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where it involves consumer safety. Or, if not that, whether or not you have any suggestion that would keep this agency responsive to citizens over the long pull without this kind of —

Mr. Day. Well, general power of some kind to appear as an interested party in a proceeding is going to come about if this committee approves and if the Senate passes a Consumer Protection Agency bill. And that will be a major apparatus for having the EPA get into all kinds of proceedings and decide whether they think some other agency is doing right by the consumers.

My particular point on this thing is that this bill is unusual in having nearly every kind of a sanction that anybody can dream up put in here, with criminal penalties, civil penalties, various types of injunction powers, private lawsuits, entirely aside from the one against the agency, private lawsuit as provided for back in section 316, seizure of products, all of these different things.

And I can see some perhaps conscientious person saying the Product Safety Agency only used four of these sanctions against a company, and they didn't use number five and six which are on this list so we are going to sue the Agency. I don't think the Agency ought to be bogged down having every discretionary decision they make subject to having to be fought over in court.

You have to give a certain amount of discretion to anybody that is running something and the people who don't get their way every time can't always be given a means to go in and take up the time of that Agency so the Agency can't carry out their main function. That is our reason for our approach on this is because of the unusual number of sanctions and powers for enforcement that are given in this particular bill.

Senator HARRIS. Well, I understand your viewpoint, Mr. Day, and I appreciate your being here.

Mr. Day. Thank you, sir. Senator HARRIS. Our next witness is Mr. C. Joseph Stetler, president of the Pharmaceutical Manufacturers Association. Mr. Stetler is accompanied by Mr. Bruce J. Brennan, general counsel and vice president of the Pharmaceutical Manufacturers Association.

Gentlemen, welcome.

TESTIMONY OF C. JOSEPH STETLER, PRESIDENT, PHARMACEUTICAL MANUFACTURERS ASSOCIATION, ACCOMPANIED BY BRUCE J. BRENNAN, GENERAL COUNSEL AND VICE PRESIDENT, PHARMACEUTICAL MANUFACTURERS ASSOCIATION

Mr. STETLER. Senator Harris, as you have stated, we are here representing the Pharmaceutical Manufacturers Association. The PMA is a voluntary nonprofit trade association with approximately 115 members engaged in the development, production and sale of prescription drug products. These member firms account for approximately 95 percent of these products that are made and sold in the United States.

In our testimony, we would like to comment on titles I and II of S. 3419, which I understand are the subject of these hearings. Our comments are intended to deal specifically with drugs and medical devices and not with the various other products that are covered by the bill. Under the bill, which would create a new Consumer Safety Agency, all functions of the Secretary of Health, Education, and Welfare, administered through the Food and Drug Administration and the Division of Biologics Standards, would be transferred to the Administrator of the new agency.

Our opposition to this proposal does not stem from the fact that the suggested agency is new or that it is independent. Rather, it comes from our belief that less effective control over the safety and effectiveness of drugs would result and that the suggested reorganization would bring about a further fragmentation of the responsibility for health matters which is already widely distributed among Government agencies and departments.

It should be borne in mind that the National Commission on Product Safety, in its final report in June 1970, did not recommend the inclusion of drugs in the model bill which it proposed. It appears that the Commission considered the procedures applicable to drugs as a sort of benchmark for proposals to tighten the controls of other products. It was apparently the opinion of the Commission that the control of drugs under the existing system was adequate.

MOVING IN THE WRONG DIRECTION

In brief, S. 3419, in relation to governmental health functions, is, in our opinion, moving in the wrong direction. It would further disperse responsibility where consolidation is needed.

Lest anyone assume that we are here to preserve and protect an existing agency which, certain supporters of S. 3419 claim, has been too friendly with industry, I would like to set the record straight. The pharmaceutical industry has had numerous disagreements and confrontations with FDA during the past 10 years and at times we have been its severest critic.

PMA has gone to court against FDA five times since the 1962 amendments were passed, engaged in numerous hearings, and has reacted in writing-frequently in opposition—to more than 200 regulatory policy statements published by that agency in the Federal Register.

We are painfully aware of the FDA's deficiences and shortcomings, since the ability of our industry to progress and serve public needs is heavily dependent upon the agency's effectiveness, aggressiveness, and overall capabilities. We are of the belief that many of its existing problems are caused by inadequate funding and difficulties in attracting the high-level, scientific personnel needed to carry out the agency's complex assignments.

FDA IS IMPROVING-STRONGER LEADERSHIP

However, despite these and other problems, we would say, on balance, that the FDA today is abetter agency than it has been in at least a decade, and it is improving. Its leadership is stronger, and among its saff are many qualified and dedicated men and women. We definitely do not believe that the situation would be remedied by the elimination of FDA.

To add to this existing system, with its imperfections, an altogether new agency, with new personnel, new regulations, major new responsibilities, and all the complications and problems incident to such an action could not fail to lead to great confusion, substantial additional expense, delay, and uncertainty. To expect a new agency to quickly assimilate the intricacies of the Food and Drug Act and the Public Health Service, as it applies to the Division of Biologics Standards, is unrealistic.

The pharmaceutical industry's operations and the status of our Nation's drug supply are heavily dependent upon the effective administration of the drug laws. It is therefore in the interest of the consumer, of science, and in our own interest that the Food and Drug Administration, the Division of Biologics Standards, or whatever agency administers these laws, have stability and the best there is in staffing, financing, facilities, and public confidence.

PMA SUPPORT FOR FDA

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To help obtain those qualities for the FDA, the PMA and its predecessor organizations have a long record of active supoprt of the legislation under which the agency operates, and the budgetary requests that it has made. In 1962 for example, PMA supported major improvements of the Food, Drug, and Cosmetic Act, which increased FDA's inspection authority and added premarketing proof of efficacy to the safety requirement of the basic law. We also took a strong stand in favor of the drug abuse control amendments which passed in 1965 and which were further tightened in 1970.

On the FDA budget and staffing requests, the PMA has a record of active supoprt before the Congress. In this regard, we understand that for the next fiscal year, the Food and Drug Administration has presented a request for an appropriation of approximately $180 mil

representing an increase of $67 million over the previous year. If properly allocated, this increase, in our opinion, is justified.

We are not sure, however, of the relationship of the FDA requested figure and the budget of DBS, which approximates $10 million to the maximum authorization of $180 million for fiscal 1972-73 specified in section 116 of S. 3419. If this is the intended total authorization of funds for an agency with the sweeping authority and responsibilities of the proposed new Consumer Safety Agency, it demonstrates, at the outset, a lack of comprehension of the funds needed to administer such an operation.

We are concerned that locating the health functions of the FDA and the Division of Biologies Standards in a new Consumer Safety Agency will provide no improvement over the present environment in which these agencies function. Indeed, the new agency may simply invite stronger pressures and greater impediments to progress.

The emphasis of the additional controls in this bill is on “risk,” "injury," "hazards," "safety," and "redress.” The bill talks exclusively of risk-based analysis," not "benefit-to-risk analysis." The first mandate given in the bill to the Commissioner of Drugs is to:

(1) Attempt, in good faith, to eliminate products presenting unreasonable risk of injury in accordance with ...

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Certainly section 111(a) of the bill providing for civil penalties against the new agency if it approves the marketing of a product which is found to constitute a safety hazard would make “no” the only safe statement for any employee of the new agency to make.

MARKETING OF NEW MEDICINES

What the FDA, or any agency charged with the premarketing clear. ance of drugs, does not need are incentives for inaction.

We are seeing more and more concern recently over delays in obtaining approval for the marketing of new and improved medicines. Without attempting to identify a single or the most important cause, it is a fact that the number of new drugs, particularly new single chemical entities, marketed each year, has decreased since the passage of the 1962 amendments. In addition, many drugs discovered by U.S. firms have been introduced and used successfully in foreign markets for varying periods before being approved for marketing in the United States.

We are convinced that S. 3419, if enacted, including drugs, would further delay if not jeopardize the future development of new medicines for yet unconquered diseases, and could result in the loss of U.S. world leadership in drug research.

That, in essence, is why we are not in favor of S. 3419 as written, Quite possibly the new agency will be important, and independent, and successful, but that is certainly not assured. Major problems are certain to arise in the period between the time FDA and DBS were dismantled and the new agency took over.

It seems likely that many key FDA and DBS personnel would be considered unsuitable for employment in the new agency, and that many others would seek employment elsewhere. In the interim, consumer protection, with respect to drugs, at the Federal level would be, at least, in chaos. At a time when consumers are stressing their concern about health matters, the agency most skilled in the field would be torn down, its work reassigned and diluted with other new bureaucracies, in a new kind of governmental conglomerate.

S. 3432

There is a sound alternative to S. 3419, insofar as the regulation of drugs and medical devices is concerned. Very recently a bill to establish a single, separate, Cabinet-level Federal department of health was introduced, as S. 3432 by Senator Ribicoff, and H.R. 14199 by Representative Paul Rogers. It has bipartisan support with 23 cosponsors in the Senate, with yourself as one of the sponsors, I believe, and 60 in the House. This legislation gives health matters the priority in the Federal Establishment which they deserve. In bringing all related functions together, it would provide a blueprint for order and direction in health care at a critical time. Under these bills the FDA and the DBS would move from the present HEW structure and into a position of new stature and prominence.

We therefore urge that drugs and related medical products be removed from S. 3119, in the interest of effective consumer protection and in anticipation of their more appropriate and efficient regulation under S. 3432.

We are appreciative of the opportunity to present our views to the subcommittee, and will be pleased to answer any questions you may have.

Senator HARRIS. Thank you, Mr. Stetler.

On page 4 of your statement you say, “Indeed, the new agency may simply invite stronger pressures and greater impediments to progress.

I wonder if you could elaborate on the pressures from whom and why they would be stronger than they are now and what sort of impediments you are talking about that would hinder progress.

MARKETING OF NEW DRUGS

Mr. STETLER. The major impediment, the one I specified in the statement, was the difficulty in getting FDA to move expeditiously in connection with the marketing of new drug products.

Senator HARRIS. Are the pressures you are talking about from the industry?

Mr. ŠTETLER. There are pressures now from various sources. What I say is that under the new bill not only would those pressures exist but quite possibly additional pressures. I can't conceive of there being any lessening of pressures on the Food and Drug Administration.

Senator HARRIS. You mean pressures from the industry or from whom?

Mr. STETLER. Industry, Congress, consumers, the press, the same pressure sources that exist now. The one additional thing that was mentioned earlier that is in the bill, is the invitation for litigation in the form of mandamus-type actions.

Normally that is considered as an extraordinary legal remedy. I think under the bill it would probably become an ordinary legal remedy. There are provisions, incidentally in the present Food and Drug Act that permit any interested party, whether he is an individual or the industry, to litigate, to question the actions of the Food and Drug Administration.

We think they are sufficient and appropriate and many cases have been brought. The invitation in this bill would certainly be louder and probably more accepted. There is a question, in connection with the discretionary powers of an agency like the FDA, as to whether or not it should always be subject to that kind of questioning.

The result, I am sure, is that they would become more conservative and they are very conservative now, and in some instances too conservative. It would be difficult to get the average employee in the FDA to take an action when he knew that not only would he be subject to all of the questioning that comes his way now but possibly a good deal more.

AMALGAMATION Senator HARRIS. Let me ask you about some amalgamation of the questions.

What about the possible amalgamation of FDA and DBS, aside from the separate agency, which you oppose, what about that kind of

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