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. 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. 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. Manufacturers have  requested meetings with OS to discuss their new tobacco product  submissions, as well as study protocols and other scientific issues. 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. 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. 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 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. 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. 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. 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. requested meetings in order to provide information to CTP that may be  useful for CTP’s work. 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 half of the responses to meeting requests taking more  than about 1.5 months. 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. CTP continued to spend  less than planned for fiscal year 2012. 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. However, most of the planned $200 million  total was not awarded until the first quarter of fiscal year 2013.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. 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. HHS also provided additional information on CTP activities in its  comments.
Why GAO Did This Study

In 2009, the Family Smoking Prevention and Tobacco Control Act granted FDA, an agency within the Department of Health and Human Services (HHS), 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. HHS agreed with GAO's recommendations.