many people work there and they are proud of it. third, what the drug companies do, i totally agree is widely important. my first wife had cancer. nine years and medication. it is important to get it right. here's the dilemma. by a letter.nt up my four year son has a severe peanut allergy. i'm a single mother working a low-wage job with little health care coverage. i can't afford to pay this much for epipen's and i can't afford not to because that cost is possibly his life. the heart of the matter here is that moms and dads are being given a choice. they can pay more than they can

afford or they can risk a loss they cannot door. . that is why it is so urgent that we work together to get to the bottom of this. i want to focus my questions on some of what i think are the market breakdowns for lack of competition. we have to make some reforms. when your company bought the , that was 2007. how many were sold then? >> much less than today.

>> there is a lot of head scratching going on here. >> i totally appreciate that. there has been a lot of misinformation, understandably so given the complexity that many of you have acted out. -- pointed out. >> i'm going to ask you to get your graph out where the wholesale acquisition price is just under eight bucks. then you go down to the bottom and that is the $50 per profit. that $50 sounds reasonable. , whoebates and allowances

is getting all that money? the other between people in the supply chain. the pharmacy benefit managers, retail pharmacy, wholesalers and insurers. provide,rvice they best it to negotiate a price with the pharmaceutical companies to get a given drug. can they get the rebate? probably be better to have -- philosophically i think that pharmacy manager of the system -- > >> about talking philosophically. or to understand how it works. huge drugat buys quantities, they get a discount from you and they keep some of that and that is how they make money. part of their way of negotiating

is with the formulary. if you have heart disease, there might be an option of drug a, b, c and they put on the formula drug a and they get increased rebate going. with respect to epinephrine, there is no formulary. if you're having shock, there is only one thing you need and it is the product you sell. >> there has been competition. if i could only get this point. they launch the project at the end of 2013, we had to face formulary choices of not being on the formulary did to the competition in the market. will you ended up with 94% of the market. >> i would ask that people recognize the product. it is more complicated. the product was recalled of the

market for safety reasons. >> i understand that. in this graph, what is impossible to understand is how do something cost $608 when the company that sells it is only making $50? that is hard to understand. complicatedand how and how head scratching that is which is why i have said i would welcome the opportunity -- this is about epipen's. >> i don't have time, i have to keep going. vermonter with the choice, it is tough on taxpayers and the medicaid program. $111 andit was paint ,his is a lot of money for us we spent then $111. now it is $557.

we went from $256,000 to $1.7 million. that is tough. that is why the generic, being able to put it into the market would help lower health care cost across the board. >> the generic, what i understand is, it used to be a position that you had is that doing these authorized generics was a threat to the generic industry. that is the public record of your point of view. , -- i know that this is complicated. the authorized generic of keeping a first generic or competing with the generic, and assistance, that is not the case -- in this instance, that is not the case. the cost of that depends the netherlands is $105. that is where corporate headquarters are. $105?d they get

you move the headquarters from the u.s. to the netherlands. how do they get to buy it for $105 and we pay $608? >> i'm not sure of the cost. what i would say as they have a completely different system. back.ield >> we would appreciate some clarification on that. we do have a pharmacist on the committee. mr. carter of georgia. >> thank you. before i start, can i inquire of you, the witnesses took a and they are still under. -- both. -- oath. have you ever seen a child have anaphylactic shock? >> i have not. >> have the ever gone up to a aarmacy counter and carried

pack of to epinephrine's and to epipen's and told a mother of a child who has had anaphylactic shock with analogy that the president that is going to be $600? >> no. -- price of that is going to be $600? >> no. >> have you seen it mother cry because she can't afford it? i have. i have seen a mother go out and have to call a family member to see if she can get the money together to try and see if she can pay for this medication that she knows her child has to have. i have witnessed that firsthand. none of us are without blame here. i include my profession as well. let me ask you a couple of yes or no questions. $608 wholesale acquisition,

is that awp? >> nesser. >> -- no sir. >> it is $608. you said that your company receives approximately $274 after rebates. after you take out the expenses like manufacturing and acquisition costs, regulatory compliance, all of those things come your profit is even less than that, correct? >> correct. that would be the $50 per pen. that, the have any contracts? any pharmacy benefit managers? >> yes. >> can you describe some of those contracts briefly? >> they are around products, multiple product. to participate on the formularies so patients have access to the products.

half established that over of the list price does not go to mylan. you know how much they receive? >> i don't have a breakdown between the channels. you know specifically how much -- >> nor do i and on the pharmacist. i don't know either. nobody knows. that is the problem. there is no transparency. >> do you know how much they receive in rebates and other educated?ed >> i do not.

all i know is that my computer calls insurance and they tellhe patient. the know how much you get back in rebate for pbm? >> i don't want to give you an inaccurate number. >> can you provide us with that information? >> i will certainly go back. i don't want a give an accurate number.

my good friend from georgia has introduced this bill dealing with the mac transparency act. this would help us and take a step towards transparency. i want to thank you for holding this hearing today. my requesteiterate that i have made to you for time for time about investigating

deceptive practices and how they are impacting drug prices. would you agree with that? >> i would agree that transparency is needed. the health care system has evolved dramatically. as you have seen, as a pharmacist, the system has not kept pace with the evolution of the health care system. >> the system has not kept pace. dollarshad billions of and wanted to let you know. after -- i watched mothers cry and watch her have to call family members to give money to pay for the medication. we don't know where it is going. where is it going? i need to tell her where that money is going. >> the most immediate thing i

can do is put a generic on the market. don't go there. i know better than that. that is a fraud. you know that. it is due there is no different whatsoever. >> we cut the price. >> do not do that to me. don't try to convince me that you are doing us a favor. you are not doing a paper by that. you could have brought the price -- instead, he said you are going to make it generic. the point of the wholesale acquisition cost of getting to those patients and making a difference, to make your everyone who needs one has one, i cannot ensure that the wholesale acquisition cost on the brain inside the channel that that would get to. >> you did not want to cut the price on the that the pan -- epipen brandy could use would

not get the rebate. i'm waiting for the information that you promised that you would send to this committee. i will hold her to that. caller: -- >> what i can tell you is that the most immediate thing we can do was put a generic in. it bypassed the formulary, everything you are describing. >> are you getting a rebate on those generics? are you getting a rebate from the generic version of epipen? >> we have not done those arrangements that. >> are you planning on getting a rebate? are you planning on getting a rebate from the pbms? >> i honestly don't know. >> remember the oath. >> i'm not negotiating does. as you know, the formularies, the pbm's and the generics, they

are very different. i just want to help clarify something, -- >> a yield. >> one step further, do you know what you get from the pbm's or the regular epipen? ?ow much rebate the gentleman was talking about that. >> i don't want to give an inaccurate number. >> can you give us the information? >> i will. >> do you expect to be getting rebates from the generic, is that right? yes or no? >> he asked specifically about the pbm and i don't want to give an accurate -- >> are you getting -- >> we pay rebates. on the neck as well. >> that is not what he is talking about. >> i can't sit here today and

tell you what comes back on the generic. i can tell you there are discounts and rebates paid. it is a smaller degree on the generic. >> this is a shell game. that is all it is. i hope you never have the experience of going to a counter and telling him other of a child who is suffering from anaphylactic shock that she needs to pony up with $600. i hope you never experienced that. mr. chairman, i yield back. expected tod be have that information? that is reasonable. you are the ceo. >> i'm not sure. know what he's asking, do you want him to ask again? >> we will do it as soon as possible. >> i'm asking you to reasonable date? a week?

>> 10 days. >> ok. 10 days. appreciate it. ms. watson coleman. a generous five minutes. >> thank you. i'm sorry i cannot be here all day. i may ask you some questions that have artie been asked. -- already been asked. i want to talk about the company and how generous it is. tor perks are not limited just astronomical salary. you also have access to the company's -- >> is that tru -- yes. on themoney spent company in 2015, he spent 310 house and in 2014, he spent 319,000. does that sound correct? >> yes. >> did you fly here today? >> earlier in the week.

i flew but not today. >> people on the private jet -- you flew on the private jets? >> yes. accompanied by other employees. do you have any idea how much that costs? it is for efficiency and safety. >> another question. where did you fly from? >> from pittsburgh. >> is that where you are located? >> yes. it is stunning to see so much money could be spent on your traveling around in a jet while we having this discussion here about whether americans are ed for a life-saving

drug. i know the importance of epipen because when i was a legislature , we may legislation that all schools had it. i was interested in your response to mr. welsh if this wouldad increased -- there have been an associate to decrease in the cost of the book because it was so widely used. i, that is not the case. i want to talk about the company and some of its tax benefits. i want to participate in the backdrop of the picture. we know you profited from increasing the price of epipen. the company has also increased profits by taking advantage of the tax loophole. the texan version which involves a company moving its official

headquarters abroad to a lower -- to lower the taxes paid. in 2014, mylan moved to the netherlands. >> that is true. >> you write to shareholders about the texan version and i quote, the transaction also is expected to lower my link tax rate.- mylan's tax lower to 20-20 1% in the first full year after the consummation of the transaction. the companywide expected tax rate in 2014? the believe it was in mid-20's before we inverted. >> what is it today? 15-17%.en perspective, hard-working americans had to

pay 25% on all amounts they earned over $38,000. to $1had earnings close billion. you paid lower tax rates than many individuals who are struggling and are possibly parents who need access to those drugs for their children. did you lower the cost of the epipen expense they would be saving by this move? >> 15-17% is our global tax rate. that is after averaging everything up. in the united states, we are paying higher taxes on everything that we sell. the benefit that you derived from moving your headquarters, did you lower the epipen cost here? >> we >> are still paying taxes. is that a yes or a no? >> we did not lower. >> according to an article in the washington post, some

executives based in the united states have higher arsenal tax liability related to stock their seed is part of their compensation. that same article stated that mylan paid you more than $59 to cover these taxes. while they skirted their tax liability and left the country leaving hard-working americans defer the bill, he did not have to worry because mylan paid more than $59 to cover your personal taxes. that is hard to deal with. $5 million to cover your personal taxes. that is hard to deal with. you are the ceo. when they moved their official headquarters abroad, did you move? >> no. >> according to your website, the chief executive officer and other executive officers carry business into-day the company's school office

in pennsylvania. >is that true? >> yes. >> is there anything more than a personal -- virtual office netherlands? >> we run our global business there. ofsically, we work out pennsylvania. >> you are running the business out of there. you moved your address to another country so that you did not have to pay the tax rate in this country. at the same time, this life-saving drug and this whoeased cost to families could barely imported -- afforded. this sounds to me like it is a shell. it is hard to hear this. youou think it is fair that don't have to pay the taxes as a u.s. company? >> we do pay taxes here in the

united states for all of the that wed revenue receive in the united states. we are paying our taxes. for everything we sell. i get that you are very smart about avoiding responsibility and straightforwardness. there is a bill that could close the loophole that you have your virtual office in the netherlands for tax purposes. that is the stock corporate inversion act of 2014 which was introduced in january of last year. i'm sorry to say that my republican colleagues have failed to act on it. i think that having had a hearing of this nature, we can expect to have more attention to this matter. with that, i thank you for the generosity of time, mr. chairman. i yield back. >> gentlewoman from new mexico.

>> thank you. i want to think the ranking member and the chairman for bringing this hearing together .nd having you unfortunately it is not our first hearing on such matters. we are talking and dealing with valiant and mylan and seeing a disturbing pattern where congress provides a variety of mechanisms to invest in innovation and pharmaceutical companies so that we get the right public health treatments. we also have innovation. we give you path and protections. our anti-money -- r and d money. what we get in return is a monopoly using your generic aspects in a way we did not attend. and have a hearing where we will not get any relief. you have made it clear that you

are following the rules and completely justified and that the amount of money you are both spending on salaries and bonuses and infrastructure and acquisition is all justified while you are making a billion dollars on a drug that most people can't afford with a patient assistance program that most drug companies created in the 90's so that as drive cartridge -- drug prices went up, policy would hesitate before dealing with price legislation. it would make it -- the problem is, if your consumer and you have to have it because it is life-saving, it is already unfair. the going to do whatever we need. quite frankly, my constituents are not happy about a prescription drug assistance program. the taxas to give you returns or social security number or tell you over the phone their income. i don't know what you pay for that staff to provide

valuation. the reality, just don't do it. make the drug affordable. and to create an environment where you have preferences and make sure it is on the preventative drug list. instead of having any more conversations -- i don't think we have gotten very many of our questions answered because, it is true, it is very complicated and we are created an environment where they don't have to be transparent so they aren't. an example where what we thought in terms of policymaking and competition works. years, we decided as a public health issue we should defibrillators- in all public places because we want to say people's lives. we know that creates an opportunity where people can help administer that level of care and prevent a person from dying from heart attack. , having six companies effectively compete,

we have dropped those prices of the two the lakers i -- two thirds. defibrillators by two thirds. we are seeing price increases and generics and longer patent protection, negotiated longer panted protection, i would suggest today while we have bipartisan support and real interest in protecting our consumers that maybe it is time that this committee lead the effort, let's join up with ways and means and energy and commerce and hear some ideas. i think it is time to consider allowing fda to look at price increases and then ask them to include that when they prioritize generic application. need ase that maybe we price reduction program for public health. we need to decide a public formulary. there is no formulary to the epipen. you have it.

it works wonders complication -- competition. different drugs for high blood pressure or insulin. you don't need a formulary. canada and all over europe, here drug is much cheaper. i think we should import those drugs right back. we paid you to figure out the device, the application, the drug and now we are protecting you with a generic. we are allowing you to do rep. grisham: we create rebates and very complicated, you pay them, they pay you back. i say, let us demystify it. congresske sure that put in real patient protection programs to prevent companies like yours from taking advantage of every policy aspect that was intended to make affordable ,ealth care, and quite frankly i thought as i am on this rant, i am tired of paying prescription drug companies and

manufacturers and advised companies to treat these issues. if we put the same kind of money that we are allowing you to keep to deal with allergies, we would not be having this conversation about epipens, would we? i say we do not try to pull out information where i agree, you have been far less than transparent. to dok we ought transparent legislation. i think there is a whole host of lead where we could incident being dragged down this path where we are upset for our constituents when none of these prices on their own at these companies hands will shift. they certainly have not. pharmaceutical companies and insurance companies and pbm's, retry to ship to them, they are making incredible profit. in an environment where that

profit-making environment has all been at the hands of policymakers trying to create a competitive, innovative, private sector, high-quality protectnts, to americans. instead, we have created that access around the world and we have left americans holding, if back.ll, the financial i for what i'm tired of that. i do not need any answers because i will not get any that are fair from you or your company. i am if they can congress to take a much different leadership role. i think my colleagues -- thanks my colleagues. maybe, because of your greed, and the other companies, maybe you have a congress in a position whereby partisan -- where, bipartisan, we have the to help our constituents. i yield back. >> we recognize the gentleman from wisconsin.

all, thank you. maybe somebody has asked this question. note to the next question. --go to the next question. how we figured out what the market is not working and my other companies are not marketing these things and undercutting mylan? is another product being marketed. why it is not marketed more broadly, whitey's increases in prices, i think is the question you are -- why fees increases in prices, that is why you are asking? >> bit his lower price, yes. market, right? >> that is our current market share. there have been products in and out of this marketplace over the years. >> other products in the

marketplace today? >> yes. >> are the lower-priced than your product? an bresch: there is generic.d and measure its exact price. it is in the $450 range. >> is there any reason why there are generic available? producing this stuff for substantially less? >> there are no generics in the way i think your speaking of them. the generics available are generics,"authorized that have chosen to remove the name from the label. otherwise, they are, our interest. the broader interest that we have is in encouraging real

competition, which means multiple manufacturers creating many different versions of epinephrine auto injectors, including true generics, generics approved under the fda. theou would argue competition is not as good or not the same thing? simply atre looking the numbers of manufacturers in the area, there are two manufacturers currently making forephrine auto injectors prescription in the u.s.. there is a third product that is approved that was voluntarily withdrawn last fall because of manufacturing issues. they addressed those issues, if they did, they would be able to come back on the market. >> you expect them to? >> we are offering any assistance we can for them to do that. my next question, a more difficult question. im not suggesting any governmental problem.

murraya book by charles a little while ago. he talked about the moral decline of america. a lot of that moral decline, he focused on the underclass. somethinge is not many people in my age group had when we were growing up, he focused a little bit on the upper class. things that he focused on, which i think, collectively is not a huge amount of money, maybe it had a penny to each prescription drug you have, but i think it is bad for the fabric of society. i realize it is legal and i am not just targeting you because it is common across the board. it came up earlier that you are making whatever, $90 million, $20 million a year. that is a half cent off of every prescription you guys make. the point marie made was that made was it -- murray

that chief executive got along making a lot less, and they make a lot less insightful companies around the globe. the point he made was that this greed, and while it amountrelatively small for every person in the country, it probably tears a little bit the moral fabric as people who work for companies and make relatively small amounts of money look at the chief thantive making more money anybody could possibly imagine. do you ever feel guilty or have feelings of guilt making such a large sum of money? who founded the company, but as an employee that does not have a lot of risk yourself? am blessed look, i and fortunate.

i have been working of his company for 25 years representing 40,000 employees. mylan has continued to provide access to multiple medications here in the u.s., over 600 products. mr. grothman: i'm sure there are many employees that do wonderful things, valuable scientists saving people's lives. i am saying, as he walked around the cubicles and the all you $40,000 year, $50,000 a year, do you feel guilty that you and the board of directors have arranged to make you make millions of dollars a year? ms. bresch: i love that mylan is trying to make a difference and howy in what we do much product and access we are bringing and the savings to this company alone -- this country alone, $180 billion. mr. grothman: do you understand what i'm saying? understand.n't

maybe you are very good and maybe you are worth it. one of the things that frustrates a lot of americans is that there are a lot of people who run their company into the ground and make tens of millions of dollars, but i'm going to ask you to comment again. you think it is good for the moral fabric of society and the idea that we want people to believe in the free economy in a business, some people make $20 million a year. to your point, the free market system and delivering being a well-run company and delivering great shareholder value is part of that free market system. mr. grothman: i'm sure they are getting good value. do you see what i'm saying? maybe you don't understand what i'm saying. there are a lot of people out there, we are going to elections, a lot of people out there think that the system is broke because they are working butt off,-- their told to take cuts in pay, and

they see a chief executive making a huge amount of money, way more proportionately even adjusting than inflation. i understand it, more than a make in other western countries. gatesthink a -- it rates at someg people. in all walks of life, people have the ability of making more involuntary lease a, -- voluntarily say, i am not going to make that much money. i want you to comment on the system we have in america were so many chief executives seem to be making far more money than i think anybody would even know what to do with. that is my only question. and i, other than commenting, the free market hope, thereis, i

are companies that are giving , giving back and creating access and providing, providing many things, and like i said, i , and what welan have been able to create, and, with 80 billion doses capacity, and lowering health care costs. ms. bresch: you're not answering the question means you are a little bit embarrassed the inside. your last comment on how reducing the price, i find offensive and inaccurate. let me go first, it is epipen a brand drug or a generic drug? ms. bresch: it is a brand drug. >> does that mean it is an innovator drug? mean based onu

cms classification? it is a non-innovator drug. >> those are often really ?enerics, correct # think it is a branded product, but a non-innovator drug for the purpose of cms? ms. bresch: that is how it is classified. mr. chaffetz: your familiar mylan had to settle $118 million settlement that in 2009, right? ms. bresch: i am not familiar. i am trying, what, settlement? mr. chaffetz: with the department of justice to resolve allegations that mylan had underpaid their rebate obligations in the medicaid prescription drug rebate program with respect to several other mylan products, not epipen, but are you familiar with that? ms. bresch: i am not recalling

the settlement that you are speaking of. mr. chaffetz: this is the justice department. i asked consent to enter this into the record. companies,ceutical submissions of false claims to medicaid without objections ordered. um, have you or anybody are mylan spoken with cms? yes, there has been conversations with cms. mr. chaffetz: have you had any of those conversations with cms about epipen or the generic epipen? ms. bresch: i have not. mr. chaffetz: have you spoken with anybody at health and human services about epipen? ms. bresch: i have not. mr. chaffetz: nobody.

have you been in discussions with cms about epipen? ms. bresch: yes, people at the company has talked to staff back and forth. mr. chaffetz: who at your company has done that? ms. bresch: i think there has been several people, i mean, several people within the company that have had conversations. mr. chaffetz: can you get us the names of those people? i am sure we could tell you, yes. mr. chaffetz: within that 10 days? ms. bresch: i am sure that we can do that. mr. chaffetz: we would also like the names of the people at cms they have been in discussions with. can you give us the names of the cms people your staff has been working with? ms. bresch: i'm sure we can. mr. chaffetz: is 10 days reasonable? ms. bresch: sure. mr. chaffetz: the concern here is that, and the question really, is why is mylan

classifying epipen as a non-innovator drug? thebresch: when we acquired product, it had been designated as a non-innovator drug and there have been several points throughout time that confirmed that that is. mr. chaffetz: do you believe the generic that you're planning to introduce, and when by the way, do you hope to introduce the generic? ms. bresch: certainly before the end of the year. mr. chaffetz: in the neck 90 days or something. ms. bresch: yes. to chaffetz: a you going work to classify that as a non-innovator drug or an innovator drug? ms. bresch: i'm much or without classification is. we have not submitted that document. we have not submitted yet because we have not launched the product. mr. chaffetz: i need to spend a few minutes going through this. this chart that is right next to you. i also need help with you, and it is going to take a few minutes to appreciate the indulgence of the committee to understand some of the definitions. out, there isnted

a revenue line which seems to be missing. correct? let me go first to the mylan it revenue. met for me. is that the average revenue? --defined that for me. is that the average revenue? ms. bresch: yes. mr. chaffetz: i will read here. "approximately 85% of consumers who are prescribed and epipen autoinjector payless than $200 for a two unit pack, and a majority play less than -- lessss and $50 -- pay than $50." is that correct?

they are both in the majority, right? 85% were prescribed and epipen payless than $100 for a two unit pack, and the majority payless pay less than $50. ms. bresch: yes. mr. chaffetz: how many do it as a prescription? do you have to have a prescription? ms. bresch: yes. 100% of the: so universe. if your average revenue to mylan , and the majority of people are paying less than $50, the minority is paying what to get it? it could range from, it could be anything because all of the plans, if you are uninsured or if, it would range

because every plan is different. mr. chaffetz: what is the highest number? is the $608 low? ms. bresch: because we do not set the price when you patient walks up to the pharmacy -- mr. chaffetz: i'm talking about your revenue. our revenue is the $224 per pen on average. mr. chaffetz: that is the average. what is the remainder? what are they paying? ms. bresch: the cost to the patient is different than what we are receiving. mr. chaffetz: you just told me, look, you told me that you sell 4 million to pat summitt 8 million individual. , 8 millions individual. you miraculously get to roughly $1.1 billion. ms. bresch: correct.

mr. chaffetz: how is it that the majority, according to what you wrote us, payless and $50, if the majority of 4 million people , more than 2 million people are paying less than $50, how do you get to that? ms. bresch: what the patient is paying is not coming back to mylan. from when we were speaking earlier of the people, the middlemen in the system, that is either the pharmacy benefit managers, retailers, --lesalers, read to insurers, i am not interfacing directly with a price perspective or a paid perspective to the patient. you'reffetz: representing to us that 85% of consumers are paying less than $100. thanority are paying less $50. the reason you're having this hearing is not because the

public thinks they are getting a good deal. look, i got a $600 product and i only had to pay $48. that is not why you are here. they are telling us, they are having to pay much greater numbers. ms. bresch: it is a growing minority i spoke of earlier that is being faced with the wholesale acquisition cost or more at the counter. mr. chaffetz: how do you define profit? what is profit to you? ms. bresch: the $50 per pin profits is then direct epipen cost. there is no allocation off of that. mr. chaffetz: that is not what you wrote me. less thanthis letter a week ago. here's what you said. "among other things, this profit is used to fund research and development and to maintain and improve our facilities across mylan, in which we invest $1.2 billion this year alone, or more than $3 million every day."

that is not the definition of profit. ms. bresch: that is how we reinvest the profit that we make. i fight you are asking me how $50 -- when there are five executives over five years at a $300 million, where in your p&l is that show up? where does it show up? ms. bresch: the $50 number i am showing you per pen is taking no company allocation to that whatsoever. mr. chaffetz: that is what you just wrote to me. you said "this profit is used for --" responsibly that your $50 profit is funding r&d and facilities? i just read to you verbatim what you wrote to me. ms. bresch: we absolutely take our profits and reinvest in our business. this year alone, $750 million in r&d we are spending. mr. chaffetz: when you take a three hundred million dollars that the five executives got, where on your p&l does that show

up? ms. bresch: i am saying that we did not take any of that out of this $50. mr. chaffetz: i'm not talking about the $50. i'm talking about the whole thing. your operating expenses over everything, correct? ms. bresch: correct. mr. chaffetz: where does that show up in that spreadsheet, tell me where that number is. here.esch: it is not on $50 would be lower if we were taking this company allocation like running the business out of this. this is straight just epipen. mr. chaffetz: i'm going to come back to this because your numbers are so askew. it really is troublesome. let me recognize the ranking member, mr. cummings. >> thank you very much. to be frank with you, you might

,s well take the fifth, too with the kind of information you got here today because i do not think that we, i will tell you, this reminds me of a game when, it is like hiding a ball. and it is like a shell game. it seems like we can never figure out where the ball is, and as i said from the very beginning, i was concerned that is worse.e here rep. cummings: in a row but up on andon, the boxer hold try to get through. .t the end, he comes back

in this situation, not only are you holding on, trying to win, you are placing we are position where not making very much progress here at all. i am saying i have been here 99% of this hearing, and i have practiced law for many years, and i will tell you, i do not know what your lawyers are telling you, but you, i do not think that you have been frank with us. i could understand it a little bit better if you did not know what this hearing was all about, and i do not say those words lightly. let me ask you a few questions, see if we might be able to move forward here a little bit. you know, your numbers just do not add up. if i could sum up this hearing,

it would be the numbers do not add up. it is extremely difficult to believe that you are making only $50 in profit when you just increased the price by more than $100 per pen. do you have any internal company documents to track the total profit you have made off of from 2007, when you acquired it, until today? do you have any of those documents? ms. bresch: well, we certainly could, i sitting here today do not have a cumulative number. i totally understand, and i know , if i had only read everything that has been out there around the price, i can totally understand how perfect thing it how- help her pick like --

perplexing it is. while i do not have answers to fix all of it, i think i could not agree more with the transparency of the $608 down is needed across the board because, patients have no visibility, pharmacists, nobody has a visibility of the value or what is being paid for what. rep. cummings: hold on for that one little thing you just said. value of thet the medication, right? , i know, you can take that mean, when you talk about the value of a medication, i guess you are saying, if you have a certain medication, it will keep you out of the hospital. certain medications will save your life. where does that end? in other were, had you put value in other words, how do you put value on life?

are saying, you because i am able to save somebody from possibly going to the hospital, whatever, that is supposed to be incorporated in the value and that is partly why we are able to charge these prices. are you telling us you are doing us a favor, you are doing our constituents a favor by raising these prices? i think, hopefully what you will see with the generic coming to the market -- rep. cummings: i'm happy about my now, right now. the other night, i was at a pta meeting in my district, and i had a mother who has three children, and all of them use epipen. she has to have one set at home, one at school. tears,od there in because she is only making maybe $50,000 a year or less, and she is trying to figure out how she is going to afford this.

other listened you more and more and you talk about, i think, i so, i might be a little bit more trustful if i had not heard some of this before, if i had not read some of it before from people who , but now,imbeciles when you present to me that you have got these assistance programs, as i see the assistance programs, and by the way, everybody comes in with the same story. it must be some playbook that you all use, and they say, oh, we have got an assistance program, we are going to help some people, and the next thing you know, they then you use that then use that to justify not reading the prices down. you understand that? that is exactly what you're coming here to do, you have done, that is what you are doing. are you going to go down on the price or are you going to come back down on the price at all?

stuff,de the generic what about coming down on the price? ms. bresch: we believe that the generic was much more meaningful to make sure we are reaching those patients so that across all the access points, and one thing i would say, and i know you have other companies in here, and i know there has been conversations, i would say, just as an example, mylan has had an orphan drug product for years, years and years, and it treats a very small number of patients. i believe it is now $500. it is a rare disorder. aroundice has stayed annually to00 provide the medicine needed every day, where it company came on the market three years ago at treat that same

patient population with just a more convenient dose. arederstand that there three things that you have seen and companies that you have spoken to, but i would hope that you would be able to look at mylan and the role we have played with generics, the role that i play if i talk about our sister gone it -- our sister gone -- if i talk about our experience. in schools and other public places, so that there is an epipen there were epinephrine autoinjector there for anyone who needs it. rep. cummings: we appreciate all of that. thatmylan have a slogan seeing is believing? ms. bresch: yes. rep. cummings: you do? ms. bresch: yes. rep. cummings: seeing is believing, that is what we want to do, we want to see the records.

you are refusing to say how much profit your company makes, you are repeating industry talking points with no substance whatsoever, you are try to claim priceour massive increases are actually a good thing for american families. our committee requested documents from mylan, but so far, you have failed to produce everything we have asked for. as you just said, mylan's slogan is seeing is believing, so in summary, ms. bresch, will you agree today, i know the chairman has asked you to do some next 10s within the days and information within the next 10 days, will you agree today to produce all the the committee has requested that we can confirm what is going on here? ms. bresch: we will certainly produce everything that we can.

rep. cummings: what is that mean? i do not know what that means. you, we have asked for specific documents. ms. bresch: i know we have been responsive and i know we are still, i understand that we have produced thousands of documents, a couple thousand documents, and i know there is more that we have to produce. i am saying that i am sure we will produce everything that we possibly can to give you the visibility and transparency to the numbers that i am showing you here today. rep. cummings: we want your agreements and contracts with manufacturers. we want suppliers. we want distributors, ebm's, and any of your other partners in the distribution channel for epipen. will you produce those? ms. bresch: i cannot be to all of those contracts from the ity agreement,

competitive information in some of those. that is why i have got to rely on the lawyers who are producing the documents to make sure that we are staying compliant with some of the other provisions in the contract. s,p. cummings: you will get u i know you are lawyered up back there, make sure you consult with your lawyers to get is what you can? ms. bresch: yes. rep. cummings: thank you. >> i recognize the gentleman from georgia. >> thank you. i find the chart very interesting. can you hold it up a little more, i cannot see the bottom of it. rebates and allowances, this is what you give back to patients, and so that is minus $334? ms. bresch: no. are all the same, the pbm,

retail, that is all the rebates and things. >> you are giving a rebate to a pbm? ms. bresch: yes. >> that is where that comes in there? >> it is part of it. >> what are allowances? ms. bresch: so, all of the>> fe, there is wholesale or fees, discount, rebate, that is capturing everything between the $608 -- >> are you getting any rebates from pbm? i did not want to give you an inaccurate number. are you getting rebates from a pbm? yes or no? ms. bresch: we are paying rebates for the pbm.

rep. carter: are you getting rebate for a pbm? ms. bresch: we are not getting epipen specific rebates for being the manufacturer. rep. carter: you are not getting rebates from a pbm? ms. bresch: i don't believe so. rep. carter: you just told me earlier you are going to produce documents that would give us the numbers. ms. bresch: what i do not want to confuse is that we are an employer. we have a pdm that is managing all of the employees in the u.s.. what i did not want to give you was an inaccurate number if there was rebates that come from the pbm as an employer versus the manufacturing. we are paying the rebates for the products. this is amazing. this is amazing. i have never in my life seen such a shell game.

am speechless, and that does not happen often. ms. bresch: that is what we have said and encourage to your point thattransparency and where is going and how it works, so that you do know what the cost is. rep. carter: let me ask you one more question, and i will stop. can you hold it up again? you took an oath earlier today saying you would tell the truth. ms. bresch: yes. rep. carter: is that the truth? $50 per pen? ms. bresch: yes. our profit is approximately $50 per pen. chairman,r: mr. i yield. again, i wouldt like to see a definition of .ebates and allowances i would like to see a definition

for each of those numbers. cost of goods sold. what do you include and not include in the number? ms. bresch: that is everything we are paying for partner for the cost of its old. >> -- of it sold. >> that is it? ms. bresch: we are, we have a partner on the product. we pay a price -- >> you buy it as a finished product? ms. bresch: yes. to packay them $69 per ?- two pack of epipens that is your turnkey price? ms. bresch: yes. rep. chaffetz: what you'd call

the cost of $105? marketing, sales, the disease awareness, everything that would be directed to epipen or around anaphylaxis awareness. all of the access programs, that would be all inclusive of everything directly related to epipen. and the number for research and development, you're fixed cost, your variable costs, where does that number show up? on here.h: that is not these are direct epipen related costs. if you look at the entire theany, obviously, that was point i was trying to just say earlier, that this is looking at a product on a standalone basis versus saying it takes a company or human resources or any other entities to sell the product, that this does not take any of that into consideration.

this is just giving you an approximate profit on just from an epipen related perspective. rep. chaffetz: not to pixel much on your own personal compensation, none of this comes out of this number, these numbers, you want us to believe your profit is less than $50? ms. bresch: if you do company allocation and all of that in, yes. not know who: i do the investors of this company are, but i am telling you, this is fishy business, because these things do not add up. we would expect a very professional presentation on these dumbed down versions do not make sense without the definitions in here. just, it just feels like you are not being candid and honest with congress, who is

asking you for some very basic information. allare scrambling uncomfortable, but you know what, we just want some basic information. you does this hole for yourself. dug this hole for yourself. tell me this is all out of your profit line. any responsible p&l would lay this out for us. you can make this thing go away by being honest and candid and we just do not think you are. that is why we are in i don't know what number our and we are asking you to provide more information. do not come here and tell us that you are doing the world a favor by increasing the price from $125 to over $600, and everybody else is making money but poor old mylan. that just does not smell right. it does not pass the basic sniff test. chairman, i do not

think i said we were not making money. we were trying to set the record straight as to the dollar amounts that have been out there around the $608 price to show that we received the $274 and to walk down that. we will happily provide the definitions and that transparency to show you the $50. rep. chaffetz: i just cannot buy the idea that the majority of consumers are paying less than $50. i mean, that is what you are telling us. ms. bresch: right. rep. chaffetz: seeing is believing, the mylan way. show it to us. ms. bresch: that is what our data shows, and we will. rep. chaffetz: we have not seen it. we appreciate you providing that to us. i have fda questions here. how many abbreviated new drug applications are pending before the fda right now? >> 2300 actions are currently.

is theaffetz: how long average wait time for an approval of a generic drug? >> i would like to get the information and get it back u.s. as i can. rep. chaffetz: can you define what, in fairness, what is a reasonable time before we start raising the red flags here? 10 days? >> 10 days sound like a, number, if that is good enough for you. rep. chaffetz: we would appreciate that. mentioned, as you you had some confidentiality agreements. that does not apply to congress, you know that, right? hello? ms. bresch: no, i did not know that. confidentiality. us.hat does not apply to i am sure your attorneys would work that through. i just want tot,

go back and briefly, as i close, with what i said before, i have asked you every kind of way, with the prices come down, and you have basically made it , basically it falls in the , and the valiant people. the company the hearing and go through the motions, at least you tried to answer some questions, but in the end, our constituents still suffer. i hope that when you fly back on your jet, you will think about the mother i told you about or the people that mr. carter talked about a few minutes ago, trying to just take care of their families. , i try to really look at things from a very, in a

way, a very balanced way. rep. cummings: but i can tell you that i have been on this committee for 20 years, and very rarely have i seen a situation it seems that we could not get the answers that we were looking forward to this degree. and what that does is it goes against credibility. and that is a very difficult hurdle. that is why we really do need to see the documents, and what we're trying to do, you can make all the money you want, i just do not like the idea of it being done in a way that is not transparent, and i do not like it being done on the backs of who can least afford it. you keep trying to convince us that mylan is doing a great favor, but mylan is making money.

but to come in and to say that some of the things that you have said, it just makes me, you know, feel that maybe you do not think we are that bright. and that is a sad commentary. so thank you very much, and we look forward to receiving your answers. and documents. >> we will be following up both of you within 10 days. committee stands adjourned. thank you. >> thanks, buddy. >> the presidential inauguration is about four months away. preparations around the u.s. capitol have begun. members of house and senate leadership to heart in a

ceremonial groundbreaking today, inmering in the first nail what will become the state really 45th president of the united states will be sworn into office on january 20, 2017. let us have a look. if we could please pick up our hammers, and join me in driving the first nail for the presidential inaugural platform. let us do that on three. 1, 2, 3. [hammering] [laughter] [hammering] [applause] >> well done.

>> that video from our capitol hill producer. for more updates, you can follow him on twitter. ♪ >> c-span's washington journal, life every day with news and policy issues that impact you. this thursday morning, we are live on capitol hill, where members of the house and homeland security committee talk in newhe recent bombings york and new jersey and the threat environment in the country and the work of their committee. -- guests include georgia republican congressman, new york republican, brian higgins, and dr. e, the chair of .he subcommittee watched c-span's "washington journal," thursday morning. join the discussion. ♪ c-span radio app makes it

easy to continue to follow the 2016 election wherever you are. it is free to download the apple app store or google play. get audio coverage and up-to-the-minute schedule information for c-span radio and c-span television, plus podcast times. stay up-to-date on all of the election coverage. c-span's radio app means you always have c-span on the go. dr. janet woodcock is director of the fda's drug evaluation and research center, which approved the sale of over-the-counter and prescription drugs. she testified at a senate hearing about the lack of generic alternatives to many brand-name medicines, including the epipen. the senate appropriations subcommittee hearing is a little over one hour.

>> good afternoon, everyone. thank you for joining us. ,he ranking member is on route oxy is here. i will give my opening statement. montana have am scheduling issue and we will try to get very quickly. we are pleased to have witnessed today, and i think dr. janet woodcock for joining us. she is at the fda's center for drug evaluation and research, makeheir mission is to

certain that the public has access to safe and effective drugs. sen. moran: earlier this summer, kansans and american families discovered that, particularly those families that had allergies, their children had allergies, that they were faced with a dramatic increase in the cost of epinephrine injectors, or epipens. in my view, that raises issues for us as appropriators for the food and drug administration in this sense. food and drug administration does not have jurisdiction over the cost and price of drugs. they are not a regulator in that regard, but their role is to make certain that drugs are as well as safety. efficacy and safety is bringing generics market and i think it would be useful for our subcommittee to hear that process.

all of us have an interest in making certain that drugs that are effective and useful are made available to consumers across the country at prices that are affordable, and one of the ways that we can address the fact that is the benefit is to look at the process that the fda utilizes to sense,enerics, in a competition to market is working in the way it should. so, this hearing is designed for us to elicit information woodcock,da, from dr. as to that process. we shouldole that pursue as members of the appropriations subcommittee responsible for the fda. congress approved the generic act in 2012. it was designed to address the

issues i have talked about, speeding up the process to bring generic drugs to market. in the past three years, under this act, the fda has collected $1 billion from generic drug manufacturers, which is translated into the hiring of an additional 1000 employees at fda, and they are replacing presumably an antiquated technology system. despite that, despite the 1000 employees and a new computer more than 4000re generic drug applications currently awaiting approval, and the average time it takes for fda to approve a generic is now 47 months, nearly 14 years. nearlyest for years -- 4 years. to adjust the backlog, and my guess is that dr. woodcock cannot speak nearly 4 about the details i amose negotiations, but

hoping this hearing will allow us to get a better understanding of how fda plan to tackle that accolade and that it -- that log and extension of the waiting time. note, dr., i would like to take the opportunity to acknowledge your efforts to advance the accelerated approval process for patients who have no other treatment options. i know that, in this regard, i want to talk or just mention in the muscular dystrophy issue that has occurred at fda. and i want to express my efforts for, my support for the efforts that bring that drug to market in a timely way. i look forward to discussing these topics with you, and we look forward to the witnesses, i'm sorry, my colleague is asking you questions in just a

moment. tester, we can defer to sen. merkley: your rise. you have a scheduling -- sen. merkley: when he arrives. you have a scheduling issue. >> that the doctor have a statement? sen. moran: yes. dr. woodcock, the floor is yours. you, mr.ock: thank chairman, for this opportunity to testify. fda has no role in setting drug pricing. there to enhance competition, which has been shown to decrease drug prices. would like to go through some of the actions we do take that enhance competition. we often approve multiple drugs in a therapeutic class. they are separate drugs. for example, there are a lot of antibiotics out there, and so , and there a class

may be a lot of drugs that compete in the market. also, we often approve different versions of a marketed drug once passions of exquisite -- once patents of exclusivity have expired. it is part of the legislation. these copies also can compete with the marketed drug. under the generics program, multiple more or less exact copies of a branded drug can be produced once all exclusivity patents have expired. recently, very recently, we cr oved eight generic drugs on the same day. the introduction of multiple copies into the market often can of thelower the pricing

drug. finally, our new program, all rise by congress and number of years ago introduces competition for biologic drugs, which generally are very expensive protein drugs. e have approved so far -- three biosimiolars. program takes 47 months to approve a generic applications. senator, you said that. you are telling me i am under a misunderstanding? that is fair. dr. woodcock: for the really old products that were in the the programre

started, the user fee program theyed, they have already, are already four years old. they are not getting any younger. as we approved them, they are going to have very long time to market because they started before the program even was put in place. 1 of thisctober year,, if a company sent us an approvable drug application, we'll approve in 10 months. thatof the problem is generic industry does not have a high level of meeting our standards on the first try. and though, they have to go through multiple cycles. after the prescription drug user fee program was put into place, now, it has been 20 years, we have extremely high rates of first title approval for new drugs. which are much more complicated.

it is possible to approve those drugs, approved drugs very rapidly if in fact the application meets our standards. but we cannot approve substandard generic drugs because that would, first of all, those are our standards, but it would erode the in thence of the public generic drug program and really us backould really take to the time when generic drugs were not well accepted by the medical community. another misconception, a lot of first generic drugs are moldering in backlog that have been so long. is not true. fewer than 100 applications in the backlog that have not already, that manufacturers have not gotten feedback from fda on the application. of reviewing and providing deficiencies for 90%

thehe backlog by the end of program that is next october. we already exceeded that goal 15 month ahead of schedule. 90% of those mac log applications have already fromed the communication fda about what their deficiencies are. there is a large number, 1700 applications, most of them from this backlog that are with the manufacturers, awaiting them, returning them, with improved information. we have really exceeded the goal that was set for us under the first user fee program by 15 month of dealing with this backlog in its first iteration. 500 of those are sitting with the manufacturers have actually been there for longer than one year.

huge activity our in getting all of these questions and applications back to the manufacturers for repair has somewhat overwhelmed their ability to get back to us promptly. also a belief that a large number of important generic applications are sitting untouched at fda. are almost no applications that are not touched, except ones recently submitted to us going through the filing process. however that we are not at steady-state yet. we have built of a huge backlog any testimony. we are still working our way through that in a sense that they will return again and again until such time as they meet our standards and they can be approved.

we have approved 1700 applications, this year we are proved 700. and the program we have approved 2200 approvals tentative approvals, since the program started. so, that is a number. -- we also prioritize generic applications may have public health implications, sometimes we have those that are first generics, and other words they might be only one other product out there, and it is to generic. so we prioritize the second one, and of course shortage drugs, if there is a shortage we will prioritize generic applications. we will move them to the front of the line, like the express line to try to get them through. i would like to say i am really proud of the work our staff has done in setting up the new

generic programs and the bio programs, they were very tough. they require multiple changes. very heavy left, and i think we are showing we are getting the work done. it is really been an enormous amount of effort, and that continues. i am confident we will continue to improve these programs, and they will provide a pathway for competition in the form of markets that will be very robust. i look forward to your questions. doctor, thank you very much. let me turn to the ranking member, senator merkley. senator merkley: thank you very much, chairman moran. i think there is a lot of interest in the role of generic drugs, and the role they can play in diminishing drug prices in america, which are a significant factor in the overall cost of our health care

system. certainly, significant factor for famiedeductibles, as so mang families do have. we have had a series of cases where a drug company controls a single product, in particular a segment of the medical market, single drug or a large share of the market. sale at aem up for vastly increase prices, very sudden, very dramatic price increases. it seems like every month there is some prominent story that catches the attention of america. the most recent of those is the epipen. thethe mylan company, dramatic increase from roughly $100 to $600 for a pack of two, despite the fact that the drug within them i understand costs very, very little, in terms of what is inside those injectors. ponder all of these

cases, we are very interested in the approval process. there are other dimensions of this, as well, such as the challenge when companies by of generics in order to keep them off the market, or use patent changes to try keep them off the market. or pay generic companies, market mutilations of this kind might not be things -- manipulations of this kind might not be part of your role in looking of the effectiveness and reliability of drugs, but they are part of the broader picture that is of great concern to americans. so, i look forward to hearing my colleagues. and hearing from you, and exploring this, because we have -- there is a lot of room for improvement. thank you. >> center merkley, thank you very much. i would yield my time to the senator from montana.

>> you're very kind. i thank you for the courtesy. you are right, this is a very important issue. as i go home, i hear from not only patients and friends and family, but i hear from doctors about what is going on in pharmaceuticals. and even though my questions to ultimately end up applying to money, the deal is really with your job. and that is that the ranking member talk about this briefly, but can you tell me how a company can take a generic and change it to what the doctor says is very, very slightly, and end up to be on the ticket back on the market, jack the price of when it is basically the generic insan, it was modified very little. talk to me about that. dr. woodcock: the generics have to be copies of the drug, a

brand drug originally. and so, they have to have a copy. they cannot substantively modify the generic. they may make it look different or something like that, but in our experience, the price rises for generics or innovative products, as you are referring to, have to do where there is no competition in the market, where they may be the only game in town. overall, generic drug prices are going down, have been going down, but in these cases that you are referring to, where for some reason there is no competition, there may be other approved generics. as senator merkley said, market share may be so small, or for other reasons they are not effective competition. >> well, i will tell you i appreciate that. and i don't have any problems with the pharmaceutical companies getting research and

development money back. i also think that if we are funding part of that research and development, we also want to get a break on that money. that aside, i think it is important to do the research. but i have heard from many docs, not just one or two, but many who say a patient using the generic the company will pull the back, some of deposit back, changes it not significantly at all, puts it back on the market for five or 10 times the money. or more. dr. woodcock: what you may be referring to is what the change of ownership, so a one generic soldny may own a product, so it looks different, a different manufacturer. >> but it is the same stuff. dr. woodcock: it has to be. the generic law. >> is there anything we can do about that, or is that just the way it is? dr. woodcock: fda, as i said

earlier, does not regulate prices. we have nothing to do with it. what we try to do is if there is a sole source, we try to get more copies into the market. >> i have a friend who had childhood diabetes diagnosis at the age of 13, 1970 he first became a diabetic. i cannot remember the number because it has been over a month. my memory does not last that long. he had told me that insulin back in 1970 was less than $10. and now, it is significantly much, much higher than that. has insulin changed over the last 40 years, or is insulin insulin? dr. woodcock: there are many new forms of insulin that have been introduced, and modern diabetic care usually includes a long acting insulin and short acting people cansulin pens auto inject so it is less painful, so there have been changes in technology, but some

of the basic insulins have not changed. mean, is it just pure greed they would increase prices like that? dr. woodcock: well, i cannot comment on the motives. but i can say that congress pass a number of years ago legislation for bio similars, so that the biologic product -- insulin right now is regulated as a drug. this is compensated, but it will biologic, a by a similar transition over to the insulin being subject to the cost of a bio similar copy. >> i appreciate your testimony today. i will have to get the companies and visit with them to find out what is going on. like i say, i get it. you have to recoup research and development. but man, i'm hearing so many stories on the street where there is minor modifications, or a drug that is really the same drug that has been around 45-50

years that keeps getting priced out the marketplace, driving people into poverty in the process. frankly, the concerns me. thank you. thank you, mr. chairman. >> there is no doubt that the cost of the price of drugs is important policy issue. and has significant issues to kansas families, significant consequence to taxpayers as we look at medicare costs. and i think our focus, i mean i hope our focus will be how we make sure fda is doing his job well to create competition and opportunities for families to make other choices, and to hold down the cost of the prices of those drugs as result. let me ask a couple of questions. first of all, at the pan in particular is a combo, a combination between the device and the drug.are there unique circumstances , to beke the generic

more difficult in that circumstance because of accommodation? firm thatck: yes, the markets at the then has patent patent the go a through 2025. any wish to make a generic what get aroundi those patents, or challenge them suggestively. >> i read your column, it talks about generics for the drug, but they are not widely used. dr. woodcock: ok, this is confusing, too. [laughter] there is another brand of epinephrine auto injector. fda have approved a number of them. the first category i talked about, they are all standalone new drug applications.

alright, they are not generic copies. they are separate. each one does the same thing. it treats anaphylaxis. and one of those, there is something people call and authorize generic. it is very confusing because it is not generic. alright, it is when a brand-name company decides to market their product, usually along with marketing the brand product, they take the brand name off and they make it look like the generic, and then the market that. usually a lower price. ,and some people have a brand loyalty who stay with the brand, but they can also compete in the generic market with this version. it is the same product. they make it in the same plants, just has a different label on it. ok? and so, the other manufacturer of the current epipen, the current epinephrine auto has anr, ok, that one

authorized generic, and that is what is currently being marketed. >> thank you, i think, for the clarification. [laughter] dr. woodcock: sorry. >> you indicated that, first of all, i indicated in my opening statement of a backlog. you did a pretty persuasive set of statements that indicate that there really is not a backlog. and so, if we were asking what you would do to solve the backlog problem, you would tell us the fda is on path in the way that it should be. is that fair? dr. woodcock: at the very back of the slides, of paper i passed out there is a chart. what it shows is that right now , the are 2300 andas generic drug application in the process of fda revealing them. the ones at the top, ok, they

were the backlog. now, they've come back in. we are reviewing them again. not all of them. but each year the goals becomes shorter for us to do the first review.and that i said, next year 2070 will be 10 months. completelyonest, straightforward about this, these are more applications than we would like to have in process. it will be better if we had fewer applications in process. i have given authorization to our manufacturing reviewers to hire 50 more people, temporary people who are going to work on trying to get this down. but mainly, this is going to be up to the manufacturers to submit to us approvable applications, and then we will be able in the cycle to approve them, if they still have deficiencies, then they have to go back. and it takes longer.

>> the way i understood your testimony is that what i described as a backlog really is applications that are pending, that have been reviewed to some extent but not yet approved,, sent back to the drug manufacturer for further actions on their part. dr. woodcock: that is correct. there are about 7000 with the manufacturer. >> are those problems with the application, are they processed in the proverbial sense that they did not cross the t, dot it the i. notthese substances issues, providing fda decision? we have tried to make them all substantive. part of the changes we made were we were calling the people all the time, while reviewing the application. we call that information request, so that these minor issues do not delay a decision on application. we are back and forth. we send out thousands of these information request, and

predicate the application fixed up as much as possible. but then, when we send it out as a complete response, then the manufacturer has substantive work to do. >> i have a series of other questions, but let me turn now to senator merkley. senator merkley: well, thank you very much, mr. chair. and you mentioned, dr. woodcock, iat there is a competitor, believe the name is adrenalclick . that competitor also has injectable device, but you also mention that anyone who wishes to compete has to get around the patents, that mylan has. what is the difference in these products, and how much is a barrier on the patent? and does adrenalclick have a patent? somehow wrapped up by these

companies? dr. woodcock: we actually have approved five different epinephrine autoinjector. three are not the market right now. i don't know what adrenalclick's patents might look like. we can get back to you on that. we do not know. copiest does not mean cannot be made. it simply means because of the intellectual property rights that they either have to be challenged, or an autoinjector has to be made that performs similarly, but did not use the technology. precisely, what is sound like you're are saying there have been five different approaches that of all been proven -- dr. woodcock: none of them generic. correct. >> adrenalclick has the authorize generic, a version of iself, i gather epipen planning to do so. what is the cost of the actual amount of epinephrine that is in one of these pens?

dr. woodcock: the cost of the epinephrine is probably insignificant. there is a cost, obviously is a chemical. but it has been around 100 years. >> i am told it is five dollars out of $100. dr. woodcock: that would be a generous estimate. >> so if i am somebody at risk for this challenge of my throat closing down, unable to breathe, and i would suffocate, can i legally acquire an amount of the drug put it in a syringe,, injected myself? dr. woodcock: yes, dr. can write that prescription. i have personally treated patients, because i run a clinic for a while. and i did not have an autoinjector. i injected them with epinephrine. the problem is if you are moveating, you have to

fast. if you do not do this all the time, it is not something intuitive. it is not as good as doing autoinjector. >> i am challenged to understand why competition does not kick in more quickly? if someone out in the audience today said, hhm, there are three other companies that have approved auto injectors, i will go to one of them, rent the technology, get up on the market that will cost instead of $600 for, $200will sell it make a ton of money. why does that not happen? is your agency so difficult to deal with that it is just a huge inhibiting factor to people who wouldn't ordinarily see an opportunity? dr. woodcock: well, according to my staff, we have approved four autoinjector. we cannot be too difficult. not five, but four. it is harder, though, to get a generic copy approved, because of the patents that have to be

-- >> use of the others are no longer on the market, so someone could conceivably purchase, license, rent the patent, payment for the patent. and that is not happening. yet, this vast and out of money being made -- amount of money being made, what is the barrier? it seems like a dysfunctional market, in other words, let us say someone here wanted to do this, if they have to go through an approval process for you from scratch, even know the pen as artie been approved? dr. woodcock: no, companies frequently, as we were discussing earlier, frequency sell rights to someone else, including the new drug application can be sold, and picked up by someone else that can reintroduce the product, they have to show us their manufacturing, and so forth. but they do not have to go through again, showing safety and effectiveness. >>, when you ask yourself the

question why hasn't someone jumped into this gap, is a because getting their factory approved is so difficult that although there are a bazillion dollars to be made they think it is an unworkable process? what is this huge barrier to market entry, when there are available patents that are not being utilized for autoinjector? dr. woodcock: i do not know. approved, we have generics, so clearly the barrier is not for many companies to get to generics on the market. >> i'm hoping somebody with an entrepreneurial spirit will jump in here tomorrow and figure out how to create some competition. will like to see a generic certainly, but as you pointed out, there are easier pathways given other auto injectors have been approved. my time is up. i will defer to my colleagues,

but there is something, something is fundamentally difficult that is preventing ordinary investments and market entry from a current -- i think we have to understand that better. >> the center for main, senator collins. senator collins: thank you, mr. chairman. good to see you, dr. woodcock. i know you are very familiar with the investigation that the aging committee under my leadership and senator mccaskill 's leadership has conducted into the pricing of certain prescription drugs. i want to follow-up on your comment about mylan's decision to introduce what is called an authorized generic of the epipen. i have to say that that strikes me as gaming the system. isentially, what mylan

doing, as you confirmed, is just changing the label on its product, and then selling it for a lower price. but doesn't that have the effect of reducing the incentive for a true first generic to come onto the market? i know that you have approved others, and that some of them were recalled due to problems. but in general, the idea of a brand-name company simply swapping the label on its product, and then issuing it as a generic, strikes me as greatly reducing the incentive for a true first generic to come on the market. could you comment? dr. woodcock: i am no economist, but i would say that would depend on how much money a generic company felt they could

make in the market, based on what they could price the generic at. us i believe congress asked to require companies to tell us if they were making authorized generics in the annual report, and for a supposed that information. and so far, we have noted 980 authorized generics that we have been notified about. of different drugs. so, it appears to be a relatively common practice in the industry. it is onehink personally that does need more examination, as far as the impact on discouraging a true first generic, or second generic to come onto the market. let me switch to a different issue that came up in the course of our investigation. and that is, we found that certain dru companiesg were putting their

brand-name drugs into restricted distribution systems. and that made it difficult, according to our investigation, for generic companies to get a sufficient amount of the drug, in order to conduct the bioequivalent studies, that fda requires. what can be done about that? dr. woodcock: well, we have received over 100 degrees from generic companies about problems they have been having and getting the reference drugs. in some cases, this relates to rems, restricted program for safety, however we have tried to remedy that by writing a letter to the reference company, saying, you know, use of the product for this purpose is acceptable, and it does not violate the rems. nevertheless, companies even have their own restricted

distribution, outside of rems, and clearly this is impeding the ability to obtain enough drug to compare. with respect to what can be done about it by congress, we remain therened that, you know, is so much -- many of these drugs are so valuable that companies will do a great deal to delay generic competition. it is worthwhile. so, any have a legislation that would have a lot of extra steps, and for each one of those would be an opportunity to sue us or send us a citizen petition, said we did not do the process right, or whatever. and get into court and delay introduction of the generic, or delay availability of the product. considering what you might do about this, you have to consider there is a very -- fines might consider the cost of

doing business, because there is so much at stake in delaying generic competition. >> i think this is another real problem. because the system is not supposed to work that way. 'se rem system, as you said, safety-oriented. it is not intended to restrict distribution, in a way that prevents the generic company from gaining access to a sufficient quantity of the drug, so that they can do the bioequivalence studies. i hope you will work with us to try to come up with something that does not have the kinds of unintended consequences that you said, and yet, prevents companies -- we found all sorts -- and otherf this means that companies were using to try to block or delay the introduction of generics.

thank you. > senator collins>, thank you very much. know that your committee with your leadership has significant interest in this topic. appreciate your interest. in order for mexico, senator udall. senator udall: thank you. dr. woodcock, it seems like every few months here about another pharmaceutical company raising the cost of a certain drug or device to a new, astronomical price. autoinjector is most recent to draw national attention. it has become so expensive that state ofin my home new mexico and across the country are struggling to afford it, even though the doctor say they must carry it in advance of an allergic reaction, but mylan, the manufacturer, has increased the price of the pens by over 480% since 2009.

i have received messages from many of my constituents in new mexico, who are directly impacted. i have heard from warring parents across the state, one of fromup a woman name page truth or consequences, new mexico. she needs to carry a pen to prevent a possible life-threatening reaction. paige wrote to me about her family's struggle to pay for the medication b she even had to chang. she even had a change jobs to cover the cost, get medication for the child. i am worried about the cost this will have on families, for families who can no longer afford the epipen. linda wrote to me that because of rising costs, she has stopped buying and carrying a pen, forced to go against the advice

of her doctor, who subscribed the pen after a severe reaction to a be staying. no one should have to go without an assertive product because of cost. that is why i went to the commissioner last week, along with members of the new mexico congressional delegation, requesting that the fda you lies all available resources to build -- i would like you to answer for them because i think the real question they have of you and the fda is, how did we get to this point? what happened to create this situation, how we got into a monopoly situation that we're talking about. could you describe that is simply as possible how you think we got here. that it terribly troubling this company now