Washington, DC - FDA Commissioner Scott Gottlieb, M.D.: Chairman Hoeven, Ranking Member Merkley and members of the Subcommittee. Thank you for the invitation to testify today to discuss the President’s Fiscal Year (FY) 2019 Budget request and for this Subcommittee’s continued, strong support of the FDA.

The investment you made in the FY 2018 Omnibus budget helps support programs that made 2017 the most successful in the FDA’s history, with a record number of approvals of innovative and generic drugs and novel medical devices.

The President’s FY 2019 Budget request for FDA builds on these goals. Overall, the Budget requests $5.8 billion in total resources for FDA, which includes an increase of $473 million in budget authority and $190 million in user fees.

The Budget requests new resources for the FDA to make significant investments in advancing critical areas of science, domestic technology and public health. Today, I want to focus my remarks on two of these budget proposals.

First, I want to highlight our request for resources to modernize generic drug development and review to enable increased competition, promote generic substitution and lower drug costs to provide more affordable drug options for patients.

Our proposal to modernize our generic drug platform comprises two policy components. The first element of our proposal will help make the approval of new generic drugs more efficient, by establishing a structured application.

The new process will also make submission of new generic drug applications, and their review, more seamless and efficient.

We believe a structured application, which allows key sections of the generic drug file to be captured in a structured template, will speed the review of the application and cut down on the number of review cycles that applications must undergo, thereby reducing generic drug development timelines.

The second component of this initiative is aimed at promoting the more widespread use of existing generic drugs, by looking for ways to keep generic drug labels up-to-date with the latest information about each medicine’s safety and benefits.

The current statute generally requires generic drugs to have the same labeling as the brand drug that they reference.

The burden to update the label with new safety and effectiveness information is typically born by the brand company.

However, when brand reference drugs voluntarily withdraw their marketing applications and therefore stop updating their labeling, FDA loses a mechanism to update generic labels.

This framework can stymie the updating of generic drug labels.

Having out of date labels, in turn, can depress use of generic drugs. By one rough estimate, there are about 5,600 reference-listed drugs that correspond to generic medicines. And of these reference drugs, 1,170 are tagged as discontinued or withdrawn by their original, branded sponsors for reasons other than safety or effectiveness.

In many of these cases, these are old drugs, and there’s no longer a sponsor who actively markets the reference drug.

If the brand drug sponsor has voluntarily withdrawn their marketing application, there’s no sponsor who is responsible for making any necessary label updates that other generic applicants would follow. The result is that these drug labels get frozen in time.

These drugs may be older medicines. But many are still very useful. Some form the backbone of modern cancer regiments.

The number of generic drugs that reference discontinued or withdrawn brand drugs essentially comprise about one-fifth of the total number of reference-listed drugs.

This covers about 460 unique active ingredients.

Assuming each discontinued or withdrawn reference listed drug corresponds to five generic drug products that, on average, refer to it, then it could mean that about 20 percent of all generic drug products on the market have been discontinued or withdrawn reference listed drugs.

For the generic drugs with a withdrawn reference listed drug, that means there’s no single sponsor that’s responsible for updating the generic drug label. This is about 5,000 drugs.

FDA can assume more responsibility to help bring these drug labels up-to-date. I believe that if we take on this role; it can promote more widespread use of generic medicines.

Our Budget requests money to do just this.

FDA, consistent with current authorities that allow for certain types of labeling changes to continue to be made for generic drugs after the brand drug is withdrawn, expects to play a more active role in updating more of these generic labels, building upon a pilot to update the labels on older generic cancer drugs.

Our Budget also includes a request for funding to support another initiative to allow us to make sure that medical products are developed as efficiently and quickly as possible.

This second effort will help make sure patients and providers have the most up-to-date the information on which to make informed decisions -- in addition to improving the use of real world evidence for many of the products we oversee.

We seek to expand new and existing active surveillance systems to enhance our real-time understanding of medial product performance by broadening our use of healthcare data to better take advantage of data available from electronic health records.

To accomplish this, several things must happen.

First, the data must be high quality and “inter-operable,” meaning that the data can be collected in one system, but used in many systems to inform patient care.

Second, we must work toward better integration of clinical care and clinical research.

The most informative and efficient way of developing medical products is to study them and how and where they will be used.

Finally, we must support development of tools that will allow these data to be properly used to inform our understanding of not only medical product safety, but also its efficacy.

Right now, our active post-market data monitoring systems – principally our NEST database for medical devices and our Sentinel system for drugs and biologics – depend largely on the secondary use of claims data because that’s what’s available.

As helpful as it is, we know that as a nation we can do better.

Real-time surveillance is first and foremost about safety.

But having a real-time, post-market, real-world experience system will also give us additional ways to use real world evidence to expand what we know about the effectiveness of new products.

And new products are often safer because they can be designed to address safety issues identified through better surveillance.

For example, we can better utilize electronic healthcare data to broaden the indications for use of approved medical products, eventually perhaps conducting much of late stage development in the “real world” making our pre-market development process more efficient.

And, as always, we continue to learn about medical products after marketing approval.

No matter the design or size of clinical trials, we can never answer – or anticipate – all the questions we may have before we approve a new product.

Thus, we must rely on post-market data tools.

The better those tools are, the more confidence we can have in the ability for questions to be answered in a real-world setting.

The FY 2019 Budget includes $100 million to advance the use of real-world experience to inform patient care and provide efficient and potentially lower cost ways to develop clinical data to expedite medical product development.

The proposal would create the capability to conduct near-real-time evaluation down to the level of individual electronic health records for at least 10 million individuals from a broad range of healthcare settings.

This will enrich our tools for evaluating safety and can reduce the cost of medical product development.

To see how this new system can improve product review, consider the steps we’re taking to modernize our approach to the review of medical devices and assure their safety.

This Budget proposal builds upon our efforts as part of the NEST, which is a public private partnership under the Medical Device Innovation Consortium.

With the new investment, FDA will be able to link across data sources, including electronic health records to capitalize on the opportunity to evaluate broader sets of endpoints that are not easily accessible and utilized today. This will provide for a fundamental shift from passive to active device surveillance.

These are transformative initiatives that can modernize the foundation of FDA oversight and improve patient safety.

Your support, through appropriations, allows us to modernize how the FDA fulfills its vital consumer protection mission and provide meaningful benefits for patients.

I look forward to explaining our Budget request in more detail and answering any questions.

The FDA, an agency within the U.S. Department of Health and Human Services, protects the public health by assuring the safety, effectiveness, and security of human and veterinary drugs, vaccines and other biological products for human use, and medical devices. The agency also is responsible for the safety and security of our nation’s food supply, cosmetics, dietary supplements, products that give off electronic radiation, and for regulating tobacco products.