[Congressional Record (Bound Edition), Volume 147 (2001), Part 16]
[House]
[Pages 22339-22352]
[From the U.S. Government Publishing Office, www.gpo.gov]



                 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).
       ``(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

[[Page 22340]]

       ``(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;
       (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.''.

[[Page 22341]]



     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
       ``(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.

[[Page 22342]]

       ``(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 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.''.

[[Page 22343]]



     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 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

[[Page 22344]]

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 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

[[Page 22345]]

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.
  Mr. Speaker, we need to know that before this drug is put out on the 
market and it is marketed by the drug

[[Page 22346]]

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

[[Page 22347]]

alone. This is irresponsible public policy. It is bad for the budget, 
bad for 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.''

[[Page 22348]]



                             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
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

[[Page 22349]]

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.
  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

[[Page 22350]]

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.
  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

[[Page 22351]]

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 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

[[Page 22352]]

     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 
     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.

                          ____________________