Congressional Record, Volume 147 Issue 156 (Tuesday, November 13, 2001)

[Congressional Record Volume 147, Number 156 (Tuesday, November 13, 2001)]
[House]
[Pages H8094-H8107]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

{time} 1930
BEST PHARMACEUTICALS FOR CHILDREN ACT

Mr. TAUZIN. Mr. Speaker, I move to suspend the rules and pass the
bill (H.R. 2887) to amend the Federal Food, Drug, and Cosmetic Act to
improve the safety and efficacy of pharmaceuticals for children, as
amended.
The Clerk read as follows:

H.R. 2887

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 ``Best Pharmaceuticals for
Children Act''.

SEC. 2. PEDIATRIC STUDIES OF ALREADY-MARKETED DRUGS.

(a) In General.--Section 505A of the Federal Food, Drug,
and Cosmetic Act (21 U.S.C. 355a) is amended--
(1) by striking subsection (b); and
(2) by redesignating subsections (c) through through (k) as
subsections (b) through (j), respectively.
(b) Conforming Amendments.--Section 505A of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 355a) is amended in
subsection (b) (as redesignated by subsection (a)(2) of this
section)--
(1) by inserting after ``the Secretary'' the following:
``determines that information relating to the use of an
approved drug in the pediatric population may produce health
benefits in that population and''; and
(2) by striking ``concerning a drug identified in the list
described in subsection (b)''.

SEC. 3. RESEARCH FUND FOR THE STUDY OF DRUGS LACKING
EXCLUSIVITY.

Part B of title IV of the Public Health Service Act (42
U.S.C. 284 et seq.) is amended--
(1) by redesignating the second section 409C (relating to
clinical research) as section 409G;
(2) by redesignating the second section 409D (relating to
enhancement awards) as section 409H; and
(3) by adding at the end the following:

``SEC. 409I. PROGRAM FOR PEDIATRIC STUDIES OF DRUGS LACKING
EXCLUSIVITY.

``(a) List of Drugs Lacking Exclusivity for Which Pediatric
Studies are Needed.--
``(1) In general.--Not later than 1 year after the date of
enactment of this section, the Secretary, acting through the
Director of the National Institutes of Health and in
consultation with the Commissioner of Food and Drugs and
experts in pediatric research, shall develop, prioritize, and
publish an annual list of approved drugs for which--
``(A)(i) there is an approved application under section
505(j) of the Federal Food, Drug, and Cosmetic Act;
``(ii) there is a submitted application that could be
approved under the criteria of section 505(j) of the Federal
Food, Drug, and Cosmetic Act;
``(iii) there is no patent protection or market exclusivity
protection under the Federal Food, Drug, and Cosmetic Act; or
``(iv) there is, under section 505A(c)(4)(C) of the Federal
Food, Drug, and Cosmetic Act, a referral for inclusion on
such list; and
``(B) additional studies are needed to assess the safety
and effectiveness of the use of the drug in the pediatric
population.
``(2) Consideration of available information.--In
developing the list under paragraph (1), the Secretary shall
consider, for each drug on the list--
``(A) the availability of information concerning the safe
and effective use of the drug in the pediatric population;
``(B) whether additional information is needed;
``(C) whether new pediatric studies concerning the drug may
produce health benefits in the pediatric population; and
``(D) whether reformulation of the drug is necessary;
``(b) Contracts for Pediatric Studies.--The Secretary shall
award contracts to entities that have the expertise to
conduct pediatric clinical trials (including qualified
universities, hospitals, laboratories, contract research
organizations, federally funded programs such as pediatric
pharmacology research units, other public or private
institutions, or individuals) to enable the entities to
conduct pediatric studies concerning one or more drugs
identified in the list described in subsection (a).
``(c) Process for Contracts and Labeling Changes.--
``(1) Written request to holders of approved applications
for drugs lacking exclusivity.--
``(A) In general.--The Commissioner of Food and Drugs, in
consultation with the Director of National Institutes of
Health, may issue a written request (which shall include a
timeframe for negotiations for an agreement) for pediatric
studies concerning a drug identified in the list described in
subsection (a) to all holders of an approved application for
the drug under section 505 of the Federal Food, Drug, and
Cosmetic Act. Such a written request shall be made in a
manner equivalent to the manner in which a written request is
made under subsection (a) or (b) of section 505A of the
Federal Food, Drug, and Cosmetic Act, including with respect
to information provided on the pediatric studies to be
conducted pursuant to the request.
``(B) Publication of request.--If the Commissioner of Food
and Drugs does not receive a response to a written request
issued under subparagraph (A) within 30 days of the date on
which a request was issued, the Secretary, acting through the
Director of National Institutes of Health and in consultation
with the Commissioner of Food and Drugs, shall publish a
request for contract proposals to conduct the pediatric
studies described in the written request.
``(C) Disqualification.--A holder that receives a first
right of refusal shall not be entitled to respond to a
request for contract proposals under subparagraph (B).

[[Page H8095]]

``(D) Guidance.--Not later than 270 days after the date of
enactment of this section, the Commissioner of Food and Drugs
shall promulgate guidance to establish the process for the
submission of responses to written requests under
subparagraph (A).
``(2) Contracts.--A contract under this section may be
awarded only if a proposal for the contract is submitted to
the Secretary in such form and manner, and containing such
agreements, assurances, and information as the Secretary
determines to be necessary to carry out this section.
``(3) Reporting of studies.--
``(A) Upon completion of a pediatric study in accordance
with a contract awarded under this section, a report
concerning the study shall be submitted to the Director of
National Institutes of Health and the Commissioner of Food
and Drugs. The report shall include all data generated in
connection with the study.
``(B) Availability of reports.--Each report submitted under
subparagraph (A) shall be considered to be in the public
domain, and shall be assigned a docket number by the
Commissioner of Food and Drugs. An interested person may
submit written comments concerning such pediatric studies to
the Commissioner of Food and Drugs, and the written comments
shall become part of the docket file with respect to each of
the drugs.
``(C) Action by commissioner.--The Commissioner of Food and
Drugs shall take appropriate action in response to the
reports submitted under subparagraph (A) in accordance with
paragraph (4).
``(4) Request for labeling changes.--During the 180-day
period after the date on which a report is submitted under
paragraph (3)(A), the Commissioner of Food and Drugs shall--
``(A) review the report and such other data as are
available concerning the safe and effective use in the
pediatric population of the drug studied; and
``(B) negotiate with the holders of approved applications
for the drug studied for any labeling changes that the
Commissioner of Food and Drugs determines to be appropriate
and requests the holders to make; and
``(C)(i) place in the public docket file a copy of the
report and of any requested labeling changes; and
``(ii) publish in the Federal Register a summary of the
report and a copy of any requested labeling changes.
``(5) Dispute resolution.--If, not later than the end of
the 180-day period specified in paragraph (4), the holder of
an approved application for the drug involved does not agree
to any labeling change requested by the Commissioner of Food
and Drugs under that paragraph--
``(A) the Commissioner of Food and Drugs shall immediately
refer the request to the Pediatric Advisory Subcommittee of
the Anti-Infective Drugs Advisory Committee; and
``(B) not later than 90 days after receiving the referral,
the Subcommittee shall--
``(i) review the available information on the safe and
effective use of the drug in the pediatric population,
including study reports submitted under this section; and
``(ii) make a recommendation to the Commissioner of Food
and Drugs as to appropriate labeling changes, if any.
``(6) FDA determination.--Not later than 30 days after
receiving a recommendation from the Subcommittee under
paragraph (5)(B)(ii) with respect to a drug, the Commissioner
of Food and Drugs shall consider the recommendation and, if
appropriate, make a request to the holders of approved
applications for the drug to make any labeling change that
the Commissioner of Food and Drugs determines to be
appropriate.
``(7) Failure to agree.--If a holder of an approved
application for a drug, within 30 days after receiving a
request to make a labeling change under paragraph (6), does
not agree to make a requested labeling change, the
Commissioner may deem the drug to be misbranded under the
Federal Food, Drug, and Cosmetic Act.
``(8) Recommendation for formulation changes.--If a
pediatric study completed under public contract indicates
that a formulation change is necessary and the Secretary
agrees, the Secretary shall send a nonbinding letter of
recommendation regarding that change to each holder of an
approved application.
``(d) Confidential Commercial Information; Trade Secrets.--
Nothing in this section requires or authorizes the use or
disclosure of confidential commercial information or trade
secrets.
``(e) Authorization of Appropriations.--
``(1) In general.--For the purpose of carrying out this
section, there are authorized to be appropriated $200,000,000
for fiscal year 2002, and such sums as may be necessary for
each of the fiscal years 2003 through 2007.
``(2) Availability.--Any amount appropriated under
paragraph (1) shall remain available to carry out this
section until expended.''.

SEC. 4. WRITTEN REQUEST TO HOLDERS OF APPROVED APPLICATIONS
FOR DRUGS THAT HAVE MARKET EXCLUSIVITY.

Section 505A of the Federal Food, Drug, and Cosmetic Act
(21 U.S.C. 355a) is amended in subsection (c) (as
redesignated by section 2(a)(2) of this Act) by adding at the
end the following:
``(4) Written request to holders of approved applications
for drugs that have market exclusivity.--
``(A) Request and response.--If the Secretary makes a
written request for pediatric studies under subsection (b) to
the holder of an application approved under section
505(b)(1), the holder, not later than 180 days after
receiving the written request, shall respond to the Secretary
as to the intention of the holder to act on the request by--
``(i) indicating when the pediatric studies will be
initiated, if the holder agrees to the request; or
``(ii) indicating that the holder does not agree to the
request.
``(B) No agreement to request.--
``(i) Referral.--If the holder does not agree to a written
request within the time period specified in subparagraph (A),
and if the Secretary determines that there is a continuing
need for information relating to the use of the drug in the
pediatric population (including neonates as appropriate), the
Secretary shall refer the drug to the Foundation for
Pediatric Research established under section 499A of the
Public Health Service Act (referred to in this paragraph as
the `Foundation') for consideration for the conduct of the
pediatric studies described in the written request.
``(ii) Public notice.--The Secretary shall give public
notice of a referral under clause (i), including notice of
the name of the drug, the name of the manufacturer, and the
indication to be studied.
``(C) Lack of funds.--If, on referral of a drug under
subparagraph (B)(i), the Foundation certifies to the
Secretary that the Foundation does not have funds available
to conduct the requested studies, the Secretary shall refer
the drug for inclusion on the list established under section
409I of the Public Health Service Act for the conduct of the
studies.
``(D) Confidential commercial information; trade secrets.--
Nothing in this paragraph requires or authorizes the use or
disclosure of confidential commercial information or trade
secrets.
``(E) No requirement to refer.--Nothing in this subsection
shall be construed to require that every declined written
request shall be referred to the Foundation.''.

SEC. 5. TIMELY LABELING CHANGES FOR DRUGS GRANTED
EXCLUSIVITY; DRUG FEES.

(a) Elimination of User Fee Waiver for Pediatric
Supplements.--Section 736(a)(1) of the Federal Food, Drug,
and Cosmetic Act (21 U.S.C. 379h(a)(1)) is amended--
(1) by striking subparagraph (F); and
(2) by redesignating subparagraph (G) as subparagraph (F).
(b) Labeling Changes.--
(1) Definition of priority supplement.--Section 201 of the
Federal Food Drug, and Cosmetic Act (21 U.S.C. 321) is
amended by adding at the end the following:
``(kk) Priority Supplement.--The term `priority supplement'
means a drug application referred to in section 101(4) of the
Food and Drug Administration Modernization Act of 1997 (111
Stat. 2298).''.
(2) Treatment as Priority Supplements.--Section 505A of the
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355a), as
amended by section 2(a)(2) of this Act, is amended by adding
at the end the following:
``(k) Labeling Supplements.--
``(1) Priority status for pediatric supplements.--Any
supplement to an application under section 505 proposing a
labeling change pursuant to a report on a pediatric study
under this section--
``(A) shall be considered to be a priority supplement; and
``(B) shall be subject to the performance goals established
by the Commissioner for priority drugs.
``(2) Dispute resolution.--If the Commissioner determines
that an application with respect to which a pediatric study
is conducted under this section is approvable and that the
only open issue for final action on the application is the
reaching of an agreement between the sponsor of the
application and the Commissioner on appropriate changes to
the labeling for the drug that is the subject of the
application--
``(A) not later than 180 days after the date of submission
of the application--
``(i) the Commissioner shall request that the sponsor of
the application make any labeling change that the
Commissioner determines to be appropriate; and
``(ii) if the sponsor of the application does not agree to
make a labeling change requested by the Commissioner by that
date, the Commissioner shall immediately refer the matter to
the Pediatric Advisory Subcommittee of the Anti-Infective
Drugs Advisory Committee;
``(B) not later than 90 days after receiving the referral,
the Pediatric Advisory Subcommittee of the Anti-Infective
Drugs Advisory Committee shall--
``(i) review the pediatric study reports; and
``(ii) make a recommendation to the Commissioner concerning
appropriate labeling changes, if any;
``(C) the Commissioner shall consider the recommendations
of the Pediatric Advisory Subcommittee of the Anti-Infective
Drugs Advisory Committee and, if appropriate, not later than
30 days after receiving the recommendation, make a request to
the sponsor of the application to make any labeling change
that the Commissioner determines to be appropriate; and
``(D) if the sponsor of the application, within 30 days
after receiving a request under subparagraph (C), does not
agree to make a labeling change requested by the
Commissioner, the Commissioner may deem the drug that is the
subject of the application to be misbranded.''.

SEC. 6. OFFICE OF PEDIATRIC THERAPEUTICS.

(a) Establishment.--The Secretary of Health and Human
Services shall establish an Office of Pediatric Therapeutics
within the Office of the Commissioner of Food and Drugs.
(b) Duties.--The Office of Pediatric Therapeutics shall be
responsible for oversight and coordination of all activities
of the Food and Drug Administration that may have any effect
on a pediatric population or the practice of pediatrics or
may in any other way involve pediatric issues.
(c) Staff.--The staff of the Office of Pediatric
Therapeutics shall include--
(1) employees of the Department of Health and Human
Services who, as of the date of enactment of this Act,
exercise responsibilities relating to pediatric therapeutics;

[[Page H8096]]

(2) 1 or more additional individuals with expertise
concerning ethical issues presented by the conduct of
clinical research in the pediatric population; and
(3) 1 or more additional individuals with expertise in
pediatrics who shall consult and collaborate with all
components of the Food and Drug Administration concerning
activities described in subsection (b).

SEC. 7. NEONATES.

Section 505A of the Federal Food, Drug, and Cosmetic Act
(21 U.S.C. 355a) is amended in subsection (f) (as
redesignated by section 2(a)(2) of this Act) by inserting
``(including neonates in appropriate cases)'' after
``pediatric age groups''.

SEC. 8. SUNSET.

Section 505A of the Federal Food, Drug, and Cosmetic Act
(21 U.S.C. 355a) is amended by striking subsection (i) (as
redesignated by section 2(a)(2) of this Act) and inserting
the following:
``(i) Sunset.--A drug may not receive any 6-month period
under subsection (a) or (b) unless--
``(1) on or before October 1, 2007, the Secretary makes a
written request for pediatric studies of the drug;
``(2) on or before October 1, 2007, an approvable
application for the drug is submitted under section
505(b)(1); and
``(3) all requirements of this section are met.''.

SEC. 9. DISSEMINATION OF PEDIATRIC INFORMATION.

Section 505A of the Federal Food, Drug, and Cosmetic Act,
as amended by section 5(b)(2) of this Act, is amended by
adding at the end the following:
``(l) Dissemination of Pediatric Information.--
``(1) In general.--Not later than 180 days after the date
of submission of a report on a pediatric study under this
section, the Commissioner shall make available to the public
a summary of the medical and clinical pharmacology reviews of
pediatric studies conducted for the supplement, including by
publication in the Federal Register.
``(2) Effect of subsection.--Nothing in this subsection
alters or amends in any way section 552 of title 5 or section
1905 of title 18, United States Code.''.

SEC. 10. CLARIFICATION OF INTERACTION OF MARKET EXCLUSIVITY
UNDER SECTION 505A OF THE FEDERAL FOOD, DRUG,
AND COSMETIC ACT AND MARKET EXCLUSIVITY AWARDED
TO AN APPLICANT FOR APPROVAL OF A DRUG UNDER
SECTION 505(J) OF THAT ACT.

Section 505A of the Federal Food, Drug, and Cosmetic Act,
as amended by section 9 of this Act, is amended by adding at
the end the following:
``(m) Clarification of Interaction of Market Exclusivity
Under This Section and Market Exclusivity Awarded to an
Applicant for Approval of a Drug Under Section 505(j).--
``(1) In general.--If a 180-day period under section
505(j)(5)(B)(iv) overlaps with a 6-month extension under this
section, so that the applicant for approval of a drug under
section 505(j) entitled to the 180-day period under that
section loses a portion of the 180-day period to which the
applicant is entitled for the drug, the 180-day period shall
be extended--
``(A) if the 180-day period would, but for this subsection,
expire after the 6-month extension, by the number of days of
the overlap; or
``(B) if the 180-day period would, but for this subsection,
expire during the 6-month extension, by 6 months.
``(2) Effect of subsection.--Under no circumstances shall
application of this section result in an applicant for
approval of a drug under section 505(j) being enabled to
commercially market the drug to the exclusion of a subsequent
applicant for approval of a drug under section 505(j) for
more than 180 days.''.

SEC. 11. PROMPT APPROVAL OF GENERIC DRUGS WHEN PEDIATRIC
INFORMATION ADDED TO LABELING.

(a) In General.--Section 505A of the Federal Food, Drug,
and Cosmetic Act, as amended by section 10 of this Act, is
amended by adding at the end the following subsection:
``(n) Prompt Approval of Generic Drugs When Pediatric
Information Added to Labeling.--
``(1) In general.--A drug for which an application has been
submitted or approved under section 505(j) and which
otherwise meets all other applicable requirements under that
section shall be considered eligible for approval and shall
not be considered misbranded under section 502 even when its
labeling omits a pediatric indication or other aspect of
labeling pertaining to pediatric use that is protected by
patent or by market exclusivity pursuant to clause (iii) or
(iv) of section 505(j)(5)(D).
``(2) Labeling of generic drug.--Notwithstanding the
provisions of clause (iii) or (iv) of section 505(j)(5)(D),
the Secretary may require that the labeling of a drug
approved under section 505(j) that omits pediatric labeling
pursuant to paragraph (1) include--
``(A) a statement that the drug is not labeled for the
protected pediatric use; and
``(B) any warnings against unsafe pediatric use that the
Secretary considers necessary.
``(3) Rule of construction.--Paragraphs 1 and 2 of this
subsection do not affect--
``(A) the availability or scope of exclusivity under this
section;
``(B) the availability or scope of exclusivity under
section 505 for pediatric formulations; or
``(C) except as expressly provided in paragraph (1) and
(2), the operation of section 505.''.
(b) Effective Date.--The amendments made by subsection (a)
take effect on the date of the enactment of this Act,
including with respect to applications under section 505(j)
of the Federal Food, Drug, and Cosmetic Act that are approved
or pending on that date.

SEC. 12. ADVERSE-EVENT REPORTING.

(a) Toll-Free Number in Labeling.--Not later than one year
after the date of the enactment of this Act, the Secretary of
Health and Human Services shall promulgate a final rule
requiring that the labeling of each drug for which an
application is approved under section 505 of the Federal
Food, Drug, and Cosmetic Act (regardless of the date on which
approved) include the toll-free number maintained by the
Secretary for the purpose of receiving reports of adverse
events regarding drugs. With respect to the final rule:
(1) The rule shall provide for the implementation of such
labeling requirement in a manner that the Secretary considers
to be most likely to reach the broadest consumer audience.
(2) In promulgating the rule, the Secretary shall seek to
minimize the cost of the rule on the pharmacy profession.
(3) The rule shall take effect not later than 60 days after
the date on which the rule is promulgated.
(b) Drugs With Pediatric Market Exclusivity.--
(1) In general.--During the one-year beginning on the date
on which a drug receives a period of market exclusivity under
505A of the Federal Food, Drug, and Cosmetic Act, any report
of an adverse event regarding the drug that the Secretary of
Health and Human Services receives shall be referred to the
Office of Pediatric Therapeutics established under section 6
of this Act. In considering the report, the Director of such
Office shall provide for the review of the report by the
Pediatric Advisory Subcommittee of the Anti-Infective Drugs
Advisory Committee, including obtaining any recommendations
of such Subcommittee regarding whether the Secretary should
take action under the Federal Food, Drug, and Cosmetic Act in
response to the report.
(2) Rule of construction.--Paragraph (1) may not be
construed as restricting the authority of the Secretary of
Health and Human Services to continue carrying out the
activities described in such paragraph regarding a drug after
the one-year period described in such paragraph regarding the
drug has expired.

SEC. 13. FOUNDATION FOR PEDIATRIC RESEARCH.

Title IV of the Public Health Service Act (42 U.S.C. 281 et
seq.) is amended by adding at the end the following part:

``PART J--FOUNDATION FOR PEDIATRIC RESEARCH

``SEC. 499A. ESTABLISHMENT AND DUTIES OF FOUNDATION.

``(a) In General.--The Secretary, acting through the
Director of NIH and in consultation with the Commissioner of
Food and Drugs, shall establish a nonprofit corporation to be
known as the Foundation for Pediatric Research (hereafter in
this section referred to as the `Foundation'). The Foundation
shall not be an agency or instrumentality of the United
States Government.
``(b) Purpose of Foundation.--The purpose of the Foundation
shall be to collect funds and award grants for research on
drugs listed by the Secretary pursuant to section
409I(a)(1)(A).
``(c) Certain Activities of Foundation.--
``(1) In general.--In carrying out subsection (b), the
Foundation may solicit and accept gifts, grants, and other
donations, establish accounts, and invest and expend funds in
support of a program to encourage donations for the conduct
of studies of drugs referred to in subsection (b).
``(2) Fees.--The Foundation may assess fees for the
provision of professional, administrative and management
services by the Foundation in amounts determined reasonable
and appropriate by the Executive Director.
``(3) Authority of foundation.--The Foundation shall be the
sole entity responsible for carrying out the activities
described in this subsection.
``(d) Board of Directors.--
``(1) Composition.--
``(A) The Foundation shall have a Board of Directors
(hereafter referred to in this section as the `Board'), which
shall be composed of ex officio and appointed members in
accordance with this subsection. Appointed members of the
Board shall be the voting members.
``(B) The ex officio members of the Board shall be--
``(i) the Chairman and ranking minority member of the
Subcommittee on Health (Committee on Energy and Commerce) or
their designees, in the case of the House of Representatives;
``(ii) the Chairman and ranking minority member of the
Committee on Health, Education, Labor and Pensions or their
designees, in the case of the Senate;
``(iii) the Director of NIH; and
``(iv) the Commissioner of Food and Drugs.
``(C) The ex officio members of the Board under
subparagraph (B) shall appoint to the Board 11 individuals
from among a list of candidates to be provided by the
National Academy of Science. Of such appointed members--
``(i) 5 shall be representative of the experts in pediatric
medicine and research field;
``(ii) 1 shall be a biomedical ethicist; and
``(iii) 5 shall be representatives of the general public,
which may include representatives of affected industries.
``(D)(i) Not later than 30 days after the date of the
enactment of the Best Pharmaceuticals for Children Act, the
Director of NIH shall convene a meeting of the ex officio
members of the Board to--
``(I) incorporate the Foundation and establish the general
policies of the Foundation for carrying out the purposes of
subsection (b), including the establishment of the bylaws of
the Foundation; and

[[Page H8097]]

``(II) appoint the members of the Board in accordance with
subparagraph (C).
``(ii) Upon the appointment of the members of the Board
under clause (i)(II), the terms of service of the ex officio
members of the Board as members of the Board shall terminate.
``(E) The agreement of not less than three-fifths of the
members of the ex officio members of the Board shall be
required for the appointment of each member to the initial
Board.
``(F) No employee of the National Institutes of Health
shall be appointed as a member of the Board.
``(2) Chair.--
``(A) The ex officio members of the Board under paragraph
(1)(B) shall designate an individual to serve as the initial
Chair of the Board.
``(B) Upon the termination of the term of service of the
initial Chair of the Board, the appointed members of the
Board shall elect a member of the Board to serve as the Chair
of the Board.
``(3) Terms and vacancies.--
``(A) The term of office of each member of the Board
appointed under paragraph (1)(C) shall be 5 years, except
that the terms of offices for the initial appointed members
of the Board shall expire as determined by the ex officio
members and the Chair.
``(B) Any vacancy in the membership of the Board shall be
filled in the manner in which the original position was made
and shall not affect the power of the remaining members to
execute the duties of the Board.
``(C) If a member of the Board does not serve the full term
applicable under subparagraph (A), the individual appointed
to fill the resulting vacancy shall be appointed for the
remainder of the term of the predecessor of the individual.
``(D) A member of the Board may continue to serve after the
expiration of the term of the member until a successor is
appointed.
``(4) Compensation.--Members of the Board may not receive
compensation for service on the Board. Such members may be
reimbursed for travel, subsistence, and other necessary
expenses incurred in carrying out the duties of the Board, as
set forth in the bylaws issued by the Board.
``(5) Meetings and quorum.--A majority of the members of
the Board shall constitute a quorum for purposes of
conducting the business of the Board.
``(6) Certain bylaws.--
``(A) In establishing bylaws under this subsection, the
Board shall ensure that the following are provided for:
``(i) Policies for the selection of the officers,
employees, and agents of the Foundation.
``(ii) Policies, including ethical standards, for the
acceptance, solicitation, and disposition of donations and
grants to the Foundation and for the disposition of the
assets of the Foundation. Policies with respect to ethical
standards shall ensure that officers, employees and agents of
the Foundation (including members of the Board) avoid
encumbrances that would result in a conflict of interest,
including a financial conflict of interest or a divided
allegiance. Such policies shall include requirements for the
provision of information concerning any ownership or
controlling interest in entities related to the activities of
the Foundation by such officers, employees and agents and
their spouses and relatives.
``(iii) Policies for the conduct of the general operations
of the Foundation.
``(B) In establishing bylaws under this subsection, the
Board shall ensure that such bylaws (and activities carried
out under the bylaws) do not--
``(i) reflect unfavorably upon the ability of the
Foundation to carry out its responsibilities or official
duties in a fair and objective manner; or
``(ii) compromise, or appear to compromise, the integrity
of any governmental agency or program, or any officer or
employee involved in such program.
``(e) Incorporation.--The initial members of the Board
shall serve as incorporators and shall take whatever actions
necessary to incorporate the Foundation.
``(f) Nonprofit Status.--The Foundation shall be considered
to be a corporation under section 501(c) of the Internal
Revenue Code of 1986, and shall be subject to the provisions
of such section.
``(g) Executive Director.--
``(1) In general.--The Foundation shall have an Executive
Director who shall be appointed by the Board and shall serve
at the pleasure of the Board. The Executive Director shall be
responsible for the day-to-day operations of the Foundation
and shall have such specific duties and responsibilities as
the Board shall prescribe.
``(2) Compensation.--The rate of compensation of the
Executive Director shall be fixed by the Board.
``(h) Powers.--In carrying out subsection (b), the
Foundation shall operate under the direction of its Board,
and may--
``(1) adopt, alter, and use a corporate seal, which shall
be judicially noticed;
``(2) provide for 1 or more officers, employees, and
agents, as may be necessary, define their duties, and require
surety bonds or make other provisions against losses
occasioned by acts of such persons;
``(3) hire, promote, compensate, and discharge officers and
employees of the Foundation, and define the duties of the
officers and employees;
``(4) with the consent of any executive department or
independent agency, use the information, services, staff, and
facilities of such in carrying out this section;
``(5) sue and be sued in its corporate name, and complain
and defend in courts of competent jurisdiction;
``(6) modify or consent to the modification of any contract
or agreement to which it is a party or in which it has an
interest under this part;
``(7) establish a process for the selection of candidates
for positions under subsection (c);
``(8) solicit, accept, hold, administer, invest, and spend
any gift, devise, or bequest of real or personal property
made to the Foundation;
``(9) enter into such other contracts, leases, cooperative
agreements, and other transactions as the Executive Director
considers appropriate to conduct the activities of the
Foundation; and
``(10) exercise other powers as set forth in this section,
and such other incidental powers as are necessary to carry
out its powers, duties, and functions in accordance with this
part.
``(i) Administrative Control.--No participant in the
program established under this part shall exercise any
administrative control over any Federal employee, nor shall
the Foundation attempt to influence an executive branch
agency or employee.
``(j) General Provisions.--
``(1) Foundation integrity.--The members of the Board shall
be accountable for the integrity of the operations of the
Foundation and shall ensure such integrity through the
development and enforcement of criteria and procedures
relating to standards of conduct (including those developed
under subsection (d)(6)(A)(ii), financial disclosure
statements, conflict of interest rules, recusal and waiver
rules, audits and other matter determined appropriate by the
Board.
``(2) Financial conflicts of interest.--Any individual who
is an officer, employee, or member of the Board of the
Foundation may not (in accordance with policies and
requirements developed under subsection (d)(6)(A)(ii)
personally or substantially participate in the consideration
or determination by the Foundation of any matter that would
directly or predictably affect any financial interest of the
individual or a relative (as such term is defined in section
109(16) of the Ethics in Government Act of 1978) of the
individual, of any business organization or other entity, or
of which the individual is an officer or employee, or is
negotiating for employment, or in which the individual has
any other financial interest.
``(3) Audits; availability of records.--The Foundation
shall--
``(A) provide for annual audits of the financial condition
of the Foundation; and
``(B) make such audits, and all other records, documents,
and other papers of the Foundation, available to the
Secretary and the Comptroller General of the United States
for examination or audit.
``(4) Reports.--
``(A) Not later than 5 months following the end of each
fiscal year, the Foundation shall publish a report describing
the activities of the Foundation during the preceding fiscal
year. Each such report shall include for the fiscal year
involved a comprehensive statement of the operations,
activities, financial condition, and accomplishments of the
Foundation.
``(B) With respect to the financial condition of the
Foundation, each report under subparagraph (A) shall include
the source, and a description of, all gifts or grants to the
Foundation of real or personal property, and the source and
amount of all gifts or grants to the Foundation of money.
Each such report shall include a specification of any
restrictions on the purposes for which gifts or grants to the
Foundation may be used.
``(C) The Foundation shall make copies of each report
submitted under subparagraph (A) available for public
inspection, and shall upon request provide a copy of the
report to any individual for a charge not exceeding the cost
of providing the copy.
``(D) The Board shall annually hold a public meeting to
summarize the activities of the Foundation and distribute
written reports concerning such activities and the scientific
results derived from such activities.
``(5) Service of federal employees.--Federal employees may
serve on committees advisory to the Foundation and otherwise
cooperate with and assist the Foundation in carrying out its
function, so long as the employees do not direct or control
Foundation activities.
``(6) Relationship with existing entities.--The Foundation
may, pursuant to appropriate agreements, acquire the
resources of existing nonprofit private corporations with
missions similar to the purposes of the Foundation.
``(7) Intellectual property rights.--The Board may adopt
written standards with respect to the ownership of any
intellectual property rights derived from the collaborative
efforts of the Foundation prior to the commencement of such
efforts.
``(8) National institutes of health amendments of 1990.--
The activities conducted in support of the National
Institutes of Health Amendments of 1990 (Public Law 101-613),
and the amendments made by such Act, shall not be nullified
by the enactment of this section.
``(9) Limitation of activities.--The Foundation shall exist
solely as an entity to collect funds and award grants for
research on drugs listed by the Secretary pursuant to section
409I(a)(1)(A).
``(10) Transfer of funds.--The Foundation may transfer
funds to the National Institutes of Health. Any funds
transferred under this paragraph shall be subject to all
Federal limitations relating to federally-funded research.
``(k) Duties of the Director.--
``(1) Applicability of certain standards to non-federal
employees.--In the case of any individual who is not an
employee of the Federal Government and who serves in
association with the National Institutes of Health, with
respect to financial assistance received from the Foundation,
the Foundation may not provide the assistance of, or
otherwise permit the work at the National Institutes of
Health to begin until a memorandum of understanding between
the individual and the Director of NIH, or the designee of
such Director, has been executed specifying that the
individual shall be subject to

[[Page H8098]]

such ethical and procedural standards of conduct relating to
duties performed at the National Institutes of Health, as the
Director of NIH determines is appropriate.
``(2) Support services.--The Director of NIH shall provide
facilities, utilities and support services to the Foundation.
``(l) Reports of Studies; Labeling Changes.--
``(1) In general.--Upon completion of a pediatric study
conducted pursuant to this section, a report concerning the
study shall be submitted to the Director of National
Institutes of Health and the Commissioner of Food and Drugs.
The report shall include all data generated in connection
with the study.
``(2) Availability of reports; action by food and drug
administration; labeling changes.--With respect to a report
submitted under paragraph (1), the provisions of paragraphs
(3)(B) through (8) of section 409I(c) apply to such report to
the same extent and in the same manner as such provision
apply to a report submitted under section 409I(c)(3)(A).
``(m) Funding.--
``(1) Authorization of appropriations.--For the purpose of
carrying out this part, there are authorized to be
appropriated such sums as may be necessary for fiscal year
2002 and each subsequent fiscal year.
``(2) Limitation regarding other funds.--Amounts
appropriated under any provision of law other than paragraph
(1) may not be expended to establish or operate the
Foundation.''.

SEC. 14. STUDY CONCERNING RESEARCH INVOLVING CHILDREN.

(a) Contract With Institute of Medicine.--The Secretary of
Health and Human Services shall enter into a contract with
the Institute of Medicine for--
(1) the conduct, in accordance with subsection (b), of a
review of--
(A) Federal regulations in effect on the date of the
enactment of this Act relating to research involving
children;
(B) federally-prepared or supported reports relating to
research involving children; and
(C) federally-supported evidence-based research involving
children; and
(2) the submission to the appropriate committees of
Congress, by not later than 2 years after the date of
enactment of this Act, of a report concerning the review
conducted under paragraph (1) that includes recommendations
on best practices relating to research involving children.
(b) Areas of Review.--In conducting the review under
subsection (a)(1), the Institute of Medicine shall consider
the following:
(1) The written and oral process of obtaining and defining
``assent'', ``permission'' and ``informed consent'' with
respect to child clinical research participants and the
parents, guardians, and the individuals who may serve as the
legally authorized representatives of such children (as
defined in subpart A of part 46 of title 45, Code of Federal
Regulations).
(2) The expectations and comprehension of child research
participants and the parents, guardians, or legally
authorized representatives of such children, for the direct
benefits and risks of the child's research involvement,
particularly in terms of research versus therapeutic
treatment.
(3) The definition of ``minimal risk'' with respect to a
healthy child or a child with an illness.
(4) The appropriateness of the regulations applicable to
children of differing ages and maturity levels, including
regulations relating to legal status.
(5) Whether payment (financial or otherwise) may be
provided to a child or his or her parent, guardian, or
legally authorized representative for the participation of
the child in research, and if so, the amount and type of
payment that may be made.
(6) Compliance with the regulations referred to in
subsection (a)(1)(A), the monitoring of such compliance
(including the role of institutional review boards), and the
enforcement actions taken for violations of such regulations.
(7) The unique roles and responsibilities of institutional
review boards in reviewing research involving children,
including composition of membership on institutional review
boards.
(c) Requirements of Expertise.--The Institute of Medicine
shall conduct the review under subsection (a)(1) and make
recommendations under subsection (a)(2) in conjunction with
experts in pediatric medicine, pediatric research, and the
ethical conduct of research involving children.

SEC. 15. STUDY ON EFFECTS OF THIS ACT.

Not later than October 1, 2006, the Comptroller General of
the United States shall submit to the Congress and the
Secretary of Health and Human Services a report that
describes the following:
(1) The effectiveness of the amendments made by this Act in
ensuring that all drugs used by children are tested and
properly labeled, including--
(A) the number and importance for children of drugs that
are being tested as a result of such amendments, and the
importance for children, health care providers, parents, and
others of labeling changes made as a result of such testing;
(B) the number and importance for children of drugs that
are not being tested for their use notwithstanding the
amendments, and possible reason for this; and
(C) the number of drugs for which pediatric testing has
been done, for which a period of market exclusivity has been
granted, and for which labeling changes required the use of
the dispute resolution process established pursuant to the
amendments, together with a description of the outcomes of
such process, including a description of the disputes and the
recommendations of the advisory committee.
(2) The economic impact of the amendments made by this Act,
including an estimate of--
(A) costs to taxpayers in the form of higher expenditures
by Medicaid and other government programs;
(B) costs to consumers as a result of any delay in the
availability of lower cost generic equivalents of drugs
tested and granted exclusivity pursuant to such amendments,
and loss of revenue by the generic drug industry and any
other affected industry as a result of any such delay; and
(C) benefits to the government, to private insurers, and to
consumers resulting from decreased health care costs,
including--
(i) decreased hospitalizations, due to more appropriate and
more effective use of medications in children as a result of
testing and re-labeling because of such amendments;
(ii) direct and indirect benefits associated with fewer
physician visits not related to hospitalization;
(iii) benefits to children from missing less time at school
and being less affected by chronic illnesses, thereby
allowing a better quality of life;
(iv) benefits to consumers from lower health insurance
premiums due to lower treatment costs and hospitalization
rates; and
(v) benefits to employers from reduced need for employees
to care for family members.
(3) The nature and types of studies in children of drugs
granted a period of market exclusivity pursuant to the
amendments made by this Act, including a description of the
complexity of such studies, the number of study sites
necessary to obtain appropriate data, and the numbers of
children involved in any clinical studies, and the cost of
such studies for each type of study identified.
(4) The increased pediatric research capability, both
private and government-funded, associated with the amendments
made by this Act.

SEC. 16. MINORITY CHILDREN AND PEDIATRIC-EXCLUSIVITY PROGRAM.

(a) Protocols for Pediatric Studies.--Section 505A of the
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355a) is
amended in subsection (c)(2) (as redesignated by section
2(a)(2) of this Act) by inserting after the first sentence
the following: ``In reaching an agreement regarding written
protocols, the Secretary shall take into account adequate
representation of children of ethnic and racial
minorities.''.
(b) Study by General Accounting Office.--
(1) In general.--The Comptroller General of the United
States shall conduct a study for the purpose of determining
the following:
(A) The extent to which children of ethnic and racial
minorities are adequately represented in studies under
section 505A of the Federal Food, Drug, and Cosmetic Act; and
to the extent ethnic and racial minorities are not adequately
represented, the reasons for such under representation and
recommendations to increase such representation.
(B) Whether the Food and Drug Administration has
appropriate management systems to monitor the representation
of the children of ethnic and racial minorities in such
studies.
(C) Whether drugs used to address diseases that
disproportionately affect racial and ethnic minorities are
being studied for their safety and effectiveness under
section 505A of the Federal Food, Drug, and Cosmetic Act.
(2) Date certain for completing study.--Not later than
January 10, 2003, the Comptroller General shall complete the
study required in paragraph (1) and submit to the Congress a
report describing the findings of the study.

SEC. 17. TECHNICAL AND CONFORMING AMENDMENTS.

Section 505A of the Federal Food, Drug, and Cosmetic Act
(21 U.S.C. 355a) is amended--
(1)(A) by striking ``(j)(4)(D)(ii)'' each place such term
appears and inserting ``(j)(5)(D)(ii)''; and
(B) by striking ``(j)(4)(D)'' each place such term appears
and inserting ``(j)(5)(D)''; and
(2)(A) in subsection (c) (as redesignated by section
2(a)(2) of this Act), in each of paragraphs (1) through (3),
by striking ``subsection (a) or (c)'' and inserting
``subsection (a) or (b)''; and
(B) in subsection (d) (as so redesignated), in the last
sentence, by striking ``subsection (a) or (c)'' and inserting
``subsection (a) or (b)''.

The SPEAKER pro tempore (Mr. Otter). Pursuant to the rule, the
gentleman from Louisiana (Mr. Tauzin) and the gentleman from Ohio (Mr.
Brown) each will control 20 minutes.
The Chair recognizes the gentleman from Louisiana (Mr. Tauzin).

General Leave

Mr. TAUZIN. Mr. Speaker, I ask unanimous consent that all Members may
have 5 legislative days within which to revise and extend their remarks
and insert extraneous material on H.R. 2887, the bill under
consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Louisiana?
There was no objection.
Mr. TAUZIN. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise today in strong support of the Greenwood-Eshoo
Best Pharmaceuticals for Children Act, and I urge swift passage of this
bipartisan bill.
For years, drugs used in children were not tested for children. To
address this situation, the gentleman from Pennsylvania (Mr. Greenwood)
and the gentleman from California (Mr. Waxman) worked together in 1997
to provide manufacturers with an incentive to

[[Page H8099]]

test these drugs in children. The incentive adopted then was an
additional 6 months of exclusivity to be added to existing exclusivity
or patent protection for testing drugs at the request of the FDA.
No one denies that this incentive has worked. According to the FDA,
the pediatric exclusivity provision has done more to generate clinical
studies and useful prescribing information for the pediatric population
of our country than any regulatory or legislative process to date. Put
another way, this bill, this act, has done more to test drugs for
children in America than any other legislative initiative in the
history of this Congress.
According to the American Academy of Pediatrics, the incentive has
advanced therapeutics for infants, children, and adolescents in ways
that were not possible in the several decades prior to the passage of
the law.
Every children's group in America supports this reauthorization.
Without this reauthorization, the law expires. Every children's group
is urging us to adopt this bill and to reauthorize this good law. That
is why the Committee on Energy and Commerce reported the bill by a
strong 41 to six bipartisan vote.
In fact, at the Committee on Energy and Commerce we have the support
of Members, such as the gentleman from Michigan (Mr. Stupak), the
gentleman from Texas (Mr. Green), the gentlewoman from Colorado (Ms.
DeGette), the gentleman from Maryland (Mr. Wynn), the gentleman from
New York (Mr. Engel), the gentleman from Illinois (Mr. Rush); and the
list goes on.
While some may object to this bill today, this is a matter that was
so bipartisan that it has already passed the Senate with unanimous
consent.
A handful of Members oppose this reauthorization by saying that
pediatric exclusivity has provided a windfall to the industry that has
increased costs to consumers. Here are the facts: while some companies
have benefited financially for testing their drugs in children, the GAO
notes that while there has been some concern that exclusivity may be
sought and granted primarily for drugs that generate substantial
revenue, most of the drugs studied are not the top sellers.
In fact, 20 of the 37 drugs which have been granted exclusivity for
performing these tests in children, at the request of the FDA, 20 of
the 37 drugs fall outside the top 200 in terms of drug sale revenue.
Further, the FDA estimates that the cost of this provision adds about
one-half of one percent to the Nation's pharmaceutical bill; but
according to Tufts University, it saves us $7 billion in medical costs
because we now know what levels to prescribe drugs for children and
what children can take what drugs and which children cannot, depending
on the weight and age and many other factors.
Another argument against the bill is that it costs too much. Frankly,
I, too, was surprised by the CBO score on this bill. While the CBO
estimates that the bill will result in direct savings and revenue
increases over the next 5 years, they also estimate that it will result
in increased discretionary spending over this period.
The flaw in the CBO score is that they assume that the new public
fund for the study of generic drugs will study 165 drugs over the next
5 years. That is simply unrealistic. The American Academy of Pediatrics
has told our committee that only 30 to 50 generic drugs will need to be
studied under this program, not the 165 that was identified by the CBO;
and assuming that the experts in pediatric medicine are correct, rather
than CBO, this reduces the score by more than $400 million.
The American Academy of Pediatrics, the Coalition for Children'S
Health, the National Association of Children's Hospitals, and the
Elizabeth Glaser Pediatric AIDS Foundation are all telling us to please
pass the Greenwood-Eshoo legislation now. If the program is not
reauthorized this year, it expires. So I urge my colleagues, please
pass this legislation.
I commend the gentlewoman from California (Ms. Eshoo) for her
diligent work on this and the gentleman from Pennsylvania (Mr.
Greenwood) for their leadership in getting this legislation to the
floor.
Mr. Speaker, I reserve the balance of my time.
Mr. BROWN of Ohio. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, I know of no Member of Congress who opposes testing
drugs for use in children. I know of no Member of Congress who believes
it is okay that drug safety and efficacy and dosage information is
available for adults but not for children.
The question is, how much must Americans pay the drug industry to
secure this kind of testing? By keeping lower-priced generics off the
market, the 6-month exclusivity provisions cost the Federal Government,
employer-sponsored health plans, seniors, all of us, literally
billions, billions of dollars in inflated drug prices.
The Federal Government instead could pay the companies two, three,
four, even five times the cost of doing these tests. It would still
cost less than 6 months of exclusivity, but that would be direct
government spending and we cannot have that.
The drug industry and my friends in the majority have made it very
clear, if the Nation wants prescription drugs to be tested for use in
children, we have to help the drug industry choke off its competition.
The most profitable industry in the world has convinced us it deserves
another multi-billion dollar windfall for conducting $4 million tests.
I thought committee deliberations on this legislation might produce
some legitimate argument, but no such luck. The line of reasoning
behind this bill goes something like this: 6-month exclusivity works,
they tell us. So would handing the drug industry a blank check and
asking them to rob us blind. Does that make it a good idea?
Typically policy-makers weigh both the benefits and the costs when
formulating public policy. Why are we only weighing the benefits here?
They tell us pediatric exclusivity is the most successful program in
our history when it comes to increasing the number of pediatric tests.
It is also the only program attempted that offers any economic
incentive for pediatric testing. Attempts in the past relied on subtle
persuasion, not any kind of economic incentives.
Third, they tell us the carrot works better than the stick. Yes, but
how big does the carrot need to be? Do drug companies need to earn a
600 percent to 1,500 percent return on their investment or they will
refuse to make sure that their drugs are safe for kids?
They assert that pediatric exclusivity uses marketplace incentives,
it is a free market solution. Pediatric exclusivity is not a free
market solution. It does not use marketplace incentives. In free
markets, competition and demand drive behavior. Monopolies, as this
extends, are anathema to free markets.
They tell us that FDA says pediatric exclusivity represents about
only a half of 1 percent of the Nation's pharmaceutical bill. If the
added costs of pediatric exclusivity were spread evenly over all drug
purchases, then the impact would be minimal.
The lost savings, however, are not spread over every purchase. They
are imposed only on the consumers who use Prilosec or Vasotec or one of
the drugs eligible for exclusivity.
So a constituent calls one of us and says the price of a prescription
suddenly doubled, I would make her feel better by saying that increase
represents only one half of 1 percent of all prescription drug prices?
I do not think so.
They tell us when we factor in lower children's health care costs,
pediatric exclusivity actually saves money. I wonder if the authors of
this research actually factored in the higher health care costs that
accrue when seniors, who cannot afford the inflated drug prices
associated with 6-month exclusivity, when they remain ill, or when
children who may remain ill, whose parents cannot afford inflated drug
prices.
Why do I oppose this legislation? It is costing my constituents too
much. It is costing employer-sponsored health care plans too much. It
costs the State and Federal Government too much.
Generic competition, remember, typically cuts a drug's price in half
initially; and over time, the price difference grows so that consumers
are paying 80 percent, even 90 percent, less for a generic drug that
this bill wants to keep off the market. For drugs like

[[Page H8100]]

Prilosec, Prozac, and Zocor, exclusivity adds $70 to each prescription,
and the manufacturer of these drugs will take home an additional, as
committee testimony proved, an additional $500 million to $1.6 billion
for drug tests that cost about $4 million each. That is why many of us
on this side are opposed to this legislation.
I am opposed to considering this bill as a suspension, not only
because this Congress should have the opportunity to consider
alternatives, but because the gentleman from Michigan (Mr. Stupak)
should have the opportunity to amend the labeling provisions in this
bill. Drug companies are rewarded with more market exclusivity before
the labels on the drugs are changed to reflect the pediatric
information.
Consumers are paying a huge bill, for which they receive a vague
promise that labels will change eventually to reflect new information.
That makes no sense.
For the sake of children, for seniors, for every consumer, the
gentleman from Michigan (Mr. Stupak) wants to improve this bill. We
should revisit this bill.
I urge a ``no'' vote with the best interests of children, their
families, consumers, taxpayers, all of us. That means voting no.
Mr. Speaker, I reserve the balance of my time.
Mr. TAUZIN. Mr. Speaker, I am pleased to yield 4 minutes to the
gentlewoman from California (Ms. Eshoo), the co-sponsor of this
important legislation.
Ms. ESHOO. Mr. Speaker, I thank the distinguished chairman of our
committee for his leadership on this, and I am proud to be the
Democratic sponsor with the gentleman from Pennsylvania (Mr. Greenwood)
of the Best Pharmaceuticals for Children Act.
This legislation extents the pediatric exclusivity provision, which
is one of the most successful programs created by Congress to inspire
medical therapeutic advances for children. Prior to its enactment, 80
percent of all medications had never been tested for use by children,
even though most were widely used by pediatricians to treat them. Many
of these drugs carry disclaimers stating that they were not approved
for children, and pediatricians were literally cutting pills in half
and thirds and in quarters, guessing, and essentially experimenting on
children as they used anecdotal information or guesswork to use the
medications for them. Obviously, this was not acceptable for our
Nation's children.
In 1997, the Congress passed a pediatric exclusivity provision as
part of the FDA Modernization Act, which I sponsored with the gentleman
from Texas (Mr. Barton) at the time. This provision has made a dramatic
change in the way pediatricians are practicing and administering
medicine to children.
Now they have the necessary dosage guidance on drug labels to
administer drugs safely to children, but there are many more drugs that
can and should be used in the pediatric population. This bill ensures
that those drugs will also be studied and that information on safe use
will be provided to pediatricians.
Because previous attempts for drug studies for children had actually
failed, this provision was given a 4-year life span. It expires in
January of 2002. That is why we are here today.
The incentive that was granted to drug companies to study drugs for
children was to give them 6 months of additional market exclusivity.
Some of my colleagues on my side of the aisle do not think that that is
right. Actually, the proof is in the pudding because it has worked.
Since the law has been in place, the FDA has received close to 250
proposed pediatric study requests from pharmaceutical companies and has
issued nearly 200 requests to conduct over 400 pediatric studies. If
this were a business, we would have to say it was good because this
never happened before. Yes, there is a carrot that has been taken a
bite out of. I think that some of my colleagues do not think that this
is good enough.
By comparison, in the 7 years prior to enactment of this provision,
only 11 studies were completed. The FDA has granted market exclusivity
extensions for 33 products; 20 of them include new labeling information
for pediatrics and parents. So I think that better informed decisions
are being made and children are being taken better care of.
During our committee deliberations, a number of proposals by my
colleagues, the gentleman from New Jersey (Mr. Pallone), who is here,
and the gentlewoman from Colorado (Ms. DeGette) were adopted and are
part of the underlying bill.
The bill before us also makes some significant improvements,
improvements that we thought needed to be made over what we have
learned over the last 4 years by creating an off-patent drug fund
within NIH and setting up a public-private foundation to support the
research necessary for these important drugs.
The bill also addresses some concerns that were raised by both the
FDA and the GAO with regard to labeling. The bill enhances the labeling
process and provides the FDA commissioner the authority to misbrand a
drug if drug companies actually drag their heels and do not do what we
are looking for.
Twenty-eight national children's health advocacy groups support this
bill's passage. Among them are the American Academy of Pediatrics, the
March of Dimes, and the National Association of Children's Hospitals.
This bill deserves to be passed overwhelmingly by the House of
Representatives. We should follow in the other body's footsteps, which
passed this, by the way, on a unanimous consent.
So I thank the gentleman from Louisiana (Mr. Tauzin) and the
gentleman from Pennsylvania (Mr. Greenwood) for their leadership. It
has been a pleasure working with my colleagues.

{time} 1945

Mr. BROWN of Ohio. Mr. Speaker, I yield 4\1/2\ minutes to the
gentleman from Michigan (Mr. Stupak) who has worked hard on making this
bill fairer for consumers and fairer for children and fairer for
consumers of prescription drugs.
Mr. STUPAK. Mr. Speaker, I rise tonight to urge Members to vote
against H.R. 2887, the Pediatric Exclusivity Act, as it is on the
suspension calendar with controversial provisions.
First approved in 1997, pediatric exclusivity granted the drug
companies an extra 6 months extension on their patents if they would
provide a study to determine if the drug was beneficial to young
people. Upon completion of that study, the FDA grants a pediatric
exclusivity to the drug which the drug companies then used as a
marketing tool to promote and increase drug sales.
The grant of pediatric exclusivity only takes place upon completion
of a study without anyone knowing what the study says about the safety,
the effectiveness and dosage requirements for young people. There is no
requirement to change the labeling on the drug to reflect the changes
needed. There is no label to tell the doctors what is the proper
dosage, how to dispense and use the drug safely. Before we grant
pediatric exclusivity to a drug and it is then marketed as being FDA
approved for pediatric use, we should at least know what is the effect
of the drug on young people.
Under the current bill, after the study is completed, exclusivity is
granted, but whether the drug helps or hurts young people remains a
secret and is not disclosed to doctors, patients, or their families.
Physicians, patients, and their families should have a right to know
about the drug before they ingest it.
If Members take a look at this chart, Lodine was approved on December
6, 1999; it was 9 months later before we had a label change. What did
the label tell the doctors, an approximately two times lower dose than
has been recommended for adults. For 9 months they did not know to
lower the dosage.
Buspar is another drug that got pediatric exclusivity just for doing
a study. Safety and effectiveness were not established in patients. The
drug did not even work on young people.
Fluvoxamine, approved on January 3, 2000. On September 28, 2000, they
make a label change. What does it say? Girls 8 to 11 years of age may
require lower dosage. Why does it take 8 months for a doctor and a
family to know?
How about Propofol, granted August 11, 1999? Label change February
23, 2001, 18 months later. Serious bradycardia can result from it. It
is not indicated for pediatric ICU sedation, as safety has not been
established. Incidence of mortality, twice as great.

[[Page H8101]]

Mr. Speaker, we need to know that before this drug is put out on the
market and it is marketed by the drug companies as being FDA approved
for pediatric use. Why should it take 2 to 18 months, and an average of
9 months? Under the current bill, it can go as much as 11 months.
Pediatric exclusivity, the only time labeling is not required is when
we are dealing with pediatric exclusivity. Why should we endanger our
children?
I cannot offer an amendment, the amendment I offered in committee, I
cannot offer it because we are under the suspension calendar. I am
asking Members to reject this bill on the suspension calendar. Let us
make it better.
Even the FDA says the goal of pediatric exclusivity is labeling. We
need to put the label on so we have the information before the doctor
prescribes and before the consumer takes this drug. I cannot understand
why the majority would not want doctors, patients, and families to know
the effect a drug may have on their children.
What is the proper dosage? What is the effectiveness of the drug? And
is the drug safe for our children? Why do we have to wait an average of
9 months to find out after this drug is dispensed to our children
whether a drug is safe and did the child receive the proper dosage? We
need to know that before children take the drug, not 9 or 11 months
after.
Mr. Speaker, defeat this legislation on the suspension calendar so we
can offer an amendment to tell the drug companies no pediatric
exclusivity until a drug is properly labeled, before our children take
that drug. Defeat this bill on suspension. Bring it back to the floor
with the Stupak amendment to tie pediatric exclusivity to proper
labeling.
Mr. TAUZIN. Mr. Speaker, I yield myself 1 minute to respond to the
gentleman from Michigan.
First of all, the gentleman knows that he offered three amendments to
the committee, two of which were accepted; and the gentleman voted for
the bill in committee.
On the last part, I want to make it clear to the House that current
law section 502(n) and 301(z) in the regulations that interpret that
law prohibit the marketing of exclusivity until the pediatric
indication is on the label. That is the law today. What we do in this
bill is go further. We make it a priority review on the pediatric
indication, and we put a time certain after which it is misbranding if
the pediatric indication is not on the label.
The point I am making is that the problem the gentleman is concerned
about is already covered in the law as a violation. A pharmaceutical
company is prohibited under the law today to market a drug's
exclusivity without the pediatric indication being on the label. That
is, under current law, prohibited.
Mr. Speaker, I yield 3 minutes to the gentleman from Florida (Mr.
Bilirakis).
Mr. BILIRAKIS. Mr. Speaker, I thank the gentleman for yielding me
this time.
Mr. STUPAK. Mr. Speaker, will the gentleman yield?
Mr. BILIRAKIS. I yield to the gentleman from Michigan.
Mr. STUPAK. Mr. Speaker, it has been good working with the majority.
We cannot agree on this amendment. Even the FDA has asked for this
amendment. When they testified before our committee in January, they
said the weakness is labeling. ``The goal of pediatric exclusivity
should be labeling,'' that is a quote from the FDA.
Section 552 does not work in the real world; that is why we need this
amendment.
Mr. BILIRAKIS. Mr. Speaker, I rise in support of the bill. If it is
not broken, do not fix it. According to the FDA, ``The pediatric
exclusivity provision has been highly effective in generating pediatric
studies on many drugs and in providing useful new information and
product labeling''; that is a quote from them.
The American Academy of Pediatrics states that they ``cannot
overstate how important this legislation has been in advancing
children's therapeutics.'' The Greenwood-Eshoo legislation reauthorizes
this important program, which has worked, for an additional 6 years. It
keeps the present incentive in place and makes important improvements.
The legislation ensures that off-patent generic drugs are studied, and
tightens the time line for making labeling changes.
We heard from the gentleman from Michigan (Mr. Stupak) before. He
believes that this program does not do enough to ensure that
pediatricians get access to labeling information. We have worked
diligently to address these concerns. The gentleman from Michigan (Mr.
Stupak) I think would be the first one to agree. For 5 hours today,
staff has worked together on the bill. Agreement was reached. The
gentleman from Michigan (Mr. Stupak) was concerned, as we all are, that
in fact the providers are made aware of any problems that result or any
potential problems that result as a result of the testing.
We agreed that there would be language in the legislation that would
require the manufacturer to share a summary of the tests and whatnot
with all providers. That was agreed to by the gentleman from Michigan
(Mr. Stupak), or at least by his staff. I will put it that way. As I
understand it, there is a change of mind in that regard.
We agree that the providers should know. We have worked very
diligently to address that. Our bill does make pediatric, what we call
``priority supplements,'' which will speed up the process for getting
new labels. Second, by giving the Secretary authority to deem drugs
misbranded, we guarantee label changes will be made. We believe, and
children's groups agree, that the changes we make are the right
compromises to maintain the incentives and get labels changed.
Mr. Speaker, I would like to acknowledge the hard work of the
gentleman from Pennsylvania (Mr. Greenwood) and the gentlewoman from
California (Ms. Eshoo). Their bill enjoys strong bipartisan support.
The companion bill passed the Senate without opposition. This bill
favorably passed the Committee on Energy and Commerce by a 41-to-6
vote.
I thank the staff that worked so very long and hard on this
legislation, including John Ford and David Nelson with the minority;
Eric Olson with the office of the gentlewoman from California (Ms.
Eshoo); Brent Del Monte with the majority staff; Alan Eisenberg from
the office of the gentleman from Pennsylvania (Mr. Greenwood); and
finally, Mr. Steve Tilton, of my staff. I ask all Members to support
this legislation.
Mr. BROWN of Ohio. Mr. Speaker, I yield 4 minutes to the gentleman
from California (Mr. Waxman) the original author of the Waxman-Hatch
Act, who understands the importance of generic drugs and generic
competition.
Mr. WAXMAN. Mr. Speaker, before the Greenwood-Eshoo bill which is now
under consideration, there was a law called the Greenwood-Waxman bill.
It was passed in 1997. It was an attempt to get the pharmaceutical
companies to do studies on the dosage and the reactions of drugs for
children.
I supported that bill, as the original cosponsor, but I think it was
a mistake because we are overpaying for the work of the pharmaceutical
companies to test for children. The cost of exclusivity, which was the
price we said we would pay for them to do these tests, has exploded
beyond any relation to the cost of a drug company doing the pediatric
studies.
In the case of one heartburn drug, exclusivity provided between a
30,000 and a 60,000 percent return on the company's investment. The
trial was estimated to have cost between $2 and $4 million. The
exclusivity is estimated to be worth more than $1.2 billion. In turn,
this windfall contributes to skyrocketing insurance premiums, rapid
growth in Medicaid budgets and the soaring out-of-pocket costs for
seniors on Medicare.
As with each of the delays the drug companies use to postpone generic
competition, each time we extend patents or exclusivity, it costs
patients money. If we look at just 25 more drugs that are coming up for
exclusivity soon, this law will add at least $11 to $12 billion to the
Nation's health care bill. The entire budget of the National Institute
of Child Health is less than one-tenth of these windfalls, in fact,
less than gained for the heartburn drug alone. This is irresponsible
public policy. It is bad for the budget, bad for

[[Page H8102]]

helping us secure a Medicare drug benefit, and bad for the American
public that pays for these drugs.
But the supporters of the drug say, if we do not pay this highway
robbery to the drug companies, the companies will stop doing research
on children. That is not true. We do not have to pay that much. In
subcommittee and in committee, I offered an amendment to provide
generous, but not excessive payments to the drug companies to do
pediatric trials. We would have paid them twice the cost of doing the
trial, 100 percent return on their investment should be enough for
anyone.
Although I offered to accept a friendly amendment that would have
made it 200 percent, 300, 400, or 500 percent profit, but not even that
was good enough for the pharmaceutical manufacturers.
This debate is about how seriously distorted the pharmaceutical
marketplace has become, and no wonder senior citizens and people with
disabilities and insurers are screaming about drug costs. I am
particularly concerned that this legislation results in a windfall for
drug makers without even getting the public health and pediatric
benefits that were promised.
If we are getting anything back from drug companies, it is supposed
to be new information for parents and pediatricians. But as the
gentleman from Michigan (Mr. Stupak) has pointed out, even drugs that
are given exclusivity have not been getting their labels changed. He
has an amendment that would link the exclusivity to the actual label
change. The label change is important. That is what we are paying for.
It is the information about the pediatric trials; and the drug
companies are getting their side of the bargain, an extended patent
period. But the consumers, especially the pediatricians, are not
getting what we are bargaining for, which is the information for them
to make the best judgment for children.

{time} 2000

I would have hoped that the House would have given a chance to debate
and support the Stupak amendment and not put this bill on the
suspension calendar. I think on the substance of it, it is a bill that
is poorly thought out in light of the experience we have had, and I
will oppose the bill. But I would also oppose it because the suspension
calendar is not the appropriate place for this legislation where an
important amendment like the Stupak amendment should be given a chance
to be debated.
Mr. TAUZIN. Mr. Speaker, I am pleased to yield 2 minutes to the
gentleman from New York (Mr. Towns) for whom all of us share great
sympathy and concern tonight as New York again experiences another
tragedy.
Mr. TOWNS. Mr. Speaker, how soon we forget.
I would like to remind my colleagues of the practice of pediatric
medicine before 1997. We need to remember just how difficult it was for
physicians to know the proper dosages of certain medicines for their
small patients. Is half of an adult dose enough, too much or too
little? Before 1997, many children were denied access to medicines
because drugs were not produced in dosable forms that could be used by
pediatric patients. It was not very encouraging to be a pediatrician
prescribing medicine to children, breaking pills in half, breaking
pills into quarters; and it was mostly guesswork.
Let me remind my colleagues of what happened in 1997 that changed the
practice of pediatric medicine. Let me remind my colleagues, because it
happened right here on this floor. We passed the Better Pharmaceuticals
for Children Act, which was enacted into law as part of the Food and
Drug Administration Modernization Act. You remember this, I hope. Our
colleagues saw the importance of enacting this legislation and
providing an incentive for research-based pharmaceutical companies to
conduct research on pediatric indications for medicines. The Better
Pharmaceuticals for Children Act provided additional market exclusivity
as an incentive for pediatric studies on new and existing
pharmaceuticals. This act will expire on January 1, 2002, unless we
pass this legislation before us today to reauthorize it.
Let us pass it so we can protect our little ones, because the health
of our children has been greatly improved as a result of this act. Let
us not go away saying that we should continue to do guesswork.
Mr. BROWN of Ohio. Mr. Speaker, I yield 3 minutes to the gentleman
from Florida (Mr. Deutsch), who believes that Astrazeneca's $4 million
investment in Prilosec and $1.4 billion in higher prices to consumers
is wrong.
Mr. DEUTSCH. Mr. Speaker, there really is no such thing as a free
lunch, and what this legislation does is it gives 6 months of
additional exclusivity for these companies.
Again, I think it is interesting, first of all these companies
develop these drugs without knowing that they would get the additional
6-month exclusivity, so this was not a factor in any of the research to
develop the drugs. None of these drugs are being developed because of
it. It really is a gift of this additional 6 months of exclusivity.
When we are talking about these billions of dollars, the $1.4 billion
for Prilosec or for Prozac about $900 million or for Pepcid $200
million or for Zestril $300 million or for Claritin $580 million, what
are we talking about? We are talking about additional profit for these
companies. That is not make-believe profit. That profit, that monopoly
profit, is coming from our constituents, from us, out of our society,
for monopoly reasons, for no good reasons, because the reality is that
these drugs would be developed for an incredibly, it seems almost
unreal the numbers, the magnitude of what we are talking about.
The gentleman from California (Mr. Waxman) mentioned in the committee
that he offered a 100 percent return, 200 percent return, 300 percent
return, 400 percent return. It is almost like the Biblical tale when
they are saying how many righteous people does it need to save the
city. And the reality is it did not matter. It did not matter how many
righteous people were needed. It does not matter how much profit could
be made, because that is what the majority and the supporters of this
bill want to see happen. The drugs would be developed, anyway.
As the ranking Democrat on the subcommittee in the introduction to
this debate said, we are all for increasing the availability of
prescription drugs for children. In fact, there is nothing about the
proposals that we offered in the committee, the substantive proposals,
that would make less. In fact, they probably would make more because of
the availability of not just doing it for drugs that are blockbusters
but for other drugs. But those amendments were rejected in the
committee.
I urge my colleagues to defeat this bill on suspension. We have the
opportunity on a regular order basis to offer amendments. And also to
educate our colleagues as much as we possibly can about this. I think
this is one of these issues that the light of day shines very brightly;
and as it shines very brightly, I believe that in fact it would lead to
a program such as some of the proposals in the committee that would not
have the $10 billion of these drugs, the 24 drugs that we are talking
about, $10 billion that literally is taken out of the pockets of our
constituents and given as additional monopoly profits, total monopoly
profits to the drug companies. That is the cost of this bill. For my
colleagues or anyone who votes for it, I think that should be your
standard. You are paying $10 billion for what the reality is you can
pay maybe $40 million for. The scale is that dramatic. There is no
reason for us to be doing that.
Defeat the bill. I urge my colleagues to vote ``no.''

ESTIMATED COST TO CONSUMERS OF A SIX-MONTH PEDIATRIC EXCLUSIVITY EXTENSION FOR 24 POPULAR DRUGS
--------------------------------------------------------------------------------------------------------------------------------------------------------
Status of Benefit to Brand-Name
Drug Manufacture Exclusivity 2000 Sales Cost to Consumers Drug Manufacturers
--------------------------------------------------------------------------------------------------------------------------------------------------------
Prilosec........................ ASTRAZENECA............ Received.......... $4,102,195,000 $676,862,175 $1,435,768,250
Prozac.......................... ELI LILLY.............. Received.......... 2,567,107,000 423,572,655 898,487,450
Pepcid.......................... MERCK.................. Received.......... 568,684,000 93,832,860 199,039,400
Daypro.......................... SEARLE................. Received.......... 163,783,000 27,024,195 57,324,050
Plendil......................... ASTRAZENECA............ Likely to Receive. 169,716,000 28,003,140 59,400,600
Zestril......................... ASTRAZENECA............ Likely to Receive. 833,359,000 137,504,235 291,675,650

[[Page H8103]]

Claritin........................ SHERING................ Received.......... 1,667,347,000 275,112,255 583,571,450
Mevacor......................... MERCK.................. Likely to Receive. 216,661,000 35,749,065 75,831,350
Monopril........................ BRISTOL MEYERS SQUIBB.. Likely to Receive. 233,969,000 38,604,885 81,989,150
Paxil........................... SMITHLINE BEECHAM...... Likely to Receive. 1,807,955,000 298,312,575 632,784,250
Viracept........................ AGOURON................ Likely to Receive. 315,510,000 52,059,150 110,428,500
Zocor........................... MERCK.................. Likely to Receive. 2,207,042,000 364,161,930 772,464,700
Zoloft.......................... PFIZER................. Likely to Receive. 1,890,416,000 311,918,640 661,545,600
Ultram.......................... JOHNSON RW............. Received.......... 601,465,000 99,241,725 210,512,750
Celebrex........................ SEARLE................. Likely to Receive. 2,015,508,000 332,558,820 705,427,800
Cipro........................... BAYER.................. Likely to Receive. 1,023,657,000 168,903,405 358,279,950
Flovent......................... GLAXO WELLCOME......... Likely to Receive. 647,980,000 106,916,700 226,793,000
Serevent........................ GLAXO WELLCOME......... Likely to Receive. 448,923,000 74,072,295 157,123,050
Glucophage...................... BRISTOL MEYERS SQUIBB.. Received.......... 1,629,157,000 268,810,905 570,204,950
Avandia......................... SMITHLINE BEECHAM...... Likely to Receive. 617,629,000 101,908,785 216,170,150
Duragesic....................... ALZA................... Likely to Receive. 352,934,000 58,234,110 123,526,900
Prevacid........................ TAP PHARM.............. Likely to Receive. 2,832,602,000 467,379,330 991,410,700
Imitrex......................... GLAXO WELLCOME......... Likely to Receive. 747,631,000 123,359,115 261,670,850
Norvasc......................... PFIZER................. Likely to Receive. 1,597,091,000 263,520,015 558,981,850
Total-24 Drugs.............. ..................... ................ 29,258,321,000 4,827,622,965 10,240,412,350
--------------------------------------------------------------------------------------------------------------------------------------------------------

Mr. TAUZIN. Mr. Speaker, we have heard from the laymen. It is time
now to hear from the distinguished gentleman from Georgia (Mr.
Norwood), to whom I yield 2 minutes.
Mr. NORWOOD. Mr. Speaker, I think that it is perfectly clear to me
and perhaps to other Members that there really are people in our body
that just do not like the pharmaceutical industry. It is a little
baffling to me. I do not impugn their motives, I do not question their
motives, I just do not understand it because this is a bill not about
profits; but this is a bill about making sure that medications that are
produced for adults are then further studied for children. I do not
understand exactly why a system that has worked so well and has
produced what we wanted it to do should be attacked so tonight.
I have time only to make just one point, but the pharmaceutical
industry does not choose which drug is to be studied. Therefore, it
does not choose which drug can have 6 months' extension on its patent.
Not every drug is eligible for pediatric exclusivity. The decision
about whether to issue a written request, that rests with the FDA. That
is not based on dollars and cents. It is based on which medication
needs to be studied. If there is no written request, there is no
opportunity for pediatric exclusivity which means the 6 months'
extension on their patent. Hence, and for sure, blockbuster drugs like
Rogaine and Viagra will never gain the ability to have pediatric
exclusivity.
Lastly, I think just on labeling, I want to point out to you that
when you go to the drug store and you get your little plastic vial and
it has a label on it, the label on the medication is the doctor's
orders. The pediatrician has written to the pharmacist what we want on
the label. And to imply that pediatricians in this country simply do
not have enough sense to understand that a drug produced for an adult
has to be changed for a child is wrong. I give them credit to know that
they worry about what they write and what kind of prescription they
write, and they carefully put the label through the pharmacies on the
drug.
I encourage my colleagues to vote for this and let us go forward and
study these drugs for the children of this country that has proven to
be reliable, the system that we have been under lately.
Mr. BROWN of Ohio. Mr. Speaker, how much time does each side have?
The SPEAKER pro tempore (Mr. Otter). Each side has 3 minutes
remaining.
Mr. BROWN of Ohio. Mr. Speaker, I yield the balance of my time to the
gentleman from New Jersey (Mr. Pallone), who knows that Eli Lilly's $4
million investment in Prozac and $900 million increase in profits robs
consumers.
Mr. PALLONE. Mr. Speaker, I listened to what the gentleman from
Georgia (Mr. Norwood) said about perhaps some of us who are opposed to
this bill not liking the pharmaceutical industry. Let me say that is
not true. The pharmaceutical industry is a major industry in my State
and particularly in my district. But the point that I think those of us
opposed to this bill are trying to make is that there is no reason to
continue a Federal program that can provide the same service for much
less cost to the consumer at a time when we know that the high cost of
prescription drugs is making it difficult for consumers to have access
to them.
We all agree in this debate, Mr. Speaker, that we have an enormous
responsibility to our children. I have three children, 4, 6, and 8
years old. Above all else, we must ensure that the prescription
medications our children may have to take are in fact tested
appropriately and deemed safe for children. But the intent of this law
was to create an incentive for companies to discover new pediatric uses
for their products in exchange for 6 months of exclusivity for the work
done.
There are several drawbacks. When the other side says that this
program works, I would maintain that it does not work. It certainly
does not work as well as it should. According to the HHS report on the
pediatric exclusivity provision, the FDA's interpretation of the law
has in essence been granting companies patent extensions without
receiving the pediatric benefits it was intended to generate. The
report states that the incentive has naturally tended to produce
pediatric studies on those products where the exclusivity has the
greatest value to the product's sponsor. This has left some drugs of
importance to children, but for which the incentive has little or no
value, unstudied.
Additionally, I am concerned that granting 6 months of exclusivity
has a very dramatic financial impact on consumers. This type of a
patent extension serves as yet another obstacle that blocks access to
generic drugs for consumers, forcing seniors and others to pay higher
prices because lower-cost alternatives are needlessly kept off the
market. The HHS report states again that the Secretary finds that the
impact of the lack of lower-cost generic drugs on some patients,
especially those without health insurance and the elderly, may be
significant.
Mr. Speaker, I cannot emphasize enough that testing of drugs for
pediatric use is essential. Again, I have small children so I
understand that. However, I feel that reauthorizing the pediatric
exclusivity provision would simply provide tightly budgeted dollars to
an industry that can afford to protect children's health with less of
an incentive. I said in committee and I will say again on the floor, I
do not think the pharmaceutical industry needs an incentive to conduct
studies to ensure safety for children. Frankly, I think they should do
it as a public service. But as the gentleman from California (Mr.
Waxman) said, we are not asking them to do it for free. We have stated
many times that we would provide twice the cost for profit or 200
percent or 300 percent, whatever. We offered all these amendments in
committee. But the bottom line is that they are getting a windfall, and
it is too much of a windfall. This was something we tried, but it does
not have to be repeated again because it is not helpful to the
consumer.
Mr. TAUZIN. Mr. Speaker, I am pleased to yield the balance of my time
to close on this important bill, which is supported by every children's
health group in America, to the gentleman from Pennsylvania (Mr.
Greenwood), the author of the legislation and the chairman of the
Subcommittee on Oversight and Investigations.
Mr. GREENWOOD. Mr. Speaker, I thank the gentleman for yielding time,
and I thank him for his great support in moving this legislation to the
floor tonight. It has been a good debate; but I think at the end of the
debate it is time to get our focus back on what this bill is about. It
is about children. That is why it is called the Best Pharmaceuticals
for Children Act.

[[Page H8104]]

In the history of medicine in America, we could never figure out a
way to get the drug companies to do studies on children, delicate
children, children who get sick from taking drugs. We could never find
a way to get these studies done so we could bring the benefits of
modern medicine that the elderly enjoy, that the middle-aged enjoy,
fully to the children of America.

{time} 2015

It could not be done. In 1997, my Democratic proponent of this bill,
the gentleman from California (Mr. Waxman) and I, wrote legislation
that did that. We broke the impasse after all of those years, and we
have just begun to reap the benefits from it. The children of America
have just begun to reap the benefits from it.
The Federal Food and Drug Administration said, ``The pediatric
exclusivity provision has done more to generate clinical studies and
useful prescribing information for the pediatric population than any
other regulatory or legislative process to date,'' period. That
practically says it all.
But there are two arguments that have been raised. The gentleman from
Michigan (Mr. Stupak) raises a relatively arcane argument about
labeling. This bill is all about labeling. This bill is about making
sure that when a doctor sees a sick child and a doctor thinks medicine
is good for that child, the doctor can open the box, pull out the
pills, read the label and find what is the best dosage for children.
How do we do that? We do that by creating an incentive for these
studies to be done. And when the pediatric exclusivity is determined
has nothing to do with how the product is marketed. The fact of the
matter is, we give them 6 months exclusivity, and in return, we get
decades and decades and decades of good knowledge about how to make
sick children well.
You can take my word for that, or you can take the word of the
gentleman from Michigan (Mr. Stupak) on that, or you can take the words
of the General Accounting Office, which said ``The pediatric
exclusivity provision has been successful in encouraging drug sponsors
to generate needed information about how drugs worked in children. The
infrastructure for conducting pediatric trials has been greatly
strengthened.''
Now, there is a second argument. The second argument is this question
about are we paying the drug companies too much to do these tests?
The basic premise of the bill is this: If the FDA asks you to study
your drug on children and you do the study, you add 6 months to your
patent before it expires. It is the same for everyone.
Now, the tortured logic of the opposition is, here is what we should
do: If your drug is so successful in reducing suffering in America, so
successful in curing the disease, you get penalized; now, if you have a
drug that is not so successful, not a lot of people take it, it does
not seem to be all that popular with the medical community, well, we
will let you make more.
We want to penalize success, and to penalize these companies for
easing the pain and the suffering of Americans through the products
they make is ridiculous. We ought to all get behind this bill, like
every children's health group in America has, and support it
overwhelmingly because it deserves that kind of support.
Today, Mr. Speaker, I am happy that the House is considering H.R.
2887, the Best Pharmaceuticals for Children Act.
This bill is the essence of bipartisan policy. It was reported out of
the Energy and Commerce Committee by a vote of 41-6, and the Health
Subcommittee by a vote of 24-5. Chairman Tauzin and Chairman Bilirakis
thank you for your leadership in moving this bill from committee to the
floor.
Mr. Speaker, I am also pleased to have worked with Ms. Eshoo and the
16 other members of the minority who have cosponsored this legislation.
H.R. 2887 represents public policy at its best. There are now 197
drugs being studied that are undergoing 400 studies with respect to how
these drugs affect kids. Contrast this with the change from the prior 6
years, when only 11 studies had been done.
As the Food and Drug Administration itself said in its report to
Congress, the Better Pharmaceuticals for Children Act has had
``unprecedented success,'' and ``the pediatric exclusivity provision
had done more to generate clinical studies and useful prescribing
information than any other regulatory or legislative process to date.''
This act has helped get drugs to kids who need them, let us better
understand how drugs work in kids, and also know when we should and
should not be giving kids certain drugs. Or as Linda Suydam, the FDA
representative who testified before the Health Subcommittee earlier
this year pointed out, ``The results speak for themselves.''
Let me give an example of how this has worked:
Take LODINE, which is prescribed for juvenile rheumatoid arthritis.
This drug did not have safety and effectiveness in children established
prior to this program. With the studies, we have determined a new
indication for children 6-16 years in age and recommended a higher
dosage in younger children.
Contrast this with the traditional mindset of just ``taking the pill
and breaking it in half'' to determine the dosage for children.
This has been an incredibly effective law. But we can do even better.
Six of the 10 most used drugs by children have not been studied
because they are off-patient. This bill will provide the funds for the
studies to be completed on those off-patient drugs that are used so
often to treat our children. Furthermore, we have developed a
foundation to provide resources for the completion of these studies
that will have so much value.
Some will argue that this is a Republican bill, helping drug
companies. Nothing could be further from the truth. This bill, which I
am proud to work on with Ms. Eshoo, is the very essence of
bipartisanship. It passed out of the subcommittee by a vote of 24-5.
And today, we have more Democrat cosponsors than Republican, including
several members of the committee.
Some of my colleagues on the opposite side of the aisle will try to
suggest that this bill is both costly and helps blockbuster drugs stay-
off competition. This provision is not about blockbuster drugs. Over
half of the 38 drugs that have been granted exclusivity do not even
make the list of top 200 selling drugs.
Simply put, this bill is good policy. It is sound. It is tested. It
is tried. It works.
We need to reauthorize pediatric exclusivity. Vote yes on H.R. 2887.
Mr. DINGELL. Mr. Speaker, I rise to oppose passage of H.R. 2887, a
bill that would continue a program that grants drug companies an
additional six month period of market exclusivity, if they conduct
tests on the use of their drugs for children. Make no mistake; there is
complete agreement on the part of all Members that improved testing and
labeling of prescription drugs for use in children is a good thing. The
only question for debate is how to accomplish that important public
health objective.
In 1997, when this law was enacted, the economy was healthier and
drugs were cheaper. Even then, I expressed concern about the
detrimental impact this provision could have the availability of
generic drugs. It is now my view that we made a mistake in enacting the
pediatric exclusivity law. First, it establishes a voluntary
``incentive'' for activity that should instead simply be required.
Second, assuming that we choose to provide an incentive, the
exclusivity program is more expensive, less equitable, and less
efficient than any number of alternatives.
Let there be no doubt. The central feature of this bill, exclusivity,
is about further increasing the profits of an already bloated
industry--an industry that does not seem to be able to moderate its
pricing practices even as it increasingly burdens its customers,
American consumers, and taxpayers. For example, one drug, Prilosec,
earned an additional $1.4 billion during the six months of additional
monopoly pricing that AstraZeneca enjoyed. Another drug, Prozac, earned
Eli Lilly an additional $900 million.
Indeed, of the 38 drugs that have been granted pediatric exclusivity,
less than 20 of them now have pediatric labeling. The companies are not
even required to make public the results of the studies they agreed to
perform. The Committee rejected, unwisely in my view, an amendment by
Representative Stupak that would have closed this dangerous loophole in
the law by conditioning the grant of exclusivity to actual pediatric
labeling. Don't just take my word for it. The American Academy of
Pediatrics, the Food and Drug Administration (FDA), and many supporters
of this legislation have declared that the absence of pediatric
labeling of drugs used by children presents serious health risks to
them.
How much did these studies cost the manufacturers? An average of less
than $4 million each. How much did this cost American consumers? For
only 24 drugs that either have received or will likely receive
pediatric exclusivity under this bill, their sponsors will net $11.5
billion and cost consumers $5.4 billion over the five fiscal years of
the program. Depending on future price increases, the total windfall to
the brand name pharmaceutical industry could easily exceed $20 billion.
The Prilosec windfall alone is worth more to AstraZeneca than the
Administration's entire 2002 budget request for the FDA.

[[Page H8105]]

The impact of pediatric exclusivity falls directly on those who
consume the drugs that get the exclusivity. Who are these people? They
include seniors, many that cannot afford the prescription drugs they
need. And, ironically, pediatric exclusivity can hurt the very people
it is intended to help because many unemployed, uninsured, and working
poor cannot afford the expensive drugs needed by their children.
During the Subcommittee and Full Committee mark-ups, Democratic
colleagues offered amendments that were collectively aimed at enhancing
the protection afforded to children when they take prescription drugs
and designing programs that minimize and equitably allocate the
financial burden. Unfortunately, we will not be allowed to offer those
amendments today. Any of them would have saved consumers billions and
offered the same or better benefits in the accurate labeling of these
medicines for children. But the Republican Leadership has chosen to
hide behind process and avoid votes on these ideas. I urge my
colleagues to vote no so we can have the opportunity to craft a more
efficient and equitable way to accomplish this important public health
objective.
Several potential, and very serious, abuses of the Hatch-Waxman
procedures have been uncovered during the course of the discussions
with the FDA regarding the technical provisions of this bill. We
learned that one company, Bristol Meyers Squibb, had apparently
succeeded in convincing FDA that it was entitled to all additional 3\1/
2\ years of exclusivity for the same pediatric study of its drug,
Glucophage, that Bristol Meyers Squibb they had submitted to acquire
the initial six months of monopoly marketing. Three of those years of
alleged exclusivity were based on the company's claim that a study of
some 68 pediatric patients was sufficient to merit a new indication of
use claim under Section 505(j) of the Act. Normally, such claims only
result in differential labeling between a product that was the subject
of a new trial and other therapeutically equivalent products on the
market. However, Bristol has apparently succeeded in convincing at
least some of the decisionmakers in FDA that the differential labeling
regarding pediatric use may constitute a safety risk if not found on
equivalent generic products. Because FDA has granted three-year
exclusivity to the pediatric label of Glucophage, Bristol has argued
that no generic may be marketed during the pendency of its labeling
exclusivity.
Most Members recognize this argument as a fundamental abuse of the
system and were the FDA and the Bush Administration to accept the
claim, consumers would be harmed. I am happy to note that H.R. 2887
closes this potential loophole by instructing the FDA to approve
generic drugs without proprietary pediatric labeling awarded to product
sponsors under the Hatch-Waxman Act.
However, this is merely a partial fix of the abuses that can arise
from decisions of the FDA that performing 505(j) studies for ``new
indications'' allows the grant of exclusivity for studies that merely
segment the population for which there is an already approved
treatment. While differential pediatric labeling may not prevent the
development of a competitive market for a drug product, generic
labeling or labeling based on race, gender or a host of other
distinctions within a population could ``evergreen'' the monopoly
enjoyed by a drug manufacturer and the inflated prices charged all
consumers.
Not surprisingly, attempts to close this potential three-year
loophole were opposed by the brand name industry. We can now expect a
rush of petitions to the FDA to approve special labeling for sub-
populations that, in many cases, will cost consumers billions of
dollars for each drug. Even worse, such studies would divert research
dollars into preserving existing monopolies instead of developing new
products, the purpose of government protection. This would be quite a
legacy for the FDA, for the Bush Administration, and for the House
Republican Leadership.
Ms. DeGETTE. Mr. Speaker, I rise today in support of H.R. 2887, the
``Best Pharmaceuticals Act for Children.'' Passage of this bill will
continue to enhance our understanding of which medications are safe and
efficacious for children by reauthorizing the pediatric exclusivity
program.
I thank Chairman Tauzin and Mr. Greenwood for including two of my
provisions in this bill. Their inclusion will help to ensure that the
program works for all children. These provisions will aid in increasing
the representation of ethnic and racial minority children in clinical
trials covered under the Act. It certainly has the potential of
impacting the families of half my constituents--49.5 percent of who are
ethnic or racial minorities.
My provisions require General Accounting Office to conduct a study to
examine the extent to which minority children are adequately
represented in studies covered by Act. The study will also explore
whether drugs used to treat diseases that disproportionately affect
ethnic and racial minorities are being studied for their safety and
efficacy. This line of inquiry is key as myriad diseases including
diabetes, heart disease, sickle cell anemia, and others
disproportionately affect ethnic and racial minorities, we must ensure
that medications used to treat these ailments are studied.
Additionally, the bill permits the Secretary of Health and Human
Services to take into account the presence of adequate representation
of ethnic and racial minority children when negotiating written
protocols with clinical sponsors. This additional language highlights
the need to include this population among study participants.
Mr. Speaker, both additions to the bill help to ensure that all
children, white, black, and brown receive the best health care
possible. The demographic changes that are anticipated over the next
decade magnify the importance of this issue.
While I am in support of this measure, I am concerned that its
placement on the suspension calendar precludes Members who have
concerns about the bill from bringing their issues and proposed
solutions to the House floor for consideration by all Members. I hope
their issues are addressed as we work out the differences between the
Senate and House passed versions.
Ms. HARMAN. Mr. Speaker, I would like to thank my colleague from
California for the opportunity to speak in support of this important
legislation.
The Best Pharmaceuticals for Children Act is about harnessing the
promise of the most advanced pharmaceuticals for the most vulnerable
members of our society. Dr. Jay Lieberman, a pediatric disease
specialist from my district, has told me that literally every day he
sees children with serious, sometimes life-threatening infections, on
whom he must use antibiotics and other drugs that have not been tested
to determine how safe they are for children.
``Are we using too much drug?'' he asks. ``Not enough? Will there be
adverse effects in children that have not been seen in adults? We can
only hope that our sickest infants and children don't die because of
our ignorance.''
We must do all we can to end this ignorance, and thanks to the
extension of patent exclusivity for companies that test their
pharmaceuticals for children, we have already accomplished much. Over
the past four years. pharmaceutical companies have dramatically
increased the number of pediatric trials for new prescription drugs.
More products are being labeled with the proper dosage for children and
potentially harmful interactions, and more companies are conducting
research into special drug formulations for children.
Today we have the opportunity to act to renew and strengthen the
legislation that has made this possible. I urge all my colleagues to
vote for the Best Pharmaceuticals for Children Act.
Mr. UPTON. Mr. Speaker, as an original cosponsor of H.R. 2887, The
Best Pharmaceuticals for Children Act, I am very pleased that we are
taking it up tonight under the Suspension Calendar. As the FDA's report
to Congress earlier this year indicated, ``the pediatric exclusivity
provision has been highly effective in generating pediatric studies and
in providing useful new information on product labels.'' It is
important that we reauthorize this very effective program to protect
and improve children's health.
The bill before us today makes some important improvements in current
law. Under current law, there is little incentive to perform the
studies necessary to label off-patent drugs for pediatric use. This
bill establishes a federally funded program operated through the NIH
and the FDA to contract for studies of off-label drugs. It also
establishes a nongovernmental foundation to fund these studies as well
as other pediatric research. I have confidence that this foundation's
work will be generously supported by the pharmaceutical industry, which
indicated in a recent letter to Chairman Tauzin that ``such a
charitable foundation is an excellent idea.''
Third, the bill provides the user fees that the FDA has requested to
speed up the consideration of applications for labeling changes to
reflect pediatric use and gives priority status to the review of these
applications.
Fourth, the bill establishes an Office of Pediatric Therapeutics at
the FDA to coordinate and oversee pediatric activities across the
agency.
Mr. Speaker, I urge all of my colleagues to join me in supporting the
Best Pharmaceuticals for Children Act. In the interest of children's
health, we cannot allow the pediatric exclusivity provisions to expire
at the end of this year.
Ms. JACKSON-LEE of Texas. Mr. Speaker, on October 11, 2001, the
Committee on Energy and Commerce favorably reported H.R. 2887, the
``Best Pharmaceuticals for Children Act.'' I commend the Committee for
its great work to reauthorize legislation to promote labeling of
prescription drugs for use in children. As the Chairwoman of the
Congressional Childrens' Caucus, I am concerned that a section

[[Page H8106]]

of this legislation may violate the Takings Clause of the United States
Constitution. As a member of the Committee on the Judiciary, I have
vigorously sought to protect private property rights and to pursue just
compensation for those whose property rights are violated. My analysis
of section 11 of H.R. 2887, brings me to the conclusion that it would
violate current exclusive rights of manufacturers and in turn expose
the U.S. government to substantial claims for just compensation.
Attached are legal memoranda prepared by the law firm of Wilmer, Cutler
& Pickering that validate my concerns:

MEMORAUNDUM TO THE HOUSE ENERGY AND COMMERCE COMMITTEE

Subject: Legal Analysis of the Proposed Amendment to the
Hatch-Waxman Act Concerning Approval of Generic Versions of
Drugs Without Pediatric Labeling
Congress and the FDA have long sought to encourage
pharmaceutical manufacturers to continue researching and
refining their products once they are on the market. They
have been particularly concerned with developing much-needed
clinical research into the efficacy and safety of existing
adult drugs for children. To give manufacturers an incentive
to engage in research and develop new uses for their
products, current law gives manufacturers a three-year
exclusive right to market their products with any FDA-
approved labeling changes that are based on new clinical
research. (Since drugs cannot now be marketed without FDA-
approved labeling, this restriction is the equivalent of a
three-year exclusive right to market the products
themselves.) To provide an extra incentive to conduct
clinical research regarding children's health, current law
grants manufacturers an additional six-month extension of
market exclusivity for any FDA-approved label change based on
pediatric clinical trials.
In exchange for this promise of exclusive marketing rights,
manufacturers have spent tens of millions of dollars to
conduct research into whether their adult products are safe
and effective for children and to develop appropriate dosage,
indication, and other labeling information for pediatric use.
Bristol-Myers Squibb (``BMS''), for example, has spent
significant resources on pediatric trials for Glucophage, its
type 2 diabetes medicine, and has developed guidelines for
the product's safe and effective use for children. BMS did
this work at the express request of the FDA, which was
concerned that none of the oral type 2 diabetes treatments on
the market were approved for pediatric use.
On October 11, however, the House Commerce Committee
adopted a proposed amendment to these provisions that would
strip away these exclusive marketing rights for existing
products like Glucophage. The proposed legislation would
likely be found to take pharmaceutical manufacturers'
intellectual property within the meaning of the Fifth
Amendment, thereby exposing the Treasury to massive claims
for just compensation. The proposed legislation also reneges
on the express quid pro quo the government has promised
manufacturers like BMS, exposing the United States to breach
of contract litigation similar to that following the savings
and loan crisis. In sum, the proposed legislation presents a
certain risk of litigation and a substantial risk of large
judgments against the Treasury.

1. THE PROPOSED LEGISLATION WOULD EFFECT A ``TAKING'' OF PRIVATE
PROPERTY FOR WHICH ``JUST COMPENSATION'' WOULD LIKELY BE REQUIRED

The Takings Clause of the Fifth Amendment to the United
States Constitution provides that the federal government may
not take ``private property . . . for public use, without
just compensation.'' U.S. Const. amend V. The Supreme Court
has concluded that intellectual property--including
exclusive rights to use such property--is protected by
this Clause, and that when such property is taken for a
``public use,'' compensation to the owner of the property
must be made. See Ruckelshaus v. Monsanto Co., 467 U.S.
986, 1001-1004 (1984).
Pharmaceutical manufacturers' current exclusive rights to
market their products are no different from patents or other
intellectual property and would be protected by the Takings
Clause. The proposed legislation may interfere with BMS's
(and other manufacturers' rights) in at least two distinct
ways. First, under current law, including the pertinent FDA
regulations governing the ``misbranding'' of prescription
drugs, BMS has the exclusive right to distribute Glucophage
for both adult as well as pediatric use. Two separate
provisions of the Federal Food Drug and Cosmetic Act
(``FEDCA'') provide BMS with the exclusive right to label
Glucophage for pediatric use. As a result of this statutory
exclusivity, another manufacturer may not distribute
Glucophage bearing labeling for pediatric use until June 15,
2004.
But the legal effect of the statutory exclusivity is
broader than mere pediatric use. Under the FDA'S
``misbranding'' regulations, manufacturers of prescription
drugs must provide labeling information related to pediatric
as well as adult use. See 21 C.F.R. Sec. 201.57(f)(9). A drug
that is ``misbranded'' may not be marketed or distributed,
see, e.g., 21 U.S.C. Sec. 352(a), and as a result, generic
manufacturers are prevented by current law from distributing
Glucophage at all. In short, when BMS obtained the exclusive
right to pediatric labeling, the legal effect of that
exclusive right was to obtain the exclusive right to market
Glucophage for adult as well as pediatric use. According to
the proposed legislation, however, BMS would lose this
exclusive right, because a generic manufacturer of Glucophage
would be deemed to be in compliance with the FDA's labeling
laws without including the required pediatric use by
including on their labels ``a statement that the drug is not
labeled for the protected pediatric use'' and ``any warnings
against unsafe pediatric use that the Secretary considers
necessary.''
Second, the proposed legislation would, as a practical
matter, eviscerate the exclusive right to pediatric labeling
that BMS obtained under federal law. Once the generic
versions are introduced into the market, even though they are
not specifically labeled for pediatric use, doctors may
nonetheless prescribe those same drugs to children for off-
label use. This fairly common practice would eliminate the
value of the market exclusivity for pediatric labeling to
which BMS is entitled under federal law.
These two incursions onto BMS's rights maybe deemed to
constitute a compensable taking of its intellectual property.
Courts typically consider several factors when determining
whether a governmental action constitutes a taking, including
``the character of the governmental action,'' ``its economic
impact,'' and ``its interference with reasonable investment-
backed expectations.'' Ruckelshaus, 467 U.S. at 1005. Similar
to Ruckelshaus, ``force of [the third factor]''--interference
with reasonable, investment-backed expectations--``is so
overwhelming . . . that it disposes of the taking question.''
Id. at 1005. BMS obtained the statutory exclusivity only
after making substantial investments in clinical studies,
doing so in the reasonable expectation that its exclusivity
to market Glucophage would be extended for an additional
three and one-half years. Even assuming that the BMS did not
receive a de jure exclusive right to market Glucophage for
all uses, it certainly had the reasonable expectation that
its right to exclusive pediatric use would not be later
eviscerated by a new labeling regime.
But the other factors also play a key role. The new
legislation would have a distinct ``economic impact'' on BMS,
by preventing it from enjoying the valuable intellectual
property rights that the FFDCA and the pertinent FDA
regulations conferred. And unlike traditional forms of
economic regulation, ``the character of the governmental
action'' would suggest that a taking occurred, because the
proposed statute would effectively divest BMS of the
intellectual property described above.
Accordingly, the proposed legislation presents a
substantial risk that the federal government will be forced
to compensate BMS for the loss of its valuable intellectual
property. Given the large expected sales of Glucophage, the
amount of compensation required could likewise be large.

ii. the proposed legislation would breach the government's implied
contract with manufacturers such as bms.

As the FDA recognized when it authorized BMS to begin
clinical trials on Glucophage in children, the absence of
information on the use of oral drugs to treat type 2 diabetes
in children is a significant public health issue. Type 2
diabetes has become, in recent years, increasingly prevalent
in children, recent epidemiological studies indicate that up
to forty percent of newly diagnosed diabetic children have
type 2 disease. Until last year, however, none of the
fourteen oral medications approved for treatment of type 2
diabetes had been approved by the FDA for use in children.
Based on this treatment gap, in 1998 the FDA issued a
written request to BMS seeking initiation of clinical studies
regarding the safety and effectiveness of Glucophage in
children; pursuant to this request, BMS agreed to conduct
such studies. By responding favorably to the FDA's request
for clinical trials, BMS stood to reap several significant
advantages with respect to its exclusivity over Glucophage.
Under the exclusivity provisions of the FFDCA, 21 U.S.C.
Sec. 355a, completion of a pediatric clinical trial in
accordance with the FDA's specifications entitles the patent
holder to six months' additional exclusivity over the drug.
Moreover, under provisions of the Hatch-Waxman Act, 21 U.S.C.
Sec. 355(j)(5)(D)(iv), and the regulations promulgated
thereunder, 21 CFR Sec. 314.108(b)(5)(ii), the FDA may grant
three years' further exclusivity for labeling changes made
possible by clinical investigations. In December 2000, the
FDA granted BMS that three-year extension with respect to
pediatric indications for Glucophage. In devoting time and
resources to its pediatric clinical trials on Glucophage, BMS
therefore reasonably relied on its statutory right to six
months' exclusivity for following the FDA's pediatric
clinical study guidelines, and it right to additional
exclusivity under Hatch-Waxman if its research culminated in
FDA-approved labeling changes.
By undoing the benefits promised to BMS for completing
clinical trials on Glucophage, the proposed legislation would
be a breach of contract. As the Supreme Court recently held
with respect to Congress's abortive bailout of the savings
and loan industry, ``[w]hen the United States enters into
contract relations, its rights and duties therein are
governed generally by the law applicable to contracts between
private individuals.'' United States v. Winstar Corp., 518
U.S. 839, 895 (1996) (plurality opinion). The Court affirmed

[[Page H8107]]

the core principle of Winstar last year in Mobil Oil
Exploration & Producing S.E., Inc., v. United States, 530
U.S. 604 (2000). In that case, the Court was asked to analyze
the validity of the Outer Continental Shelf Lands Act
(``OCSLA''), which barred offshore drilling for which oil
companies had previously paid the United States $158 million
to receive permits. The court found that the passage of OCSLA
violated the oil companies' rights under the contract, and
that the government was required to return the $158 million.
Id. at 624. This was the case, according to the Court,
despite the fact that the permits the oil companies received
only entitled them to pursue drilling if they subsequently
fulfilled certain regulatory requirements. Id. at 621. As the
Court found, ``[t]he oil companies gave the United States [a
benefit] in return for a contractual promise to follow the
terms of pre-existing statute and regulations. The new
statute prevented the Government from keeping that promise.
The breach substantially impaired the value of the contracts.
And therefore the Government must give the companies their
money back.'' Id. at 624 (internal citations and quotation
marks omitted).
Just as was the case in the S & L and oil drilling
situations, the proposed legislation here would deprive the
party contracting with the government--in this case, BMS--the
right to the benefit of the bargain it had struck with the
United States. This breach by the government would entitle
BMS to bring suit in the Court of Federal Claims under
several theories of contract law, and would expose the United
States to expensive and protracted litigation.

The SPEAKER pro tempore (Mr. Forbes). All time has expired.
The question is on the motion offered by the gentleman from Louisiana
(Mr. Tauzin) that the House suspend the rules and pass the bill, H.R.
2887, as amended.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds of
those present have voted in the affirmative.
Mr. BROWN of Ohio. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the
Chair's prior announcement, further proceedings on this motion will be
postponed.

____________________