pharmaceutical manufacturers and sell only to a program licensed customers the vast majority of which are pharmacies or other health-care providers. pharmaceutical products have distributed through coordinated supply chain to provide maximum efficiency and effectiveness and safety. pharmacies and other entities place more prescription medicines by 8:00 in the evening and received delivery from distributors the next morning. the average distribution center in this company processes 2,000 orders a day. aware house maintains 30 days of inventory level. this number varies by product blogger the subject of the man and other factors. pharmaceutical products and special handling requirements typically have shorter cycle times in the system. distributors provide an array of services for manufacturers beyond movement of product including but not limited to receivables risk-management for the manufacturer, customer validation, inventory management tracking, processing returns that recalls and contract

management. pharmacy at provider customers have research services like edward the ordering, assistance with stalking need, software and accounting and credit support. in the case of inventory management distributors fill customer orders six seven days a week, 365 days a year which limits the need for large inventory levels at the pharmacy level. some distributors maximize the efficiency between manufacturers and health-care providers by managing complex network of products and systems by providing mechanisms for the transformation of product. for the close relationship with stakeholders' we are aware of the impact of drug shortage on patients. effectively addressing the drug shortage is difficult and complex for the entire health care community because the shortage typically appears with little or no warning and often requires significant resources to manage. htma works to maintain

communication from manufacturer to distributor to provider to mitigate the impact of the drug shortage. all the distributors do not manufacture products they pay an important role helping to ward nate and share information with no shortages arrived. distributors are notified by a manufacturer or provider partner. once that shortage information is received distributors communicate with their manufacturing partners about product availability to understand the scope and expected duration of any shortage. then the distributor works with customers to fill orders, to the extent they are able to do so based on purchasing history or identify alternative product in the supply chain. there is a delicate balance between the need to share information and prevent an environment of panic buying. htma has worked with pharmacists and federal agencies and other supply chain partners to share expertise about the drug supply chain.

in addition we are working with our distributor members and manufacturer providers to abate in this voluntary guidelines to have communications between supply chain partners. we hope this will contribute to better management of the process in its entirety. htma believe the health care industry as a whole must continue to work together towards collaborative solutions that mitigate the impact of shortages and the impact on stakeholder, the patient. i thank you again for this invitation to participate and hope the overview has been valuable and look forward to your questions. >> mr. colgan beleaguered and you recognized for an opening statement. >> thank you, chairman pitts and members of the subcommittee. i am a corporate director of university medical center in chicago, illinois. i am here because i cannot serve

my patients due to shortages of medications some of them critical to patient care. there's no single solution that will solve the problem of drug shortages but there are things we can do to help address this issue. bipartisan legislation of both houses of congress would enable fda to require drug manufacturers report confidentially to the agency when they experience an interruption in production of their product. this system will help the fda work with other manufacturers to ramp up production when another company experiences a problem. moreover the bills call on fda to work with manufacturers to develop continuity of supply plans which could help identify backup sources, pharmaceutical ingredients and produce redundancies to serve as reserve supplies. some have argued this legislation won't have any

impact. we disagree. you have heard this morning from the fda that in 2010, 38 drug shortages were avoided. last year 99 were avoided when the agency was given advance notice. for their opponents of this approach argue it will lead to orting. we know that it already occurs. how do some find out about drug shortages before others? we don't know all the answers to this question. what we do know is early-warning to the fda will help assure that everyone has the same information at the same time. simply put the public benefit of an early warning system far outweighs the risk of awarding and other prepared as areas like biotech arisen and flu pandemic and natural disasters we develop action plans and communication

channels among necessary responders. why would we approach drug shortages any differently? second, pharmacists have been collaborating with other clinicians to work with the fda to address this problem. we believe we can devote 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 comparative risk of public harm when potential enforcement action will worsen the drug shortage. exploring incentives for manufacturers to continue or re-enter the market, generic user fee program to speed approval and insuring the agency have the funding it needs to carry out its mission. many of you sitting in this room some time over the next several months will receive news that

you or a family member or friend has been diagnosed with cancer and has been admitted to intensive care unit as a serious infection that requires iv antibiotic has a premature baby or grandchild that requires nutritional support. the last thing you want to hear as we don't have first line medication therapy to treat you. the medication we have may not work as well and could cause heart damage but it -- is all we have to offer we are delaying your treatment until you can obtain drugs that are in short supply. these are all situations i and my clinical pharmacy staff and physicians and nurses and respiratory therapists we work with have had to manage over the past year. drug shortages represent a national health-care crisis. we don't have one single solution but we offered a number of solutions that can help resolve this problem. thank you, mr. chairman and members of the committee for the opportunity to provide input on

this problem. >> we are in the middle of votes. we have 14 votes. we will try to get a couple more before we go and recess for the vote. >> thank you, chairman pitts. i am chief operating officer of the health-care alliance. premier is not-for-profit hospital and health system. we use the power of collaboration for the transformation to high-quality and cost-effective health care. one way we do this is aggregating buying power of 2500 hospitals to get the most effective medical supplies and drugs at the best prices. i think the committee for leading efforts to address drug shortages. the number of drug shortages has tripled and many of these medicines are essential to patient care. premier set out to understand through a survey. we found out between july and

december of 2010 more than 240 drugs were in short supply or completely unavailable in 2010. four hundred generic equivalents were back ordered for five days. many were noted as back ordered in 2010 and remained unavailable or in short supply in 2011 and 80% of the hospitals reported shortages resulted in the delay or cancellation of a treatment. drug shortages kerri accost. estimated four fifteen million annually through the purchase of substitutes and labor costs. we can't estimate the financial impact of shortage of drugs where there are normal terms. we are working to diminish these costs by determining manufacturing capabilities to assess whether manufacturers can supply the market. we look for alternative demand. instituting an early warning system for hospitals that notify us of shortages. once notified we determine the

scope of the problem and communicate with the fda. long-term contracts to create more predictable volume and stability in the market. in this crisis we hope people will do what they can to help patients get the drugs they need. instead we have seen market vendors taking advantage of the problem offering to sell shortage product at exorbitant prices. premier analyzes unsolicited offers from market vendors, shortage drugs. we compare prices and find that average marks of 650% and the highest markup was 4,500%. the file to treat high blood pressure that sells for $25.90 was offered for $1,200. markups to treat leukemia and non hodgkin's lymphoma were 3100% for pace and -- cancer patients to receive bone marrow. 45% or mark 1,000% above the

normal price and a quarter were marked up 2,000%. where and how market vendors are getting this medicine no one knows and how can the integrity of these drugs be ascertained? a question that few know. that is why premier has taken the position that pharmacies should avoid these vendors and stick to known primary distributors. in times of shortage pharmacies may need to look elsewhere and we develop a set of best practices which includes verifying product chain of custody and confirming licensure, verifying a seller's authorized to sell product and confirm they are wholesale distributor. in our view the best way to stop price gouging is to fix the drug shortage crisis. we asked the committee and the fda to consider speedy approval process for medically necessary drugs that appear to be in shortage. encourage the fda to engage stakeholders in discussions

determining whether a drug is metal quickly -- medically necessary. the objective is to prioritize drugs for treatment. grand flexibility for ingredients manufacturers may purchase for controlled substances limiting their ability to ramp up production when a supplier exit the market. fast-track approval of new ingredient suppliers for medically necessary drugs in shortage. work with manufacturers to slow the trend of acquiring raw material outside the u.s.. require manufacturers to notify the fda of supply disruption to work with remaining manufacturers to increase production and establish an early warning point of contact at the fda. i think the committee for the opportunity to share we learned about drug shortages and the impact it has on the safety and health of our community and health care costs. premier is ready to assist congress in assuring safe,

reliable drug supply. >> we appreciate your patience. we have five minute left for a vote. we will break here and come back as soon as the last vote is over and continued testimony. >> i want to ask unanimous consent to submit a written statement of congressman matheson. >> without objection so ordered. at this point of the subcommittee stands in recess until after the last vote. >> you all have a long time so you can go eat. [inaudible conversations]

you all have a long time, so you can go we. [inaudible conversations] [inaudible] >> we appreciate your patience and your testimony. you have five minutes. >> good afternoon. the remainder of the subcommittee. i am charlie penley from tennessee. us spend the majority of my time taking care of patients solomon comfortable in this environment. i talk about the impact of drug

shortage on my patients. i speak on behalf of clinical oncology. 30,000 members and their patients thank you for holding this hearing. drug shortages reached crisis proportions and i hope this will frame potential solutions. large and small community based and hospital based practices are having challenges treating the patients. the situation is worsening. drug shortages have tripled since 2005/2006. almost all cancer types are affected. leukemia, breast cancer and colon cancer. shortages are forcing us to change the way we treat our patients. often a drug in short supply is potentially curative. there is no reasonable substitute. are practice treats many patients with non hodgkin's

leukemia a life-threatening but curable disease. cytarabine is a central component of treatment but that agent has been and remains intermittently in short supply. physicians have been forced to tell patients this potentially cure of drug is not immediately available. treatment delay can result in grave consequences in these critically ill patients. in other situations they're all of canada of drugs but waif more side effects or dramatically more expensive. standard treatment for non hodgkin's lymphoma is the top regimen which includes doxorubicin which is in shortage. a colleague shared the story of a young woman who was diagnosed with lymphoma during pregnancy. that is a situation that doesn't happen very often but involves potential risk for the mother and child. because of the shortage the woman had to be treated with a substitute for which the risk

for the baby is not as well-known and may be less effective for her lymphoma. oncologist and patients should not have to make such difficult choices. i am treating a national firefighter who has cancer and was responding to chemotherapy. we were unable to obtain 5 a few and had to use an alternative regimen which caused him more side effects and increased his out of pocket cost. the price of substitute drugs can be 100 times more expensive than the drug normally chosen especially if it is a brand name drug. when the main generic drug was in shortage we had to treat patients with a substitute. medicare payments for 50 mg were $1 and a quarter. an equivalent dose of legal lipitor is $90. the clinical trial is threatened by drug shortages as researchers

delayed trials because a drug becomes unavailable. as many as 60% of clinical trials have been delayed at a time of great promise in cancer research. the manufacturing process -- market factors are a key driver in this escalating crisis. shortages in cancer drugs are exclusively in generic and expensive drugs with low profit margin. companies that experienced manufacturing complications may not have the incentives for resources to upgrade facilities or correct quality problems. there does not appear to be a single solution to the crisis. expertise is in patient care. we offer these potential solutions which we would encourage the committee to explore.

congress should urge expedited drug applications for drugs vulnerable to a shortage in a way that does not compromise safety. because this amounts to a public health crisis congress could work with medicare to address pricing and payment for low-cost generic drugs. congress should pass it are 2245, which would give the fda increased authority to manage shortages. consider tax incentives to encourage or unable generic manufacturers to produce vital drugs, update facilities or enter the market to produce drugs vulnerable to a shortage. asco will seek resolution to the problem. the stress of dealing with cancer diagnosis and risks of necessary treatment is a heavy enough burden for patients to bear. it is absolutely unacceptable that the lack of effective therapeutic should add to that

stress or worse, threaten lives. we must do everything to resolve this crisis and we should do it immediately. we appreciate your leadership on this issue and stand ready to do everything we can to assist. >> now recognize the gentleman from lancaster, mr. paoletti. >> i want to thank the committee for the opportunity to participate in this discussion. i am vice president of operations in lancaster general health. my comments will address the challenge hospitals and providers are experiencing as a result of drug shortages occurring nationwide. in the current health-care climate hospitals are being asked to restructure to meet quality safety fiscal constraints and community benefit standards expected in today's world. resources are stretched to the limit. ongoing challenges are further taxing and diverting those resources to respond to the daily patient impact these shortages 3. this pattern is becoming the

norm for hospitals and physician practices and emergency responders and patients everywhere. lancaster general works hard to maintain a culture of quality and patient safety based on fundamental building blocks of standardization through elimination of waste and variability and conflict with the safety practices drug shortages at variability and complexity and burden increasing possibility of poor outcomes and patient harm. the lack of an early warning system is one of the greatest challenges we face so we sometimes learn about shortages or their severity one product are not received in our daily shipment. a review of our wholesale orders last month revealed receipt of only 3,452 of the 4,344 line item orders processed representing a single rate of 80%. eight hundred ninety two line

items were not received. every disruption to medication supply creates new responsibilities to investigate alternative treatments to what they protocols and procedures and technology. we must disseminate effective alternatives not only familiar to front-line caregivers. in our fast-paced environment every substitution and variation and risk. these tasks consumed dedicated hours from stakeholders and staff working collectively on detailed plans to maintain safety while requiring execution and limited time frames. this means working with anesthesiologists and emergency physicians and contemplating how to maintain air way to the trauma center without the availability of a paralyzing agent. considering how to maintain fair to compromise premature infants. searching for alternative and tight infections and discussing alternative treatment regimens midway through a course of

therapy. more importantly how to reveal to patients that we may not have the medication necessary to treat their illness. this issue represents national health care crisis. minimizing avoidable drug shortage requires short-term intervention and long term solutions. these solutions require system changes and increased capacity including the establishing an early warning system as proposed in bipartisan legislation in both houses to help mitigate drug shortages proactively. establish communications between fda and manufacturers to develop allocation plans for critical drug therapy. secure pharmaceutical supply chain and direct available supplies to our most critical patient population. explore incentives for drug manufacturers to stay in or enter the market critical to suspect it -- specific drugs. these include creation of fast-track for new production line, alternate manufacturing

sites for new supplies of raw materials for necessary drugs vulnerable to shortage without compromising quality or safety. i want to thank the committee for holding this hearing. lancaster general offered its support to assist in development of solutions that will prevent and mitigate risks caused by drug shortages. >> toucher dipaola. >> thank you. chairman pitts, a i am director of the cancer institute in new jersey. designated comprehensive cancer center. i speak as a member of the american association for cancer research. thank you for convening this hearing and recognizing the impact the drug shortage is having on our patients and our ability to advance cancer research and improve patient outcomes.

you heard about the effect of drug shortage on treating patients. as director of an nci designated cancer center and medical oncologist who cares for patients i have the same frustration regarding care of our patients and the negative impact of drug shortages. it is not only immediate for patients in our clinic but future care of cancer patients because the next generation is driven by today's clinical trial critical to meeting the national goal of improving the outcomes for cancer patients. shortages of drugs is a very complex problem. there are a number of ideas what is causing them and how they can be remedied. i am here to discuss how this growing problem of shortages of approved drugs which in some cases have been used and made for decades is affecting our best cancer care and clinical trial and threatening our

ability to continue on our trajectory of improving cancer patient outcomes. fda statistics show the number of drug shortages has more than tripled over six years with market increase in drugs involving sterile injectables which impact the treatment of cancer patients. most shortages are sterile injectables. the medications include cancer treatment drugs, anesthetics, and time microbials and pain medications. list maintained by the american system of pharmacists recently identified shortages of which 22 are cancer drugs. these include drugs that are standard treatment regimens to treat patients with many cancers and adults and children. these shortages affect critical trial options for patients with

cancer. the uncertainty of obtaining these drugs and enrollment on clinical trials has been delayed or stopped. many of these drugs in short supply are part of the standard regimen in which new treatments are added or compared to with in a clinical trial. many drugs on a shortage list are used in cooperative group trials. the coalition of cancer cooperative groups reports 50% of cooperative group cancer clinical trials involve drugs subject to shortages. many reports contain examples in which sites are unable to approve patients due to a lack of drug supply. investigators in these clinical studies are unable to enroll new patients when the drug supply is not available. patients on study are receiving alternate drugs when supply is not available and there is concern about interpretation of results when drug substitutions occur. it is important to remember the impact from the drug shortages

on clinical trial will also have a long-term effect on cancer research and treatment options for cancer patients. clinical trials represent the final step of a process of developing new therapies that improve the outcome of patients and add treatment in which there were no effective prior options. after years of effort a single researcher discovers a new drug or treatment it is often added to an existing treatment in combination were tested in comparison to the best current treatment in a clinical trial. of the trial yields positive results agents can have access to in new and improved drug or treatment combination. currently we are running out of many of the existing drugs. and a clinical trial runs out of a drug even temporarily the trial results may be compromised and enormous work and expense is wasted. this means during a clinical trial in shortage of only a few

weeks might mean delays in years of developing a new drug. the drug shortages of today can have a ripple effect on the availability of new drugs and treatment combinations tomorrow. today we estimate one in two men will develop cancer in their lifetime. over 1.5 million americans are diagnosed with cancer and half a million americans are expected to die of their disease. that is 1500 people a day or one per minute. these numbers seem staggering but we have made great strides in our ability to treat cancer and are at a most promising time in cancer research. the american association of cancer research issued a progress report marking 30 years in progress fighting cancer. thanks to advances in cancer research more and 68% adults are living five for more years which

increase from 50% in 1975. was also reported from 1990-2007 death rates for cancer decreased by 22% for men, 14% for women. the challenge is to turn groundbreaking science into life-saving care by facilitating clinical trials. we lay the ground break in cancer research into cutting edge treatment for cancer patients. the current drug shortages tendering our ability to treat cancer patients. we are entering a new era of cancer treatment but inability to have the best treatment and conduct clinical trials is a serious impediment to our bowl and will hamper our ability for the people of our nation. >> the chair thanks the gentleman and all our seven witnesses for your testimony and we begin questioning at this time. i recognize myself for five

minutes. let me begin with mr. paoletti. can you walk us through what happens from your perspective when there's a drug shortage? who notifies you? how much warning do you get? what do you need to do to notify the people in organization? >> it differs in every instance. when a drug war doesn't come our buyer and receiving process through the receiving process we learn we didn't get medication on order. a buyer has to follow up with a wholesaler to find out if that is a temporary outage, when we may next expect that and go into investigation of 150 inventory locations and automated cabinets in the facility so we look we have on hand and how much we use on a day-to-day basis and estimate how much supply we

would have. based on that and the information we get we convene a team of pharmacists, nurses, specific stakeholder positions depending on what medicinal it is and indications and alternative therapies and assess how critical the nature of the shortage is and create action plans. sometimes it involves the pharmacy, specific doses of medication to make the supply lasts as long as possible. that was the case in one instance last october that to me was the tipping point of the drug shortages it came down to the last couple days, canceling surgery and how to manage those situations. >> is there any way at present to anticipated shortage?

>> through online sources based on what the drug companies reveal and what is published. we have a surveillance program that goes to the fda website to look at that information which sometimes is published with alternatives. so the drug information center has been helpful in that regard but only as good as the information that is available and sometimes no information exists until we solve report difficulty. >> mr. kafer, what are the main reasons for drug going into shortage and how does your company work with that? >> our primary point of contact we become aware of a shortage for number of reasons. could be manufactured lot rejected during release testing meaning after you issue the manufacturing process it goes through three or four week series of tests. if they fail for quality reasons

for not meeting specifications we reject that lot. if we anticipate a shortage of primary contact is fda drug shortage. i testified this morning -- the point was made that they do not post that information because it can trigger additional behavior where awareness of a potential shortage can lead to purchasing of another generic product or therapy which can drain those supplies as well so we coordinate with the drug shortage group and our hospital partners. >> how have you worked to alleviate a shortage? >> we worked extremely well with the fda. many instances in which we collaborated. through the drug shortage group -- we mentioned earlier this morning it is not a formal process. they do a fantastic job pulling this together.

there have been three occasions where we had submitted prior approval supplements. that is an extensive review that indicates we had significant changes to the process which would take longer but they have been able to expedite those reviews and get those approved in a period that allow us to get those to market. >> can inventory management practices create the impression of a drug shortage? how do distributors know to avoid that? >> inventory management practices are across the supply chain from just in time production to delivery. are members focus on the delivery side and manufacturers on the production side. that is a process developed in the last 25 years in the consumer goods area which is to spread out predictability of

manufacturing as well as alerting the manufacturer and wholesaler and pharmacy when shortages -- it is more real time information so the reality is the inventory management programs spot the shortages before they happen. that developed since the food industry and pharmaceutical industry. i'm not sure there's a connection. i heard that today. if you look heavy science of that the mentality behind identifying those shortages early on. >> when a secondary distributor purchases the drug product they pay more than the primary distributor would pay. if they charge more for the drug they're responding to the market. this is not a gray market practice. can you contrast that with the grey market? >> our members, 34 primary wholesalers were buying from

manufacturers and we sell to state license entities be that secondary distributor or hospital or pharmacy. usually we are under contract pricing for those products. if we are selling them down to a provider it is usually a contract price. i do not know what the secondary would do. i have no information on pricing. >> mr. colgan beleaguered and you testify there is no one solution to this problem. stressed the importance of enacting legislation to require manufacturers to notify the fda of shortages. can you explain why this requires legislation to accomplish and why it needs to be done on a confidential basis? >> when there's a leak or hole in the damn you stick your finger in first and explore what the reason is and then solve the

problem. what this legislation does is sticks the finger in hole to stop the leak. we heard from testimony today from the fda that they have been able to avoid 99 drug shortages with regards to early warning systems. we believe that is needed. i am not in favor of regulation but anything i am putting in my body or my mouth of want to make sure is manufactured in the right way. it is done correctly. we support the fda's role in production drug's safety. they need the power and jurisdiction to enforce early reporting of drug shortages. the other thing that was most important is get the word to everybody at the same time. it is beyond me that others have

drug product when i don't. when drugs come to the market there are only certain places you get them from and not your normal supply chain. i think we need regulation in order to solve the problems we have at hand. >> mr. alkire, we heard end users of drugs have little advance warning when the going to shortage. a surgeon may find out the preferred drug is not available after the patient is prepped and on the operating room table. how does this happen? how do hospitals give warning to their own doctors? >> i have not heard that but very strong communication occurs that hospitals and doctors are made aware of especially with these procedures. they have to figure out the

potential clinical alternatives to assure patients the getting the highest quality care. >> dr. penley, how many drugs you using your practice regularly go into shortage? it appears there are a finite number of drugs that regularly going to shortage. >> the current number is around 23 and those are commonly used agents. we use most of them on a day in day out basis. >> is there any way for you to anticipate a shortage? >> on a practice level is difficult. we get information the way most of these folks do through the fda website or the hospital pharmacist website. organization surge as information gathering and distributing service for our members.

we have seen these will be prolonged shortages and convene expert panels to come up with the best work arounds in situations where we make substitutions. we try to bring together the best minds in oncology to come up with workable and reasonable solutions when we know those drugs will be in shortage for any length of time. >> thank you, dr. dipaola. your description of the impact of drug shortages on future cancer patients because of clinical trials may have to be stopped or not started in the first place. 50% of the cooperative group trials involved drugs that subject to shortage. that sounds like it should have a devastating effect on cancer research. give us an idea of the magnitude of this problem.

>> as we are concerned with the shortage worsening and already seeing a number of trials in our cancer center with comprehensive cancer center we take care of patients with the best standard treatment and offer clinical trials for patients who want that option. those trials are geared towards new discoveries of new regimens. if a clinical trial is compromised because it needed to substitute a particular drug for another drug and clinical trials won't allow a substitution, all the work that went into getting the point of the clinical trial is compromised. we made gains on cancer research but the discoveries in terms of targets and drug development and comparison to these existing drugs or the addition of these new targeted agents to existing drugs make it very difficult to

continue this. those statistics relate to data from the cooperative group, large national trials that do comparisons. nowadays most don't contain a placebo so the existing drug is part of the clinical trial. this is already a difficult problem in the way the stats are looking may worsen. >> thank you. i have gone over my time. i think the ranking member for his indulgence and i will yield. >> let me ask unanimous consent to put in the record this statement from the colorectal cancer group on the u.s. drug shortage. >> without objection so ordered. >> i will go back for follow-up

on what you asked dr. dipaola. who is from the cancer institute in my district. do you have an example of a clinical trial that was halted at the cancer institute because of the drug shortage? is there an actual example where you had a drug shortage? >> there are a number of examples. trials we are about to launch that we made plans and development to start a clinical trial. most of them have to do with trials where a new drug is added to existing therapies and we had difficulties in one or two trials where a new drug was added to a combination that

included max all as one example and the trial was held in initiating the trial. what happens is in the clinic we have concern in offering a patients who look for these options in terms of clinical trials when we are not assured of the drug supply. there's another trial where a young patient with breast cancer was enrolled and along with another combination of drugs it required amendments to the trial to allow the patient to be treated to change the drug to another agent which has concerned about compromising the trial and the delay involved in looking at options and changing the drug because the trial allowed -- in a number of cases

delayed trial where doxorubicin was part of the trial with the part in it better which in the example i am referring to is and and see our trial that was delayed. taken together any one of these weeks or months delays delay us getting an answer and more importantly patients are coming because they are concerned the standard option may not be what they are looking for and they are looking for these options in clinical trials. >> how does this impact the future of cancer research and treatment? are you concerned? in an overall sense? >> it is going to be important. it is important that everybody gets together in a collaborative way to look at the root causes

and come up with solutions because it is concerning especially if it does worsen and statistics indicate that it is. it is concerning. we need to keep pushing forward in all areas of research. includes discovery on basic science leading into the efforts of translating into clinical trials. but it is concerning with the statistics we are seeing. >> thank you. i want to ask mr. kafer from teva a couple things. frequent reason for shortages is manufacturing problems. sterile injectable drugs are hard to manufacture. if your supplier have a problem that can lead to a shortage.

obviously there are circumstances outside your control that can interfere with your ability to deliver a product. are these problems unique to drugs prone to shortages? all sterile injectable drugs prone to shortage or is there something that makes controlling their manufacture more difficult? are there things manufacturers can do to avoid these problems? >> one thing you need to understand from the complexity standpoint by the nature of a sterile manufacturing facility it is sterile and is a complex manufacturing environment. picture people in spacesuits doing prep work. there is more complexity. the other thing is each technology has its own defined manufacturing sweet. you cannot manufacture oncology products on the same line as

hormones or something of that nature. many products are a powder with a unique manufacturing sweet. the full line is a unique manufacturing sweet. it is possible within one manufacturing facility you have a disruption in just one suite. it is specific to oncology and a dynamic environment. over the last couple years industry has had some disruptions in those manufacturing sweets so we are manufacturing product but in a slow build impacting patients as the panel testified today. >> we always worry not only today but in so many cases about

active ingredients in drugs sold in the united states supplied from abroad. i am asking to what extent that is a problem. there is major concern about cracking down on the ingredients that are sold abroad. to what extent does the availability of these ingredients impact the discussion today? it is likely we put in more regulation and make it more difficult for things to come from abroad. >> regardless of whether they're from abroad or domestically to your point regarding years ago, testing requirements and scrutiny we go through before we release the active ingredient in to production is significant and we won't jeopardize that.

the testing requirements we oppose on our manufacturing partners are significant and there have been instances in which we are failing for production because it does not match specifications. if that happens on a repeated basis you will have a gap in material to produce product. so without question for good reason that we are testing that material to requirements we are required to and we will not use it unless it passes those tests. >> you heard me mention your testimony in the context that you acknowledge in your testimony that it can take two or three years to approve a new facility. that is not a good situation. on the first panel they also said fda has the flexibility to

adjust resources to improve facilities and suppliers very quickly. has that been your experience? that flexibility is exercised or works or are you sticking to two to three years? >> standard process has been two or three years for secondary manufacture approval for the traditional path. those reviews take time because it is a complex review requiring extensive work. at the same time we have seen expedited review in that area. we have been the beneficiary to handle critical situations but also in my earlier statement in my opening remarks i mentioned a lot of shortages are unforeseen. we are applying a great deal of coordination and collaboration when solving the problem.

as a standard of practice is it possible to expedite those reviews as a standard of practice was the point of my written testimony but we do see on a routine basis without jeopardize in of the product we will never jeopardize a product or a system but we have seen collaboration in a matter of months. >> what i am trying to say is what i mentioned two or three years in your written testimony it was sort of suggested that the first panel not so much a flexibility. is it your experience that there is enough flexibility to deal with the situation or not? i know that is a difficult question. >> i have had experience where we had expedited reviews in favorable outcomes. the volume of work based on

continued remediation i can predict and can't forecast that impact. prior to significant shortages we plan for a two year review. we knew what that type was. when we were making sure we had redundancy in place it was of immediate need. we are seeing those expedited review is. >> thanks. i want to ask one more question of mr. colgan. he suggests incentives to encourage manufacturers to enter the field or stay in the field. in principle incentives are a good idea if we get more manufacturers to produce excess supply you would think shortages would be less likely to occur and less severe if they do

occur. the suggestions in your testimony need some fleshing out for me to better understand what you're trying to achieve or how you would achieve the goal. i was puzzled by the suggestion of granting temporary exclusivity for new product line of drugs either in short supply or deemed vulnerable to a shortage considering that the goal is to get as many companies in the field as possible. granting exclusivity would do the opposite. it is my understanding that exclusivity works best as an incentive when the company is the only one manufacturing the product or in the case of the new generic the only company offering a generic alternative to a name brand. it is not clear that granting exclusivity is an incentive. walk me through how this would

work. >> one is the generic user fees. those can incentivize manufacturers to enter the market and produce a product they produced before or not produced. we have drugs that are single sourced sometimes or drugs where we don't have enough production and throughput. in those situationss this concept needs to be explored in terms of temporary exclusivity so there's a period of time that would incentivize a manufacturer into the market to produce the product. accelerated review to that manufacturer. the manufacturing period six months or so to put the product

together and produce the product. we see the idea of getting the industry in the market is important. let me give you an example of that hopefully that will play out and you will understand. right now we have production problems we use in non hodgkin's lymphoma as a conditioning therapy getting patients ready for bone marrow transplants. right now it is not medically necessary. i have a patient that i would pay $938 for that patient's drug. for bent to me is seen and would pay $414. it advantages us to have other manufacturers producing it so we have adequate supply and some

sort of incentive so we are not forced the addition would be important secure a supply line for the drug. it adds up to the economics of the situation in terms of being able to supply a drug that is recognized as the appropriate treatment for the patient and provide lowest overall cost continue in providing care to that patient. >> thank you, mr. chairman. >> the chair thanks the gentleman. that concludes our round of questioning. i would like to thank the witnesses for answering the questions. please respond to any questions in writing in conclusion. i would like to thank the witnesses and members for participating and remind members they have ten business days to

submit questions for the record and i ask the witnesses to respond promptly to the questions and members should submit questions by close of business on october 7th. there being no further business the subcommittee is adjourned. [inaudible conversations] [inaudible] [ [inaudible conversations] [inaudible conversations]