House Energy and Commerce Subcommittee on Health Hearing

Mr. Chairman and Members of the Committee, thank you for inviting me to share with you my views on the Food and Drug Administration's proposed rule addressing supplemental applications proposing labeling changes for approved drugs. I am Director of Public Citizen Litigation Group and General Counsel of Public Citizen, and my work involves both regulatory matters such as FDA regulation and access to courts issues, such as federal preemption of state-law claims. In August 2011, Public Citizen submitted to the FDA a citizen petition asking the agency to authorize generic drug manufacturers to revise product labeling through the procedures available to brand-name manufacturers. In November 2013, the FDA granted the citizen petition in part by issuing the proposed rule. n1

I am here to speak in strong support of the FDA's proposal, which will bring post-market regulation of generic drugs in line with the realities of the pharmaceutical market today and help ensure that drug labeling provides adequate warnings to patients based on information that comes to light after the drug is on the market. While the objections to the proposal focus on liability, the purpose of the rule is to improve drug safety.

Since 1984, the prescription-drug market has been transformed: Sales of generic drugs have skyrocketed and now constitute the vast majority of all prescriptions filled. This is a good thing. Yet despite considerable changes in the market, FDA regulation of generic labeling has remained substantially unchanged.

In terms of labeling responsibility, generic manufacturers today are in a position similar to that of brand-name companies in 1982, when those companies urged the FDA to adopt the regulation that allows brand-name manufacturers to revise labeling to make safety updates prior to FDA approval of the revision--what we refer to as the "changes being effected" or CBE regulation. Before 1982, the FDA generally required prior approval for all labeling changes. n2 Brand-name manufacturers argued to the FDA that this requirement was unnecessary, took FDA reviewers away from other important work, and caused costly delays. In response, the FDA identified numerous types of changes that manufacturers could make without prior approval, including "[c]hanges that add or strengthen a contraindication, warning, precaution, or statement about an adverse reaction, drug abuse, dependence, or overdosage, or any other instruction about dosage and administration that is intended to improve the safe use of the product." n3 These changes, the FDA said, "would help concentrate the agency's limited resources more on applications for marketing, and would also permit pharmaceutical manufacturers to institute certain postmarketing changes sooner,"n4 thereby advancing safety.

The concerns that motivated the FDA to adopt the CBE option in 1982--the need to promptly inform physicians and patients, and the interest in efficiency and resource management--apply equally here. As was true then, the agency lacks the resources to be the primary instigator of post-approval labeling changes and cannot quickly pre-approve safety updates to the labeling of every approved drug. And as was true then, safety information often comes to light or is clarified after initial approval.

What is different now is that generic drugs comprise such a large percentage of all prescriptions filled and such an overwhelming percentage of all prescriptions filled for off-patent drugs. Therefore, today, to fulfill the goal of providing timely labeling updates to physicians and patients, the CBE process must be available to generic, as well as to brand-name, manufacturers. As generic market share increases, the brand-name manufacturer loses incentive to devote resources to post-approval safety monitoring. Given that the FDA cannot monitor all post-approval data by itself, drug safety is threatened when the regulatory and common-law incentives designed to motivate manufacturer diligence weaken with shifting control of market share.

Last summer, Public Citizen compiled a list of drugs for which black-box warnings-- reserved for the most serious warnings--were added after a generic equivalent entered the market. Restricting our research to a five-year period, we identified 53 drugs for which a black-box warning calling attention to serious or life-threatening risks was added after generic market entry--and the list is likely incomplete. The data show that new safety issues of the most serious type commonly arise after generics have entered the market, and they underscore the public health imperative of maintaining an incentive for generic manufacturer surveillance for safety. n5 A 2013 article authored jointly by three FDA staff and two academics confirms this result: "The most critical safety-related label changes, boxed warnings and contraindications, occurred a median 10 and 13 years after drug approval (and the range spanned from 2 to 63 years after approval), underscoring the importance of persistent and vigilant postmarket drug safety surveillance." n6

This point is particularly important because brand-name manufacturers not only drop to a small market share fairly quickly after introduction of a generic onto the market, but the brand-name manufacturer often stops selling the drug altogether. n7 In fact, a 2012 study by the Generic Pharmaceutical Association notes that, for 45 percent of generics sold, no branded product is currently on the market--that is about two thousand products. n8 Accordingly, in these instances, if generic manufacturers are not actively monitoring and proposing safety updates, no manufacturer is doing so at all.

Our research and the medical literature confirm the findings of a 2010 FDA study that "critical safety-related label changes" may occur many years after approval, after entry of the generic onto the market, and after exit of the brand-name product. n9

It is no answer to say that the FDA does postmarketing surveillance and can order labeling changes. The premise of the postmarketing regulatory scheme is that the FDA does not and cannot take primary responsibility for monitoring the thousands of drugs on the market. As the Supreme Court put it: since the Food, Drug, and Cosmetic Act was enacted, "[i]t has remained a central premise of federal drug regulation that the manufacturer bears responsibility for its label at all times." n10 This point is borne out in practice: In 2010, manufacturers "initiated 58% of safety-related label changes compared to 42% initiated by the FDA." Although the "FDA initiated most of the boxed warnings (84% versus 16%)," manufacturers initiated 78% of the changes to the adverse reaction section. n11

The concern that the proposed rule would result in confusing or inconsistent labeling is unwarranted. First, the FDA has structured the regulation to invite the brand-name manufacturer to submit a revision upon receipt of the generic labeling revision, to allow simultaneous review--with simultaneous approval or other response--of both the generic manufacturer's labeling revision and the corresponding brand-name manufacturer's revision. n12 And the period in which labeling of the brand-name and other generic drugs would differ will be no more than under current regulations (and perhaps less, in light of an aspect of the proposed change that would specify a 30-day period for conforming changes n13-- whereas today, there is not a specified time for conforming changes). This approach guards against labeling with varied warnings existing beyond a short period, and, in this regard, the process is no different than under current regulations. Second, there is simply no reason to think that, even where several different generic manufacturers are selling the same drug product, the FDA will receive inconsistent labeling revisions. Numerous different newly discovered safety risks are unlikely to come to light for a single drug at the same time. We know this because where there are several distinct drugs within a single class (for example, Prozac, Zoloft, and Paxil, members of a specific class of antidepressants) sold by different brand-name manufacturers, we do not see the manufacturers discovering a variety of new safety risks all at about the same time. If several manufacturers submit changes at or near the same time, the changes are likely to address the same risk--and it will hardly confuse physicians and patients if, for instance, one generic warns that its drug "has been associated with inflammatory bowel disease in patients without a prior history of intestinal disorders," while another warns that "long term use is associated with serious intestinal problems, including ulcerative colitis and Crohn's disease," and a third warns that "patients taking this product should be monitored closely for signs of signs of inflammatory bowel disease." Third, while there is no reason to think that it will happen, if several generic manufacturers submit different types of updates at the same time, and the FDA sees a risk of confusion, it can promptly disapprove updates or send a letter to manufacturers of that drug product asking them not to submit additional updates until the agency has considered those that are pending.

Moreover, currently, despite the "sameness" requirements of the Hatch-Waxman Amendments, brand-name and generic labeling often vary, a fact that "stands in stark contrast to the expectations of providers, the FDA, and, more recently, the United States Supreme Court." n14 As a 2012 study by three academic physicians found, there often is significant inconsistency between safety labeling on the brand-name drug and the generic counterpart. n15 While these variations seem to run counter to the regulatory regime, other variations are built into the regulations--such as the listing of different formulations or different allergy warnings or omission of a particular use. Thus, the FDA, manufacturers, and patient advocates have long accepted that "sameness" is not to be taken literally, but functionally, as a way to implement Hatch-Waxman's concern that generic and name-brand drugs be equivalent. Adopting an additional exception that applies only temporarily as a means of expediting the provision of updated safety information to physicians and patients is likewise consistent with the Hatch-Waxman Amendments.

By giving generic manufacturers more responsibility for labeling, the proposed rule also encourages more vigilance, both to monitor adverse events and medical literature to determine when labeling updates are called for and also to monitor the FDA's labeling webpage for approved (and required) updates for the drug. FDA regulations have long required generic manufacturers to do this monitoring (the same as brand-name companies), and continuing that already-required monitoring ensures that the proposed rule creates no confusion. Indeed, the clear time limits proposed by the agency are likely to ameliorate the current variations in labeling between generic products and their brand-name equivalents.

In addition, generic manufacturers are fully capable of initiating labeling changes. Mechanically, the procedure already exists, as the CBE process is well-established, and generic manufacturers already have in place procedures for revising labeling in response to FDA orders and revisions by brand-name manufacturers. Practically, the FDA webpage will facilitate the process. Realistically, many (although not all) generic manufacturers are large companies, including some that also manufacture brand-name drugs and, therefore, have the resources and familiarity with the process to make labeling changes promptly and accurately. For instance, leading generics manufacturer Teva Pharmaceutical Industries "rank(s) among the 10 top pharmaceutical companies in the world" and boasts a 20 percent share of the U.S. generics market, according to the company's website, while brand-name manufacturers Pfizer Inc. and Novartis Corp. have generics divisions that in 2010 ranked as the third and fifth leading generics companies, respectively. n16 In addition, adverse event reports are the most frequent source of labeling changes. n17 These reports are publicly available through the FDA n18 and therefore available to all generic manufacturers.

Another objection recently made to the FDA's proposal is that, if allowed to make safety-related revisions, manufacturers will over-warn. This objection is also unwarranted. Although brand-name manufacturers have had the ability to make safety updates for more than 30 years, over-warning has not been a problem. As the FDA's Associate Director for Policy, Center for Drug Evaluation and Research (CDER), who has led CDER's Office of Regulatory Policy for more than 20 years, n19 has stated: "We rarely find ourselves in situations where sponsors want to disclose more risk information than we think is necessary. To the contrary, we usually find ourselves dealing with situations where sponsors want to minimize the risk information." n20 Put simply, the FDA "has not experienced problems with sponsors' use of CBE supplements to over warn." n21

Finally, the generic manufacturers have suggested several economic arguments in opposition to the rule change, based on the fact that they would be open to liability for harm to patients if, after the rule change, they failed to provide adequate warnings about safety risks associated with their products. Specifically, the companies have argued that the proposed rule, when finalized, will increase the cost of generics drugs, that insurers may refuse to insure the companies, and that some companies may even go out of business or decline to enter the market as a result. Although to initiate safety labeling revisions would also allow the manufacturers to be held accountable to patients for failure to warn, this accountability does not pose the grave problems suggested by generic drug companies. Rather, very recent history proves these theories wrong.

For all but the last three years, generic drug manufacturers have faced liability risk because, until the Supreme Court'sPLIVA v. Mensing decision in June 2011, generic companies could be and were sometimes sued for failure to warn of risks posed by their products. No court of appeals had accepted the argument that generic drug manufacturers could not be held accountable for failure to warn. Thus, the proposed rule would not create a new cost, but one borne and managed well by the industry consistently until June 2011--and still borne by brand-name manufacturers today. n22

Further, as the cost per prescription did not drop after the Supreme Court's decision in 2011, there is no basis for assuming that the cost per prescription will rise in light of the new rule. And the recent industry prediction that insurers might refuse to insure generic drug companies against liability risk is flatly contradicted both by the fact that the companies presumably carried such insurance through June 2011 and the fact that brand-name companies continue to face liability risk, and also to obtain insurance, today.

Moreover, the generic manufacturers are wrong to assume that they will incur large liability costs if the proposal is finalized. Rather, with greater ability to make prompt safety updates, the proposed rule should help avoid liability, as compared to the circumstances prior to June 2011 (a period during which the industry grew exponentially). This is because the rule will help prevent injuries from occurring in the first place.

It is important to keep in mind that lawsuits for failure to warn, when meritorious, occur because a patient suffered injury due to the lack of an adequate warning. For example, the FDA approved the acne medicine Accutane in 1982 and approved the generic form in 2002. Reports that the drug can cause inflammatory bowel disease appeared throughout that time.

Yet the brand-name company did not add a warning to the labeling, although the reports were available for both the brand-name and generic manufacturers to see. Finally, in 2009, the FDA ordered an inflammatory bowel disease warning to be added to the label. In the meantime, many patients, primarily teens, developed inflammatory bowel disease, requiring surgeries and altering their lives forever. Because only the brand-name drug could effect labeling changes, but so many of these patients were prescribed the generic form, none of them can seek compensation from the manufacturers for the thousands of dollars of medical expenses they incurred because of the inadequate warnings. And today, this drug, which has a history of causing significant injury--ranging from birth defects, to mental health issues, to ulcerative colitis, requiring a series of labeling revisions throughout its history, the most recent one just a few years ago--is available in generic-form only.

Of course, the manufacturer is not responsible every time that a patient is injured. Sometimes, the patient should not prevail in court. But sometimes, as in the case of Accutane, the manufacturers, including generic manufacturers, had the information but turned a blind eye. The current system is complicit in allowing generic manufacturers to do that. The result is more injury and more costs. Why more costs? Because immunizing the companies from liability does not make the injured patients' costs go away. The medical expenses and lost wages from lost work time still exist; they are carried by the patients, health insurers, and taxpayers, through Medicare or Medicaid. Because the proposed rule will give generic manufacturers the tools and incentive to update safety labeling, any costs of the rule should be offset by cost savings--savings in medical care for the patients who will not be injured because physicians and patients are armed with updated labeling about safety risks.

Finally, while the objections to the proposed rule center on liability, the primary concern should be with safety. The potential for liability is relevant in this regard because it incentivizes manufacturers to take extra care to ensure that their products are as safe as possible. As FDA's Chief Counsel from 1989 through 2001 stated: "FDA product approval and state tort liability operate independently, each providing a significant, yet distinct, layer of consumer protection. FDA regulation of a [product] cannot anticipate and protect against all safety risks to individual consumers." n23 Similarly, the highest official in FDA's new drug review process in 2008 (a time when the FDA was pro-active in revising regulations for the purpose of immunizing manufacturers from liability) wrote: "[M]uch of the argument for why we are proposing to invoke preemption seems to be based on a false assumption that the FDA approved labeling is fully accurate and up-to-date in a real time basis. We know that such an assumption is false." n24 He continued, "[w]e know that many current approved drug labels are out of date and in many cases contain incorrect information (e.g., the overdose section) ... [I]t is unwise to suggest that FDA approved labeling is always up-to-date and always contains a full and complete listing of all pertinent risk information." n25

In short, properly used, the revised rule will improve patient safety, and by reducing injuries should also reduce actual instances of litigation as compared to the years before June 2011.

I would be glad to take questions. Thank you.

n1 A copy of the citizen petition is available at http://www.citizen.org/documents/Citizen-Petition-8-26.pdf and attached to my written testimony, along with a 2013 study referred to later in this testimony. See infra note 5. These documents set forth in greater detail the reasons why the proposed rule fills an important gap in the regulation of drug safety.

n2 See 47 Fed. Reg. 46622, 46634 (1982).

n3 Id. at 46635.

n4 Id.

n5 Public Citizen, Generic Drug Labeling: A report on serious warnings added to approved drugs and on generic drugs marketed without a brand-name equivalent 7-10 (2013), available at http://www.citizen.org/documents/2138.pdf. And attached as an exhibit to this testimony.

n6 Jean Lester, et al., Evaluation of FDA safety-related drug label changes in 2010, 22 Pharmacoepidemiology and Drug Safety 302, 304 (2013).

n7 See Public Citizen, supra note 5, at 12-23.

n8 Generic Pharm. Ass'n, Generic Drug Savings in the U.S. at 8 (4th ed. 2012).

n9 78 Fed. Reg. 67985, 67988 (2013) (proposed rule).

n10 Wyeth v. Levine, 555 U.S. 555 (2009).

n11 Lester, supra note 6, at 303.

n12 Id. at 67990.

n13 78 Fed. Reg. at 67999 (proposed revision to [Sec.] 314.70(c)(8)(iv)).

n14 See Duke, et al., Consistency in the safety labeling of bioequivalent medications, Pharmacoepidemiology and Drug Safety (2012).

n15 Id.

n16 See Alaric Dearment, Countdown to 2011: A Big Year for Generics, Drug Store News, Nov. 14 2010, available at http://www.drugstorenews.com/article/countdown-2011-big-year-generics.

n17 Lester, supra note 11.

n18 See FDA, FDA Adverse Event Reporting System, at http://www.fda.gov/Drugs/GuidanceComplianceRegulatory Information/Surveillance/AdverseDrugEffects/default.htm

n19 FDA, About FDA, Jane Axelrad, at http://www.fda.gov/AboutFDA/CentersOffices/OfficeofMedicalProductsand Tobacco/CDER/ucm374540.htm

n20 FDA Career Staff Objected To Agency Preemption Policies, United States House Of Representatives, Committee On Oversight And Government Reform, Majority Staff Report 3 (Oct. 2008) (hereafter FDA Career Staff).

n21 Id.

n22 See World Health Organization, Trade, foreign policy, diplomacy and health: Pharmaceutical Industry (2014), at http://www.who.int/trade/glossary/story073/en/ (10 largest drug companies have profit margins of about 30%); see also id. ("Companies currently spend one-third of all sales revenue on marketing their products--roughly twice what they spend on research and development.").

n23 Margaret Jane Porter, The Lohr Decision: FDA Perspective and Position, 52 Food & Drug L.J. 7, 11 (1997) (discussing medical device regulation).

n24 FDA Career Staff, supra note 20, at 2.

n25 Id.

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