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r • THE FOOD &DRUG LETTER" An Independent Bi-Weekly, Founded 1976 WASHINGTON BUSINESS INFOR'vtACIO1r, INC. 1117 North 19th Street, Arlington, VA 22209-1798 Editorial: (703) 247-3424 e Circulation: 247-3434 e Fax: 247•3421 August 12, 1994 • Dear Reader, For 20 years Gerald Meyer p ayed an integral role in FDA activities related to drug review, approva an latory enforcement. Now retired to private life as a consultant and company regulatory affairs director, Meyer remains keenly in- terested in the agency where he spent much of his variegated career. And he has strong ooinions about that agency's assets and flaws. In this issue, we continue an in-depth report based on extensive interviews with the ex-Drug Center deputy. aimed at bringing it into line with shifts in Washington oolitical maneuvering. In this issue we explain how FDA negotiates the canyons and arroyos of Gucci Gulch. function, that apgendage has gained strength in the vast Xear via a reorganizatio FDA does not send agents of influence to haunt Capitol Hill in the manner of private-sector lobbyists, but the agency's legislative arm is well-developed. In place to cope with congressional inquiries and efforts to sway FDA policies and WHEN GERALD MEYER RETIRED FROM FDA'S DRUG CENTER, a highlight of his going- away party was a placard listing the many and sometimes imaginative ways in which his name and title were misconstrued over the years. Sometimes he was "Meyers;" sometimes "Meier" or "Mayer." Occasionally a well-meaning but misinformed caller would promote the Notre Dame graduate with an MBA to PhD or MD status. The poster was among the bigger laugh-getters at an event punctuated by boffo punchlines. But while they may have misspelled or otherwise misapprehended the genial bureaucrat's basic data, callers rarely misconstrued the significance of Meyer's tenure at the center. His long-time presence on the roster was a rare managerial constant there as the tides of circumstance moved FDA from a distant spot on the federal landscape to one of the most closely watched agencies. Meyer knew where the tangled lines of tradition and revision intertwined and separated. That mountain of experience gives Meyer an unusually detailed per- spective for assessing the present and future of Drug Center policy and direction, as well as the fate of the larger agency. Now that he is out of government for the second and final time, he is free to hold forth with his thoughts. In this issue, we conclude an article -- part one was in the July 29 F&DL -- based on lengthy conversations with him. For better and for worse, the overriding theme of FDA's immediate and middle- distant future, according to Meyer, can be summed up with "user fees." The law that authorized charging manufacturers for the drug review process imposes stiff deadlines and assumes big jumps in efficiency. This new regimen promises benefits to manufacturers via speedier review. However, the mandates arrive as FDA faces 0 Copyright m 1994 by Washington Business Intormatlon, inc. - Founding Member, Newsletter Publishers Association - ISSN 0362-6466 Avaiiable through DIOGENES searchable etectronic database (3011661-2104) The Food & Drug Letter is protecled by copyright. It Is illegal under Federai law (17 USC 101 et seq.) to make regular covar-to-cover copies or faxes of F&DL witnout our permission - even for Internal use. Violators risk crimrnal penelffes and $100,000 damages per oNense. Permission is granted for suoscsibers registered with Copyright Clearance Canter to reproouce parts or all of F3Dl, for intemal reference or personal use ony, for s4.50 per page per copy. Send payments to CCC, 222 Rosewood DrNe, Danvers, MA 01923 (fax 508l750-4744). 0362-84661641'00+L1.50.

• THE FCaOD & DRUG LE•ITER - 2 - August 12. 1994 tight budgets, Meyer notes. These will conflict significantly with the goals of the user fee program. Even with the infusions of cash for use in hiring staff made possible by fee collections, the agency will be hard-pressed to deliver approvals within the required time while running on so hurdle-studded a course, he predicted. Another obstacle is a long-standing managerial culture that often tolerates buck-passing and decision-dodging by some center division directors, Meyer said, Fear of being held accountable leads some managers into a state of paralysis, he said. Others throw the burden back on companies, demanding ever more complicated additions to submissions rather than admit there are enough data on which to act. To counteract this, Meyer urged FDA to rearrange management priori- ties. This could be done in part by rewarding effective managers and pruning or at least not promoting into key positions people who will not seize responsibility and run with it. Under user fees, FDA can ill af- ford to carry as great a burden of deadwood as it does, Meyer told us. • Better analysis of industry problems and improved communications about them would be in FDA's interest,.the consultant said. Compiling and circulating lists of flaws frequently encountered during inspections would heighten the quality of manufacturers' output and improve the focus of inspections, he added. This could be accomplished by determining which problems recur frequently in 483 reports and letting industry know about them so they can be attacked. As an example of agency efforts to clarify a situation in which absence of explicit guidance contributed to a firm's downfall, Meyer pointed to the court's decision on sanctions brought against D,aXr for drug Good Manufacturing Practice (GMP) violations. An agency task force is working up revisions that will lay out in detail what is expected of companies in this sector. Industry Is Spending More Time and EnergX on Ouality • "I do not think those changes will be major, but they will address gaps where the pre-approval inspection system and the lack of explicit guidance left companies the opportunity for misunderstanding," Meyer said. "For the agency, this creates an opportunity to make the rules more explicit." Clearer delineation of company responsibilities also would help reduce the ir- cidence of seemingly punitive inspection outcomes. "The 'Gotcha! ' culture is still strong in isolated situations," Meyer said. "However, there also are inspectors out there who are very competent and who do a very good job -- David Pullem in Arizona, Chuck Edwards in Philadelphia, Heather Pedersen in Newark, Diane Amador and Jim Lindeman in San Juan," he said. "I have enormous regard for these people; if I were running a firm, I would want someone like Edwards or Pullem to inspect me. Could I look around the field and find some jerks? Yes, of course -- but that would be true in any organization." On the industry side, Meyer sees improvements in effcrts to recruit quality assurance personnel with good training and the proper attitude. "Problems in this area are materially less than before," he told us. "Companies are looking to get the bang for the bucks they pay out," Meyer said. "The result is showing up in application preparation, where those things make a difference. More attention to quality keeps you out of trouble. You get a good report on your pre-approval inspection, and your applications get through with fewer cycles of revision and fewer amendments." Meyer listed

. • THE FOOD & DRUG LETlER - 3 - August 12, 1994 A,verst, Lill _, Ro e and Sandoz among firms that have put more emphasis on getting applications right the first time. "These firms are spending significant amounts of money and senior executive energy to do this," he said. "There is a new generation of senior corporate people who do not want to be thought of as just getting by when it comes to submissions to FDA, They recognize that FDA wants a solid commitment to a higher level of performance." One mechanism useful in that has been an accessory, but eventually will be standard equipment for all filings: computer automation of data collection and submission. An incipient internal computer upgrade at the agency will bring standardization to FDA computer use, while in the private sector the digital revolution keeps providing manufacturers with ever more pcwerful computer tools at prices within the reach of even small firms. • • "A suitcase-sized device, has replaced a roomful of technology. For $35,000- to-$50,000 you can get an array that once would have cost you between $3 milliorn and $7 million," said Meyer, now regulatory affairs director with computer manufac- turer Digital Equipment. "A small firm can afford the sophistication available to a Lilly. The computerization of drug development, application review and marketing has unlimited potential," Meyer told F&DL. "You can use these tools to screen candidate molecules, check their stability and efficacy, get insights into scale-up," Meyer explained. "In clinical studies, you can feed data directly into systems that permit storage, analysis, consolida- tion and formatting for New Drug Applications." Brand/Generic Integration Is An Imp-prtant Factor The new computer system will make improvements, but computerized filing has been codified via the Computer Assisted NDA (CANDA) program. However, there is room for more automation in post-marketing surveillance, marketing and manufactur- ing, Meyer told us. "They can be integrated all along the line," he said, noting that many sales forces now incorporate laptop computers into their pitches." Meyer downplays the long-term impact of the 1980s generics scandal, save for the imposition of pre-approval inspections and the consolidating effect on that sector of the drug industry, where 45 or so firms have been thinned by attrition and litigation to about 30, with 15 doing well in Meyer's estimation and another dozen still straightening out their regulatory acts. "People are getting accustomed to the more intense level of scru- tiny to the chemistry of applications that the scandal brought," he said. "Of more impact than the scandal is the situation of health care at large and the tendency of brand name manufacturers to acquire generic companies, which can have a beneficial effect." He noted Ciba-Geigy's acquisition of e v as an example. "Geneva has become a very good firm with significant profits, and it certainly is manufacturing more than Ciba products," h.e said. "This is a case in which a major drug firm bought a subsidiary and gave it the freedom and support it needed to flourish." At the top level of FDA, however, Meyer is less enthusiastic. He gives Com- missioner David Kessler an A+ for public relations. "I never met a commissioner who developed a staff and a program that was so publicity-oriented," he says. How- ever, Meyer grades the master of the soundbite more harshly on matters of quotidian Copyriqht ° 1994 Washinpton 8usin.as Information, Ina

0 . • • THE FOOD & DIRIIG LETTER - 4 - August 12, 1994 management. Day-to-day operations of the agency as touched on by the commission- er's office are not going well, Meyer told us. "Kessler is not interested in that aspect, and he has not devoted much of his time or commitment to it," the ex-FDAer said. "There was a long delay before he got iDeputy Commissioner for Operations) Jane Henney on duty, and no movement to replace her. Kessler has said he does not know if he will replace Henney." Without anyone as skilled as the highly regarded Henney, decisions are not being made, and when FDA becomes the object of a tug-of-war be- tween HHS and the Public Health Service, the agency lacks an advocate of enough stature and skill to keep its agenda from being warped. Pending key hires and promotions, resolutions of space allotment, even conflicts between two centers within the agency, are taking far too long. Another member of the Kessler ruling class who have graduated to positions elsewhere include Michael Taylor, recently appointed to head the reform of the Ag- riculture Dept. Food Safety Inspection Service. Taylor, who handled much of the spadework and negotiations with Congress and the White House required to bring the food labeling law into being, was a strong and talented presence who could work Kessler's will -- and his own -- to obvious result. But with the departure of Taylor, Henney and other key aides, Kessler is more and more the lone ranger. Although entrenched in the public mind as the figurehead of a reinvigorated agency, the commissioner is not moving to recruit a second wave of new and energetic deputies who can keep polishing his image by their efforts. "The only thing I am hearing out of there now is that Kessler is looking for a,job and cannot seem to find one," said Meyer. "There is talk that he may run for the Senate from New York, but that seems like a long shot." Industr9/FDA Relat{ons Have Soured Significantlv One apparently solid pillar of the Age of Kessler -- a radically revivified approach to old-fashioned bare-knuckles enforcement -- may turn out to have a hollow core, according to Meyer. "Enforcement really has gone sour," he told us. "Kessler talked a lot about tone, but he did not make real changes." As an example, Meyer cited the commissioner's authorization of field-level decisions to issue warning letters without advance clearing by headquarters. "That has been a mixed blessing," Meyer said. "You are really taking off a level of restraint and review. The majority of field personnel are responsible, but not everyone," he ex- plained. "Some behavior is not justified. I do not think Kessler has put a lot of time into enforcement; he has paid more attention to publi- city related to the topic than to niceties of the actions being taken." . As a result, relations with the drug industry have gone poorly. "Companies do not see Kessler as a person who has tried to develop a constructive relation- ship," Meyer said. "He is not cozy but professional, and his actions suggest a ~ thinly veiled mistrust of or disdain for industry representatives as evil and ~ wrong. I am not sure how he got that way. I do not know how many drugs he ever ~ developed, but that is certainly the message industry has gotten from him." ~ Between displaying a sourpuss attitude toward regulated companies and main- ~ taining a self-aggrandizing approach to a enc activities Kessler while raisin ~ , , g y g .•.Z his own profile as the leader of FDA, actually has put himself at a distance from ~ _Q

v Y THE FOOD 6c DRUG hE•ITER - 5- August 12, 1994 he agency, according to Meyer. "He does not have much resonance within the ~ agency. The individual centers have relationships that continue,`but what David Kessler has done is make the commissioner less relevant within FDA. "He jumps around when he sees an opportunity for a headline, but once the pub- licity is over, his interest is gone," Meyer said. "Look at user fee legislation cr the special task force on AIDS products -- they appeared to great fanfare and press releases, but we have not heard anything about them since. He acts like a person who is leaving his job but has not yet gone." AS AN AGENCY OF THE FEDERAL EXECUTIVE BRANCH, FDA DOES NOT LOBBY in the strict sense of that term. "Lobbying" connotes and denotes a straightforward effort to influence legislative decisions; this usually is done in person and traditionally occurs in the vestibule outside a hearing chamber -- hence the derivation of the much-maligned word. In government, the job of lobbying falls to the White House or the sponsor of a bill, with back-up from the department or agency involved. So FDAers provide "technical support," or "communications outreach" to make clear the impact of proposed legislation on their work. Howev- er, an agency that oversees a quarter of the U.S. economy -- as FDA does -- is bound to incite intense interest among legislators, especially when that quadrant includes such high-profile elements as drugs, medical devices and food, and matters of public health and safety. • • FDA's heightened profile is a legacy of the 1980s that ups pressure on its legislative office. "At the agency level, this is one of the busiest congressional shops in all of government," Diane Thompson, director of the Office of Legislative Affairs, told F&DL. "The scope of FDA jurisdiction -- medicines, devices, the blood supply, food -- attract significant congressional and public attention." Prompted by concerns raised by individual constituents or anxieties voiced by firms back home, members of Congress constantly pepper FDA with requests for in- formation. They want to know what the agency is doing, how it is doing what it is doing and why. Some years, the agency fields as many as 5,000 congressional let- ters demanding explanations of some activity or inactivity. At the same time, legislators are at work on new laws that affect FDA policy or programs. Regularly recurring bills, such as the budget, include an important FDA component, whose progress through the sausage machine the agency must monitor. And then there are the FDA-targeted bills that seek to broaden FDA authority or move to correct perceived flaws in the agency. A prime example being considered is a bill that would permit agency authority to charge user fees for review and ap- proval to medical devices and diagnostics products (F&DL, 7/1, p. 6). The sum of these parts means, despite the fig leaf of strict defi- nition putting a thin barrier over the verb "to lobby," FDA is very busy trying to influence legislative decisions, directly and indirectly. That task falls to Thompson's office. After working in private sector as a litigator and in non-profits as general counsel with the National Organization for Women, Thompson entered politics as an organizer for Walter Mondale's 1984 presidential campaign. When M.ondale lost, Thompson moved to Capitol Hill, directing the staffs of Barbara Mikulski (D-Md.) first in the House and then in the Senate. She joined FDA in October 1993. Among Copyripht 0 1994 Washington Business informetion, inc, .

a . • THE FOOD & DRUG L=ER - 6 - August 12, 1994 Thompson's first acts was reorganizing the legislative affairs office's 36-person operation into a more efficient structure. Her changes were based on experience with the legislative process and a conviction that FDA's approach to legislative affairs had grown outmoded, Thompson told us. Under the old order, the office had two divisions: oversight and legislation. In theory, they corresponded to the twin functions of responding to congressional inquiries and providing support to bills moving through congress. In practice, the arrangement produced rampant redundancies, according to Thompson. "I felt I had inherited an office that was functioning in relation to the Congress of 15 or 20 years ago. It was unworkable," she said. "Frequently the office would deal with the same issue in both divisions if a member of an oversight committee brought up something that came un- der the legislative division's jurisdiction. There was a duplication of specialties. The pracess did not reflect how Congress works." • • In the old days, lines of congressional authority and interest were clearer, but grew fuzzy. During the Reagan and Bush presidencies, Congress began to use appropriations bills to authorize activities the GOP administrations resisted. In addition, as constituent concerns over health matters rose, members began to use the thin edge of whatever wedge was available to them to get FDA to focus on them. "Members use whatever jurisdiction they have to do whatever they want," said Thompson. "For example, members of oversight panels bring attention to issues they think are amenable to legislative solutions. Appropriations measures can affect agency missions as much as what happens in the authorizations committees." ency Needed New Perspective and Tools To drag congressional relations into the late 20th century, Thompson analyzed activities and functions, regrouping staff along subject matter lines, with certain staffers responsible for all issues related to a given center. She pushed for more reliance on computers and such private-sector efficiency enhancers as voice mail. "These tools came into private business 15 years ago," Thompson noted. "Loath as we were to introduce more impersonal communication, establishing a voice mail decision tree has helped a great deal." Many congressional callers ask for copies of regulations or similar documents. Voice mail imposes an economy of expression and clarity of request that speeds legislative affairs staffers' work. Thompson emphasizes the imperative to pierce to the core of a call. "A legi- slative affairs office needs people who understand the congressional process," she said. Key staff members have spent time on the Hill either as FDAers or as con- gressional staffers. These backgrounds make it easier for them to figure out what House or Senate staffers really want and what is worrying their elected bosses. "They need to be able to meet that person's needs," Thompson said. "And they need to be able to decide whether those needs are best met with a phone call or a letter, whether this is a policy-driven or con- stituent-driven issue or the interplay between those two, if it is going to precipitate a crisis. TWhen you understand the process, you can see what is driving the inquiry and know what questions to ask." Typically, when a bill to affect FDA is taking shape, an agency working group -- composed of Thompson, her deputies, staff analysts and representatives from the appropriate echelons of FDA -- begins to meet. The group marshals expertise as needed and assigns technical support and explanatory duties on Capitol Hill.

4 S THE FOOD & DRUG Li':,ZTER - 7- August 12, 1994 • "The structure is not unlike that of a corporation," said Thompson. "My of- fice coordinates activities and provides expertise on congressional process and political implications. We do not lobby -- that is an administration function -- but we frequently lend technical assistance." Thompson often carries the spear, but she and her staff may work in concert with an HHS team or a White House representative in persuading members of Congress. "FDA does not go as an advocate unless we are working on something on which the administration has a position," she said. "For example, when we go to work on the pesticide proposal, we will be more the advocates for the administration position." The user fee proposal is part of the President's budget, but also has the en- dorsement of the White House, so Thompson is working more actively on its behalf. The authorizing legislation is being introduced by Reps. 10"ohn Dingell (D-Mich.) and Henry Waxman (D-Calif.) with Senate sponsorship by Edward Kennedy (D-Mass.). "We worked with those members' staffs in doing that piece of legisiation," she noted. When a bill cuts across agency lines, as in the food safety pesticide propo- sal, FDA participates in a larger working group composed of representatives from affected bodies -- for pesticides, agency staffers are working with counterparts from the Environmental Protection Agency and Agriculture Dept. Thompson and staff mostly monitor the Senate Labor and Human Re- lations Committee and health subcommittee of House Energy & Commerce. Attention is demanded due to the panels' influence and their powerful chairmen. Sen. Kennedy heads the former; Rep. Dingell the latter. In the past 15 years, FDAers great and small have logged many hours in the hot seat before the committees, especially Dingell's. Other panels that pop up on her radar screen include the House subcommittee on government operations and House small business subcommittee. Sometimes an is- sue, such as food safety, will bring FDA into the ken of the Agriculture Committee. But inquiries and prospective bills can come from any corner, a legacy of the styl- istic shifts since 1980. "Fifteen years ago, when we had cleaner lines between authorization and oversight, our function was purely informational," Thompson said. "Then, all this office did was respond to constituent or oversight inquiries. Now it takes a different set of analytical skills to assess issues. You need a sense of timing as to where an issue fits into administrative and department prior- ities, as well as those of the member championing it," she added. A key element of the job is communications -- getting politicians to see what FDA does and does not do, and clearly defining the line past which the agency will not bow. "We work very hard at having a good relationship with the members of our Copyright ° 1884 by Washington Business Information, Inc. -------------------------------------------------------------------- GET OFF THE ROUTING SLIP !l! Use this form to add copies to your subscription to The Food & Drug Letter YES! Others in my organization need their own copies of the informative The Food & Drug Letter bi-weekty Rush us extra copies In the same envelope as our basic subscription, and bill us only $420 each per year (pro-rated for the time remaining on our basic service). ~ p Name Organization ~ City/State Zip Phone(_ _~ Fax(_} ~" W MaII to: Washington Business Information, Inc. • 1117 North 19th St., ;K200 . Arlington, VA 22209 • 703/247-3434, Fax 247-3421 t~ ~ ~

d • • THE FDOD & DRUG Z.ETTER - 8 - Augus t 12, 1994 committees of jurisdiction, but,we also work more broadly with all members, since they all have constituents at home using products that we regulate," Thompson said. One function is explaining why products in the pipeline are not on the market, "A congressional office might be hearing from a constituent who is a small entrepre- neur who has developed what he thinks is a singularly useful medical device and wants to know why FDA is keeping it from the public." said Thompson. Oversight inquiries still arrive and are more easily dispatched by sieving the record and marshaling facts, sometimes with a trace of spin doctoring so they wear their best faces when trotted out on the Hill. More often, the office forms stra- tegies based on factors like the congressional calendar, strengths and weaknesses of a bill's sponsor and perils awaiting on the journey to floor vote. "To be effective, we have to think more strategically," said Thompson. "Legi- slative liaison is a big stage, and you have to be aware of all interests: agency, department, administration, Congress. We operate at the nexus of all these." Thompson says her years on the Hill "really gave me perspective on how the democratic process works and how Washington and Congress work." "I learned the importance of the perspective of those who live outside the Beltway opposed to protecting the interests of those inside it." Current priorities are the device user fee bill and a proposal to reform the regulation of pesticides in food. Early movement on a bill to tighten regulations on use of fetal and other tissues is getting close look, as is the 800-lb. gorilla of health care reform, which promises to rock all agencies involved in that sector. "Much of our job is helping Congress and the public understand what FDA is doing," she said. "On a major regulatory initiative like HACCP, our iob is to help the folks on the Hill understand what will happen once the rule is in place." The 1994 legislative year will be a bellwether on the direction of the Clinton administration in particular and government in general, according to Thompson. She noted the importance assigned to health reform as well as the device user fee bill, and Clintonites' efforts at "reinventing government." If all these measures make it into law, FDAers can expect a buffeting period of adjustment. But her office is not as driven by a legislative calendar as might seem. Even with voice mail and computers, 4,000 to 5,000 queries from Congress take time and energy. "Though I have only been here nine months, I see constant activity," she said. "The question is, are we running on high or are we into hypermotion?" Sincerely, L Issue No. 465 The Editors P.S. -- Due to its 24 issues-a-year schedule, the next F&DL issue will be Sept. 9. P.P.S -- The July 29 F&DL Issue No. was wrong. It should have been Issue No. 464. ~ C) ~ PUBLlSHED 24 TIMES A YEAR; SUBSCRIPTION $845 IN U.S. & CANADA, ADDITIONAL COPIES MAILED IN SAME ENVELOPE $420 A YEAR EACH ~ Affiliates: Washington Drug Letter, Europe Drug & Devrce Report, Devices & Diagnostics Letter, Reguletory Watchdog Service Publisher. Davfd Swit • Editor. Mlchael Dolan ~ - - ~ ~'r'