been educated not to be but there has to be a bottom rung and god bless them that they're do that job at the bottom rung. >> let me share two examples. you have made your agricultural operations in california that have now moved to mexico to grow produce to sell in the united states. and what's ironic is that many of the people who oppose immigration reform support border security. what i would like to see is someone explain to me how it's good in the national security interest of this country to start growing the food of this country outside of our borders. . .

there are sectors of the economy that are critical that cannot find an american worker willing to do that work. that work is critical for the services they produce. they give the underpinnings for the higher-paying jobs. maria taking care of the hotel

room leaves to give them the ability to attract other people. the list goes on and on. talk to farmers in this country. people do not think of new jersey as the garden state. that is not only our name. we do have a significant gardening interests. people tell us we have to get the immigration situation resolved because they cannot find people to pull crops from the field. there are whole sectors of our economy where you cannot find people willing to do those jobs. those jobs are the underpinnings for higher-paying jobs. if you do not want to depress the wages of all workers in the united states, you do not want an underclass that can be exploited with depressed wages. you want to have those people out of the darkness, into the

light, fully engaged, paying taxes. you want them fully engaged in the economy where they will contribute and you will not see depression of wages for other sectors. that is why the economy is not an obstacle for reform and why it should be a catalyst for reform. >> we are trying to build a robust economy of the future. you cannot do that on top of a broken immigration system. it is essential to our economic future to do this well. >> even with the robust deportations, there are still 11 million undocumented workers who will be here. >> there are more undocumented people in the united states than our citizens of -- are citizens

of hungary. >> today is the future. [speaking spanish] [laughter] today we are all here because of the importance of the law for the whole community. >> explain to me why during the first year of years of the obama administration when you were in the majority, why did we not get anything specifically brought to all of these different organizations? [applause] why did we not hear the president -- i thought his speech the other day was well-

presented. why did we not hear the president say to pass the immigration bill in the first two years? >> i was in the president in multiple meetings. i have heard him say it many times in front of the members of congress. every immigration reform since 1954 has been bipartisan and has needed members from both side of the aisle to get over the finish line. we have never had 100% of the democratic caucus although we have delivered 95% for the dream act. i have heard the president say this to the entire assembled republican caucus. he has said he just needs a hand full of those who have voted before.

we do not have the support that we need. >> two things. i heard the audience applauded, but there is a reality. the reality is that when barack obama took office in january of 2009, this country was on the verge of a new depression. no one fully understood the nature of it. if you look in the hbo movie "too big to fail," it is clear the nation was on the edge of another depression. the focus is how to get the economy working for all americans and stopped from going into a depression. in that process, how do we assure that every american has health care? as we're trying to meet those challenges in the senate, even with a majority,

you need 60 votes. 50% of a group plus one makes a majority. in the senate, that is not quite the case. you have several senators who would be very opposed to immigration reform. i remember entering the senate and hearing my colleagues talk about "those people." i asked if they were referring to me because i think i am part of "those people." one senator willing to filibuster creates a hurdle where 60 of 100 has to be achieved. that is the reality whether we like it or not. the bottom line is we do not have 60 votes. we only had 60 votes for a gleaming moment. we lost senator kennedy and that

seat as well. unless we get 60 votes, if you cannot pass anything. a combination of the challenges this president met -- i have been putting on pressure in public and private. i have to recognize he had a nation on the verge of going into a depression. that would not have served anyone well. that was focus number one. >> that was obviously a consideration. we did pass the energy bill without republicans. we did pass a health care bill without republicans. i think it does a disservice to our community and what has been established as a civil rights issue about immigration reform

to say it must be bipartisan. we have not said on any other issue that needs to be bipartisan. when all hope was lost for reforming our health care system, when there was no public support -- little or no public support, the president said [ speaking spanish] we would have liked to have gotten it done. a lot of the disillusionment is that we did not see the champion we sent to the white house to be a champion on immigration for us. [applause] i say that because 2 million more latinos voted in 2008 and 2004. we carried nevada, new mexico,

florida, colorado. nearly 70% of latinos voted. one of the principal issues that generated enthusiasm for the presidency was the hope that one day, the least among us, the immigrants, the one always being abused, that we would have a chance to lift him up so that he would live as all of us in this audience live in america. that is where we were at. i am going to work very hard to get this president reelected president of the united states of america. we have to put things in context. i watched you at the debate. if you watched the debate, you know that we have no friends in that debate.

part of it is challenging friends. it is difficult. you do not wake up in the morning to challenge a friend. you wake up to love. that is part of human nature. it is difficult. we challenged the friends. you know what? [speaking spanish] i want to be appreciative of that also. [applause] >> i want to give you a chance to respond to that. i want to hear your thoughts on it. >> these are conversations we have in the family. they are incredibly important. we understand how vital it is to the community and country. i have sat in meetings on a lot

of things where people say that if we would just speak about a more, we could bring the country with us. the man gives a really good speech. he is a forceful leader. he was elected president. he was not made king. he does not have the capacity by himself to fulfill the promise. he is serious about the commitment. but it will take all of us to get there. it will take some support on the other side of the aisle. >> the national discourse right now is amnesty. how do you change the discussion? you say it would be good for the economy. it is a way of recognizing there is a huge country inside the country with people who are

potentially invisible. what steps could america take to change the dialogue and make the discourse more about human beings and their reality rather than all of these other words that are tainted with other thoughts when you use them? >> i do not think it should be about human beings. i think it should be about the consequences of the failure to act. 80% of the 17,000 law enforcement agencies in the united states have vacancies they have trouble filling. the fbi and dea have lowered their drugs and gang standards. we now have shortages in virtually every major metropolitan city in the state of texas. they cannibalize off of each other. the senator talked about when there are not people to take the jobs and serve your meals for

the day. i would like to point out to people that when there is someone who has been in a gang who is now working in your local police department or 14% of the airline workers are eligible for retirement when we are in several wars and have an aging air force fleet, at the same time, 51% of the united states customs and border patrol agents are eligible for retirement next year. the next time someone says that we need to put more boots in the gramm, -- war boots on the ground, -- every time someone says we need to put more boots on the ground, ask will they region where they will come from. every time we hire more, some retired. >> how do you deal with this issue in your daily life?

>> when you come into this country and are an illegal immigrant, you live day by day. you try to make it day-by-day. i have tried to be an example of that is possible. this is a country where you can make your dreams come true. even in the midst of not knowing what will happen tomorrow, in the midst of your parents being deported, not knowing if you are going to get legal status or how you will go about it. today just by listening to you all, i want to believe this is more possible than ever. 1978 was a different story.

thanks to ronald reagan i am here and many of us are here. that is the honest truth. i would love for that to continue. this is a country where everyone would definitely come in and give their best and try to make the best of what they have. >> a lot of people think there are a ton of people here illegally. the border is anything but safe. i have been to the border in arizona. the ranchers say they have the right not to have hundreds of people coming through their property, maybe being led by someone with an ak-47 who may have topped off someone's head back in mexico. they could be related to the narco-terrorism we're seeing back in mexico. they say every country has the

right to have its border closed. they are doing in europe. yet we cannot get past that. we have talked about it. it is on at 11:25 on sunday. >> it is a great show. >> you were on yesterday, by the way. the senator was poetic yesterday on "in focus." it seems there are almost two different countries on immigration. the ranchers have the right to say they do not 100 the people being brought in by guys who have chalked people's heads off. >> i have been doing this for 25 years. there is a way where the debate

is all on one side. when you talk about amnesty, people use that word of the time. nobody has proposed anything resembling an amnesty. but we have to deal with that contention all the time. it is not based on the facts. it is a tool. nobody has proposed that. if you look at the metrics, we're trying to have this debate based on the metrics, something empirical. there are more resources of the border than ever in our history. crime in border communities, four of the 10 cities with the lowest level of violence are on the border. officials are raising the flag that we have to do more at the border and control crime in el paso. the congressman is saying crime in el paso is low.

if you look at the metrics, you will see we're doing a better job of the border than ever in our history. for those who say we have to take care of the border before i am willing to have a conversation about immigration reform, our conversation -- response is to get started. we are doing our job at the border. let's reform the law so we have a rational system. we do not need people to debate this out of the goodness of their hearts. you have to do it for the undocumented person, for the dream act student whose story is so compelling. do it for the sake of the country. this is what we need to get on solid economic footing in this country. [applause] >> i go back to the original premise we have to refrain the debate. -- we have to refraime the debate. when you look at the metrics, let's talk about that.

the fbi says apostle is the second city in the united states. recently, "usa today" came out with a headline story about border violence. according to the fbi data, you are far more likely to be a victim of crime 50 miles inland from the border than you are on the border. in texas, we have a different situation. we do have a river that separates us from mexico. in el paso and parts of the rio grande valley, they have put the fence of two miles inland. creates a no man's land. it is hard to get insurance there. it is hard for a farmer and rancher to get their cattle to water in the rio grande. we have logistical problems.

that is why you have to look at it. when the fence was built, we tried asking if they have considered the intended and unintended consequences. they said they would build it and consider the ramifications. it was full steam ahead and they built a thing. now we have spent billions of dollars on the border fence. illegal entries are higher now than before when the fence was built. >> i agree you have to change the debate. economic issues, national security, our friends on the other side talk about security. i cannot secure america if i do not know who is here to pursue the american dream or here to do us harm. my bill would have that be done. economics for all of the different iterations have been discussed.

i have to be honest. next year, there is a national conversation. it is called an election. elections have consequences. elections have consequences in life. i can tell you that. unless there are 218 votes in the house of representatives to pass something and 60 votes in the senate, we can aspire all we want, but we will not achieve those votes. if this is the civil rights issue of our time, which i believe it is, then each and every latino in the country should be asking anyone from the candidates for president on either side of the aisle to the candidates for the senate and the house the question you asked all of the republican

candidates the other night. the question is simple. what is your position on dealing with the 11 million people who are undocumented in this country after we seal the border? if you put any candidate to the test and say that your vote will determine how you vote, let me tell you something. we will change the dynamics and the language. i do not believe our community is there yet. when our community talks to candidates, they do not press them as they should. if they did and made it clear, any presidential candidate who wants to win the election, it will come down to the latino community in this country. in state after state, the electoral votes needed are

overwhelmingly where the latino population is. in other states that are more marginal for the senate and house, it will be critical. if we as a community believe this and that it is the civil rights issue of our time, we need to do what others in the nation's history did in order to ensure success and triumph. that is putting everyone to the test as the number one priority. >> i think that will be a very important thing. we have worked hard to make sure that we can speak. we challenged our own president and party. we have challenged our own leadership. there is this huge silence on the other side of anyone challenging the republican party from within. i am clear about the

consequences and where i am going to be in the next election. having challenged my party, i have heard a deafening silence from the other side. when you ask michele bachmann about immigration, if she says they have to learn english like they did in the 1950's. they have to know about the constitution like they did in the 1950's. i have to ask if she has ever been to the citizenship swearing in. she is still in the 1950's and we need to bring her into the modern times. at the same time, we have to understand our role and responsibility. i want to say something that is critical about what we're going

through. it's our community is going to come out to vote, there have to be leaders with credibility for that community can that region that can engage them -- for that community that can engage them or they will stay home. i saw a tv anchors say we have to wait for congress to act. i listened to people from the media and [speaking spanish] [laughter] i heard politicians say there is nothing we can do. then i heard the eloquence and the firmness with which bob

menendez argued for the undocumented in those rooms, and i heard his voice. [applause] part of what we have to understand is that there needs to be some separation. we have to challenge our party and every structure. civil rights is more important than a political party. political parties are not going to give way to civil rights unless challenged by people. i said to myself that i wanted to be unreliable. [speaking spanish] reliable, right? [laughter] your reliable and you give the keynote speech. you are reliable and you go to a state dinner. i do not want that kind of reliability. we need leaders who are unreliable to the power structures in washington, d.c.,

but responsible to the power structures in the community that they represent. [applause] sitting here at this table, [ speaking spanish] to help the 10 million become american citizens. they are out there waiting for you. 500,000 latinos turn 18 every year. are you engaging them and making sure they are graduating from high school and registering to vote and committed to the movement? the premise of today is immigration reform and the dream act. the dream act is immigration reform. if you allow it, they will separate us. they will say for your children, ok. but for the parents, nothing. that is unacceptable in

comprehensive immigration reform and something we should never allow to happen. [applause] >> there are phases and steps. >> we have taken those steps. we are take those steps when they are available to us. we should always understand -- i introduced the comprehensive immigration bill with kennedy. mccain said [speaking spanish] that is the reality. the dream act was an integral part of comprehensive immigration reform. as we move forward, we cannot allow people to divide our community. i am excited and happy. when i saw that the administration was changing its view of how they were going to

deal with young people, i read they will not be deported. i am thankful. i am thankful to the president and this administration. >> i am curious. who else is unreliable? [laughter] >> i am not reliable? >> you are very unreliable. [laughter] he is unreliable. [laughter] [applause] >> i have not seen that limousine ride yet. >> luis is right about one thing. you are right about a lot of things. [laughter] >> [speaking spanish]

[laughter] >> luis is right about this last thing. i want to refocus. we should take steps. here is the deal. the same power structures are very happy to divide us. they are very happy to take children under the dream act and say yes to them and note to everyone else. they are happy to say possibly with agricultural workers. note to everyone else. they are happy to say let's get the high-tech visas change but forget about everything else. -- they are happy to see possibly with agricultural workers but no to everyone else. we cannot get comprehensive if all the elements crumble off. the challenge is to take opportunities when they come legitimately to give people relief. by the same token, if you want

to leave millions woman, have ourselves be divided. there is a reason for the statement [speaking spanish] it is critical at the end of the day. >> i have to say the guy i work for was a community organizer. he understands as well as anybody in this room how important is to keep everybody's feet to the fire. you should do that. that is absolutely important to the process. all the things that matter like immigration and jobs, you hear the president say over and over again that people elected officials to come to this town and move things forward and make things change. this is one of those issues. jobs is another one of those issues. he is out there fighting every day to make sure we can get the ball across the finish line.

>> i have had more off the record conversations with the president that i think i have had with any other leader. he does hear from people like me what the community is saying and thinking. he hears it also from the congressmen and everyday people invited to white house. that really does break the mold of how other presidents in the past have been. i have been with the president a number of times. i have been able to tell him things that i hear on the street. people are frustrated. there is one issue i want to talk to you about. it seems to me there are always other interests on both sides of the equation like work permits, bringing people in. some unions will be upset if we

bring in people and give them work permits. the other side is that we cannot talk about immigration reform unless the border is 100% closed. cecilia, you have bounced republicans exactly what they require to make a closed border. the list changes the next week. on both sides it seems that unless you are unreliable, the reliable side of both sides does not have interest in seeing real immigration reform for their own particular a small-minded -- for their own particular, small- minded reasons. >> we need to make clear to everyone that there are consequences. i can speak for myself and members of the hispanic congressional caucus. i am pleased and honored to be able to say that i have been in

the room with senator bob menendez. i have seen his work. he is alone in the senate. i have at least 20 people with me. it is easier not being the sole person. as a community of people, it is important. i am trying to explain a situation. i came to the congress in the first thing i did was put in legislation to freeze everyone is sour. i came to change this place. that is pretty unreliable. to the extent our community understands that this is a civil rights issue, people will have to vote and elect legislators of the local and every level. this is a defining moment.

ask yourself how much you did and how much importance you give this priority in your life as a civil-rights issue. we have a great group of people working in washington. i enjoyed being on your program because you bring out a lot of the issues that are important to our community. i enjoy working with everyone on the panel to make sure we get comprehensive reform. there is an election next november. it will be the best instrument and vehicle of achieving the goal of comprehensive reform. how do you get them the green card and work permits so that they are here legitimately in the united states of america? how do we get the other millions of people to be integrated fully into the fabric of our society?

the best example -- [speaking spanish] i read his biography. i love your music. i know there is a social music -- message in your music. i want to thank you for that. >> we have to of border security first to have immigration reform. i will challenge that as well. if you have a pipe that bursts in your kitchen, we're sending in more people as a country with mops. you have to fix the broken pipe. you can build as many fixes as you want, but it does not stop the need for people to come

here because we need them to run our economy. we can either pass immigration reform and get the workers we need or we can follow the way of russia. its population decreases by 700,000 people every year. they have adopted a new federal holiday. it is a national day of procreation. [laughter] they go and do their patriotic duty. [laughter] >> he has just signed up for a 15-city tour of russia. [laughter] >> i do not know where to go after that. [laughter] >> babies are going to be made. [laughter]

>> let's look at mexico. in the 1960's, the mexican fertility rate was -- >> we're talking about more fertility? [laughter] they are telling me to wrap up. >> the average adult female in mexico in 1960's was having seven children. today it is two. the irony is defense we're building to keep people out, those people will stop coming in because of all the changes in mexico. >> but there is still the issue of people having the right of not having people trampling through their property on the border. i have to wrap it up. i have to ask for some final thoughts. >> we need to give the dreamers the tools to be able to make

that dream come true. that is what i was going to say and add to this whole conversation. it is hard for a lot of hispanics who come through the border to make a better life for themselves. give them the tools. we are a great example of how incredibly full of talent and [ speaking spanish] this country is based on immigrants. we cannot forget that. today, i believe we are not a minority. [speaking spanish] >> in the midst of our daily

lives, sometimes we lose track of the importance of people. when we get to a comprehensive immigration reform, a person's name who will go down in history as having made it possible in this country is a person who has used enormous personal political capital at all costs to drive this issue in a way i have not seen someone in the congress tried it in a long time. [speaking spanish] i just want everyone to know that. [applause] >> it has been a pleasure. you have been the first guest -- you were the first guess i have ever had. she has been able to take the difficult questions. it is the same with both of you.

thank you all for sharing this dialogue with all of us. thank all of you for having us in. we hope you enjoyed it and feel incentivized to continue on some issues that really neil -- really need dealing with. [applause] [captions copyright national cable satellite corp. 2011] [captioning performed by national captioning institute] >> tomorrow, a look at faith in the election.

then a look at the lawsuits by several large banks. later, carl anthony about his store conversations on life. that is coming up tomorrow morning here on c-span. >> on sunday, representative henry waxman talks about republican plans to roll back regulations on the environmental protection agency and other energy issues. that is at 10:00 a.m. and 6:00 p.m. eastern on c-span. >> you see the flash. then you hear them cry out in pain. the second thing you hear them say is, if i have lost anything

special, shoot me. >> he is the director of the 30- minute documentary about his friend who was severely wounded in afghanistan. the film follows his journeys in coping with rehabilitation. >> next, a senate health committee hearing on the safety of drugs made outside the u.s. the fda deputy commissioner testifies along with an official from the government accountability office. this is about two hours. 80% merican drug ingredients and 40% of finished drugs are made abroad. this hearing is two hours. >> senate committee on health

education labor and peng pensions will come to order we have convened this hearing to examine the safety and integrity of our pharmaceutical supply chain. few issues are more important to the health and safety of americans than the integrity of our drug supply. in today's increasingly global economy most of the key ingredients used in the the drugs prescribed by american doctors and consumed by american families are produced overseas. according to a gao study about 80% of the active ingredients found in u.s. pharmaceutical products come from abroad and about 40% of the finished drugs come from abroad. this trend is projected to continue and increase with more and more of our medicine cabinets stocked from products from india and china who have less robust regulatory systems

than our own. our challenge is to embrace the changing global economy while making sure we protect the american patients. the profound interest at stake are highlighted for us by tragic examples of american patients who have taken adult rated drug product such as 150 u.s. patients who died in 2007 after taking the contaminated heparin. weaknesses in our pharmaceutical supply chain not only affect the health ever american patients but also the health of american businesses. by holding foreign actors to the same standards as those in the u.s. we gafrn tee a level playing field. u.s. companies that source and manufacture drug in this country should not be placed in a competitive disadvantage by foreign firms that operate with less oversight and sell substandard ingredients into this country at reduced prices. when fda's authorities are first designed and enacted, our production methods were based here at home.

fda's primary authorities to ensure the quality of our drug chess was strict oversight of domestic manufacturers coupled with the ability to have illegal drugs at the border were well-suited to the manufacturing practices of that time in the late 1930s. but again, that was nearly a hundred years ago. we don't live in the same world as we did then, and our drug safety controls have failed to keep up with the changes in our economy and our society. . dfda and customs tried to keep pace with the increasingly global nature of our supply chain. but fda does not have the authority and flexibility it needs to make sure that foreign facilities adhere to the same quality standards as u.s. facilities. some domestic companies tried to fill that gap by adopting robust quality control practices that include inspecting overseas suppliers. some have done it. others have done. so the result is a supply chain ripe with gaps.

last year, this committee took an important bipartisan step to modernize our food safety system. giving fda the tools necessary to hold foreign food importers and producers to the same safety standards as those in the u.s. now we have to bring our drug supply system also into the 21st century. this morning we will explore systemic concerns with the drugs and drug ingredients from the united states and abroad. we will learn about the new challenges at both the fda and american pharmaceutical companies face in navigating the globe at economy. as we begin the critical discussion on how to modernize our drug supply system, we will hear from several expert witnesses who approach this important issue from a variety of perspectives. i thank all of you for being here. look forward to your testimonies. look forward to continues bipartisan cooperation with my colleague who worked closely with me on scheduling in hearing and who, himself, devoted

considerable energy to this issue. i recognize senator. >> thank you mr. chairman. in 2007 and 2008, dozens of patients died after receiving heparin, a widely used blood thinner that had been contaminated during manufacture in china. the number of products made outside of the united states doubled from 2001 to 2008. this trend will accelerate creating potential risks to patients for substandard and otherwised adult rated drugs. today we will look at the increasingly global supply chains and how places like the fda have been monitoring for consumers. the recommendation is that agency make speck policy changes to address these problems. unfortunately fda has failed to adequately respond to these recommendations. some of these gao

recommendations have been outstanding since the late 1990s. fda has still not implemented them. in part, due to these failures own the corresponding risk, goa is placed on the watch list of programs. goa has not called for sweeping legislation it solve these problems. instead, gao calls for fda to administer its programs and manage its responsibilities more effectively. following the health committee's july hearing with commissioner hemburg i asked fda a question for the record considering the progress is t made on the gao's recommendations. i still have not received a reply. we want to make sure the fda has what it neds to make sure drugs are safe and eeffective. to do that we need the facts. having said that, i understand that legislation to improve supply chain integrity is a top priority for chairman harkin and

commissioner hemburg. i look forward to working with them. let me suggest four principles it guide our work together. our first principle should be that we are a specific as possible in identifying the problem we are trying to sox. one good example of the specific problem is undercurrent law, fda must inspect domestic drug establishments every two years. but the law is silent about how off then fda must inspect foreign drug establishments. this means risky foreign establishments can avoid fda inspections and american companies bear more regulatory burden. the ceo of mylan championed a change in law it level the playing field. i agree fda should not able to target inspections globery based on risk. second principle, before making new law we should ask if da is using its existing authority effectively. for instance, fda promulgates

good manufacturing, to tell companies how to manufacture drugs. despite the obvious risks of globalization, they have not updated gmp's on point. the ingredient guide was last published in 1998 and the quality systems approach guidance was last published in 2006. fda published a gmp question answers answer guidance earlier this year but it does not address the globalization challenges we are discussing today. we need to know why they haven't updated the know your suppliers gmp. we need solutions to actually solve the problem. some ideas that sound good in speeches are politically dramatic and make us feel like we were, quote, doing something. but they won't necessarily make a dent in the real world problem. some advocate recall for drugs. we can discuss that but i'm skeptical it will make a real difference.

fda has mandatory recall authority for medical device answers several other types of product. accord to gao and institute of medicine, fda only used mandatory recall authority for devices three times. examining the data, geao found found the average time it took the fda to effectuate a class 1 medical delaware recall was 516 days. also these recalls were not always effective. there were situations where devices that should have been recalled were implanted in patients, causing several deaths and serious injuries and remember this is when the fda already had mandatory recall authority. fourth principle, as we legislate, we should not overreach. for example, some stake holders advocate for complete pedigree or system for the distru bugs of drugs. a 2008 study pegd the cost after full track and trade system at up to $110,000 for an individual

pharmacy. small independent pharmacists in wyoming are already under intense pressure from cuts in medicare part d and medicaid reimbursement. they can't afford the additional cost. more counterfeit and substandard drugs reach consumers through interneat sales, not retail pharmacies. track and trace could impose tremendous cost on pharmacies but produce only marginal effect. again i look forward to working with chairman harkin on all these issues. i have been a strong support ef of giving fda the tools it needs. for example accept tore kennedy and i sponsored a bill in 2007. the "new england journal of medicine" said it was the most significant bill in a half century. i also helped with the fda food safety and tobacco authorities. right now my concern is fda overregulating, not underregulating. in closing i want to acknowledge that fda's witness today, loin

recently assuming her new position as deputy commissioner. she inherited many challenges. deputy commissioner you deskrerve credit for taking on a tough job and i look forward to your testimony. >> thank you very much, senator enzi. we have basically two panels. our first panel will be deborah otter. ms. ought sert deputy commissioner for global regulatory operations and policy at the fda. in this capacity she leaves the fda in ensuring our pharmaceutical supply chain and is in charge of inspection and enforcement policy for all fda products p.m. also working to supplier the supply chain and for the officer of compliance at fda center for drugs. so welcome to the committee. thank you for joining us ms. autor. your statement will be made a part of the record in its entirety. if could you sum it up in five

to seven minutes it would be appreciated so we can proceed. >> thank you. good afternoon members of committee. i'm deborah autor, global operations of policy. thank you for the opportunity to testify before you today for drug safety and globalization. globalization has fundamentally altered drug manufacturing and supply. greatly increasing risk to american consumers and demands a major change in the way fda fulfills its mission to promote and protect the health of the american people. based on almost 20 years of professional experience, i have witnessed the expanding gap between the globalization of pharmaceutical manufacturing and fda antiquated domestic focused statute. this gap presents and immediate and ever growing risk to the safety of the american drug supply. it provides an opportunity for criminals to introduce dangerous adult rated and stolen product

into the supply chain. a great risk to patients and great cost to pharmaceutical companies. the facts show that the threats to our supply chain are real. recent incidents of counterfeiting and theft have posed serious threats to public health. consequences throughout the world have been tragic. in recent years, glycerine and fever medicine, coughing and teething product have a highly toxic in adults and charn in haiti, panama, and nigeria. we are well aware of the 2008 heparin crisis. heparin is used in every hospital in the country. but a cheap imposter was replaced by with the real drug. similar it contaminated drugs, counterfeit drugs present real

risks. a counterfeit drug could be made up of a substance toxic to patients or have little or no active ingredient. harming patient who take it thinking they are taking a live saving or life sustaining medication. in 2003, over $20 million in counterfeit and illegally imported libber to, popular cholesterol lowering drug was dispensed to patients at pharmacies throughout the u.s. even more frightening the criminals mixed criminal lipitor with real lipitor, presumely to stop detection. we believe patient harm was minimal. eventually, we will not be so lucky. just last year a counterfeit version of the overthe counter drug alli was sold to consumers. it contained high levels after dangerous controlled substance

placing customers at injury. in 2009 alone, at least 46 drug cargo thefts occurred. valued a at a total of $184 million. a great expense to pharmaceutical companies 37 in march of 2010, thieves broke into a warehouse and stole $75 million worth of prescription drug products including cheek no therapy drugs, anti-depressents and blood thinners. these products have not yet been recovered. we fear they could be distributed to u.s. consumers in spite of public warnings. in 2009 within stolen insulin viles were reintroduced into the drug supply and caused adverse effect into patients. they required refrigeration. lost its potency and did not provide for diabetics. these are just some examples that illustrate the enormous challenge that globalization presents to fda pharmaceutical manufacturers and the american public.

the drug supply chain is a complex path that medical products travel from raw resource materials for consumers at every stage of this process, opportunities arise for the product to be contaminated bb diversed, counterfeited or otherwise adult rated. the internet present an additional lair of complexity by introducing more players into the system and for criminals to harm patients. the role in addressing these is critical. fda has has taken a wide range of activities. they are providing training around the world and crucial regulatory discipline answers to design innovative risk solutions. the fda took aggressive action in the wake of the heparin crisis to address the vulnerabilities including inspecting damage for drugs. we acknowledge there is room for improvement and we are doing all we can to address gao's

recommendations. in june, fda published a special report, pathway to global product saefrty and quality, which lace out our action plan. the agency is developing a new model. it has improved information sharing an gathering. data griffen and small allocation of resources leveraging combined efforts of government industry and public and private sector third parties. toward this goal there was a director at focusing on the challenges and pointed me to head that directory. congress can help pl congress has the ability to align the statutory framework with a shift of the global paradigm. when president roosevelt established a modern fda in 1938 the products import need the united states was minimal. today the landscape is reversed. nearly 40% drugs american take are imported.

for more than 150 countries, many with less sophisticated manufacturing systems than our own. only about one-third of the drug manufacturing facilities that fda wants to inspect are in this country. the rest are spread around the globe. pch new statutory authorities which i detail more fully in my written testimony can help level the playing field between domestic manufacturers and foreign counter parts, increased drug safety and provide the fda with the information it needs to most effectively and officially oversee the global supply chain. i appreciate your interest in this critical issue. i apologize for running over. i look forward to working with you to address challenges we face and protecting our nation's health in this globalized world. >> thank you very much, ms. autor. we will start rounds of five minute questions. for testimony, ms. autor, it

sounds like the one significant gap is the fda's limited ability to inspect foreign producers. can what can be done to inspect these facilities more frequently given wur limited resources? now one of the things you mention in your written testimony, that i think you are asking congress for, is the authority for the refusal of product admission into the united states if inspection of the manufacturing facility is delayed, limited or denied. is that one of the critical aspects of this? let's be honest about this. i believe fda needs more personnel. i fda needs more money. but in the climate around here i doubt that will happen. on the one hand we want more safety. we want to level the playing field. so you have offices right now, fda has offices in china and india and places like that. i don't know how well they are

staffed. i know the offices are there. but speak to this, about inspections being delayed, about inspections, what good is it it if you have to announce it two, three weeks in advance. and the ability of your office is overseas to conduct on-site inspection unannounced. is that the kind of authority you need from congress? >> senator harkin, you mention one authority in particular which would be very useful which ch is the ability of the fda to refuse import of product of foreign facilities that refuse to let fda in to inspect. it seems common sensical that if a company is not a good enough players to actually let the age sin in to see how it is operating, those are not the products we want to come to the american consumers.

but at the moment the law is not clear on our authority to do that. that very important. with the respect to reach facilities over seas more, that is obviously very important and we recognize you know, in this economy, our resources are going to continue to be an issue. our office overseas are helpful. we have at this point 13 posts around the world and they do some inspections. they do also a lot of work to collaborate and work with our foreign counter parts. that is part of the answer. and they are, more likely than our u.s. inspectors to make an unannounced inspection. in foreign countries, in particular in china, there is a rule we need to have a letter of invitation from the company before we can come in and inspect. before we can enter the country to inspect. it is very difficult to do an unannounced inspection. what that means is that playing field is not level between the foreign manufacturers and domestic manufacturers. with domestic manufacturers we can show up at their door any day. they will usually let us in. if we don't, we can get a

warrant and get under. on the foreign side, it is very hard it get there. when we get there, they may or may not let us in. if they do not let us in, we do not have authority to prevent their drugs from coming to u.s. consumers. >> taking china's example then, you have to have a letter of ip i have tags from company in order to inspect, is that right? >> in order to get the visa to come to china, i expect. >> have you an office in china? >> we do and they do some inspection. they do some. >> do they have to have a letter of invitation. >> they do not. but it is not realistic to think that they will not have enough spread around the globe to see the facility when we went to. we need to think creatively about how to assess the foreign -- >> so it is very clear that in china be we have to to do the finished drugs. it can thwart inspections. deny inspections and shift their product to united states.

>> they can and the interesting thing about our law is that it puts the burden on fda to keep product out of the country. so if manufacture offers something for import, we have to show that something appears to be wrong with it in order to keep it out of this country. now every other grown up country that we know of, the regulator has the authority to say, if you want your product to come in, you must show us your prod subject good. for us, we must show it is bad. when you think about that in the context after gleeb allized world, when there are so many manufacturers we do not see, it is an reasonable burden. we think manufacturers should be required to show minimal stands are a, that their prod subject approved, in order to be able to access u.s. markets. that will also level the playing field between the manufacturers who want to do it right and manufacturers who don't. >> i have one follow-up question. my time is expired. so i will recognize senator enzi. >> thank you, mr. claireman.

the fda hasn't responded to my sole question for the record with our hearing with the commissioner. i asked for the status on the implementation that the goa supplied reng men dagss. i'll have several questions today that i'm sure i won't have time to ask. will you commit to work with a committee in ra more timely and responsive manner? >> absolutely and tore enzi. i understand you have questions for the record, pending the goa recommendations. they came in in august and we are working hard to respond to them. wasn't it make sure we get the technical fact right before we send them to you. we believe when we respond you will see we have continued to make serious challenge with congress and what gao pointed out. >> fda promulgates current good manufacturing practices or gmps to tell them how to manufacture drugs.

given the risk of globalization, why hasn't the fda updated your know your suppliers nnps? >> there are some updates undercurrent law. we will try to do so if congress does not update the law. but updating the requirements through regulation is a lengthy uncertain expensive process for the taxpayers. potentially litigious with an unclear outcome. so the gao i think said that it is urgent for these issues to be resolved. i this i if congress believes the issues are also urgent then congress can help to resolve them quickly through legislation. >> even if we do legislation, won't you have to go through the regulatory pros swes it? >> depends on what legislation says. there are some things you might be able to do immediately through legislation, which would change the paradigm to bring

manufacturers up to a higher level and level the playing field between the good and bad players between the domestic and international ones. there is some that you have to do regulations afterwards but to get it up to a modern globalized world, i think that is something congress can do quickly. >> since we should be working on that quickly, i hope you get the specific things to us so that we can do that and you know, perhaps avoid the regulation route thp although i think there is a big hesitancy to do anything too specific by a group of people that don't washing on it on a daily basis. gao found that 83 poers of the time. fda doesn't target on the basis of risk. fda's pathway to product safety and quality reporter earlier this year said the agency is building intelligent surveillance and risk assessment to grooms to fix this problem. to what extent have you implited these programs. >> the pathway to global product

safety and quality report was issued in june and part of implementing that report is my new position, new director. i assume my job july 31. i haven't had a tremendous amount of time tos staeb lish systems yet but we are thinking hard about how to do that. the pathway talks about advanced risk analytics as well as global coalitions of regulators an reliance on public and private third parties. we believe this is the way for fda to do best it can. we have history in collaborating with foreign regulators. for example on drug inspections with europe and active pharmaceutical ingredients. so they are steps we have taken in the past which lead us to this path and we are serious about implementing it right now and i'm doing my best to get it started. and i have done so the past six weeks. >> i appreciate your efforts on that. gao says the fda doesn't have

adequate systems to protect the risk. they started migrating out after paper based system into an electronics system. according to the gao, fda says it can't tell whether the system change helped solve the problem or played it worse. what is the status of that system, migration? >> we have implemented an electronic registration enlisting system. i think it is very helpful. eliminated possibility of human error when we literally had people typing in what they received on forms in the mail. so that's a major improvement, bringing news the century i believe. and it helped with consistency in our records because we don't have that error. we have things which i think would help. for example, work on a unique facility identifier. one thing that you know, could you think about, legislatively, is requiring facilities to have a unique eye identifier such as the dunns number. having a unique facility

identifier for drug manufacturers, is greatly helps fda's ability 20 have a clear inventory. we don't have the possibility of typographical errors. we have the data base of millions of corporate enits to verify information. we can use the same consistent numbering system and compare reports. there is a great deal with we have done in implementing. we can improve that especially with help for congress. >> raisees a few more questions but my time has expired. thank you mr. claireman. >> thank you. >> we are trying to get the heat down in this room. we have made two or three calls. can we get some doors open back there? we've got to get some air. see if they stay open. if not, maybe can i get staff it open the doors. get some air moving in here. it's very hot in here.

okay, thank you very much. now senator bennett and ens tone are roberts and he is not for franken. >> thank you. i want to thank you first for taking your jacket off and allowing us to do the same. i also want to thank you and the ranking member. as i travel around the state, i hear a lot about regular lugs. people are asking all the time about regular lugs. sometime people say, we should get rid of all of it. and other times people have a different view. if there was ever a case that screamed out to get a buy part partisan race, it is this case. because there are twin objectives i think we need to aaccomplish as we go forward here. one is to recognize that 80% as you said of our active ingredients are now produced overseas. and are largely unregulated.

we don't know what is going on there. which is a shock to coloradoans when they hear that. just like it is a shock when they hear the gps in their car is more advanced than the airplanes because of our i inability deal with the beale. there is a creative science ind us it try here in the united states. one we can rely on to create jobs in places like colorado, and i freesh very much that the commissioner came out it colorado so t.o. have a conversation with our bioscience community and to work clab rattly with them. i'm interesting to hear a little bit generally about how you see the globalization of our drug supply fitting into the overall effort to remove regulatory barriers and inspire innovation right here in the united states. >> sure. thank you senator bennett.

i would say that right now the incentives are not there for innovation quality. and what we hope the congress will look at is quality management systems which will improve innovation quality, foster innovation quality and right now, because the playing field is level it does not reward companies who want it do it right. who want it find innovative ways to do it right. i should point out that doing it right does not cost more. we have one company for example who committed to their quality size of house it make sure the manufacturer is right and they spend a hundred million dollars less than they inspended to spend on quality. conversely, companies that don't it right can lose a lot of money. baxtr lost $4 million in sales an millions in market capitalization. we had recalled of ejectable products because there was glass sheering off inside the viles.

there were glass in the viles, which can't be injected into the patients. industry spent probably $250 knoll wro million. that is money sme are spending on cleaning up the product. so we think putting in a modern system can help in modernization and competitiveness. >> one of the things i hear all the time from folks in our state in this field is that, is that other countries also are having to grapple with this kwith this as well as are trying to be more responsive than they have historically been. i wonder if you can talk about something else in your testimony which is the horm niezing of the national regime. are there ways to rely on others o to help us do on this work. how do we make sure we've got a

global regulatory system that can actually manage this problem? >> yes. by all means. the pathway to global safety and quality report makes crystal clear fda recommendation we can't do it alone and we need to work together with counter parts. we need to form global coalitions and regulators. that means harmon ooirzing standards and to rely on each other. this has great industry with fewer inspections, streamline roirms and if we are able to reach more companies around the world, if affectively minimizes what we have which is noncompliance. companies who choose to skirt the law can do some beyond regulators reach and thereby make more money by doing it poorly. working together with counter parts. harm onizing and collaborating is a way we can level that playing field and improve quality over all. >> i think that is one of the reasons why the good actors in

this world, want this statute updated and want there regime updated because if there is a bad actor it hurts everybody in the entire industry and our patients as well pz sni. >> thank you for your testimony. thank you mr. bennett. >> i want to recognize that mr. bennett introduced legislation on this last year. ways reading it over in preparing no their hearing today. and i think you made one remark on making the bill, we have plor information on a bar code from ra gallon of milk than anything from the drugs we get. that really capsulized it. senator rob sflerts roberts? >> thank you, mr. chairman. i have comments of my colleague and friend, of colorado. i'm still some what confused,

which is a state that i walk around in a lot. and i don't know exactly what you want in terms of of new authority. could you clarify that for me? does the fda need new authority to inspect foreign facilities or are you asking for more funds or both? i mean there is a difference between a need and a want and in the climate we're in, it's extremely difficult in regards to funding. but authority may be the answer and senator enzi really posed that question. so my question is just to repeat of his. >> sure. just to clarify, we are not talking about new authority to allow us to inspect foreign facility per se. we are talking about new authorities in light of the fact

that our pharmaceutical supply chain has globalized. so for example, as i said, right now, if a foreign facility refuses to let us inspect then we need to let their product in. globalization has grately increased -- or may need to. the law is unclear whether we can keep their product out simply because they refuse inspection. it greatly increases clainincres the challenge. >> yes ma'am, i understand that. but do you want authority or not? >> yes. >> you do want authority? >> yes, sir. >> you will respond to senator enzi and the chairman's specific questions. okay we got that down. thank you. i didn't mean it interrupt you. i apologize. can you provide the committee with a complete list of all of the foreign drug establishments involved in the u.s. drug supply chain? is that possible? >> if you want the long list, we

could try to do that. i think that we do have list of the facilities who offer products for import into the u.s. >> yes. >> and registered with us, which is requirement. >> i that i would help, if understanding the breath of the current problem. there is a serious situation. last year's stolen insulin managed it make its way on the pharmacy shelves. and reach patients. as you know, this is a heat censored product that will not work in improperly stored. i don't know how this deception was possible. there is no comprehensive national system apparently to track and authenticate packages of drugs as they travel from the manufacturer to the wholesaler to the pharmacy. what steps account fda take to help the transparency of the drug distribution, and do you need any authority or additional mandate to do that? >> yes, sir. as you pointed out, products are

able to infiltrate the legitimate supply chain including the stolen insulin. what we could wo immediate to rectify that is a requirement for track and trace system. a system which allowed us to know or allowed manufacturers and pharmacies to know who had touched a drug between the time it was manufactured and the time it reached the pharmacy. rit now, under the law, we are required to come up with a national standard but the law does not say that standard is enforceable or a violation of the law not to comply with the standard or that law will preempt requirements of the states. the risk is right now, in fact, what what will happen is 50 states will put in separate requirements for patch work that is for industry. >> that would be a hodgepodge for sure. in fact, if you had the authority and you had the funds to do it. where are you with that? >> we are working on a track and

trade standard. we don't have the ability it make it enforceable. >> okay. i will touch on what the senator from colorado said. like the chairman and like senator enzi. everywhere i go, people say, what on earth are you doing passing regulations that are crazy and are about to put me out of business. what are you guys doing? i always reply, saying, i'm an us guy be not a you guy. i try to trace the regulation back, it doesn't make sense, when it finally reaches down stream. we are talking about up stream, now this is down stream. it is in every con conceivable busy he is not shl to the committee. let's talk about the pharmacist. the pharmacist today, in my state, do not serve medicare patients. because of all of the regulations with ppec and new

healthcare law and also competitive bidding. and they can't sell medical equipment and can't do this or that. and some of them are going out of business. because of the regulatory overkill. i want to know about the potential cost to the individual pharmacist especially in rural and small town america, if we implement a full track and trades program. somebody's got it pay for this. and the consumer usually does. until it gets to the consumer it goes to the pharmacist. so i'm worried about small town pharmacy. >> you won't have a problem withfully kind of drug if you don't have a pharmacist to distribute it in a local town because they won't get any. >> yes. sir, we fully understand that and we understand the pharmacies with the impact of the track and trace system. we are trying to come up with the best system we can and balance economic needs and

maintain economically viable. we are collecting comments and trying to come up with the best model that allows us to have the maximum impact with minimum burden. i would point out in 2009 we had drug cargo theft. that is an economic left to the pharmaceutical community which gets passed ton consumers and pharmacies. we need to come up with a system that works best in balancing all of the systems. >> you have a yardstick in your closet? >> i appreciate it. >> thank you. i'm overtime as chairman. thank you. >> thank you. >> senator franken? >> thank you mr. chairman and thank you and ranking member for this very important hearing. let me ask about the heparin. that came from china and baxtr was the distributed it here in

this country? is that right? >> virtually all heparin in this country comes from china. it takes one pig to make one vile of heparin. there are a lot of pigs in china. so most of the heparin comes interest china. in that case we traced the contaminated heparin back it china. then it was distributed through baxtr and other countries in the u.s. >> can you comment on whether fda has cred requiring manufactures, as the fda, to hold sub is suppliers and other further down the chain accountable -- chain accountable. i think that would put the cost, instead of on the fda, it would at least put the responsibility on the baxtrs of this world to say, look, i got to check the

drugs i'm distributing. >> yes. by all means. in fact we when we have talked about quality systems, as something congress might want to look at, one of the things we talked about is that manufacturers should have adequate control over suppliers and supply chain. right now, a lot of good companies do that. but the problem is that there are companies that do not. and what we need to do is raise the floor so we have consistent quality throughout. by all means, the idea is that manufacturers are best placed to ensure the quality of their products. they know the risk associated with their product. they can make sure they audited their suppliers. i don't think it is something the agency could realistically do. it is something for manufacturers to do. but it needs to be clear in the law they need to do that. >> okay. can the fda inform the public of which companies are doing it and which ones aren't? >> one thing that the fda does

now that we didn't use to is post outcomes for manufacturers. we think that is one thing that helps to bring a little bit of transparency to who is doing it right and who isn't. we, i think that's the most helpful kind of thing we can do. but again, to have a system which in light of globalization requires all manufacturers to do right in the first place is helpful. consumers off then don't get a choice about what drug they take. they go to the pharmacy and they are given what they get. the importance is to make sure when the drugs get there they are of adequate quality for consumers. >> but the pharmacist could -- would be the one i i would think would be looking at what manufacturers are doing, inspection of the subcontractors, then the pharmacist would be more inclined to take the product of the companies that are acting in good faith. >> perhaps if they had that flexibility they would do that. but more importantly is to make sure the manufacturers do it right in the first place. >> how do you do that? >> i think to make sure to put

in place a statutory scheme which levels the playing field between good guys an bad guys. puts requirements in place to do that. also, other things to think about are things to enhance product safety 37. like a mandatory recall system. like increased criminal pen al lits relating to adultrating drugs and increasing information. so the fda's role is to look across the industry to eemerging risks. right now if a company has a counterfeit incident or cargo theft or contamination, in most cases they are not required to tell us. we may not be able to immediately jump in on that issue to protect the public health and investigate but if is t something other parts of industry don't know about, he can cannot tell them if they are not alert. we have said to other companies to be have told our companies y need to be on the lookout.

but we can't consistently play that role. >> let me ask about your ability to inspect foreign subcontractors. is there anything in our trade laws or our trade policies where we can enforce that? in other words, if you're going to be selling -- if you're going to be telling your drugs and your ingredients of drugs here in the united states. we insist that we be able to inspect your factories, can that be part of our trade policy and the world trade organization's policies? >> as far as i know, that's not something that's likely to happen. i'm not a trade expert, but the challenge i think is imposing

barriers -- imposing barriers to trade is very difficult through those kinds of organizations. but what we're talking about differently is the ability to under the federal food drug and cosmetic act say if you have refused, delayed or denied inspection, then your product won't come in. that is an authority that congress put in place recently for food safety. so it's something that can easily been done through us. you need to show something is good about your product if you want to come into the u.s., rather than making fda show there's something bad about it, is a way to change the par dime to keep up with globalization in a way that's imperative. >> thank you. thank you mr. chairman. >> thanks, senator. senator mikulski. >> i have several hats at this hearing, one, of course, is the senator from maryland, in which fda is head quartered.

we're so proud of the work you do under the difficult circumstances, funding and contradictory requirements that you're given. but i'm also here as a member of the intelligence committee. and i'm also here as the appropriator for the commerce justice department. i believe that aduller ated drugs coming into this country is criminal. i think it's a form of murder. you cannot rely on blood thinners the way members of my own family have, be a diabetic and rely on prescription drugs and not know that which you are ingesting in your body could be the very thing that killed you rather than the very then that saves you from a stroke, a heart attack or a diabetic coma. we've got to get real, we've got to get serious, and we have to have a sense of urgency.

we throw zillions on dod, protect the homeland. we have to have that same altitude toward those that are aduller ating drugs over there so they don't kill us here. now, your background is terrific. you're a trial lawyer, you work at the justice department. you have incredible background in wagging with federal law enforcement. and my question to you is, where are we going to do the create the sense of alarm, alarm, red ale alert, going to the edge of our chair, because this is a growing problem. this is not exaggerated hyperbole for cnn for me. this is a compelling need when we look at the number of people who teak prescription drugs and which we are now so vulnerable. which are usual and customary drugs, particularly the issue of

blood thinner. i don't know about those chinese pigs, okay? i don't know if they're communist pigs, capitalist pigs? and i don't know if they're clean pigs in order to do this. what i do now, is that right now all over the united states of america, there are over a million people taking some form of blood thinner that depends on heparin and warfaren. are we moving with that sense of urgency, has this been escalated to a homeland security issue? is this the top of anyone's agenda, because this is as important as protecting our borders as we do from anything else illegal or threatening coming into our country. >> thank you for that question, i share your sense of urgency.

i worry about products like this which frankly cross our border every day. this is counterfeit tamiflu and lipitor. they look very, very similar, they come into the country. the risk is not simply ofrom th people who want to make a quick buck. it's for people who are much more ma lev nant. i do what i can to be more creative, to collaborate, there are things which are not currently in the law, requiring manufacturer's to update their test standards to look for vulnerability. >> it's supposed to be criminal charges. >> exactly. >> we have to do out of the box thinking here. are you for regs or against regs? we're for smart regulation. >> i completely agree. and with respect to another crisis like heparin or something

worse, it's not a matter of if, it's a matter of when. >> but is this? let's talk about fda justice and the department of homeland security. do they feel that this has this heightened urgency? and has this been moved up the chain of command while we're looking at the supply chain of drugs and counterfeit drugs? >> that's a very interesting question. i can't speak for them. i'm not sure i could answer that question sitting here today. >> i just wanted our committee to know this. senator white house was on the intel committee, so was senator roberts. we see the growing nexus between organized crime, international organized crime, and the corruption of public officials overlooking any other kinds of collaborative enforcement. i don't want to do complicated foreign policy here, but i think we need to look at it.

i know my time is up, i had a chance to talk with interpol this summer and do extensive investigations into what they see as a growing problem. this is an international problem. whatever we feel about eu, for any of us that value safety and efficacy, this has to be elevated to a national security, homeland security and criminal level. and i look forward to talking with my colleagues so that we approach it that way, so that the american people know that if they take it, it will be okay. >> thank you. >> senator mikulsky thank you very much. our chairman will be testifying later, and his testimony i read last night said that this he

heparin incident, to this day, no one in any country has yet been held accountable. is that a fact? can you verify that or not? i'm just reading from what someone's going to testify here shortly, said that no one has yet been held accountable in any country. >> with respect to heparin we did conduct a criminal investigation in china, but were not able to bring that to fruition at this point with a culpable individual. one thing i will say about represent run, it's a crime of opportunity. we need to work to minimize the opportunities for something like that to happen again. >> thank you very much, senator white house? >> thank you, chairman. >> you stead about inspecting overseas facilities that manufacture product for american

consumers that you -- i think you used the phrase may not be able to prevent the importation of a drug manufactured in a facility that refused inspection. what are the dimensions of that question that you may not be able to? why is that an uncertain proposition? and what are the sort of from a lawyer's point of view, what are the weasel words around that proposition that define a little bit more clearly? >> sure. the way the law works right now, we have to show that the product appears to be aduller ated, misbranded or un approved in order to keep it out of the country. the burden is on us, that is our standard. the argument we have to make, because they refused inspection or delayed or limited our inspection. that means that their products appear to be aduller ated or unapproved.

that's an argument we can make, it's not as clear in the laws, it could be, especially if congress wants to clearly say we recognize that there are a lot of global facilities out there, and we want to level the playing field and make sure we assure the quality of the products being imported. >> it's largely a fact based determination evaluating whether you'll be able to succeed? >> exactly. in every situation, we have to say here are the facts this is is the facility, here's when we tried to contact them, here's what we did, as opposed to saying they didn't let us in. clearly if they didn't let us in, we shouldn't let them in. >> you indicated you thought the smartest and simplest way to go about this would be to allow the american companies to police this themselves with adequate supply chain assurance policies. you said that most of the bigger companies had adequate good supply chain assurance policies, but there were some players that

did not. what is your authority to regulate the supply chain assurance policies as a target that is an effective proxy for the ultimate determination, which is whether or not the drug is safe? can you actually say to american industries, we want to review your supply chain assurance policy, if you don't have one we think is up to snuff, then you're in violation and force behavior that way? do you have that regulatory authority? >> that authority is not as clear as it could be under the law. that is something congress could clarify. at this point we can look to putting out regulations on that, but that's a lengthy uncertain potential lilily litigous proce.

>> can you think of any regulations you have done to oversee an internal process question in the company, would this be venturing into completely new territory? >> we have good manufacturing practice regulations in place which do some of that. those were written in 1978 before the real explosion of global manufacturing. so they don't get to that as clearly as they could. so it's not new territory, but it's something congress could deal with much more seriously. >> senator blumenthal. >> thank you, mr. chairman. and thank you for holding this hearing on this very important topic. you referred just a few minutes ago to a crime of opportunity with heparin. and i want to talk about what

creates opportunities for crime. in fact, exponentially increasing crime in theft or illegal importation. and in my view, one of the main contributors. one of the main circumstances that creates that opportunity is the acute shortages of certain drugs in this country arising from a variety of circumstances and problems, one of them being termination of the legitimate supply. but also others being the gray market. the gray markets that have been documented in this country for certain drugs literally are threatening our health. gray markets are playing russian roulette with patient lives. and shortages of drugs around the country mean that hospitals

are unable to meet the demand for workhorse medicines. and i'm using that phrase because it's been used by hospital administrators, emergency room physicians. workhorse medicines that provide cancer treatment. they're not generics, where the profit motive has dissipated or disappeared. shortages occur or the result of hoarding, and as you aware i'm sure in april 2011. premiere health care alliance asked its pharmacy support team to review the incidents of gray market offers, and they found overall 1,745 examples of gray market offers recorded in 42 acute care hospitals with an average market of 650%. the impacts are not only on health, they are on safety and

on costs. health care delivery is increasingly costly because of the gray markets and shortages that are the result of defects in the current supply chain. so all of that said, i wonder if you could address what steps can be taken and there is a group of senators, myself included, working to combat the acute shortages of certain drugs. what can fda do under its existing authority? >> sure. thank you for the question. that's a lot of different issues in there. let me speak to one thing first, which is what creates the opportunities for things like the heparin crisis. that's really more players involved in the drug supply chain. greater volume of products imported, greater number of firms involved. greater complexity of the

products, further and further. with respect to shortages, that is really a complex economic problem, i believe, primarily. there are fewer manufacturers who have consolidated their drug manufacturing, to fewer facilities, fewer lines, for products for which the economics are not great because they're not very highly priced products any more. they have not fully invested in the quality of those products. the agency takes the problem seriously. we're doing what we can to prevent it. last year, for example, when we were notified of shortages early, we were able to prevent 38 different shortages, we were told earlier we could work with the manufacturer's to see if the products were good enough to go to patients, to work with creative solutions, for example, if a product had metal shavings in an injectable product. we worked with the company to send a filter. we are working toward having a public meeting with stakeholders

to talk about this, but it really is a multifaceted problem that requires a multifaceted solution. and all the stakeholders to step up to the plate. shortages create an incentive and opportunity for people to at best charge an awful lot for these products. at worst, produce counterfeit or contaminated products. one thing that would work is track and trace systems. pharmacies and hospitals would be able to know if this product being offered to them at high prices is a legitimate product because they would know everyone who touched it throughout the supply chain. >> my time has skpeered, i wo . i would welcome the opportunity to speak with you on this in the future. does the fda need additional authority for track and trace?

>> yes, we would need additional authority to make it clear that we can promulgate forceful standards for track and trace. to require manufacturer's to notify us of shortages right now, the authority is limited. if we know about shortages, we can try to prevent them. we can't always do it, but at least knowing about it in the past helps the problem. >> track and trace would not be a solution to shortages? >> it would not. but it would be something to address the public health risks with the shortages. >> thank you. >> thank you very much. we have to move on to our second pan il. panel. i wanted to ask one question. most of the testimony has to do with prescription drugs. could you speak to the over the counter drug supply, the same problem problems occur there. and speak to the inactive

ingredients, going clear back to the 1930s, ethanol glycol was one of those. and the problems that you may see in both areas. >> one way i tend to look at pharmaceuticals is to think about the innovator products, the generic products, the over the counter products and components. all of them present similar but different challenges. the agagenerics industry recogns the challenges with generic drugs. over the counter drugs present a challenge because most of them are done through a mono graph system. a cookbook system for prices -- they don't require affirmative fda approval.

they can come on the market. that means that there's a greater opportunity for firms to introduce products without us knowing. those products could go straight from a facility in china we've never seen to a pharmacy in any state. that is a real challenge. that's why we talk about really needing to understand the global supply chain and really needing to put in particular authorities at the border to say, show us something is right about your products before they come in. as you point out die ethylene glycol has led to many deaths in the recent years. there's a huge number of occipians out there, used in drugs and foods. that's why we talk about the need for manufacturer's to be responsible for policing their supply chain. it will never be the case that fda can go to all those

facilities and assure they're doing everything right. it has to be incumbent on the manufacturer who's suing pharmaceuticals that people rely on to save their lives to go and make sure their components are safetiry. satisfactory. >> thank you very much. we may want to submit some questions in writing to you. thank you very much for your testimony. we'll call our second panel. i'll introduce them as they take their place at the table. we have dr. marcia cross, director of health care for the gao, government accountability office. she's been at gao since 1983. she comes to us today with

significant experience in evaluating public health issues. her work focuses in particular on evaluating product safety, pharmaceutical regulations. next we have mr. ken martello, the assistant general counsel for pharma. and we appreciate you being here. next is mr. gordon johnston, senior adviser for regulatory sciences at the pharmaceutical association. has worked in the pharmaceutical industry for the last 25 years. we thank you for being here. mr. martin van triust. senior vice president of amgen. is the past chair of rx-360

regarding counterfeits, thefts and aduller ated materials in the pharmaceutical supply chain. we thank you for being here. last is allen kukel. did i pronounce that right? >> alan kockel. he overseas the initiative of the pharmaceutical supply chain safety. in july the pugh released an interesting report that shed light on the weaknesses and gaps in our pharmaceutical supply chain. we thank you for being here. all of your testimony will be made a part of the record in their entirety and i'll go from left to right and ask if you could sum up in 5 to 7 minutes. appreciate it. we'll start with you, dr. cross. >> thank you, mr. chairman. ranking member enzy and members of the committee. i'm pleased to be here today to discuss oversight of the drug

supply chain. gao has issued a number of reports on the challenges we identified in fda's oversite of drugs that are manufactured in other countries for the u.s. market. while fda is making progress, we have concerns about the agency's use of information and the pace at which it is implementing changes. globalization has placed new demands on fda as the pharmaceutical industry has increasingly relied on global supply chains in which each manufacturing step may be outsourced to foreign establishments. in examining these issues, we have particularly focused on the challenges for fda in inspecting these facilities, the limitations on fda's knowledge and information about these facilities and the steps fda is taking to improve the oversight of the supply chain. inspections of foreign drug manufacturer's are an important element of oversight. as we've heard, fda is far from achieving foreign inspection rates comparable to domestic

inspection rates where the agency's required to examine this every few years. in 2008 we recorded it would take fda about 13 years to inspect the foreign establishment that is were then on its inventory. since that time, fda has been increasing the number of foreign inspections it performs reducing the estimated time to about nine years. however, while the agency is trying to catch up, it's facing a continually growing number of foreign facilities. in addition, although fda has been working to develop risk information to help it prioritize its foreign inspections, the risks of the products being manufactured have not been the real drivers of which facilities are inspected. rather, foreign establishments have generally only been inspected when they have been named on an application for a new drug. conducting inspections abroad also continues to pose unique

challenges for the agency. for example, fda cannot require foreign manufacturer's to allow it to affect its facilities. in addition to the challenges of conducting inspections we previously reported that fda lacked complete and accurate information about these facilities. information critical to understanding the supply chain. fda databases contain incorrect information. and the agency still does not have an accurate list of the foreign establishments manufacturing drugs for the u.s. market. this hampers fda's ability to make inspection decisions and adequately oversee shipments arriving at our ports. the contaminated heparin crisis provides a useful case study of some of the problems the fda is facing. including facilities that had never been inspected, mixups in

fda's databases. outdated testing standards. questions about manufacturer's validation of their supply chains. delays in gaining entry because of visa requirements. fda's inability to require cooperation by foreign facilities. difficulties tracing contaminated supplies to end products including medical devices and difficulties recalling products thought to be contaminated. given the difficulties that fda has faced in overseaing the supply chain and recognizing that oversight is lone is not sufficient. fda established new offices overseas and has taken other positive steps such as sclab rating with and exchanging information with foreign governments. fda should be credited for its recent actions, which represent important initial steps toward addressing these challenges.

however, as the agency has acknowledged, there are additional steps that it still needs to take. we have previously made recommendations to address some challenges such as poor information and planning. and the agency has identified additional authorities that could provide it with necessary enforcement tools. in light of the growing dependence upon drugs, manufactured abroad and the potential for harm, fda needs to act quickly to implement changes across a range of activities in order to better assure the safety and availability for drugs for the u.s. market. mr. chairman, ranking member enzy, this concludes my prepared remarks, i'd be happy to answer any questions you or other members of the committee may have. >> thank you very much dr. crosse. >> thank you very much, mr. chair, ranking members of the committee. my name is kendra martello.

our members represent america's leading biopharmaceutical research companies. last year, research investment was greater than $67 billion, a record. our companies invest on average more than a billion dollars over ten to 15 years to research and develop a new medicine. additionally, our companies provide directly and indirectly millions of stable and high paying jobs for american workers, jobs that can help fuel our nation's economic recovery. i'm pleased to offer this testimony today on securing the pharmaceutical supply chain. we appreciate the committee's long standing interest in this issue and want to acknowledge in equipment the knowledge of the chairman and senator bennett to seeking solutions to these important issues. patient safety is of primary importance. patients trust that the medicines they take meet high standards met from the fda no

matter where they're made. and pharma member companies are committed to improving the lives of patients and approving high quality safe effective drug products. second, the u.s. drug approval and overview system is the world standard worldwide. it's this comprehensive system coupled with our distribution system closed by congress in the mid 1980s that helps provide the high level of product quality, safety and integrity that we enjoy today. no one aspect of the system in isolation is responsible for protecting our secure supply chain. in addition to the requirement to obtain approval of a new drug application before a new drug can be sold, manufacturer's must also follow current good manufacturing practices. these regulations recognize that testing and inspections alone cannot ensure the quality of a product. these nda and gnp requirements

apply to all products sold in the u.s. third, supply chain security is a shared responsibility. even with our comprehensive regulatory system, the globalization of pharmaceutical supply chains presents new challenges that require us to be adaptive and flexible. everybody has a role to play. ever manufacturer, whether brand or generic recognizing that 80% of the drugs dispensed in thes are for generic medicines. and every distributor has a role to play in the safety and security of the supply chain. pharma and its member companies are committed to doing our part. to the extent that an entity that a product or bulk manufacturer circumvents the established requirements, they place patients at risk and disadvantage those who strive to

comply. fourth, as we consider challenges presented by globalization, we believe any new authorities must be grounded in sound science and driven by risk. risk based approaches are not new, and widely accepted by both industry and fda. for example, we support giving fda the flexibility to prioritize inspections based on risk. reliance on certain risk factors such as compliance history and time since last inspection will enable the agency to efficiently and effectively target the resources to the benefit of patients. we also encourage giving fda the discretion to rely on satisfactory inspection results from foreign countries with comparable drug regulatory inspections. this would in no way take the place of fda inspections, rather it would allow the agency the flexibility to leverage the work of other competent authorities and maximize its own resources,

all without limiting in anyway its ability to inspect the particular facility. we also believe that those who produce components and products destined for sale in the u.s. should register with the fda. this will help provide transparency to those who supply products sold here and will help fda develop a risk based inspection approach. in conclusion, our comprehensive regulatory and closed distribution system helps provide assurances in the safety, quality, and integrity of the new drug products sold here in the u.s. patients rely on the system to safeguard the medicines they need to improve their health and sustain their lives. the challenges of globalization present new opportunities to discuss how best to strengthen our existing supply chain. but they also remind us how critically important it is to maintain this existing closed distribution system. pharma member companies are committed to doing our part and to working with the committee,

members of congress and other stakeholders on this important issue. thank you. >> thank you very much dr. martello. we'll turn to mr. gordon johnson with the generic pharmaceutical association. welcome. please proceed. >> good morning chairman harkin, ranking member enzy and members of the committee. thank you for asking me to participate in this timely and important hearing. i am gordon johnston senior adviser for regulatory sciences. gpha represents the manufacturer's and distributors of generic pharmaceuticals and active ingredients. generic pharmaceuticals now fill 78% of all prescriptions in the united states. i served in the u.s. public health service, and in 1987 was

assigned to the fda. securing the nation's pharmaceutical supply chain is of vital importance to gpha and our member companies. we have a key interest in a level, competitive and accountable playing field in the supply chain. we commend the committee for your focus on ensuring the safety of america's pharmaceutical supply, brand and generic. gpha is committed to doing everything possible to promote a vigorous and rigorous oversight of the nation's drug supply. as the committee begins to take a closer look at this important issue, it's critical to understand the fundamental underpinnings of the current system and acknowledge the global dynamics of our supply here in the u.s. first as my colleague -- as pharma mentioned, i certainly want to make it clear that the u.s. drug supply is the safest in the world. however, we recognize that globalization has added new and

complex challenges to continue to assure this safety. the pharmaceutical marketplace that the fda overseas in today's global age looks drastically different than it did in 1938 when congress passed the stat e statute, as mentioned previously today, nearly 40% of all prescription drugs are manufactured outside of the country and nearly 80% of the ingredients used in these drugs are manufactured abroad. according to fda estimates, the number of drug products made outside of the u.s. doubled between 2001 and 2008. unfortunately this growth has outpaced the law's reach, as well as the funds needed for fda to hold all participants to the same high quality standards. the act of 138 requires american drug manufacturer's to undergo surveillance inspections at least every two years to confirm

that these facilities are complying with good manufacturing standards, however, the act is not imposed the same by annual inspection requirement on foreign facilities. further, this disparity and degree of oversight experienced by domestic versus foreign facilities, reduces american competitiveness by creating an uneven playing field while creating opportunity for threats to the u.s. drug supply. also delays in foreign inspections slow the approval of products that serve unmet medical needs such as those faces drug shortages. to paraphrase recent statements by hhs secretary kathleen sebelius and fda, that hhs and fda are looking to congress to modernize its antiquated authority so fda's legal tools can keep pace with globalization. gpha is in agreement with the secretary and fda that it's cen

will to modernize the laws governing the u.s. supply chain. the responsibility of ensuring safety is a shared one that rests with all of us in industry and not just fda. as my colleagues noted in their recent report, it's critical manufacturer's continue to go beyond gmp's and assure that the supplier qualification tools are used and using risk based assessment to assure the quality and integrity of suppliers abroad. such practices of which ashould also be supplemented by federal pedigree tracking system with uniform standard as cross all states as opposed to a patchwork of random state enforced regulations. even with these significant efforts in place, however, the generic industry has realized that more needs to be done, that's why the industry stepped up to the plate and is now

finalizing the generic drug user fee program with fda. one of the main goals of this user fee program is to hold all generic players to the same gmp inspection standards and enhancing fda's ability to identify, track and register all contributors involved in the generic drugs in the united states. in conclusion, mr. chairman, gpha stands ready to support congress and fda in strengthening its oversight, updating the law eninvesting resources to ensure the u.s. continues to be a leader in the world when it comes to safety and also maintaining the american industry's competitiveness. i thank you for this time, and would be happy to address any questions from the committee as we move forward. >> thank you very much, mr. johnst

johnston. >> members of the committee, thank you for the opportunity to testify today. my name is martin van tries. i'm the senior vice president at amgen. i'm the founder of rx-360, it's on behalf of rx-360 i testify here today. rx-360 was founded in 2009 in direct response to the adulter ated heparin. our membership has quickly grown to over 65 member companies, including most of the large pharmaceuticals, biotechnology and generic drug manufacturers. this industry is extensively regulated by the fda in a variety of ways, including through compliance with good manufacturing practices or gmp's, however, economically motivated adulteration do little

to prevent unethical players to exploit the supply chain. let me give you a lack of transparency that was able to be exploited outlined in the chart i've submitted to the committee. glycerin, an inactive ingredient used in many pharmaceuticals, panama purchased unadulter ated glycerin used in cough syrup, which led to 67 deaths. as illustrated in box one, the problem began in china at the glycerin factory which produced a substitute for glycerin, it contained anti-freeze, which is three times cheaper than glycerin. this factory was never inspected

by the chinese fbi. and as boxes two, three and five described, the brokers changed the name of the material, the manufacturing site and never performed any tests. this adulter ated glycerin was used to manufacture cough syrup. if the purchaser knew they were really purchasing anti-freeze these fatalities would have been prevented. this is why transparency of the supply chain is so important. rx-360 members recognize we're responsible for our suppliers and must address the challenges associated with the global supply chain. in our short period of existence we have implemented many solutions, including auditing our suppliers. developing technologies to prevent adulterations.

implementing best practices for industry and issuing supply chain security to our members. all of these methods are intended to eliminate security gaps in the supply chain. we intend these activities to be complimentary of the extensive work in this area. as policy makers look at ways to improve the integrity of the supply chain. it's important that any legislative or regulatory proposals are carefully considered, such as adding to the complexity of the supply chaen. creating unintended drug shortages and adding costs to the health care system. as you examine these issues, i have a few points for consideration. first some issues are related to the fact that suppliers don't disclose the manufacturing site of those ingredients.

this was the issue in the glycerin i discussed earlier. we can assure enhanced oversight of our suppliers. there are many foreign suppliers who register with the fda but have no intention of distributing product within the united states. they use this registration to convey some sense of fda approval. and undermining the integrity of the registration system. other points that are worth considering include increased fda inspections, using inve investigators who are specifically trained in fraud detection, allowing use of qualified third party inspectors, and increased criminal penalties for knowingly engaging in counterfeiting. in conclusion, on behalf of rx-360, i thank the committee for its examination of this issue. i appreciate senator bennett's work in this area and the interest of chairman harkin in

finding solutions to these complex issues. rx-360 stands ready to assist the committee on this important wo work. >> thank you. >> thank you, mr. chairman. thank you for the opportunity to testify. my name is allen coukell. we recently released a report called after heparin. our findings are consistent with what you've heard from previous speakers. to ensure safety both the fda and manufacturers must adjust. the pugh report is based on published studies and documents and dozens of documents with experts including a two-day

conference. we outline a series of case studies and illustrate the kind of rare, but potentially very serious risks we face. we identify systemic problems and practical solutions 37 we called the report after heparin because it was a wakeup call for industry and regulators and it show clearly shows many of the failings of our current system. for example, the u.s. manufacturer in that case failed to perform a timely audit of its chinese supplier. the standard test for heparin then in use was outdated and not designed to detect a contaminant. there were significant manufacturing quality issues and even after the fact neither the fda nor the manufacturer was ever able to gain complete access to that upstream supply chain. unless you think this is ancient history, i'll point out that

just last month. the fda issued a warning letter to yet another heparin facility in china for failing to adequately evaluate suppliers or perform testing. others have stressed the need for increased foreign concession. speakers have also mentioned the need for manufacturer's themselves to ensure quality. and that's crucial. one speaker at our conference last year was a china based pharmaceutical auditor whose business involves manufacturing facilities in asia on behalf of u.s. and european companies. i'd like to share a photo he shared with us. this is a facility in china, just from the rusted pipes and broken windows, you know this is not using good manufacturing practices. of course, there are very good facilities in china, this just wasn't one of them. it is is the start of a supply chain for a western company. sometimes substandard facilities

sell to show factories, high quality facilities that sell to products they didn't actually make. american and european companies are misinformed about the identity of all or part of their supplyin