the ones struggling. we had a aaa rating going into the legislative session. governor rick scott mike, speaker dean and those legislators make tough decisions because the people demanded in their constitution. they came out with a balanced budget, less spending, no new taxes, no new feeds. the same week s&p downgraded the country, the upgraded the outlook for the state of florida from negative to stable because the demanded and they had to deliver a bonnet. that is the difference. so i'd like to add what he said is there's all different varieties. but remember, the balanced budget amendment is dealing with the symptom, the disease is spending and debt. that is what we are going after here. so anything we do that does not restrict a liberal's ability to just have a balanced budget amendment, which is again, they

will take that is a mandate to raise taxes, they will jump on the express lane and to cost the western european system faster than anything that you can imagine they have to balance any budget amendment and if the restricted lead they should be good enough for the united states congress. let me just tell you the people of this date we put a strong balanced budget and the people of florida last fall and every editorial writer in the state just railed against it and feed to a bonnet on the question. if the united states should develop a balanced budget amendment without raising taxes not one time was spent on that initiative and yet every editorial writer sounded at by 72%. the people of florida embraced it. that was our message to every presidential candidate and to the delegation of florida give a balanced budget amendment without raising new revenue. >> great. thank you. [applause]

>> now, the leader armey refer to the balanced budget amendment offered back in the senate by senator michael e. and quickly thereafter signed on bye senator orrin hatch and rand paulen and a few others. that a balanced budget amendment has three additional restrictions beyond the very basic provision that income and outlays must match. those three provisions are a super majority to raise taxes, two-thirds in its original form, the cap on spending, federal spending as a percentage of our total the economy or gross domestic product of 18%, and then a third restriction that many people are not aware of because it only consists of one sentence in the law, but it's a very important one, and it is one that specifically strips the court of the power to mandate the court ordered the tax

increase. that is contrasted with the version of the balanced budget amendment that you remember very well from 1995 that came within a vote of passing because that was a very simple balanced budget amendment that is essentially just said that income and outlays must match. i'd like to have first leader armey and then grover talk about these restrictions, helen porth and you think they are and how they might function because i think that mr. atwater said the stage to dig a little deeper into that aspect. estimate it's critically important. you have to understand these folks have the privilege of being in public office left to their own devices were being convenience minimize terse. what they really want is the good life but there's no trouble to me as possible and certainly not in the hard work.

so what you have seen happen here in florida is the instrument causes a discipline. it's a wonderful word. discipline workmanship, which requires making hard choices which requires we did a seminar in utah a couple weeks ago on the budget. we had 300 utah citizens that took the seminar and it lost a lot an hour and a half or two hours and the next day i laughed because at the end of that time period i knew i had a population of 300 citizens in utah that knew more about the federal government of the united states government that in the population at 300 house and senate members could put together because they are not disciplined, and this is why i think's we are winning. america has come away and people

realize these folks are willing to give me the job they are giving me the job of high expectations of workmanship and they are watching me. so, we sent them off to washington and we do that disciplined workmanship. [applause] >> gingrich, armey, that is the creative republican party committed to not raising taxes. the tea party movement predicted the republican party that's not going to spend as much money. prior to the tea party, they said the table, and the make or break issue was the total government spending oddly enough the party of small government didn't have anyone at the table whose central issue was total government. yet pieces of it but not total government. so, focusing the part of the constitution amendment was put

forward that says the federal government should never be more than 18% of the gdp which a couple years from now will recognize this and we will have to ratchet it down but it is lower than now and -- >> which is what? it's a very good target. when we get there we will unwind and denounce it and let it be lower, but a lot of work to get their. focussing on spending as a percentage of the government spending as a percentage of the economy is the correct metric. focused on the deficit which is the difference between the two interesting and important members how much the take and how much they spend. it's not the interesting number. the important number is how big is the government as a percentage of the economy. we can have a bigger government in france because we are bigger than france, so both numbers, the size of the government, how big what percentage of that economy is the government. that is a measure of how big the government is.

our team has to solutions to meet the government smaller as a percentage of the economy. spend less and grow the economy by taking all of the trial lawyers and putting them in a plastic bag and floating them out to see producing marginal tax rates and other important reforms. so we can make the economy grow and we can make the economy shrank. we have two sides. the modern democratic party has no solutions to either reducing the size of government and a short demonstrate they have no idea how to make the economy grow. so we want to stay on the playing field which is to shrink the size of government as a percentage of the economy and not get into the discussion of just the deficit because the democrats have a solution to that. it's called higher taxes. >> how would you evaluate the both the value and the sort of method of operation of the restrictions if there were a

deal being made because it's great to be very hard to get a substantial number of democratic votes for the balanced budget so it's going to be some negotiations come some give-and-take and at some point some people may conclude that it's within reach and that is when the negotiation get serious so those three provisions, any one of those three assist can you rank them? >> at the end of the godfather they come to michael and say the guy that comes and offers to some of the meeting a trader. the person that comes to us and says let us water down the well that's the one that gets the finger around the neck. because the other team will come and constantly said just we might be for this if you took 2/3 to 3/5. we might be for this if the courts could mandate tax increases and they will be

tempted. you might have six democrats who would vote for this if we carved it down and carved it down and carved it down but by the time we carted down to where it wasn't worked very much and then we said i that you and nickel they disappeared so i would argue stick with the bill on changed it some democrat said i got six moderates within idea i would say find write it down, put it in the amendment, get the six co-sponsors and if it's good enough we will join your bill but we are not changing hours on the prospect you might someday have moderate democrats joining it. i think that is exactly just as in the godfather you know how they are going to come at you. they are going to water down the amendment and why we water it down our friends decide we are not worth the effort and the others are making it worse and they will never come and help

us, even though watered down one. so i don't think that we should give on any of them because i don't think that they will actually bring the votes to get on them. i would rather beat the guy is in the next election than to negotiate with them before the election to make it possible for them to get reelected. >> that means that we need to meet the balanced budget amendment and a real one with t a defining issue in 2012, not simply an issue, not simply an issue supported by 70 to 80% of the american people, but a defining issue in 2012. >> i'm sure that you are going to watch this in the state legislative bodies. every legislative body has the defining margin proposition not there and it's going to be voted yes or it's going to be voted no

on the true convictions predictable but those who voted yes out of the true convictions are reliable and then within the body i call them the bedwetters. [laughter] this is the group whose boat belongs to the people they fear the most. throughout most of my adult life, that people who appear the most have been the teachers' unions, the afl-cio. now here is what is changing in america today. the people they fear the most are the american citizens who have nothing of the office except do your job with some degree of confidence and a

devotion and do the right thing. ladies and gentlemen they are more scared of us today than the nra. this is a marvelous revelation and we have to stand down. >> if people in this room and millions like them never quit, never get off message, and the messages that we need to change the trajectory of spending and growth of government in this country that needs to come down. you talked about the 18%, and so did leader armey. the 18% cap as federal spending as a ratio of the total gross domestic product that number did not come out of the air, that is the historic number for federal revenue from the end of the second world war until about five years ago, and about five

years ago it began drifting north. up until that point lead in the narrow band of 18% sometimes and 20 lanier windel of all of it. so 18 to 20% ban and then about five years ago started to head north 24 points, 8% a year ago and has mentioned a few moments ago it is now over 25. so, the 18% number is not some sort of onerous draconian a number of all. this is a number that stood well for laconic cycles, through tremendous prosperity, through a number of conflicts and so on. this is not a foolish and restrictive and overly idealistic number. it's a perfectly realistic number. you know, yes, sir. >> it is a realistic goal and an ice interim goal.

you have to understand with 18% if it was good enough for a word humphrey it ought to be good enough for this gang. we must force these people to do is get down to some discerning discretionary choices. if you believe in freedom, you should expect from your government that it do nothing except what is correct and necessary. if it's the right thing to do and it's not necessary that the government to do it, they shouldn't do it and i will guarantee when we start making the judicious decision on it as a legitimate and necessary enterprise of government and there's a lot of missing around with your rights and my rights of 18%.

>> let's ask jeff at atwater to follow on that point. how do choices get made under the cap on the balanced budget amendment. how does that change the dynamic? it is deliberating dynamic because you are forced to prayer ties. you can no longer hide behind who brought it to you, who was your friend, who wants it, who needs it treated as believe what you believe your solemn duty is delicate the resources to the people back to what has to be done under your constitutional charge. it makes it easier, and again this 18% number, when you look around the globe of those enterprises in the nation, it is that low percentage number with the economic activity turned loose because of the entrepreneurial mind set and wisdom and work ethic of the people who are not burdened by that extraordinary participation of extraction and spending by their government, and i just want to add a final point on this. it matters in the state of

florida matter what state snorkeling from, if it has conservative leadership for the last five years we've reduced everything we can education mize the part of transportation, civil justice system, only to find out at the end of the day here comes the federal law entitlement of medicaid dumped on our lab, the final estimate in after all of that if we can't reduce any further. it keeps piling on unless the federal government takes ownership of the responsibility of being as disciplined as those in the state there is for a little distant legislators can do in the next five to six years to be able to maintain the lowering of expense burden on the citizen today of the serving. the federal government has to address it and it makes it easier to say no. that is the great take away. it makes it easier to say no pity any final remarks? growth fer? >> this is an incredibly important fight. i think i would urge you to talk to any congressman, senator

looking for your support. if we run a campaign going into 2012, we ought to be running a lot of senate seats and the 23 democrats senate seats up for election, ten republicans, the democratic s seats are vulnerable and open to change if we run an election where this is a top key issue and as successful as i believe we will be there is a strong likelihood that we can get a very good strong vote for this. you have to sort of college in the corner pocket and explained to win that election to get the balanced budget amendment that limits the size of government when you when you get the right to push forward. >> the clock in front of me says we have eight seconds left that is enough time to join me in thanking our panel. [applause] >> always good to be with you. thank you very much. [applause]

[applause] ♪ this weekend in charlotte north carolina with book tv and american history tv throughout the weekend for history of literary life from the site of the 2012 democratic national convention. on book tv on c-span2, charlotte's banking industry with bank town author and dreaming of dixie how the south was created in american popular culture. also a visit to learn about the relationship between independent bookstores and publishers. in american history teacher on

c-span freak mature the 11th president's birthplace a discussion with the civil-rights leader charles jones on his experience during the 1960's lunch counter sit in and visit the gold mine where gold was first discovered in america. book tv and american history to be in charlotte north carolina this weekend on c-span2 and c-span3. at this house confederal officials said that many cancer patients are not getting the necessary care due to drug shortages. witnesses from the health and human service department at the fda along with a panel of physicians testified drug scarcities have tripled since 2005. colorado congresswoman diana degette recently introduced a bill requiring drugmakers to notify the fda of possible shortages. this energy and commerce subcommittee hearing is just under three hours. >> the subcommittee will come to order. the chair recognizes himself for

five minutes for an opening statement. in a 2005, 61 drug shortages were reported to the fda. by 2010, there were 178 reported drug shortages. 132 of which involved sterile injectable drugs. so far, this year fda has continued to see an increasing number of shortages, especially those involving older sterile injected drugs. these shortages have involved cancer drugs, anesthetics used for patients undergoing surgery as well as drugs need for emergency medicine and e electrolytes need for patience on of ev feeding. it appears that there are many potential causes for the drug shortages. in some cases shortages have been caused by quality and manufacturing issues. additionally production delays at the manufactured level including limited production lines for certain older drugs

and difficulty in receiving of rall materials and components from suppliers to cause drug shortages. many raw material suppliers also experience capacity problems at their facilities causing delays that ripple through the drug production process. shortages can also result from a company discontinuing a particular drug. certain drugs are susceptible shortages particularly those of our complex to manufacture, such as an injectable drugs or require longer lead times. fda cannot compel a company to manufacture a particular drug and if there is a shortage of that drug it cannot compel others to increase their capacity. further, companies are not required to notify the fda in advance of a potential drug shortage unless the company is discontinuing a sole source. medically necessary drug. in that case a company must inform the fda six months in

advance. drug shortages have real effects on a real patient is due to shortages patients have not received the appropriate drugs for their conditions often getting a less effective drug or more costly substitutes as a result. according to a study done by the premier health care alliance of 228 hospitals, retail pharmacies and other health care facilities nearly 90% of hospitals reported a drug shortage in the last half of last year that may have caused a patient safety issue resulted in a procedural delay or cancellation required a more expensive substitute or resulted in a pharmacist compounding drug. i look forward to hearing from our witnesses today about their experiences with drug shortages and learning what remedies they believe are necessary. i would like to say a special hello to richard, vice president operations pharmacy laboratory and radiology at the lancaster

general hospital in my district. it the largest employer in the 16th congressional district and for ten of the past 13 years it has been named among the top 100 hospitals in america by the leading source of of your business intelligence. the hospital is also helping to revitalize the northwestern part of lancaster city for the partnership with franklin marshall college. again think you to the witnesses and i will yield the balance of my time to congressman shimkus from illinois. >> we want to welcome our folks in the two panels. obviously this is a concern. whenever there is a lag in a commodity good or product, you have to really wonder about the demand and the supply and the available cost because when there is a limited supply and high demand cost should go up so that begs the question of what

is constraining the market signals from producing the product to consumers need is that insurance companies, is that government reimbursement rates is that the state medicaid provision? that's what i will be looking at because the bigger the government is the more manipulative it gets in the market services and the less to provide goods and services to consumers. we appreciate that, look forward to it and i yield back my time, a researcher man. >> we recognize the ranking member of the subcommittee for five minutes. >> thank you, mr. sherman i want to thank you for holding today's hearing on this important issue. i am encouraged by the bipartisan nature and i think the witnesses for joining us. today we will discuss the recent increase in the drug shortages that have been the subject of numerous reports. the girard shortages appear to be on the rise and an alarming rate and threatening the supply of some of our most important

medications from life-saving life saving on ecology drugs to antibiotics to and aesthetics to go through even the most minor surgical procedures. these drugs have become an important part of our health care system. no patient want to be told their chemotherapy most be postponed because the only drug used to treat their cancer is unavailable. likewise, no anesthesiologist to begin their work with the realization they have to use sub-par drugs on a patient because the one they normally rely on is out of stock in definitely so we can't let this become the new norm. we've depended upon the medications on the fda drug shortage list for years and continue to look for them for the health and well-being. it's alarming the drugs that have been around for so long would suddenly be the most difficult to keep hospitals from pharmacies and doctors' offices supplied with. furthermore they tend to be a low-cost generic which are an essential component of health care for most americans as they

seek to keep their health care costs low. in this fiscal climate, having a readily accessible supply of generic medications is a profound importance. and to that end, it has been disheartening to learn that the so-called market would to get the vantage of such a dire situation to engage in price gouging at the expense of those desperate enough to pay. so i'm hoping we can begin today to identify the cause of the shortages and to discuss solutions for replenishing the drug supply. we must address this increase so that americans can continue to receive high-quality treatments at low costs and remain confident to both the pharmaceutical industry and health care providers. unfortunately companies are not currently required to report to the fda when a shortage will be occurring whether because of changes in the investment strategy or manufacturing difficulties. there is currently no policy for notification unless the company is the sole manufacturer.

my colleague representative diana degette has introduced bipartisan legislation h.r. 2245, the preserving access to life-saving medications act of 2011, as a first step in addressing this issue. this legislation would require manufacturers to notify the fda of any actual or perspective drug shortages, and i want to commend representative degette on pioneering this effort and hope that as a result of hearing from the witnesses today, we can identify additional solutions to this growing problem. this hearing will allow us to learn more about why drug shortages are occurring, with the administration and industry are doing to address the problem and what new authorities the fda might need to do to prevent shortages from happening in the future. and i am encouraged that we are exploring this issue in the subcommittee today and look forward to working with you, chairman, as we get to the bottom of this issue and again, thank you for having me here and i yield back.

>> the chair recognizes the ranking member of the full committee, mr. waxman for five minutes. >> thank you, chairman pets for recognizing me and for having this hearing. the recent media and others indicate the drug shortages are now at an unprecedented level. indeed, according to fda the number of drugs and short supply of 2010 was almost triple that of 2005. the shortages affect a broad spectrum of critically important drugs including oncology drugs to treat lynn chollet, leukemia, breast and other cancers and drugs without which surgery's have to be postponed and antibiotics to remedy life-threatening bacterial infections. without these drugs, patients' lives are at risk. drug scarcities generally affect sterile injectable drugs. these drugs are technically difficult to make and each drug

is usually manufactured by only one or a handful of producers. if only one company develops manufacturing problems, which is not uncommon, other companies may have little access capacity to help fill the need to read with the aging of the population and field sourcing of drug manufacturing, the increasing consolidation of drug companies, and the general adoption of a just-in-time approach to the drug production and distribution this problem may be significantly worse unless the media measures including congressional action not taken to address this multiple causes. representative degette has introduced legislation that would be an important first of in this process. h.r. 2245, the preserving access to life-saving medications act of 2011 would require manufacturers to notify the fda of any actual or prospective drug shortages, such events notice would enable the fda to

help the volume of mitigate the shortage by those working with the manufacturer and the hospitals and physicians of the problem. weigel this is an important piece of legislation that has broad bipartisan support i don't think anyone believes it alone can solve the drug shortage problem so i look forward to hearing from the witnesses to lead to better understand the causes of what is already a crisis for many patients, and to find out what we in congress can do to help even the shortages in the future. we already have been working in a bipartisan manner to learn about this very disturbing issue, and i trust it will continue to work together to develop and to enact legislation to help address it and address it quickly. >> thank you mr. sherman. i yield back the time. it's been in the chair thinks the gentleman and that concludes opening statements. ..

>> there's potential to impact our entire health care system, and as we discussed this problem today, we should always remember that our goal is to protect the health of people affectedded most by the -- affected most by the shortages to their pairkts and families. i say a that as a physician who cared for patients more than 30 years. according to drug evaluation and research, the number of shortages 1 rising over the last five years as you already heard, and shortages occur with any drug,

generic, sterile, and injectables make a large share. in fact, in 2010, 27% of the shortages involved the older sterile injectable agents. it includes drugs, nutrition drugs, and others used in emergency rooms. there is no >> they operate alone or together to cause a shortage. these factors include, but no r not limited to industry consolidation, major issues of quality and manufacturing challenges, changes to inventory and distribution practices, difficulty in producing a drug.

we are finding solutions to protect patients. in 1999, the fda formed the drug shortage program to monitor and mitigating potential drug shortages. when the fda becomes aware of the shortages, it works collaboratively with the affected firm to return to the usual market availability without affecting harm to the patient. although the fda does not require it, it does encourage other firms to do so. fda expedites reviews of

submissions from manufacturers that include expiration products, increased capacity, use of new raw material source, license new manufacturers, and allow changes in product specifications. the fda committed to working with drug manufacturers to prevent shortages whenever possible, and, in fact, as a direct result of this report, staff and experts across the agency, last year in 2010, 38 shortages were prevented, and so far for 20 11, this year, i'm pleased to report for the first time that 99 shortages have been prevented. also, at the same time, the fda goes to great lengths to mitigate shortages let r lessening the impact when they occur. one notable recent example involves the well described shortage of the drugs used to treat certain types of acute

leukemia. kris call formation in the viles of the drug represent a quality problem that led to a disruption in production and a shortage that received tremendous publicity across the nation within recent months. in this case, the fda worked with the manufacturers found the viles were warm, the crystals dissolved and the drug could be safely administered to the patient. as a result of this collaboration, the manufacturer was able to ship the viles to health care professionals along with a letter from the fda notifying them to inspect for crystal formation, and if present, warm the viles to dissolve crystals, and this led to ensuring and upholding patient safety. we can report today that this drug's -- this well reported drug shortage has been recently resolved. in limited circumstances, the fda can allow the temporary importation of critical drugs

when l shortage is not resolved immediately, however, there's several factors limiting this option. the product may already be in short supply abroad, so importation could exacerbate the shortage. fda has to ensure drugs from abroad meet fda quality standards. to discuss these and other possible solutions, the fda will be hosting a public meeting next month, september 26th, and this is held to gain additional insight of the causes and impacts of this challenge and possible strategies for solutions. then on friday, september 30th, the fda is conducting a webinar for the public, and this is an opportunity for people to learn more about what the fda is doing to address this challenge, and it will be a venue for citizens to ask questions 20 experts working on this topic every day. although i focused my comments until now on the fda, i should stress that the entire

department of health department and human services has been fully engaged on this topic for quite some time. we view this as a pressing public health challenge, and we want to resolve this on behalf of the department and indeed the entire country. this past summer, i convened a series of meetings with representatives from fda, national cancer institute, the cvv, center fer disease control and prevention, office of assistant secretary, the secretary of planning an evaluation, office of medicaid services, and others. we have joined together as one department to explore more deeply the root causes of this problem and the possible steps to be taken to address them. these have been productive meetings and we pledge to continue them until the problem is solved. we are committed to protecting the public health. earlier this month with senior

leaders in the department hosted a meeting with over a dozen representatives from pharmaceutical manufacturers, organizations, hospitals, insurance companies, group participating entities and add vo cosigh organizations, and this meeting gave us firsthand insight into the challenges, generated a good discussion, and also served as a foundation for our future collaboration. shortly, later on this fall, the fda releases a report with a detailed analysis of the problem with recommendations for the future and potential solutions are being examined. one suggestion is manufacturers to report impending supply disruptions with discontinuation of drugs to improve shortages and improve the drug supply. the sooner the fda learns of a shortage, the more effective they can be and notify the

public and uphold patients' safety. we are committed 20 working with all parties, manufacturers, patients, and other stake holders to minimize and solve this problem. in conclusion, the department is committed to addressing and solving this critical public health challenge. it is our goal to advance this dialogue with all interested parties both internal and external, and we also recognize and depply respect the roles of the members of congress, and we welcome the opportunity to discuss this important topic with you today. thank you very much, and we will be very happy now to take any questions you may have. >> chair thanks the gentleman doctor, why have drug shortages increased so much in the last few years? >> well, again, there's no one single reason, but there are changes here that we are seeing in the backdrop of an economic

and business climate that's leading to market consolidation, a complicated manufacturing process that's being conducted increasingly in aging facilities, leading to quality in manufacturing issues as we have heard now. sometimes products are discontinued for business reasons. it's a complicated process, so all the factors converge to create the issues we are macing right now. >> have other countries experienced shortages such as we have? >> unfortunately, the united states is not unique this this situation, and, yes, we are indeed seeing similar situations in other countries around the world. >> and when a shortage occurs in another developing country, how is that situation resolved there? >> well, we want to learn more from our colleagues there. i don't know if you want to say more about that particular issue? >> we are often contacted by our

regulatory colleagues from other countries looking for -- looking to collaborate on finding solutions to particularly worldwide problems. different countries have different ways of producing drugs -- assuring production of product, but we work as much as panel with others to make sure that shortages are limited and mitigated. >> does europe have a particular method of resolving the situation? >> i believe the method in europe is pretty much similar to ours, particularly since they have multiple countries. they look, seek other sources of supply from other countries. >> and do you know what is causing the drug shortages in these countries in europe? >> many of them are the same sorts of things. they are, you know, many of the products are marketed globally. they are not just in the u.s..

the sources of the drug substance itself are -- most of them are foreign sources, so if there's an interruption of a source in the u.s. at a u.s. plant, they -- if a source in another country -- a manufacturer in another country has the same source, they will be in the same situation, and everyone will be out looking for alternatives at the same time. >> okay. dr. kweder what steps were taken to prevent or alleviate drug shortages? >> first, we tend to learn in terms of preventing drug shortages. we, when companies let us know that they have -- that they are experiencing a problem, it is usually a problem in prurks. sometimes it's a business decision to discontinue a product. when they inform us in advance, that's the case.

we work very closely with them to understand the problem, and assess whether the shortage would be something that would be critical for patients, so, for example, if a company -- if a company is making a product that 20 other companies make, that's not likely to be critical health situation or anything, but for the injectables, that's not the case, so we'll work with the company to help them develop solutions to fix the problem and avoid an interruption in production. that is not always possible. when it's not possible and looks like the company may have to interrupt production, we go to other manufacturers, and we talk to them about their capacity to increase their production. they usually can't turn that around on a dime, but we work

with them to facilitate ramping up in order to supply the market with usual sources. if it requires -- we'll work with the original company that's having a problem, we have a number of tools in our kit that we can use to help them address the problem. you were given an example of the kinds of things we can do in some cases to look at the end product itself. if there's a problem with the end product itself, in this case, it's crystallization of the active drug, and we work with the company. they got right on the case to figure out why those kris crystals were forming, what can be done to mitigate that, inform providers, and since then, the crystal problem has been fixed. >> do you feel you need earlier warning than you currently have? >> we can always use earlier notification. there's circumstances where things happen and they are very,

very unexpectedly, but the vast -- the majority of cases of shortages -- we could have been notified, and in the majority of cases we are not notified in advance. it's getting better. i'll say it's getting better, but we still have a large percentage of actual shortages where we were not aware that it was coming. >> thank you. my time expired. chair recognizes the ranking member for five minutes for questions. >> thank you, mr. foreman. i'd like to ask unanimous consent to enter into the record the testimony of the national coalition for cancer research. i think you have a copy of it. >> without objection, so ordered. >> thank you, mr. chairman. we all agree that drug shortages are the real problem, you know, are a real problem facing the country, and, you know, from what i understand, it's getting

worse, but i guess it's hard to figure out, at least for me, what the cause is, and i'd like to ask, you know, some questions bouts the root causes of the problem. the fda has said in 2010 last year, over half the shortages were due to manufacturing and quality issues, and i understand, i think you mentioned many or a majority of those are sterile injectable drugs. why would these drugs be prone to manufacturing and product quality issues in particular? >> well, many of these products are the result of a long production process, and those production processes are now occurring in fewer manufacturing sites because of industry consolidation. there's also aging of the facilities where this work is ongoing. there are business and economic factors in the background that are lowering the profit margin,

so oftentimes businesses make a decision to perhaps discontinue a particular product for business reasons, and as a result, we are seeing the quality of manufacturing issues, congress maren, that you are -- congressman, that you are referring to. some of the issues are quite disturbing where we literally are tracking products that have particlat matter like pieces of glass and metal in what should be sterile products that are injected into patients, so this is the reason why the fda upholds this mission of safe and effective drugs and also high quality drugs in the middle of this challenges environment. >> now, the next panel, the written testimony, they state it takes two or three years to get approval from a new supplier for ingredients or an alternate manufacturing site.

is that true? does it take two to three years 20 get the fda approval? why is that if that is true? >> i'll start. one of the advances of the fda in this situation is to prioritize generic drugs, expedite, and accelerate approval in every way possible particularly if the public health is threatened, so there are efforts to try to advance that time frame. that's also the goal of the generic drug user fee act under review right now, so these are issues that are very important to the fda, and they take it seriously. >> but i mean is that time period that was mentioned -- i mean, would that generally be true, and is there any kind of flexibility that you have to expedite review and inspections of new facilities to -- so they could address the shortage when it exists?

>> there absolutely is flexibility, and we do that routinely when we are aware that say a new facility is needed or a new supplier is needed, and when there is a circumstance that might lead to a potential shortage of an important medical product. we do it routinely. we can often turn things around in a matter of weeks. >> but i mean you have not answered that two or three year time span. >> sure. i'd be happy to do that. the two or three year time span is what is being referred to under usual conditions when a company -- when there is not a sharnlg situation. >> but if there is, then you deal with it quicker? >> absolutely. even the two to three year time frame, we are working and happy to see there's been an agreement on generic user fees to change that into a matter of months and not years. >> my concern is we face the

extraordinary fiscal pressures and the house passed budget for fda with a 20% cut with appropriated funds. i mean, are these -- is this cut -- will that affect your ability to work with companies to avoid or mitigate shortages? i know you mentioned generics. are you negotiating with the generic industry to develop the user fee and can that alleviate drug shortages? this is about the funding now. >> we are negotiating and have reached agreements with the generic industry about user fees, and that will be coming up for discussion by yourself, you know, within the next year. >> what about this house budget cut? >> as far as -- there's no question that resources matter, and there's -- it takes -- these are not automated processes. they take people with judgment and knowledge and having enough people makes a big difference. >> all right. thank you very much. thank you, mr. chairman.

>> chair thanks the gentleman, and i want to request the following statements to be entered into the record. i think you have copies. the statement of the national community pharmacist association, the letter from the american society for hematology, and the statement of the generic farm suital association. >> without objection, so ordered. i recognize the gentleman from illinois for five minutes. >> thank you, i think we all agree resources matter in this tough fiscal period. i think also part of the issue is priorization, and especially in life saving issues and what are agencies doing to put first things first, and what can they do to obviously redirect funds in a different direction?

for -- how have cost and payment factors impacted these drug shortages 234 >> again, this is an industry that's producing products in an environment where they are facing increasing economic pressures. the profit margin for any particular agent is declining for them, so they have to make business decisions, but also keep their products moving until the decision is made, perhaps to discontinue a product or another. throwing in the quality and manufacturing issues and delay issue contributes to the situation that we're seeing now. >> who are the big payers? >> well, there's a process where purchasers hospitals, and

fashions and providers buy these products, but they are purchasing organizations and managers involved who want to drive down the price for understandable business reasons. these are all the stake holders involved in the chain. >> i do appreciate the opening testimony because we had a series of questions, and really you answered them in the open statement which i'm just going to highlight. one of the things was, a question we were going to ask was closely collaborating, and you gave the example of the drug with the crystallization, and i thought that was very, very helpful. the other issue was alternative sponsors and using import restrictions or -- i can't read my writing -- temporarily doing something else, but you said that's constrained based upon if

there was a shortage overseas of the same product which, and something that we've talked about over the past years, and with ranking members is the ability to make sure that the dryings we're importing were inspected by our inspectors so we know the safety of that. >> right. >> i've always been a risk-based person saying on the focus point that those who are more questionable facilities ought to get a lot of looks. if they have been operating safely and they have been inspected like a #*us facility every year -- u.s. facility every year, then it might make for every two years or 18 months, and that's the issue of shifting sources too from the critical elements in safety versus known products

and industries that you all have real competence in. we don't expect you to do that to industries that have a poor record, but those who are, you know, you have really good confidence in, that's the funding issue. you also mentioned, you know, business reasons and aging facilities, and i think you mentioned increased regulations. is that part of your testimony? >> well, the quality of standards the fda puts forward in areas like this are unchanged. in fact, the fda really has gone the extra mile in my view to show tremendous regulatory flexibility here. again, since we can't require any manufacturer to do much of anything, all we can ask is for

information, communication, collaborate and they show flexibility, the rewarming of the drug i mentioned, filtering out matter so again these medications can be used and not put aside is another example. >> i have 12 seconds. >> sure. >> i'll go back to the statement of the testimony because i scribbled a comment, and i'll look at that. why doesn't a shortage of a product in this sector then send an increased price signal to manufacturers for them to then produce the good? >> well, we have come to learn that the standard economic principles of supply and demand -- >> and the question is why is that distorted? i think that's the basic fundamental question of the problem. what has distorted the

fundamental principles of supply and demand and my time's expired, but i think that's the heart of the issue. i yield back my time. >> would you like to respond? >> sure, and first of all, the agreements are made often through long term contracts, and so alaska this whole process involves multiple stake holders including the pharmacy managers and purchasing organizations, so it complicates this environment, and sort of does not make relevant the standard supply and demand economic principles we see in other businesses. >> i would say you said what i would say. thank you. >> chair thanks the gentleman and recognizes the gentlelady from illinois for five minutes. >> thank you, i'm sponsor of the degette legislation for early

notification. we have a chicago based injectable drug company that has endorsed the bill, and they already do many of the things including proactively reporting to the fda about potential drug shortages. you've explained the advantage of that early notification. let me just raise a question that some have raised about early warnings that could increase the problem and lead to hording of critical drugs. ..

what type we are talking about. is this a true product shortage or imbalance in distribution because sometimes you see things that seem to be in a shortage in one part of the country but there's plenty more so in another part. but, we will take the potential for making things worse very, very seriously. meanwhile we are working on it to access it and what we might do to mitigate if israel were usually announce the fact that it exists and try to let the public know what we are doing to try to address it. >> early notification is an what

tool. >> it's a very useful tool. we see that is different than early publication. >> got it. >> let me ask you this. the fda has limited authorities. let me run through some of those. at this point you can't require manufacturers to do this early notification. you have no authority to require companies to increase production of a drug dillinger shortage. you can't impose an allocation plan when a shortage causes life-threatening conditions and the fda has limited ability to post timely information on its website for health care professionals and patients regarding reasons for time lines for the resolution i don't really understand that one, but are there in addition to the early notification other authorities you needed that would help mitigate this

problem? >> think most important are two things. the early notification is something that helps in the mitigation and prevention greatly the sure that they are making a quality product and upholding their responsibility to produce high-quality products where a these things won't happen. our goal is to prevent even the potential from the shortage from occurring. not possible. in the case of many of these threatened shortages even as the dr. mix said these are in plants that manufacture multiple, multiple products if you look at the record of the things that led to the actual problem of production are things we've been telling the country about in routine expectations for years

but only became critical whether they need to address these modernized so they could continue producing quality products without a glitch to read this first and foremost from our standpoint, assuring that we are aware so that we can step in and use every possible communication tool and flexibility and regulatory action. >> let me just ask you to what extent is the issue of business decisions? what% of the case where we have shortages would you say this is a business decision? >> you know i can't give an exact percentage. i would be happy to provide that. >> is it a major issue and is their anything we can do about that? >> i would say that that is not the major issue. i would say by far and away the more common scenario has something to do it manufacturing and product quality. >> thanks to those of you that

have been here. >> the chair thinks the gentlelady and recognizes the gentleman from kentucky for five minutes for questions. >> thank you for being here. i'm just going to follow a little long, shimkus. you asked a lot of the questions in the opening testimony that i had a group of oncologist the other day these are people that make drugs and sell drugs and people that are fda issues or whatever these are people sort of taking care of the patients and they say they literally have to make choices about who they take care of because they don't have the drugs available so that this kind of question. i don't believe the company won't make them if you have a demand for them and they told me that these particular types of drugs are very different and the federal government said the medicare actually has price is different than other drugs is that what they were saying is true? >> i can start with that first of all thank you for your attention to the patient and this is a dire situation for the patient and i've actually tried

in other fields so this is very personally and professionally in important to me. we have a rule of medicare here that reimburses according to what is called the average sales price. so that is one factor here but we don't view that as a significant issue and attriting the shortage as we are seeing here. >> the generics are different than others. >> what we are seeing is -- you mentioned the benefit managers are driving up the drug costs they're doing it all drug costs but we see that as a particular class of drugs having a bigger problem than others and the leading i can think is different is that the way the federal government treats them they treat them different than other drugs. >> i'm not sure i can answer the question the these are generic drugs they're off patent for the

most part, so they are at a point in time the profit-margin for the drugs generally because they are generic and you can have multiple manufacturers as lower and you mentioned medicare cms but there are other group purchasers some of them are government related and others are private insurance companies that are negotiating in bulk basically for the prices and they are no different than what the federal government does. it's the same. >> why isn't that happening in other clauses? this he seems to be more than others. >> and then on generic world there is one source said there in the greater bargaining position because they are the innovator product and the have the patent. >> but there is a different system for the medicare.

>> the attempt to be priced lower and that is the access point for the public. >> but if you have lower costs which are all going to drive lower-cost but you have the lower-cost then you get less supplies because the price is lower and you have less quality of people producing so it appears there are not others, it's not a mechanism where if you just say a little bit more you are going to get the drug that is going to take care of it. there's not a price mechanism to say we have a low supply the contras mentioned this is talking about therefore if we can adjust the price we get the supply that we need to take care of the patient. >> you're raising interesting point we can get more information and work with you. >> mentioned business decisions and that's all part of the knicks but there's some things we can do. one of the things quickly the

flexible teams is that relatively new reached out to some people and they did talk about some issues with inspection time and congressman shimkus so it sounds like that is being addressed. estimate it absolutely is being addressed. >> that's good because i understand the new physicians and so we appreciate your attitude and move forward to do so so thank you. i yield back. >> the chair thinks the gentleman and recognizes the chair, the ranking member emeritus of the full committee, michigan for five minutes for questions. >> mr. chairman, thank you for your courtesy and for holding this hearing. let me begin by asking this question yes or no. do you have authority at the fda

for any of the requirements with regard to efficacy from good manufacturing practices or safety, yes or no in the event of a shortage? >> yes. >> you do have it? >> we have the authority to have flexibility in how we implement the regulations. regulatory discretion. >> i would like to add a further answer on that particular point. >> but the requirements are the same how one who reaches them is flexible. >> i would like to have a further statement on that we understand what the authority is. it's my understanding the fda has been working to address shortages of the medically necessary approach. can you please define what medically necessary means? >> medically necessary is

defined as a product used to treat or prevent serious diseases and conditions to know the product available to act as a substitute. >> you indicated your testimony invest majority shortages experienced in the united states is attributable to the injectable salk. is that correct? >> that's correct. >> according to your testimony 54% of the shortages were due to the product quality such as particular its microbial changes resulting in the personalization. is the right? >> that's right. >> are you finding those american pharmaceuticals or imports? >> we are finding them here in the united states. >> what about imports? >> those are the issues we try to prevent which is why importing is always a challenging issue. >> but you have no authority to address the question of the manufacturing practices abroad,

no authority to do with good manufacturing practices, you have no real authority to see to it that the requirements opposed on the manufacturers for safety, efficacy are there and you have very little power to effectively inspect those manufacturers either of the finished pharmaceutical products or components and constituents, right? >> that's correct. >> and the ability to know who is manufacturing these things and chase them through the product line, is the right? >> that is why the process has done very carefully and selectively. >> i have some legislation and i hope that we will shortly be addressing it in this committee. >> we would address the problem of the quality problems by the ministry process by requiring the drug manufacturers to implement effective system as complies with gmp. the quality system will also be

required to ensure risk-management procedures that would address all relevant factors for the supply change and putting our original source materials and their origin and on-site audits and methods to detect the potential risky substances. the believe that this manufacturers also have to maintain records to establish the drug was manufactured and distributed under the conditions that ensure its identity, strength, quality or with the legislation of this kind help you address quality issues? >> yes, tracking quality every step of the we would certainly appalled latest in a matter of which i work with the gentleman, my colleague mr. shimkus. it's been widely reported that information of the drug shortage in acted in a market tries to sell drugs in short supply to the pharmacist for hospitals. does this present a safety concern?

>> yes it does, congressman. >> howell and what can you do about it? >> this is largely unregulated. the commission is involved in some degree but -- >> they don't have the expertise that you have. would you submit a proper answer informing me of what we have to do to address that particular problem? >> i would be happy to do that. >> do you know of these drugs have been stored properly to ensure the effectiveness, whether they have been delivered or whether they are free of self and contaminants or -- yes or no? >> unfortunately we know very little about the products in the market. >> as i mentioned the many factors to maintain the records establishing the drugs and its materials would produce and putting all the information relative to the producers, and the manufacturers, distributors and importers with such legislation and such power assist with the safety of these kind of pharmaceuticals?

yes or no? >> we want to appoint a safety and quality. >> american consumers and patience are facing three problems. one, are the drugs available and affordable, are the drugs they need a safe and number three, are they efficacious? do they work? >> i believe the committee needs to examine these issues carefully. our colleagues on the senate, mr. harkin and mr. enzi have already called to improve the oversight of the pharmaceutical supply chain. i would hope the committee would follow suit but i would like to have you give a statement of what authority need to adequately carry that out. i don't believe in sending you a letter asking you to do something for which you have no authority. would you submit for the record because my time is up what it is that has to be done to give the authority to address those problems? >> i would be happy to. >> i think you for your courtesy and i ask unanimous consent that

the responses be inserted in the record. >> without objection, so ordered. we recognize the gentleman from louisiana, dr. cassidy for five minutes for questions. >> callow. thank you. >> you do have the ability from overseas obviously come and so those issues raised regarding the adequacy of quality control of you help with the def heparin from china causing many deaths, correct? one of the issues raised here in the previous hearing is that the inspectors as part of the union contract are not come can refuse to go overseas and so i think mr. pallone spoke about adequate resources, but the issue was year there is enough money to inspect the requirement to inspect the pharmaceutical every two years and then it is happening every nine and when i

ask if we can redirect the resources to send that person over to e alleviate some of these standing in partitions it wasn't the unions would never allow this to occur the have the right to refuse the overseas assignment. is that true? and to what extent is that limiting the ability to improve the api, i forget the acronym that you know what i'm speaking of. >> in terms of a shortage situation that hasn't been a big issue. for the most part when we have a circumstance where some inspection activity is necessary in order to prevent a drug shortage we find that our staff are extremely cooperative and willing to roll up their sleeves and stepped in. we are addressing the issue of inspection force more broadly in

a parallel to this, but it hasn't been a critical issue in mitigating or preventing drug shortages. >> there's a lot of generics being manufactured in india and other third world countries. so, are they just not producing the ones that we are in the shop to supply of or are we not confident of the quality of the product that they produce? >> i'm not sure that all the understand the question. >> is there a world wide supply of drugs currently in a shortage here it's just that we are not trusting the manufacturing process by which they are produced and therefore do not allow the importation? >> i would say the lack of the imported product has been unusual. if there is a foreign source we are usually able to work through and get it approved. there have certainly been circumstances where there have been important problems the would prevent that, but in most

cases if there is a foreign source coming and going to a foreign source is necessary we are able to work through that. >> the gentleman who was going to testify speaks about the dea having a quota for control products and that if somebody goes out of business it might not necessarily be assigned to another manufacturer and so you have a kind of centrally planned economy induced shortage. any way that we can address that? >> i can start. i know that controlled substances to represent only a very small part of the drug shortage situation we are talking about, so we do work with the dea but it is limited in several instances. >> it is more complicated having the dea involved with good reason does create an additional step and complicates this but we

work closely with the dea when the controlled substance shortage is an issue. >> dalia understand that, but is there any plan to make it so that if somebody stops producing their quota as transferred to -- i gather that is in the situation now and although we are working closely that is an obvious solution i'm not sure is being implemented from your statement. >> we are continuing to try to figure of how to expedite these kind of issues with the dea and i don't have an answer exactly when that will be resolved but we are committed to doing it as are they. >> they also mentioned, just because i like to read with the other panelists say that the word quote, speaking of a source in an active pharmaceutical ingredient in the say that the ta qualification process to identify supply can be onerous for the qualifying approval of the new api supply or alternative manufacturing side for the already approved supplier can take as long as two

to three years. now i am channeling my inner what would be your response to that? >> we are trying to show as much regulatory flexibility as possible when necessary. so, we are hoping to address these things to the maximum flexibility possible. >> and we already do. whenever there is an issue related to a supplier where it requires them to approve a new supplier or even a new facility that is one of the concerns we turned those around very quickly. these are not in a matter of weeks or two months. weeks to months these are not business as usual where there's a long wait time. we understand the patient said at the end of this at the end of the line and we need to do everything possible to get on the case and work with the

company's and we have done that. >> i yield back. thank you. >> the gentleman from utah for five minutes for questions. >> thank you mr. chairman i appreciate you yielding time and holding this hearing. i think we have established the problem lots of people have talked about in their district. i represent the university of utah and the project more than 360 products have been shortages and not many by the end of this year. just two weeks ago they were talking about the challenges they are facing so i guess everybody up here has a story but i thought i would try as my backyard as well. i wonder if you can address for me some of the concerns about the gray market activity as a result of the drug shortages and the integrity of what is out there in terms of the quality of the medications, the counterfeit or how we can address some of these challenges of the market in these medications.

>> first of all, thank you for your commitment to research. we didn't say exclusively but we can say now that this issue is dramatically affecting clinical trials as well in a cancer and infectious disease in many parts so that's very troubling to us as a nation that prides its scientific advances. the market unfortunately is very poorly in underserved and as we mentioned already it is largely unregulated and to have now this dimension complicating an already complicated situation is very disturbing. so, we appreciate the attention to that and want to address the factors. spriggs other others we should draw some degree market specifically or should we be addressing the shortage of these medications? is that the more viable way to address that would eliminate i guess if we don't have a shortage. islamic one of the questions asked previously is what we know

about the products that appear on the grand market. do we understand when they expired, where they came from, and are they made by the company is experiencing a shortage? we don't, because we don't have a tracking system for within the drug supply to know what product comes from what. >> high-yield by 32nd advertisement. i introduced our track and trace legislation for maintaining integrity in this country and the rule in 1988 when the world was changed. i think this country is getting beyond the topic of the hearing but i do think we faced too much money on the table for the counterfeiters and the u.s. pharmaceutical market place and i hope the committee can take a look at that legislation introduced because i do think it is an important factor for the integrity of the supply chain congenital. i appreciate you coming for the hearing and i will yield back.

>> i recognize the gentle lady from tennessee for five minutes. >> i want thank to the witnesses for being here. we did have the cylinder and oversight hearing going on downstairs, so we completed that one before coming up but we are grateful that you are here and our second panel of witnesses we are also looking forward to and i'm glad we got a tennessee in on the panel joining us. >> a couple questions. we are going to look how we address this issue and how having you here helps to inform and our decision making process. so a couple things i would like to know, and if you don't have the answer for me, please submit it to us so we can include it in our record. >> i wanted to see if each of you had any examples where you

had worked closely and collaborative lee with your agencies, manufacturers of drugs where there is a known or projected shortage and see if you can articulate what that process was, the nsa transpired there and if you have those examples now, please go ahead and give them and if not, we will accept them in writing. >> i can repeat the example we are proud to show for the first time that had to do with a life-saving drug used for acute lymphoma and it received tremendous national publicity, and the representative challenged for the cancer patients and so the fda worked with the industry on this particular drug and they found one of the issues complicating the production was the crystallization of the drug in

the solution we warming it would restore the safety features that would allow infusion into patients. without collaboration between the fda and the industry that issue has been recently resolved and we are very pleased to report that. i know my colleague as other examples. >> fi would like to expand on that one because there is the before the issue of the crystals in the finals where the shortage began that it was being made a predominantly by the company's but the majority of the supply was by one firm. they were experiencing significant production delays so with the fda did is contacted the other manufacturers to work with them to increase their production in order to be able to supply the market. in the course of increasing the

production and trying to produce products rapidly, the crystallization occurred in both facilities. then came end of the -- said that preceded the crystals and we then resolve that activity as well. so, in that case, we also when there was concerned whether we would find a solution to the crystallization we investigated alternative manufactures whether there were in the overseas we were not able to identify an alternate of manufacturers. >> let me interject. do you have examples, other than this one, examples where he worked with some of those alternatives manufacturers in the broader than in and then once you identify that there is a near shortage that is approaching do you think there is a way through the protection process or the compensation model to provide incentives so

that you have a more predictable supply? >> another example we can provide for you, congresswoman, has to do with the proposal which is an agent that is used in anesthesia, and when a shortage starts occurring the fda could facilitate temporary importation of an agent to help them leave the situation but that is yet another example and i know that the fda has many others. the economic issues here are so complex that usually the station requires a full analysis and they are trying to do more of that especially for the secretary's evaluation and we hope we can come out with more definitive answers for the area. >> we appreciate that. in the interest of time i will yield back. >> the chair thinks the gentlelady and recognizes the gentle lady ms. murray for five minutes of questions. specs before, mr. chairman.

and thank you all for being here. i was also at another hearing so i'm sorry i missed your testimony and some of the questions. i was experiencing the same problems and our doctors we were with them constantly with a particularly nasty as diyala shia don ecology. we have the same problems and it's scary from the standpoint of what could happen with somebody given another drug that doesn't work or they have a reaction to it or something. so we hope and think you very much for any efforts in trying to get to the bottom of it. and i wanted to ask if really the consolidation has taken place in the drug industry over the last few years and continues to take place. what affect or how does that contribute to the problem that we are seeing today? jeneane, is this a large contributing factor because of the fewer manufacturers

available? >> thank you for your interest and support we feel it is one of the driving causes here and as you can imagine if you were denominator of a manufacturer shrinks and anyone of them has a manufacturing problem it puts the owner and some of the others and of the affairs don't happen to produce that product in this particular company as a sole source producer then you have what we are seeing right now. ..

>> as mentioned, we also want to have more assurances that the products produced have high quality so that we don't run into quality manufacturing issues, so those are two things that would be very helpful to us. you find the companies work well with you? >> we have had excellent dialogue to date, and we want to do much more of that, not just the fda, but the entire department and also engage the public, and this is, as you've heard. >> thank you, i yield back, mr. chairman. >> the chair thanks the gentle lady and recognizes the gentleman from pennsylvania, mr. murphy for five minutes for

questions. >> thank you. we appreciate your concern for our citizens' country. a couple areas here. are you meeting with the manufacturers? i want to ask a couple questions to find out here with regard to what the causes of the shortage. you laid out these things well, thank you. cancer drugs, for example, why the shortages with cancer drugs? we know they are very expensive in many compasses. what is the reason for that? >> it's very disstressing to see these time honored life saving drugs caught in the middle of the crisis, and some of the agents we mentioned here, time honored agents shown to be effective for decades are now stuck in these shortages, so, again these are older, generic sterile injectable drugs that are typical. >> do we not have enough

manufacturers, for example? working on these things? is that part of the problem? >> that's part of the problem again because the industry consolidated, and so we don't have the dozens -- >> of those there, are they not working at capacity? do we know if that's an issue? >> i'm not sure i can address that directly. >> i think that what often happens in a lot of companies, they make dozens of products -- >> uh-huh. >> these sterile injectables can only be made in certain types of facilities, so there's a limited number of those, and base of the market and the few number of producers, there is pressure to produce and continually produce, and so maintenance of the facilities, themselves, is often put off because it requires an investment on these low profit margins. >> with their expense of the low profit margins -- >> some are not terribly expensive, but low profit margin.

>> that's important what you just said. this is one of the concerns we have. >> right. >> certainly, we want medication to be affordable. why window shop when you can't afford, but in the push to make sure that drugs are affordable, are we also -- tripping over ourselves 1234 is it hurting the patients when we say we want there to be such a low profit margin that it ends up backfiring, and we don't have the medications to save lives? is that part of the policy getting in the way for us? >> well, thank you for posing those questions, and ultimately obviously, our goal is to protect the patient and give timely delivery of the medications. >> do we know -- if you don't know the information today -- is that something you can advise us on? i'm looking for -- i want to know from the stand point of myself as a health care provider. if we're doing something saying we want drugs to be affordable, but cutting the price so much that people don't want to make them, that's a serious concern, and so my question is policy

interfering. can you get back to us with that? >> sure, congressman. those are precisely the issues we're wrestling with as a department and country. thank you for posing that. >> i say that from the standpoint of -- look, oftentimes on the him there's lots of acquisitions in politics. we can't afford to engage in any of that with these live saving issues. i appreciate the honest answers from one colleague to another. >> thank you very much, congressman. >> also, with regard to inventories, i'm hearing hospitals saying they have a hard time keeping their inventory. it's not an issue that they're not purchasing enough; correct? or is it? if a hospital says we can't have the things in supply because it's too expensive or difficult for us to keep using inventory because of special requirements on how to maintain them, secure them, and under special conditions, is that part of the problem too? they might not order them because for themselves it's very

expensive? >> i believe it can be a problem. there also has been a trend, and it's not 100%, but there has been a trend in the industry that some people call just in time production. they don't have the long lead time production that may be in certain -- particularly for the sterile injectables compared to others with long shelf lives. they make less and distribute it out in smaller amounts that certainly contributes to hospitals not able to maintain a supply in addition to a large supply and cushion in addition to what the other concerns that you made. >> inventory is one where they think they also have a small margin. look, we understand health care's expensive. >> yeah. >> sickness is more expensive, and we all want to work together there. i do appreciate and look forward to seeing information on this. thank you very much. i yield back, mr. chairman. >> the chair thanks the gentleman and recognizes the

gentleman from georgia, dr. gingrey, for five minutes. >> thank you, mr. chairman, very much. i'm sorry i messed your testimony, witnesses, but thank you for being here. let me address that in your testimony you cite there's 178 drug shortages in 2010, and the sterile injectable drugs make a up large share of the shortages, and by my count roughly 172 of the 178 were sterile injectables. of these drugs, can you tell me how many were in shortage in previous years? is this a long term problem or just more recently? >> a long term problem, congressman. unfortunately, the trend is going the wrong way and shortages are increasing year by year. we have data back through 2006, and the trend is getting worse since then. >> then tell me this, are there

any other common characteristics that you are aware of among these 132 besides the fact that they are generic and they are sterile injust ainjectables? >> for instance, are they drugs just on the market for years -- actually, you answered that. thank you. are the profit margins typically very low or any other issues you are aware of? >> first question, congressman, the irony is these are older generic drugs that we understand are very helpful, if not life saving, and so to have this situation is really ironic and tragic, and you're right -- there is an issue with respect to business forces here and the profit margin is understood to be low for many individual products. >> and my last question can go to really either one of you. help me understand something.

earlier it was addressed. many of the drugs we are talking about are these older generics, not just the sterile injectables, where the profit mar gyp -- margins can be low. the low profit margins can lead to little competition or even drugs which only one company makes the product. the point was raised about market prices, and maybe secretary koh, you tried to answer this for him. i just want to be clear. do either one of you have any thoughts as to why you get to the point where there's a limited number of manufacturers of a particular generic? why the prices at that point remain low? i mean, the market should be able to work. the market of supply and demand, and obviously when a brand name drug, which is very expensive, first goes generic, and you have several manufacturers jumping in

and producing that generic, and at a much, much lower price, and then finally it's too low for some of them to survive, they stop doing it, and go on to something else; maybe another generic, and maybe one company hangs on. it would seem because of supply and demand that that company would be able to raise their prices. are there any government rules, regulations, laws, pharmacy benefit managers, something that would cause them not to be able to raise their prices even though the market would certainly let them do that otherwise? >> yes, congressman. so, we have come to understand this is a complex business situation where the standard of economic principles of supply and demand do not easily apply, and we have manufacturers, we

have purchasers, providers, hospitals. we have group purchasing organizations, and pharmacy benefit managers, so we have multiple forces all working here to the final outcome that ordinarily you would see with a shortage arising in price and profit, but that doesn't apply here. this is why we need the extra analysis that our departments are doing and others, and we welcome new information and modeling to really help us understand root causes better. >> dr. qweda? >> the questions you raise are the questions we have as we try to understand the roots of 24 problem. what are the things that could be done to try to prevent shortages from occurring or even being at risk in the first place. >> well, i thank both of you for those answers then because, you know, the federal government trying to do the right thing, and in instances, i hope in all instances, and it seems that far too much of the time they screw

it up. [laughter] that's why i ask you those question, and i hope that you'll continue to look at that so that market forces can continue to preville, and then i don't think we would be faced with these shortages. >> gentleman yields back? that is round of questions for the subcommittee members. we have a couple members of the committee who joined us. chair recognizes mr. waldon for e couple questions. >> i thank the chair for having the hearing, and i appreciate the testimony from the two witnesses today. i got involved in this issue some time ago because of oncology that was brought to my attention and staff's attention, and the drug i recall he mentioned, and i'll try to say

it right, doxirubison, an ovarian cancer drug, that he's prescribed for a long time, an effective drug i'm told. what was the fda's role in interrupting the production of that drug? can you speak to that? >> i can speak to it very generally. there were several companies that produced the drug. one of them was a major supplier also was the same producer for the drug dr. qoh mentioned earlier. some of the issues were the same, facility issues, production delays because of, you know, chronic problems in an

aging facility is the best way to summarize. what fda did is we worked with the other two producers to facilitate their ability to increase production. it did take awhile. they were, as i said, these are complex products to make. companies just can't ramp up production over night. >> right. >> but in the meantime, a fourth company came in with a new version of the product, and they helped to make up the supply, so we worked -- we made sure to expedite review of that fourth company's application and any inspections, ect., that were necessary in order to turn this around. >> now, dr. koh, do you have comment on that? >> i think she summarized it well. >> so you feel like you've taken all the steps? this drug is now available on the market again without shortage? is that accurate?

>> my expert tells me, yeah. the drug itself is. there's another version of the drug that's sort of a special formulation with a sole source that's a problem, but that's a different company. >> all right. >> same company. >> you mentioned glass and metal in injectables that you were discovering that sends shivers up everyone's spines, but i heard with new technologies, scientists are able to see deeper into the drugs than we've ever seen before in parts per billion or whatever. again, this is your field, not mine, but are we looking deeper and finding things we never knew was there before, and is that really a problem from a health department standard, or is it a question, but may play a role? >> well, again, those examples, congressman, are very graphic examples of quality issues that we're facing.

i must say, though, that again, the fda worked with companies so in the case of matters, pieces of glass, pieces of metal, first to identify the issue, but also advances in developing for a filtering systems to filter them out and make the drugs safe to inject into patients, so that's another example of regulatory flexibility that has marked this chapter of our history. >> so i guess the end of my time's about to expire -- my time to ask questions is about to expire. [laughter] i want to clarify that. it'll be a short night. [laughter] it's the sense of urgency. i applaud you for bringing people together to figure this problem out, but as i hear from others in my district, there's this patient coming in, drug's not available, they prescribed it for years, it's effective, it works. they can't get it. my mother had ovarian cancer and

died from it, so i have this sense of urgency. i know you feel that, both of you, we all do. if there's a way to play a constructive role here whether it's ms. degette's bill on notification, i mean, she put a lot of work into this. you know, we have to do everything we can to be a partner in this to find a slews. i look forward to working with both of you to the extent this committee lets me play a role. >> the chair recognizes the gentle lady from colorado. >> thank you. mr. chairman, thanks for letting me participate. it's good to be back in my old stomping grounds of the house committee, and as i know you've been discussing, congressman roonny and i introduced in a bipartisan way that preserving access to life saving medications act creating an

early warning system between fda drug companies and providers so that we can respond to these drug shortages quickly and efficiently. do i think the bill will solve the root problems of the drug shortage crisis? no. do i think it's a necessary first step? absolutely. i appreciate the witnesses coming here to talk to the members of this committee. this bill came up because mr. rooney and i independently were going around, meeting with our hospitals and doctors, and suddenly they said to us, i was in the middle of a chemotherapy treatment of a child, and suddenly i couldn't get the drug. it seems to us -- i'm sure it didn't happen immediately, but it seems like it did. doctor, you're shaking your head. do you want to comment on that? >> well, to the prescriber, you know, they are not following, you know, websites. they just know they can't get

the drug, and they have a patient who is ill and needs it today or tomorrow, and not in two months when the supply can be reuped, and that's a very difficult position to be in as a physician, and even worse as a patient. >> and is there some reason why these shortages have increased recently? either one of you. >> we're trying to understand that, some of the things that we have identified is that these are products that are complicated -- most of the products that have been problematic are complicated to produced. >> yep. >> there's a limited number of producers, and they are all working, many of them are working in facilities that are aging and have had chronic challenges in maintaining production. or product quality. >> yeah, and, you know, i think you -- i think before i got here, mr. chairman, you

discussed the current system which is reporting system for companies that don't have competition, and it's a voluntary system. even though it's much more limited, it's really worked. in 2010, 38 drug shortages were avoided when the agency was given advanced notice, and i just want to give a couple examples. in august of 2009, espira know fitted fda of their intention to discontinue a drug in 2010 due to low volume. the drug is often critical for neonatal care. they received a note back from the fda drug shortage in september 2009 thanking them, and in march 2011, the other -- the other supplier of this drug, american region recalled the product because of a quality issue, so what happened then is

in april 2011, the fda made them aware of the drug shortage caused by the recall, and asked them to assess their ability to return to manufacturing, and then in that same month, they told the agency they would return to manufacturing the drug so that the patients could be served, and the fda -- and so it worked, but that's on a very limited basis, and so -- so i -- i just think that this could really work, and i guess i want to ask you, dr. koh, in my minute remaining, how will it work if we enact legislation like this to get the information into the provider's hands that there's an impending drug shortage because you folks had some experience with it. >> sure, and congresswoman, first of all, thank you for your

leadership on the issue. it's very much appreciated. we all feel that establishing highest level of communication as early as possible about my potential shortage can give us the opportunity all to be proactive, and that's just not fda and hhs, but providers, hospitals, and patients, so if we can do this together, understand that a potential shortage is on the horizon as soon as possible, make that information available to relevant parties and ultimately to parties in the public, then we can all work together in a proactive way. right now, it's a situation you summarized well where the information is voluntary and the fda does not know until it's too late, and then patients are stuck in a dire situation which is just not acceptable. we are looking forward to greater emphasis on earlier notification and communication. >> great, thank you. >> thank you.

>> the chair thanks the lady. before panel two, we have a request for a follow-up. panel one, without objection, we'll let you ask the follow-up question. >> thank you. we have actually, my office and i, looked into a drug and there was a problem we heard from you of a toxin being in the product, and it's unclear where in the manufacturing process that toxin had been introduced. now, obviously, that's an issue, and frankly, i called my constituent saying fda did the right thing. we don't know where it's introduced. it's disturbing to me that the toxins should be in the product, so the -- speaking about manufacturing problems, but really they are significant, so is it a pattern of manufacturing that know there's some sort of contamination for which in their

gmp, they do not know where it's entering? that's a process problem of tremendous concern. >> the answer is yes. that's exactly the kind of thing that we're concerned about. when you find a product with toxin in it, you have to figure out how the toxin gets in there in the fairs place. there's multi. multi. steps where that would be occurring. figuring that out is not easy and could take 5 long time to determine that and then a long time to fix it, so -- and it's particularly -- we see this with metal shavings in medicine, glass shards in viles. all things that would be unconscionable to give to patients, but the key is being on top of those good manufacturing practices, and maintaining facilities to avoid those kinds of events, and where

you have facilities that are in 100% production mode all of the time, it's often difficult to maintain your facilities and modernize them in a way that's needed to, again, assure that for a company to assure that they are producing a reliabilitibly high quality -- reliably high quality product. >> thank you. >> well, dr. koh, as was said earlier, classic economics would suggest that when a product is in demand, prices should rise and the market establish a new e quill equilibrium. we now have more shortages than the year before. i'm also curious why the market failed to establish an equilibrium because both discussed program constraints, and there's brand name drugs and

not generics. is that correct that they only apply to the name brand and not generics? >> well, congressman, those economic issues are precisely the ones that we are analyzing right now, and we have, especially our assistant secretary for planning evaluation and healthy economists looking at the economic principles and modeling to help us predict where we need to go in the future, so thank you again for raising these issues. these are very, very complicated business and economic models we have come to find. >> the generic drugs where we've seen most of the drug shortages in recent years, i mean, if there's that distinction, is that -- is that the problem? >> we do know that it's older generic sterile injectables that are making up about three quarters of these shortages, and that's where we focus our intention.

>> i don't know if either asked you -- if you said you were going to get back, but i would really like to get some answers, you know -- i mean, obviously, you're not prepared or you don't feel you're having an answer today, but i'd like you to get back to us through the chairman if you could. >> be happy to. there's an upcoming report from the fda to give further often sis and further economic analysis that are intensely underway right now. >> will that relate to this, or you don't know for sure? >> well, hopefully, we'll get a better understanding of root causes, and then of course -- >> all right, but, mr. chairman, if ce can -- he can get back to us on that because we asked the same question, and we would really like to know. >> sure. >> yeah, if the chairman can yield on this point -- >> go ahead. >> i thank my friend for following up on this debate and question, but in the opening statements, i just didn't focus

on the government pricing. i did say insurers too. we're in this together, and if the market's going to work, it's got to work. i want to correct the record. i was not just picking -- >> no, i understand. i just wanted to bring up the public program aspect. get back to us on it. i mean, to be perfectly honest, the questions asked today, we've gotten a response, and we have a little better idea, but i almost feel like more questions have been raised than answered today, and that's not anybody's fault, but that's where i feel we are right now, mr. chairman. >> all right. thank you. we'll -- if you'll respond to the questions in writing, we'll get those to the committee members, and i look forward to reading your report. the chair thanks the first panel. >> thank you very much. >> thank you, we'll call up at this time panel two, and the

second panel consists of seven witnesses. our first witness is mr. johnanthan vice president of sales and market and testifying on behalf of teva pharmaceuticals. next is mr. john grey, the president and ceo of health care distribution management association. our third witness is mr. kevin colgan, the corporate director of pharmacy at rush medical center in chicago. our fourth witness is mr. mike, chief operating officer of premier inc. next we'll hear from dr. charles testifying on behalf of crin call oncology. we have the vice president of operations at lain caster general health, and finally

dr. robert, director of the cancer institute of new jersey. we thank all of you for coming. your written testimony is entered into the record, and we ask that each of you summarize the testimony in five minute opening statements. .. representing tab of

pharmaceuticals. teva pharmaceuticals is a global leader in grand generic ideological consumer-products. we are a market leader in many of the markets in which we serve. here at the united states where the market leader in generic -- generic products. we have a fast portfolio including made dosage forms, oral solid presentations, inject bold presentations that i look forward during the question period to share and site-specific to that important category. as reference, we are a market leader. teva is a market leader and we understand and embrace responsibility that does come with being a market leader in non-that context i'm happy to be here today. one side note, as all of us have been, we all have personal stories as it relates to family

friends, people we know, individuals that have been impacted by not being able to get medications. in my particular situation, i have friends and family as well. given the role they play, i maybe will to make a difference. unfortunately, many times i can't and it's very challenging. at the same time, given the role i played, ear from patients. i hear from family members of patients, constituents. i hear from positions. looking to the manufacturer to ask the questions why. i would respond and understand that. then at the same time, i see every day when i go to work hundreds and hundreds of people working tirelessly around the clock, sparing no expense to do whatever we can to return to historical production volumes so we can get these critical products back to america. as referenced in earlier

testimony, this is a complex multi-stakeholder issue and it's going to require the court nation and communication amongst other stakeholders to resolve this issue. as noted earlier testimony as well, there are many factors that impact the truck shortage issue. whether it be api being sourced and available. to discuss that. the industry has experienced manufacturing challenges. i'll go into greater detail specific to how it impacts a sterile facility versus oral solid facility. there has been regulatory impacts on facilities. as appropriate as required tsca regulates these complex facilities and projects to ensure that the manufacturing community is operating within full cgmp compliance ultimately to provide the highest quality of products in all of this are impaired as the manufacturer, we certainly embrace that. most of the shortages are

unanticipated. those unanticipated shortages have boomerang effects, a finance supply chain. as noted in earlier testimonies, we getting greater detail a handful of manufacturers that sometimes are unable to pick up the last supply from other manufactured in will go into detail about that as well. what is teva doing specifically to address drug shortage issues? we have significantly made embarrassment and enhancement of facilities as well as their quality systems. we've unrestricted access to resources globally and prioritize those people in those facilities they required to wear that needs to be done to get the products back to market. we have embarked on a very aggressive redundancy plan. there is no requirement to a manufacturer to have a secondary or tertiary facility qualified

to manufacture these products. we have identified in combination with drug shortage division does not critically medically necessary products and we have five fda approved facilities and we put a team in place that is actively working on redundancy planning for these critical products. as referenced also for the testimony, dr. krieger and dr. koh within the fda. just as it relates to resolving and mitigating these challenges. i can speak to a couple different references. one come a discussion earlier in testimony around court nation of importation of product to alleviate critical troop shortages. there was a specific instance in which we worked with the fda to bring a new product called leucovorin that's used in combination with chemotherapy to enhance the effect is said that treatment does so as to mitigate side effects.

we brought it in and had a significant resources to work collaboratively with that and were able to help mitigate that problem. the solution that we are looking at recognizing as the multi-stakeholder issue. i do need to comment as it exists today, there is tremendous cooperation within the truck shortage crippen manufacturing community. as referenced earlier, there is no formal process. it's an informal process and i can speak on behalf of teva and other manufacturers in the state that we too will collaborate with the fds testified earlier in the take that very seriously. we are responding where we can be a doctor ribs and example mentioned earlier. i received a phone cow to do what we can. we'll be able to work in collaboration with the get product release to market and we continue to prioritize those types of products. during question i'll be more than happy to go into greater detail about how we are seeing the court nation and effect this

is how we would like to see a greater communication amongst multiple state kernels -- multiple stakeholders beyond the manufacturing fda. going forward, we had seen discretion by the agency deployed to allow earlier availability of key products. that is working. we would like to see a process in which we can get that on the front end as well to potentially mitigate potential problems while incorporating remedial steps that have no impact or can you do the patient. i know i'm all for my time, chair, so i apologize. >> mr. grey company recognized for five minutes. >> good morning chairman pitt's, ranking member pullout. i have judd gregg, president and ceo of the management association in arlington, virginia appear to appreciate the opportunity to provide an some overview of the pharmaceutical distribution

system and inform your committee and efforts regarding critically important issue of a drug shortages. a little history, each dna is a national association representing america's primary health care distributors, a vital link in health care distribution. each business are 34 member companies ensure that nearly 9 million prescriptions, medicines and parties that delivered safely and efficiently to nearly 200,000 premises in clinics, hospitals, nursing homes and other providers nationwide. approximately 90% of all pharmaceutical product sales in the united states flow through our member companies. continued innovation have really set members apart to contribute about $42 billion in value to the nation's health care system. federal law defines wholesale drug distribution is the distribution of prescription drugs do other than consumer or patient appeared wholesale distributors have listed

entities bound by range of federal and state ammunition distributors must comply with licensure requirements in every state in which they operate. support to note each dna members are primary distributors. they buy predominately from manufacturers that sell only to appropriate license customers the vast majority of which are pharmacies are health care providers. pharmaceutical projects have distributed maximum efficiency and effectiveness and safety. arms is another health care entities to place orders for prescription medicines by a clock in the evening and received deliveries from distributors the next morning. the irish distribution center in this country processes nearly two dozen orders a day. on the average warehouse maintains about 30 days of inventory level. this number varies by product subject to demand, seasonality and other factors. pharmaceutical products a special manufacturing five shorter cycle times and system.

distributes provide services for manufacturers beyond simply the movement of products including but not limited to receivable risk management for manufacturer, customer validation, order management, processing returns and because of contract management appeared for privacy and provide your customers can enter super have equal services including aggregate ordering assistance is stuck in income support information systems as well as accounting credit support. in the case of inventory management surveys are able to fill orders six or seven days per week. 365 days a year. it limits large inventory levels at the pharmacy levels. distributors maximize efficiency between health care providers by managing a very complex network of products and systems by efficiently providing mechanisms for the seamless transformation of product. to the unique position, distributors and relationship as stakeholders, we are acutely aware of the impact of drug shortages on patient,

effectively addressing drug shortages is a difficult and complex health care community in large part because shortage typically occurs with little or no warning and often require significant resources to manage. we work harder to improve communications up in the supply chain for manufacturer to distributor to provider where possible and try to mitigate the impact of the drug shortage. other distributors to manufacture products in the deeply and unimportant while helping to coordinate and share information about drug shortage when no shortage arrives. distributors are notified of a shortage by a manufacturer provider factory. once the information is received from distributors can indicate with partners about product availability to understand the scope and expected duration of any shortage. the distributed works as quickly as possible with orders to the extent they're able to do so based upon purchasing history are necessary to alternative products in the supply chain. as you can appreciate the

delicate balance between the need to share information at the appropriate level and at the same time preventing environment for panic buying. supplements are collaboratively with the farmer says, federal agencies and congress and other supply chain partners to share expertise about the whole drug supply chain. in addition, work with members of manufacture providers to update voluntary guidelines on improving communications between supply-chain partners in the event of shortages. we hope the effort will contribute to better management of the process in its entirety. someone believes the health care industry as a whole, government decoders must continue to rake together towards collaborative solutions at this problem that mitigate impact of the shortages and the impact on the stakeholder -- the key stakeholders the patient. to that end i thank you for the invitation to participate in the hope the overview has been valuable than that for two questions. >> mr. colgan company recognized for five minutes for opening statement. >> good morning. good morning and thank you,

chairman pitt, ranking member pullout and distinguished members for holding this hearing. my name is kevin cole, the corporate director at rush medical center in chicago, illinois. i am here today because i cannot serve my patients are the caregivers due to shortages of medications, some of them critical to patient care. while there's no single solution that will solve the problem of drug shortages, there's things we can do to help address this issue. first, require legislation in both houses of congress would enable fda to require drug manufacturers report confidentially to the agency when they experience an interruption in the production of their product. this early warning system will help the fda work with manufacturers to ramp up production when another company experiences a problem. moreover, the bills call upon fda to work with manufacturers to develop continuity of supply

plans, which could help to identify backup sources, pharmaceutical ingredients and produce redundancies in inventory service reserve supplies. some have argued that this legislation won't have any impact. we disagree. your party heard this warning from the fda did in 2010 to 30 drug shortages were avoided in the last year 99 drug shortages were avoided when the agency was given advance notice. further opponents of this approach argue that it will lead to hoarding. we know that according already occurs. how do some find out about drug shortages before others? we don't all the answers to this question. what we do know is early warning to fda will help make sure your everyone has the same information at the same time. simply put, the public in a fit of an early warning system far outweighs the risk of hoarding.

another emergency preparedness areas such as via terrorism, flu pandemic and national disasters develop action plans and communication channels among necessary responders. why would we approach drug shortages any differently? sector, health system pharmacists have been collaborating with other clinicians and members of supply chain to work with the fda to address this problem. for example, we believe fda should have been developed necessary resources to speed up the regulatory process to address drug shortages. other alternatives include improved communication between fda field personnel and drug shortages program to assess the comparative risk of public arms when a potential enforcement action will cause or worsen a drug shortage. export incentives for manufacturers to continue or reenter the market, generic user fee program to speed approvals

and last, ensuring the agency has the funding it needs to carry out its mission. many of you sitting there is room sometime over the next several is going to receive news that you, family member or friend has been diagnosed with cancer can any surgery, has been admitted into an intensive care unit, has a serious infection that requires antidiuretic and has a premature baby or grandbaby that requires nutritional support. the lessons of my tears would on a first-line medication therapy to treat you. medication we have may not work as well as could cause heart damage, but it's always have to offer. or we are delaying treatment until you are able to obtain drugs that there ensures supply. these are all situations i all situations i come on the clinical pharmacy staff and the physicians, nurses and respiratory therapists we work with have had to manage over the past year. from our perspective, drug shortages represent a national

health care crisis. we don't have one single solution, but we've offered a number of solutions that together can help resolve this problem. again, thank you, mr. chairman. and all the members of the committee to provide input on this problem. thank you. >> the chair thanks the gentleman. we're in the middle of votes. we have 14 votes. or going to try to get a couple more before we go over in recess for the vote will come back. >> good morning chairman pitt's members of the committee, chief operating officer of the premier health care alliance. premiere is on by not-for-profit hospitals and health systems. we use the power collaboration to be the transformation to high-quality and cost-effective health care. one of the ways we do this is by aggregating the buying power of 2500 hospitals to get the most medical supplies and drugs at the best prices. i think the committee for leading efforts to address drug

shortages. as you were coming to number drug shortages has tripled since 2005 in many of these medicines are essential to patient care. premieres at us understand the extent of the problem through a survey. we found between july and december 2010, more than 240 drugs buried there ensures supply or completely unavailable in 2010. over 400 generic equivalents were backordered for more than five days. many of the drugs that it is backordered in 2010 have remained unavailable for a short supply in 2011 and 8% of the hospitals reported shortages resulted in the delay or cancellation of the treatment. drug shortages also carry a cost, an estimated 450 million annually to the purchase of more expensive substitutes an additional labor costs. we don't have the ability to estimate financial impact of shortage drugs, whether it's normal turnips. we are working to diminish these costs by determining

manufacturing capabilities to assess whether manufactured can supply the market and alternatives if they don't meet the demand. instituting an early warning system for hospitals to notify you shortages, but notified we determine the scope of the problem and communicate with the fda and explain longer-term contracts with manufacturers to create more predictable volumes and stability in the market. in the crisis we hope people do everything they can to help patients get drugs they need. instead, we send a great market vendors take advantage of the problem, offering the shortage products at exorbitant prices. premier analyzes unsolicited offers from vendors in shortage drugs. we compare prices to premieres. we find a rich markups for 650% and the highest markup as 4500%. the high blood pressure medicines sells for 25 india

suffered for $1200. markets were 4000% for drugs that treat leukemia and hodgkin's lipoma. it helps cancer patients retain bone marrow. 45% were marked up a thousand% above the normal price and a quarter were marked up 2000%. where and how great market vendors are getting these medicines, no one knows. and how can the integrity of these drugs be ascertained? again become a question few know. premier's taken a position that pharmacy should avoid these vendors and stick to know if primary distributors. in times of shortage, pharmacies may need to look elsewhere and in these cases are developed to set of best practices. these practices include verifying custody, comparing licensure, verifying the sellers of the race to sell the product in confirming the settlers are fed a credit to wholesale distributor. interview the best way to stop

price gouging is to fix the drug shortage crisis. we asked the committee and fda to consider the following. speed the approval process for medically necessary drugs that appear to be in shortage. encourage fda to engage stockholders and discussions determine whether a drug is medically necessary. the objective is to prioritize drugs necessary for treatment and also may be at risk for shortages. granted dea flexibility to address quotas limiting the amount of active ingredients manufacturers may purchase as limiting their ability to read that the production of a supplier exits the market. fast-track approvals with new pharmaceutical agreement suppliers for medically necessary grubs in shortage. work with manufacturers to slow the trend of acquiring raw materials outside the u.s. require manufacturers to notify the fda for plain supply interruptions that allow time to work with remaining manufacturers to increase production. establish an early warning point of contact at the fda. in closing, i think the

committee for opportunity to share with learned about drug shortages and a learning impact it has on the safety and health of our communities as well as their health care costs. premier stands ready to assist congress in finding ways to ensure a safe, reliable supply. >> the chair thanks the gentleman and again we appreciate your patience. we've got five minutes left for a vote. i think will break your comeback as soon as the last vote is over and continue their testimony. the chair recognizes mr. pallone. >> i want to submit this statement for mr. matheson. >> without injections ordered. this point, the subcommittee stands in recess until after the last vote. you all have a long time, so you can go we. [inaudible conversations]

>> thank you heard much for your patience and thoughtful testimony. remove the testimony with dr. finley and they believe you're up next. your five minutes. >> at afternoon, chairman pitts, ranking member pallone and member of the subcommittee. last night i and charlie family i'm a practicing oncologists in nashville, tennessee. spend the majority of my time taking care of patients and this is why pretty and comfortable environment. i'm here to talk about the impact of drug shortage on my patience. i speak on behalf of the american society of clinical oncology and i 30,000 members in a patient's thank you for holding this hearing. drug shortages have read proportions in oncology and we hope this hearing will better frame potential solutions. hearings across the country at large and small, community-based

and hospital-based practices have challenges treating patients. situation as you heard this morning is worsening. drug shortages in the united states have tripled since 2005, 2006. almost all cancer types are affected. leukemia, lymphoma, breast cancer and colon cancer. shortages are indeed forcing us to change the way we treat our patients. often a drug in short supply is potentially curative. there's a reasonable substitute. our practice treats many patients diagnosed with acute leukemia, aml, a life-threatening but potentially curable disease. fake european is one of the essential components of treatment for aml but that agent has been underway as internet in short supply today. physicians have been forced to tell patience this potentially curative drugs is not immediately available to them. treatment delay can result in grave consequences in these critically ill patients.

in those situations there's alternative drugs, the less effect it. they have more side effects are dramatically more expensive. for example, this treatment for non-hodgkin's thumb is known as the chalk regiment. shot chemotherapy include stocks or redfin is in shortage. they call it shared the theory of a woman diagnosed with lymphoma during pregnancy. that's a very complex situation in which forshaw doesn't happen often but involves potential risk for the mother and the child. because it shortage, the woman had to be treated with a substitute. one for the risk for the baby is not well known and may be less effective treatment for her lymphoma appeared on colleges and patients should not have to make such difficult choices. currently treating national firefighter who has enhanced gastrointestinal cancer and was responding to chemotherapy. grow this summer were unable to an aide five if you had to use alternate regiment of what

caused him more personal side effects and significant weight increased his out-of-pocket costs. the parser substitute drugs can be up to 100 times more expensive than a drug normally chosen, especially if the substitute is a brand-name drug. as an example of the main state generic drug went into shortage, oncologists had to treat patients at the substitute, legal leucovorin. medicare payments or 50 milligrams were a dollar and a quarter. an equivalent doses approximately $90. the clinical trial infrastructure in this country is threatened a drug shortages as researchers delayed trials because the drug as part of the study becomes unavailable. 60% of clinical trials have been delayed. this at a time of great promise in cancer research. we understand many causes of this problem. number involved in the manufacturing process. however markets that there's the key to book a squid in crisis.

are almost exclusively in generic sterile injectables to which are generally inexpensive drugs at the low profit margin. companies experience complications may not have incentives to invest resources required to upgrade facilities are of current quality problems. as we further does not appear to be a single solution to the crisis. our primary expertise is in patient care, but would offer potential solutions which we would encourage the committee to explore. first, congress should urge expedited approved new drug applications or amd is for drugs vulnerable to shortage in a way that does not compromise safety. secondly, because this amounts to a public health crisis, congress could work with medicare to address pricing and payment for ultralow cost generic drugs. third, congress should pass as 296 and h.r. 2295 bipartisan legislation to give dft

increased authority to manage the shortages. fourth, consider tax incentives to encourage or enable generic manufacturers to continue to produce vital drugs and update facilities are into the market to produce drugs vulnerable to shortage. mr. chairman, ask a has-been will remain an active partner in seeking resolution to the problem. the diagnosis and risk of necessary treatment is to have enough burden for patients and families to bear. it's absolutely unacceptable that the lack of effective oncologic therapeutic should add to that stress or worse threat mice. we must do everything in our power to resolve this crisis and we should do it immediately. we appreciate leadership on this issue is seen to do everything we can to assist. thank you very much. >> the chair thanks the gentleman recognizes mr. pol nt. >> at afternoon. i want to thank the committee for convening this hearing in

the opportunity to participate in this discussion. and vice president of operations at general health in lancaster, pennsylvania. my comments will address daily challenges hospitals, patients and providers experience as a result of increasing shortages occurring nationwide. the current health care claim the hospitals have been asked to restructure to the quality, safety, fiscal constraint and benefit standards expected in today's world. resources are being stretched to the limit. i'm going drug shortage challenges that lancaster general attacks and diverting resources to respond to the daily patient impacts the shortages create. the pattern is becoming the verb for hospitals, physicians and most importantly patients everywhere. we work hard to maintain a culture of quality and patient safety virtually based on fundamental building blocks of standardization or elimination of waste and variability. direct conflict with safety practices, drug shortages have

complexity and additional burden increasing possibility of medicaid misadventure, poor outcomes in patient harm. the lack of an early warning system regarding shortages is one of the greatest challenges we face as health care providers such that we sometimes the shortages or severity with products are not received their daily shipments. her villa drug wholesaler orders last month revealed receipt of only 3452 of the 4344 line items process can represent innovative about 80%. afterward, 892 by natives ordered in august were not received. every disruption to medication supply creates new responsibilities to investigate alternative treatments and procedures in various technologies. additionally, we must disseminate educational alternatives not always readily familiar to front-line caregivers. in our fast-paced complex environment from every substitution had variation in risk. these logistical task is

insignificant dedicated hours with multiple stakeholders and staff working collaboratively on the two plans to mean safety while the current execution and limited time frames. this means for commit anesthesiologists emergency physician and contemplating how we maintain airway and patient percentage become the center of that availability of the paralyzing agent. neonatologist how he must provide nutritional care to compromise premature intense. infectious disease.yours and on colleges discussing alternative to the regiments midway through a course of therapy. more importantly, how we revealed to patients that we may not have the medication necessary to treat their ailments. in our opinion this issue represents a national health care crisis. minimizing short-term innovation and longer-term solutions, potential solutions require system changes send capacity including the following.

establish an early warning system has proposed a bipartisan legislation in both houses of congress to immediately help to avert or mitigate churn shortages proactively. establish communications between fda manufacturers to develop evidence-based allocation plans for critical drug therapies. the pharmaceutical supply chain directs available supplies to most critical patient populations. explore incentives to encourage drug manufacturers to stay and to reenter initially enter the market critical to specific judge untrue drugs in short supply. fast track for approval of new production lines of all she manufacturing states provide materials for medically necessary drugs are vulnerable to shortage that compromising quality and safety. again i want to thank the committee for holding this hearing. lancaster general offers continued support and commitment to assist in the development of solutions to prevent mitigate risk caused by drug shortages. thank you. >> the chair thanks the john

amen. >> at afternoon, chairman pitts and ranking member said poor and members of the subcommittee. my name is robert pollo director of the cancer is the new jersey national cancer institute designated cancer center. i also speak as a member of the american association for cancer research and science policy affairs committee. thank you for recognizing the impact the current drug shortage problem is having on patience and ability to advance cancer research and improved outcomes. you for the effects of shortages on treating patients. as the director of nsa designated cancer center and oncologists myself a treat and care for patients, at the same frustrations regarding the care of our patients a negative impact of drug shortages. this impact is not on the media for the patients and their clinics today, but also affects

the future care of cancer patients because the next generation of cancer therapy is triggered by today's clinical trials that are critical to meeting the national goal of improving outcomes for cancer patients. shortages of drugs is actually a very complex problem. regarding what is causing them and how they can be remedied. i'm here today to discuss how this growing problem of shortages of already approved drugs, which in some cases if you've heard have been used made for decades is affecting our best cancer care, clinical trials and threatening our ability to continue on our great is steadily improving cancer patient outcomes. fda statistics are the number of drug shortages has more than tripled over the past six years with the market increase in drugs involving sterile injectables, which negatively impact treatment of cancer patients. again is if you heard, most shortages in oncology or sterile

injectables. the medications in short supply include cancer treatment drugs, anesthetics, antimicrobials and pain medications. a list maintained by the american society of health system pharmacists recently identified 193 shortages in 2011 of which 22 or cancer drugs in the shortages project to do were sent. these include drug standard treva regiments used to treat patients with many different cancers in both adults and children. the shortages are now affecting clinical trial options for patients with cancer. do the insurgency have been able to obtain drugs in patients on clinical trials has been delayed or stepped in several of our trials. many of these drugs in short supply are part of the standard regimens in which new treatments are added or compared to within a clinical trial. many of the drugs of the shortage list are used in a large national cooperative group trial spirit coalition of cancer cancer cooperative groups

reports 50% of active cooperative cancer clinical trials involve drugs subject to shortages. many reports contain examples in which sites are unable to enroll patients can improve clinical trials to relax at drug supply. investigators who studies are unable to enroll patients and drug supply is not available. patients studied or sometimes receive an alternate drugs and supplies not available and there is concern about interpretation of themselves when drug substitutions occur. it's important to remember the impact from the drug shortage on clinical trials today will also have a long-term effect on cancer research and future treatment options for cancer patients. clinical trials represent final step of a long process of developing new therapies that improve outcome of patients and i treatments for patients in which there is no effective prior options. when after years of effort a single researcher discovers a potential new drug or treatment,

that a drug is often best added to an existing treatment in combination and/or tested and compares them to the best current treatment clinical trial. it said yields positive results, patients can ultimately have access to a new and improved drug or treatment combination. currently however, were running out of existing drugs. when a clinical chat events outcome even temporarily at the trial results may be compromised in an enormous amount of work and expense is pasted. this means during a clinical trial a shortage of only a few weeks in an existing drug might mean delays commuters of developing a new drug. in other words, drug shortages can have a ripple effect that availability of new drugs and treatment combinations tomorrow. today we estimate wanted to men and one in three women will develop cancer in their lifetime. this year over 1.5 million

americans are estimated to be diagnosed with cancer and more than half a million americans are expected to die of the disease. but for the 1500 people a day for more than one per minute. while these numbers seem staggering, we've made great strides in our ability to diagnose, treat and prevent cancer anonymous promising time in cancer research. earlier this week the american association for cancer research issued a progress report marking 40 years of progress in fighting cancer. in fact, cancer research today more than 60% of adults are greece from 50% in 1975. it was reported. from 19,922,007, death rates for cancer in the u.s. decreased 22% for men and 14% for women. the challenge we now face is to continue to turn groundbreaking science into life-saving care to even greater speed by facilitating clinical trial. we laid the groundwork for

discoveries in cancer research to translate into cutting-edge treatments for patients. the shortage hinders our ability to treat patients overall. we are anti-new era of cancer treatment and prevention. however an inability to the best treatment for patients in general and conduct clinical trials is a serious impediment to her cool and will hamper our ability to reduce a torn cancer for the people of our nation. thank you. >> the chair thanks the gentleman and all for seven witnesses for your thoughtful testimony and we will begin questioning at this time. i'll recognize myself for five minutes for that purpose. let me begin with you, mr. mr. paoletti. can you walk us through what happens in your perspective when is a drug shortage? who notifies you? how much warning do you get? what do you need to do to notify people in your situation.

>> lifetimes of a drug quarter doesn't come, our buyer and receiving process -- to the receiving process vivendi didn't get a medication on order. the buyer has to follow up at the wholesaler to find out that the temporary outage, when the next expect that that would relay into an investigation of more than probably for us 100 to 150 inventoried locations in automated cabins throughout a facility. so we look at what we have on hand, how much we continually use on a day-to-day basis and estimate how much that i would have if we continue business as is. based on that and information they get, we have to convene a team. typically pharmacists, nurses, specific stakeholder physicians depending on what medicinal it is. we look at indications, alternative therapies may have available in kind of assess how critical the nature of the shortages. based on that we had to create action plans. sometimes it involves the

pharmacy manually specific minimal dose is to make our supply lasts as long as conceivably possible. that was the case with one instance last october that to me was the tipping point of the drug shortages. that we came down to the last couple days of therapy and contemplating canceling surgeries and how he would manage the situations. >> is there any way a president to anticipate a shortage? connectors some online web services come as good as the information is based on what the drug companies reveal it was published, we have an active surveillance program that goes out to the fda website, to look at that information, which sometimes is published with alternatives. the university of utah's information center has been helpful in that regard and it's only as good as information

available and a lot of times no information exists until we self-report for having difficulty. >> luscious go down the line. mr. kafer, what are the main reasons for a drive going into shortage and how does your company work at the fbi to notify the shortage? >> from a notification standpoint, when they become aware of a shortage for a number of reasons, we could've had a manufacturer luck rejected during release testing. what that means is after you finish the every object a vocalist or three to four week series of tests. if those tests failed for quality reasons for unspecified you reject that lot. we anticipate shortage of primary point of contact continues to be the shortage burgess testified this morning, i think the point was made they do not immediately post that information because that can trigger additional behavior, where the awareness of a potential shortage could be too

purchasing of another generic product reasoning other compared of therapy which can drain the supplies as well. so we coordinate directly with the drug shortage group and we coordinate with our hospital partners and our distribution partners. >> how do you work with the fda to alleviate a shortage? been that we work well with the fda. there's many instances in which we've collaborated. the drug shortage group they can play quarterback on this. as you mentioned this morning it's not a formal process. they do a fantastic job in pulling instances together. there's been at least three occasions where we had submitted a prior approval supplement by definition of that, that's an extensive review that indicates we have had significant changes to a product or process which would typically take long, but they've been able to expedite those reviews can get those approved in a better three-month period that allowed us to get critical products to market.

>> thank you. >> mr. gray, can inventory management practices create thee avoid the situation? >> inventory management practices for just-in-time are actually across the supply chain from production, just-in-time production to just-in-time delivery. our members focus on the delivery side, manufactures on the manufacture site. it's really to spread out predictability of manufacturing as well as alerting both the manufacture, the wholesaler and retailer pharmacy when shortages won't product potentially ashore. it's my real solid information. so the reality is the management programs are really there to spot shortages potentially before they happen. that's really what's been developing since the late 1980s from the food industry into the pharmaceutical

industry. so i'm not sure there's a connection there. i've heard that today. if you really look at the signs of that, the mentality behind this is really to identify shortages early on. >> with the second distributor purchases a product when they often pay more than the primary distributor with pay. so if they then charge more for the job, they're simply responding to the market, aren't they? this is not a great market product is, is a? you contrast that with the grey market? >> i can't speak to secondaries. our members, or 34 primary members are directly from manufacturers and we sell only to state license entities would be that a secondary distributor, hospital pharmacy or whatever. and usually we are under contract for those products. so if we sell them on down to a provider comments usually contract price 30 preset period was secondary but do i do not

know. in terms of pricing, i have no information on that. >> thank you or mr. coulton comments you state there is no one solution to this problem. however, you stress important of enacted legislation to require manufacturers to notify pop the possible shortages. can you explain why this needs to be done on a confidential basis. >> when there's a leak go home again, you need to stick your finger first is happily. do you need to export the reason it is an insult. what this legislation does the sticks her finger in the hole to stop the leak. basically we've heard testimony from the fda that they need to abort drug shortages with regard to early warning systems. so we believe that's needed. i'm definitely not in favor of regulation while by regulation is needed.

honestly, anything i put in my body or my mouth, i want to make sure that it's manufactured in the right way. it's done correctly and certainly we support the fda terms of their role in protecting drug safety within this country. needless to say, that they need to be able to have the power and the jurisdiction to enforce a rerecording of drug shortages. the other thing i said i think was most important escape the word out to everybody at the same time. is beyond me sometimes that others have direct product when i don't have direct product. the drugs come on the market, there's only certain places you can get those drugs from them you can't get it from the normal supply chain. again, i think we need regulation in order to solve problems we have at hand. >> thank you. mr. said to come with heard

drugs that go into shortage had advanced warning. for example, a search and mike has a preferred anesthetic drug is not available only after the patient is prepped and on the operating table. how does this happen? how do hospitals give warning of shortages to their own doctors? >> for the most part, i've not necessarily heard that, but for the most part there is very strong communication that occurs in hospitals and doctors are made aware of what's happening from a shortage, especially as they depart for these procedures. they have to go about figuring out what our potential clinical alternatives to ensure their patients are getting the highest quality care? >> doctor penley come how many drugs that use regularly to practice go into shortage? it appears there's a finite number of drugs that regularly go into shortage. >> the current number of oncology drugs is around 23 and those are very commonly used

agents as we would use most of them in our product is on this day in day out basis. tonight is there any way at present for you to anticipate a shortage? >> on a practice level, it's difficult. we could information the same way most of these folks do through the fda website for the hospital pharmacists website. asko, our national organization serves primarily as an information gathering and distributing surveys for members and certainly at times when these things -- we see they are going to prolong shortages, asko convenience expert panels to try to brainstorm and come up with the best available workarounds in situations where we have to make substitutions. for china bring together the best minds of oncology said they can come up with a workable and reasonable solutions for patients when we know they'll be in shortage for any length of

time. >> thank you. dr. paoletti, your discretion of the impact of drug shortages and future cancer patients because of critical trials may have to be stopped or not started in the first place is quite compelling. you mentioned 50% of the cooperative group trials include drugs subject to shortage. that sounds like it should have a devastating effect on cancer research. could you give us an idea of the magnitude of this problem? >> i think as we are concerned with the shortage worsening an already we are seeing a number of trials, even within our cancer center we take care of patients with both the best standard treatments enough for clinical trials for patients who want that option. those clinical trials are geared towards partner discoveries of new regimens. if a clinical trial is

compromised because it needed to substitute a particular drug for another drug or in some cases clinical trials mauna loa substitution of all the work that went into discovery could mean the point of the clinical trial is going to be compromised. and so, we've made gains on cancer research overall, both the way discoveries in terms of the targets of the lab, drug development and money there compares into existing drugs or addition of targeting agents to existing drugs make it very, very difficult to continue this. i agree those statistics relate to data we've been given regarding cooperative group with national trials and manages most don't contain a placebo soviet as part of the trail appeared this is already a very difficult and concerning problem in the way the stats are looking may

worsen. >> thank you. i've gone way over my time. i think the ranking member for his indulgence and i will yield to mr. pallone for such time as he may concern. >> thank you, mr. chairman. let me ask unanimous consent to put in the record that statement for my gas that go cancer group. >> without objection so ordered. >> i'm going to go back to what up on what you asked dr. dipaola who is from my district. you want to give us an example -- do you an think of a clinical trial that was halted at the cancer institute because of the drug shortage? is there an actual example that the cancer institute in new

jersey where you had to hope because of the drug shortage? >> yes, there's actually a number of examples, trials that we're about to launch that we've made, you know, plans and development to start a clinical trial. most of them, congressman pallone, how to do with trials for a new drug is added to the esteemed eric pease and we've had difficulties in at least one or two trials were a new drug was added to a combination that booted taxol is one particular example and the trial was held in terms of initiating the trial. what ends up happening is in the clinic we then have concerning offering patients who actually come to the center looking for these new options in terms of clinical trials to try to what we are not assured of a particular drug supply. there was another trial, where a

young patient was enrolled for doc file was included and along with a set of combination of drugs and it required amendment to the trial to allow the patient to be treated, to change the drug to another agent, which again has or is about compromise child and again the delay involved in trying to look at options and even change the drug because in that case the trial allowed. in a number of cases coming to late trials where dioxin rebbetzin was part of the regimen again with a novel what is called perp inhibitor, which actually in the case in the example i'm referring to is an nci child that was delayed. but taken together, any one of these weeks, months delays, really delay us getting an

answer. and more importantly, patients are coming because they are concerned that in that case the standard option may not be what they are looking for and not that they are looking for these options in clinical trials. >> short. now, just give me an idea. how do you think the drug shortage impacts the future cancer resource and treating them? are you concerned just in an overall sense? >> well, it's going to be important and not placing this is important that everybody get together in a collaborative way to look at all the root causes and come up with solutions because it is concerning, especially if it does worsen and at least a statistics indicate that it is. so i think it is concerning. i think we need to keep pushing forward in all areas of research. as you know well, you know, it includes discovery on the basic science and leading into the

efforts of translating into clinical trials. but it is concerning, especially with statistics were singing. >> okay, thank you. i wanted to ask mr. kafer from teva a couple things. a frequent cited reason for shortages as manufacturing problems. of course we have heard sterile injectable drugs are hard to manufacture. and if you're a supplier, i guess that could lead to a shortage. so obviously their circumstances outside of your control that can interfere with your ability to deliver a product. i mean, are these problems unique to drugs prompter shortages? for example, roster will injectable drugs for them to shortage or is there something about these drugs that makes controlling their manufacture difficult? additives manufacturers can do to avoid these problems?

>> one of the things you need to understand from a complexity standpoint, by the nature of the sterile manufacturing stability it is sterile and it is a complex manufacturing environment. picture people in space suits, doing the prep for. if you're an oral solid manufacturing facility, it's much different so there is more complexity. the other day within a manufacturing facility, each technology has its own defined mind or manufacturing suite. for instance, you cannot manufacture cytotoxic products on the same line he would manage hormones or something of that nature. many products are also manufacturing suite and a liquid feline is also a very unique manufacturing suite. so it is possible that within one manufacturing facility permits you have a disruption in just once we, one of those

technologies. one of the questions we've heard from the panel is specific to oncology and it is a very dynamic complex environment. unfortunately over the past couple of years, industries had some disruptions within this manufacturing suite better in the stages of recovery. so we are manufacturing product, but we are in a slow build and its impact is obviously patience as the panel has testified today. >> already. of course we always worry, not only today, but is at tears ingredients in drugs sold in the united states and supply from abroad i guess i'm asking you to what extent does the problem in the wake of hybrid and of course there's a major concern about cracking down on some of the ingredients. to what extent does the

availability of these ingredients from a broad impact discussion today? is likely that we put a lot more regulation and make it more difficult for things to come from abroad. >> regardless of materials coming from abroad or domestically, to your point regarding heparin years ago, testing requirements and scrutiny we would go through before we release the ingredients into production is significant and we will not jeopardize that. so the testing requirements that we oppose on you manufacturing partners on the api side are significant. and there has been repeated instances in which we are failing api coming in for production because if not better specifications. if that happens on a repeated basis, you're obviously going to have a gap in readily available material to produce product. without question, for