[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1411 Introduced in House (IH)]







105th CONGRESS
  1st Session
                                H. R. 1411

To amend the Federal Food, Drug, and Cosmetic Act and the Public Health 
Service Act to facilitate the development and approval of new drugs and 
              biological products, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 23, 1997

 Mr. Burr of North Carolina (for himself, Mr. Greenwood, Mr. Barton of 
 Texas, Mr. Klug, Mr. Coburn, and Mr. Deal of Georgia) introduced the 
    following bill; which was referred to the Committee on Commerce

_______________________________________________________________________

                                 A BILL


 
To amend the Federal Food, Drug, and Cosmetic Act and the Public Health 
Service Act to facilitate the development and approval of new drugs and 
              biological products, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE, REFERENCE, AND TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Drug and 
Biological Products Modernization Act of 1997''.
    (b) Reference.--Except as otherwise specified, whenever in this Act 
an amendment is expressed in terms of an amendment to a section or 
other provision, the reference shall be considered to be made to that 
section or other provision of the Federal Food, Drug, and Cosmetic Act 
(21 U.S.C. 321 et seq.).
    (c) Table of Contents.--The table of contents is as follows:

Sec. 1. Short title, reference, and table of contents.
Sec. 2. FDA mission and annual report.
Sec. 3. Streamlining clinical research on drugs and biological 
                            products.
Sec. 4. The content and review of a new drug application.
Sec. 5. Effectiveness determination.
Sec. 6. Scientific review panels.
Sec. 7. Marketing approval.
Sec. 8. Accreditation of third parties.
Sec. 9. Dispute resolution.
Sec. 10. Good manufacturing practices.
Sec. 11. Pilot and small scale manufacture.
Sec. 12. Manufacturing changes.
Sec. 13. Insulin and antibiotics.
Sec. 14. Nonprescription drugs.
Sec. 15. Information system.
Sec. 16. Environmental impact review.
Sec. 17. Application of State and Federal law to the practice of 
                            pharmacy compounding.
Sec. 18. Harmonization.
Sec. 19. Informal agency statements.
Sec. 20. Research and education; practice of medicine.
Sec. 21. Delegation of authority.
Sec. 22. Publication of notice of deviation.
Sec. 23. Modernization of regulation of biological products.
Sec. 24. Requirements for human tissue.
Sec. 25. Access to unapproved therapies.
Sec. 26. Radiopharmaceuticals.
Sec. 27. Protection of confidential information.
Sec. 28. National uniformity.
Sec. 29. Centers for education and research on drugs, devices, and 
                            biological products.

SEC. 2. FDA MISSION AND ANNUAL REPORT.

    (a) Mission.--Section 903 (21 U.S.C. 393) is amended by 
redesignating subsections (b) and (c) as subsections (c) and (d), 
respectively, and by adding after subsection (a) the following:
    ``(b) Mission.--The Food and Drug Administration shall protect the 
public health by ensuring that--
            ``(1) foods are safe, wholesome, and sanitary;
            ``(2) human and veterinary drugs are safe and effective;
            ``(3) there is reasonable assurance of safety and 
        effectiveness of devices intended for human use;
            ``(4) cosmetics are safe; and
            ``(5) public health and safety are protected from 
        electronic product radiation.
The Food and Drug Administration shall promptly and efficiently review 
clinical research and take appropriate action on the marketing of 
regulated products in a manner that does not unduly impede innovation 
or product availability. The Food and Drug Administration shall 
participate with other countries to reduce the burden of regulation, 
harmonize regulatory requirements, and achieve appropriate reciprocal 
arrangements.''
    (b) Annual Report.--Section 903 (21 U.S.C. 393), as amended by 
subsection (a), is amended by adding at the end the following:
    ``(e) Annual Report.--The Secretary shall, simultaneously with the 
submission each year of the budget for the Food and Drug 
Administration, submit to the Committee on Commerce of the House of 
Representatives and the Committee on Labor and Human Resources of the 
Senate an annual report which shall--
            ``(1) review the performance of the Food and Drug 
        Administration in meeting its mission and the development of 
        Food and Drug Administration policies to implement such 
        mission;
            ``(2) review the performance of the Food and Drug 
        Administration in meeting its own performance standards, 
        including its own outcome measurements and statutory deadlines 
        for the approval of products or for other purposes contained in 
        this Act;
            ``(3) describe the staffing and resources of the Food and 
        Drug Administration and list those persons and organizations 
        accredited to conduct investigations under sections 505(i) and 
        520(g), to review drugs under section 505, to make initial 
        classification of devices under section 513, and to perform 
        good manufacturing practice reviews under sections and 520(f); 
        and
            ``(4) describe the goals, activities, and accomplishments 
        of the Food and Drug Administration in bilateral and 
        multinational meetings that addressed methods and approaches to 
        reduce the burden of regulation, harmonize regulation, and to 
        seek appropriate reciprocal arrangements, list each such 
        meeting, and list pending issues specifying those that are not 
        consistent with or are contrary to the provisions of this Act.
    ``(f) GAO Annual Report.--The Comptroller General of the United 
States shall each January submit to the Committee on Commerce of the 
House of Representatives and the Committee on Labor and Human Resources 
of the Senate a report which compares--
            ``(1) the performance of the Food and Drug Administration 
        in approving innovative drug, device, human tissue, and food 
        products with that of agencies performing similar functions in 
        countries listed in section 802(b); and
            ``(2) the resources used by agencies in such countries to 
        approve such products.
In developing a methodology for the report, the Comptroller General 
shall consult with representatives of the Secretary, the regulated 
industry, academic experts in the field, and experts knowledgeable 
about information in such other countries so that the approach 
accurately presents the information in a fair and balanced manner.

SEC. 3. STREAMLINING CLINICAL RESEARCH ON DRUGS AND BIOLOGICAL 
              PRODUCTS.

    Section 505(i) (21 U.S.C. 355(i)) is amended by adding ``(1)'' 
prior to the first sentence, by redesignating paragraphs (1), (2), and 
(3) as subparagraphs (A), (B), and (C), respectively, and by adding the 
following new paragraphs at the end thereof:
    ``(2) A clinical investigation of a new drug may begin 30 days 
after the Secretary has received from the sponsor of the investigation 
a submission containing information about the drug and the clinical 
investigation as follows: The submission shall contain--
            ``(A) information on design of the investigation and 
        adequate reports of basic information, certified by the 
        applicant to be accurate reports, necessary to assess the 
        safety of the drug for use in clinical investigation; and
            ``(B) adequate information on the chemistry of the drug, 
        manufacturing of the drug, controls available for the drug, and 
        primary data tabulations for the drug from animal or human 
        studies, except that for phase I clinical investigations 
        detailed information for drugs and well-characterized 
        therapeutic, biotechnology derived drugs shall not be required 
        unless the director of the office responsible for the review of 
        the drug makes a request within 30 days after the submission 
        regarding such detailed information in writing and specifies 
        the reasons for the request.
    ``(3)(A) At any time, the Secretary may issue to the sponsor of an 
investigation a clinical hold confirmed in writing prohibiting the 
sponsor from conducting the investigation and specifying the basis for 
the clinical hold. The Secretary may issue a clinical hold upon a 
demonstration, based on specific information available to the 
Secretary, that the drug to be investigated represents an unreasonable 
risk to the safety of the persons who are the subject of the clinical 
investigation, taking into account the qualifications of the clinical 
investigators, information about the drug, and the design of the 
clinical investigation, the condition for which the drug is to be 
investigated, and the health status of the subjects involved.
    ``(B) Any response from the sponsor of an investigation to the 
Secretary requesting that a clinical hold be removed shall receive a 
decision, in writing and specifying the reasons therefor, within 30 
days after receipt of such response or the clinical hold shall be 
deemed to be withdrawn.
    ``(4)(A) As an alternative to the procedure established in 
paragraph (2), a Phase I or Phase II non-commercial clinical 
investigation may begin after an accredited institution, accredited by 
the Secretary under subparagraph (B) to conduct the specific type of 
investigation which is the subject of such research, has approved the 
investigation and the sponsor of the investigation has submitted to the 
Secretary a notification setting forth the name and address of the 
sponsor, the identity of the drug, and the uses of the drug that the 
sponsor intends to investigate. Data and information developed through 
such an investigation may be submitted in support of an application for 
approval of a new drug and shall be considered by the Secretary to the 
same extent as data and information developed through an investigation 
under paragraph (2). Paragraph (3) shall apply to such an 
investigation.
    ``(B) The Secretary shall establish and provide an opportunity for 
public comment on the requirements and qualifications that an 
accredited institution, which may include medical colleges and other 
organizations, shall meet to be eligible to approve an investigation 
for purposes of this paragraph.
    ``(5) The Food and Drug Administration shall have exclusive 
regulatory jurisdiction in the Department of Health and Human Services 
over the use of a new drug in any clinical investigation.''.

SEC. 4. THE CONTENT AND REVIEW OF A NEW DRUG APPLICATION.

    (a) Section 505(b).--Section 505(b) (21 U.S.C. 355(b)) is amended 
by adding at the end the following:
    ``(4)(A) Within 1 year after the date of the enactment of the Drug 
and Biological Products Modernization Act of 1997, the Secretary, in 
order to minimize the burden of unnecessary information submissions and 
to better harmonize international regulatory requirements, shall, after 
consultation with patient advocacy groups and the regulated industry, 
publish in the Federal Register criteria for the type and amount of 
information relating to effectiveness to be included in an application 
for the approval of a new drug or a new use of an approved drug. In 
developing the criteria, the Secretary shall consider any 
recommendations of the International Conference on Harmonization of 
Technical Requirements for Registration of Pharmaceuticals for Human 
Use.
    ``(B) The Secretary shall establish standards for the review of 
applications submitted under paragraph (1) relating to promptness, 
technical excellence, lack of bias and conflict of interest, and a 
knowledge of regulatory and scientific standards which shall apply 
equally to outside reviewers and to employees of the Secretary who 
review such applications.
    ``(C) Food and Drug Administration employees shall meet with a 
sponsor of an investigation or an applicant under an application for a 
new drug or a new use of an approved drug submitted under paragraph (1) 
within 30 days of any reasonable request for a meeting by the sponsor 
or applicant for the purpose of reaching agreement on the design and 
size of clinical trials. Minutes of any such meeting shall be 
exchanged. Advice provided to a sponsor or applicant at its request by 
a Food and Drug Administration employee, which is reduced to writing 
and made part of the administrative record by the sponsor or applicant 
or by the Food and Drug Administration, regarding appropriate testing 
of a new drug shall not be changed after such testing begins, except 
with the written agreement of the sponsor or applicant or by a decision 
in writing, after an informal hearing, by the director of the office in 
which the drug is reviewed where such change is needed because there is 
a demonstrated need to protect the public health or a valid safety 
consideration.
    ``(D) The written decisions of the office responsible for the 
review of a drug on all aspects of scientific and medical matters 
relating to a new drug shall be binding upon, and may not directly or 
indirectly be changed by, the field personnel of the offices of 
compliance of the office responsible for the review unless in 
consultation with the reviewing office, such field personnel 
demonstrate why such decision should be modified.
    ``(E) No action by the office responsible for the review of a drug 
on any matter relating to a new drug for which an application has been 
submitted under paragraph (1) may at any time, or under any 
circumstance other than a demonstrable extraordinary circumstance, be 
delayed because of the unavailability of information from or action by 
field personnel unless the field personnel demonstrate to the office 
that such a delay is necessary to assure the marketing of a safe and 
effective drug.''.
    (b) Section 505(j).--
            (1) Amendment.--Section 505(j) (21 U.S.C 355(j) is amended 
        by redesignating paragraphs (3) through (8) as paragraphs (4) 
        through (9), respectively, and by adding after paragraph (2) 
        the following:
    ``(3)(A) The Secretary shall establish standards for the review of 
applications submitted under paragraph (1) relating to promptness, 
technical excellence, lack of bias and conflict of interest, and a 
knowledge of regulatory and scientific standards which shall apply 
equally to outside reviewers and to employees of the Secretary who 
review such applications.
    ``(B) Food and Drug Administration employees shall meet with a 
sponsor of an investigation or an applicant under an application 
submitted under paragraph (1) within 30 days of any reasonable request 
for a meeting by the sponsor or applicant for the purpose of reaching 
agreement on the design and size of bioavailability or bioequivalence 
studies. Minutes of any such meeting shall be exchanged. Advice 
provided to a sponsor or applicant at its request by a Food and Drug 
Administration employee, which is reduced to writing and made part of 
the administrative record by the sponsor or applicant or by the Food 
and Drug Administration, regarding bioavailability or bioequivalence 
studies shall not be changed after such testing begins, except with the 
written agreement of the sponsor or applicant or by a decision in 
writing, after an informal hearing, by the director of the office in 
which the drug is reviewed where such change is needed because there is 
a demonstrated need to protect the public health or a valid safety 
consideration.
    ``(C) The written decisions of the office responsible for the 
review of a drug on all aspects of scientific and medical matters 
relating to a new drug shall be binding upon the field personnel of the 
offices of compliance of the office responsible for the review unless 
in consultation with the reviewing office, such field personnel 
demonstrate why such decision should be modified.
    ``(D) No action by the office responsible for the review of a drug 
on any matter relating to a new drug for which an application has been 
submitted under paragraph (1) may at any time, or under any 
circumstance other than a demonstrable extraordinary circumstance, be 
delayed because of the unavailability of information from or action by 
field personnel unless the field personnel demonstrate to the office 
that such a delay is necessary to assure the marketing of a safe and 
effective drug.''.
            (2) Conforming amendments.--Section 505(j) (21 U.S.C. 
        355(j) is amended--
                    (A) in paragraph (2)(A)(i), by striking ``(6)'' and 
                inserting ``(7)'';
                    (B) in paragraph (3), by striking ``(4)'' and 
                inserting ``(5)'';
                    (C) in paragraph (3)(I), by striking ``(5)'' and 
                inserting ``(6)''; and
                    (D) in paragraph (6)(C), by striking ``(5)'' each 
                place it occurs and inserting ``(6)''.

SEC. 5. EFFECTIVENESS DETERMINATION.

    Section 505(d) (21 U.S.C. 355(d)) is amended--
            (1) by adding after the last sentence the following: 
        ``Substantial evidence may, where there is a high level of 
confidence in the scientific validity of the results of an adequate and 
well-controlled investigation, consist of data from an adequate and 
well-controlled investigation and adequate supportive scientific 
evidence (obtained before or after such investigation).'';
            (2) by adding at the end the following: ``For purposes of 
        the preceding sentence, a well-controlled investigation shall 
        only include methods of control that are appropriate to the 
        disease or condition for which a drug is intended as 
        prescribed, recommended, or suggested in its labeling. The 
        Secretary may waive the requirement to conduct any well-
        controlled investigation, as defined in the preceding 
        sentence.''; and
            (3) by inserting ``(1)'' after ``(d)'', by redesignating 
        clauses (1) through (7) as clauses (A) through (G), by striking 
        ``(1) through (6)'' and inserting ``(A) through (G)'', and by 
        adding at the end the following:
    ``(2) For purposes of paragraph (1)--
            ``(A) the Secretary shall, for the purpose of making an 
        evaluation of a new drug for a serious or life-threatening 
        condition, consider whether the benefits of the drug outweigh 
        the known and potential risks of the drug and the need to 
        answer remaining questions about risks and benefits of the 
        drug, taking into consideration the severity of the diseases 
        and the absence of no comparable or satisfactory alternative 
        therapy; and
            ``(B) concurrent with the approval of a drug described in 
        clause (i), the Secretary may seek agreement from the sponsor 
        of such drug to conduct certain postmarketing studies to 
        delineate additional information about such drug's risks, 
        benefits, and optimal use.
    ``(3) For the purpose of making an evaluation of an application 
submitted for a new use of a previously approved new drug, the 
Secretary shall consider whether the new use is supported by adequate 
valid scientific information from clinical investigation reports in 
peer reviewed medical and scientific journals, patient registries or 
compendia, and other sources recognized by the Secretary. In carrying 
out the preceding sentence, the Secretary may, as appropriate, consult 
with medical speciality societies.
    ``(4) For purposes of paragraph (1), the determination of 
effectiveness shall not include any potential use not explicitly 
included in the labeling, except for public health reasons.

SEC. 6. SCIENTIFIC ADVISORY PANELS.

    Section 505 (21 U.S.C. 355) is amended by adding at the end the 
following:
    ``(n)(1) For the purpose of providing expert scientific advice and 
recommendations to the Secretary regarding a clinical investigation of 
a drug or biological product or the approval for marketing of a drug or 
biological product under section 505, the Secretary shall establish 
panels of experts or use panels of experts established before the date 
of the enactment of this subsection, or both. Scientific advisory 
panels shall consider scientific issues and shall not include 
considerations of cost, economic aspects, comparative effectiveness, or 
legal matters.
    ``(2) The Secretary may delegate the appointment and oversight 
authority granted under section 904 to a director of a center or 
successor entity within the Food and Drug Administration.
    ``(3) The Secretary shall appoint to each panel established under 
paragraph (1) persons who are qualified by training and experience to 
evaluate the safety and effectiveness of the drugs and biological 
products to be referred to the panel and who, to the extent feasible, 
possess skill in the use of, or experience in, the development, 
manufacture, or utilization of, such drugs or biological products. The 
Secretary shall make appointments to each panel so that each panel 
shall consist of members with adequately diversified expertise in such 
fields as clinical and administrative medicine, engineering, biological 
and physical sciences, and other related professions. In addition, each 
panel shall include as nonvoting members a representative of consumer 
interests and a representative of interests of the drug and biological 
product manufacturing industry. Scientific, trade, and consumer 
organizations shall be afforded an opportunity to nominate individuals 
for appointment to the panels. No individual who is in the regular 
full-time employ of the United States and engaged in the administration 
of this Act may be a voting member of any panel. The Secretary shall 
designate one of the members of each panel to serve as chairman 
thereof.
    ``(4) Each member of a panel shall publicly disclose all conflicts 
of interest that member may have with the work to be undertaken by the 
panel. No member of a panel may vote on any matter where the member or 
the immediate family of such member could gain financially from the 
advice given to the Secretary. The Secretary may grant a waiver of any 
conflict of interest upon public disclosure of such conflict of 
interest if such waiver contributes to the ability of a panel to 
contribute to the public health, except that the Secretary may not 
grant a waiver for a member of a panel when the member's own scientific 
work is involved.
    ``(5) The Secretary shall provide education and training to each 
new panel member before such member participates in a panel's 
activities. Such education and training shall include a familiarization 
with certain requirements under this Act and any related regulation of 
the Secretary and the administrative process and procedures related to 
panel meetings.
    ``(6) Panel members (other than officers or employees of the United 
States), while attending meetings or conferences of a panel or 
otherwise engaged in its business, shall be entitled to receive 
compensation at rates to be fixed by the Secretary, but not at rates 
exceeding the daily equivalent of the rate in effect for grade GS-18 of 
the General Schedule, for each day so engaged, including traveltime. 
While so serving away from their homes or regular places of business, 
each member may be allowed travel expenses (including per diem in lieu 
of subsistence) as authorized by section 5703 of title 5, United States 
Code, for persons in the Government service employed intermittently.
    ``(7) The Secretary shall take whatever action is necessary to 
ensure that regular meetings are held by scientific advisory panels, at 
appropriate intervals and for a sufficient length of time, so that any 
matter to be reviewed by any such panel shall be presented to the panel 
not more than 60 days after the matter is ready for review by the 
panel. Meetings of the panel may be held using electronic communication 
to convene the meeting.
    ``(8)(A) Any person whose drug is the subject of a scientific 
advisory panel shall have the same rights and responsibilities as the 
Secretary regarding--
            ``(i) the submission of written information to a scientific 
        advisory panel;
            ``(ii) the participation of the persons at meetings of the 
        panel; and
            ``(iii) access to data and information submitted to a 
        scientific advisory panel (except for data and information that 
        are not available for public disclosure under section 552 of 
        title 5, United States Code).
    ``(B) In a case in which a scientific advisory panel reviews an 
application submitted under section 505 or section 351 of the Public 
Health Service Act (including a petition, notification, or other 
similar request), all related data and information that are not 
available for public disclosure under section 552 of title 5, United 
States Code, shall be exchanged between the applicant and the Food and 
Drug Administration at the time the data and information are submitted 
to such panel but shall not otherwise be publicly disclosed.
    ``(C) Any meetings of a scientific advisory panel shall provide 
adequate time for initial presentations and for response to any 
differing views and shall encourage free and open participation by all 
interested persons.
    ``(9) Within 30 days after the date a scientific advisory panel 
makes its conclusions and recommendations on any matter under review by 
the panel, the Food and Drug Administration official responsible for 
the matter shall review the conclusions and recommendations of the 
panel, shall make a final decision on the matter, and shall notify the 
affected persons of the decision in writing and, if the decision 
differs from the conclusions and recommendations of the panel, shall 
include the reasons for the difference.
    ``(10) A scientific advisory panel under this subsection shall not 
be subject to the annual chartering and annual report requirements of 
the Federal Advisory Committee Act. Such a panel shall make an annual 
report of its activities to the Secretary.''.

SEC. 7. MARKETING APPROVAL.

    (a) Section 505.--
            (1) Subsection (b).--Section 505(b) (21 U.S.C. 355(b)), as 
        amended by section 4(a), is amended--
                    (A) in the first sentence of paragraph (1), by 
                inserting immediately before the period the following: 
                ``or and the Secretary may request a review of all or 
                part of such application by an accredited person 
                authorized to review applications for marketing 
                approval , upon concurrence of the sponsor, and the 
                Secretary shall pay for such review with fees 
                authorized by section 736''; and
                    (B) by adding after paragraph (4) the following:
    ``(5) The scope of review responsibilities of an accredited person 
authorized to conduct reviews of marketing approval applications shall 
include the review of all or part of an application as requested by the 
Secretary . The accredited person shall submit a report of its review, 
including the basis for any recommendation to the Secretary.
            (2) Subsection (j).--Section 505(j)(1) (21 U.S.C. 
        355(j)(1)) is amended by adding at the end the following: ``The 
        Secretary may request a review of all or part of such an 
        application by an accredited person authorized to review 
        applications for marketing approval upon concurrence of the 
        sponsor. The scope of review responsibilities of such an 
        accredited person shall include the review of all or part of 
        such an application as requested by the Secretary. The 
        accredited person shall submit a report of its 
review, including the basis for any recommendation to the Secretary.''.
    (b) Section 735(7).--Section 735(7) is amended--
            (1) by striking ``applications for'' and inserting 
        ``applications'' and by inserting ``for'' after ``(A)'', 
        ``(B)'', and ``(C)'';
            (2) by striking ``and'' at the end of subparagraph (C),
            (3) by striking the period at the end of subparagraph (D) 
        and inserting ``, and'', and
            (4) by inserting the following after subparagraph (D):
                    ``(E) by outside organizations and individuals.''.

SEC. 8. ACCREDITATION OF THIRD PARTIES.

    (a) Amendment.--Subchapter A of chapter VII is amended by adding at 
the end the following:

``SEC. 712. ACCREDITED PERSONS.

    ``(a) In General.--The Secretary shall, within 180 days of the date 
of the enactment of this section, by regulation establish procedures 
for the accreditation of persons for the purposes of reviewing 
applications under section 505(b), or under section 351 of the Public 
Health Service Act, providing written reviews to the Secretary for the 
Secretary's consideration, and making recommendations on whether or not 
such applications should be approved.
    ``(b) Accreditation.--
            ``(1) Programs.--The Secretary shall provide for such 
        accreditation through programs administered by the Food and 
        Drug Administration, other government agencies, or by other 
        qualified non-government organizations.
            ``(2) Accreditation.--
                    ``(A) General rule.--Within 180 days of the date of 
                the enactment of this section, the Secretary shall 
                establish and publish in the Federal Register 
                requirements to accredit or deny accreditation to 
                persons who request to perform the duties specified in 
                subsection (a). The Secretary shall respond to a 
                request for accreditation within 60 days of the receipt 
                of the request. The accreditation of such person shall 
                specify the particular activities under subsection (a) 
                for which such person is accredited.
                    ``(B) Withdrawal of accreditation.--The Secretary 
                may withdraw accreditation of any person accredited 
                under this paragraph, after providing notice and an 
                opportunity for an informal hearing when such person 
                acts or fails to act in a manner that is inconsistent 
                with the purposes of this section or poses a threat to 
                public health.
                    ``(C) Performance auditing.--To ensure that persons 
                accredited under this section will continue to meet the 
                standards of accreditation, the Secretary shall--
                            ``(i) make onsite visits on a periodic 
                        basis to each accredited person to audit the 
                        performance of such person; and
                            ``(ii) take such additional measures as the 
                        Secretary determines to be appropriate.
                    ``(D) Annual report.--The Secretary shall include 
                in the annual report required under section 903(e)(2) 
                the names of all accredited persons and the particular 
                activities under subsection (a) for which each such 
                person is accredited and the name of each accredited 
                person whose accreditation has been withdrawn during 
                the year.
            ``(3) Qualifications.--An accredited person shall, at a 
        minimum, meet the following requirements:
                    ``(A) Such person shall be an independent 
                organization which is not owned or controlled by 
                manufacturer, supplier or vendor of drugs and which has 
                no organizational, material, or financial affiliation 
                with such a manufacturer, supplier, or vendor.
                    ``(B) Such person shall be a legally constituted 
                entity permitted to conduct the activities for which it 
                seeks accreditation.
                    ``(C) Such person shall not engage in the 
                development, manufacture, promotion, or sale of drugs.
                    ``(D) Such person shall be operated in accordance 
                with generally accepted professional and ethical 
                business practices and shall agree in writing that as a 
                minimum it will--
                            ``(i) certify that reported information 
                        accurately reflects data reviewed;
                            ``(ii) limit work to that for which 
                        competence and capacity are available;
                            ``(iii) treat information received, 
                        records, reports, and recommendations as 
                        proprietary information; and
                            ``(iv) promptly respond and attempt to 
                        resolve complaints regarding its activities for 
                        which it is accredited.''.
    (b) Conforming Amendment.--Section 301 (21 U.S.C. 321) is amended 
by redesignating the second paragraph (u) as paragraph (v) and by 
adding after that paragraph the following:
    ``(w) in the case of a drug, device, or food--
            ``(A) the submission of a report or recommendation by a 
        person accredited under section 712 that is false or misleading 
        in any material respect;
            ``(B) the disclosure by a person accredited under section 
        712 of confidential commercial information or any trade secret 
        without the express written consent of the person who submitted 
        such information or secret to such person; or
            ``(C) the receipt by a person accredited under section 712 
        of a bribe in any form or the doing of any corrupt act by such 
        person associated with a responsibility delegated to such 
        person under this Act.''.

SEC. 9. DISPUTE RESOLUTION.

    Chapter V is amended by adding after section 505 the following:

                          ``dispute resolution

    ``Sec. 506. (a) In instances in which there is a scientific 
controversy between a regulated person and the Secretary regarding an 
obligation under this Act, and no specific provision of this Act or 
regulations promulgated under this Act by the Secretary provides a 
right to review of the subject matter of the dispute, the Secretary, 
upon receipt of a request for review of the controversy from such a 
regulated person, shall refer the disputed issue--
            ``(1) to an existing (as of the date of the notification) 
        scientific advisory panel having expertise related to the 
        issue; or
            ``(2) to a special Government employee, as defined in 
        section 202(a) of title 18, United States Code, or to a non-
        governmental person qualified to mediate or arbitrate the 
        substance of such impasse who is acceptable to the Secretary 
        and the applicant.
    ``(b) The applicant and representatives of the Secretary may 
consult with the panel, special Government employee, or non-
governmental person on the matter referred. The panel, special 
Governmental employee, or non-governmental person shall submit to the 
Secretary and the applicant a report containing recommendations 
(including a statement of reasons for the recommendations) regarding 
the matter not later than 60 days after the date of the referral, or 
not later than 90 days after the date of the referral if the panel, 
special Governmental employee, or non-governmental person considers the 
additional 30 days to be necessary. Not later than 30 days after the 
date of receiving the report, the Secretary shall, in writing, confirm 
or modify the recommendations received, providing reasons and reference 
to data before the panel, special Governmental employee, or non-
governmental person for any modification. If the Secretary fails to act 
on such a recommendation within 30 days of its receipt, the 
recommendation of the panel, special Government employee, or non-
governmental person shall be deemed to be the recommendation of the 
Secretary.
    ``(c) Whenever the Secretary fails to complete a premarket 
submission review under section 505 in a timely manner as prescribed by 
this Act and the regulations of the Secretary under this Act, the 
person who made the submission may request that the director of the 
office responsible for the review (or any successor entity) evaluate 
the failure to timely complete the review of the submission and issue 
an explanation for such failure and a new date for completion of the 
review. Such director shall complete such an evaluation within 14 days 
of the date a request is made for it.
    ``(d) The Federal Advisory Committee Act shall not apply to any 
scientific advisory panel acting under this section.''.

SEC. 10. GOOD MANUFACTURING PRACTICES.

    (a) Amendment.--Section 501(a) (21 U.S.C. 351(a)) is amended--
            (1) by striking ``(a)(1)'' and inserting ``(a)(1)(A)'';
            (2) by redesignating subclauses (A) and (B) in clauses (2) 
        and (4) as subclauses (i) and (ii), respectively; and
            (3) by redesignating clauses (2) through (6) as clauses (B) 
        through (F), respectively;
            (4) by adding at the end the following:
    ``(2) All chemistry, manufacturing, and controls which comply with 
an approved new drug application under section 505 or a license 
application under section 351 of the Public Health Service Act or with 
the opinion of an appropriate official in the component of the Food and 
Drug Administration responsible for the review of such chemistry, 
manufacturing, or controls and which is reduced to writing and made 
part of the administrative record shall be deemed to comply with 
current good manufacturing practice. The Secretary shall not take 
action to delay or prevent the manufacture or marketing of a drug under 
section 505 or section 351 of the Public Health Service Act for failure 
to conform to current good manufacturing practice unless there is 
reasonable probability of harm to the public health or the Secretary 
determines in writing that the drug is--
            ``(A) not bioequivalent,
            ``(B) deviates from the specifications for the drug 
        established in the approved new drug application from the 
        specifications for the drug established by the manufacturer,
            ``(C) lacks adequate assurance that it will meet the 
        represented sterility, or
            ``(D) has been rendered unsafe or ineffective.''.
    (b) Conforming Amendments.--
            (1) Section 303.--Section 303(g)(1)(B)(iii) (21 U.S.C. 
        333(g)(1)(B)(iii)) is amended by striking ``501(a)(2)(A)'' and 
        inserting ``501(a)(1)(B)(i)''.
            (2) Section 304.--Section 304(d)(1) (21 U.S.C. 334(d)(1)) 
        is amended by striking ``501(a)(3)'' and inserting 
        ``501(a)(1)(C)''.
            (3) Section 512.--Section 512(a)(1) (21 U.S.C. 360c(a)(1)) 
        is amended by striking ``501(a)(5)'' and inserting 
        ``501(a)(1)(E)'', section 512(a)(2) (21 U.S.C. 360c(a)(2)) is 
        amended by striking ``501(a)(6)'' and inserting 
        ``501(a)(1)(F)'', and section 512(a)(3) (21 U.S.C. 360c(a)(3)) 
        is amended by striking ``501(a)(5) or (6)'' and inserting 
        ``501(a)(1)(E) or 501(a)(1)(F)''.
            (4) Section 721.--Section 721(a) (21 U.S.C 379e(a)) is 
        amended by striking ``501(a)(4)'' and inserting 
        ``501(a)(1)(D)''.
            (5) Section 802.--Sections 802(b)(1)(D) and 802(f)(1)(B) 
        (21 U.S.C.382(b)(1)(D), 382(f)(1)(B)) are each amended by 
        striking ``(a)(1), (a)(2)(A), (a)(3)'' and inserting 
        ``(a)(1)(A), (a)(1)(B)(i), (a)(1)(C)'' .

SEC. 11. PILOT AND SMALL SCALE MANUFACTURE.

    Section 505(c) (21 U.S.C. 355(c)) is amended by adding at the end 
thereof the following:
    ``(4) A new drug manufactured in a pilot or other small facility 
may be used to demonstrate the safety and effectiveness of the drug and 
to obtain approval prior to scaling up to a larger facility, unless the 
Secretary demonstrates in writing and specifying in detail the reasons 
that a full scale production facility is necessary to ensure the safety 
or effectiveness of the drug.''.

SEC. 12. MANUFACTURING CHANGES.

    Chapter VII (21 U.S.C. 371 et seq.) is amended by adding at the end 
thereof the following:

                 ``Subchapter D--Manufacturing Changes

``SEC. 741. MANUFACTURING CHANGES.

    ``(a) In General.--A change in the manufacture of a new drug or new 
animal drug may be made in accordance with this section.
    ``(b) Changes.--
            ``(1) Validation.--Before distributing a drug made after a 
        change in the manufacture of the drug from that established in 
        the approved new drug application or new animal drug 
        application or license application under section 351 of the 
        Public Health Service Act, the applicant shall validate the 
        effect of the change on the identity, strength, quality, 
        purity, or potency as they may relate to the safety or 
        effectiveness of the drug.
            ``(2) Reports.--The applicant shall report such changes to 
        the Secretary and may distribute drugs made after the changes 
        as follows:
                    ``(A) Minor modifications in facilities, minor 
                changes in personnel, or other minor manufacturing 
                changes, which are of a type determined by the 
                Secretary to have minimal potential to adversely affect 
                the identity, strength, quality, purity, or potency as 
                they may relate to the safety or effectiveness of a 
                drug, may be made at any time and shall be reported 
                annually with supporting data to the Secretary.
                    ``(B) Major manufacturing changes, which are of a 
                type determined by the Secretary to have a substantial 
                potential to adversely affect the identity, strength, 
                quality, purity, or potency as they may relate to the 
                safety or effectiveness of a drug, shall be submitted 
                to the Secretary in a supplemental application and 
                drugs made after such changes may not be distributed 
                until the Secretary approves the supplemental 
                application. Major manufacturing changes are (i) 
                changes in the qualitative or quantitative formulation 
                or the specifications in the approved marketing 
                application (unless exempted by the Secretary); (ii) 
                changes which the Secretary determines by regulation or 
                guidance require completion of an appropriate human 
                study demonstrating equivalence to the drug 
                manufactured before such changes; and (iii) other 
                changes which the Secretary determines by regulation or 
                guidance have a substantial potential to adversely 
                affect the safety or effectiveness of the drug.
                    ``(C) All other manufacturing changes shall be 
                reported to the Secretary in a supplemental 
                application. Unless the Secretary notifies the 
                applicant within 30 days that preapproval of the 
                supplement is required, the applicant may distribute 
                the drug before the application is approved. The 
                Secretary will subsequently approve or disapprove the 
                supplemental application. The Secretary may determine 
                types of manufacturing changes after which distribution 
                of a drug may commence at the time of submission of the 
                supplemental application.''.
    (b) Existing Law.--The requirements of the Federal Food, Drug, and 
Cosmetic Act with respect to manufacturing changes shall remain in 
effect for--
            (1) a period of 12 months after the date of the enactment 
        of this section, or
            (2) until the Secretary's regulations implementing section 
        741 of such Act take effect,
whichever is sooner.

SEC. 13. INSULIN AND ANTIBIOTICS.

    (a) Certification of Drugs Containing Insulin.--
            (1) Amendment.--Section 506 (21 U.S.C. 356) is repealed.
            (2) Conforming amendments.--
                    (A) Sections 301(i)(1) and 301(j)(1) (21 U.S.C. 
                321(i)(1), 321(j)(1)) are each amended by striking 
                ``506, 507,''.
                    (B) Section 501(k) (21 U.S.C. 351(k)) is repealed
                    (C) Section 502(k) (21 U.S.C. 352(k) is repealed.
                    (D) Sections 510(j)(1)(A) and 510(j)(1)(D) (21 
                U.S.C. 360(j)(1)(A), 360(j)(1)(D)) are each amended by 
                striking ``506, 507,''.
                    (E) Section 8126(h)(2) of title 38, United States 
                Code, is amended by inserting ``or'' at the end of 
                subparagraph (B), by striking ``; or'' at the end of 
                subparagraph (C) and inserting a period, and by 
                striking subparagraph (D).
                    (F) Section 1927(k)(2) of the Social Security Act 
                (42 U.S.C. 1396r-8(k)(2)) is amended by striking ``; 
                and'' at the end of subparagraph (B) and inserting a 
                period and by striking subparagraph (C).
    (b) Certification of Antibiotics.--
            (1) Amendment.--Section 507 (21 U.S.C. 357), as in effect 
        on the date of the enactment of this Act, is repealed.
            (2) Conforming amendments.--
                    (A) Section 201(aa) (21 U.S.C. 321(aa)) is amended 
                by striking out ``or 507'', section 201(dd) (21 U.S.C. 
                321(dd)) is amended by striking ``507,'', and sections 
                201(ff)(2)(B) and 201(ff)(3) (21 U.S.C. 321(ff)(2)(B), 
                321(ff)(3)) are each amended by striking ``, certified 
                as an antibiotic under section 507,''.
                    (B) Section 301(e) (21 U.S.C. 331(e)) is amended by 
                striking ``507(d) or (g),''.
                    (C) Sections 301(i)(1) and 301(j) (21 U.S.C. 
                321(i)(1), 321(j)) are each amended by striking 
                ``507,''.
                    (D) Section 306(d)(4)(B)(ii) (21 U.S.C. 
                335a(d)(4)(B)(ii)) is amended by striking ``or 507''.
                    (E) Section 502 (21 U.S.C. 352) is amended by 
                striking subsection (l).
                    (F) Section 510(j)(1)(D) (21 U.S.C. 360(j)(1)(D)) 
                is amended by striking ``507,''.
                    (G) Section 520(l) is amended by striking paragraph 
                (4) and by striking ``or Antibiotic Drugs'' in the 
                subsection heading.
                    (H) Section 525(a) (21 U.S.C. 360aa(a)) is amended 
                by inserting ``or'' at the end of paragraph (1), by 
                striking paragraph (2), and by redesignating paragraph 
                (3) as paragraph (2).
                    (I) Section 525(a) (21 U.S.C. 360aa(a)) is amended 
                by striking ``, certification of such drug for such 
                disease or condition under section 507,''.
                    (J) Section 526(a)(1) (21 U.S.C. 360bb) is amended 
                by striking ``the submission of an application for 
                certification of the drug under section 507,'', by 
                inserting ``or'' at the end of subparagraph (A), by 
                striking subparagraph (B), and by redesignating 
                subparagraph (C) as subparagraph (B).
                    (K) Section 526(b) (21 U.S.C. 360bb(b)) is amended 
                by striking ``, a certificate was issued for the drug 
                under section 507,'' each time it appears and by 
                striking ``, approval of an application for 
                certification under section 507,''.
                    (L) Section 527(a) (21 U.S.C. 360cc(a)) is amended 
                by inserting ``or'' at the end of paragraph (1), by 
                striking paragraph (2), by redesignating paragraph (3) 
                as paragraph (2), and by striking ``, issue another 
                certificate under section 507,''.
                    (M) Section 527(b) (21 U.S.C. 360cc(b)) is amended 
                by striking ``, if a certification is issued under 
                section 507 for such a drug,'', and ``, of the issuance 
                of the certification under section 507,''.
                    (N) Section 704(a)(1) (21 U.S.C. 374) is amended by 
                striking ``, section 507 (d) or (g)''.
                    (O) Section 735(1) (21 U.S.C. 379g(1)(C)) is 
                amended by inserting ``or'' at the end of subparagraph 
                (B), by striking subparagraph (C), and by redesignating 
                subparagraph (D) as subparagraph (C).
                    (P) Sections 5(b)(1)(A) and 5(b)(1)(B) of the 
                Orphan Drug Act (21 U.S.C. 360ee(b)(1)(A), 
                360ee(b)(1)(B)) are each amended by striking ``or 
                507''.
                    (Q) Section 28(b)(2)(A)(ii)(II) of the Internal 
                Revenue Code of 1986 is amended by striking ``or 507''.
                    (R) Section 156(f)(4)(B) of title 35, United States 
                Code, is amended by striking ``507,'' each place it 
                occurs.
                    (S) Section 1927(k)(2)(A)(i) of the Social Security 
                Act (42 U.S.C. 1396r-8(k)(2)(A)(ii)(II)) is amended by 
                striking ``or 507''.
    (c) Exportation.--Section 802 (21 U.S.C. 382) is amended by adding 
at the end thereof the following:
    ``(h) Exportation of Insulin and Antibiotics.--Insulin and 
antibiotics may be exported without regard to the requirements in this 
section if the insulin and antibiotics meet the requirements of section 
801(e)(1).''.

SEC. 14. NONPRESCRIPTION DRUGS.

    Chapter V is amended by adding after section 510 (21 U.S.C. 360) 
the following:

                        ``nonprescription drugs

    ``Sec. 511. All applications or petitions requesting that a drug be 
switched from prescription to nonprescription status and all other 
matters relating to nonprescription drugs shall be reviewed and acted 
upon solely by a single office in the Center for Drug Evaluation and 
Research or a successor entity, and that office shall report directly 
to the Director of the Center. A single scientific advisory panel may 
provide conclusions and recommendations regarding any such matter.''.

SEC. 15. INFORMATION SYSTEM.

    Chapter IX is amended by adding at the end the following section:

``SEC. 906. INFORMATION SYSTEM.

    ``The Secretary shall establish and maintain an information system 
to track the status and progress of each application or submission 
(including a petition, notification, or other similar form of request) 
submitted to the Food and Drug Administration requesting agency action. 
The system shall permit access by the applicant.''.

SEC. 16. ENVIRONMENTAL IMPACT REVIEW.

    Chapter VII, as amended by section 12, is amended by adding at the 
end the following:

              ``Subchapter E--Environmental Impact Review

``SEC. 744. ENVIRONMENTAL IMPACT REVIEW

    ``No action by the Secretary proposed to be taken pursuant to this 
Act shall require the preparation of an environmental assessment or 
environmental impact statement under the National Environmental Policy 
Act of 1969 unless the Secretary finds that because of extraordinary 
circumstances the proposed action may have a significant effect, either 
directly or cumulatively, on the human environment.''.

SEC. 17. APPLICATION OF FEDERAL LAW TO THE PRACTICE OF PHARMACY 
              COMPOUNDING.

    (a) In General.--Section 503 (21 U.S.C. 353) is amended by adding 
at the end the following:
    ``(h)(1) Sections 501(a)(2)(B), 501(f), 501(h), 502(f)(1), 502(l), 
502(o), 502(s), 502(t), 505, and sections 510 through 520 shall not 
apply to a drug or device that is compounded by a licensed pharmacist 
or licensed physician or other licensed practitioner authorized by 
State law to prescribe drugs or devices or both--
            ``(A) on the order of such a licensed physician or other 
        licensed practitioner for an individual patient; or
            ``(B) in limited quantities, as determined by the principal 
        State agency of jurisdiction which regulates the practice of 
        pharmacy for that pharmacist, before receiving a valid order 
        for an individual patient if the compounding of the drug or 
        device is based on a history of receiving valid orders that 
        have been generated solely within an established relationship 
        between the pharmacist, and (i) the patient for whom the order 
        will be given, or (ii) the physician or other licensed 
        practitioner who will write such order.
Such sections shall not apply to a drug or device if such pharmacist or 
physician or other licensed practitioner does no more than advertise or 
otherwise promote the compounding service and does not advertise or 
otherwise promote the compounding of a particular drug or device.
    ``(2) None of the provisions of this Act referred to in paragraph 
(1) shall apply to a bulk drug product or other drug, including an 
imported drug, that is intended for use by a licensed pharmacist or 
licensed physician or other licensed practitioner in compounding a drug 
or device on the order of a licensed physician or other licensed 
practitioner for an individual patient, except to the extent that the 
provision relates directly to the quality, purity, potency, or identity 
of such drug.''.
    (b) Withdrawal of Proposed Rule and Guideline.--The proposed rule 
of the Secretary of Health and Human Services concerning exceptions to 
the current good manufacturing practices for makers of positron 
emission tomography drug products and the draft guideline on the 
manufacture of positron emission tomography drug products published in 
the Federal Register of February 27, 1995 (at 60 FR 10517-10520 and 60 
FR 10593-10594) are null and void and the Secretary of Health and Human 
Services may not propose another proposed regulation or guideline 
respecting the same matters covered by the proposed regulation and 
guideline described in this subsection.

SEC. 18. HARMONIZATION.

    Section 803 (21 U.S.C. 383) is amended by adding at the end the 
following:
    ``(c)(1) The Secretary shall participate in meetings with other 
countries to discuss methods and approaches to reduce the burden of 
regulation, harmonize regulatory requirements, and seek appropriate 
reciprocal arrangements. The Secretary shall, within 180 days of the 
date of enactment of this subsection, make public a plan that 
establishes a framework for achieving mutual recognition of good 
manufacturing practices.
    ``(2) The Secretary shall report to the Committee on Commerce of 
the House of Representatives and the Committee on Labor and Human 
Resources of the Senate at least 60 days before executing any bilateral 
or multilateral agreement under paragraph (1).''.

SEC. 19. INFORMAL AGENCY STATEMENTS.

    Section 701 (21 U.S.C. 371) is amended by adding at the end the 
following:
    ``(h)(1) The Secretary shall not rely upon informal agency 
statements, including guidance documents, policy statements, points to 
consider documents, or any other statements that have not been 
promulgated in accordance with the rulemaking requirements of chapter V 
of title 5, United States Code, to require any action be taken to 
satisfy a requirement of this Act.
    ``(2) The Secretary shall publish notice in the Federal Register of 
the availability to the public of each type of statement identified in 
paragraph (1). Additionally, the Secretary shall undertake to make 
available all such statements by electronic or other similar means.''.

SEC. 20. EDUCATION AND RESEARCH; PRACTICE OF MEDICINE.

    Chapter IX, as amended by section 15, is amended by adding at the 
end the following sections:

``SEC. 907. EDUCATION AND RESEARCH.

    ``(a) Education.--The Secretary shall conduct training and 
education programs for the employees of the Food and Drug 
Administration relating to the regulatory responsibilities and policies 
established by this Act, including programs for scientific training, 
administrative process and procedure, and integrity issues.
    ``(b) Research.--The Secretary, acting through the Food and Drug 
Administration, may conduct or contract for scientific research only if 
it is directly related to the implementation of this Act.

``SEC. 908. PRACTICE OF MEDICINE.

    ``Nothing in this Act shall be construed to limit or interfere with 
the authority of a health care practitioner, licensed by law to 
administer drugs and devices, to prescribe or administer any legally 
marketed drug or device to a patient for any condition or disease 
within a legitimate health care practitioner-patient relationship.''.

SEC. 21. DELEGATION OF AUTHORITY.

    Section 903 (21 U.S.C. 393), as amended by section 2(b), is amended 
by adding at the end the following:
    ``(f) Delegation of Authority.--The reference in sections 
505(b)(4)(A), 505(b)(4)(C), 505(i)(2)(B), 505(n)(1), 701(n), and 
505(a)(4)(E) to the authority of a specific official or position in the 
Food and Drug Administration to perform a particular function is an 
authority which shall be only exercised by such official or individual 
in such position and the authority to exercise such authority may not 
be delegated.''.

SEC. 22. PUBLICATION OF NOTICE OF DEVIATION.

    Section 705 (21 U.S.C. 375) is amended by adding at the end the 
following:
    ``(c) The Secretary may make public or communicate to any person 
outside the Food and Drug Administration any information regarding a 
notice which informs a regulated person of a purported deviation from a 
requirement of this Act only after the Secretary has completed the 
investigation of such deviation, except as provided in subsection 
(b).''.

SEC. 23. MODERNIZATION OF REGULATION OF BIOLOGICAL PRODUCTS.

    (a) In General.--Section 351 of the Public Health Service Act (42 
U.S.C. 262) is amended by striking ``Sec. 351. (a)'' and all that 
follows through ``barter, or exchange the same.'' and inserting the 
following:
    ``Sec. 351. (a)(1) Except as provided in paragraph (6), no person 
shall introduce or deliver for introduction into interstate commerce 
any biological product unless--
            ``(A) a license is in effect for the biological product; 
        and
            ``(B) each package of the biological product is plainly 
        marked with the proper name of the biological product contained 
        therein, the name, address, and applicable license number of 
        the manufacturer of the biological product, and the expiration 
        date of the biological product.
    ``(2) The license required under paragraph (1)(A) shall, as 
determined by the Secretary, cover the biological product, any facility 
in which the biological product is manufactured, processed, packed, or 
held, or both the product and facility.
    ``(3)(A) The Secretary shall establish, by regulation, requirements 
for license applications for biological products.
    ``(B) Except as provided in subparagraph (D), a license application 
that covers a biological product shall be approved based upon a 
demonstration that--
            ``(i) the product that is the subject of the application is 
        safe and effective in accordance with subsections (c) and (d) 
        of section 505 of the Federal Food, Drug, and Cosmetic Act (21 
        U.S.C. 355), or meets standards designed to ensure that the 
        product is safe, pure, and where appropriate, potent; and
            ``(ii) the methods used in, and the facilities and control 
        used for, the manufacture, processing, packing, and holding of 
        such product meet standards designed to ensure that the product 
        meets the requirements of clause (i).
    ``(C) A license application that covers a facility shall ensure 
that the product and the facility meet standards designed to ensure 
that the product meets applicable requirements of subparagraph (B).
    ``(D) A license application for blood or a blood component 
(including plasma) shall be approved based on a demonstration that the 
product meets standards designed to assure that such product is safe, 
pure, and where appropriate, potent, and that the facility in which the 
product is manufactured, processed, packed, or held meets standards 
designed to ensure that such product is safe, pure, and where 
appropriate, potent.
    ``(4)(A) Requirements prescribed under paragraph (3) shall include 
a requirement for preapproval inspection under subsection (c).
    ``(B) A license shall be approved only on condition that the 
licensee agrees to permit inspection of the facility of the licensee in 
accordance with subsection (c).
    ``(5)(A) Except as provided in subparagraph (C), an approved 
license for a biological product may be revoked if the Secretary 
determines, on the record after providing an opportunity for a hearing 
in accordance with section 554 of title 5, United States Code, that the 
requirements for approval as specified in paragraph (3) are no longer 
met with respect to such product, or that other public health reasons, 
prescribed by regulation, exist. No action to revoke a license based on 
the findings of an inspection shall be initiated prior to the 
submission and review by the Secretary of a written response submitted 
by the licensee to a notice of inspection findings so long as such 
written response is received within 30 days after the date of receipt 
by the licensee of the findings. The revocation of any product license 
shall not prevent the continued use of any licensed biological product 
that has been sold and delivered by the licensee unless the biological 
product is subject to recall under subsection (d).
    ``(B) If at any time before the Secretary has taken final action to 
revoke a license, the licensee requests an inspection by the Secretary 
to determine whether the licensee is in compliance with applicable 
standards, the Secretary shall conduct an inspection within 30 days 
after the date of the request. If the inspection confirms that the 
licensee is not in compliance with applicable standards, the 30-day 
requirement for inspection shall not apply to any subsequent request by 
the licensee under this subparagraph for inspection. If the inspection 
confirms that the licensee is in compliance with all applicable 
requirements, the Secretary shall withdraw any proposed action within 
30 days after the inspection.
    ``(C) If the Secretary determines that conditions exist that 
constitute a danger to health, the Secretary shall suspend the license, 
notify the licensee that the licensee's license is suspended, and 
require notification of the suspension to any consignee. Within 30 days 
thereafter, the Secretary shall initiate the hearing process under 
subparagraph (A).
    ``(6) The requirements of paragraph (1) do not apply to a 
biological product for which there is in effect an investigational new 
drug application under section 505(i) of the Federal Food, Drug, and 
Cosmetic Act.''.
    (b) Deletion of ELA Requirement.--Section 351(d) of the Public 
Health Service Act (42 U.S.C. 262(d)) is amended--
            (1) by striking ``(d)(1)'' and all that follows through 
        ``of this section.'';
            (2) by redesignating paragraph (2)(A) as subsection (d)(1);
            (3) by redesignating subparagraph (B) as paragraph (2); and
            (4) in paragraph (2) (as so redesignated), by striking 
        ``subparagraph (A)'' and inserting ``paragraph (1)''.
    (c) Labeling.--Section 351(b) of the Public Health Service Act (42 
U.S.C. 262(b)) is amended to read as follows:
    ``(b) No person shall falsely label or mark any package or 
container of any biological product or alter any label or mark on the 
package so as to falsify the label or mark.''.
    (d) Inspection.--Section 351(c) of the Public Health Service Act 
(42 U.S.C. 262(c)) is amended by striking ``virus, serum,'' and all 
that follows through ``other product aforesaid'' and inserting 
``biological product''.
    (e) Definition; Application.--Section 351 of the Public Health 
Service Act (42 U.S.C. 262) is amended by adding at the end thereof the 
following new subsections:
    ``(i)(1) For purposes of this section, the term `biological 
product' means a virus, therapeutic serum, toxin, antitoxin, vaccine, 
blood, blood component or derivative, allergenic biologic product 
(except for topically applied allergenic products used for the 
diagnosis of Type IV allergies), or arsphenamine or its derivative (or 
any other analogous biological product) applicable to the prevention, 
treatment, or cure of diseases or conditions of human beings.
    ``(2) The Secretary shall promulgate regulations under section 
513(d) of the Federal Food, Drug, and Cosmetic Act to provide for the 
regulation of diagnostic testing kits using topically applied 
allergenic products as devices within the meaning of section 201(h) of 
such Act. Such regulations shall take into account the following--
            ``(A) topically applied allergenic products used for 
        diagnostic testing elicit a biological response, not a chemical 
        response, on the body;
            ``(B) diagnostic testing kits using topically applied 
        allergenic products were commercially marketed prior to May 28, 
        1976;
            ``(C) diagnostic testing kits using topically applied 
        allergenic products are appropriately classified as class II 
        devices pursuant to section 513(a)(1)(B) of such Act, without 
        need for a review by or recommendation from a classification 
        panel under section 513(c) of such Act; and
            ``(D) clinical data are not required for purposes of 
        determining substantial equivalence of diagnostic testing kits 
        using topically applied allergenic products under section 
        513(i) of such Act.
    ``(3) Not later than 12 months after the date of the enactment of 
this Act, the Secretary shall issue proposed regulations under 
paragraph (2). Not later than 24 months after the date of enactment of 
this Act, the Secretary shall issue final regulations under paragraph 
(2).
    ``(j)(1) Sections 505(i), 903, and 904 of the Federal Food, Drug, 
and Cosmetic Act shall apply to all biological products, and references 
in such sections to new drug applications shall be deemed to include 
product license applications for biological products.
    ``(2) Requirements involving labeling or advertising for biological 
products shall be established in accordance with sections 201(m) and 
502(n) of the Federal Food, Drug, and Cosmetic Act.''.
    (f) Strengthening Regulation of Blood and Blood Products.--The 
Secretary of Health and Human Services, in order to strengthen and 
streamline the regulation of blood and blood products, shall, after 
consultation with patient advocacy groups and the regulated industry, 
develop the concept of a single license for the regulation of blood and 
blood products that would, as appropriate, cover multiple individual 
locations that fall under a single management. The Secretary shall 
report the progress on achieving a single license to the Committee on 
Commerce of the House of Representatives and the Committee on Labor and 
Human Resources of the Senate by March 31, 1997.

SEC. 24. REQUIREMENTS FOR HUMAN TISSUE.

    (a) In General.--Section 201 is amended by adding at the end the 
following:
    ``(gg)(1) The term `human tissue' means a collection of similar 
human cells which--
            ``(A) is intended for use in the diagnosis, cure, 
        mitigation, treatment, or prevention of a disease or condition 
        in man or for reproduction,
            ``(B) achieves its primary intended purpose through repair 
        or replacement by structural support or cellular function and 
        not systemic action,
            ``(C) may have been propagated or otherwise processed 
        before use, and
            ``(D) may be combined with substances that are safe under 
        conditions of intended use and not intended to provide a 
        therapeutic effect.
    ``(2) The term human tissue does not include vascularized human 
organs, gene therapy, blood, blood components, milk, or human tissue 
combined with biomaterials.
     ``(3) Human tissue is not a drug, biological product, or device 
unless reclassified by the Secretary pursuant to 355 of the Public 
Health Service Act.
    (b) Regulation of Human Tissue.--Subpart 1 of part F of title III 
of the Public Health Service Act (42 U.S.C. 262 et seq.) is amended by 
adding at the end the following section:

                      ``regulation of human tissue

    ``Sec. 352A. (a)(1) Human tissue shall be subject to regulation 
under this section only if the Secretary publishes a finding in the 
Federal Register, after a hearing before the Commissioner, that 
voluntary regulation under generally accepted scientific standards is 
inadequate to protect the public health with respect to any particular 
type of human tissue or human tissue generally.
    ``(2) Human tissue shall not be subject to regulation as a drug, 
biological product, or device unless it is reclassified under 
subsection (e).
    ``(b)(1) Any person subject to regulation under this section who 
recovers, processes, stores, or distributes human tissue for 
transplantation or implantation in the United States shall register in 
accordance with the registration procedures established for drugs under 
section 510 of the Federal Food, Drug, and Cosmetic Act. Such 
registration shall contain the name of the person, the location of the 
facilities of the person, a list of the types of human tissue 
recovered, processed, stored, or distributed by the person, and a brief 
description of the basic method or methods of processing of such 
tissue.
    ``(2) A registered person shall be deemed to be authorized to 
conduct human tissue recovery, processing, storage, and distribution 
activities identified in its registration unless--
            ``(A)(i) the Secretary determines, upon inspection, that 
        such person fails to meet applicable operating standards under 
        subsection (c);
            ``(ii) the Secretary so notifies such person, advises the 
        person of the steps necessary to meet such standards, and 
        provides the person with a reasonable opportunity to establish 
        compliance with the standards;
            ``(iii) the Secretary determines, after an opportunity for 
        an informal hearing, that the person has failed to establish 
        such compliance within the applicable period and such failure 
        constitutes a threat to the public health; and
            ``(iv) the Secretary suspends or revokes the authority to 
        conduct such activities;
            ``(B) the Secretary determines, after an opportunity for an 
        informal hearing, that such person has failed to comply with 
        any patient registry or other retrospective patient data 
        requirement, and the Secretary suspends or revokes the 
        authority to conduct such activities; or
            ``(C) the Secretary determines that such person presents an 
        immediate or substantial danger to the public health, and the 
        Secretary suspends or revokes the authority to conduct such 
        activities.
    ``(c) The Secretary may establish operating standards for human 
tissue that shall be limited to the following general requirements for 
the recovery, processing, storage, and shipment of human tissue:
            ``(1) Requirements for infection control designed to 
        prevent transmission of disease.
            ``(2) Requirements for processing practices that assure the 
        safety of, and prevent damage to, human tissue.
            ``(3) Requirements for labeling and record keeping to 
        identify the type of tissue and any added foreign substance and 
        to permit tracing.
    ``(d) A registered person may be required by the Secretary to 
maintain a patient registry or meet other retrospective patient data 
requirements if, after notice and an opportunity for comment, the 
Secretary finds that such tissue has been commercially available within 
the United States for a period of less than 5 years and that such data 
requirement is necessary to protect the public health.
    ``(e)(1) The Secretary may reclassify a particular type of human 
tissue as a drug, biological product or device if, after notice and an 
opportunity for comment, the Secretary finds that--
            ``(A) the particular type of human tissue is--
                    ``(i) subject to a patient registry or other 
                retrospective data requirement under which the 
                collection of information has been required for at 
                least 5 years (or such other time period as agreed to 
                by the Secretary and the registered person); and
                    ``(ii) the information received from such patient 
                registry or other retrospective data requirement is 
                insufficient to confirm the safety and clinical benefit 
                from the use of such tissue; or
            ``(B) a particular type of human tissue should be 
        reclassified because it presents an imminent hazard to public 
        health.
    ``(2) The Secretary may reclassify a human drug, biological product 
or medical device as human tissue if, after notice and an opportunity 
for comment, the Secretary finds that such previous classification is 
not necessary to protect public health.
    ``(3) The Secretary may reclassify a drug, biological product, 
device, or human tissue upon the petition of the sponsor of such drug, 
biological product, or device, or the registered person of such human 
tissue, if, after notice and an opportunity for comment, the Secretary 
finds that such reclassification is consistent with the protection of 
the public health.
    ``(f)(1) If the Secretary finds that a person violates any 
provision of this section or any regulations promulgated thereunder, 
and the Secretary finds the violation constitutes a significant risk to 
the public health, the Secretary may issue an order that such person 
cease distribution of human tissue, or that human tissue recovered, 
processed, stored or distributed by such person be retained, recalled, 
or destroyed. After receipt of such an order, the person in possession 
of the human tissue shall not distribute or dispose of the human tissue 
in any manner inconsistent with the provisions of the order.
    ``(2) A person subject to an order under paragraph (1) may obtain 
an informal hearing regarding the order if the person requests such a 
hearing not later than 5 days after receiving the order. If the person 
makes such a request within such period, the Secretary shall conduct 
the hearing not later than 30 days after receiving the request and 
shall issue an order not later than 15 days after the hearing is 
conducted. Such order shall be considered a final order of the 
Secretary.
    ``(g) Each registered person shall be subject to inspection under 
section 704 of the Federal Food, Drug, and Cosmetic Act. The Secretary 
may, with the concurrence of the registered person, authorize an 
inspection to be conducted by a person specifically accredited by the 
Secretary to conduct such inspection under section 712 of such Act.
    ``(i) This section (including provisions regarding 
reclassification) shall apply with respect to cord blood to the same 
extent and in the same manner as this section applies with respect to 
human tissue.''.
    (c) Transition--The requirements of the interim regulation 
promulgated by the Secretary of Health and Human Services on December 
11, 1993, shall remain in effect until amended or withdrawn by the 
Secretary. Any changes to such regulations after the date of the 
enactment of this Act are subject to this Act and the amendments made 
by this Act.
    (d) Effective Date.--Section 352A of the Public Health Service Act 
shall take effect on June 30, 1997.
    (e) Conforming Amendments.--
            (1) Adulteration provision.--Section 501 (21 U.S.C. 351) is 
        amended--
                    (A) in the first sentence, by striking ``drug or 
                device'' and inserting ``drug, device or human 
                tissue''; and
                    (B) by inserting at the end thereof the following:
    ``(j) If it is human tissue and is recovered, processed, stored, or 
distributed by--
            ``(1) a registered person under section 352A of the Public 
        Health Service Act whose failure to comply with operating 
        standards for human tissue consistent with such section 
        constitutes a threat to the public health; or
            ``(2) a person who is required under such section to 
        register but has failed to do so.''.
            (2) Misbranding provisions.--Section 502 (21 U.S.C. 352) is 
        amended--
                    (A) in the heading for the section, by striking 
                ``misbranded'' and all that follows and inserting the 
                following: ``misbranded drugs, devices, and human 
                tissue''; and
                    (B) in the first sentence, by striking ``drug or 
                device'' and inserting ``drug, device or human 
                tissue''.
            (3) Prohibited acts.--Section 301 (21 U.S.C. 331) is 
        amended by inserting the following new section:
            ``(v) The adulteration or misbranding of any human 
        tissue.''.
            (4) Seizure.--
                    (A) Section 304 (a)(2)(D) (21 U.S.C. 334 (a)) is 
                amended by inserting ``or human tissue'' after 
                ``device.''
                    ((B) Section 304(d)(1) is amended by deleting the 
                ``or'' before ``cosmetic'' and inserting ``, or human 
                tissue'' after ``cosmetic'' in the first sentence.
            (5) Inspection.--Section 704(a)(1) (21 US.C. 374(a)(1)) is 
        amended--
                    (A) in the first sentence, by inserting ``human 
                tissue,'' after ``device,'' each place such term 
                appears; and
                    (B) in the second sentence, by inserting ``human 
                tissue,'' after ``drugs,'' each place such term 
                appears.

SEC. 25. ACCESS TO UNAPPROVED THERAPIES.

    Chapter V (21 U.S.C. 351 et seq.) is amended by adding at the end 
thereof the following:

     ``Subchapter D--Access to Unapproved Therapies and Diagnostics

       ``expanded access to unapproved therapies and diagnostics

    ``Sec. 543. (a) Any physician acting on behalf of a patient or a 
patient may request from a manufacturer or distributor, and any 
manufacturer or distributor may provide to such a physician or patient 
after compliance with this section, an investigational drug for the 
diagnosis, monitoring, or treatment of a serious disease or condition, 
life-threatening or seriously debilitating disease or condition, and 
any other disease or condition designated by the Secretary as 
appropriate for expanded access under this section by the physician or 
patient making the request if--
            ``(1) in the case of a physician acting on behalf of a 
        patient the physician has no comparable or satisfactory 
        alternative therapy available to treat, diagnose, or monitor 
        the disease or condition; or
            ``(2) in the case of such a physician or patient, the risk 
        to the physician or patient from the investigational drug or 
        device is not greater than the risk from the disease or 
        condition.
    ``(b) A manufacturer or distributor may submit to the Secretary one 
or more expanded access protocols covering expanded access use of a 
drug described in subsection (a). The protocols shall be subject to the 
provisions of section 505(i) for a drug and may include any form of use 
of the drug outside a clinical investigation, prior to approval of the 
drug for marketing, including protocols for treatment, use, emergency 
use, and uncontrolled trials and single patient protocols.
    ``(c) A manufacturer or distributor may charge for an 
investigational drug under an expanded access protocol, but the price 
of the drug or device may not be more than that necessary to recover 
the costs of manufacture, research, development, and handling for the 
drug or device.
    ``(d) The manufacturer or distributor may inform national, State, 
and local medical associations and societies, and voluntary health 
associations, about the availability of an investigational drug for 
expanded access use pursuant to this section but--
            ``(1) shall state that the drug is investigational;
            ``(2) shall not represent that the drug is safe or 
        effective for any use; and
            ``(3) shall not otherwise promote or advertise the 
        availability of the product for expanded access use.

SEC. 26. RADIOPHARMACEUTICALS.

    Section 505(d) (21 U.S.C. 355(d)), as amended by section 5, is 
amended by adding at the end the following:
            ``(4)(A) For purposes of paragraph (1), the safety and 
        effectiveness of a radiopharmaceutical intended to be used for 
        purposes of diagnosis or monitoring shall be determined by--
                    ``(i) weighing the probable benefit from the use of 
                the radiopharmaceutical against any probable risk of 
                injury or illness from such use; and
                    ``(ii) taking into account the appropriate use of 
                the radiopharmaceutical in the practice of medicine, 
                the level of pharmacological and toxicological activity 
                of the radiopharmaceutical, and the estimated absorbed 
                radiation dose of the radiopharmaceutical.
            ``(B) In the case of a radiopharmaceutical intended to be 
        used for purposes of diagnosis or monitoring, the indications 
        for which such a radiopharmaceutical is approved under this 
        section may refer to manifestations of disease (such as 
        biochemical, physiological, anatomical, or pathological 
        processes) common to or present in one or more disease states 
        or may refer to a diagnostic procedure used in the diagnosis of 
        one or more diseases or conditions.
            ``(C) Within 180 days after the date of the enactment of 
        this paragraph, the Secretary shall, after consultation with 
        patient advocacy groups, associations, physicians licensed to 
        use radiopharmaceuticals, and the regulated industry, issue 
        guidelines pertaining to the evaluation, in accordance with 
        this paragraph, of the safety and effectiveness of 
        radiopharmaceuticals.
            ``(D) As used in this paragraph, the term 
        `radiopharmaceutical' means--
                    ``(i) an article that is intended for use in vivo 
                in the diagnosis, cure, mitigation, treatment, or 
                prevention of disease or a manifestation of disease in 
                man, and that exerts its primary effect by the 
                spontaneous disintegration of unstable nuclei with the 
                emission of ionizing radiation; or
                    ``(ii) a reagent kit or nuclide generator that is 
                intended to be used in the preparation of any such 
                article.''.

SEC. 27. PROTECTION OF CONFIDENTIAL INFORMATION.

    Section 301, as amended by section 8(b), is amended by adding after 
paragraph (w) the following:
    ``(x) The release to the public of confidential patient and donor 
identifying information from establishments licensed or registered by 
the Secretary unless the release of such information is critical to a 
public health purpose.''.

SEC. 28. NATIONAL UNIFORMITY.

    (a) Chapter VII is amended by adding at the end thereof the 
following:

                  ``Subchapter D--National Uniformity

    ``Sec. 741. (a)(1) Except as provided in subsection (d)(1) or (e), 
no State or political subdivision of a State may establish or continue 
in effect any requirement--
            ``(A) that relates to the regulation of a drug or cosmetic, 
        and
            ``(B) that is not identical with a requirement of this Act, 
        section 351 of the Public Health Service Act (42 U.S.C. 262), 
        or the Fair Packaging and Labeling Act (15 U.S.C. 1451 et 
        seq.), and the administrative implementation of such Acts.
    ``(2) Except as provided in subsection (d)(2) or (e), no State or 
political subdivision of a State may establish any requirement after 
the date of enactment of this section or continue in effect any 
requirement established after such date--
            ``(A) that relates to the regulation of food, and
            ``(B) that is not identical with a requirement of this Act 
        or the Fair Packaging and Labeling Act (15 U.S.C. 1451 et seq.) 
        and the administrative implementation of such Acts.
    ``(b) For purposes of subsection (a)(1), a requirement that relates 
to the regulation of a drug or cosmetic shall be deemed to include any 
requirement that relates to the subject matter in any provision of this 
Act, section 351 of the Public Health Service Act (42 U.S.C. 262), or 
the Fair Packaging and Labeling Act (15 U.S.C. 1451 et seq.), including 
any notification requirement for a drug or cosmetic that provides for a 
warning concerning the safety of the drug or cosmetic or any component 
or package thereof, but shall not include any requirement that relates 
to the practice of pharmacy or any requirement that a drug be dispensed 
only upon the prescription of a practitioner licensed by law to 
administer such drug.
    ``(c) For purposes of subsections (b)--
            ``(1) the term `warning' with respect to a drug or cosmetic 
        means any statement, vignette, or other representation which 
        indicates, directly or by implication, that the drug or 
        cosmetic presents or may present a hazard to human health or 
        safety; and
            ``(2) the term `notification requirement' includes any 
        mandatory disclosure requirement that relates to the 
        dissemination of information about a drug or cosmetic in any 
        manner, such as labels, labeling, posters, public notices, 
        advertising, or any other means of communication.
    ``(d)(1) Upon application of a State, the Secretary may by 
regulation, after notice and opportunity for written and oral 
presentation of views, exempt from subsection (a)(1), under such 
conditions as the Secretary may impose, a State requirement which--
            ``(A) is justified by compelling and unique local 
        conditions,
            ``(B) protects an important public interest that would 
        otherwise be unprotected,
            ``(C) would not cause any drug or cosmetic to be in 
        violation of any applicable requirement or prohibition under 
        Federal law, and
            ``(D) would not unduly burden interstate commerce.
    ``(2)(A) A State may establish a warning notification requirement 
for food that would otherwise violate subsection (a)(2) if--
            ``(i) the warning is needed to address an imminent hazard 
        to health that is likely to result in serious adverse health 
        consequences or death, and
            ``(ii) a petition for an exemption is submitted by the 
        State no later than 7 days after the warning notification 
        requirement is established and is not subsequently denied by 
        the Secretary.
The Secretary shall take action on a petition no later than 30 days 
after its submittal.
    ``(B) For purposes of subparagraph (A)--
            ``(i) the term `warning' with respect to a food means any 
        statement, vignette, or other representation which indicates, 
        directly or by implication, that the food presents or may 
        present a hazard to human health; and
            ``(ii) the term `notification requirement' includes any 
        mandatory disclosure requirement that relates to the 
        dissemination of information about a food in any manner, such 
        as labels, labeling, posters, public notices, advertising, or 
        any other means of communication.
    ``(e) An application described in paragraph (1) or a petition 
described in paragraph (2) of subsection (d) that demonstrates that a 
drug, cosmetic, or food during the period of its likely availability in 
the State will pose a significant public health threat from acute 
exposure shall be considered an urgent application or petition. If an 
order by the Secretary to grant or deny the requested authorization in 
an urgent application or petition is not made within 30 days of receipt 
of the application or petition, the State may establish and enforce a 
temporary requirement. The temporary requirement shall be validated or 
terminated by the Secretary's final order on the application or 
petition.
    ``(f) Nothing in this section shall be construed to modify or 
otherwise affect any action or the liability of any person under the 
product liability law of any State.''.

SEC. 29. CENTERS FOR EDUCATION AND RESEARCH ON DRUGS, DEVICES, AND 
              BIOLOGICAL PRODUCTS.

    Chapter IX is amended by adding at the end the following section:

``SEC. 909. DEMONSTRATION PROGRAM REGARDING CENTERS FOR EDUCATION AND 
              RESEARCH ON DRUGS, DEVICES, AND BIOLOGICAL PRODUCTS.

    ``(a) In General.--The Secretary, acting through the Commissioner, 
shall establish a demonstration program for the purpose of making 1 or 
more grants for the establishment and operation of 1 or more centers to 
carry out the activities specified in subsection (b).
    ``(b) Required Activities.--The activities referred to in 
subsection (a) are the following:
            ``(1) The conduct of state-of-the-art clinical and 
        laboratory research for the following purposes:
                    ``(A) To increase awareness of new uses of drugs, 
                devices, or biological products and the unforeseen 
                risks of new uses of drugs, devices, or biological 
                products.
                    ``(B) To provide objective clinical information to 
                the following entities:
                            ``(i) Health care practitioners or other 
                        providers of health care goods or services.
                            ``(ii) Pharmacy benefit managers.
                            ``(iii) Health maintenance organizations or 
                        other managed health care organizations.
                            ``(iv) Health care insurers or governmental 
                        agencies; and
                    ``(C) To improve the quality of health care while 
                reducing the cost of health care through the prevention 
                of adverse effects of drugs, devices, or biological 
                products and the consequences of such effects, such as 
                unnecessary hospitalizations.
            ``(2) The conduct of research on the comparative 
        effectiveness and safety of drugs, devices, or biological 
        products.
            ``(3) Such other activities as the Secretary determines to 
        be appropriate, except that the grant may not be expended to 
        assist the Secretary in the review of new drugs.
    ``(c) Application for Grant.--A grant under subsection (a) may be 
made only if an application for the grant is submitted to the Secretary 
and the application is in such form, is made in such manner, and 
contains such agreements, assurances, and information as the Secretary 
determines to be necessary to carry out this section.
    ``(d) Peer Review.--A grant under subsection (a) may be made only 
if the application for the grant has undergone appropriate technical 
and scientific peer review.
    ``(e) Authorization of Appropriations.--For the purpose of carrying 
out this section, there are authorized to be appropriated $2,000,000 
for fiscal year 1997 and $3,000,000 for fiscal year 1998.''.

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