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Executive Summary

FDA Commissioner Young has requested an outside audit of the agency's generic drug review program to support a similar ongoing review by the Center for Drug Evaluation & Research (CDER). The outside audit by the HHS Office of the Inspector General will involve a complete review of the agency's generic drug approval program. It will be conducted concurrently with the inspector general's ongoing investigation into criminal allegations of favoritism involving the generic drug division. Young asked Inspector General Kusserow for the audit by telephone during the last week of April. FDA has been conducting an internal review, which has failed to find any discrepancies in ANDA review records or other evidence of favoritism. CDER Deputy Director Gerald Meyer told a May 4 drug development seminar that the agency continues to go through the ANDA workload records looking at receipt dates and approval dates. "We're going through past products that were involved to see if, in fact, there was something that was overlooked," Meyer said. Acknowledging that money was received by at least one reviewer, FDA managers do not believe that any favoritism was shown toward specific sponsors. However, it is understood that one of the reviewers under scrutiny in the investigations was active in the clearance of four first-approval ANDAs for one company. Meyer expressed the agency management dismay with the revelations, stating that "as a career federal employee -- and as an FDA employee -- I am embarrassed and I am offended by somebody who would do this." He declared: "I believe in the agency, I am proud to work for it and [the investigation] causes me no end of personal concern." FDA's request for the outside audit coincided with the resignations of two agency ANDA reviewers, David Brancato and Charles Chang ("The Pink Sheet" May 1, T&G-1). At a May 3 hearing on the investigation, House Energy & Commerce Committee Chairman Dingell (D-Mich.) suggested in an opening statement that the outside audit was overdue. Referring to FDA's internal audits, Dingell stated: "It is hard to believe that any impartial observer could call the generic drug approval process fair." The inspector general's criminal investigation was initiated at Dingell's request. The subcommittee called one witness to testify publicly on May 3, FDA's Walter Kletch, a review chemist with ANDA Review Branch I of the Division of Generic Drugs. Kletch, who appeared with his attorney, Charles Schulze (Schulze Sorrell Pederson), declined under the Fifth Amendment of the Constitution to answer any questions. Dingell excused Kletch from the hearing with the caution that he could be recalled later. The subcommittee then went into closed executive session to take testimony from other witnesses, reportedly including members of the FDA generic drug division. The subcommittee will resume public hearings on May 10 and 11. The subcommittee chairman noted that Kletch had been summoned to testify by a subpoena ad testificandum. The subpoena was issued April 6 after Kletch refused to respond to the subcommittee's request for an interview. A second subpoena had been issued to FDA's David Brancato. However, the subpoena was withdrawn at the request of the U.S. Attorney for Maryland. Dingell asked Kletch two questions before excusing him. First, he asked whether Kletch had "ever been offered items of value from anyone employed by, affiliated with or acting on behalf of any company who makes or sells products regulated by the Food and Drug Administration?" Secondly, Dingell asked: "Have you ever actually received, either directly or indirectly, any money or any items of value from any person employed by, affiliated with, or acting on behalf of any company that makes and/or sells products regulated by the Food and Drug Administration?" Dingell noted that the subcommittee's review of FDA's program has produced both "good news and bad news." The "bad news" he said, "is that there is substantial evidence that the irregularities were widespread. Put simply, for a large number of companies submitting multiple applications for generic drug approvals, the process was rigged." The "good news," Dingell pointed out, "is that there is no substantial evidence that any of the improper gratuities or other irregularities in the generic drug approval process has resulted in unsafe or ineffective drugs being sold to the American people." The subcommittee "hopes that no more than a handful of FDA employees will ultimately prove to have been so corrupt as to merit criminal prosecution," he said. "But the acceptance of payoffs is only part of the story of a process, which is regrettably full of favoritism and inconsistency." In deference to FDA, Dingell stated: "The subcommittee notes that the Food and Drug Administration has a long and a proud history of protecting the American people. It is a distinguished agency; it has many fine people in it. It carries out very important responsibilities which are essential to the protection of the American people."

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