[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4780 Introduced in House (IH)]







106th CONGRESS
  2d Session
                                H. R. 4780

  To amend the Federal Food, Drug, and Cosmetic Act and the Internal 
 Revenue Code of 1986 with respect to drugs for minor animal species, 
                        and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 28, 2000

    Mr. Pickering (for himself, Mr. Hall of Texas, Mr. Combest, Mr. 
   Stenholm, and Mr. Pombo) introduced the following bill; which was 
referred to the Committee on Commerce, and in addition to the Committee 
 on Ways and Means, for a period to be subsequently determined by the 
  Speaker, in each case for consideration of such provisions as fall 
           within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
  To amend the Federal Food, Drug, and Cosmetic Act and the Internal 
 Revenue Code of 1986 with respect to drugs for minor animal species, 
                        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.

    This Act may be cited as the ``Minor Animal Species Health and 
Welfare Act of 2000''.

SEC. 2. FINDINGS.

    The Congress finds as follows:
            (1) There is a severe shortage of approved animal drugs for 
        use in minor species.
            (2) There is a severe shortage of approved drugs for 
        treating animal diseases and conditions that occur infrequently 
        or in limited geographic areas.
            (3) Because of the small market shares, low-profit margins 
        involved, and capital investment required, it is generally not 
        economically feasible for animal drug manufacturers to pursue 
        approvals for these species, diseases, and conditions.
            (4) Because the populations for which such drugs are 
        intended are small and conditions of animal management may vary 
        widely, it is often difficult or impossible to design and 
        conduct studies to establish drug safety and effectiveness 
        under traditional animal drug approval processes.
            (5) It is in the public interest and in the interest of 
        animal welfare to provide for special procedures to sanction 
        the lawful use and marketing of animal drugs for minor species 
        and minor uses that take into account these special 
        circumstances and that ensure that such drugs do not endanger 
        the public health.
            (6) Exclusive marketing rights and tax credits for clinical 
        testing expenses have helped encourage the development of 
        orphan drugs for human use, and comparable incentives will help 
        encourage the development and sanctioning for lawful marketing 
        of animal drugs for minor species and minor uses.

SEC. 3. AMENDMENTS AFFECTING THE FOOD AND DRUG ADMINISTRATION.

    (a) Definitions.--Section 201 of the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 321) is amended by adding the following new 
subsections at the end:
    ``(kk) The term `minor species' means animals other than cattle, 
horses, swine, chickens, turkeys, dogs, and cats, except that the 
Secretary may amend this definition by regulation.
    ``(ll) The term `minor use' means the use of a drug--
            ``(1) in a minor species, or
            ``(2) in an animal species other than a minor species for a 
        disease or condition that occurs infrequently or in limited 
        geographic areas, except that the Secretary may amend this 
        definition by regulation.
    ``(mm) The term `species with no human food safety concern' means 
an animal species, or life stage of an animal species, that is not 
customarily used for food for man and does not endanger the public 
health.''.
    (b) Minor Use Animal Drugs.--Chapter V of the Federal Food, Drug, 
and Cosmetic Act is amended by adding at the end the following new 
subchapter:

              ``SUBCHAPTER F--ANIMAL DRUGS FOR MINOR USES

                 ``designation of drugs for minor uses

    ``Sec. 571. (a) The manufacturer or the sponsor of a drug may 
request the Secretary to designate the drug as a drug for a minor use. 
A request for designation of a drug shall be made before the submission 
of an application under section 512(b) for the drug. If the Secretary 
finds that a drug for which a request is submitted under this 
subsection is being or will be investigated for a minor use and if an 
application for such drug is approved under section 512, the approval 
would be for such minor use, the Secretary shall designate the drug as 
a drug for such minor use. A request for a designation of a drug under 
this subsection shall contain the consent of the applicant to notice 
being given by the Secretary under subsection (c) respecting the 
designation of the drug.
    ``(b) A designation of a drug under subsection (a) shall be subject 
to the condition that--
            ``(1) if an application was approved for the drug under 
        section 512(c), the manufacturer of the drug will notify the 
        Secretary of any discontinuance of the production of the drug 
        at least one year before discontinuance; and
            ``(2) if an application has not been approved for the drug 
        under section 512(c) and if preclinical investigations or 
        investigations under section 512(j) are being conducted with 
        the drug, the manufacturer or sponsor of the drug will notify 
        the Secretary of any decision to discontinue active pursuit of 
        approval of an application under section 512(b).
    ``(c) Notice respecting the designation of a drug under subsection 
(a) shall be made available to the public.

                 ``protection for drugs for minor uses

    ``Sec. 572. (a) Except as provided in subsection (b):
            ``(1) If the Secretary approves an application filed 
        pursuant to section 512 for a drug designated under section 571 
        for minor uses, no active ingredient (including any salt or 
        ester of the active ingredient) of which has been approved in 
        any other application under section 512, the Secretary may not 
        approve or conditionally approve another application submitted 
        under section 512 or section 573 for such drug for such minor 
use for a person who is not the holder of such approved application 
until the expiration of ten years from the date of the approval of the 
application.
            ``(2) If the Secretary approves an application filed 
        pursuant to section 512 for a drug designated under section 571 
        for minor uses, which includes an active ingredient (including 
        an ester or salt of the active ingredient) that has been 
        approved in any other application under section 512, the 
        Secretary may not approve or conditionally approve another 
        application submitted under section 512 or section 573 for such 
        drug for such minor use for a person who is not the holder of 
        such approved application until the expiration of seven years 
        from the date of approval of the application.
    ``(b) If an application filed pursuant to section 512 is approved 
for a drug designated under section 571, the Secretary may, during the 
ten-year or seven-year period beginning on the date of the application 
approval, approve or conditionally approve another application under 
section 512 or section 573 for such drug for such minor use for a 
person who is not the holder of such approved application if--
            ``(1) the Secretary finds, after providing the holder 
        notice and opportunity for the submission of views, that in 
        such period the holder of the approved application cannot 
        assure the availability of sufficient quantities of the drug to 
        meet the needs for which the drug was designated; or
            ``(2) such holder provides the Secretary in writing the 
        consent of such holder for the approval or conditional approval 
        of other applications before the expiration of such ten-year or 
        seven-year period.

         ``conditional approval for minor use new animal drugs

    ``Sec. 573. (a)(1) Except as provided in paragraph (2), any person 
may file with the Secretary an application for conditional approval of 
a new animal drug for minor use. Such person shall submit to the 
Secretary as part of an application--
            ``(A) reports of investigations which have been made to 
        show whether or not such drug is safe for use;
            ``(B) information to show that there is a reasonable 
        expectation that the drug is effective for its intended use, 
        such as data from a pilot investigation, data from an 
        investigation in a related species; data from a single 
        investigation, data from an investigation using surrogate 
        endpoints, data based on pharmacokinetic extrapolations, data 
        from a short-term investigation, or data from the investigation 
        of closely-related diseases;
            ``(C) the quantity of drug expected to be manufactured and 
        distributed on an annual basis;
            ``(D) a commitment that the applicant will conduct 
        additional investigations to support approval of an application 
        under section 512 within the time frame set forth in subsection 
        (d)(1)(A);
            ``(E) reasonable data for establishing a conditional dose; 
        and
            ``(F) the information required by section 512(b)(1)(B)-(H).
    ``(2) A person may not file an application under paragraph (1) if 
the person has filed a previous application under paragraph (1) for the 
same drug and conditions for use that was conditionally approved by the 
Secretary under subsection (b).
    ``(b)(1) Within 180 days after the filing of an application 
pursuant to subsection (a), or such additional period as may be agreed 
upon by the Secretary and the applicant, the Secretary shall either (A) 
issue an order conditionally approving the application if the Secretary 
then finds that none of the grounds for denying conditional approval 
specified in subsection (c) applies, or (B) give the applicant notice 
of an opportunity for an expedited informal hearing on the question 
whether such application is conditionally approvable.
    ``(2) A drug manufactured in a pilot or other small facility may be 
used to demonstrate the safety and effectiveness of the drug and to 
obtain conditional approval for the drug prior to manufacture of the 
drug in a larger facility, unless the Secretary makes a determination 
that a full scale production facility is necessary to ensure the safety 
or effectiveness of the drug.
    ``(c)(1) If the Secretary finds, after due notice to the applicant 
and giving the applicant an opportunity for an expedited informal 
hearing, that--
            ``(A) the investigations, reports of which are required to 
        be submitted to the Secretary pursuant to subsection (a), do 
        not include adequate tests by all methods reasonably applicable 
        to show whether or not such drug is safe for use under the 
        conditions prescribed, recommended, or suggested in the 
        proposed labeling thereof;
            ``(B) the results of such tests show that such drug is 
        unsafe for use under such conditions or do not show that such 
        drug is safe for use under such conditions;
            ``(C) the methods used in, and the facilities and controls 
        used for, the manufacture, processing, and packing of such drug 
        are inadequate to preserve its identity, strength, quality, and 
        purity;
            ``(D) upon the basis of the information submitted to the 
        Secretary as part of the application, or upon the basis of any 
        other information before the Secretary with respect to such 
        drug, the Secretary has insufficient information to determine 
        whether such drug is safe for use under such conditions;
            ``(E) evaluated on the basis of the information submitted 
        to the Secretary as part of the application and any other 
        information before the Secretary with respect to such drug, 
        there is insufficient information to show that there is a 
        reasonable expectation that the drug will have the effect it 
        purports or is represented to have under the conditions of use 
        prescribed, recommended, or suggested in the proposed labeling 
        thereof;
            ``(F) upon the basis of information submitted to the 
        Secretary as part of the application or any other information 
        before the Secretary with respect to such drug, any use 
        prescribed, recommended, or suggested in labeling proposed for 
        such drug will result in a residue of such drug in excess of a 
        tolerance found by the Secretary to be safe for such drug;
            ``(G) based on a fair evaluation of all material facts, 
        such labeling is false or misleading in any particular; or
            ``(H) such drug induces cancer when ingested by man or 
        animal or, after tests which are appropriate for the evaluation 
        of the safety of such drug, induces cancer in man or animal, 
        except that the foregoing provisions of this subparagraph shall 
        not apply with respect to such drug if the Secretary finds 
        that, under the conditions for use specified in proposed 
        labeling and reasonably certain to be followed in practice (i) 
        such drug will not adversely affect the animals for which it is 
        intended, and (ii) no residue of such drug will be found (by 
        methods of examination prescribed or approved by the Secretary 
        by regulations, which regulations shall not be subject to 
        subsections (c)), in any edible portion of such animals after 
        slaughter or in any food yielded by or derived from the living 
        animals; or
            ``(I) another person has received approval under section 
        512 for a drug with the same active ingredient or ingredients 
        and the same conditions of use, and that person is able to 
        assure the availability of sufficient quantities of the drug to 
        meet the needs for which the drug is intended;
the Secretary shall issue an order refusing to conditionally approve 
the application. If, after such notice and opportunity for hearing, the 
Secretary finds that subparagraphs (A) through (I) do not apply, the 
Secretary shall issue an order conditionally approving the application.
    ``(2) In determining whether such drug is safe for use under the 
conditions prescribed, recommended, or suggested in the proposed 
labeling thereof, the Secretary shall consider, among other relevant 
factors, (A) the probable consumption of such drug and of any substance 
formed in or on food because of the use of such drug, (B) the 
cumulative effect on man or animal of such drug, taking into account 
any chemically or pharmacologically related substance, (C) safety 
factors which in the opinion of experts, qualified by scientific 
training and experience to evaluate the safety of such drugs, are 
appropriate for the use of animal experimentation data, and (D) whether 
the conditions of use prescribed, recommended, or suggested in the 
proposed labeling are reasonably certain to be followed in practice. 
Any order issued under this subsection refusing to approve an 
application shall state the findings upon which it is based.
    ``(d)(1) A conditional approval granted by the Secretary under this 
section shall be effective for a one-year period. The Secretary shall, 
upon request, renew a conditional approval for up to four additional 
one-year terms, unless the Secretary by order makes a finding that--
            ``(A) the applicant is not making appropriate progress 
        toward meeting approval requirements under section 512, and is 
        unlikely to be able to fulfill those requirements and obtain an 
        approval under section 512 before the expiration of the five 
        year maximum term of the conditional approval;
            ``(B) excessive quantities of the drug have been produced, 
        without adequate explanation; or
            ``(C) another drug with the same active ingredient or 
        ingredients for the same conditions of use has received 
        approval under section 512, and the holder of the approved 
        application is able to assure the availability of sufficient 
        quantities of the drug to meet the needs for which the drug is 
        intended.
    ``(2) If the Secretary does not renew a conditional approval, the 
Secretary shall provide due notice and an opportunity for an expedited 
informal hearing to the applicant.
    ``(e)(1) The Secretary shall, after due notice and opportunity for 
an expedited informal hearing to the applicant, issue an order 
withdrawing conditional approval of an application filed pursuant to 
subsection (a) if the Secretary finds--
            ``(A) that experience or scientific data show that such 
        drug is unsafe for use under the conditions of use upon the 
        basis of which the application was conditionally approved;
            ``(B) that new evidence not contained in such application 
        or not available to the Secretary until after such application 
        was conditionally approved, or tests by new methods, or tests 
        by methods not deemed reasonably applicable when such 
        application was conditionally approved, evaluated together with 
        the evidence available to the Secretary when the application 
        was conditionally approved, shows that such drug is not shown 
        to be safe for use under the conditions of use upon the basis 
        of which the application was conditionally approved;
            ``(C) on the basis of new information before the Secretary 
        with respect to such drug, evaluated together with the evidence 
        available to the Secretary when the application was 
        conditionally approved, that there is not a reasonable 
        expectation that such drug will have the effect it purports or 
        is represented to have under the conditions of use prescribed, 
        recommended, or suggested in the labeling thereof;
            ``(D) that the application contains any untrue statement of 
        a material fact; or
            ``(E) that the applicant has made any changes from the 
        standpoint of safety or effectiveness beyond the variations 
        provided for in the application unless the applicant has 
        supplemented the application by filing with the Secretary 
        adequate information respecting all such changes and unless 
        there is in effect a conditional approval of the supplemental 
        application, which supplemental application shall be treated in 
        the same manner as the original application.
If the Secretary finds that there is an imminent hazard to the health 
of man or of the animals for which such drug is intended, the Secretary 
may suspend the conditional approval of such application immediately, 
and give the applicant prompt notice of the Secretary's action and 
afford the applicant the opportunity for an expedited informal hearing, 
but the authority conferred by this sentence to suspend the conditional 
approval of an application shall not be delegated below the 
Commissioner of Food and Drugs.
    ``(2) The Secretary may also, after due notice and opportunity for 
an expedited informal hearing to the applicant, issue an order 
withdrawing the conditional approval of an application with respect to 
any new animal drug under this section if the Secretary finds--
            ``(A) that the applicant has failed to establish a system 
        for maintaining required records, or has repeatedly or 
        deliberately failed to maintain such records or to make 
        required reports in accordance with a regulation or order under 
        subsection (h), or the applicant has refused to permit access 
        to, or copying or verification of, such records as required by 
        paragraph (2) of such subsection;
            ``(B) that on the basis of new information before the 
        Secretary, evaluated together with the evidence before the 
        Secretary when the application was conditionally approved, the 
        methods used in, or the facilities and controls used for, the 
        manufacture, processing, and packing of such drug are 
        inadequate to assure and preserve its identity, strength, 
        quality, and purity and were not made adequate within a 
        reasonable time after receipt of written notice from the 
        Secretary specifying the matter complained of; or
            ``(C) that on the basis of new information before the 
        Secretary, evaluated together with the evidence before the 
        Secretary when the application was conditionally approved, the 
        labeling of such drug, based on a fair evaluation of all 
        material facts, is false or misleading in any particular and 
        was not corrected within a reasonable time after receipt of 
        written notice from the Secretary specifying the matter 
        complained of.
    ``(3) Any order under this subsection shall state the findings upon 
which it is based.
    ``(f) The decision of the Secretary under subsections (c), (d), or 
(e) shall constitute a final agency decision for purposes of judicial 
review.
    ``(g) When an application filed pursuant to subsection (a) is 
conditionally approved, the Secretary shall by notice publish in the 
Federal Register the name and address of the applicant and the 
conditions and indications of use of the new animal drug covered by 
such application, including any tolerance and withdrawal period or 
other use restriction and, if such new animal drug is intended for use 
in animal feed, appropriate purposes and conditions of use (including 
special labeling requirements and any requirement that an animal feed 
bearing or containing the new animal drug be limited to use under the 
professional supervision of a licensed veterinarian) applicable to any 
animal feed for use in which such drug is conditionally approved, the 
expiration date of the conditional approval, and such other 
information, upon the basis of which such application was conditionally 
approved, as the Secretary deems necessary to assure the safe and 
effective use of such drug. Upon withdrawal of conditional approval of 
such new animal drug application or upon its suspension, the Secretary 
shall publish a notice in the Federal Register.
    ``(h)(1) In the case of any new animal drug for which a conditional 
approval of an application filed pursuant to subsection (a) is in 
effect, the applicant shall establish and maintain such records, and 
make such reports to the Secretary, of data relating to experience, and 
other data or information, received or otherwise obtained by such 
applicant with respect to such drug, or with respect to animal feeds 
bearing or containing such drug, as the Secretary may by general 
regulation, or by order with respect to such application, prescribe on 
the basis of a finding that such records and reports are necessary in 
order to enable the Secretary to determine, or facilitate a 
determination, whether there is or may be ground for refusing to renew 
the conditional approval under subsection (d) or for invoking 
subsection (e). Such regulation or order shall provide, where the 
Secretary deems it to be appropriate, for the examination, upon 
request, by the persons to whom such regulation or order is applicable, 
of similar information received or otherwise obtained by the Secretary.
    ``(2) Every person required under this subsection to maintain 
records, and every person in charge or custody thereof, shall, upon 
request of an officer or employee designated by the Secretary, permit 
such officer or employee at all reasonable times to have access to and 
copy and verify such records.
    ``(i)(1) The label and labeling of a drug with a conditional 
approval under this section shall state that fact prominently and 
conspicuously.
    ``(2) Conditions of use that are the subject of an conditional 
approval under this section shall not be combined in product labeling 
with any conditions of use approved under section 512.
    ``(j)(1) Safety and effectiveness data and information which has 
been submitted in an application filed under subsection (a) for a drug 
and which has not previously been disclosed to the public shall be made 
available to the public, upon request, unless extraordinary 
circumstances are shown--
            ``(A) if no work is being or will be undertaken to have the 
        application conditionally approved,
            ``(B) if the Secretary has determined that the application 
        is not conditionally approvable and all legal appeals have been 
        exhausted,
            ``(C) if conditional approval of the application under 
        subsection (c) is withdrawn and all legal appeals have been 
        exhausted, or
            ``(D) if the Secretary has determined that such drug is not 
        a new animal drug.
    ``(2) Any request for data and information pursuant to paragraph 
(1) shall include a verified statement by the person making the request 
that any data or information received under such paragraph shall not be 
disclosed by such person to any other person--
            ``(A) for the purpose of, or as part of a plan, scheme, or 
        device for, obtaining the right to make, use, or market, or 
        making, using, or marketing, outside the United States, the 
        drug identified in the application filed under subsection (a), 
        and
            ``(B) without obtaining from any person to whom the data 
        and information are disclosed an identical verified statement, 
        a copy of which is to be provided by such person to the 
        Secretary, which meets the requirements of this paragraph.
    ``(k) To the extent consistent with the public health, the 
Secretary shall promulgate regulations for exempting from the operation 
of this section new animal drugs, and animal feeds bearing or 
containing new animal drugs, intended solely for investigational use by 
experts qualified by scientific training and experience to investigate 
the safety and effectiveness of animal drugs. Such regulations may, in 
the discretion of the Secretary, among other conditions relating to the 
protection of the public health, provide for conditioning such 
exemption upon the establishment and maintenance of such records, and 
the making of such reports to the Secretary, by the manufacturer or the 
sponsor of the investigation of such article, of data (including but 
not limited to analytical reports by investigators) obtained as a 
result of such investigational use of such article, as the Secretary 
finds will enable the Secretary to evaluate the safety and 
effectiveness of such article in the event of the filing of an 
application pursuant to this section. Such regulations, among other 
things, shall set forth the conditions (if any) upon which animals 
treated with such articles, and any products of such animals (before or 
after slaughter), may be marketed for food use.

``index of legally marketed unapproved minor use animal drugs for minor 
               species with no human food safety concern

    ``Sec. 574. (a) The Secretary shall establish an index of 
unapproved minor use new animal drugs that may be lawfully marketed for 
use in minor species with no human food safety concern. The index is 
intended to benefit primarily zoo and wildlife species, aquarium and 
bait fish, reptiles and amphibians, caged birds, and small pet mammals 
as well as some commercially produced species such as cricket, 
earthworms and possibly nonfood life stages of some minor species used 
for human food such as oysters and shellfish. The index shall conform 
to the requirements in subsection (d).
    ``(b)(1) Any person may submit a request to the Secretary for a 
preliminary determination that a drug may be eligible for inclusion in 
the index. Such a request shall include--
            ``(A) information regarding the proposed species, 
        conditions of use, and anticipated annual production;
            ``(B) information regarding product formulation and 
        manufacturing; and
            ``(C) information sufficient for the Secretary to determine 
        that there does not appear to be human food safety, 
        environmental safety, occupational safety, or bioavailability 
        concerns with the proposed use of the drug.
    ``(2) Within 90 days after the submission of a request for a 
preliminary determination under paragraph (1), the Secretary shall 
grant or deny the request, and notify the submitter of the Secretary's 
conclusion. The Secretary shall grant the request if it appears that--
            ``(A) the request addresses the need for a minor use animal 
        drug for which there is no approved or conditionally approved 
        drug, and
            ``(B) the proposed drug use does not appear to raise human 
        food safety, environmental safety, occupational safety, or 
        bioavailability concerns.
If the Secretary denies the request, the Secretary shall provide due 
notice and an opportunity for an expedited informal hearing. If the 
Secretary does not grant or deny the request within 90 days, the 
Secretary shall provide the Committee on Commerce of the House of 
Representatives and the Committee on Health, Education, Labor, and 
Pensions of the Senate with the reasons action on the request did not 
occur within such 90 days. The decision of the Secretary under this 
paragraph shall constitute a final agency decision for purposes of 
judicial review.
    ``(c)(1) With respect to a drug for which the Secretary has made a 
preliminary determination of eligibility under subsection (b), the 
submitter of that request may request that the Secretary add the drug 
to the index established by subsection (a). Such a request shall 
include--
            ``(A) a copy of the Secretary's preliminary determination 
        of eligibility issued under subsection (b);
            ``(B) a qualified expert panel report that meets the 
        requirements in paragraph (2);
            ``(C) a proposed index entry;
            ``(D) proposed labeling;
            ``(E) anticipated annual production of the drug; and
            ``(F) a commitment to manufacture, label, and distribute 
        the drug in accordance with the index entry and any additional 
        requirements that the Secretary may prescribe by general 
        regulation or specific order.
    ``(2) For purposes of paragraph (1), a `qualified expert panel 
report' is a written report that--
            ``(A) is authored by a panel of individuals qualified by 
        scientific training and experience to evaluate the safety and 
        effectiveness of animal drugs for the intended uses and species 
        in question and operating external to the Food and Drug 
        Administration;
            ``(B) addresses all available target animal safety and 
        effectiveness information, including anecdotal information 
        where necessary;
            ``(C) addresses proposed labeling;
            ``(D) addresses whether the drug should be limited to use 
        under the professional supervision of a licensed veterinarian; 
        and
            ``(E) addresses whether, in the expert panel's opinion, the 
        benefits of using the drug outweigh its risks, taking into 
        account the harm being caused by the absence of an approved or 
        conditionally approved new animal drug for the minor use in 
        question.
    ``(3) Within 180 days after the receipt of a request for listing a 
drug in the index, the Secretary shall grant or deny the request. The 
Secretary shall grant the request if the Secretary finds, on the basis 
of the expert panel report and other information available to the 
Secretary, that the benefits of using the drug outweigh its risks, 
taking into account the harm caused by the absence of an approved or 
conditionally approved new animal drug for the minor use in question. 
If the Secretary denies the request, the Secretary shall provide due 
notice and the opportunity for an expedited informal hearing. If the 
Secretary does not grant or deny the request within 180 days, the 
Secretary shall provide the Committee on Commerce of the House of 
Representatives and the Committee on Health, Education, Labor, and 
Pensions of the Senate with the reasons action on the request did not 
occur within such 180 days. The decision of the Secretary under this 
paragraph shall constitute a final agency decision for purposes of 
judicial review.
    ``(d)(1) The index established by subsection (a) shall include the 
following information for each listed drug:
            ``(A) The name and address of the sponsor of the index 
        listing.
            ``(B) The name of the drug, its dosage form, and its 
        strength.
            ``(C) Labeling.
            ``(D) Production limits or other conditions the Secretary 
        deems necessary to prevent misuse of the drug.
            ``(E) Requirements that the Secretary deems necessary for 
        the safe and effective use of the drug.
    ``(2) The Secretary shall publish the index, and revise it monthly.
    ``(e)(1) If the Secretary finds, after due notice to the sponsor 
and an opportunity for an expedited informal hearing, that--
            ``(A) on the basis of new information before the Secretary, 
        evaluated together with the evidence available to the Secretary 
        when the drug was listed in the index, the benefits of using 
        the drug do not outweigh its risks; or
            ``(B) the conditions and limitations of use in the index 
        listing have not been followed, the Secretary shall remove the 
drug from the index. The decision of the Secretary shall constitute 
final agency decision for purposes of judicial review.
    ``(2) If the Secretary finds that there is an imminent hazard to 
the health of man or of the animals for which such drug is intended, 
the Secretary may suspend the listing of such drug immediately, and 
give the sponsor prompt notice of the Secretary's action and afford the 
sponsor the opportunity for an expedited informal hearing, but the 
authority conferred by this sentence to suspend the listing of a drug 
shall not be delegated below the Commissioner of Food and Drugs.
    ``(f)(1) In the case of any new animal drug for which an index 
listing pursuant to subsection (a) is in effect, the sponsor shall 
establish and maintain such records, and make such reports to the 
Secretary, of data relating to experience, and other data or 
information, received or otherwise obtained by such sponsor with 
respect to such drug, or with respect to animal feeds bearing or 
containing such drug, as the Secretary may by general regulation, or by 
order with respect to such listing, prescribe on the basis of a finding 
that such records and reports are necessary in order to enable the 
Secretary to determine, or facilitate a determination, whether there is 
or may be ground for invoking subsection (e). Such regulation or order 
shall provide, where the Secretary deems it to be appropriate, for the 
examination, upon request, by the persons to whom such regulation or 
order is applicable, of similar information received or otherwise 
obtained by the Secretary.
    ``(2) Every person required under this subsection to maintain 
records, and every person in charge or custody thereof, shall, upon 
request of an officer or employee designated by the Secretary, permit 
such officer or employee at all reasonable times to have access to and 
copy and verify such records.
    ``(g) The labeling of a drug that is the subject of an index 
listing shall state, prominently and conspicuously, that the drug is 
legally marketed but not approved.
    ``(h) The Secretary shall promulgate regulations to implement this 
section. Such regulations shall address, among other subjects, the 
composition of the expert panel, sponsorship of the expert panel under 
the auspices of a recognized professional organization, conflict of 
interest criteria for panel members, and the use of advisory committees 
convened by the Food and Drug Administration.
    ``(i) To the extent consistent with the public health, the 
Secretary shall promulgate regulations for exempting from the operation 
of this section new animal drugs intended solely for investigational 
use by experts qualified by scientific training and experience to 
investigate the safety and effectiveness of animal drugs. Such 
regulations may, in the discretion of the Secretary, among other 
conditions relating to the protection of the public health, provide for 
conditioning such exemption upon the establishment and maintenance of 
such records, and the making of such reports to the Secretary, by the 
manufacturer or the sponsor of the investigation of such article, of 
data (including but not limited to analytical reports by investigators) 
obtained as a result of such investigational use of such article, as 
the Secretary finds will enable the Secretary to evaluate the safety 
and effectiveness of such article in the event of the filing of a 
request for an index listing pursuant to this section. Such 
regulations, among other things, shall set forth the conditions (if 
any) upon which animals treated with such articles, and any products of 
such animals (before or after slaughter), may be marketed for food use.

 ``grants and contracts for development of animal drugs for minor uses

    ``Sec. 575. (a) The Secretary may make grants to and enter into 
contracts with public and private entities and individuals to assist in 
defraying the costs of qualified testing expenses and manufacturing 
expenses incurred in connection with the development of drugs for minor 
uses.
    ``(b) For purposes of subsection (a) of this section:
            ``(1) The term `qualified testing' means--
                    ``(A) clinical testing--
                            ``(i) which is carried out under an 
                        exemption for a drug for minor uses under 
                        section 512(j), 573(k), or 574(i); and
                            ``(ii) which occurs after the date such 
                        drug is designated under section 571 and before 
                        the date on which an application with respect 
                        to such drug is submitted under section 512; 
                        and
                    ``(B) preclinical testing involving a drug for 
                minor use which occurs after the date such drug is 
                designated under section 571 and before the date on 
                which an application with respect to such drug is 
                submitted under section 512.
            ``(2) The term `manufacturing expenses' means expenses 
        incurred in developing processes and procedures intended to 
        meet current good manufacturing practice requirements which 
        occur after such drug is designated under section 571 and 
        before the date on which an application with respect to such 
        drug is submitted under section 512.
    ``(c) For grants and contracts under subsection (a), there are 
authorized to be appropriated $1,000,000 for fiscal year 2001, 
$1,500,000 for fiscal year 2002, and $2,000,000 for fiscal year 
2003.''.
    (c) Three-Year Exclusivity for Minor Use Approvals.--Section 
512(c)(2)(F)(ii), (iii), and (v) of the Federal Food, Drug, and 
Cosmetic Act is amended by striking ``(other than bioequivalence or 
residue studies)'' and inserting the following: ``(other than 
bioequivalence studies or, except in the case of a new animal drug for 
minor uses, residue studies)''.
    (d) Scope of Review for Minor Use Applications.--Section 512(d) of 
the Federal Food, Drug, and Cosmetic Act is amended by adding the 
following new paragraph at the end:
    ``(5) In reviewing a supplement to an approved application that 
seeks a minor use approval, the Secretary shall not reconsider 
information in the approved application to determine whether it meets 
current standards for approval.''.
    (e) Presumption of New Animal Drug Status.--Section 709 of the 
Federal Food, Drug, and Cosmetic Act is amended by designating the 
existing text as subsection (a), and by adding the following new 
subsection (b):
    ``(b) In any action to enforce the requirements of this Act 
respecting a drug for minor use that is not the subject of an approval 
under section 512, a conditional approval under section 573, or an 
index listing under section 574, it shall be presumed that the drug is 
a new animal drug.''.
    (f) Conforming Amendments.--
            (1) Section 512(a)(1) of the Federal Food, Drug, and 
        Cosmetic Act is amended by striking subparagraphs (A) and (B) 
        and inserting the following:
                    ``(A) there is in effect an approval of an 
                application filed pursuant to subsection (b) with 
                respect to such use or intended use of such drug, and 
                such drug, its labeling, and such use conform to such 
                approved application;
                    ``(B) there is in effect a conditional approval of 
                an application filed pursuant to section 573 with 
                respect to such use or intended use of such drug, and 
                such drug, its labeling, and such use conform to such 
                conditionally approved application; or
                    ``(C) there is in effect an index listing pursuant 
                to section 574 with respect to such use or intended use 
                of such drug, and such drug, its labeling, and such use 
                conform to such index listing.''.
            (2) Section 512(a)(4) of the Federal Food, Drug, and 
        Cosmetic Act is amended by adding after ``if an approval of an 
        application filed under subsection (b)'' the following: ``or a 
        conditional approval of an application filed under section 
        573''.
            (3) Section 503(f) of the Federal Food, Drug, and Cosmetic 
        Act is amended as follows:
                    (A) In paragraph (1)(A)(ii) by striking ``512'' and 
                inserting the following: ``512, a conditionally 
                approved application under subsection (b) of section 
                573, or an index listing under subsection (a) of 
                section 574.''.
                    (B) In paragraph (3) by striking ``section 512'' 
                and inserting the following: ``sections 512, 573, or 
                574.''.
            (4) Section 504(a)(1) of the Federal Food, Drug, and 
        Cosmetic Act is amended by striking ``512(b)'' and inserting 
        the following: ``512(b), a conditionally approved application 
        filed pursuant to section 573, or an index listing pursuant to 
        section 574.''.
            (5) Section 504(a)(2)(B) and (b) of the Federal Food, Drug, 
        and Cosmetic Act are amended by striking ``512(i)'' and 
        inserting the following: ``512(i) or section 573(g), or the 
        index listing pursuant to section 574.''.
            (6) Section 403(a) of the Food and Drug Administration 
        Modernization Act (Public Law 105-115) is amended by adding the 
        following sentence at the end: ``For purposes of this section, 
        an approved article includes a new animal drug that is the 
        subject of a conditional approval or an index listing under 
        sections 573 and 574 of the Federal Food, Drug, and Cosmetic 
        Act, respectively.''.
    (g) Regulations.--The Secretary of Health and Human Services shall 
publish proposed regulations to implement amendments to the Federal 
Food, Drug, and Cosmetic Act made by this Act within 6 months of the 
date of enactment, and final regulations within 24 months of the date 
of enactment.
    (h) Office of Minor Use Animal Drug Development.--
            (1) The Secretary shall establish within the Food and Drug 
        Administration, Center of Veterinary Medicine, an Office of 
        Minor Use Animal Drug Development that reports directly to the 
        Director of the Center for Veterinary Medicine. This office 
        shall be responsible for designating minor use animal drugs 
        under section 571 of the Federal Food, Drug, and Cosmetic Act, 
        for administering grants and contracts for the development of 
        animal drugs for minor uses under section 575 of the Federal 
        Food, Drug, and Cosmetic Act, and for serving as liaison with 
        any party interested in minor use animal drug development.
            (2) For this office, there are authorized to be 
        appropriated $1,200,000 for each of the fiscal years 2001 
        through 2003.

SEC. 4. CREDIT FOR CLINICAL TESTING EXPENSES FOR CERTAIN ANIMAL DRUGS 
              FOR MINOR USES.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by inserting after 
section 45C the following new section:

``SEC. 45D. CLINICAL TESTING EXPENSES FOR CERTAIN ANIMAL DRUGS FOR 
              MINOR USES.

    ``(a) General Rule.--For purposes of section 38, the minor use 
animal drug credit determined under this section for the taxable year 
is an amount equal to 50 percent of the qualified animal clinical 
testing expenses for the taxable year.
    ``(b) Qualified Animal Clinical Testing Expenses.--For purposes of 
this section--
            ``(1) Qualified animal clinical testing expenses.--
                    ``(A) In general.--Except as otherwise provided in 
                this paragraph, the term `qualified animal clinical 
                testing expenses' means the amounts which are paid or 
                incurred by the taxpayer during the taxable year which 
                would be described in subsection (b) of section 41 if 
                such subsection were applied with the modifications set 
                forth in subparagraph (B).
                    ``(B) Modifications.--For purposes of subparagraph 
                (A), subsection (b) of section 41 shall be applied--
                            ``(i) by substituting `animal clinical 
                        testing' for `qualified research' each place it 
                        appears in paragraphs (2) and (3) of such 
                        subsection, and
                            ``(ii) by substituting `100 percent' for 
                        `65 percent' in paragraph (3)(A) of such 
                        subsection.
                    ``(C) Exclusion for amounts funded by grants, 
                etc.--The term `qualified animal clinical testing 
                expenses' shall not include any amount to the extent 
                such amount is funded by any grant, contract, or 
                otherwise by another person (or any governmental 
                entity).
                    ``(D) Special rule.--For purposes of this 
                paragraph:
                            ``(i) section 41 shall be deemed to remain 
                        in effect for periods after June 30, 2000; and
                            ``(ii) the trade or business requirement of 
                        section 41(b)(1) shall be deemed to be 
                        satisfied in the case of a taxpayer that owns 
                        animals and that conducts clinical testing on 
                        such animals.
            ``(2) Animal clinical testing.--
                    ``(A) In general.--The term `animal clinical 
                testing' means any clinical testing--
                            ``(i) which is carried out under an 
                        exemption for a drug being tested for minor use 
                        under section 512(j), 573(k), or 574(i) of the 
                        Federal Food, Drug, and Cosmetic Act (or 
                        regulations issued under such sections),
                            ``(ii) which occurs--
                                    ``(I) after the date such drug is 
                                designated under section 571 of such 
                                Act, and
                                    ``(II) before the date on which an 
                                application with respect to such drug 
                                is approved under section 512(c) of 
                                such Act, and
                            ``(iii) which is conducted by or on behalf 
                        of--
                                    ``(I) the taxpayer to whom the 
                                designation under such section 571 
                                applies, or
                                    ``(II) the owner of the animals 
                                that are the subject of clinical 
                                testing.
                    ``(B) Testing must be for minor use.--Animal 
                clinical testing shall be taken into account under 
                subparagraph (A) only to the extent such testing is 
                related to the use of a drug for the minor use for 
                which it was designated under section 571 of the 
                Federal Food, Drug, and Cosmetic Act.
    ``(c) Coordination With Credit for Increasing Research 
Expenditures.--
            ``(1) In general.--Except as provided in paragraph (2), any 
        qualified animal clinical testing expenses for a taxable year 
        to which an election under this section applies shall not be 
        taken into account for purposes of determining the credit 
        allowable under section 41 for such taxable year.
            ``(2) Expenses included in determining base period research 
        expenses.--Any qualified animal clinical testing expenses for 
        any taxable year which are qualified research expenses (within 
        the meaning of section 41(b)) shall be taken into account in 
        determining base period research expenses for purposes of 
        applying section 41 to subsequent taxable years.
    ``(d) Definition and Special Rules.--
            ``(1) Minor use.--For purposes of this section, the term 
        `minor use' has the meaning given such term by section 201(ll) 
        of the Federal Food, Drug, and Cosmetic Act. Determinations 
        under the preceding sentence with respect to any drug shall be 
        made on the basis of the facts and circumstances as of the date 
        such drug is designated under section 571 of the Federal Food, 
        Drug, and Cosmetic Act.
            ``(2) Denial of credit for testing conducted by 
        corporations to which section 936 applies.--No credit shall be 
        allowed under this section with respect to any animal clinical 
        testing conducted by a corporation to which an election under 
        section 936 applies.
            ``(3) Certain rules made applicable.--Rules similar to the 
        rules of paragraphs (1) and (2) of section 41(f) shall apply 
        for purposes of this section.
            ``(4) Election.--This section shall apply to any taxpayer 
        for any taxable year only if such taxpayer elects (at such time 
        and in such manner as the Secretary may by regulations 
        prescribe) to have this section apply for such taxable year.''.
    (b) Conforming Amendments.--
            (1) Section 38(b) of such Code is amended--
                    (A) by striking ``plus'' at end of paragraph (11),
                    (B) by striking the period at the end of paragraph 
                (12) and inserting ``, plus'', and
                    (C) by adding at the end the following new 
                paragraph:
            ``(13) the minor use animal drug credit determined under 
        section 45D(a).''.
            (2) Section 280C(b) of such Code is amended--
                    (A) in paragraph (1), by striking ``section 
                45C(b)'' and inserting ``section 45C(b) or 45D(b)'', 
                and
                    (B) in paragraphs (1) and (2), by striking 
                ``section 45C'' each place it appears and inserting 
                ``section 45C or 45D''.
    (c) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of such Code is amended by 
inserting after the item relating to section 45C the following new 
item:

                              ``Sec. 45D. Clinical testing expenses for 
                                        certain animal drugs for minor 
                                        uses.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.
    (e) Regulations.--The Secretary of the Treasury shall publish 
proposed regulations to implement amendments to the Internal Revenue 
Code of 1986 made by this Act within 6 months after the date of the 
enactment of this Act, and final regulations within 24 months after 
such date.
                                 <all>