art quality assurance methods.

The Office of Generic Drug’s QbD Initiative will clarify the type of information we need from industry during the ANDA review—and improve the system for providing industry with questions about the manufacturing process and product quality that must be answered for approval to take place.

If the manufacturer can demonstrate to us what risks to quality exist in terms of variation to the manufacturing process, we can allow for more flexibility for new methods, equipment, and overall process improvements—eliminating the extensive submission and review that currently must take place before such changes can be implemented.

We hope that all of these changes—in addition to our ongoing efforts to build capacity and strengthen our science base—will increase our ability to handle large quantities of generic products, communicate with your industry, and, ultimately, better serve the public health.

That brings me to your industry. What can you do?

First, you must remain vigilant to the age-old issue of public confidence in generic products, which involves two factors—therapeutic equivalence and quality. While generics enjoy significant market penetration and ever increasing prescription volume, I do not think we can take these trends for granted.

You must always be able to unequivocally answer the question: are the quality and performance of generic drugs equivalent to brand drugs? Recent survey indicates nearly half of consumers have concerns about generic drug quality, and that is far too many.

With the health care demands we are facing today, it is more important than ever to rigorously investigate any potential lack of therapeutic equivalence, focus on quality standards, and take public concerns seriously. The reality is that differences between generic and innovator drugs are usually no greater than differences between batches of innovator drugs. You know this and I know this. But unfortunately, much of the public does not understand this, so we must continue to educate them about generic products. And we need to have members of your industry helping to support studies on generic drugs that address key medical issues or concerns, for example the equivalence of anti-epileptic drugs.

It is also in the interest of the generics industry, patients, and the FDA for you to invest in consumer confidence by making high-quality products. Obviously this means conducting recalls when they are necessary. But, it is far better to avoid situations when a recall is needed. To do this, each of us needs to go above and beyond to improve the science and increase the attention and resources required to ensure quality. Investment in quality pays. And failing to invest in quality can lead to serious consequences—human and financial.

In addition, it is clear that you must continue to focus on optimizing the presentation and patient acceptability of your products—the factors that promote patient compliance. If a tablet is too large, if it sticks to your mouth, or if it smells or tastes bad, patients are more likely to stop taking their drugs. That’s a public health issue, but it’s also a trust issue for both FDA and industry. It undermines confidence in that particular product and in generics more broadly.
Maintaining public confidence is something that we at FDA care deeply about and are committed to working with you to ensure. We have many shared interests and responsibilities—but earning and sustaining the trust of the American people, in our agency and in the entire lifecycle of products we approve, is perhaps the most important of all.

Lastly, there have been some concerns over generic drug shortages. This is sometimes related to manufacturing and/or compliance issues. Obviously we want to avoid these, but when they happen, they need to be addressed swiftly and surely to prevent limitations in medically necessary drugs. And when there are foreseeable problems or facility needs that may affect manufacture and result in shortages, we need early warning so that we can prepare. It is also important to have back-up plans to ensure the availability of safe and effective drugs to the public—and manage and mitigate the risks of facilities being compromised by unexpected events. And in other circumstances, we also want to work with you proactively to help make more product available to address critical unmet needs. All of this is sound business practice and can only yield positive health outcomes.

There are plenty of differences in our work, but, in the end, we share goals and, more importantly, we share a public health mission.

So we have a few things to keep us busy. And while there are plenty of differences in our work, in the end, we share goals and, more importantly, we share a common responsibility—and accountability—to the people we serve. This meeting comes toward its end, let us look forward—together—to the start of the next era of enhanced collaboration between the generics industry and the FDA…an era focused on delivering the highest quality medical products to the American people.

It is a bit like the infamous prisoner’s dilemma—the worst case is that both of us fail to live up to our responsibility. But the public also suffers if only one of us acts. We must instead act in tandem, rising together to the challenges ahead. Public confidence will follow. Success for your industry will follow. But, above all, the health of the public will improve.

Thank you.