we really be addressing the underlying problem, the shortage of these medications? is that the more viable way to address -- that would eliminate the gray market problem, i guess, if we didn't have a shortage. >> one of the questions asked previously was what we know about the products that appear on this gray market. >> right. >> do we understand when they expire, where they came from and are they, are they made by the company that is experiencing the shortage, or are they counterfeit products. we don't, because we don't have a tracking system for within the drug supply to know what product comes from. >> i appreciate that. i'll give it my 30 second advertisement. i just introduced with mr. bilbray this week our track and trace legislation, our pedigree legislation for maintaining the integrity of the drug supply in this country. we're operating on rules that were created in 1988 when the world was changed. i think this country is getting beyond the topic of this hearing, but there's just too much money on the table for the

counterfeiters in terms of the u.s. pharmaceutical marketplace, and i hope this committee can take a look at that legislation that mr. bilbray and i have introduced because i do think it's important for the integrity of our supply chain in general. i appreciate your coming here for this hearing. mr. chairman, i'll yield back. >> chair thanks the gentleman and recognizes the gentle lady from tennessee, ms. blackburn, for five minutes for questions. >> i want to thank our witnesses for being here, and as you know, some of us arrived a little bit late. we did have the solyndra oversight hearing going on downstairs, so we completed that one before coming up. but we are grateful that you're here and our second panel of witnesses, we're also looking forward to, and i'm glad we've got a tennessean on that panel. l thank you for joining us. just a couple of questions. as you can see, we're going to look at how we address this issue and having you hear helps to inform our decision making process. so a couple of things i would like to know, and if you don't

have the answer for me, please, submit it to us so that we can include it in our, in our record. i wanted to see if each of you had any examples where you had worked closely and collaboratively with your agencies, with manufacturers of drugs where there was a known or a projected shortage and see if you could articulate what that process was, the interface that transpired there. and if you have those examples now, please, go ahead and give them, and if not, we will accept those in writing. >> so, congresswoman, i can repeat the example that we're very proud to share actually here for the first time which had to do with a life-saving drug used for acute leukemia. and this shortage received tremendous national publicity and represented a dire challenge for cancer patients.

and so when the fda worked with the industry on this particular drug, they found that one of the issues complicating the production was the crystallization of the drug in the solution and that rewarming it would, um, restore the safety features that would allow, um, infusion into patients. so with that collaboration between the fda and industry, that issue has now been recently resolved, and we're very, very pleased to report that. and i know my colleagues has other examples. >> i'd actually like to expand on that one because there is, before the issue of the crystals in the vials where the shortage began was it was being made predominantly, it was being made by three companies. but it was being made, the majority of the supply was by one firm. they were experiencing significant production delays, so what fda did was we 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 them increasing their production and trying to produce product rapidly, the crystallization occurred in both facilities. that came in the, um, then -- so that preceded the crystals. we then resolved that activity as well. so in that case we also when there was concern about whether we would find a solution to the crystallization, we began the -- we also investigated alternative manufacturers whether there were any overseas. we were not able to identify any alternative manufacturers. they were all u.s. firms. >> let me interject there. do you have examples other than this one, are there examples where you've worked with some of those alternative manufacturers and brought them into the fold? and then once you identify that

there is a near shortage that is approaching do you think there is a way through the production process or the compensation model to provide incentives so that you have a more predictable supply? >> well, another example that we can provide for you, um, congresswoman, has to do with propose fall which is an agent that's used in anesthesia. and when those shortages start occurring, the fda could facilitate temporary importation of a substitute agent to help ameliorate that situation. and that's another example, and i know the fda has many others. the economic issues here are so complex that offering an economic solution really requires, first, a careful analysis. and we're trying to do more of that, especially through our assistant secretary for applying evaluation, and we hope we can come out with more definitive

explanations in the future. >> in the interest of time, i'll yield back. >> chair thanks the gentle lady and recognizes the gentle lady for five minutes for questions. >> thank you, mr. chairman. thank you all, all of our witnesses, for being here. i was also at another hearing, so i'm sorry i missed your testimony and some of the questions. um, like everybody else, our area's experiencing the same problems, and our doctors, we meet with them constantly, but particularly in an thesology and oncology, as you well know. we have the same problems, and it is scary from the standpoint of what could happen with somebody if they're given another drug that really doesn't either work or they, you know, have a reaction to it or something. so we hope and thank you very much for any efforts in trying to get to the bottom of it. and i wanted to ask if really, um, the consolidation that's taken place in the drug industry

over the last few years and continues to take place, you know, what effect or how does that contribute to the problem that we're seeing today? i mean, is this a large contributing factor because of fewer manufacturers available? >> thank you, congressman, for your interest and support. and, yes, we view industry consolidation as one of the driving root causes here. and as you can imagine, if you were denonmater of available manufacturer shrinks and any one of them has a manufacturing problem or delay, it really puts the onus on the others. and if others don't happen to produce that product and if this particular company is a sole-source producer, then you have the, um, ramifications that we're seeing right now. so there's no doubt that industry consolidation has contribute today this. >> so what, if any, recommendations do you have of how we get over this hump?

because, you know, you mentioned the generics which we're all very much aware of and the fact that they aren't as popular to do because of the cost factors and other things that have entered into it. i mean, what is it that you think we should be doing or looking at to try and get to the bottom of how we can help with this? >> well, we, again, want to stress the importance of communication and early notification because that will help all parties to work together. and as the number of industries involved shrinks, we want to really maximize our communication with those manufacturers, and we're doing so as we speak. and then as dr. kweder mentioned, we also want to have more assurances that the products that are being produced have high quality so that we don't run into these quality of manufacturing issues. so those are two themes that would be very helpful to us. >> and you find the companies work well with you? >> we've 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 in this, as you have heard. >> thank you. i'll yield back, mr. chairman. >> chair thanks the gentle lady and recognizes the gentleman from pennsylvania, dr. murphy, for five minutes for questions. >> thank you, and i thank this distinguished panel, we appreciate your concern for our citizens and 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 are some of the causes of the -- you laid out a number of these things very well, thank you. but let's say, for example, cancer drugs. why the shortages with cancer drugs? we know they're very expenses in many cases. what specifically is the reason for that? >> well, it's very distressing, congressman to see some of these time-honored, lifesaving medications being caught in the middle of the public health crisis, and some of the agents we have mentioned here,

time-honored agents that have been shown to be effective for decades are now stuck in these shortages. so, again, these are older, generic, sterile injectable drugs that are typical of the ones -- >> 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 has consolidated, and so we don't have the dozens -- >> of those who are 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, um, what often happens in a lot of these companies, they make dozens of products. >> uh-huh. >> thesester lille in-- these sterile injectables can only be made in certain quantities, so there are a limited number of those. and because 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 margin -- >> very expensive but low profit margin? >> some of them are not expensive, but low profit margin. so there is -- >> that's important, what you just said. so this is one of the concerns we have. certainly, we want medication to be affordable. i mean, why window shop when you can't afford? but in their push to make sure that drugs are affordable, are we also tripping over ourselves? 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 end up with the medication to save lifeves? is that part of the policy that's get anything the way for us? >> thank you for posing those questions and, obviously, our goal is to protect the patient and give timely delivery of -- >> is that something that, you know, and even if you don't have that information today, is that something you could advise us onsome i'm looking for

anything -- politics aside, i really want to know from the standpoint of myself as a health care provider. if we're doing something that is saying we want drugs to be affordable, but we're curting the price so much -- cutting the price so much that people don't want to make it, the concern. i just want to know if you'll get back to us with that. >> sure, congressman. and those are precisely the issues that we are wrestling with as a department and as a country. so thank you for posing that. >> and i say this from the standpoint of, look, often times what goes around the hill is accusations and politics. we can't afford to engage in many any of that on these lifesaving agencies, so i'm trusting you to give us those honest answers, and i really appreciate it as one colleague to another here. >> thank you, congressman. >> and also with regard to inventories, hospitals are having a hard time keeping their inventory. it's not an issue that they're not purchasing enough, correct? or is it?

that if a hospital says we can't have some of these things in supply because it may be too expensive or difficult to keep these in inventory because of special requirements on how to maintain them, how to secure them, special conditions, is that part of the problem, too, they may not be ordering enough because for themselves it's also very expensessive? >> i believe that it can be a problem. there also has been a trend, and it's certainly not 100%, but there has been a trend in the industry to have some people call just-in-time production. they don't have the long lead time production that may be in -- particularly for these sterile injectables that there may be for other products that have longer shelf lives. so they tend to make less and distribute it out in smaller amounts. >> uh-huh. >> which certainly contributes to hospitals not being able to maintain a supply in addition to a large supply and cushion in addition to what the other concerns you mentioned. >> again, if they also have a

small margin, i mean, it's one of these things, look, we understand health care's expensive. sickness is more expensive, and we all want to work together. and so i do appreciate and look forward to seeing your information on this. thank you very much. i yield back. >> chair thanks the gentleman and recognizes the gentleman from georgia, dr. gingrey, for five minutes for questions. >> mr. chairman, thank you very much. i'm sorry i missed a lot of your testimony, witnesses, but thank you for being here. let me, first, address two -- secretary koh. in your testimony you cite that there were 178 drug shortages in 2010, and the sterile injectable drugs make up a large and increasing share of these shortages, and by my count roughly 132 of the 178 were sterile injectables. of these drugs, can you tell me how many were in shortage in previous years? has this been a long-term problem or just more recently?

>> this is a long-term problem, congressman. unfortunately, the trend is going the wrong way. the shortages are increasing year by year. we have data back through at least 2006, and the trend is getting worse since then. >> and then tell me this are there any other common characteristics that you're aware of among these 132 besides the fact that they are generic, and they are sterile injectables? for instance, are these drugs typically newer generics or drugs that have been on the market for years? actually, you just answered that, and i thank you. well, the other thing on that is are the profit margins typically very low? or any other issues that you might be aware of. >> on the first question, congressman, the irony here is that these are older generic drugs that we understand are very helpful, if not lifesaving, and so to have this situation is really quite 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 quite low for many of these individual products. >> and my last question can go to, really, either one of you, mr. secretary or dr. weeder. am i saying that correctly? good. help me understand something. mr. shimkus earlier addressed this. many of the drugs we are talking about are these older generics, not just the sterile injectables, where the profit margins can often be very low. these low profit margins can often times lead to very little competition or even drugs which only one company makes the product. mr. shimkus raised this point about the market prices, and i understand maybe, secretary koh, you tried to answer this for him. i just want to be clear. do you, 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 gets too low for some of them to survive, they stop doing it and go on to something else, maybe another generic. and a couple or maybe even one company hangs on, it would seem because of supply and demand that that company would be able to raise 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 that this is a complex business situation where the standard 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 here all working to the final outcome that ordinarily you would see with a shortage, a rise in price and profit. but that doesn't apply here. so this is why we need the extra analysis that our department's doing and others, and we welcome new information and modeling to really help us understand the root causes better. >> dr. kweder? >> i think the questions that you raise are exactly the questions, some of the questions that we have as we really try to understand the roots of this problem. what are the things that could be done to try and prevent these

shortages from occurring or even being at risk in the first place? >> well, i thank both of you for those, those answers. because, you know, the federal government tries to do the right thing in many instances, i would hope in all instances, and it seems that far too much of the time they screw it up. and so that's why i ask you those questions, and i hope that you'll continue to look at that so that market forces can continue to prevail. then i don't think we'd be faced with these shortages. >> gentleman yields back? um, that is the round of questions for the subcommittee members. we have a couple of members of the committee who have joined us. chair recognizes gentleman, mr. walden, for five minutes for questions. >> i thank the chairman very much, first of all, for his recognition since i'm not a member of the subcommittee, but also for having this hearing. and i appreciate the testimony from the two witnesses today.

i got involved in this issue sometime ago because of an oncology doctor in my district, dr. chuck dibbs, who brought this issue to my attention, my staff's attention. and the drug, specifically, that i recall he mentions was -- and i'll try and say this right -- dotsarubisson. i understand it's a ovarian cancer drug. apparently it's very effective, and i'm not a doctor, but that's what he tales me. what was the fda's role in interrupting the production of that drug? can you speak to that? >> i can speak to that very generally. there were, um, there were several companies that produced the drug, one of them which was the major supplier, um, also was the same producer for the sigh

tear bean that dr. koh mentioned earlier. some of the issues were exactly the same. there were facility issues, production delays because of, you know, chronic, chronic problems in an aging facility is probably the best way to summarize it. what fda did was we work with the the other two producers to facilitate their ability to increase production. it did take a while. they were, as i said, these are complex products, complex products to make, companies can't just ramp up production overnight. >> right. >> but in the meantime, a fourth company came in with a new version of the product and helped to make up the supply. so we worked, we made sure to expedite review of that fourth company's application and the inspections, etc., that were necessary horde to turn this around -- in order to turn this

around. >> now -- dr. koh, do you have any comment on that? >> i think dr. kweder summarized it well. >> um, so i guess, so you feel like you've taken all the steps, this drug is now available on the market again and without shortage? is that accurate? >> my expert tells me -- [laughter] yeah, that drug itself is. there's another version of the drug, um, that's sort of a special formulation that has a sole source that continues to be a problem, but again, that's a different company. >> all right. then -- >> same company. >> dr. koh, you mentioned glass and metal in injectables, i think, you were discovering which sent sort of shivers up everybody's spinement i've also heard -- spine. i've also heard, though w the new technologies the scientists are able to see deeper into the drugs than we've ever seen before, and 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 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. um, i must say, again, the fda has worked with companies. so in the case of particulate matter, pieces of glass, pieces of metal first to identify the issue, but also there have been advances in developing filtering systems so we can filter those out, make those drugs then 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, but -- i mean, my time to ask questions is about to expire. [laughter] just want to clarify that. it was a short night. um, it's this sense of urgency, i applaud you for bringing

people together and trying to figure this problem out. but as i'm hearing from both dr. dibbs and others in my district, this, you know, patient comes in, the drug's not available, they've been prescribing it for years, it's effective, it works, and they can't get it. i know my own mother had ovarian cancer and died from it, and so i have this sense of patient urgency. i know you feel that, both of you. we all do. so if there's a way we can play a constructive role here whether it's ms. degette's bill on notification, i mean, she's put a lot of work into this, you know, we just, we just need to do everything we can to be a partner in this, and i look forward to working with both of you and members of this committee to the extent they'll let me play a role. so with that, i would yield back the balance of my time. >> chair thanks the gentleman and recognizes ms. degette for five minutes for questions. >> thank you very much. and i want to thank my colleague from oregon for the free commercial announcement. mr. chairman, thanks for letting me participate. it's good to be back in my old

stomping grounds of the house subcommittee. and as i know you've been discussing, congressman mooney and i have introduced in a bipartisan way the preserving access to lifesaving medications act which creates an early warning system between fda drug companies and providers so that we can respond to these drug shortages quickly and efficiently. um, do i think that this bill will solve the root problems of the drug shortage crisis? no. but do i think it's a necessary first step? absolutely. and i appreciate the witnesses coming here to talk to the members of this committee. um, this bill came up because mr. rooney and i independently were going around meeting with our hospitals and our doctors, and suddenly they started, they started saying to us, you know, i was in the middle of a chemotherapy treatment of a child, and suddenly i couldn't get the drug. and it just seemed to us that

this -- i'm sure it didn't happen immediately, but it seemed like it did. doctor, you're shaking your head. do you want to comment on that? >> well, to the prescriber, you know, they're not following, you know, web sites, they just know that they can't get the drug. and they, 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 produce. there are 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. product quality. >> yeah. and, you know, i think you, i think before i got here, mr. chairman, you discussed the current system which is, um, 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 advance notice, and i just want to give a couple of examples. in august of 2009, aspira notified fda of their intention to get rid of the drug potassium clear rate due to low volume. the drug is often critical for neonatal care.

they received a no back from the fda shortage in 2009 thanking them, and then in march 2011 the other supplier of potassium phosphate, american regent, recalled its product because of a quality issue. so what happened then is in april 2011 the fda made hospira aware of the shortage and asked them to assess their ability to return to manufacturing, and then in that same month hospira told the agency that they would return to manufacturing potassium phosphate so that the patients could be served. and the fda, um -- and so it worked. but that's on a very limited basis. and so, so, um, i just think that this could really work. and i, i guess i want to ask you, dr. koh, in my minute remaining, um, how does, how will it work if we enact

legislation like this to get the information into the providers' hands, that there's an impending drug shortage? because you folks have had some experience with it. >> sure. and, congresswoman, first of all, thank you for your leadership on this issue. it's very, very much appreciated. and we all feel that establishing highest level communication as early as possible about any potential shortage can give us the opportunity all to be proactive, and that's not just fda and hhs, but also providers and 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 patients and the public, then we can all work together in a proactive way. right now we are in a situation that you've summarized very well where the reporting is voluntary, often times the fda does not know until too late,

and then patients are stuck in this dire situation which is just not acceptable. so we are looking forward to greater emphasis on early notification and communication. >> thank you so much, my time's expired. >> thank you, congresswoman. ..

so, euphemistically speaking about manufacturing problems, but really they are significant. so is it a pattern, we are seeing manufacturing is some sort of contamination such as endotoxin, for which in their gnp, they do not know where it entering? that is a process problem that is a terminus concern. >> the answer is yes. that's exactly the kind of thing we're concerned about. when you find a product that has endotoxin at the first thing you do is find out how the endotoxin is getting them in the first place. there are multiples types in production where that could be occurring, but figuring it out is not easy and it can take a very long time to determine that. and then a long time to fix it. and it's particularly -- we see this with metal shavings in

madison, clash out mobiles, all things that would be unconscionable to give to patients. but the key is being on top of those good manufacturing says and maintaining facilities to avoid those kinds of events. and where you have facilities better in 100% production mode all of the time, it is often difficult to maintain your facilities and modernize them. anyway that is needed to i can assure -- for a company to assure they are producing a reliably high-quality product. >> thank you, mr. chairman. >> i believe mr. pullout has a follow-up as well. >> as mr. shimkus said earlier, classic economics would suggest many product is in demand, prices should rise in the market establish a new equilibrium.

we are now in the seventh consecutive year in the year before. i am also curious why the market has failed to establish an equilibrium because most mr. shimkus and mr. guthrie discussed public program constraints and as they understand these apply to brand-name drugs are not generic. is that correct that the only apply to the namebrand and not generics quirks >> well, congressman, those economic issues are persisted once we are analyzing right now we have especially her assistant secretary planning an healthy economist looking at what the economic pulse and modeling that could help us predict where we need to go in the future. the thank you again for raising these issues. these are complicated business and economic models we have come to find. >> the generic drugs as the most of the shortages and recent

years. if there is that distinction, is that the problem? >> well, we do know it's older generic steroid injectables that make up three quarters of the shortages and that's what we are indeed folksinger attention. >> i don't know if either mr. shimkus or mr. guthrie asked you if you said you're going to get back to them, but i would really like to get some answers, you know, obviously you are not prepared or do not feel you have an answer today, but i'd like you to get back to us through the chairman if you could. >> we'd be happy to, congressman. i mention we have an upcoming report that will give further analysis and further economic analysis is also intensely underway. >> with that relate to this or you don't know for sure? >> hopefully will get a better understanding of the causes.

>> mr. chairman, if he could get back to us on that because i know many of us have asked the same question and would really like to know. >> if the chairman would yield just on this point. and i thank my friend for following up on this debate in this question. but in my opening statement they didn't just focus on the government pricing. i did say insurers, too. so we are all in this together in the market going to work if that were. i just want to correct the record. >> i just wanted to bring up the public program aspect. get back to us on it because i understand to be perfectly honest, a lot of the questions me about today, we've gotten a response and have a little better idea, but it must be like more questions have been raised and answered today and that's not in the default, but that is kind of where i feel we are right now, mr. chairman.

>> thank you. if you respond to the questions in writing, will get those to the members and look forward to reading your report. the chair thanks the first panel. >> thank you pubertal call at this time time panel to end our second panel consists of seven witnesses. our first witness is mr. jonathan kafer, vice president at sales and marketing for testifying on behalf of kiva pharmaceuticals. next is mr. john gray, president and ceo of health care distribution management association. our third witness is mr. kevin colgan. our fourth witness is mr. mike alkire, chief operating officer

premier. next we will hear from.or charles penley who is testifying on behalf of the american society of clinical oncology. we also have a mr. richard paoletti can a vice president at lancaster general house. and finally, that are robert dipaola, director of the cancer institute of new jersey. we thank all of you for coming. your written testimony will be entered into the record. we ask each one of you to summarize your testimony in five-minute opening statements. and mr. kafer, you may begin your testimony. >> thank you on the chairman. chairman pitt, ranking member pallone and distinguished colleagues in the full committee and subcommittee, thank you for the opportunity to be here today. as referenced by the chairman, my formal testimony has been submitted to you. i am more than willing to answer

questions specific for that testimony throughout the questioning. and i will symbolize my remarks in my opening. i am john kafer, vice president of sales and marketing for teva, representing teva pharmaceuticals. teva pharmaceuticals is a global leader in biological pharmaceutical products. we are a market leader in many markets in which we serve here in the united states, where the market market leader in generic -- generic products. we have a vast portfolio, including dosage forms, including oral solid presentations, injectable presentations including a significant portfolio of oncology, generic and just all presentations and i look forward during the questions. specific to that very important category. as referenced, we are market

leader. teva is a market leader and we understand and embrace the responsibility that does come with being a market leader appeared on that context, i'm very 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 come individuals that have been impact it by not being able to get medications. in my particular situation i have friends and families given the role it played a reach out to me, hoping i may be able to make a difference. unfortunately, there's many times they can't and it's very challenging. at the same time, i hear from patients. i hear from family members of patients. i hear from constituents. i hear from physicians. looking to the manufacturer to rest the questions fly. and we responded and we certainly understand not. at the same time, i see everyday 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 volume so we can get these critical markets -- critical products back to market. referenced in earlier testimony, and this is a complex multi-stakeholder issue in both require the coordination and communication among stakeholders in order for us to resolve this issue. as noted in earlier testimony as well, there're many for yours been impact the drug shortage issue. whether the api being source and available, we just does that. the industry has experienced manufacturing challenges. i'll go into greater detail specific to how it impacts a sterile facility versus an oral facility. as the regulatory impacts on facilities. as appropriate, the fda regulates the complex facilities and products to assure the

manufacturing community is operating within full cgmp compliance, ultimately to provide the highest quality products to wallace in this room. we understand that nic manufacturer, we certainly embrace that. most of the shortages are unanticipated. those unanticipated shortages cannot boomerang effects depend on the supply chain. and as noted in earlier testimony, will get into greater detail a handful of manufacturers that sometimes are unable to pick a pro-life supply from other manufacturers and will go into detail around that as well. what is teva doing specifically to address some of the drug shortage issues? we have significantly made a significant investment in enhancement of facilities as well as our quality systems. we have unrestricted access to resources globally to prioritize those people in those facilities

that require the work 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 be manufacturer to have a secondary or tertiary facility qualified to make these products. we have identified those most critically, medically necessary products and we have five fda approved facilities and we have put a team in place that is actively working on redundancy planning for these critical products. as referenced also through the testimony of dr. kafer and her koh. i can speak to a different preferences. there was a discussion earlier in testimony around coordination of importation of products to

alleviate critical drug shortages. there is a specific instance in which we worked with the fda to bring in a product called leucovorin that is used in combination with chemotherapy, twofold, to enhance effectiveness of the treatment as well as to mitigate side effects. we brought in income have a significant amount of this to work collaboratively with akamai are able to help mitigate that problem. the solutions that we are looking at recognizing it as a multi-stakeholder issue -- i do need to comment as it exists today, there is tremendous cooperation within the drug shortage group in the 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 that we do all collaborate with the fda has testified earlier in the case take that very seriously. the doxorubicin example mentioned earlier i received a

phone call, do what we can. work in collaboration with them and give product release to market and we continue to pirate has those types of products. during question i'd been more than happy to go into greater detail around how we are seen a coordination effectiveness in how we would like to see a great communication among stakeholders , multiple stakeholders beyond the manufacturing and fda. going forward, we had seen discussion 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 impactor concern to the patient. >> the chair thanks the

gentleman. mr. gray for five minutes. >> at morning, chairman pitts, ranking member pallone and the sub committee commerce on health. president and ceo of the health care distribution and virginia. i appreciate the opportunity to provide overview of the pharmaceutical distribution system and for your committee and critical issue. each dna as a national association representing america's vital link in our nation's systems. each business are 34 member companies ensure that nearly 9 million prescriptions delivered safely and efficiently to nearly 200,000 nursing homes and other providers nationwide. approximately 90% of pharmaceutical product sales in the united states flow through our member companies, continuous innovation operationalization t. have really set our members a part a part in trying to

continue a to the nation's health care system. federal law defines wholesale drug distribution of code to the distribution of prescription drugs to other than the consumer patient. wholesale distributors are bound by the range of federal and state laws and edition or distributors must comply with licensure requirements in every state in which they operate. it's important that each dma members by predominantly from pharmaceutical manufacturers and sell only to appropriate license customers the vast majority of which are pharmacies or other health care providers. pharmaceutical products are highly cordoning a supply-chain provide maximum efficiency and effectiveness and safety. pharmacists and other health remedies place orders for prescription medicines buy it if in the evening and receive deliveries from the distributors the next morning. the average 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, costs and other factors. pharmaceutical products of handling requirements typically have shorter cycle times in the system. distributors provide an array of services for manufacturers beyond simply movement of products, including but not limited to receivable risk management for the manufacturer customer validation, order management, inventory management tracking, processing returns and recalls and contract management. they are distributors provide equal services including aggregate assistance for stocking income support information system software as well as accounting credit support. in the case of inventory management can distributors are able to fill customer orders sixers one days per week 365 days a year, which limits the need for large inventory bubbles at the pharmacy level. i'm distributors serve to maximize the efficiency between manufacturers and health care providers by managing a very complex network of products and

systems by efficiently providing mechanisms for the seamless transformation of information and product information and product information and product information and product, we are acutely aware of drug shortages on patience, effectively addressing the drug shortages in the complex and entire companies because it appears that little or no warning and often require significant resources to manage. each dma member companies for karcher improved communications with a supply-chain to provide where possible and try to mitigate the impact of the drug shortage. although distributors do not manufacture a product from any play an important role in helping to coordinate and share information about drug shortage when the shortages arise. distributors are notified of a shortage by manufacturer or provider partner. once the information is received from interested readers to indicate that manufacture partners about product availability to understand the

scope and expected duration of any shortage. and distributor works as quickly as possible with customers to fill orders to the extent they're able to do so based upon purchasing history or if necessary identify alternative products and supply chain. as you can appreciate there's a delicate balance between the need to share information at the appropriate level and at the same time preventing environment from panic buying. each dma has worked collaboratively with the american society federal agencies another supply-chain partners to share expertise about all drug supply chain. in addition, we were a distributor members and providers to update voluntary industry guidelines on improving communications between supply-chain partners in the event of shortages. we hope the effort will contribute to better management of process in its entirety. hdma believes the health care industry as a whole, government and stakeholders work together towards collaborative solutions of this problem that indicate impact of shortages and most importantly impact on the key stakeholders the patient.

too bad i'm coming to the mac for this opportunity to participate i hope the overview is invaluable that forge your questions. >> mr. corgan coming to recognize for five minutes for an opening statement. >> good morning. good morning and thank you, chairman pics, ranking member pallone. i am a corporate director at rush medical center in chicago, illinois. i'm here today because i cannot serve my patients or caregivers due to shortages of medications, some of them critical to patient care. while there is no single solution that will immediately solve the problem of drug shortages, derek enzi can do to help address this issue. first, bipartisan legislation in both houses of congress would enable fda to require the drug manufacturers report confidentially to the agency when they variants and interaction in the production of

their product. there's early warning system of the fda work with other manufacturers to ramp up production when another company experiences a problem. moreover, the bills call upon fg to work with manufacturers to develop continuity of supply plan, which could help to identify backup sources, pharmaceutical ingredients and produce redundancies and inventory to serve as reserve supplies. summit argued that this legislation won't have any impact, we won't disagree. your party heard this morning from the fda that in 2010, 38 drug shortages were avoided in the last year 99 drug shortages were avoided when the agency was giving it to notice. further opponents of this approach argue that it will lead to hoarding. we know that hoarding 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 now is that early warning to fda will help make sure 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 hoarding and other emergency preparedness area such as bioterrorism, flu pandemic and natural disasters, we develop action plans in communication channel from unnecessary responders. why would we approach drug shortages any differently? a second come system pharmacists have been collaborating with other clinicians and members of the supply-chain to work with the fda to address this problem. for example, we believe fda should have said about necessary resources to speed up the regulatory process to address drug shortages. other alternatives include improved communication between the fda field personnel and the drug shortages program to assess

the comparative risk of public arm when a potential enforcement action will cause or worsen a drug shortage. explain incentives for manufacturers to continue or reenter the market, a generic user fee program to speed approval and last ensuring the agency has the funding it needs a to carry out its mission. many of you sitting in this room sometime over the next several months is going to his evenings that you, family member or friend has been diagnosed with cancer company surgery, has been admitted to the intensive care unit or requires an antibiotic or medication as a premature baby or grandbaby that requires nutritional support. the last thing you want to hear his weed on a first-line medication therapy to treat you. the medication we have may not work well and cause heart damage, but it's always have to offer or that we are doing your treatment until you are able to

obtain drugs that are in short apply. these are all situations by, my clinical service staff and physicians nurses unrest tory therapist that 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 solution that together can help resolve this problem. again, thank you, mr. chairman, ranking member and members of the committee for the opportunity to provide input on this problem. thank you. >> the chair thanks the gentleman. we are in the middle of those. we have 14 votes. were going to try to get a couple more before we go over in recess and then we'll come back. so mr. alkire, you're recognized for five minutes. turn good morning chairman pitts, ranking member pallone i'm chief operating officer of the premier health care alliance. chimeras owned by not-for-profit hospitals and health systems. to use the power of

collaboration to high-quality and cost-effective health care. one of the ways we do this is by aggregating buying power 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. as you're aware, the number of drug shortages has tripled since 2005 and many of these medicines are essential to patient care. premier set out to understand the extent of the problem three survey. we found that between july and december 2010, more than 240 drug retailer in short apply or completely unavailable in 2010. over 400 generic equivalents were backordered for more than five days. many of the drugs noted as backordered in 2010 have remained unavailable or in short supply in 2011 in 80% of the hospitals reported shortages resulted in a delay or cancellation of a treatment. drug shortages also carry a

cost, an estimated 415 million annually through the purchase of more expensive subsidies and additional labor cost. we don't have ability to estimate the financial impact of shortage drives where there are no alternatives. we are working to diminish these costs by determining manufacturing capabilities to the concise whether a manufacturer can supply the market. we look for alternatives of capabilities to meet demand. instituting an early-morning system for hospitals to notify its shortage, once on once on a side we determine scope of the problem and communicate with the fda in exploring longer-term contracts with manufacturers to create more predictable volumes and stability in the market. in this crisis, we hope people will do everything they can to help patients get drugs they need. instead, we have seen the great market vendors taking advantage of the problem, offering to sell shortage products at exorbitant prices. premier analyst also said officers from grey market

vendors shortage drives. we compare prices to premieres. we found that average markups for 650 and in the highest markup is 4500%. in this case if ioc treat high blood pressure that sells for 2590s is offered for $1200 fee is muskrats for 4000 or so for drugs that treat leukemia and not hodgkin the foam appeared 3100% for drugs that help cancer patients retain bone marrow. 43% were marked up 1000% above the normal price and a quarter were marked up 2000%. where and how great market vendors are getting these minutes in, no one knows. and how can the integrity of these drugs be ascertained, again a question if you know. that's why premier has taken a position that pharmacy should avoid vendors and 60 known primary distributors. intensive shortage, pharmacies may need to look elsewhere in many cases we develop a set of

best practices. these practices include verifying products chain of custody, confirming my some my some in the a seller is authorized to sell the product in confirming the seller is a verified accredited wholesale distributor. it be the best way to stop price gouging is to fix the drug shortage crisis. we have committee in sg to consider the following: speed the approval process for medically necessary drugs that appear to be in shortage and to encourage fda to encourage stakeholders and discussions determining whether a drug is medically necessary. the objective is to prioritize drugs that are necessary for treatment also may be at risk for shortages. granted dea flexibility to adjust quotas limiting the amount of active ingredients manufactures may purchase for controlled substances, thus limiting the ability to bring about production money supplier exit the market. fast-track approvals of new active pharmaceutical ingredient suppliers for medically necessary drugs in shortage. work with manufacturers to slow the trend of acquiring raw

materials outside the u.s. require manufacturers to notify the fda a planned supply interruptions, which will 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 the opportunity to share what we've learned about drug shortages and the alarming impact it has on the safety and health of our communities, as well as our health care costs. premier stands ready to assist congress in finding ways to ensure a safe, reliable truck supply. >> the chair thanks the gentleman and again, we appreciate your patience. we've got five minutes left for you though. i think we will break here and come back as soon as the last vote is over and continue the testimony. the chair recognizes mr. pallone. >> mr. chairman, i want you has to consent to submit a written statement or congress and not the same. >> without objections to work very. at this point, the subcommittee

stands in recess until after the last vote. >> you all have a long time, so you can go deep. [inaudible conversations] [inaudible conversations]

i'm charles penley, a practicing oncologist in nashville, tennessee. i take care of patients, and that's why i'm uncomfortable in this environment, but i'm here to talk about drug shortage for my parents. i speak for the society of on kolk and we thank you for hold ing this hearing. we hope that this hearing better frames potential solutions. there's hearings around the country, large and small and other practices and they have challenges treating their patients. the situation is worsening. drug shortages in the united states tripled from 2005 to 2006. almost all cancer types are affected. leukemia, breast cancer, ovarian cancer, and colon cancer. this forces us to change the way

we treat our patients. often, a drug in short supply is tentively curative. there's no substitute. we treat patients who have leukemia, aml -- a life threatening, but potentially curable disease. one of the central components of treatment for aml, but that agent has been and remains in short supply today. physicians are forced to tell patients this potentially curative drug is not immediately available to them. treatment delay results in grave consequences to these patients. in other situations, there's alternative drug, but they are less effective and have bad side effects. limb foam mas has the chop regimen which includes a drug that's in shortage. a colleague sharedded the story of a young woman who was diagnosed with limb foe ma

during preeing pregnancy. that doesn't happen very oven, but involves risks for the mother and child. he was treated with a substitute, one for which the risk of the baby is not well-known and may be less effective. oncologists and parties should not have to make such difficult choices. i'm treating 5 national firefighter with a gastro cancer and was responded to five chemotherapy. we were unable to obtain the drug and used an alternative regimen causing him more side effects and increased his cost. the price of substitute drugs are up to 100 times more expensive than the drug normally chosen, especially if the substitute is a brand name drug. in the main strag drug went into shortage, oncologists treated patients with a substitute.

medicare payments for 50 milligrams is a dollar and a quarter. the brand name is approximately $90. as researchers alter or delay trials because of drugs part of the study are unavailable. as many as 60% of trials have been delayed. this, at a time of great promise in cancer research. there's many causes to the problem, many 6 them involving the manufacturing process. however, market factors appear to be a key driver in the crisis. shortages in cancer drugs are almost exclusively in jen nark injectables. manufacturers may not have the incentives needed to invest resources required to upgrade facilities or correct quality problems. as we heard, there does not appear to be a single solution to the crisis.

our expertise is in patient care, but we offer these potential solutions which we encourage the committee to explore. first, congress should urge expedited abbreviated new drug applications 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 ultra low cost generic drugs. third, congress should pass s296, bipartisan legislation giving the fda increased authority to manage the shortages. fourth, considered tax incentives to encourage or enable manufacturers to continue to produce vital drugs, update facilities, or enter the markets that are vulnerable to shortage. we will be an active partner this seeking resolution to the proke. the stress of dealing with a cancer diagnosis and the risks

of necessary treatment is a heavy enough burden for patients and families 20 bear. it is absolutely unacceptable that the lack of effective therapies should add to the threat or worsen lives. we have to do everything in our power to we solve the crisis and do it immediately. we appreciate the leadership on this issue, and we stand ready to do everything we can to assist. thank you very much. >> chair thanks the gentleman and now recognizes the gentleman from lancaster. >> good afternoon. i want to thank you for convening the hearing and for the opportunity to participate in the discussion. i'm vice president of lain caster health. my comments address the shortage we are facing nationwide. in the current outcare climate, hospitals are asked to restructure to meet the quality, safety, fiscal constraint and community benefit standards expected 234 today's world. our resources are being

stretched to the limit. ongoing drug shortage challenges at lan caster general are taxing and diverts resources to respond to the almost daily patient impacts these shortages create. this pattern is increasingly the norm for hospitals, physician practices, emergency responders, and most importantly parties everywhere. at lancaster general, we work hard to maintain a culture of quality, patient safety based on building blocks of standard ization. drug shortages add variability, complexity, and additional burdens increasing the possibility of misadventure, poor outcomes, and patient harm. the lack of a warning system is a great challenge we face as health care providers, such that we learn about shortages when products are not received in daily shipments. a review revealed receipt 6 just

3,452 of the 35 harks forms processed. in other words, 892 line items ordered in august were not received. every disruption to medication supply creates new responsibilities to investigate alternative treatments in evidence to update procedures and various technologies. additionally, we have alternatives not always readily available to front line care givers. in our fast paced environment, there's always variation and risk. these tasks consume significant, dedicated hours from multiple stake holders and staff working together on detailed plans to map tan safety while requiring execution in limited time frames. this means working with emergency physicians and thinking how to maintain airway in a patient in the trauma center without a paralyzing agent and how we can best give

nutritional care to premature infants. oncologists discuss alternative regimens midway through courses of therapy. more importantly, how we'll reveal to parties we do not have the medication necessary to treat their ailments. this issue remits the national health care crisis. relieving and minimizing drug shortages requires short term intervention and longer term solutions. these potential solutions require system changes in increased capacity including the following: establish early warning systems as proposed in legislation in both houses of congress to immediately help or mitigate drug shortages proactively, establish and improve communications between the fda and manufacturers to develop evidence-based allocation plans for critical drug therapies, secure the supply chain and direct supplies to the most critical patient populations, explore incentives

to encourage manufacturers to stay in or initially enter the market for drugs in short supply. there could bism provements in production lines or suppliers of raw materials for necessary drugs that are in shortage without compromising the quality and safety. again, i want to thank the committee for holding this hearing. lancaster general offers continued support and assistance to assist in development of solutions to help and mitigate risks caused by drug shortages. thank you. >> the chair thanks the gentleman, and you are recognized for i've minutes. >> thane. i'm robert, and i speak as a member of the national cancer research, and it's science policy and legislative affairs

committee. thank you for hearing and recognizing the impact the current drug shortage program has on our parents and ability. you heard about the affects of drug shortages on treating patients. as director of a cancer center and medical con cost myself who treats patients, i have the same frustrations regarding the care of patients and the negative impact of drug shortages. this impact is not only immediate for the patients in our clinics today, but also effects the future care of cancer patients because the next generation of cancer therapy is driven by today's trials that are critical to meeting the national goal of improving the outcomes for cancer parties. shortages of drugs is actually, as you know and heard today, a very complex problem. there are number of ideas 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, as you heard, have been used for decades, is affecting our best care, clinical trials, and threatening our ability to continue on our path of steadily improving cancer patient outcomes. fda statistics show the number of drug shortages has more than tripled over the past six years. with a market increased in sterile injectables. most shortages are sterile injectables. there's cancer treatment drugs in short supply, aesthetics, and microbee yal drugs and there's 193 shortages in 2011, 22 of which are cancer drugs, and the shortage is predicted to worsen. these include drugs that are

ridge mines treating patients with many cancers in adults and in children. these shortages are now affecting clinical trial outcomes for parties with cancer. due to the uncertainty of being able to obtain these drugs, trials have been delayed or stopped in our trials. many of the drunks that are 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 object shortage lists are used in cooperative group trials. the groups reports approximately 50% of active cooperative group cancer clinical trials involve drugs subject to shortages. many reports contain examples in which sites are unable to enroll patients due to a lack of drug supply. investigators in these clinical studies are unable to enroll new parents.

parties on study are sometimes receiving al tern gnat drugs when supply is not vail, and it's concern about results when drug substitutions occur. it's important to remember the impact from the drug shortages have a long term effect on cancer research in future treatment options for cancer patients. clinical treatments represent the final step of developing new therapies that improve the outcomb of paicialghts and add treatments for patients in which there were no effective prior options. a single researcher discovers a new treatment, that particular new drug is best added to an existing treatment in combination or/or tested in comparison to the best current treatment in a clinical trial. if that trial yields positive results, patients can ultimately have access to a new and improved drug or treatment combination. however, we are running out of the many existing drugs.

when a trial runs out of a drug even temporarily, the results are compromised, and enormous amount of work and expense is wasted. this means during a clinical trial, a shortage of only a few weeks in an existing drug might mean delays in years of developing a new drug. in other words, the drug shortages of today can have a hip l effect on the availability of new drugs and treatment combinations tomorrow. today, we estimate that one in two men and one in three women develop cancer in their lifetimes. 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 this disease. that's more than 1500 people a day or more than one per minute. while the numbers are staggering, we've made great strides in the ability to diagnose, treat, and prevent cancer and at the most promising time of cancer research. the american cancer research issued a progress report marking

40 years in progress in fighting cancer. in fact, thanks to advances made, 40% of adults are living five or more yeared in connection withs from 50% in 1975. it was reported in a period from 1990 to 2007, death rates for cancer in the u.s. decreased by 22% for men and 14% for women. the challenge we now face is to continue to turn ground breaking science into life saving care at greater speed by facilitating clinical trials, we lay the ground work for research to translate into cutting edge treatment for parties. the current drug shortage hipters our ability to treat parties overall. an inability to have best treatment in general and conduct trials 1 a serious impediment to our goal hampering our ability to reduce the toll on cancer for

the people of our nation. thank you. >> the chair thanks the gentleman, and thank you all for your thoughtful testimony, and we'll begin questioning at this time. i'll recognize myself for five minutes for that purpose. walk us through what what happens with a drug shortage? who notifies you? how much warning do you get? what do you need to do to notify the people in your organization? >> it differs in every instance, but a lot of times we find out when a drug order doesn't come, our buyer and receiving process, through the receiving process, we learn we didn't get a medication on order: the buyer follows up to see if it's a temporary outage and when to next expect that, and that relays into an investigation of more than 150 inventory locations and automated cabinets

throughout the facility. we look at what we have on hand, how much we continually use on a day day-to-day basis and estimate how much supply we'd have if continue business as is. based on that and the information we get, we convene a team. it's pharmacists, nurses, the specific stakeholder physicians depending on what medicinal it is. we look at indications and alternative therapies available to us, and kind of assess how critical the nature of the shortage is. based on that, we have to create action plans. sometimes it involves the pharmacy manually preparing specific minimal doses of medication to make the supplies last 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 with a drug. that week came down to the last couple days of therapy and we were contemplating canceling

surgeries and how to manage those situations. >> any way at present for you to anticipate a shortage? >> through some online web sources, as good as the information is based on what the drug companies reveal and what's published. there's a program now going out to the fda website to look at that information which sometimes is published with alternatives. the university of utah's drug nchtion center is helpful in that regard, but a lot of times no information exists until we self-report we are having difficulty. >> thank you. down the line. mr. kafer, from your companies experience, what are the main reasons for shortages and how do you work with the fda to notify of shortages? >> our primary point of contact when we become aware of a shortage for any number of reasons, we could have had a

manufacture lot rejected during release testing, and that means after you finish your manufacturing process, every injectable goes through a series of tests. if those tests fail for quality reasons or unspecified, not meeting a specification, reject the lot. if there's participator shortage, our contact is fda. as testified, i think the point was made they do not immediately post that information because that can trigger additional behavior where the shortage leads to purchasing of another generic product or even another comparative therapy that can drain those supplies as well. we coordinate directly with the drug shortage group and with our hospital partners and distribution partners. >> how have you worked with the fda? >> extremely well.

there's many instances in which we collaborated. through the drug shortage groups they have been playing quarterback on this. it's not a formal process, but they do a fantastic job. there's been at least three occasions where we had submitted a prior approval supplement, and by definition of that, that's an extensive review indicating there's been sighted changes to a process that would take long, but they expedite reviews and get those approved in about a three month period that allowed us to get the critical products to market. >> thank you. mr. gray, can management practices create the impression of a drug shortage? how do districters and others work to avoid that situation? >> well, inventory management practices are just in time if you want to call it. they are actually across the supply chain from production, just in time production to just in time delivery. we focus on the delivery, the

manufacturers on the production side. that's actually a process developed over the last 25 years in the consumer goodses area to spread out the predictability of manufacturing as well as alerting both the manufacturer, the wholesaler, and the retailer or pharmacy when product potentially is short. it's more realtime information. the reality is the inventory management programs are there to spot the shortages, potentially before they happen, and that's really what's developed since the late 1980s from the food industry into the pharmaceutical industry. i'm not sure there's a connection there. i heard that today. if you look at the singes -- science of that. the mentality of that is a identify shortages early on. >> would a secondary distributer purchase a drug product, they pay more than the primary distributer would pay so if they then charge more for the drug, they are simply responding to the market, armet they?

this is not a gray market process, is it? can you contrast that? >> i can't speak to the secondaries. i know our members, we're buying directly from manufacturers, and then we sell only to state license entitied, be that a secondary distributer, hospital, or pharmacy or whatever, and usually, we are undercontract pricing with the manufacturers of those products. if we sell them down to a provider, it's usually a contact price preset. what a secondary does with the product i don't know. in terms of pricing, i have no information on that. >> thank you. mr. colgan, in your testimony you state there's no one solution to the problem, but stress the importance of enagenting legislation to require manufacturers to notify of possible shortages. can you explain why this requires legislation to accomplish and why it needs to be done on a confidential

basis? >> sure. when there's a leak or hole in the dam, stick your finger 234 it first to stop the leak and explore the reason for it, and then you need to solve the problem. what this legislation really does is sticks your finger in the hole and the dam to stop the link, and basically we've heard from testimony today from the fda that they've been able to basically abort 99 drug shortages this year with regards to early warning systems. we believe that's needed. i'm definitely not in favor of regulation where regulation is not needed, but honestly anything i put in my body or mouth, i want to make sure that it is manufactured in the right way, it's done correctly, and certainly we support the fda in terms of their role in protecting drug safety within this country. needless to say, they need to be able to have the power and the jurisdiction to enforce army

reporting of drug shortages and the other thing that i said i think was really most important is get the word out to everybody at the same time. it's beyond me sometimes that others have drug product when i don't have drug product. when drugs come back to market, there's only certain places you can get the drugs from, and you can't get it from the normal supply chain. again, i think we need the regulation in order to solve the problems that we have at hand. >> thank you. mr. alkire, we heard the end users of drugs have little warning of shortage. a preferred aesthetic drug is not available only after the patient is prepped and on the operating table. how does this happen and give notices to their doctors? >> for the most part, i have not necessarily heard that, but for the most part, there's strong

communication that occurs in the hospitals and doctors are made aware of what's happening with shortages, especially if they are prepping for procedures. they have to figure out what are the alternatives to ensure their patients get the highest quality care. >> okay. dr. penley, how many drugs you use in your practice regularly go into shortage? there appears there's a finite number of drugs that regularly go into shortage. >> the current number from oncology drugs is around 23 i believe, and those are very commonly used agents so we would use most of them in our practice on a day-in, day-out basis. >> is there any way at present for you to anticipate a shortage? >> on a practice level, it's difficult. we get information the same way the folks do through the fda website or hospital and pharmacist websites.

the national organization serves primarily as an information gathering and distributing service there for our members, and certainly at times when these things -- we see that there's prolonged shortages, we convene expert panels to brainstorm and come up with the best available work-around in areas where we have to make substitutions. we try to bring together the best minds in oncology to have a workable and republican solutions for the patients when we know the drugs will be in shortage for any length of time. >> thank you. your description of the impact of drug shortages on future cancer parties because of clinical trials may have to be stopped or not started in the first place is quite compelling. you mentioned that 50% of the cooperative group trials involve drugs that are 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 that it's, you know, as we'll all concerned with the shortage even worsening and already we're seeing a number of trials even within our cancer center as an nci designated cancer cementer, we care for parties with the standard treatments and offer clinical trials for partes who want that option. those trials are geared towards our new 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 do not allow a substitution, all of the work that went into the discovery getting to the point of the clinical trial is going to be compromised, and so, you know, we've made gains on cancer research overall, but ultimately, the discoveries in

terms of the targets in the lab, the drug development, and then either the comparison to the existing drugs or addition to the new targeted agents to existing drugs make it very, very difficult to continue this, and i agree that, you know, those statistics relate to data we've been given regarding the cooperative group trials, usually the large national trials that do comparisons, and nowadays the trials don't contain placebo so the drug is part of the trial. 24 drug is already -- this is already a very difficult and concerning problem in the way the stats are looking. >> thank you. i'm over my time, but i thank the ranking member for his indulgence, and i will yield to mr. plum as much time as he'll consume. >> thank you, mr. chairman. i ask for unanimous consent to put into the record this

statement from the colorecto cancer. >> without objection. >> i'll go back to what you said, mr. chairman, or follow-up on what you asked. the cancer substitute of new brunswick is 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 therein an actual -- is there an actual example where you had to halt? >> yes. i mean, there's actually a number of examples, trials where about to launch that we made, you know, we've made, you know, the plans and development to start a clinical trial. most of them kind of have to do with trials where a new drug is added to existing therapies, and

we've had difficulties in at least one or two trials where a new drug was added to a combination that included taxol as one particular example, and the trial was held in terms of initiating the trial. what happens is in the clinic, we then have concern in offering patients who actually come to the center looking for new options in terms of clinical trial. the trial when we are not assured of the particular drug supply. there is another trial where a young patient with breast cancer was enrolled where doxol was could 234ed along with -- included along with another set of combination of drugs, and it required amendment to the trial to allow the patient to be treated to change the drug from doxol to another agent which again has concerns about compromising the trial, and, again, the delay involved in

trying to look at options, and then even changing the drug because in that case, the trial allowed, and then in a number of cases, delayed trials where doxorubison was part of the regimen with an up deny inhibiter with an nci trial that was delayed. all 6 these taken together, any one of these, you know, weeks, months, delays really delay us in 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're looking for enough, and they are looking for these options in clinical trials. >> sure. now, just give me an idea, how do you think the drug shortage impacts the future of cancer research and treatment? i mean, are you concerned, and just an overall sense. >> well, i think, you know, it's

going to be important, and that's why i think this is important that everybody get together in a collaborative way to look at all of the root causes and come up with solutions because it is concerning, especially if it does worsen, and it is, if the statistics indicate that it is, i think it is concerning. i think that we need to keep pushing forward in all areas of research. i mean, as you know well, you know, it includes the discovery on the basic science and leading into the efforts of translating into clinical trials. it is concerning, especially with the statistics that we're seeing. >> okay. thank you. i wanted to ask mr. kafer a couple things. manufacture -- frequent cited reason for shortage is manufacturing problems, and now,

of course, sterile injectable drugs are hard to manufacture, and if you're a supplier, that is a problem that leads to a shortage. obviously, there's circumstances outside of your control that can interfere with your ability to deliver a product. i mean, are these problems unique? are they all prone to shortages or something about the drugs that makes controlling their manufacture more difficult? are there things manufacturers can do to avoid these problems? >> i think as one of the things you need to understand from a complexity stand point, but the nature of the sterile manufacturing facility, it is sterile, and it's a very complex manufacturing environment. picture, if you will, people in space suits doing the prep work. if you're in an oral solid manufacturing facility, it's much different so there is more complexity. the other thing within a manufacturing facility, each

technology has its own defined manufacturing line or manufacturing suite. for instance, you cannot manufacture oncology products on the same line you manage hormones or something of that nature. many of the products are also, some are in a powder with a very unique manufacturing suite and other a liquid fill line with a very unique manufacturing suite. it is possible that with within one manufacturing facility, that you have a disruption in just one suite. 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, and unfortunately over the last couple of years, industry has had some disruptions within those manufacturing suites that are in the stages of recovery so we are manufacturing product, but we're in a slow build, and it's impacting, obviously,

parents as the panel testified today. >> all right. you know, of course, we always worry not only today, but in so many cases about active ingredients in drugs sold in the united states that are supplied from abroad, so i guess i ask to what extent is that a problem, and, you know in the wake of heparin, there's a major concern on cracking down on some of the ingredients that are colted abroad. i mean, to what extent does the availability of these ingredients from abroad impact this discussion today? i mean, it's very likely that, you know, we put a lot more regulation for things to come from abroad. >> regardless if it's abroad or domestically, the heparin scare

years ago, the scrutiny we go to before we release the active ingredient into production is significant, and we do not jeopardize that. we oppose on our manufacturing -- we improse on our manufacturing side procedures that are significant, and there's been instances of denying them from coming in because they have not met our specifications. if that happens on a repeated basis, there's a gap in readily available material to produce product. without question, for good reason that we are testing to which we're required to and don't produce until they pass those tests. >> you mentioned to me earlier in the context that you and

dr. kater it can take two to three years for fda to approve a new facility, and obviously, that's not a good situation; however, on the first panel, fda has the flexibility to adjust resources to improve facilities and suppliers very quickly. i mean, is that your experience that that flexibility works or are you sort of going with the past two to three years? >> two to three years api, manufacturer approval or site through traditional paths, and, you know, those reviews take time because it's a complex review requiring extensive work. at the same time, yes, we have seen expedited reviews in that area. we've been the beneficiary of expedited reviews to handle critical situations, but also in my earlier statement, and in my

opening remarks, a lot of the shortages are unforeseen. we're applying a great deal of coordination and a great deal of collaboration when we're solving the problem, and as a standard of practice, is it possible to expedite some reviews as a standard of practice was the point of my written testimony, but we do see on a routine basis now we're applicable without jeopardizing a product or system, but we have seen collaboration to expedite reviews in a matter of months. >> i appreciate that, but what i'm trying to say when i mentioned two or three years in your written testimony, i don't want to put words in their mouth, but it was suggested rat the first panel that maybe not so much a problem because we can use the flexibility, but i mean, is it your experience that there is enough flexibility to deal with the situations or not? i mean, i know that's a difficult question.

>> i've had experience where we have had expedited reviews, collaborative work in favorable outcomes. you know, the volume of work that could be forthcoming based on continued remediation, i can't predict, and i can't, you know, forecast that impact, but prior to significant shortages, which the industry planned for, you know, we were planning for a two year review. we knew what that type was, but that was -- at the time when we were just making sure we had redundancy in place for the critical prurkts, it was not of immediate need. now that we are seeing immediate need, we are seeing the expedited review. >> all right. thanks. i just wanted to ask one more question of mr. colgan here, mr. chairman. in his written testimony, he suggests a number of incentives that might be provided to encourage manufacturers to stay or enter the field, and, of

course, i think in principle incentives are a good idea if we get more companies to manufacture product or produce excess supply, you would think the shortages would be less likely to occur and less severe if they do occur. with that being said, the suggestions in your testimony, i think, need more flushing out for me to better understand what you are trying to achieve or how you achieve the goal. i know they are just presented as options to be further explored, but i was puzzled by the suggestion of granting temporarily exclusivity for a new product line of drugs either already in short supply or deemed vulnerable to a shortage considering that the goal was seen it be to get as many companies into the field as possible, it seems that granting exclusivity would be doing the exact opposite, and it's my understanding that exclusivity works best when a company is the only one manufacturing the product or in the case of a new generic, the only company offering a generic to a name

brand. it's not clear to me granting exclusivity is incentives. i'm not critical, just walk me through how you think this would work. >> sure. well, there's two things here. one is the generic user fee, and we believe those can be use liesed to insent manufacturers to enter or reenter the market in producing a product they produced before or not produced. we have drugs that are single source sometimes, or we have drugs where there's not enough production or throughput. in those situations, we think within limits this is a concept that needs to be explored in sorts of some sort of exclusivity in the market so there's a period of time that would insent a manufacture to get into the market and produce the product. it could be the, that the fda

provides accelerated review of a supplemental nda to that manufacturer allowing that manufacture a period of six months or so to put the product together and produce the product. we see the whole idea of insenting the industry to jump into the generic market as being really important. let me give you an example of that. hopefully that plays out, and you'll understand. right now, we have production problems with camustine, and we use this is a conditioning therapy in getting patients ready for bone marrow transplants. right now, that's not a necessary drug because we can use another drug. if i have a patient on camustine, i pay $938 for that patient's drug if they had a body surface area of two.

for the other, i pay $1440. it advantages us to have other manufacturers in producing camustine so there's adequate supplies and some sort of incentive allowing them to do that so we are not forced to use the more expensive one which is important to us in terms of securing a supply line for the drug, and is certainly adds up to the economics of the situation too in terms of being able to supply drugs that is category one recognized as the appropriate treatment for the patient, but also provides lowest overall cost continuum in providing the care to that patient. >> all right. thanks a lot. thank you, mr. chairman. >> chair thanks the gentleman. that concludes our round of questioning. again, i'd like to thank the witnesses for your testimony, for answering the questions. we'll ask you to please respond to any questions in writing in

and in conclusion, i'd like to thank all the witnesses and members for participating in today's hearing and remind members that they have ten business days to submit questions for the record, and then i ask the witnesses to please respond promptly to questions, and members should summit their questions by the close of business on october 7th. there be no further business, the subcommittee is adjourned. [inaudible conversations] >> some people may be more polished in their presentations, like the little debate last week

where i was biting my nails and wiggling my feet. you know what? i think we got a debater-in-chief right now. i'm not looking for debater-in-chief, i'm looking for a leader and a commander-in-chief that will do the right thing to get our country back on the right track in working again. [applause] >> then ann romney, wife of mitt romney. >> what i can do is being out there representing my husband age giving people the opportunity to recognize that we need a person in the white house with leadership skills that are going to change the course of direction that our country is headed in, and i'm willing to do that. >> and later, presidential candidate representative michelle bachmann's speech.

>> now, a look at the government guarantee loan program to help green energy companies. two top executives from the bankrupt solyndra solar panel invoked their amendment rights last week before a panel of oversight negotiations. the company received a half billion dollars in loan guarantees before going bankrupt. this is about an hour and 15

minutes. >> this meeting will come to order. my colleagues, before we begin today, i'd like to address the procedures used as this hearing. i call ranking member degette yesterday evening to consult with her about today's hearing. we agreed to the following process for opening statements and questions. i will recognize myself and ranking member degette for five minute opening statements, and then each member of the committee will be able to give a two-minute opening statement. after swearing in the witnesses, the majority and minority each have 10 minutes to ask questionings of today's witnesses. this time will be allotted among members who wish to ask questions among the chafer and ranking member. we start with five minutes from majority members and minority members and repeat. i thank the ranking member for her support, and know i recognize myself for a five

minute opening. >> good morning, everybody, we convene this hearing on oversight investigations to examine what solyndras knew about its financial condition and how it represented that condition to the department of energy, the white house, and members of this committee. just two years ago after solyndras received its $535 million loan guarantee and six months after the department of energy restructured the deal, they laid off over 1,000

workers. filing for bankruptcy has been rated by the fbi, and two months ago, ceo brian harrison met with me in the offices, looked me in the eye, and assured me everything was fine and the company was on track to be cash flow positive. mr. harrison told me and other members of the committee that they were continuing to make excellent process, that it was meeting all costs and performance milestones, and that revenues were projected to nearly double in 2011. i was hoping that mr. harrison would testify today and explain to me and to this committee how he could make those representations in late july about solyndra improving prosects, when the company was on the path to bankruptcy just 30 days later. it seemed clear to me that he

knew or should have known in july that the company would restate its financial projections 20 reflect increasing market and pricing pressure on its products resulting in decreased revenue. when the committee invited them to testify at last week's hearing, solyndras's counsel said he'd appear voluntarily and answer the committee's question, however, they asked the committee to postpone their testimony by one week claiming that mr. harrison was involved in active negotiations to potentially sell the company and that an earlier sale might potentially result in a better recovery for the taxpayer at the companies' bankruptcy. i agreed to this request and provided that mr. harrison appear this week and testify. in return for postponing his testimony by one week, i was provided written assurance by

solyndra's counsel that he would answer the committee's questions. unfortunately, we won't get those answers today. mr. harrison's counsel informed the committees three days ago that they would decline to answer the committee's question and would invoke their rights under the 5th amendment to the united states constitution. i respect the witnesses' rights under the 5th amendment, but i want to make it clear today though this subcommittee's investigation will continue. we've been asking questions about this deal since february of this year. we'll get to the bottom of why this loan was pushed out to a question whose issues were a major issue to department of energy staff reviewing the loan back in 2009 in which ultimately caused its bankruptcy. we also figure out just how doe concluded that restructuring the

surrender deal positioned the u.s. taxpayer for maximum recovery. when documents produced to the committee showed that omb staff doubted that it would prevent a solyndra bankruptcy or result in greater speedometer for the government. we are certainlied to know why they allowed the taxpayers to be so board nateed to the private investors during that restructuring in violation of the clear letter of the law. what we do not no is if the executives have something to hide. with all the information complete, what did they know about their financial situation, and when did they know it, and how did they represent it to others including this committee? what did doe understand about the financial situation? did they know what they were

doing and properly monitor them being used to prop solyndra up? colleagues, these are all the questions i would have liked to have received answers from our witnesses today. congress and the american taxpayers have a right to know whether this loan guarantee was rushed out the door before it was ready for prime time, whether the administration doubled down on a bad bet with prospects, or even worse whether dwhrr -- $535 million were wasted on false or incomplete information. we intend to get those answers. that concludes my statement. with that, i recognize the ranking member, ms. degette with her opening statement. >> thank you, mr. chairman. we requested this subcommittee seek testimony from solyndra

president and ceo brian harrison. i'm pleased the subcommittee sought the testimony of mr. harrison and his colleague for today's hearing. i respect that witnesses appearing before the committee have the right to invoke their constitutional rights under the 5th amendment, but i'm disappointed that the executives here today won't be responding to questions. i believe that their testimony would greatly inform the subcommittees' investigation of the department of energy loan guarantee to solyndra, and i hope once those constitutional questions are resolved, that they will be able to return and testify voluntarily. nonetheless, mr. chairman, i'm glad that the subcommittee will continue to examine key questions relating to this the solyndra loan guarantee. as i noted in the statement at the september 14th subcommittee hearing, it's critically important that we understand a number of factors. first, whether the bush and obama administrations conducted due diligence on the loan

guarantee. whether solyndra made accurate representations to the government. whether the administration sufficiently monitored the financial status of solyndra particularly as market forces seemed to be against the company, and finally, whether the government made correct decisions about restructuring the loan. in addition to our specific concerns around this loan, it's also imper titch that the subcommittee examine issues in the broader context of how government should support development of our nation's clean energy technology industry. the united states has an unparalleled history of innovation, and at the beginning of the 21st century, it's to our long term economic parol if we seek clean energy from another development. to understand these issues, ranking member waxman and i urged you, mr. chairman, to take several additional steps in

this investigation. first, we've asked that the subcommittee convene hearings to ensure whether u.s. policies and insenttives are adequate to ensure that u.s. manufacturers can compete in the global clean energy market. we already heard testimony in our investigations that china's share of the solar market jumped from 6% in 2005 to 64% six years later, and we've heard that half of the ten largest solar panel manufacturers are now based in china. at the same time, just last week, some of the country's business leaders including the ceos of general electric and xeorox said they have a place in energy innovation and if fails to invent new technologies and new markets and new jobs, that drives the transformation and

revitalization of the $5 trillion global energy industry, we will have lost an opportunity to lead in what is arguably the largest and most pervasive technology sector in the world. accordingly, review of the solyndra loan guarantee should go hand in hand with the path our nation can take to avoid seeding leadership of the clean energy technology market to china and other countries. second, we asked chairman sterns to obtain testimonies of the representatives of the two private equity firms, the most significant investors in solyndra. private investors invested twice as much as the government and solyndra. the subcommittees should understand why solyndra attracted so much private capital and what representations the company made to private investors as well as to the government. i'm certain the chairman sees the merits of these requests,

mr. chairman, and i look forward to working together on these and other issues as the investigation continues, and i yield back the balance of my time. >> i thank the gentlelady, and now the full chairman of the energy and commerce, distinguished gentleman from michigan, mr. upton, is recognized for five minutes. >> thank you, mr. chairman. in 1963, there was a great train robbery in england, at the time, the largest heist ever, and because of the cleverness, the legend continues. the take was 2.6 pounds, that's about $7.5 million in 1963 dollars, and now we have a modern day train robbery. there's a great heist of over half a billion dollars and possibly even willing collaborators, maybe even co-conspirators of the u.s. government who rushed out a $535 million loan to solyndra.

.. no, we are not. in 2009 cylinder was the very first company to receive the department of energy loan guarantee funded with stimulus dollars. the company was touted in statements by the president of vice president secretary of energy as a model for the governments investment in green technology. and now less than two years later, solyndra has filed for bankruptcy and was raided by the fbi.

ion to stand that are two witnesses today, mr. harrison and mr. subto intend to invoke their right under the fifth amendment and will not testify. solyndra has left taxpayers holding the bag for 535 million-dollar guarantee and we we still can't get answers. last week we learned even more facts about the administration's review of the solyndra guarantee. concerns about the liquidity and cash flow were ignored. the financial model show the company would run out of cash by september of 2011, which as it turns out precisely did. omb felt pressure to complete its review in time for a groundbreaking event for the vice president and when solyndra face default at the end of last year the administration restructure the guarantee and put the taxpayers behind the investors despite concerns by omb staff that the restructuring would not need a better deal for the government and frankly in

direct contradiction to the law. these facts clearly showed the committee was right to start asking questions about solyndra when we opened up our investigation seven months ago. the administration's actions in this case are deeply troubling and so is their response to our findings. rather than engage in a dialogue about their efforts to protect the taxpayer from the risks posed by solyndra, they are arguing to the press, the clean energy and doe project that republicans on this committee have supported. they believe that this somehow undermines our basis for asking tough questions about solyndra. according to politico, quote, the obama administration officials have spent the last week digging up letters sound bites in media stories from republican lawmakers who had previously beg for clean energy spending in their districts, end quote. first let's talk about clean

energy. yes republicans do support innovation and we are uniform in our support for any solution that improves our energy security. while we may question whether the federal government is capable of selecting the most promising technologies, we have concerns about the stimulus passed in 2009 and we have concerns now that it failed to deliver the jobs that were promised. this is not a debate about the virtues of clean energy. it is a serious inquiry in to the reckless use of taxpayer dollars on a company that was known to pose serious risks for a single dime one out the door. i yield back. >> the chairman yields back. senator schakowsky the gentlelady from illinois is recognized for two minutes and as i told all the members we are trying to start reinforce that two minutes. >> thank you mr. chairman. i am saddened that a company in

which both the bush and obama department of energy saw such promise has filed for bankruptcy causing the loss of more than 100,000 -- 1000 high-tech jobs. i also seek answers to solyndra's executives about the possible misleading or incomplete assessment of the financial circumstances behind the fbi on solyndra facilities earlier this month. it is unfortunate that mr. harrison and mr. stover have elected not to testify or answer questions today so that our subcommittee together might have answers to those questions. however, i think it is important that as we work to address the solyndra solution that we don't throw the baby out with the bathwater. last night exploiting the solyndra case, this house voted to cuff the doe loan program. this is a short-sighted mistake that will undermine our ability

to compete in the global energy sector. as a the demand for energy arises the technologies will need our support to compete with businesses in china who solar industry was provided with $30 billion in government subsidies just last year. conceding the green energy rays of china would be a reckless and irreversible decision. in a political op-ed list with a group of leading american venture capitalist said that they quote energy industry needs more investor capital unquote. they insisted a program like the loan guarantee program has the resources required to fully promote our green energy economy. as we move forward with our investigation of solyndra, we should ensure that the loan guarantee program remains a priority for this congress and our country. and now i yield back the remainder of my time. >> i thank the gentlelady and the chairman emeritus of the full committee the distinguished

gentleman from texas is recognized for his opening statement for two minutes. >> thank you mr. chairman. let's set the scene. it is a sunny day in northern california. it should be a good day for a solar energy company especially a solar energy company who is just received a government guaranteed loan of over half a billion dollars. the solar energy company that has been paid a visit by the president of the united states himself. a solar energy company that president obama called the true engine of economic growth. and touted as a green energy success story, a stimulus success story and a job creating success story. as it turns out that day was not a good day for the company. instead, that company after taking a half a billion dollars of taxpayer money closed its doors, laid off over 1000 employees and declared bankruptcy. and the next week the fbi not gone the doors -- the company store to secure its files.

the question before the subcommittee today mr. chairman is, how does a company go from having the president of the united states visit it to having the fbi come in and confiscate its files? the american people deserve an answer to that question mr. chairman. the two gentlemen is that before the committee today told us in meetings with the staff that they were ready to answer questions. they had no thing to hide. they made a deal with this committee to delay the data of the hearings with the promise that when they came they would answer our questions. now, they are going to assert their fifth amendment right and refused to answer our questions because those questions, the answers to those questions, might be incriminating. however, i am sure that the members of the subcommittee would still ask those questions so at least the american people mr. chairman know what questions should be answered. with that i yield back. >> i think of the gentleman.

the gentleman from california, the ranking member of the full committee mr. waxman is recognized for five minutes. >> two weeks ago ranking member to get and i requested the senior executives from solyndra appear before our committee and i am pleased chairman stearns agreed and invited ryan harrison and bill stover ceo to testify before us today. the attorneys for mr. harrison and mr. stover have indicated that both witnesses will invoke their constitutional rights under the fifth amendment. i respect that they have his constitutional prerogative but i'm disappointed they will not answer our questions. mr. harrison was in my office in july and he said solyndra's future was bright with sales and reduction booming and i would like to know why he told me that in july and then filed for bankruptcy one month later. unfortunately i will not get an answer today. as this investigation continues

one key question is whether the department of energy made a mistake in investing in solyndra. chairman of sin and chairman stern said they already know the answer to this question. they said last week that solyndra was a quote bad bad from the beginning, end of quote. a lot of smart people thought otherwise. in march 2010, "the wall street journal" announced the ranking of the top 10 venture backed clean technology companies. solyndra was number one on that list. some very successful and experienced private venture capitalists invested over a billion dollars in solyndra, twice the support of the federal government. they obviously did not share chairman upton's views. our nest step in this investigation should to be -- to hear from these -- early this week to request a hearing with our do not private equity and

the drones capital, solyndra's to large private investors. they will be able to tell us what private investors thought about the company and its business prospects. we need to put our investigation into perspective. republicans in congress are now now -- on solyndra's great but they seem to have a case of collective amnesia. it wasn't too long ago they were urging the department of energy to award loans and loan guarantees to companies in their districts. one republican member of our committee, representative blackburn, welcomed the award of $1.6 billion loan to a japanese company in her district. another member, representative -- said he believed in the subsidies received by reliable power district to other members represented a representative bilbray and representative bono mack wrote the speaker earlier this year to support doe's loan

guarantee program. even chairman upton pressed for clean energy loans in his state. risk is an inherent component of the loan guarantee program. that is necessarily the case with a program designed to help new technologies get off the ground. the alternative is to simply give up on the important role that the government can play in supporting development of these technologies. we need to face reality and stop denying science. climate change is real and is caused by man. in the past year alone extreme weather has caused record floods, droughts and fires that have turned much of our nation into disaster areas. the future will belong to the country that recognizes the reality and invest in clean energy. china knows this and invested $30 billion in chinese solar manufactures manufacturers last year alone. we need an effect of strategy to compete. that is why ranking member dig at and i wrote the chairman

yesterday to ask for a hearing. unfortunately we seem intent on denying the future. this night republicans last night republicans voted to block funding for clean vehicles and they voted to take away funding for innovative renewable energy projects. that is not an economic plan for the future. it is a job destroying strategy that keeps us tied to a fossil fuel past. >> the gentleman yield back the balance of time. we are in opening statements in the gentleman from nebraska mr. terry is recognized for two minutes. >> thank you mr. chairman and this was to be an important hearing. as the chairman of the full committee said, we want clean jobs. we like clean energy. all of us want jobs to be created in our own districts. some of the districts mentioned by mr. waxman have very high unemployment rates.

so when you combine the two it only makes sense that members would encourage job growth in their own communities. and i think it is a tactic that is being used by the white house and now by members of this committee to reflect attention away from the real issues and that is whether or not the fundamental question was, it doe and omb and the white house was duped by solyndra, or did they ignore the information that was available to them for whatever purposes, whether it was to put green energy and a better light than it was currently in the markets for press availability glory even for more onerous, for one of its major shareholders, mr. kaiser who had 16 contacts with the white house, some of which were during important times of consideration for

solyndra's request. those are all legitimate questions that we need answered, that could have been answered here today. so, it is disturbing that when the taxpayers have been duped out of 500, over $500 million, that we are not receiving vm permission on their behalf that could result -- resolve questions and fix problems for the future and i yield back. >> the jumped meant for massachusetts is recognized for a two minute opening statement. >> last night the republican house passed a bill that would destroy the advanced technology vehicle loan program, and destroy the renewable energy loan guarantee program and destroyed thousands of jobs. and what was the rationale? they used solyndra. is this just a failed company that could not compete when faced with a 42% decline in the

place of solar energy or was wrongdoing about? we don't know the answer to that but the republican majority is recklessly exploiting this one case to advance a political agenda that is very clearly aimed at killing the solar, wind and renewable industry. it is reckless to toss around accusations of illegality on the part of the department of energy officials who agreed to restructure the solyndra loan guaranteed by putting some private investors ahead of taxpayers in the reimbursement money. i sent mr. upton and mr. stearns a letter this morning that provides a bit of a history lesson. the loan guarantee program was created at 2:30 a.m. in this room in july of 2005 in the conference between the house and senate on what would become the energy policy act of 2005. senator domenici authored the provision. largely a look lead -- nuclear power plant that's wall street had no interest in financing.

the amendment was opposed by the republican majority in the provision became law. the nuclear industry hailed the new law but soon everyone started complaining. republican members of this committee along with the nuclear industry ask cory at a doe for not getting the loan guarantee more quickly in the nuclear industry said repeatedly that if doe did not allow private investors to jump ahead of taxpayers in the reimbursement line, wall street wouldn't give them the money to build any new nuclear power plants. doe finally acceded to the nuclear industry, but it wasn't secret had to follow the right regulatory -- and we should hold hearings. >> the gentleman from pennsylvania, mr. murphy. >> thank you mr. chairman. on january of 2000 department of department of energy pushed administration unanimously rejected the solyndra loan. three weeks later the process began again. in march they said the deal is

not ready for primetime and by august doe employees were warned that they solyndra bottle had run out of cash and yet what happened next was pretty incredible. there are two major factors this is just a strongly -- not the taxpayer. it was an airtight scheme the trust of birnie madoff scheme. first solyndra executives filed with the ftc in december 2009 this initial public offering. which could ensure them a strong financial return by being able to profit from stock sales. "the new york times" said behind the pageantry of a presidential visit solyndra was robbing hemorrhaging cash so quickly that within weeks of mr. obama's visit big canceled plans to share with the public. secondly the the law and acquitted the state's taxpayers would not be subordinate to other financing and these loans but the executives and investors arranged a contract to put themselves first and january of 2011. it appears you knew the titanic

was thinking and he made sure give god to the lifeboats first. i am very disappointed we will not get answers to this today but the taxpayers deserve answers and they deserve to get their money back. i yield back. >> the gentleman yield back. the gentleman from texas mr. green is recognized for two minutes. >> thank you mr. chairman. i thought you were giving me extra time because we were slow talkers. today's hearing should be an opportunity for solyndra to clear its name however due to the ongoing investigation and the witnesses exercising their constitutional right, they will not shed any light on the events surrounding the loan guarantee or the restructuring of the loan. it is their right to do so but i'm disappointed we will not get the information. like other members of congress, in july shortly after this issue was first raised by the subcommittee our staff met with a representative of solyndra. during this meeting our office was assured solyndra the solvent and well-positioned to grow and only days later solyndra file bankruptcy. is clear they were disingenuous

at best. they misled her office and other members of the subcommittee. this leads me to believe there there's a good chance a similar -- they similarly misled investors about the process. what is important to recognize is no entity than the federal government is immune. the case of solyndra should not lead anyone to believe that our country should not stop exploring the development of alternative energy sources particularly solar. loan guarantees need to be thoroughly vetted by the them a stake is made and fraud happens we can't simply turn and run away. wrongdoing should be thoroughly and vigorously investigated for and perpetrator should be punished but we must continue to explore ways to derive energy from alternative sources. for instance 90% of israeli water is heated with solar-powered. other countries are doing this and so should we. if we are not aggressively pursuing these technologies we will be left behind. if we lose our competitive edge and our nation ceases to be the world leader in technical logical development innovation

the financial loss will be dwarfed iyer and ability to compete. while i'm shocked at the conduct of this company a welcomed the investigations by the subcommittee and the department of justice, the allegations have been made and may be in this case cannot be used as a pretext for abolishing federal programs that have enormous potential and i yield back my one second. >> at thank the gentleman for an opening statement dr. burgess is recognized for two minutes. >> i think the chairman for the recognition that i want to thank the witnesses for appearing today in do know that they are here voluntarily and not under subpoena. i mobbed as disappointed as every of america committee that we will not be all get our questions answered today as the assertion is as you assert your under -- your rights under the fifth amendment. mr. cham and we have been trying for months to get this information out of the department of energy and it is a shame this committee has been stonewalled and ashamed that this committee had to resort to subpoena in july this year in order to get this information.

and that subpoena pass on a partyline vote. i suspect there are several members on the other side of the guys that would like to have that vote back in light of what we know. yes last night the money from further disbursements of cash to these energy programs was corralled in the continuing resolution. i think that was a good thing. now i wish we could have gotten more. mr. markey, in march of 2010, at this very table 1 of your subcommittee hearings the assistant secretary of the department of energy told this committee that all of the money for the energy programs was obligated and that was 15 months ago. now we have learned that rapidly approaching the end of the fiscal year they are trying to cram eight to $10 more in the door. hell yes we took that money back that the doe will continue to corral what they are doing. i only wish we could appropriate a little bit more money and invested in crime scene tape and taken it down there and circled their building. i hope that they will be

forthcoming in the future and i hope secretary chu will be down to testify. it is only the right thing to do. you over to the taxpayers. come to our committee, bring the documents and tell us what you know. i yield back. >> the gentleman yield back. the chair recognizes the distinguished gentleman from michigan, mr. dingell, for two minutes for opening statements. >> like every other member of this committee, i am disappointed, and we feel that we should be able to ask questions from today's witnesses if we are going to look into this issue. we need to get those sides of the story and in all truth, i believe the witnesses today have much to tell us that is probably in their interest, but their behavior is fully within the constitution and like everybody else, i have to support, and protect those rights because they were wisely -- by great men. now, having said this, i am hard

put to believe there is wrongdoing on the part of the department of energy's loan program office. i believe that is documented over the course of three years and two administrations, one of each, republican and emma craddick and i believe that they have shown that due diligence was done by the loan program office and by outside engineering and marketing consultants. and i know how hard it is to get loans because i have had to support on a number of occasions constituents of buying who had need of this kind of assistance. in any event members of the subcommittee were assured earlier this year the company was driving and on track to success and it concerns me that we may have been given an accurate information. i did hope that we could hear solyndra's story at some point as we went through these matters. many of my colleagues on the subcommittee support renewable energy and it is very clear many

members on both sides of the aisle submitted maam -- letters in support of funding projects for this district. from their district, republicans and democrats and i hope that we don't take for whatever reason of this project to mean that all renewable energy products are bad investments or that the congress or that the government should not establish programs to enable the government to support good technology twos keep this country competitive. i thank you the time mr. chairman. >> i thank the gentleman. we recognize the gentlelady from tennessee for an opening statement of two minutes. >> thank you mr. chairman and welcome to our witnesses. we are pleased you were here but we are very disappointed that you are not going to answer the questions that we have on behalf

of our constituents and the american taxpayers that want to know what happened to the money. mr. harrison and mr. stover i think it is important that you realize, this hearing is not about science or energy policy. it is not about previous legislation. this hearing is about you. the department of energy and your interactions with the administration. there is a desire to be accountable. we want to be accountable to the taxpayers. we need to have the answers from you. there are plenty of questions to go-round. mr. chairman did mr. harrison plead the fifth? has interacted with the white house? did he find it necessary to complete the fifth when he visited with some of my colleagues and said you were on pace to triple your out plugged? in fact if we have learned anything about mr. harrison, it is that until this morning, he has had no problem talking about the company. in fact it makes you wonder what you are trying to hide or cover up. did your 1100 former employees know that they were going to be laid off on the morning of august 31? did they know that there was

going to be difficulty with the financial bearings of your company? did they understand that there are plenty of questions that are yet to be answered? i think another part of this story that causes concern is what is going to happen with the $783 million euo creditors that trusted you? i yield back. >> the gentlelady yields back. there was no one on the democrat side so we will move to the republican side. the gentlelady from california sue myrick is recognized for two minutes. >> thank you mr. chairman. it goes without saying like everyone else in this committee i'm very disappointed we are not going to get any answers today. we appreciate you being here today and we respect your fifth amount -- fifth amendment rights. i'm confident the committee will get to the bottom of this in the future because we want to find out exactly what went on and how this loan guarantee was handled.

and also, what was the real reason for the companies eventual failure after the federal government provided support. i would also be very interested to hear about the financial controls and turn away or lack thereof, because in september 22 "the washington post" article cited former employers who saw solyndra's employs burning through cash after receiving the federal loan guarantee. the article also mentions the inventory continued to pile up in the least space at the same time they were building their 340 million-dollar plus facility around the corner. like most americans i would be very interested to know how solyndra spent so much money so quickly. and if the company's management team really believed in the financial picture that they painted at the same time the company was evidently spy alluring -- spiraling toward rent. i would like to ask her witnesses whether they complain too anything that solyndra that would benefit the american

people? unfortunately these questions won't be answered this morning however as i said before is not the end of the investigation and i know we will get these questions answered in due time. the least we can do for the taxpayers who have been left holding the bag on this one. i.e. you back. >> the gentlelady yields back. the john shoeman from georgia dr. gingrey is recognized. >> mr. chairman want to thank you for calling today's hearing as we tend to get answers from the executives of solyndra. unfortunately despite assurances from salanter's executives and then e-mail in september 2011 that they would testify before the subcommittee i'm extremely disappointed that ceo brian harrison and cfo stover have reneged on this to provide us with answers and instead chose to invoke their constitutional rights under the fifth amendment to avoid self-incrimination. mr. chairman hundreds of millions of taxpayers are owed an explanation as to how they were swindled out of $535 million in loan guarantee

money. my constituents in northwest georgia deserve to know why it is that this company whose financial outlook in august of 2009 indicated that they would be out of cash in september of 2011? in fact the time they could declare bankruptcy and get received a hefty loan and a rush to judgment about unproven technology. yet today we hear nothing. even more frustrating than a carolyn this is -- carelessness of which solyndra acted after putting taxpayers on hope for over half a billion dollars in the fact that these executives sitting before us today had the audacity to tell members of this subcommittee two months ago that solyndra only to see the doors close leaving another 1000 people at work. as we all know who solyndra is a subject of a criminal investigation by the fbi. mr. chairman my constituents mike constituents would like to know the answers to several questions. how did solyndra managed to obtain this loan in the first place given the shaky financial outlook? what indirection did solyndra have with the white house during

this process? how did solyndra restructure the finances in february of this year and obtain obama administration's approval to return $75 million to private investors before taxpayers were paid back? was this a violation of federal law? mr. chairman these questions will be answered with nothing but silence as you can see. this subcommittee deserves better and quite frankly the american people deserve better. >> and the gentleman from colorado is recognized for his opening statement for two minutes. >> thank you mr. chairman and i thank you for being here today. you receive the full faith and credit of the united states. the american people deserve answers. what went wrong, what could have been done? to the lobby is no? was information hidden from the department of energy? did the department of energy paint a rosy picture, hiding from congress? half a billion dollars was taken from the american people. they won't get it back.

this morning this congress passed a continuing resolution and you have managed to do something that few congresses have. you have killed a program. we don't have answers, but we will continue to ask. we will restore the full faith and credit of this country and the answers that they deserved. ideal back. >> the gentleman yield back and we recognize the gentleman from virginia for an opening statement for two minutes. >> i respect your decision to invoke your constitutional fifth amendment rights. that stated the american people deserve to know the answers to a lot of questions. after all this is their money we are talking about. if i had the opportunity to ask questions which would be answered today, i would ask in light of the fact that the justice department got a search warrant for your records shortly after the unflattering e-mails from within the obama administration were given to this committee, do you feel you

have been unfairly targeted by the obama administration's justice department in order to keep you from testifying here today? or, do you believe the justice department's investigainvestiga tion into this matter is a smokescreen by the administration to shield the administrations gross negligence and giving you and possibly others questionable loan guarantees in the first place? or, do you believe it is a smokescreen for the administration's decision to subordinate $75 million in taxpayer money against the clear meaning of law? secondly, did you or anyone of your directors speak with anyone and particularly legal counsel at the department of energy and attempt to persuade or educate them that there was a legal theory that would allow subordination of taxpayer loan guarantee money? also i would like to know, did you have knowledge of anyone else possibly speaking to particularly legal counsel at the department of energy in an attempt to persuade or educate

them that there was a legal theory that would allow such subordination? i would also have inquired whether you could affirmatively state that you don't have any knowledge of representatives from argonaut or madrone speaking to anyone particularly legal counsel of the department of energy in an attempt to persuade or educate them that there was a legal theory that would allow subordination. thank you mr. chairman and i yield back. >> the jumped bond yields back and we have completed our opening statements at this point and now we will move to the witnesses. mr. sullivan is recognized for two minutes for an opening statement. >> thank you mr. chairman. this is a critical hearing to examine solyndra's representation on its financial status to this committee and the department of energy. mr. harrison on july 212 came to my office to meet with me, and i quote from your meeting request to my office to discuss the solyndra's continue success in

the global marketplace. i guess a lot can change in five weeks. in our meeting you like to me about the financial health of your come for me because just five weeks later your company was bankrupt. what happened? today i want to know how you are now bankrupt company got 535 million taxpayer-funded loan guarantee from doe and they also want to know how your chief financial officer mr. stover, dupe to the obama administration and others on the financial health of your company? the american people deserve answers because they footed the bill. did you know when you are meeting with me and other members that your company would be bankrupt five weeks after your business? as a longtime critic of the solyndra loan guarantee i want to know what happened. americans deserve to know their taxpayer fax taxpayer dollars are spent wisely. >> at this point we are complete with their opening statements and we will move darwinist is. my understanding is mr. harrison and mr. stover authorized their

counsel to advise the committee that they will rely on their constitutional right not to testify in today's hearing. i believe this privilege should be personally exercise before the members as we have done in the past, and that is why we have requested mr. harrison and mr. stover's appearance today. i request that given the importance of their testimony, they reconsider their decision to invoke the fifth amendment rights. especially because the american people deserve answers about what happened to half a billion dollars of their money. because mr. harrison met with many of us and made statements to us that we think we should answer our questions, they should answer our questions now. in addition both of you and your company, solyndra, it made statements that you don't know of any wrongdoing and that you are corporate and with the department of justice. if you are not aware of any wrongdoing, how can you plead the fifth amendment and say that answers to our questions will

expose you to criminal liability? i ask you today, both of you, to reconsider. i am now going to place both witnesses under oath. mr. harrison you are aware that the subcommittee is holding an investigative hearing and in doing so we have the practice of taking testimony under oath. do you have any objection to being under oath during your testimony? >> no. >> mr. stover you are aware that the subcommittee is holding an investigative hearing. and in doing so we have the practice of taking testimony under oath. do you have any objection to being under oath during her testimony? >> no. >> the chair advises you under the rules of the house and the rules of the committee, you were entitled to be advised by counsel or could do you desire to be advised by counsel during your testimony today? mr. harrison? vs. >> mr. stover? >> yes. >> in that case would you please identify your counsel for the record each of you. mr. harrison please identify your attorney by name.

>> mr. walter browne. >> mr. stover? [inaudible] >> thank you. at this time would you please rise and rate your -- right hand and i will swear you in. and i need you to make sure your mic is on. do you both swear that the testimony that you are about to give is the whole truth and nothing but the truth so help you god? thank you mr. harrison and thank you mr. stover. the chairman recognizes himself for questioning of the witnesses. and i should read less than two minutes, hopefully. mr. harrison and mr. stover, with every document and piece of information you submitted to the department of energy and the white house office of management and budget of the united states congress and your investors accurate, complete and to the best of your knowledge? >> mr. chairman i have tremendous respect for the

subcommittee and the important oversight role that it plays. as as much as i wish to be able to answer the members questions, i have been advised by my counsel that it is the better course for me to assert my constitutional right to decline to answer questions under the fifth amendment. while i hope to have an opportunity to assist this committee's inquiry in the future, on the advice of my attorney, i must respectfully decline to answer any questions put forth to me by this committee. >> mr. stover? >> mr. chairman from the advice of my counsel i must invoke the privilege of afforded by the fifth amendment to the u.s. constitution and i respectfully decline to answer any questions put to me by this committee and subcommittee. i have great respect for the crucial oversight role that congress place in our democracy. i trust that the members of the subcommittee similarly have great respect for the privilege of afforded every citizen by the fifth amendment. >> mr. stover knowing the financial conditions of the company in mid-july, were you aware of mr. harrison coming to

congress and painting such a rosy picture of the company? did you review all the financial information being presented to members of congress, the department of energy and omb and did you discuss it with mr. harrison? >> on the advice of my counsel, invoke the privilege afforded by the fifth amendment to the u.s. constitution and i respectfully decline to answer any questions. >> my time is expired. we will now go to the gentleman from texas, mr. barton who is recognized for a minute and a half. i'm sorry. we recognized -- i think what we are going to do is go five minutes on the side in five minutes on this site so mr. barton you are recognized for a minute and they have. >> before my time starts can i inquire the chair if the witness -- witnesses were given an opportunity to give an opening statement they didn't but where they offer that? >> no, they were not.

>> they were not offered an opportunity? >> they are certainly welcome to have the opportunity to speak today. >> i would ask unanimous consent we give them the opportunity to give a statement if either of them wish to speak. >> normally we give witnesses an opportunity. >> it is my understanding mr. barton that when you are taking the fifth, there is no opportunity for opening statements. the gentlelady. >> if the gentleman would yield. the way the subcommittee has operated for, as you know mr. chairman emeritus, for the last number of years is when witnesses prepared to take the fifth they generally don't give an opening statement that i would certainly have no objection if either of these witnesses decided to do so. >> i just think we should give them that opportunity to be fair and balanced as they say.

>> mr. barton, we are told by the council that met with our counsel, they did not wish to give an opening statement and that is what we are hearing from their counsel. >> we were also told that they were going to answer questions. >> well i think it is a fine point, but i think judging from the council's reaction here, they do not wish to give opening statements and i think if you look at their nodding heads i think that should be apparent to you they do not wish to give opening statements. do you wish to give an opening statement? >> i wish to ask questions mr. chairman. >> go ahead and ask your questions, yes. >> i want to ask mr. harrison if he thinks the american people who have invested over a half a billion dollars deserve to know what happened to that money? >> on the advice of my counsel, invoke the privilege afforded to me by the fifth amendment of the constitution and i respectfully decline to answer any questions. >> i want to ask the same question to mr. stover.

>> on the advice of my counsel i invoke the privilege afforded by the fifth amendment to the u.s. constitution. i respectfully decline to answer any questions. >> i don't understand what is self-incriminating about a yes or no answers to whether the american people deserve to know what happened over half a billion dollars of their money but then i'm not a defense lawyer mr. chairman. i would secondly like to know what changed between january of 2009 when the bush administration and doe rejected the loan application in march of 2000 and when the obama administration reversed course and approved this half a billion dollar loan? mr. harrison would you care to answer that question? >> on the advice of my counsel i invoke the privilege afforded to me by the fifth amendment of the constitution of the united states and i respectfully decline to answer any the questions. >> i would like to add as the

same question of mr. stover. >> on the advice of counsel i invoke the privilege afforded to me by the fifth amendment of the constitution and respectfully decline to answer any question. >> and mr. chairman i'm puzzled by the assertion of the right of self-incrimination which is the only thing that changes the outcome is in the white house and that is certainly not illegal for the american people to decide to put a new president and the white house. i've got time for one more question. is it not true mr. harrison that the former ceo and other investors of solyndra met frequently with officials in the obama white house? >> on the advice of my counsel i invoke the privilege afforded to me by the fifth amendment of the constitution of the united states and i respectfully decline to answer any questions. >> the gentleman's time has expired. >> i would like mr. stover to be given an opportunity to answer that question. >> on the vice of my counsel i

invoke the privilege afforded by the fifth amendment of the u.s. constitution and respectfully decline to answer the question. >> again mr. chairman i think it is incriminating in going to see folks in the white house. i will say this mr. chairman. i hope on a bipartisan basis, we get to the bottom of this and i hope our staffs look at the constitutionality of invoking a broad privilege when in fact there doesn't appear to be any reason for these gentlemen not to answer the questions of the subcommittee. >> i i i thank the gentleman and the gentleman from nebraska is recognized for one minute. >> the thank you mr. chairman. mr. harrison and mr. stover, did you or someone on solyndra's at the half discuss with investor mr. kaiser of the perilous financial position before february 23, 2011 when the doe and omb agreed to subordinate the united states decision to recover funds and a bankruptcy

to embezzlers like mr. kaiser? mr. harrison? >> on the advice of my counsel i invoke the privilege afforded to me by the fifth amendment of the united united states constitution and i respectfully decline to answer. >> mr. stover? >> on the vice of my counsel i invoke the privilege afforded by the fifth amendment of of the u.s. constitution and respectfully decline to answer the question. >> okay. >> the gentleman yields back. the gentlelady and ranking member is recognized for two minutes. >> five. >> five minutes. >> based on the answers that you have given to the other members of this committee, mr. harrison i would like to ask you first. is my understanding that upon the advice of counsel you intend to exercise her fifth amendment right to not answer any questions on any subject put to you by this committee today. is that correct? >> yes. >> mr. stover i'm going to ask you the same question. based on your responses to the

questions asked to you by the other members of this committee it is your intention based on the advice of your counsel that you do not intend to answer any questions based on exercise of your fifth amendment right. is that correct? >> yes. >> to both of the gentleman i would say these are important constitutional rights that we all treasure and while we are frustrated today particularly because you told a number of us in august that the company was strong, that it was doing well and this was only five weeks before the bankruptcy we would like to get to the bottom of that. we have the at most respect for re bunited states constitution ed n tt i ecli question i am not asking you are compelling you to be witness against yourself nor my depriving you of life, liberty or property with -- property without due process of law. what is your plan to pay back the taxpayers? $535 million you owe them and

when we pay it back? mr. harrison. >> on the advice of my counsel i invoke the privilege afforded to me by the fifth amendment of the united states constitution and i respectfully decline to answer any questions. >> on the advice of my counsel i invoke the privilege afforded by the fifth amendment to the u.s. constitution and i respectfully decline to answer any questions. >> i thank adjustment and now we recognize dr. burgess the gentleman from texas for one minute. >> thank you mr. chairman. again i thank the gentlemen for being here. a question for both of you mr. harrison mr. stover in today's "new york times" article about this problem administration officials like -- someone may curse question whether the firm's executives cover-up their precarious financial condition. an aide to a top white house official valerie jarrett was met with three times to push for

laws. would you be willing to provide to this committee communications between yourselves or your senior executives with members of the west wing of the white house specifically ms. gerrit, carol browner and rahm emanuel or their staffs? >> on the vice of my counsel i invoke the privilege afforded to me by the fifth amendment of the united states constitution and i respectfully decline to answer any questions. >> mr. stover same question. >> on the vice of my counsel i invoke and respectfully decline to answer any questions. >> the gentleman's time has expired. the gentlelady from tennessee is recognized for one minute. >> the thank you mr. chairman into both mr. harrison and mr. stover what we would like to know is who was the first in your company to realize that you were not going to be profitable and when it became aware was this discussed at a board meeting, and were doe staff

members present? were white house employees or administration appointees present for such board meetings, and prior to your bankruptcy filing, and you are a awareness of your financial straits, did you issue bonuses to your senior management, your leadership team or your lord and was this discussed as an agenda item in a board meeting? >> on the advice of my counsel i invoke the privilege afforded to me by the fifth amendment of the united states constitution and i respectfully decline to answer any questions. >> mr. stover? >> on advice of my counsel i invoke the privilege afforded by the fifth amendment to the u.s. constitution and respectfully decline to answer any questions. >> i yield back. >> the gentlelady yields back. the gentlelady -- the gentleman mr. griffin is recognized. >> gentleman i would like to know what role you outplayed in the subordination and whether or

not your company or agents of your company came up with a legal theory that allows subordination in direct conflict with what the statute passed by this congress says? if each of you could answer that i would appreciate a. >> on the advice of my counsel i invoke the privilege afforded to me by the fifth amendment of the u.s. constitution and i respectfully decline to answer any questions. >> on advice of my counsel i invoke the privilege afforded by the fifth amendment to the u.s. constitution and respectfully decline to answer the question. >> the thank you mr. chairman. i yield back. >> i understand that when i did my questions we had one minute left on our side and i will ask this question for mr. harrison. in relation to solyndra's february 2011 restructuring agreement with doe, did anyone from doe or omb and for once discuss with you the issue that subordinating taxpayers to solyndra's by mary investors was a violation of the law?

mr. harrison? >> on advice of my counsel i invoke the privilege afforded to me by the fifth amendment of the united states constitution and i respectfully decline to answer any questions. >> we have completed our questions on this side and we recognize the minority for five minutes. their ranking member, mr. waxman is recognized for five minutes. >> thank you very much mr. chairman. the chairman could have easily have asked a cue question ascertain whether the fifth amendment was going to be asserted. that is consistent with other situation which we have face witnesses invoking the fifth amendment rights. what we have instead here today is questions that seem designed to create catchy sound bytes rather than establish a clear record regarding the the witnesses intent to assert their constitutional rights, and these questions constitute witness

badgering that is both unseemly and inconsistent with a long line of precedent under which courts have recognized that protections of the fifth amendment would be meaningless if rustic users could require criminal defendants to repeatedly assert their privilege in the face of incriminating questions. according to a supreme court ruling it is considered prosecutorial misconduct when the government calls witnesses in a conscious and flagrant attempt to build its case out of inferences arising from the use of testimonial privilege. the federal appeals court has written that misconduct may arise at the prosecution continues to question a witness once there is consistent refusal and which legitimate or otherwise has become apparent. so i just wanted to take this moment to assert the fact that i think it is unseemly and inappropriate for members to be

asking questions that we know you will not answer. you do have a privilege under the u.s. constitution not to give this testimony and. should you answer any of these questions, you may well then have waived your rights and so therefore it seems to me when members ask questions like when are you going to pay back the money, when did you tell the white house this information, when did you tell your board about it? when did you subordinate the from others? that to me is an improper line of questioning. they are sound bites and they are attempts not to get real answers. i think our committee is better than this. this is an important inquiry. we must find out what happened to ensure that similar companies do not suffer the same fate and let's not put a desire for media attention above our duty to conduct fair and balanced investigations into matters of national importance. i yield back my 10.

>> with a distinguished former chairman deal for a question to himself? >> i will not take the fifth amendment. >> okay, good. i was told that you appeared on "the today show" this morning and said that the committee deserved to have the right to ask questions and you wanted to ask questions. was i told that erroneously? >> you are told that erroneously. i did not appear on "the today show." i came to this hearing directly from home but i told the press and i have told everyone else that has asked me that in fact i requested the witnesses be brought to our committee because i do have questions i would like to ask them and i think we are entitled to get answers to these questions. but we do have the constitution of the united states and there may be other ways we can elicit some of the information, and i'm willing to -- excuse me it is my time. i'm willing to work with the chairman of the committee and the members of this committee to

pursue other ways to get the information, but if they have asserted the fifth amendment there is nothing else we can do and to badger them with questions that are simply sound bites for the press does not strike me as a fairway or a balanced way for the committee to conduct its business. >> the gentleman yields back the balance of his time. >> i do. >> i would point out to the ranking member that this format today was agreed to by your side, the ranking member, ms. degette and i both. >> at the gentleman revealed. just because i agreed to the format doesn't mean i agree to the witnesses being badgered by sound bite questions. >> i am just saying the format we did i just point that out. let me move to close here. mr. harrison, let's see. mr. harrison will you invoke your fifth amendment rights in response to all questions here

today? bes. >> then you are excused from the witness table at this time but i advise you that you remain subject to the process of the committee and if the committee needs are such then we may recall you. you may leave. mr. stover, let me be clear mr. stover are you refusing to answer questions on the basis of the protection afforded to you under the fifth amendment of the constitution? yes or no? can the press step down a little bit so we can see each other? do you want me to repeat the question for you? that may be clear, you refusing to answer the question on the basis of the protections afforded to under the fifth amendment to the united states constitution? bes. >> mr. stover will you invoke your fifth amana writes in response to all the questions here today? bes. >> then you are excused from the witness table at the time but i advise you to remain subject to the process of the committee and

if the committees need is such then we may call you. with that my colleagues i ask unanimous consent to enter document, the the document and majority supplemental memo. no objections. i thank the members for coming today and for the questions. i'm sorry that solyndra executives were unable to provide any answers. nonetheless the committees investigations will continue to go forward. the committee stands three document request this week went to the department of energy seeking their communications with the white house on solyndra and two to solyndra's argonaut and the drone. we will get to the bottom of what the administration understood about solyndra's financial and why they continue to believe solyndra was a good bet for five and 35 million-dollar in taxerpayer money even though it omb about the very same financial problems

that resulted in solyndra's bankruptcy two years later. we also press forward in trying to understand the political and time pressures that may have pushed this loan out the door before it was ready for prime-time. and despite mr. harrison's mr. stover's inability to answer questions day we will determine whether solyndra played any part in the government's failure to accurately assess the risks this deal presented to the government and the united states taxpayers. >> mr. chairman? if you will yield. >> i will yield. >> the chairman has stated about the continuing document request that is outstanding. i'm wondering if the chairman has refused a request that mr. waxman and i have made about having general hearings about our policies and incentives about whether u.s. manufacturers can compete in the global clean energy market and also their request that mr. waxman and i had a to obtain the testimony of

the representatives of arc and not and madrone do to private