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United States Government Accountability Office: 
GAO: 

Report to the Ranking Member, Subcommittee on Primary Health and 
Aging, Committee on Health, Education, Labor, and Pensions, U.S. 
Senate: 

September 2013: 

New Tobacco Products: 

FDA Needs to Set Time Frames for Its Review Process: 

GAO-13-723: 

GAO Highlights: 

Highlights of GAO-13-723, a report to the Ranking Member, Subcommittee 
on Primary Health and Aging, Committee on Health, Education, Labor, 
and Pensions, U.S. Senate. 

Why GAO Did This Study: 

In 2009, the Family Smoking Prevention and Tobacco Control Act granted 
FDA authority to regulate tobacco products such as cigarettes. The act 
requires that tobacco manufacturers submit information to be reviewed 
by FDA in order to market new tobacco products and established tobacco 
user fees to fund FDA’s tobacco-related activities. The act represents 
the first time that FDA has had the authority to regulate tobacco 
products. 

Manufacturers have raised concerns about the progress of CTP, the FDA 
center established by the act to implement its provisions. GAO was 
asked to examine CTP’s review of new tobacco product submissions, 
responses to meeting requests, and use of funds. This report examines 
(1) the status of CTP’s reviews of new tobacco product submissions; 
(2) how CTP responded to manufacturers’ and other entities’ meeting 
requests, and the length of time CTP took to hold the meetings; and 
(3) the extent to which FDA has spent its tobacco user fee funds. GAO 
analyzed data regarding submissions received by FDA as of January 7, 
2013; reviewed data on meeting requests, spending plans, and amounts 
obligated; and interviewed CTP and tobacco industry officials. 

What GAO Found: 

As of January 7, 2013, the Food and Drug Administration’s (FDA) Center 
for Tobacco Products (CTP) had finished initial, but not final, review 
steps for most of about 3,800 submissions for new tobacco products 
(those not on the market on February 15, 2007). Ninety-nine percent of 
the submissions received by FDA were made under the substantial 
equivalence (SE) pathway. CTP determines whether the new tobacco 
product in an SE submission  has the same characteristics as a 
predicate tobacco product (a product commercially marketed in the 
United States on February 15, 2007,or previously found by FDA to be  
substantially equivalent) or has different characteristics that do not 
raise different questions of public health. Initial review steps 
include CTP’s determination of whether the new product is a type 
regulated by FDA and whether the submission is missing information. 
For most SE submissions, CTP took more than a year and a half from the 
date a submission was received to the date these initial steps were 
completed. Of the 3,788 SE submissions, 3,165 were received by FDA 
prior to a statutory deadline (March 22, 2011) allowing the product to 
be marketed unless CTP finds that they are not substantially 
equivalent. SE submissions received after that date cannot be marketed 
until CTP determines they are substantially equivalent. In late June 
2013, CTP made a final decision on 6 of the 3,788 SE submissions, 
finding that 2 of the products were substantially equivalent and that 
4 were not; the remaining submissions were still undergoing CTP 
review. CTP officials and manufacturers told GAO that several factors 
(such as CTP requests for additional information from manufacturers 
for submissions and having to hire and train new staff) impacted the 
time it took CTP to review SE submissions. While CTP is working to 
address these factors by, for example, disseminating information to 
manufacturers to improve submission quality and developing training 
for staff, CTP does not have performance measures that include time 
frames for making final decisions on submissions by which to assess 
its progress. Without time frames, CTP is limited in its ability to 
evaluate policies, procedures, and staffing resources in relation to 
its review process and, in turn, is limited in its ability to 
reasonably assure efficiency and effectiveness. 

A variety of outside entities (such as manufacturers) have requested 
meetings with CTP to discuss new tobacco product submissions, public 
health activities, and other issues, and four CTP offices have 
received meeting requests. Those offices granted more meetings (72) 
than they denied (22) of all the meeting requests they received 
through January 7, 2013. The number of calendar days from the date a 
meeting was requested to the date it was held ranged from 1 to 262 
days, and the averages among the four offices ranged from 51 to 97 
days. 

FDA spent (obligated) less than half of the nearly $1.1 billion in 
tobacco user fees it collected from manufacturers and others through 
the end of fiscal year 2012; $603 million of these user fees remained 
unspent and, thus, remained available to CTP. CTP spent substantially 
less than planned in fiscal years 2011 and 2012. CTP had planned on 
spending a total of $611 million for fiscal year 2012; instead, the 
center spent $272 million for that year. CTP officials told GAO that 
the time it took to award contracts contributed to the center spending 
less than planned. For example, CTP planned to award a $145 million 
contract in fiscal year 2012 for a public health education campaign, 
but most of that amount was not awarded until the first quarter of 
fiscal year 2013. 

What GAO Recommends: 

GAO recommends that FDA establish performance measures that include 
time frames for making decisions on new tobacco product submissions 
and that the agency monitor performance relative to those time frames. 
The Department of Health and Human Services agreed with GAO’s 
recommendations. 

View [hyperlink, http://www.gao.gov/products/GAO-13-723]. For more 
information, contact Marcia Crosse at (202) 512-7114 or 
crossem@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

CTP Finished Initial, but Not Final, Review Steps for Most 
Submissions, and Lacks Time Frames for its Review Process: 

CTP Granted Most Meeting Requests, but the Time from Request to Date 
Held Varied Widely: 

FDA Spent Less than Half of the $1.1 Billion in User Fees Collected: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments: 

Appendix I: Staffing Resources for Conducting Reviews of New Tobacco 
Product Submissions: 

Appendix II: Comments from the Department of Health and Human Services: 

Appendix III: GAO Contact and Staff Acknowledgments: 

Tables: 

Table 1: Description of FDA Center for Tobacco Product (CTP) Offices: 

Table 2: Types of Submissions under the Substantial Equivalence (SE) 
Pathway: 

Table 3: Tobacco Control Act Authorization of Tobacco User Fees, 
Fiscal Years 2009 through 2019: 

Table 4: Meeting Requests Received by FDA Center for Tobacco Products 
(CTP) through January 7, 2013: 

Table 5: Calendar Days from Date Meeting Request Received to Date 
Meeting Held, by Center for Tobacco Products (CTP) Office: 

Table 6: Center for Tobacco Products (CTP) Planned and Actual 
Spending, Fiscal Years 2011 and 2012: 

Table 7: Time Spent on Review of New Tobacco Product Submissions for 
the Center for Tobacco Products (CTP) Office of Science by Job Title: 

Figures: 

Figure 1: Key Review Steps Performed by FDA's Center for Tobacco 
Products (CTP) for Substantial Equivalence (SE) Submissions as of 
January 7, 2013: 

Figure 2: Number of Submissions Received by FDA for Each New Tobacco 
Product Pathway as of January 7, 2013: 

Figure 3: Provisional and Regular Substantial Equivalence (SE) 
Submissions Received by FDA as of January 7, 2013, by Fiscal Year 
Quarter: 

Figure 4: Finished Review Steps for Provisional and Regular 
Substantial Equivalence (SE) Submissions Received by FDA, as of 
January 7, 2013: 

Figure 5: Time Taken for Initial Review Steps for Provisional 
Substantial Equivalence (SE) Submissions: 

Figure 6: Time Taken for Initial Review Steps for Regular Substantial 
Equivalence (SE) Submissions: 

Figure 7: Meeting Requests Received by FDA Center for Tobacco Products 
(CTP) Offices, by Type of Entity: 

Figure 8: Total Tobacco User Fees Spent and Not Spent by FDA through 
Fiscal Year 2012: 

Figure 9: Center for Tobacco Products (CTP) Planned and Actual 
Spending, by Office, Fiscal Years 2011 and 2012: 

Figure 10: Center for Tobacco Products (CTP) Office of Science (OS) 
Staff Time Spent Conducting Reviews of New Tobacco Products: 

Abbreviations: 

AI: Advice and information: 

CTP: Center for Tobacco Products: 

FDA: Food and Drug Administration: 

HHS: Department of Health and Human Services: 

OCD: Office of the Center Director: 

OCE: Office of Compliance and Enforcement: 

OP: Office of Policy: 

OS: Office of Science: 

PMTA: Premarket tobacco product application: 

SE: Substantial equivalence: 

[End of section] 

GAO:
United States Government Accountability Office: 
441 G St. N.W. 
Washington, DC 20548: 

September 6, 2013: 

The Honorable Richard Burr: 
Ranking Member: 
Subcommittee on Primary Health and Aging: 
Committee on Health, Education, Labor, and Pensions: 
United States Senate: 

Dear Senator Burr: 

Tobacco use is the leading cause of preventable death, disease, and 
disability, and it is a significant contributor to health care costs 
in the United States. The Centers for Disease Control and Prevention 
reports that smoking and exposure to secondhand smoke account for over 
440,000 premature deaths per year. In June 2009, the Family Smoking 
Prevention and Tobacco Control Act (Tobacco Control Act) granted the 
Food and Drug Administration (FDA), an agency within the Department of 
Health and Human Services (HHS), authority to address the concern of 
tobacco use by young people and to regulate the manufacturing, 
marketing, and distribution of tobacco products using a public health 
standard.[Footnote 1] Under this standard, FDA regulates tobacco 
products as appropriate for the protection of public health while 
taking into account the risks and benefits of tobacco products on the 
population as a whole, including users and nonusers. The Tobacco 
Control Act requires that manufacturers of tobacco products submit 
information--for example, a statement of the product's ingredients and 
a description of the methods used for manufacturing the product--to be 
reviewed by FDA using this public health standard in order to 
introduce new tobacco products into the market after February 15, 
2007.[Footnote 2] The Tobacco Control Act represents the first time 
that FDA has had the authority to regulate tobacco products. 

The Tobacco Control Act also established the Center for Tobacco 
Products (CTP) within FDA to be responsible for implementing the act. 
[Footnote 3] CTP was formed in 2009--the first new center within FDA 
in 21 years--and it implements the act by reviewing submissions for 
marketing new tobacco products, enforcing prohibitions on the sale of 
certain tobacco products, developing and issuing regulations and 
guidance, engaging in public education about the risks associated with 
tobacco product use, and performing other activities.[Footnote 4] The 
act also authorizes FDA to assess and collect user fees from each 
tobacco manufacturer and importer to be spent on only FDA's tobacco 
regulation activities.[Footnote 5] All of CTP's activities are funded 
exclusively through tobacco user fees. 

Tobacco manufacturers have raised concerns about CTP's progress in 
implementing the provisions of the Tobacco Control Act. You asked us 
to look at CTP's review of new tobacco product submissions, responses 
to meeting requests, and use of resources. This report examines (1) 
the status of CTP's reviews of new tobacco product submissions; (2) 
how CTP has responded to requests for meetings from manufacturers and 
other entities, and the length of time CTP has taken to hold the 
meetings; and (3) the extent to which FDA has spent its tobacco user 
fee funds. We also provide information on staffing resources for 
conducting reviews of new tobacco product submissions. (See appendix 
I.) 

To examine the status of CTP's review of new tobacco product 
submissions, we analyzed data maintained by CTP's Office of Science 
(OS)--the CTP office primarily responsible for conducting reviews of 
new tobacco product submissions--regarding all submissions received by 
FDA as of January 7, 2013. This included data on whether specific 
steps of the review process were completed for each submission, and 
key dates for each submission. We calculated the number of calendar 
days to complete key steps in the review process and the number of 
days a submission was pending in a particular step in the process. In 
addition, we reviewed relevant laws, regulations, and agency documents 
(such as guidance documents and draft standard operating procedures) 
and we viewed CTP webinars on new tobacco product submissions. We also 
interviewed OS officials to learn about the process for tracking and 
reviewing submissions, and to identify factors that contributed to the 
time CTP took to review new tobacco product submissions. We compared 
CTP's review processes against internal control standards, which 
specify that performance measures such as time frames and the 
monitoring of actual performance against measures are an integral part 
of operating efficiently, achieving effective results, and planning 
appropriately.[Footnote 6] Finally, we interviewed industry 
representatives from manufacturers and tobacco trade associations to 
learn about factors that may have contributed to the time taken by CTP 
to review submissions. 

To examine how CTP responded to requests for meetings and the length 
of time CTP has taken to hold the meetings, we reviewed and analyzed 
data from the four CTP offices that received meeting requests from 
manufacturers and other entities: OS, the Office of the Center 
Director (OCD), the Office of Compliance and Enforcement (OCE), and 
the Office of Policy (OP). For each of the four offices, we analyzed 
data provided by officials from the office on meeting requests 
received as of January 7, 2013, including the date requests were 
received and the date meetings were held. We analyzed the data from 
each of the four offices separately because the data maintained by 
each office varied. For example, OS officials only maintain data on 
the date the meeting request was received by FDA while OP officials 
maintain data on the date the meeting request was received by FDA and 
by OP. We analyzed the number of meeting requests granted, denied, 
transferred, withdrawn, and pending. We also analyzed the number of 
calendar days from the date the request was received by FDA or a 
specific CTP office, depending on available data, to the date the 
meeting was held.[Footnote 7] Finally, we reviewed a relevant FDA 
guidance document, and interviewed officials from each of the four CTP 
offices to learn about the processes for scheduling and holding 
meetings. 

To examine the extent to which FDA has spent its tobacco user fee 
funds, we reviewed FDA's data, including information from CTP on 
tobacco user fees from the fourth quarter of fiscal year 2009 through 
the fourth quarter of fiscal year 2012, such as the amounts collected 
by FDA and the amounts spent by all seven CTP offices: [Footnote 8] 
OS, OCD, OCE, OP, Office of Management, Office of Regulations, and 
Office of Health Communication and Education. We analyzed these data 
to determine how collection related to spending over time. Further, we 
reviewed FDA and CTP documents, such as FDA budget justification 
documents, CTP's spend plan (which is used by CTP to identify its 
plans for spending user fee funds on staffing, acquisitions, and 
operational needs), and CTP quarterly reports to Congress (which 
describe CTP's implementation of the Tobacco Control Act 
provisions).[Footnote 9] 

We assessed the reliability of FDA data we received by reviewing 
related documentation, performing data reliability checks (such as 
examining the data for missing values), and interviewing CTP 
officials. After taking these steps, we determined that the data we 
used were sufficiently reliable for our purposes. 

We conducted this performance audit from November 2012 to September 
2013 in accordance with generally accepted government auditing 
standards. Those standards require that we plan and perform the audit 
to obtain sufficient, appropriate evidence to provide a reasonable 
basis for our findings and conclusions based on our audit objectives. 
We believe that the evidence obtained provides a reasonable basis for 
our findings and conclusions based on our audit objectives. 

Background: 

FDA's authority to regulate tobacco products under a public health 
standard is unique among its regulatory responsibilities. CTP is the 
FDA center with primary responsibility for executing this regulatory 
responsibility, and its offices conduct work in several areas, 
including reviewing submissions for new tobacco products to determine 
if such products can be legally marketed in the United States, and 
responding to meeting requests from manufacturers and other entities. 
All of CTP's activities are funded through tobacco manufacturer user 
fees, as required by the Tobacco Control Act.[Footnote 10] 

FDA Oversight of Tobacco Products: 

FDA--primarily through CTP--undertakes four broad categories of 
activities in carrying out its responsibilities and authorities under 
the Tobacco Control Act: [Footnote 11] (1) reviewing submissions for 
marketing new tobacco products and setting scientific standards for 
tobacco products; (2) enforcing statutory and regulatory requirements 
prohibiting the sale, marketing, and distribution of certain tobacco 
products; (3) developing and issuing regulations and guidance, 
conducting compliance checks, and removing violative products from the 
market pursuant to the Tobacco Control Act; and (4) engaging in public 
education and outreach activities about the risks associated with 
tobacco product use, and promoting awareness of and compliance with 
the Tobacco Control Act. CTP is organized into seven offices. (See 
table 1.) Within CTP, OS is the office primarily responsible for 
conducting reviews of new tobacco product submissions; however, OS 
staff duties are not limited to reviewing new tobacco product 
submissions. 

Table 1: Description of FDA Center for Tobacco Product (CTP) Offices: 

Office: Office of the Center Director; 
Description: 
* Provides scientific, policy, and managerial leadership and direction 
to the other six offices that constitute the center; 
* Communicates agency initiatives and guidance to consumers and 
industry in support of public health. 

Office: Office of Compliance and Enforcement; 
Description: 
* Advises center officials on compliance and enforcement issues, 
policies, and procedures relating to regulated tobacco products and 
industry; 
* Ensures that regulated tobacco products and the manufacturers, 
distributors, retailers and importers of those products are in 
compliance with the law.

Office: Office of Health Communication and Education; 
Description: 
* Leads CTP's public education and communication activities. 

Office: Office of Management; 
Description: 
* Provides administrative services to support CTP's business 
operations in the following areas: financial management, information 
technology, human resources, acquisitions, management analysis, and 
logistics. 

Office: Office of Policy; 
Description: 
* Develops and analyzes policies to implement the Tobacco Control Act. 

Office: Office of Regulations; 
Description: 
* Leads and coordinates the development and issuance of regulatory and 
policy documents. 

Office: Office of Science; 
Description: 
* Develops and implements CTP's regulatory science framework and 
policies in tobacco regulatory development and tobacco product review; 
* Implements a research agenda to meet regulatory science needs and to 
evaluate population and public health impact of tobacco products. 

Source: GAO summary of FDA information. 

[End of table] 

New Tobacco Product Submissions and CTP's Review Process: 

Under the Tobacco Control Act, a manufacturer may make a submission to 
FDA for CTP's determination of whether the manufacturer may introduce a 
new tobacco product to the market in the United States. CTP reviews 
submissions made by manufacturers through one of three pathways: 

* Substantial Equivalence (SE) pathway: Manufacturers make a 
submission under the SE pathway if either (1) a new tobacco product 
has the same characteristics as a predicate tobacco product--that is, 
a product commercially marketed in the United States on February 15, 
2007, or a product previously found by CTP to be substantially 
equivalent; or (2) the new tobacco product has different 
characteristics from a predicate tobacco product, but does not raise 
different questions of public health. There are two types of 
submissions made under the SE pathway--provisional and regular--that 
are defined by the date that the product came on the market and when 
the manufacvturer made the submission. For provisional SE submissions, 
a manufacturer may market the new product that is the subject of the 
submission while CTP conducts its review of the submission, but for 
regular SE submissions, a manufacturer may not market the new product 
until CTP completes its review and determines that the product meets 
the SE requirements. (See table 2.) 

Table 2: Types of Submissions under the Substantial Equivalence (SE) 
Pathway: 

SE submission type: Provisional; 
Statutory criteria for SE submission type: 
* New tobacco product commercially marketed after February 15, 
2007, but before March 22, 2011; and; 
* SE submission made to FDA by March 22, 2011; 
When manufacturer may legally market the new tobacco product in the 
United States: May be commercially marketed unless the FDA Center for 
Tobacco Products (CTP) issues an order that the new tobacco product is 
not substantially equivalent. 

SE submission type: Regular; 
Statutory criteria for SE submission type: 
* Does not meet the statutory criteria for a provisional SE submission; 
When manufacturer may legally market the new tobacco product in the 
United States: Cannot be marketed until CTP issues an order that the 
new tobacco product is substantially equivalent. 

Source: GAO summary of FDA information. 

Note: A substantially equivalent tobacco product is one that CTP has 
found to either have the same characteristics as an existing tobacco 
product (a product commercially marketed in the United States on 
February 15, 2007, or previously found by FDA to be substantially 
equivalent); or has different characteristics, but does not raise 
different questions of public health. 

[End of table] 

* Exemption from SE pathway: Manufacturers make a submission under the 
Exemption from SE pathway if (1) the new product is a minor 
modification (adding, deleting, or changing the quantity of an 
additive) of another tobacco product marketed by the same 
manufacturer; (2) an SE submission is not necessary to ensure that 
permitting the tobacco product to be marketed would be appropriate for 
the protection of public health; and (3)an Exemption from SE is 
otherwise appropriate. 

* Premarket Tobacco Product Application (PMTA) pathway: Manufacturers 
make a submission under the PMTA pathway if the new tobacco product 
does not meet the criteria of the SE or Exemption from SE pathways--
that is, the new tobacco product is not substantially equivalent to a 
predicate product or is not a minor modification of an appropriate 
product for modification. The PMTA submission must include, among 
other things, full reports of investigations of health risks, and must 
meet the public health standard described under the Tobacco Control 
Act (that is, would be appropriate for the protection of public 
health).[Footnote 12] 

The Tobacco Control Act does not mandate a time frame for CTP's review 
of new tobacco product submissions with the exception of PMTA 
submissions. For PMTA submissions, the act requires CTP to issue an 
order stating whether the product may be marketed as promptly as 
possible, but not later than 180 days after FDA's receipt of a 
submission.[Footnote 13] 

CTP reviews of SE submissions--primarily conducted by OS--include 
three key steps: [Footnote 14] (1) jurisdiction review to determine if 
the product is regulated by FDA, (2) completeness review to determine 
if the submission is missing information, and (3) scientific review to 
determine if the product is substantially equivalent or not (see 
figure 1). 

Figure 1: Key Review Steps Performed by FDA's Center for Tobacco 
Products (CTP) for Substantial Equivalence (SE) Submissions as of 
January 7, 2013: 

[Refer to PDF for image: illustration] 

Key steps in the SE review process: 

Jurisdiction review: 
CTP’s Office of Science (OS) determines if new product is an FDA-
regulated product. 

Completeness review: 
OS determines if submission is missing information needed to finish 
the next review step. 

Scientific review: 
OS determines whether new tobacco product is substantially equivalent 
to existing tobacco product.[A] 

Source: GAO summary of FDA information. 

Note: The steps in this figure represent key steps in CTP's review 
process for SE submissions. There are other steps in the review 
process that are not represented in this figure. 

[A] A substantially equivalent tobacco product is one that CTP has 
found to either have the same characteristics as a predicate tobacco 
product (a product commercially marketed in the United States on 
February 15, 2007, or previously found by FDA to be substantially 
equivalent); or has different characteristics, but does not raise 
different questions of public health. 

[End of figure] 

The jurisdiction and completeness review steps are facilitated by OS's 
project managers. During jurisdiction review, project managers use a 
checklist to determine whether the new tobacco product is an FDA-
regulated tobacco product (that is, whether it is a cigarette, 
cigarette tobacco, roll-your-own tobacco, or smokeless tobacco). 
[Footnote 15] During completeness review, project managers use another 
checklist to determine whether the submission is missing information 
that OS will need for scientific review, such as the product's full 
brand name and a rationale for why a comparison between the new and 
the predicate tobacco products' characteristics should find that the 
new product is substantially equivalent. When project managers 
determine that additional information is needed to make SE 
determinations, OS issues administrative advice and information (AI) 
letters to manufacturers. Initially, CTP officials said they had given 
manufacturers 60 days to respond to administrative AI letters, but in 
April 2012, CTP began giving manufacturers 30 days to respond to an 
administrative AI letter. 

After OS finishes these initial two steps in the SE review process, 
the next step is a scientific review, which involves an assessment of 
the product by scientists in different disciplines (such as chemistry 
and toxicology).[Footnote 16] These scientists work to determine 
whether the product is substantially equivalent to a product already 
on the market--that is, has the same characteristics as a predicate 
tobacco product, or has different characteristics but does not raise 
different questions of public health. During scientific review, OS may 
issue scientific AI letters to request additional information that the 
scientists determine is needed to make a final determination (such as 
clarification of ingredients and additional testing results). In these 
letters, CTP officials told us that OS requests that manufacturers 
respond within 60 days. If OS determines that the SE criteria have 
been met, then CTP will issue an SE order, and the product may 
continue being marketed by the manufacturer (if it was a provisional 
SE submission) or may be legally introduced into the U.S. market (if 
it was a regular SE submission). If neither of these criteria is met, 
then CTP will issue an order that the product is not substantially 
equivalent and the manufacturer must remove the product from the 
market (if it was a provisional SE submission) or cannot introduce the 
product into the market under the SE pathway (if it was a regular SE 
submission). 

According to CTP officials, reviews of Exemption from SE and PMTA 
submissions also include jurisdiction, completeness, and scientific 
review steps. However, the specific activities within each review step 
for those pathways may differ from the specific activities involved in 
review steps for SE submissions. 

Requests for Meetings with CTP Offices: 

The Tobacco Control Act does not require CTP to conduct meetings with 
outside entities, but CTP officials reported that they are valuable 
because they increase knowledge of tobacco regulation among public 
health groups, promote compliance among manufacturers, and clarify 
information needed for new tobacco product submissions. However, each 
CTP office follows different processes for receiving and processing 
meeting requests. In the event that an outside entity--for instance, a 
manufacturer or a public health advocacy organization--wants to meet 
with CTP officials, it can request a meeting in various ways. For 
example, manufacturers can submit written requests to the Director of 
OS by mail, courier, or electronically to FDA's document center. 
Manufacturers have requested meetings with OS to discuss their new 
tobacco product submissions, as well as study protocols and other 
scientific issues. Manufacturers, tobacco trade associations, and 
other entities have also proposed meetings with OS, OCD, OCE, and OP 
to educate CTP on tobacco industry operations (for example, current 
practices in tobacco product manufacturing), and to discuss industry's 
views on FDA's approaches to tobacco regulation (for example, industry 
feedback on published guidance documents). State, local, and tribal 
governments, as well as academic and scientific organizations, have 
requested meetings in order to coordinate public health efforts or 
share relevant knowledge. CTP officials told us that CTP follows FDA's 
practice not to grant meetings for which the topic of discussion is in 
draft guidance. Additionally, according to officials, one office 
within CTP may transfer a meeting request to another office within CTP 
in order to provide the most knowledgeable and appropriate agency 
officials at the meeting. However, a request may not result in a 
scheduled meeting. 

Tobacco User Fees: 

The Tobacco Control Act requires FDA to assess user fees on 
manufacturers of FDA-regulated tobacco products based on their market 
share and specifies that the tobacco user fees can only be applied 
toward FDA activities that relate to the regulation of tobacco 
products.[Footnote 17] FDA bills and collects tobacco user fees from 
manufacturers on a quarterly basis and fees are generally collected 
the quarter after they are billed. For example, fees billed in the 
fourth quarter of fiscal year 2011 were collected in the first quarter 
of fiscal year 2012. The Tobacco Control Act specified the total 
amount of user fees authorized to be collected for each fiscal year 
beginning with fiscal year 2009, and authorized user fees to remain 
available until expended (which means that FDA may carry over user 
fees to subsequent fiscal years if they are not obligated by the end 
of the fiscal year in which they were collected).[Footnote 18] (See 
table 3.) 

Table 3: Tobacco Control Act Authorization of Tobacco User Fees, 
Fiscal Years 2009 through 2019: 

Fiscal year: 2009; 
User fee amount: $85 million[A]. 

Fiscal year: 2010; 
User fee amount: $235 million. 

Fiscal year: 2011; 
User fee amount: $450 million. 

Fiscal year: 2012; 
User fee amount: $477 million. 

Fiscal year: 2013; 
User fee amount: $505 million. 

Fiscal year: 2014; 
User fee amount: $534 million. 

Fiscal year: 2015; 
User fee amount: $566 million. 

Fiscal year: 2016; 
User fee amount: $599 million. 

Fiscal year: 2017; 
User fee amount: $635 million. 

Fiscal year: 2018; 
User fee amount: $672 million. 

Fiscal year: 2019 and each subsequent year; 
User fee amount: $712 million. 

Source: GAO analysis of the Tobacco Control Act. 

Note: The amounts shown are the total user fee amounts authorized to 
be collected by FDA for its regulation of tobacco products. Fees are 
collected and available for obligation only to the extent and in the 
amount provided in advance in appropriations acts, with the exception 
of user fees assessed for fiscal year 2009, which were appropriated by 
the Tobacco Control Act. Tobacco Control Act, § 101(b), 123 Stat. at 
1826-28 (codified at 21 U.S.C. § 387s(b)-(c)). 

[A] Because the Tobacco Control Act was enacted during fiscal year 
2009, the $85 million authorization for fiscal year 2009 was reduced 
by a pro-rata amount. 

[End of table] 

All of CTP's activities, other FDA activities related to tobacco 
regulation (such as the tobacco-related work of FDA's Office of 
Regulatory Affairs and FDA Headquarters and Office of the 
Commissioner), and other activities such as rent are funded only 
through tobacco user fees.[Footnote 19] According to CTP officials, 
426 full-time equivalent staff in FDA were supported by the tobacco 
user fees in fiscal year 2012, 346 (81 percent) of which were in CTP. 

CTP Finished Initial, but Not Final, Review Steps for Most 
Submissions, and Lacks Time Frames for its Review Process: 

As of January 7, 2013, the vast majority of new tobacco product 
submissions FDA received from manufacturers were made under the SE 
pathway. CTP has finished initial review steps (jurisdiction and 
completeness reviews) for most SE submissions, but CTP has not made 
final decisions for most submissions. For the majority of provisional 
SE submissions, CTP took over a year and a half to complete these 
initial review steps. In late June 2013, CTP made a final decision on 
6 of the 3,788 SE submissions, finding that 2 of the products were 
substantially equivalent and that 4 were not; the remaining 
submissions were still undergoing CTP review. Several factors 
contributed to the significant amount of time it took for review of 
new tobacco product submissions, according to officials from CTP and 
tobacco manufacturers. CTP officials reported taking steps to address 
factors that contributed to the length of time the center has taken to 
review submissions, but the center has not established review time 
frames by which to assess progress. 

Almost All New Tobacco Product Submissions Have Been under the SE 
Pathway: 

As of January 7, 2013, nearly all new tobacco product submissions FDA 
received from manufacturers (99 percent) were SE submissions, most of 
which were provisional SE submissions. FDA received a total of 3,788 
SE submissions and 23 Exemption from SE submissions from 
manufacturers. FDA did not receive any PMTA submissions. (See figure 
2.) 

Figure 2: Number of Submissions Received by FDA for Each New Tobacco 
Product Pathway as of January 7, 2013: 

[Refer to PDF for image: illustration] 

Pathways for marketing a new tobacco product under the Tobacco Control 
Act: 
* Product is a new tobacco product under the Tobacco Control Act if it 
was not commercially marketed in the United States before February 15, 
2007. 

Substantial equivalence (SE) tobacco product pathway: 
* Product has same characteristics as an existing tobacco product 
commercially marketed in the United States on February 15, 2007; or: 
* Product has different characteristics, but does not raise different 
questions of public health. 

Provisional SE tobacco product pathway: 
* Product commercially marketed after February 15, 2007, but before 
March 22, 2011, and manufacturer’s submission received by FDA by March 
22, 2011; 
* Product may be commercially marketed unless the Center for Tobacco 
Products (CTP) issues order that it is not substantially equivalent; 
3,165 submissions[A]. 

Regular SE tobacco product pathway: 
* Product not commercially marketed before March 22, 2011, or 
manufacturer’s submission received by FDA after March 22, 2011; 
* Product may not be commercially marketed until CTP issues an order 
that it is substantially equivalent; 
623 submissions[B]. 

Exemption from SE tobacco product pathway: 
* Product modified by the same manufacturer by adding or deleting a 
tobacco additive, or changing the quantity of an existing additive; 
* Modification must be minor; 
* Product may not be marketed until CTP provides written notification 
CTP has granted the product an exemption' 
23 submissions. 

Exemption from SE tobacco product pathway: 
* Product modified by the same manufacturer by adding or deleting a 
tobacco additive, or changing the quantity of an existing additive; 
* Modification must be minor; 
* Product may not be marketed until CTP provides written notification 
CTP has granted the product an exemption; 
No submissions. 

Source: GAO analysis of FDA information. 

Note: This figure represents new tobacco product submissions received 
by FDA as of January 7, 2013. 

[A] Of the 3,165 provisional SE submissions, 44 were withdrawn by the 
manufacturer as of January 7, 2013. 

[B] Of the 623 regular SE submissions, 20 were withdrawn by the 
manufacturer as of January 7, 2013. 

[End of figure] 

As shown in figure 2, of the 3,788 SE submissions received by FDA as 
of January 7, 2013, 3,165 (84 percent) were provisional SE submissions 
and 623 (16 percent) were regular SE submissions.[Footnote 20] Almost 
all of the provisional SE submissions were received in the second 
quarter of fiscal year 2011--3,115 of the provisional SE submissions 
were received within the 3 weeks prior to the statutory deadline of 
March 22, 2011. The number of regular SE submissions received in a 
quarter ranged from 19 (in the third quarter of fiscal year 2011) to 
192 (in the third quarter of fiscal year 2012). (See figure 3.) 

Figure 3: Provisional and Regular Substantial Equivalence (SE) 
Submissions Received by FDA as of January 7, 2013, by Fiscal Year 
Quarter: 

[Refer to PDF for image: vertical bar graph] 

Fiscal year quarter: 2010, Q3; 
Provisional SE submissions[A]: 1; 
Regular SE submissions[B]: 0. 

Fiscal year quarter: 2010, Q4; 
Provisional SE submissions[A]: 23; 
Regular SE submissions[B]: 0. 

Fiscal year quarter: 2011, Q1; 
Provisional SE submissions[A]: 26; 
Regular SE submissions[B]: 0. 

Fiscal year quarter: 2011, Q2; (March 22, 2011: Statutory deadline for 
provisional SE submissions); 
Provisional SE submissions[A]: 3,115; 
Regular SE submissions[B]: 24. 

Fiscal year quarter: 2011, Q3; 
Provisional SE submissions[A]: 0; 
Regular SE submissions[B]: 19. 

Fiscal year quarter: 2011, Q4; 
Provisional SE submissions[A]: 0; 
Regular SE submissions[B]: 76. 

Fiscal year quarter: 2012, Q1; 
Provisional SE submissions[A]: 0; 
Regular SE submissions[B]: 61. 

Fiscal year quarter: 2012, Q2; 
Provisional SE submissions[A]: 0; 
Regular SE submissions[B]: 61. 

Fiscal year quarter: 2012, Q3; 
Provisional SE submissions[A]: 0; 
Regular SE submissions[B]: 192. 

Fiscal year quarter: 2012, Q4; 
Provisional SE submissions[A]: 0; 
Regular SE submissions[B]: 82. 

Fiscal year quarter: 2013, Q1; 
Provisional SE submissions[A]: 0; 
Regular SE submissions[B]: 108. 

Source: GAO analysis of FDA data. 

Note: This figure represents 3,788 SE submissions (3,165 provisional 
and 623 regular) received by FDA as of January 7, 2013. FDA did not 
receive any SE submission from January 1, 2013, through January 7, 
2013. 

[A] Provisional SE submissions are for new tobacco products 
commercially marketed after February 15, 2007, but before March 22, 
2011. Provisional SE submissions were received by FDA by March 22, 
2011. The tobacco products represented in these submissions may be 
commercially marketed unless the Center for Tobacco Products (CTP) 
issues an order that they are not substantially equivalent. 

[B] Regular SE submissions are for new tobacco products not yet 
commercially marketed. Regular SE submissions were received by FDA 
after March 22, 2011. The tobacco products represented in these 
submissions may not be marketed until CTP issues an order that they 
are substantially equivalent. 

[End of figure] 

In addition to the 3,788 SE submissions, FDA received 23 Exemption 
from SE submissions from manufacturers as of January 7, 2013.[Footnote 
21] Eligibility for the Exemption from SE pathway is limited to new 
tobacco products that are minor modifications of an existing tobacco 
product (adding, deleting, or changing the quantity of an additive) 
already marketed by the same manufacturer. According to CTP officials, 
a key factor contributing to the relatively small number of 
submissions is that it is not common for a manufacturer to change only 
additives when making a change to an existing tobacco product. 
According to industry representatives, a key reason for the relatively 
small number of submissions under this pathway is insufficient 
guidance from CTP about what exactly constitutes a minor modification 
of another commercially marketed tobacco product. FDA did not include 
a definition of the term "minor modification" in its final rule to 
establish procedures for the Exemption from SE pathway because the 
agency did not have the experience needed to provide a useful 
definition.[Footnote 22] In the rule, FDA stated that as it gains 
experience in evaluating Exemption from SE submissions, it will 
consider establishing a definition for minor modifications. 

CTP had not received any PMTA submissions as of January 7, 
2013.[Footnote 23] CTP's guidance document for the PMTA pathway states 
that PMTA submissions should include data from well-controlled studies 
demonstrating that the tobacco product is appropriate for the 
protection of the public health. According to CTP officials and 
industry representatives, one reason for the lack of submissions under 
this pathway may be the challenge in demonstrating that a manufacturer 
has met the public health standard (appropriate for the protection of 
public health) for the PMTA pathway. Data from such studies must 
address, for example, the health risks associated with the product in 
comparison to the health risks of other products on the market and the 
product's effect on the likelihood that current tobacco users will 
stop using tobacco products. According to industry representatives, 
meeting the standards under the PMTA pathway may not be feasible for 
some manufacturers--in particular, for small manufacturers (which are 
manufacturers that have fewer than 350 employees). Industry 
representatives reported that small manufacturers do not have the 
research and development resources to design or initiate clinical 
trials that would be needed to support a PMTA submission. 

CTP Finished Initial Review Steps for Most SE Submissions: 

As of January 7, 2013, CTP finished jurisdiction and completeness 
reviews for over two thirds of the provisional and regular SE 
submissions received since June 2010, but had not made a final 
decision on any of the 3,788 SE submissions.[Footnote 24] CTP finished 
both jurisdiction and completeness reviews for about 69 percent of 
provisional SE submissions (2,191 out of 3,165), and about 67 percent 
of regular SE submissions (415 out of 623). Almost all of the 
remaining 974 provisional SE submissions and about half of the 
remaining 208 regular SE submissions were through jurisdiction review 
but not completeness review. (See figure 4.) Provisional SE 
submissions and regular SE submissions were pending in completeness 
review for as long about 1.5 years and 1 year, respectively.[Footnote 
25] As of January 7, 2013, CTP had not finished scientific review for 
any of the SE submissions. 

Figure 4: Finished Review Steps for Provisional and Regular 
Substantial Equivalence (SE) Submissions Received by FDA, as of 
January 7, 2013: 

[Refer to PDF for image: 2 pie-charts] 

Provisional SE submissions (n=3,165)[A]: 
Jurisdiction and completeness reviews (2,191): 69%; 
Only jurisdiction review (945): 30%; 
None (29): 1%. 

Regular SE submissions (n=623)[B]: 
Jurisdiction and completeness reviews (415): 67%; 
Only jurisdiction review (107): 17%; 
None (101): 16%. 

Source: GAO analysis of FDA data. 

Note: This figure represents 3,788 SE submissions (3,165 provisional 
and 623 regular) received by FDA as of January 7, 2013, including 64 
submissions withdrawn by manufacturers as of that date. Submissions 
withdrawn in jurisdiction review are represented in the category 
labeled none, and submissions withdrawn in completeness review are 
represented in the category labeled only jurisdiction review. 
Submissions withdrawn in scientific review are represented in the 
category labeled jurisdiction and completeness reviews. 

[A] Provisional SE submissions are for new tobacco products 
commercially marketed after February 15, 2007, but before March 22, 
2011. Provisional SE submissions were received by FDA by March 22, 
2011. The tobacco products represented in these submissions may be 
commercially marketed unless the Center for Tobacco Products (CTP) 
issues an order that they are not substantially equivalent. 

[B] Regular SE submissions are for new tobacco products not yet 
commercially marketed. Regular SE submissions were received by FDA 
after March 22, 2011. The tobacco products represented in these 
submissions may not be marketed until CTP issues an order that they 
are substantially equivalent. 

[End of figure] 

CTP officials reported that as of late June 2013, CTP had started 
scientific reviews for all of the 415 regular SE submissions and 42 of 
the 2,191 provisional SE submissions that had finished the 
completeness review step as of January 7, 2013.[Footnote 26] CTP 
officials reported that CTP began scientific reviews for provisional 
SE submissions in May 2013, more than a year after they began 
scientific reviews for regular SE submissions in March 2012 because 
they prioritized completeness reviews for regular SE submissions over 
completeness reviews for provisional SE submissions. CTP officials 
reported that regular SE submissions went into scientific review based 
on the order that FDA received submissions (which generally aligned 
with the order that CTP finished each submission's completeness 
review). CTP officials also reported that CTP prioritized scientific 
reviews for provisional SE submissions based on the public health 
impact of the new tobacco product.[Footnote 27] According to CTP 
officials, prioritization of provisional SE submissions based on 
public health impact was necessary because new tobacco products in 
provisional SE submissions may remain on the market unless CTP finds 
that the product is not substantially equivalent to a predicate 
tobacco product. 

On June 25, 2013--about 3 years after FDA's receipt of the first SE 
submission--CTP made a final decision on 6 of the 3,788 SE 
submissions. CTP concluded that the new tobacco products in two of the 
submissions were substantially equivalent and that the products in the 
four other submissions were not. These six submissions were regular SE 
submissions received by FDA in fall 2011 (about 1 year and 8 months 
prior to CTP's final decisions). For each of the two substantially 
equivalent products, CTP found that the new product had different 
characteristics than the predicate tobacco product but did not raise 
different questions of public health. CTP found that four new tobacco 
products were not substantially equivalent to predicate tobacco 
products due to factors such as inadequate evidence that the products 
to which the new products were being compared were valid predicate 
products and lack of complete information on tobacco product 
characteristics.[Footnote 28] 

CTP Took Over a Year and Half for Initial Review Steps for the 
Majority of Provisional SE Submissions: 

CTP took over a year and a half from FDA's receipt of a submission 
through the end of initial review steps for more than half of 
provisional SE submissions, and 6 months for more than half of the 
regular SE submissions. As of January 7, 2013, the median length of 
time to finish initial review steps--from FDA's receipt of a 
submission through the end of completeness review--for provisional SE 
submissions was about 1 year and 9 months, and the length of time 
ranged from about 9 months to about 2.5 years (see figure 5). The 
median length of time to finish initial review steps for regular SE 
submissions was about 6 months, ranging from about 1 month to about 2 
years (see figure 6). 

Figure 5: Time Taken for Initial Review Steps for Provisional 
Substantial Equivalence (SE) Submissions: 

[Refer to PDF for image: 2 pie-charts] 

Jurisdiction review for provisional SE submissions[A]: 
(median = 0.5 year): 
0 to 0.5 year: 70%; 
0.5 to 1.0 year: 27%; 
1.0 to 1.5 year: 1%; 
1.5 years or more: 2%. 

Completeness review for provisional SE submissions[B]: 
(median = 1.3 years) 
0 to 0.5 year: 3%; 
0.5 to 1.0 year: 5%; 
1.0 to 1.5 year: 91%. 

Source: GAO analysis of FDA data. 

Note: Manufacturers use the SE pathway if a new tobacco product has 
the same characteristics as a predicate tobacco product (a product 
commercially marketed in the United States on February 15, 2007, or 
previously found by FDA to be substantially equivalent); or has 
different characteristics, but does not raise different questions of 
public health. Provisional SE submissions are for new tobacco products 
commercially marketed after February 15, 2007, but before March 22, 
2011. Provisional SE submissions were received by FDA by March 22, 
2011. The tobacco products represented in these submissions may be 
commercially marketed unless FDA's Center for Tobacco Products (CTP) 
issues an order that they are not substantially equivalent. 
Percentages for completeness review do not add up to 100 percent due 
to rounding. 

[A] Jurisdiction review involves the CTP Office of Science's (OS) 
determination of whether the submitted product is an FDA-regulated 
tobacco product. This pie chart represents the length of time from 
FDA's receipt of a provisional SE submission to the end of 
jurisdiction review for 3,136 (out of 3,165) provisional SE 
submissions. As of January 7, 2013, CTP had not finished jurisdiction 
review for 29 provisional SE submissions. 

[B] Completeness review involves OS's determination of whether the 
center requires additional information to finish the review process. 
Completeness review does not begin until jurisdiction review is 
finished. This pie chart represents the length of time from the end of 
jurisdiction review to the end of completeness review for 2,191 of the 
3,136 provisional SE submissions through jurisdiction review. As of 
January 7, 2013, CTP had started but not finished completeness review 
for 945 provisional SE submissions. 

[End of figure] 

Figure 6: Time Taken for Initial Review Steps for Regular Substantial 
Equivalence (SE) Submissions: 

[Refer to PDF for image: 2 pie-charts] 

Jurisdiction review for regular SE submissions[A]: 
(median = 0.2 years) 
0 to 0.5 year: 79%; 
0.5 to 1.0 year: 20%; 
1.0 to 1.5 year: 1%. 

Completeness review for regular SE submissions[B]: 
(median = 0.3 years) 
0 to 0.5 year: 74%; 
0.5 to 1.0 year: 20%; 
1.0 to 1.5 year: 7%. 

Source: GAO analysis of FDA data. 

Note: Manufacturers use the SE pathway if a new tobacco product has 
the same characteristics as a predicate tobacco product (a product 
commercially marketed in the United States on February 15, 2007, or 
previously found by FDA to be substantially equivalent); or has 
different characteristics, but does not raise different questions of 
public health. Regular SE submissions are for new tobacco products not 
yet commercially marketed. Regular SE submissions were received by FDA 
after March 22, 2011. The tobacco products represented in these 
submissions may not be marketed until FDA's Center for Tobacco 
Products (CTP) issues an order that they are substantially equivalent. 
Percentages for completeness review do not add up to 100 percent due 
to rounding. 

[A] Jurisdiction review involves CTP Office of Science's (OS) 
determination of whether the submitted product is an FDA-regulated 
tobacco product. This pie chart represents the length of time from 
FDA's receipt of a regular SE submission to the end of jurisdiction 
review for 522 (out of 623) regular SE submissions. As of January 7, 
2013, CTP had not finished jurisdiction review for 101 regular SE 
submissions. 

[B] Completeness review involves OS's determination of whether the 
center requires additional information to finish the review process. 
Completeness review does not begin until jurisdiction review is 
finished. This pie chart represents the length of time from the end of 
jurisdiction review to the end of completeness review for 415 of the 
522 regular SE submissions through jurisdiction review. As of January 
7, 2013, CTP had started but not finished completeness review for 107 
regular SE submissions. 

[End of figure] 

CTP Officials and Manufacturers Identified Several Factors That 
Contributed to Review Times for New Tobacco Product Submissions: 

Several factors have contributed to the significant amount of time it 
took for review of SE submissions, according to CTP officials and 
industry representatives. These officials identified factors such as 
insufficient information provided by manufacturers in submissions; the 
prioritization of regular SE submission reviews over provisional SE 
submissions; and other factors. 

CTP officials told us that insufficient information from manufacturers 
in SE submissions has had the most significant impact on review times 
for those submissions. According to CTP officials, the majority of SE 
submissions were incomplete and required follow-up with manufacturers 
to obtain additional information, such as a full description of both 
the new tobacco product and the predicate tobacco product. CTP 
officials reported that they spent significant time sending out AI 
letters requesting missing information from manufacturers and awaiting 
the manufacturers' responses. Our analysis found that administrative 
AI letters were associated with 2,559 SE submissions, and CTP 
officials told us that some submissions had more than one 
administrative AI letter. In these letters, CTP officials requested 
that manufacturers respond to requests within 60 days or 30 days. In 
addition, our analysis found that scientific AI letters were 
associated with 81 SE submissions. In these letters, CTP requested 
that manufacturers respond to requests within 60 days, but CTP 
officials reported that it had granted extensions of up to 4 months. 

Industry representatives agreed that the lack of completeness of 
submissions had an impact on reviews, but they told us that guidance 
provided by CTP was neither timely nor adequate for manufacturers to 
provide what CTP would consider SE submissions with sufficient 
information. Manufacturers we interviewed said they were not able to 
include all information indicated in CTP guidance that was issued on 
January 5, 2011, for provisional SE submissions, which needed to be 
submitted by March 22, 2011, in order for those products to remain on 
the market provisionally.[Footnote 29] Some industry representatives 
indicated that the time it took to prepare a submission was more than 
CTP estimated, and that the deadline for provisional SE submissions 
was not enough time to incorporate all of the requirements in the 
guidance in their submissions.[Footnote 30] Additionally, industry 
representatives we interviewed reported that the January 2011 guidance 
did not direct manufacturers to include some information by the March 
22, 2011, submission deadline that CTP later requested in its 
September 2011 draft guidance or AI letters, such as an environmental 
assessment.[Footnote 31] 

CTP placed a higher priority on its review of regular SE submissions 
than on its review of provisional SE submissions, which contributed to 
longer review times for provisional SE submissions when compared to 
regular SE submissions. Specifically, according to OS officials, in 
the summer of 2011 CTP prioritized completeness reviews for regular SE 
submissions over provisional SE submissions, so resources were shifted 
away from provisional SE submissions. As a result of this decision--
coupled with the fact that provisional SE submissions were received 
earlier than regular SE submissions--completeness review times for 
provisional SE submissions were longer than for regular SE 
submissions. CTP officials said that there were three reasons for 
placing a higher priority on its review of regular SE submissions over 
provisional SE submissions: (1) tobacco products in provisional SE 
submissions could remain on the market legally (unless and until CTP 
issued an order of not substantially equivalent), (2) FDA received a 
large number of provisional SE submissions on March 21, 2011 (the day 
before the statutory deadline for submitting provisional SE 
submissions), making it impractical to prioritize reviews by the date 
the submission was received, and (3) CTP required time to assess which 
approach to reviewing provisional submissions would be the most 
effective at addressing the public health burden of tobacco use. 
[Footnote 32] 

Two more factors that had a significant impact on review times were a 
shortage of experienced tobacco product review staff and slow IT 
systems, according to CTP officials. These officials reported that 
when they started reviews of SE submissions the center had a shortage 
of experienced staff and that finding qualified staff was challenging. 
Additionally, CTP officials said that initial training of review staff 
contributed to review times as new staff were unable to review 
submissions until receiving the necessary training. CTP officials also 
told us that a slow IT system impacted the rate at which project 
managers could enter data during jurisdiction and completeness reviews 
of SE submissions, which slowed down those review times. 

CTP Has Worked to Address Factors That Contributed to Review Times, 
but Has Not Established Time Frames by Which to Assess Progress: 

CTP has taken action to address the factors CTP officials identified 
as contributing to the significant amount of time the center has taken 
to review submissions. CTP has provided additional direction to 
manufacturers in an attempt to decrease delays due to agency requests 
for more information through AI letters. Specifically, it has held 
webinars and published frequently asked questions to provide more 
guidance to manufacturers that prepare submissions. Additionally, CTP 
officials told us that in November 2012 CTP began alerting 
manufacturers of upcoming scientific review of their submissions by 
issuing a notification to manufacturers 45 days prior to starting 
scientific review. According to CTP officials, this notification 
reminds manufacturers of the option to amend their submissions as 
needed prior to the start of scientific review, to facilitate higher 
quality submissions, and potentially avoid delays in scientific review 
due to the issuance of scientific AI letters. CTP also noted that it 
is working on a standardized form for manufacturers to use when 
submitting new tobacco product information for review.[Footnote 33] 
According to CTP officials, this form may take time to develop as it 
will require FDA to issue regulations, but CTP officials anticipate 
that, when implemented, a standardized form should improve review 
times. To address the shortage of staff available for reviews, CTP 
officials told us they have increased OS staff from 12 staff in June 
2010 to more than 100 staff in January 2013, including scientists and 
project managers involved in submission reviews. Also in 2012, CTP 
drafted a reviewers' guide to help train staff on aspects of the SE 
review process. According to CTP officials, the center plans to 
continue to revise its draft reviewer's guide as it further refines 
its new tobacco product review process. CTP officials also reported 
that CTP had upgraded its IT system as of early 2013, which has 
improved the time taken for data entry on SE submissions. They also 
reported that CTP plans to transition to a new IT system in late 2013. 

Our analysis of data provided by CTP found that for regular SE 
submissions the length of time from the end of jurisdiction review 
through the end of completeness review improved over time. Among 
regular SE submissions received by FDA in fiscal year 2011 and for 
which CTP had finished completeness review as of January 7, 2013, the 
length of time from the end of jurisdiction review to the end of 
completeness review ranged from about 3 months to 1.5 years, with a 
median length of time of about 8 months. In contrast, the length of 
time for these steps for regular SE submissions received in fiscal 
year 2012 ranged from less than 1 day to 11 months, with a median of 
about 2 months. CTP officials reported that actions such as hiring 
review staff and providing training for review staff have resulted in 
improved review times. 

While CTP is moving forward with its reviews of SE submissions and 
efforts to improve review times, CTP does not have time frames for 
reaching a final decision on submissions. Time frames would allow CTP 
to evaluate its efficiency and effectiveness and help it make 
appropriate adjustments. Under federal standards for internal control, 
control activities that establish performance measures, such as time 
frames, and the monitoring of actual performance against measures are 
an integral part of operating efficiently, achieving effective 
results, and planning appropriately.[Footnote 34] There are no time 
frames set by statute for the SE pathway, and CTP has not established 
performance measures that include time frames for making final 
decisions on the review of SE submissions. Although CTP officials 
agreed that establishing time frames would be useful for performance 
evaluation, CTP has not identified specific plans to establish such 
time frames. According to CTP officials, they have not yet established 
time frames because they first need to collect and analyze information 
about how long each review step should take. Yet without time frames, 
CTP is limited in its ability to evaluate policies, procedures, and 
staffing resources in relation to its review process and this, in 
turn, limits CTP's ability to reasonably assure efficiency and 
effectiveness. As a result, CTP is limited in its ability to determine 
the adjustments needed to make improvements. For example, CTP is 
limited in its ability to evaluate whether OS staff are performing 
efficiently and effectively in relation to specific review steps, and 
as a result, CTP may not appropriately make adjustments such as 
changing an individual staff member's responsibilities or increasing 
the number of available staff. 

CTP Granted Most Meeting Requests, but the Time from Request to Date 
Held Varied Widely: 

As of January 7, 2013, CTP granted more meetings than it denied. The 
number of calendar days from the date a meeting request was received 
to the date a meeting was held varied widely, and CTP officials 
reported that logistics and subject matter contributed to these 
variations. 

CTP Granted More Meetings Than It Denied: 

As of January 7, 2013, CTP's offices had responded--granted, denied, 
or transferred--to over 93 percent of the meeting requests they 
received through January 7, 2013.[Footnote 35] Based on the data 
provided by CTP officials from the four offices that received meeting 
requests from outside entities, CTP's offices responded to 108 of the 
116 meeting requests received as of January 7, 2013 (see table 4). Of 
these 108 responses, 72 of the meeting requests were granted, 22 were 
denied, and 14 were transferred to another office within CTP.[Footnote 
36] According to CTP officials, in some cases, the CTP office denied a 
meeting request because the office was able to address the entity's 
questions by telephone and a formal meeting was no longer necessary. 
The remaining eight meeting requests were pending or withdrawn as of 
January 7, 2013. CTP officials told us that since January 7, 2013, 
they responded to three of the five pending meetings by granting two 
meetings and denying one. According to CTP officials, as of July 2013, 
the other two meetings were still pending because the meeting 
requester had not responded to CTP. 

Table 4: Meeting Requests Received by FDA Center for Tobacco Products 
(CTP) through January 7, 2013: 

Office of Center Director; 
Number granted: 22; 
Number denied[A]: 6; 
Number transferred[B]: 4; 
Number pending: 0; 
Number withdrawn: 0; 
Total requests: 32. 

Office of Compliance and Enforcement; 
Number granted: 3; 
Number denied[A]: 6; 
Number transferred[B]: 2; 
Number pending: 1; 
Number withdrawn: 0; 
Total requests: 12. 

Office of Policy; 
Number granted: 32; 
Number denied[A]: 0; 
Number transferred[B]: 1; 
Number pending: 2; 
Number withdrawn: 1; 
Total requests: 36. 

Office of Science; 
Number granted: 15; 
Number denied[A]: 10; 
Number transferred[B]: 7; 
Number pending: 2; 
Number withdrawn: 2; 
Total requests: 36. 

Total requests; 
Number granted: 72; 
Number denied[A]: 22; 
Number transferred[B]: 14; 
Number pending: 5; 
Number withdrawn: 3; 
Total requests: 116. 

Source: GAO analysis of FDA data. 

[A] According to CTP officials, in some cases, the CTP office denied a 
meeting request because the office was able to address the entity's 
questions by telephone and a formal meeting was no longer necessary. 

[B] The data compiled by the CTP offices did not include data on 
whether the transferred meeting requests were either granted or denied 
by the office receiving the transferred request. As a result, a 
transferred meeting request may also be counted as granted or denied 
in the office that received the transferred request. 

[End of table] 

Of the 116 meeting requests from outside entities, most (74) were 
requested by tobacco manufacturers. Public health advocacy 
organizations had the second highest number with 19 meeting requests 
(see figure 7). 

Figure 7: Meeting Requests Received by FDA Center for Tobacco Products 
(CTP) Offices, by Type of Entity: 

[Refer to PDF for image: pie-chart] 

Tobacco manufacturers (74): 64%; 
Public health advocacy organizations (19): 16%; 
Industry associations (10): 9%; 
Other (6)[A]: 5%; 
Academic and scientific organizations (4): 3%; 
Retailers (3): 3%. 

Source: GAO analysis of FDA data. 

Note: This figure presents the type of entity requesting meetings with 
CTP offices for the 116 meeting requests received through January 7, 
2013. 

[A] Other entities include an animal rights organization, two federal 
agencies, two local, state, or tribal governments, and one entity for 
which CTP data did not indicate the type of entity that requested the 
meeting. 

[End of figure] 

Of the 74 meeting requests by tobacco manufacturers, 35 of the meeting 
requests were granted, 20 were denied, and 12 were transferred. 
[Footnote 37] The remaining 7 meeting requests were pending or 
withdrawn as of January 7, 2013. For the other types of entities, most 
of the requested meetings were granted. For example, all 19 meetings 
requested by public health advocacy organizations were granted. The 
topics of meeting requests differed among entities. For example, CTP 
data indicate that tobacco manufacturers typically requested meetings 
about tobacco product regulation and public health advocacy 
organizations generally requested meetings in order to provide 
information to CTP that may be useful for CTP's work. 

The Time Taken from Meeting Request to Date Held Varied Widely; CTP 
Reported That Logistics and Subject Matter Contributed to Variations: 

The number of calendar days taken from the date a CTP office received 
a meeting request to the date the meeting was held varied widely. 
[Footnote 38] For example, in OP, the number of days from the date a 
meeting request was received to the date a meeting was held ranged 
from 3 days to almost five months, with more than half of the 
responses to meeting requests taking more than about 1.5 months. 
Further, for OCD, the number of days from the date a meeting request 
was received to the date a meeting was held ranged from 9 days to more 
than 8 months with at least half of the responses to meeting requests 
taking over 2.5 months. (See table 5.) 

Table 5: Calendar Days from Date Meeting Request Received to Date 
Meeting Held, by Center for Tobacco Products (CTP) Office: 

CTP Office (number of requests granted)[A]: Office of Center Director 
(n=22); 
Calendar days: 
Minimum: 9; 
Median: 82; 
Maximum: 262; 
Average: 97. 

CTP Office (number of requests granted)[A]: Office of Compliance and 
Enforcement (n=3); 
Calendar days: 
Minimum: 1; 
Median: 39; 
Maximum: 112; 
Average: 51. 

CTP Office (number of requests granted)[A]: Office of Policy (n=30); 
Calendar Days: 
Minimum: 3; 
Median: 45; 
Maximum: 150; 
Average: 52. 

CTP Office (number of requests granted)[A]: Office of Science[B] 
(n=12); 
Calendar Days: 
Minimum: 22; 
Median: 86; 
Maximum: 149; 
Average: 79. 

Source: GAO analysis of FDA data. 

[A] In general, the amounts in this table represent the number of 
calendar days from the date a meeting request was received by the CTP 
office to the date on which the meeting was held for 67 of the 72 
meeting requests for which the request was granted. Data were 
insufficient for calculating the calendar days for the remaining 
meetings that were granted. All of the requests were received through 
January 7, 2013. 

[B] For the Office of Science, the amounts represent the number of 
calendar days from the date a meeting request was received by any FDA 
office (instead of the date it was received by the Office of Science). 
Data maintained by the Office of Science did not include the dates 
that meeting requests were received by the office. 

[End of table] 

For tobacco manufacturers, the type of entity with the most meeting 
requests, the amount of time taken from the date the meeting request 
was received to the date the meeting was held also varied by office. 
For example, the minimum number of days from a meeting request to the 
date the meeting was held for OS was about a month, and the maximum 
was about 5 months, with half of the responses to meeting requests 
taking more than about 3 months. The minimum number of days from a 
meeting request to the date the meeting was held for OP was 3 days, 
and the maximum was almost 4 months, with half of the responses to 
meeting requests taking more than about 1.5 months. 

According to CTP officials, logistics for scheduling meetings and the 
subject of the request contributed to the wide variation in time taken 
from the date of the request to the date the meeting was held. For 
example, OP officials said that the entity requesting the meeting may 
have to coordinate travel for several people across many locations in 
order to schedule a meeting and this coordination may contribute to a 
longer period of time before the meeting will take place. In addition, 
the subject matter of the request was another factor that CTP 
officials reported as contributing to the time taken by CTP offices to 
hold a meeting. For example, officials from OS said that CTP is a new 
regulatory agency and, as a result, it sometimes receives meeting 
requests on subject matters with which the center is unfamiliar and 
officials must involve many entities within both CTP and FDA to 
determine several things, including which office within CTP should 
host the meeting and what information the requested entity should 
prepare. 

FDA Spent Less than Half of the $1.1 Billion in User Fees Collected: 

As of the end of fiscal year 2012, FDA had spent less than half of the 
tobacco user fees collected and CTP had spent less than planned. CTP 
officials reported that issues related to contracting contributed to 
lower than expected spending.[Footnote 39] 

FDA Spent Less than Half of the User Fees Collected and CTP Spent Less 
than Planned: 

As of the end of fiscal year 2012, FDA had spent less than half of the 
$1.1 billion in tobacco user fee funds collected (46 percent) from 
fiscal year 2009 through fiscal year 2012, leaving more than $603 
million (54 percent) unspent.[Footnote 40] (See figure 8.) Of the 
almost $513 million spent during this time, CTP spent almost $468 
million. The remaining funds were spent by other FDA entities, such as 
the Office of Regulatory Affairs. 

Figure 8: Total Tobacco User Fees Spent and Not Spent by FDA through 
Fiscal Year 2012: 

[Refer to PDF for image: pie-chart] 

Total not spent ($603 million): 56%; 
Total spent ($513 million): 44%. 

Source: GAO analysis of FDA data. 

Note: FDA currently relies on the U.S. Department of Agriculture to 
determine a manufacturer's market share for the purpose of assessing 
tobacco user fees. Based on this assessment, FDA bills and collects 
tobacco user fees from manufacturers on a quarterly basis and fees are 
generally received the quarter after they are billed. This figure 
shows the tobacco user fees collected from fiscal year 2009 through 
fiscal year 2012 (which totaled about $1.1 billion), the percentage 
and amount of these fees spent during this period, and the percentage 
and amount of these fees remaining unspent at the end of this period. 
The total amount collected is the amount received through fiscal year 
2012. The figure does not include about $62 million that was billed in 
fiscal year 2012 but collected in fiscal year 2013. Of the almost $513 
million spent by FDA, the Center for Tobacco Products spent almost 
$468 million. The remaining funds were spent by other FDA entities 
(including the Office of Regulatory Affairs, Headquarters, and the 
Office of the Commissioner) and include funds spent on U.S. General 
Services Administration rent. 

[End of figure] 

In fiscal years 2011 and 2012, CTP spent less than the amounts it 
identified in its spend plan--that is, spent less than planned. 
According to CTP officials, the center's spend plan identifies plans 
for spending CTP's user fee funds on staffing, acquisitions, and 
operational needs.[Footnote 41] The spend plan is based on user fee 
funds anticipated to be collected by FDA and user fee funds that CTP 
did not spend in the previous fiscal year.[Footnote 42] Based on the 
spend plan for fiscal year 2011, all seven CTP offices had planned on 
spending a total of $225.4 million for fiscal year 2011, and these 
offices spent $106.4 million for that year.[Footnote 43] CTP continued 
to spend less than planned for fiscal year 2012. (See table 6.) CTP 
officials reported that based on spending through the third quarter of 
fiscal year 2013, the difference between the amount of planned 
spending and the amount of actual spending in fiscal year 2013 will be 
less than the differences between planned and actual spending in 
previous years. CTP planned to spend more than $810 million in fiscal 
year 2013, and as of June 30, 2013, CTP has spent or is committed to 
spend over $712 million.[Footnote 44] 

Table 6: Center for Tobacco Products (CTP) Planned and Actual 
Spending, Fiscal Years 2011 and 2012: 

Fiscal year: 2011; 
CTP Non-Overhead: 
Planned: $225.4 million; 
Spent: $106.4 million; 
CTP Overhead[A]: 
Planned: $79.2 million; 
Spent: $27.8 million; 
Total[B]: 
Planned: $304.6 million; 
Spent: $134.1 million. 

Fiscal year: 2012; 
CTP Non-Overhead: 
Planned: $585.0 million; 
Spent: $245.7 million; 
CTP Overhead[A]: 
Planned: $25.6 million; 
Spent: $26.0 million; 
Total[B]: 
Planned: $610.5 million; 
Spent: $271.7 million. 

Source: GAO summary of FDA data. 

Note: Spending means obligations, including those for which 
expenditures have been made. The term obligation refers to a definite 
commitment by a federal agency that creates a legal liability to make 
payments immediately or in the future. In addition, amounts from CTP 
and overhead may not equal total due to rounding. 

[A] Overhead includes information technology infrastructure and 
centralized funding for (among other things) furniture, office 
equipment, and center-wide training. 

[B] This total does not include amounts planned or spent for other FDA 
entities and on U.S. General Services Administration rent. Other FDA 
entities include the Office of Regulatory Affairs, Headquarters and 
the Office of the Commissioner. In fiscal years 2011 and 2012, these 
entities spent $11.1 million and $24 million, respectively. 

[End of table] 

Specifically, six of the seven CTP offices spent less user fee funding 
than CTP planned for fiscal years 2011 and 2012. For example, for 
fiscal year 2011, CTP's Office of Health Communication and Education, 
OCE, and OS planned to spend about $30 million more than they actually 
spent; and the Office of Management was the only CTP office that 
planned to spend less than it actually spent--it planned to spend 
about $1 million less than it spent. (See figure 9.) 

Figure 9: Center for Tobacco Products (CTP) Planned and Actual 
Spending, by Office, Fiscal Years 2011 and 2012: 

[Refer to PDF for image: 2 vertical bar graphs] 

Fiscal year: 2011: 

Office of the Center Director; 
Planned: $4.7 million; 
Spent: $2.9 million. 

Office of Compliance and Enforcement; 
Planned: $63.1 million; 
Spent: $30.1 million. 

Office of Health Communication and Education; 
Planned: $74.0 million; 
Spent: $18.8 million. 

Office of Management; 
Planned: $8.2 million; 
Spent: $9.3 million. 

Office of Policy; 
Planned: $12.9 million; 
Spent: $5.5 million. 

Office of Regulation; 
Planned: $6.2 million; 
Spent: $4.9 million. 

Office of Science; 
Planned: $56.4 million; 
Spent: $34.9 million. 

Fiscal year 2012: 

Office of the Center Director; 
Planned: $3.9 million; 
Spent: $3.3 million. 

Office of Compliance and Enforcement; 
Planned: $78.5 million; 
Spent: $45.6 million. 

Office of Health Communication and Education; 
Planned: $264.2 million; 
Spent: $33.8 million. 

Office of Management; 
Planned: $17.8 million; 
Spent: $14.9 million. 

Office of Policy; 
Planned: $15.4 million; 
Spent: $6.1 million. 

Office of Regulation; 
Planned: $4.6 million; 
Spent: $4.8 million. 

Office of Science; 
Planned: $200.8 million; 
Spent: $137.2 million. 

Source: GAO analysis of FDA data. 

Note: Planned refers to the amount indicated in CTP's annual spend 
plan. Spending means obligations, including those for which 
expenditures have been made. The term obligation refers to a definite 
commitment by a federal agency that creates a legal liability to make 
payments immediately or in the future. 

[End of figure] 

CTP Officials Reported That Issues Related to Contracting Contributed 
to Lower than Expected Spending: 

CTP officials told us that issues related to contracting accounted for 
most of the difference between the amounts spent and planned spending. 
Specifically, they reported that the time it took to award contracts 
resulted in CTP not spending the funds that the center planned to 
spend for a given fiscal year. For example, according to CTP 
officials, CTP's Office of Health Communication and Education had 
planned to award a $55 million contract for communications support 
services for part of its public education campaign for fiscal year 
2011. This office also planned to award a related $145 million 
contract in fiscal year 2012 for a public health education campaign. 
However, most of the planned $200 million total was not awarded until 
the first quarter of fiscal year 2013.[Footnote 45] CTP officials told 
us that both contracts were not awarded at these amounts in fiscal 
year 2011 or 2012 as planned because CTP and FDA spent significant 
amounts of time to determine the structure of the contract as FDA had 
never conducted a public education campaign of this magnitude. 

Spending for other contracts for both fiscal years 2011 and 2012 was 
lower than expected for a number of reasons, according to CTP 
officials: fewer than expected contracts were awarded, the scope of a 
contract changed, or CTP was short of staff to support the work of the 
contract. 

* For fiscal year 2011, CTP's OCE had planned to award $55 million in 
contracts with states to ensure compliance with tobacco regulations, 
but CTP awarded a total of $24 million for that fiscal year because 
fewer states participated than expected. 

* For fiscal year 2012, CTP's OS entered into an interagency agreement 
with the Centers for Disease Control and Prevention to develop 
analytical methods and establish baseline levels of harmful or 
potentially harmful constituents in tobacco products for $20 million 
less than planned because of a change in scope of the activities for 
this contract. 

* For fiscal year 2011, CTP's Office of Health Communication and 
Education entered into an interagency agreement with the National 
Institutes of Health to support regulatory communications activities. 
The agreement was $3.5 million less than initially planned because the 
Office of Health Communication and Education was just being 
established at the time and it did not have enough staff to support 
this joint effort. As a result, the office reduced the scope of the 
contract. 

In addition to issues related to contracting, CTP officials said that 
plans to hire more staff than it did and planned management related 
activities that were not undertaken were other reasons why the amounts 
spent were lower than planned. According to CTP officials, for fiscal 
years 2011 and 2012, CTP had planned to hire more staff than it did 
and this accounted for $6 million and $10 million of the differences 
between amounts planned to be spent and spent, respectively. Further, 
according to CTP officials, lower than planned spending for other 
management activities (such as computer updates and planning potential 
reorganization) is another reason why the amounts spent by CTP were 
lower than planned. For example, for fiscal year 2011, the CTP spend 
plan included $35 million for planning associated with establishing 
two new offices within CTP. According to CTP officials, this amount 
was expected to cover contingencies, such as computer updates or 
management development, if they were needed. However, the officials 
reported that this reserve was not used because funds were available 
in the Office of Management to handle any issues related to the 
addition of these new offices. 

Conclusions: 

Four years after the Tobacco Control Act established CTP and about 3 
years after the first new tobacco product submission, FDA has received 
about 4,000 submissions and collected over $1.1 billion in tobacco 
user fee funds. Although CTP has finished initial review steps for 
most of these submissions, as of June 2013, the center made a final 
decision on only 6 submissions and the time taken on reviews has been 
significant. Certainly, insufficient information provided by 
manufacturers in submissions, the prioritization of regular SE 
submission reviews over provisional SE submissions, and other factors 
have contributed to the time CTP has taken in its reviews. Yet, as CTP 
moves forward with its work, the lack of performance measures like 
time frames for reviews of SE submissions will limit CTP's ability to 
evaluate policies, procedures, and staffing resources in relation to 
CTP's submission review process and, in turn, limit CTP's ability to 
reasonably assure efficient operations and effective results. An 
entity that is limited in its ability to evaluate its performance will 
be hard-pressed to determine what adjustments it should make to its 
operations or how to plan for the future. 

Recommendations for Executive Action: 

To improve CTP's ability to operate efficiently, achieve effective 
results, and plan appropriately, we recommend that the Secretary of 
Health and Human Services direct the Commissioner of FDA to: 

* establish performance measures that include time frames for making 
final decisions on SE submissions and Exemption from SE submissions, 
and: 

* monitor FDA's performance relative to those time frames, such as 
evaluating whether staff are performing reviews of these submissions 
efficiently and effectively. 

Agency Comments: 

We provided a draft of this report to HHS for comment. In its written 
comments, reproduced in appendix II, HHS agreed with our 
recommendations. Specifically, HHS stated that FDA will identify 
performance measures and time frames for regular SE and Exemption from 
SE review processes within 6 months of our report's publication and 
that FDA will monitor its progress to determine if subsequent SE 
reviews meet the identified time frames. In addition, HHS commented 
that FDA will identify performance measures and time frames for the 
provisional SE review process as FDA gains more experience reviewing 
these SE submissions. HHS further stated that based on the actual 
performance of meeting the identified time frames, FDA will make 
modifications to the review process, if appropriate, in order to meet 
agency objectives. 

HHS also provided additional information on CTP activities in its 
comments. For example, HHS stated that CTP is working to reach 
determinations on SE and Exemption from SE submissions as 
expeditiously as possible, and that CTP has continued to make progress 
on conducting product reviews and in its process and timeliness for 
responding to requests for meetings with CTP offices. Regarding 
tobacco user fee funds, HHS commented that CTP is projecting that it 
will decrease the amount of unspent tobacco user fee funds to carry 
over at the end of fiscal year 2013 to the mid-$200 millions, which is 
less than half of the amount carried over at the end of fiscal year 
2012. HHS also suggested that our report should include information on 
all user fee spending, including spending by FDA entities other than 
CTP. We do report total user fees spent and not spent by FDA, 
including spending by both CTP and other FDA entities, through fiscal 
year 2012. In comparing spend plans with actual spending, we reported 
on spending by CTP, which comprised more than 90 percent of the $513 
million spent by FDA through fiscal year 2012. In reporting on CTP 
spending, we clearly note that other FDA entities, including the 
Office of Regulatory Affairs, Headquarters, and the Office of the 
Commissioner, spend tobacco user fee funds, and that these entities 
spent $11 million in fiscal year 2011 and $24 million in fiscal year 
2012. 

HHS also provided technical comments that were incorporated, as 
appropriate. 

As agreed with your office, unless you publicly announce the contents 
of this report earlier, we plan no further distribution until 30 days 
from the report date. At that time, we will send copies of this report 
to the Secretary of Health and Human Services, the Commissioner of 
FDA, and other interested parties. In addition, the report will be 
available at no charge on GAO's Web site at [hyperlink, 
http://www.gao.gov]. 

If you or your staff have any questions about this report, please 
contact me at (202) 512-7114 or at crossem@gao.gov. Contact points for 
our Office of Congressional Relations and Office of Public Affairs can 
be found on the last page of this report. Other major contributors to 
this report are listed in appendix III. 

Sincerely yours, 

Signed by: 

Marcia Crosse: 
Director, Health Care: 

[End of section] 

Appendix I: Staffing Resources for Conducting Reviews of New Tobacco 
Product Submissions: 

As of January 7, 2013, the Office of Science (OS)--the only Center for 
Tobacco Products (CTP) office involved in all steps of reviewing new 
tobacco product submissions--had 124 staff members on board, and the 
majority of the staff (102 or 82 percent) reported spending some 
portion of their time reviewing new tobacco product submissions. OS 
has other responsibilities in addition to reviewing new tobacco 
product submissions, including research to meet regulatory science 
needs and to evaluate the population and public health impact of 
tobacco products. According to OS officials, of the 102 staff who 
reported spending time on reviewing submissions, 60 percent or 61 staff 
reported that in general they spent at least half of their time 
working on reviews of new tobacco product submissions. The remaining 
41 staff reported generally spending less half of their time on 
reviews of new tobacco product submissions.[Footnote 46] (See figure 
10.) 

Figure 10: Center for Tobacco Products (CTP) Office of Science (OS) 
Staff Time Spent Conducting Reviews of New Tobacco Products: 

[Refer to PDF for image: pie-chart] 

At least half their time: 49%; 
Less than half their time: 33%; 
None of their time: 18%. 

Source: GAO analysis of FDA data. 

Note: This figure represents the percentage of staff that spent less 
than or at least half of their time working on reviews of new tobacco 
product submissions, as reported by 124 OS staff that were on board as 
of January 7, 2013. According to OS officials, specific details on how 
many full-time equivalent staff spent time on reviews of new tobacco 
product submissions were not available. In the absence of specific 
data, we obtained data from OS on the proportion of time (none of the 
time, less than 50 percent of the time, or 50 percent or more of the 
time) staff members in each OS position spent on new tobacco 
submissions, for staff on board as of January 7, 2013. 

[End of figure] 

The amount of time an OS staff person reported spending on new tobacco 
product submissions varied by job title. Specifically, the 23 project 
managers, the OS officials responsible for coordinating the reviews of 
new tobacco product submissions, and 17 scientists (such as chemists 
and toxicologists) reported spending at least half of their time 
working on reviews of new tobacco product submissions. Meanwhile, the 
Deputy Director for Research and the Special Assistant to the Director 
reported spending less than half of their time on the review of new 
tobacco product submissions. (See table 7.) 

Table 7: Time Spent on Review of New Tobacco Product Submissions for 
the Center for Tobacco Products (CTP) Office of Science by Job Title: 

Time on reviews of submissions: 50 percent or more; 
Office of Science Job titles: 
* Director, Office of Science; 
* Associate Director Regulatory Science Management; 
* Associate Director for Science Policy; 
* Medical Officer; 
* Regulatory Health Project Manager; 
* Director, Regulatory Science Informatics; 
* Regulatory Health Information Specialist; 
* Director, Deputy Director, Product Science; 
* Chemist; 
* Engineer; 
* Toxicologist; 
* Pharmacologist; 
* Interdisciplinary Scientist; 
* Fellow; 
* Statistician. 

Time on reviews of submissions: Less than 50 percent; 
Office of Science Job titles: 
* Deputy Director for Research; 
* Special Assistant to the Director; 
* Conflict of Interest Specialist; 
* Health Scientist Administrator; 
* Psychologist/Behavioral Scientist/Neuroscientist; 
* Epidemiologist; 
* Social Scientist. 

Source: GAO summary of FDA information. 

Note: This table shows the job titles for which CTP staff reported 
generally spending 50 percent or more of their time on new tobacco 
product submission reviews or less than 50 percent of their time (but 
more than 0 percent) on new tobacco product submission reviews, as 
reported by Office of Science staff that were on board as of January 
7, 2013. The number of staff for each job titled varied from 1 to 23 
staff. The job title with 23 staff was regulatory health project 
manager. 

[End of table] 

[End of section] 

Appendix II: Comments from the Department of Health and Human Services: 

Department of Health & Human Services: 
Office of The Secretary: 
Assistant Secretary for Legislation: 
Washington, DC 20201: 

August 13 2013: 

Marcia Crosse: 
Director, Health Care: 
U.S. Government Accountability Office: 
441 G Street NW:
Washington, DC 20548: 

Dear Ms. Crosse: 

Attached are comments on the U.S. Government Accountability Office's 
(GAO) report entitled, "New Tobacco Products: FDA Needs to Set 
Timeframes for Its Review Process" (GAO 13723). 

The Department appreciates the opportunity to review this report prior 
to publication. 

Sincerely, 

Signed by: 

Jim R. Esquea: 
Assistant Secretary for Legislation: 

Attachment: 

General Comments Of The Department Of Health And Human Services (HHS) 
On The Government Accountability Office's (GAO) Draft Report Entitled, 
"New Tobacco Products: FDA Needs To Set Timeframes For Its Review 
Process" (GAO 13-723): 

The Department appreciates the opportunity to review and comment on 
this draft report. 

On June 22, 2009, Congress passed the Family Smoking Prevention and 
Tobacco Control Act (Tobacco Control Act). This new law charged the 
Food and Drug Administration (FDA) with the regulation of new tobacco 
products, creating FDA's Center for Tobacco Products (CTP), and giving 
it unprecedented responsibility for the pre-market public health 
review of tobacco product applications and reports under a public 
health/population standard, which is a new regulatory standard 
substantially different from standards used by other FDA Centers. 
[Footnote 1] Establishing and carrying out a consistent, transparent, 
and predictable public-health-based scientific regulatory review, over 
complex and highly engineered tobacco products that have never been 
regulated before, require careful consideration of many complex and 
critical scientific issues. FDA is currently evaluating the 
information obtained in the GAO draft report, and consistent with 
GAO's recommendations, FDA will establish performance measures that 
include timeframes for the review phases within the substantial 
equivalence (SE) and Exemption from SE review processes. 

FDA takes the responsibility to make sound public-health-based 
scientific decisions on the marketing of new tobacco products 
seriously. To accomplish this, CTP has developed a rigorous, science-
based process for the work related to the review of new tobacco 
products and substantial equivalence (SE) reports. As CTP develops the 
knowledge, procedures, and policies required to carry out an effective 
regulatory program, it will become more efficient and timely in 
exercising the authority provided by Congress. 

New Tobacco Product Submissions and CTP's Review Process: 

CTP recognizes that the three pathways to market a tobacco product 
(pre-market tobacco application, substantial equivalence, and 
exemption from substantial equivalence) are new to the tobacco 
industry. During the first three years since its creation, CTP 
undertook a major effort to develop guidance and regulations to better 
inform the tobacco industry about specific regulatory review issues, 
including the scientific and public health elements needed for the 
evaluation of product applications. 

CTP is working to reach determinations on SE reports and exemption 
from SE requests as expeditiously as possible. As noted by GAO in the 
draft report, the length of time from the end of jurisdiction review 
to the end of completeness review decreased from 8 months in FY2011 to 
2 months in FY2012. This constitutes considerable progress and is a 
reflection of CTP's ongoing commitment to shortening review times.
CTP has continued to make progress on conducting product reviews since 
GAO provided FDA with its draft report. CTP has begun making SE and 
not substantially equivalent (NSE) determinations, and now has 
substantially reduced its backlog of regular SE reports awaiting 
initial scientific review. As of late June 2013, CTP had received 788 
regular reports, completed jurisdictional review of 748 of these 
reports, completed administrative review of 729 of these reports, and 
started scientific reviews for 479 of the regular SE submissions. FDA 
has initiated scientific review on all regular SE reports received as 
of November 9, 2012. 

Provisional SE reports raise separate issues. During the course of 
2011, CTP received in excess of 3,000 provisional SE reports to 
review. CTP received provisional reports on or before March 22, 2011, 
for products that were on the market on that date. These products can 
remain on the market unless FDA finds that they are NSE. Because the 
provisional reports can remain on the market pending a decision, CTP 
triages them so that those having the highest potential public health 
impact receive priority for scientific review. 

Many factors can affect the timing of an SE determination, including 
the completeness of the submission and whether manufacturers need to 
submit more scientific information in order for CTP to make a 
determination. So far nearly all of the SE reports submitted to CTP by 
tobacco companies have had significant deficiencies. In almost all 
cases, the submissions lack the information that CTP needs to make a 
finding that a new product is substantially equivalent to a predicate 
product, omitting basic statutory elements required in a complete 
submission. CTP has sought to clarify, through guidance documents and 
webinars as well as interactions with individual companies on their 
previously submitted SE reports, the information that submissions 
should contain in order for CTP to evaluate them. Some of the general 
issues that FDA is observing across multiple submissions include: 

* Reports contained contradictory statements, particularly about 
whether the new product characteristics were the same or different 
from those of the predicate product. 

* Reports named an inappropriate predicate product. 

* Reports lacked information regarding product composition, including 
information about the tobacco blend used in the product. 

* Reports were missing specifications on components used in the 
manufacture of the finished product. 

* The Harmful and Potentially Harmful Constituents (HPHC) measurements 
in many reports were scientifically inadequate or did not include 
information needed to evaluate data quality. 

* For some reports, information on product design was incomplete, 
preventing a scientific assessment, and the information on product 
packaging (which can impact product stability) was lacking. 

As noted in GAO's draft report, as manufacturers submit the full 
information that CTP needs to make SE determinations, CTP expects that 
the number of days required for scientific review of SE reports 
(exclusive of the time industry takes to respond to FDA letters) will 
substantially decrease. Also, as CTP improves its own processes and IT 
systems and hires additional staff, it will be able to conduct 
scientific reviews more quickly and efficiently. 

CTP has made significant progress in its SE review process since 
January 2013. In order to speed up the process for an SE 
determination, CTP is now providing applicants with a notification 
letter before CTP begins review. This letter notifies manufacturers 
that scientific review will begin in 45 days and they have the option 
to provide CTP with additional information before the start of 
scientific review. In addition, CTP has increased communication with 
applicants, provided feedback on questions posed by industry, and 
published FDA guidance to industry. CTP originally requested a 60-day 
response to administrative advice and information (AI) letters, but 
since April 2012, CTP has been requesting a 30-day response to 
administrative Al letters. CTP has also allowed 30 days for response 
to preliminary finding letters (which seek further correction of 
deficiencies following review of the SE report) in order to expedite 
the process for reaching an SE determination. 

CTP has hired additional Regulatory Health Project Managers and worked 
to hire and retain experienced scientists in order to provide human 
capital resources to shorten the time required to conduct SE reviews. 
CTP also set up a cross-office work group, convened by the Center 
Director's Office, specifically to examine and improve hiring 
practices associated with SE reviews. As a result of HR and work group 
recommendations, FDA has been sharing certificates and utilizing 
hiring flexibilities to increase the number of qualified scientific 
staff. To improve processes, CTP is creating reviewers' guides to 
train review staff and facilitate consistency of reviews by different 
scientists and across SE Reports, as well as improve the efficiency of 
reviews. 

CTP determined that the current eSubmissions IT system is not 
sufficient to address the document management and analytical review 
needs of CTP for SE and other regulatory submissions. CTP is 
developing a new system (OSiRIS — Office of Science Review Information 
System) that will support the tracking, management, and analytical 
review of SE submissions and exemptions, Pre-Market Tobacco 
Applications (PMTAs), Modified Risk Tobacco Products (MRTPs), and 
Investigational Tobacco Products (ITPs). The system will also 
facilitate general correspondence with industry as well as the 
scheduling and recording of industry meetings. OSiRIS is currently in 
the coding phase, with expected deployment at the end of 2013. 

Requests for Meetings with CTP Offices: 

CTP has made progress in its process and timeliness for responding to 
requests for meetings with CTP offices since January 2013. CTP has 
developed a standard operating procedure (SOP) on the CTP policies and 
procedures for scheduling and documenting meetings with tobacco 
manufacturers, importers (industry) and researchers/investigators 
(investigators) who seek guidance relating to the research, 
development, and/or review of tobacco products. The SOP is
consistent with the CTP Guidance for Industry and Investigators; 
Meetings with Industry and Investigators on the Research and 
Development of Tobacco Products, May 24, 2012 (Guidance). The purpose 
of the meeting is one factor that significantly impacts the length of 
time between the date of the meeting request and the date of its 
occurrence. Consistent with the Guidance, if a meeting is a listening 
session, the rate limiting step in scheduling is primarily logistics 
(e.g. staff availability). However, if CTP is to substantively address 
regulatory issues, it must prepare in advance of the meeting. To 
facilitate this, CTP's Office of Science (OS) requests that 
manufacturers submit background information for OS's review at least 
45 days prior to the meeting, and CTP meeting participants prepare for 
industry/investigator meetings by thoroughly reviewing the background 
materials submitted by the meeting requestor. 

Tobacco User Fee Funds: 

FDA continues to make substantial progress in making careful use of 
the funding the Tobacco Control Act makes available for regulating 
tobacco products. As of July 31, 2013, CTP has obligated $594 million 
and committed or delegated an additional $235 million, which totals 
$829 million, or 98 percent, of the FY2013 spend plan of $847 million. 
CTP plans to spend additional funds on salaries and benefits, 
scientific research, and reimbursements to FDA offices in FY2013. 
Given these figures, CTP is projecting to decrease its carryover funds 
from $603 million in FY2012 to the mid-$200 millions for FY2013. 

The Tobacco Control Act established the user fee amounts that FDA is 
authorized to collect for the regulation of tobacco products; GAO 
presents the amounts in Table 3 of the draft report. Although GAO 
presents the total amounts to be collected, it only reports on the 
portion of the Tobacco Program that CTP spends, excluding spending by 
the other FDA entities (e.g. Office of Regulatory Affairs, IT 
services, GSA rent, legal services, etc.) whose tobacco regulation-
related activities are supported by FDA tobacco user fees. This is not 
a comparable presentation since CTP's expenditures alone can never 
approach the total fees collected. This leaves out significant 
expenditures of the Tobacco Program. 

For example, in Table 6: Center for Tobacco Products (CTP) Planned and 
Actual Spending, Fiscal Years 2011 and 2012, actual CTP spending 
represented in the table for FY2011 and FY2012 was $134.1 and $271.7 
million respectively, where actual spending for the whole Tobacco 
Program, was actually $145.2 million for FY2011 and $295.7 million for 
FY2012. When comparing total resources to total expenditures, GAO 
should use comparable figures or GAO should clarify that it is only 
reporting on the subset of spending that is done by CTP and indicate 
that other Tobacco Program spending is being excluded. The same 
analysis and caveats apply to FTE figures since CTP's FTE figures are 
only a subset of the Tobacco Program's total FTE figures, which are 
all supported by tobacco user fees. 

Response to GAO Recommendations: 

To improve CTP's ability to operate efficiently, achieve effective 
results, and plan appropriately, GAO recommends that FDA establish 
performance measures that include timeframes for making final 
decisions on SE submissions and that FDA monitor its performance 
relative to these timeframes. Within 6 months of the publication of 
this report, FDA will identify performance measures and timeframes for 
regular SE and Exemption from SE review processes. FDA will implement 
these performance measures for regular SE reports received by the 
agency within 6 months after identification. In addition, FDA will 
monitor its progress to determine if subsequent SE reviews meet the 
identified timeframes. Based on the actual performance of meeting the 
identified timeframes, FDA will make modifications to the review 
process, if appropriate, in order to meet agency objectives. 

FDA will take a phased approach to implementing these performance 
measures and timeframes. Because FDA is currently prioritizing the 
review of the regular SE reports and Exemption from SE requests, the 
performance measures and timeframes for these submissions will be 
implemented first. As FDA gains more experience with reviewing the 
provisional SE reports, it will begin to implement performance 
measures and timeframes with respect to those submissions. 

Appendix II Footnote: 

[1] For example, the Center for Drug Evaluation and Research addresses 
a drug's safety and effectiveness. 

[End of section] 

Appendix III: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Marcia Crosse, (202) 512-7114 or crossem@gao.gov: 

Staff Acknowledgments: 

In addition to the contact named above, Kim Yamane, Assistant 
Director; Danielle Bernstein; Hernán Bozzolo; Britt Carlson; Cathleen 
Hamann; Richard Lipinski; and Lisa Motley made key contributions to 
this report. 

[End of section] 

Footnotes: 

[1] Pub. L. No. 111-31, div. A, 123 Stat. 1776 (2009) (hereafter, 
"Tobacco Control Act"). Tobacco products that FDA currently regulates 
include cigarettes, cigarette tobacco, roll-your-own tobacco, and 
smokeless tobacco products. The Tobacco Control Act enables FDA to 
assert jurisdiction over other tobacco products--for example, cigars, 
pipe tobacco, hookah, and e-cigarettes that do not make drug claims--
through rulemaking. In April 2011, FDA announced its plans to issue a 
proposed rule to regulate other tobacco products, such as e-
cigarettes, that are not currently regulated, but as of July 2, 2013, 
the agency had not issued a proposed rule or specified which other 
products it planned to propose to regulate. 

[2] Tobacco Control Act, § 101(b), 123 Stat. at 1808 (codified at 21 
U.S.C. § 387j(b)(1)). 

[3] Tobacco Control Act, § 101(b), 123 Stat. at 1787 (codified at 21 
U.S.C. § 387j(e)). 

[4] In addition to the term submission, CTP uses the terms report, 
request, and application (depending on the new tobacco product) to 
refer to the package of information that manufacturers provide to FDA 
for review in order to legally market a new tobacco product. 

[5] Tobacco Control Act, § 101(b), 123 Stat. at 1826 (codified at 21 
U.S.C. § 387s). User fees are a fee assessed to users for goods or 
services provided by the federal government. 

[6] See GAO, Standards for Internal Control in the Federal Government, 
[hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1] 
(Washington, D.C.: Nov. 1999) and its supplemental guide, Internal 
Control Management and Evaluation Tool, [hyperlink, 
http://www.gao.gov/products/GAO-01-1008G] (Washington, D.C.: Aug. 
2001). 

[7] We did not analyze calendar days from the date a meeting request 
was received to the date a response was communicated because not all 
of the offices maintained data on the date a response to a meeting 
request was communicated with outside entities. 

[8] For the purposes of this report, spending means obligations, 
including those for which expenditures have been made. The term 
obligation refers to a definite commitment by a federal agency that 
creates a legal liability to make payments immediately or in the 
future. 

[9] We also reviewed CTP's data on the number of staff members 
employed in each CTP office at the beginning and end of each fiscal 
year, and we interviewed officials from OS about the responsibilities 
and activities of the staff in their office. OS officials provided 
self-reported data on how OS staff spend their time. 

[10] Tobacco Control Act, § 101(b), 123 Stat. at 1826 (codified at 21 
U.S.C. § 387s(c)(2)(B)(i)). 

[11] CTP may work with other FDA offices such as the Office of 
Regulatory Affairs, which conducts inspections, and other HHS agencies 
such as the National Institutes of Health, which conducts research, to 
implement the Tobacco Control Act. 

[12] Tobacco Control Act, § 101(b), 123 Stat. at 1807 (codified at 21 
U.S.C. § 387j). To determine whether marketing of a new tobacco 
product would be appropriate for the protection of public health, CTP 
applies standards that take into account the risks and benefits to the 
population as a whole, including users and nonusers of tobacco 
products; increased or decreased likelihood that existing users of 
tobacco products will stop using such products; and increased or 
decreased likelihood that those who do not use tobacco products will 
start using such products. 

[13] Tobacco Control Act, § 101(b), 123 Stat. at 1809 (codified at 21 
U.S.C. § 387j(c)(1)). 

[14] In addition to OS, CTP officials told us that OCE participates in 
the SE review process by confirming that the tobacco product to which 
the new tobacco product in the submission is being compared meets the 
statutory requirements for a predicate tobacco product. A predicate 
product is a tobacco product commercially marketed in the United 
States on February 15, 2007, or previously found by FDA to be 
substantially equivalent, in each case, provided the product has not 
been removed from the market at FDA's request or has not been 
determined by a judicial order to be misbranded or adulterated. 

[15] According to CTP officials, project managers determine whether 
the product (including any component, part, or accessory of the 
product) is made or derived from tobacco; whether it is a drug or 
medical device; and whether it meets established definitions for any 
type of FDA-regulated tobacco product. 

[16] According to CTP officials, in late 2012, CTP began issuing 
notices to each manufacturer about the manufacturer's submission after 
finishing completeness review and before beginning scientific review. 
According to CTP officials, the notice informs the manufacturer that 
its submission will be undergoing scientific review and that the 
manufacturer has 45 days to make any amendments to the submission. In 
addition, in late 2012, CTP began segmenting the review process into 
three phases. The first phase includes FDA's receipt of a submission, 
jurisdiction review, and completeness review. The second phase 
includes the notice sent to manufacturers 45 days prior to beginning 
scientific review and OCE's review to determine whether the tobacco 
product to which the new tobacco product in the submission is being 
compared meets the statutory requirements for a predicate tobacco 
product. The third phase includes scientific review. In this phase, 
CTP may issue a preliminary finding letter if the manufacturer has not 
provided the information needed to make a final decision. CTP issued 
its first preliminary finding letter in April 2013. The preliminary 
finding letter provides the manufacturer with 30 days to provide the 
missing information, and OS then makes a decision on whether the 
product is substantially equivalent or not substantially equivalent. 
In this report, we present information about jurisdiction and 
completeness review steps (which are in the first phase) and 
scientific review (which is in the third phase). 

[17] Tobacco Control Act, § 101(b), 123 Stat. at 1826-28 (codified at 
21 U.S.C. § 387s(b)-(c)). In addition to manufacturers, the Tobacco 
Control Act authorizes FDA to assess user fees on tobacco product 
importers. FDA currently relies on the U.S. Department of Agriculture 
to determine the manufacturer's market share for assessing the user 
fees. However, in May 2013, FDA issued a proposed rule that would 
require manufacturers and importers to submit information needed to 
calculate the amount of user fees assessed under the Tobacco Control 
Act. 78 Fed. Reg. 32,581 (May 31, 2013). 

[18] Fees are collected and available for obligation only to the 
extent and in the amount provided in advance in appropriations acts, 
with the exception of user fees assessed for fiscal year 2009, which 
were appropriated by the Tobacco Control Act. For each of fiscal years 
2009 through 2013, Congress appropriated the total amounts of tobacco 
user fees authorized to be assessed and collected under the Tobacco 
Control Act to FDA. The fiscal year 2013 appropriation amount of $505 
million, however, was subject to a five percent reduction, as a result 
of the sequestration order issued by the President on March 1, 2013. 
Therefore, the maximum amount of fiscal year 2013 tobacco user fee 
collections available to FDA for obligation was reduced by 
approximately $25 million, to $480 million. In general, actual 
collections may be less than the amounts authorized and, therefore, 
the amounts credited to the agency's account may be less than the 
authorized amount. 

[19] Tobacco user fees are assessed differently than FDA user fees for 
medical devices and human drugs. FDA assesses both application and 
annual fees against medical device and human drug manufacturers for 
certain types of applications, including premarket review, and 
products. Such user fees, which are standard and do not vary based on 
market share, pay for a portion of FDA activities related to oversight 
of medical devices and drugs. In contrast, tobacco manufacturers do 
not pay user fees with their submissions for new tobacco products; 
instead, they pay a quarterly fee based on their market share of FDA-
regulated tobacco products. FDA relies exclusively on tobacco user 
fee funds to support its activities related to tobacco oversight. 

[20] Of the 3,788 SE submissions, 64 (44 provisional and 20 regular) 
were withdrawn by the manufacturer as of January 7, 2013. According to 
FDA officials, manufacturers are not required to provide reasons for 
withdrawing submissions, and FDA does not track such information. 

[21] On June 25, 2013, CTP determined that the new tobacco products in 
20 of these submissions--which were received by FDA in late September 
2011 through late December 2012--did not meet the requirements for the 
Exemption from SE pathway. CTP officials reported that they anticipate 
receiving new SE submissions or PMTA submissions for the products 
identified in these 20 submissions. In addition, from January 8, 2013, 
through June 25, 2013, FDA received an additional seven Exemption from 
SE submissions. 

[22] 76 Fed. Reg. 38,961 (July 5, 2011) (codified at 21 C.F.R. 
§1107.1). 

[23] CTP officials also reported that no submissions were received by 
FDA from January 8, 2013, through June 25, 2013. 

[24] FDA received the first SE submission on June 11, 2010. 

[25] As of January 7, 2013, provisional SE submissions not yet through 
jurisdiction review were pending in that step for as long as about 2 
years, and regular SE submissions not yet through jurisdiction review 
were pending in that step for about 1 year. 

[26] From January 2013 through late June 2013, FDA received an 
additional 165 regular SE submissions. In addition, as CTP was 
conducting completeness reviews of provisional SE submissions during 
the time period, it determined that in some cases the provisional SE 
submission incorrectly identified multiple new tobacco products 
(instead of a single tobacco product). CTP separated such submissions 
and, as a result, identified an additional 382 provisional SE 
submissions. 

[27] In June 2012, CTP established four Public Health Impact Tiers for 
provisional SE submissions, and in August 2012, CTP--specifically, 
chemists in OS--began assigning provisional SE submissions to these 
tiers in order to prioritize scientific reviews for products with the 
greatest potential to raise different questions of public health. Tier 
1 includes submissions with products that have high potential for 
raising different questions of public health, Tier 2 is for products 
with moderate potential, Tier 3 is for products with low potential, 
and Tier 4 is for products with the lowest potential. According to CTP 
officials, in assigning submissions to a tier, OS chemists apply a 
variety of criteria, such as whether the new tobacco products that are 
the subject of, and the predicate tobacco products referenced in, the 
submissions are different product types (which would result in a Tier 
1 assignment) or differ only in the way in which they are labeled 
(which would result in a Tier 4 assignment). CTP randomizes 
submissions within each tier to determine the order for beginning 
scientific review for submissions in the same tier. 

[28] Information about these final decisions, including SE orders 
issued by CTP and a summary of not substantially equivalent decisions, 
is available at [hyperlink, 
http://www.fda.gov/TobaccoProducts/Labeling/MarketingandAdvertising/ucm3
39928.htm] (accessed July 3, 2013). 

[29] U.S. Department of Health and Human Services, Food and Drug 
Administration, Section 905(j) Reports: Demonstrating Substantial 
Equivalence for Tobacco Products (Rockville, Md.: Jan. 5, 2011). 

[30] CTP estimated the average time taken to provide required 
information for SE submissions at 360 hours per response, including 
the time to review instructions, search existing data sources, gather 
the data needed, and complete and review the information collection. 
See U.S. Department of Health and Human Services, Food and Drug 
Administration, Section 905(j) Reports: Demonstrating Substantial 
Equivalence for Tobacco Products, (Rockville, Md.: Jan. 5, 2011). 

[31] In September 2011, CTP issued a frequently asked questions 
document stating that manufacturers should include an environmental 
assessment in their submissions. According to CTP, an environmental 
assessment is information provided to CTP so it can determine the 
environmental impact of granting an SE submission. See U.S. Department 
of Health and Human Services, Food and Drug Administration, Center for 
Tobacco Products, Draft Guidance for Industry and FDA Staff 
Demonstrating The Substantial Equivalence of a New Tobacco Product: 
Responses to Frequently Asked Questions (Rockville, Md: Sept. 5, 2011). 

[32] CTP officials told us that while provisional SE products could 
remain on the market prior to CTP issuing an order, CTP would have 
other authorities under which it could address any immediate concerns 
about the adverse health impact of a specific product. 

[33] In June 2013, FDA opened a docket for public comment on 
electronic submissions of tobacco products. Docket No. FDA-2013-N-0602-
0001. Electronic Submission of Tobacco Product Applications and Other 
Information; Public Workshop; Request for Comments. As a result of 
this request for public comment and a public workshop held by CTP, CTP 
intends to develop a standardized form for tobacco manufacturers to 
make new tobacco product submissions. 

[34] While we focused on the timeliness of the reviews in this report, 
other dimensions of an organization's performance--such as the 
outcomes to be achieved, quality, and cost--are equally important for 
evaluating overall efficiency and effectiveness. 

[35] The first meeting request was received by OCD on December 16, 
2009. 

[36] The data compiled by the CTP offices did not include data on 
whether the transferred meeting requests were either granted or denied 
by the office receiving the transferred request. As a result, a 
transferred meeting request may also be counted as granted or denied 
in the office that received the transferred request. 

[37] The data compiled by the CTP offices did not include data on 
whether the transferred meeting requests were either granted or denied 
by the office receiving the transferred request. As a result, a 
transferred meeting request may also be counted as granted or denied 
in the office that received the transferred request. 

[38] We analyzed the CTP offices separately because the data 
maintained by each office varied. For example, OS officials maintain 
data only on the date the meeting request was received by FDA while 
OCD officials maintain data only on the date the meeting request was 
received by OCD. 

[39] For the purposes of this report, spending means obligations, 
including those for which expenditures have been made. The term 
obligation refers to a definite commitment by a federal agency that 
creates a legal liability to make payments immediately or in the 
future. 

[40] The total amount collected is the amount received through fiscal 
year 2012, and does not include the tobacco user fee funds billed at 
the end of fiscal year 2012 and collected in the first quarter of 
fiscal year 2013 (which as of February 28, 2013, totaled about $62 
million). 

[41] CTP also develops spend plans for other FDA entities that carry 
out tobacco-related activities (which include the Office of Regulatory 
Affairs, Headquarters, and Office of the Commissioner) based on 
discussions about the tobacco related activities that these other FDA 
entities will perform. 

[42] User fees that have not been spent can be carried over to 
subsequent fiscal years. 

[43] CTP did not develop a spend plan at the office or overhead level 
for fiscal year 2010, the first year of its operation. However, CTP 
planned to spend almost $212 million in fiscal year 2010, which 
includes overhead, and spent about $67 million. 

[44] In addition, CTP officials project that they will have $256 
million in unspent tobacco user fee funds to carry over to fiscal year 
2014, which is less than half of the amount they carried over to 
fiscal year 2013. CTP officials also project that unspent funds or 
funds carried over to subsequent fiscal years will continue to 
decrease. 

[45] In order to meet the guarantee of these contracts, the minimum 
amount was awarded in fiscal year 2012 and that amount was about 
$300,000. 

[46] According to OS officials, specific details on how many full-time 
equivalent staff spent time on reviews of new tobacco product 
submissions were not available. In the absence of specific data, we 
obtained data from OS on the proportion of time (none of the time, 
less than 50 percent of the time, or 50 percent or more of the time) 
each OS position spent on new tobacco submissions, for staff on board 
as of January 7, 2013. 

[End of section] 

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