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Executive Summary

Six teams of FDAers are evaluating the feasibility of implementing 13 recommendations made in a report to FDA by the D.C. office of the law firm Kutak, Rock & Campbell for improving the agency's control over disclosure of financially-sensitive information. The six teams, which include employees from all areas of the agency, are being coordinated through Commissioner Kessler's Executive Assistant Mary Pendergast. They were established soon after FDA received the Nov. 14 report from Kutak Rock. The report, "FDA Safeguards Against Improper Disclosure of Financially- Sensitive Information," was publicly released Jan. 10 ("The Pink Sheet" Jan. 13, p. 2). After evaluating FDA's operations and regulations and interviewing employees and knowledgeable individuals outside the agency, the law firm determined that FDA is "vulnerable to potential problems" because the agency lacks "a consistent approach to disclosure issues and lacks sufficient controls over its own disclosure processes." Overall, Kutak Rock recommended new or modified safeguards and wider and earlier disclosure of certain confidential information, including disclosure of the existence of pending applications for new drugs and biologics, as well as notification that the products have reached certain "milestones" in the approval process. Releasing information on the status of products "would simplify matters for FDA while removing some of the incentives for people to try to learn 'inside' information about the agency," the report states. It cites one official in the Center for Drug Evaluation and Research who referred to FDA's rules about product status as "sham confidentiality," since people outside of FDA may already know everything about a product. The report suggests that FDA reveal the following milestones for each product: the filing of the application; the scheduling of an advisory committee; the issuance of an approvable letter or nonapprovable letter; the withdrawal of an application; and approval of the application. In addition, FDA should "disclose information about one intermediate milestone between the stage of acceptance for filing and the scheduling of an application for committee," the report recommends. Each center would determine this milestone. The Pilot Drug Evaluation Staff "could reveal the scheduling of an NDA Day," since the staff generally does not send its applications to an advisory committee. The agency should publish the milestone information by adding to its monthly product approval list and by placing the information on FDA's electronic bulletin board, the report suggests. The report also recommends that FDA "provide earlier and less formal public notice of" advisory committees. "There are inefficiencies and unevenness in the ways in which FDA handles and schedules meetings of advisory committees," the report concludes. The agency could publish the information about an advisory committee in the Public Calendar and make available the proposed agenda, it suggests. Although FDA has regulations preventing disclosure of trade secrets, the agency does not have regs prohibiting release of information about agency actions that have financial impact, the report says. The law firm therefore proposed that FDA "promulgate a supplemental regulation that would prohibit an employee from disclosing outside FDA the status of any application for product approval, until the agency has announced the approval officially or has otherwise approved the release of the information." When FDA needs to disclose product information to other government agencies, the agency should "obtain written confidentiality agreements from those persons" to whom it discloses the financially-valuable information. The report suggests that FDA "establish lines of communication with the Securities and Exchange Commission and the securities markets' self-regulatory organizations to facilitate the timely exchange of information regarding the possible misuse of financially-sensitive information." FDA said that since receiving the report, the agency has established a closer relationship with SEC and self-regulatory bodies. Kutak Rock's other recommendations include implementing an agency policy of shredding confidential documents once FDA has finished with them; and "prompt" action to heighten physical security with a commitment to a "long-term solution" to agency- wide physical security problems.

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