[Congressional Record (Bound Edition), Volume 153 (2007), Part 7]
[Senate]
[Pages 10502-10505]
[From the U.S. Government Publishing Office, www.gpo.gov]




            FOOD AND DRUG ADMINISTRATION REVITALIZATION ACT

  Mr. GREGG. Mr. President, the Food and Drug Administration, FDA, 
plays a major role in ensuring that the American people have access to 
the safe and effective medicines that they need. In fact, FDA-regulated 
products account for about 25 cents of every consumer dollar spent. At 
the heart of all FDA's regulatory activities is a judgment about 
whether a product's benefits to users will outweigh its risks. These 
judgments must be science-based to allow the agency to provide the most 
health promotion and protection at the least cost to the public. As we 
work on FDA legislation this year, we need to keep that science-based 
mission at the forefront of our decision making.
  Last week, the HELP Committee reported S. 1082, the Food and Drug 
Administration Act, FDARA. The bill couples must-pass reauthorizations 
of the Prescription Drug User Fee Act, PDUFA, and the Medical Device 
User Fee and Modernization Act, MDUFMA, with tour additional pieces of 
legislation that I am unable to support at this time. It is my hope 
that we can continue to work in a bipartisan way to improve this bill 
as it moves to the floor.
  The Prescription Drug User Fee Act, PDUFA, first enacted in 1992, 
gives the FDA the authority to collect user fees from pharmaceutical 
manufacturers in order to enhance their ability to ensure timely access 
to safe and effective medicines. By reducing the length of review time 
required to approve a drug, PDUFA has clearly been a success.
  Following the success of PDUFA, Congress enacted the Medical Device 
User Fee and Modernization Act; MDUFMA in 2002. Like with prescription 
drugs, MDUFMA funds have been essential to reducing the length of time 
of the approval process and other improvements critical to the success 
of the device review process.
  This year, both the PDUFA and MDUFMA reauthorizations have been 
negotiated between the FDA and industry and are worthy of support. In 
fact, I believe these agreements improve both programs and will improve 
the safety of these products in the marketplace. If we do not renew 
these programs by September 30, we risk losing this essential source of 
funding and patients will face longer review times and diminished 
access to much needed medicines and devices.
  However, the Kennedy-Enzi language also includes provisions on drug 
safety and pediatric medicines and devices. All are important issues, 
but each title of the bill includes provisions that I believe could do 
more harm than good.
  Originally, drug safety legislation was intended to address 
legitimate concerns many had about how long it took FDA to identify 
unexpected complications after a drug was approved and to provide FDA 
with additional authorities to act in those instances.
  The Kennedy-Enzi language attempts to address the length of time it 
can take to identify problems by including language that directs the 
FDA to establish an active surveillance system. This is essential to 
addressing any potential problems with postmarket drug safety. I 
strongly support this in concept but feel the language needs to be 
strengthened to ensure that the FDA has the direction it needs to 
implement a robust system in an expedited timeframe. Information 
collected must be standardized, and the overall system should be 
validated. Without these and other important benchmarks included in my 
Safer DATA bill, we are essentially setting the FDA up for failure.
  While not going far enough on drug surveillance, the bill goes too 
far on providing FDA with new authorities. The Kennedy-Enzi language 
imposes new requirements on manufacturers to develop Risk Evaluation 
and Mitigation Strategies, REMS, and gives the FDA the authority to 
require them in both the preapproval and postmarket settings. 
Importantly, the standards by which FDA can impose REMS are very broad 
and lack specific requirements through which this standard is 
triggered. This gives the FDA excessive discretion on imposing REMS on 
manufacturers even when a drug has a low risk profile.
  While clearly the FDA needs new authorities, it is critical to strike 
a balance, and I fear the Kennedy-Enzi language has gone too far and 
will slow the approval of new medicines and thereby reduce access.
  Instead, the language should be modified so that REMS only applies 
when the Secretary determines that the new active surveillance system 
has signaled a risk. At that point, FDA should have the authority to 
require manufacturers to judiciously minimize risks without encumbering 
drug availability or interfering with drug research, development, and 
delivery. Any expansion of FDA authority should respect this approach.
  The Kennedy-Enzi language also gives the FDA the authority to require 
prereview of direct-to-consumer advertising, specific drug advertising 
disclosures, and a 2-year moratorium on direct-to-consumer advertising. 
As drafted, these provisions raise a variety of first amendment issues, 
specifically the 2-year ban on advertising. Much

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can be done to ensure that consumers receive information that is not 
false or misleading without banning patient access to health care 
information.
  The Kennedy-Enzi language also includes three separate pediatrics 
bills: the reauthorization of the Best Pharmaceuticals for Children 
Act, BPCA, the reauthorization of the Pediatric Research Equity Act, 
PREA, and the Pediatric Medical Device Safety and Improvement Act.
  To encourage the study of more drugs in the pediatric population, 
BPCA as originally enacted as part of the Food and Drug Administration 
Modernization Act in 1997, and reauthorized in 2002, grants an 
additional 6 months of patent life to a product or pediatric 
exclusivity in exchange for the voluntary studies of prescription drugs 
conducted on children. Since its enactment, BPCA has been viewed as a 
highly successful program and has produced at least 132 completed 
studies, leading to at least 115 pediatric label changes.
  Under the Kennedy-Enzi language, the pediatric exclusivity would be 
capped at 3 months if annual sales for all drugs with the same active 
ingredient are over $1 billion in any year. This cap for 
``blockbuster'' drugs unfairly segments patent protection regimes by 
making more successful drugs subject to reduced incentives. Our health 
care system needs to enhance research into children's drugs, not reduce 
the incentives for manufacturers that produce them. Simply put, the 
current program is working, and imposing a ``cap'' on the pediatric 
exclusivity award will reduce the incentive to conduct pediatric 
studies and, however formulated, would significantly complicate the 
administration of the program.
  Enacted in 2003, PREA gives the FDA authority to require pediatric 
studies on the same approved indication of a certain drug in adults. 
BPCA and PREA work hand in hand to encourage the further study of 
prescription drugs in pediatric populations. It is because of the great 
success of these two programs that I am pleased that the bill requires 
both programs to be reauthorized together in 2012. This joint sunset 
date allows for further reauthorizations to continue to balance the 
incentives and authorities that drive pediatric study.
  One troubling aspect of the BPCA and PREA reauthorizations is the 
creation of an internal review committee. Nobody would argue that 
pediatric populations should not get special consideration within the 
inner workings of the agency; however, as drafted, the internal review 
committee conflicts with the current staff functions of the FDA.
  The Pediatric Medical Device Safety and Improvement Act aims to 
improve the process for approving pediatric medical devices and 
encourages research, development, and manufacture of pediatric devices 
through demonstration grants and incentives. It modifies the human 
device exemption for medical devices to allow manufacturers to earn a 
profit for HDE-approved pediatric devices but maintains the requirement 
that a humanitarian use device is limited to one that treats and 
diagnoses diseases or conditions that affect fewer than 4,000 
individuals in the United States. This is a good policy, which will 
help foster the development of pediatric devices. Unfortunately, the 
bill also expands FDA's authority to require companies to conduct 
postmarket studies of adult devices, even in circumstances in which the 
manufacturer has no intent to market the device to pediatric 
populations. Forcing companies to conduct studies on their products for 
unintended and unapproved use diverts resources that could be used for 
further innovation, research, and development.
  Of additional concern is that at this time, many provisions of the 
bill have never been scored by CBO. The provisions in this bill have a 
significant impact on the FDA and require a number of changes at the 
agency that will require significant dollars. Because PDUFA and MDUFMA 
are based on negotiations between industry and the administration, any 
changes that impact that careful compromise need to be fully vetted and 
understood. Unfortunately, at this time we do not have that 
information.
  It is clear to all that there are numerous complicated issues 
involved. Some provisions provide a great benefit, while others may 
have graver consequences than even the bill's sponsors would intend. It 
is my hope that as we deal with these issues, we can do so in a manner 
that is science based and favors patient access over regulatory burden.
  I ask that the following statement of HHS Secretary Leavitt be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                           Secretary of Health and


                                               Human Services,

                                   Washington, DC, April 17, 2007.
     Hon. Edward M. Kennedy,
     Chairman, Committee on Health, Education, Labor, and 
         Pensions, U.S. Senate, Washington, DC.
       Dear Chairman Kennedy: I am pleased to share the 
     Department's views on the Chairman's mark to S. 1082, the 
     Food and Drug Administration Revitalization Act. We 
     appreciate the commitment of you and the Committee in 
     addressing many of the critical issues facing the Food and 
     Drug Administration. We support many of the provisions of the 
     bill and note the many changes made in response to HHS 
     comments. However, we continue to have significant concerns 
     with a number of provisions and hope to work with you to 
     address these before the measure is considered on the floor.


                                Overview

       The Administration strongly supports the reauthorization of 
     the prescription drug user fee and medical device user fee 
     programs. These user fee programs expire at the end of the 
     current fiscal year and their timely reauthorization is 
     critical to the ability of FDA to continue to speed new 
     drugs, biologics and devices to market to benefit the health 
     of the American people.
       We are pleased that the bill is consistent with our PDUFA 
     IV proposal by providing the sound financial footing for FDA, 
     enhancing premarket review, creating a new program for review 
     of television advertisements, and significantly strengthening 
     the post-market drug safety system. However, we are troubled 
     by the proposal to fund drug safety activities in Title II 
     with user fees. In our view, the amount that could be raised 
     through user fees may be inadequate, but we are concerned 
     with reopening the PDUFA IV proposal.
       We also thank the Committee for including language that 
     reflects the draft MDUFMA II proposal. However, we want to 
     work with you to address any concerns once the public comment 
     process has been completed and we are able to transmit the 
     final package to Congress.
       There are other provisions in the bill that raise serious 
     concerns. In particular, both BPCA and PREA have been very 
     successful in providing the necessary incentives for drug 
     companies to conduct pediatric clinical trials to improve 
     drug labeling for children, thus enhancing the quality of 
     their medical care.
       We support the extension of the Best Pharmaceutical for 
     Children's Act. However, the provisions in the substitute 
     bill would reduce the incentive to conduct clinical trials 
     for children, thus reducing the effectiveness of the program 
     and changes are made that make the program virtually 
     unworkable. For these reasons, we favor a straight extension 
     of current law over the enactment of the BPCA provisions in 
     this bill.
       In addition, the PRIA, as drafted, would make this program 
     burdensome for FDA to the point that we would instead propose 
     a straight extension of current law.
       Finally, as demonstrated by proposed increases for drug 
     safety in the President's FY 2008 Budget Request and the drug 
     safety enhancements in our PDUFA IV proposal, we have a 
     strong commitment to improving the FDA drug safety system. In 
     our view, the core issues of drug safety are better tools for 
     surveillance of drug events, improved scientific tools for 
     evaluating drug safety problems, and better means of 
     communicating drug safety problems to providers and patients. 
     However, the bill as drafted is overly onerous in terms of 
     process and structural changes and could actually have the 
     unintended effect of slowing down drug approvals--while doing 
     little to address the core issues of drug safety. In 
     addition, this would be extremely resource intensive.
       Now, I would like to turn to more detailed comments on the 
     substitute bill.

                  Title I--Prescription Drug User Fees

       FDA's review of new drug applications (NDAs) and biologics 
     license applications (BLAs) is central to FDA's mission to 
     protect and promote the public health. In 1992 Congress 
     enacted PDUFA, intending to reduce the time necessary for new 
     drug application review, and subsequently has reauthorized it 
     twice. As you know, the current user fee program is scheduled 
     to expire on September 30, 2007.
       PDUFA has produced significant benefits for public health, 
     including providing the

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     public access to 1,220 new drugs and biologics. During the 
     PDUFA era, FDA reviewers have approved: 76 new medicines for 
     cancer; 178 anti-infective medications (including 56 for 
     treatment of HIV or Hepatitis); 111 medicines for metabolic 
     and endocrine disorders; 115 medicines for neurological and 
     psychiatric disorders; and 80 medicines for cardiovascular 
     and renal disease.
       In addition, PDUFA implementation efforts have dramatically 
     reduced product review times. While maintaining our rigorous 
     review standards, we now review drugs as fast as or faster 
     than anywhere in the world. The median approval time for 
     priority new drug and biologic applications has dropped from 
     14 months in fiscal year (FY) 1993 to only six months in FY 
     2006.
       The most recent reauthorization of PDUFA directed FDA to 
     consult with the House Committee on Energy and Commerce, the 
     Senate Committee on Health, Education, Labor, and Pensions, 
     appropriate scientific and academic experts, health care 
     prefessionals, patient representatives, consumer advocacy 
     groups, and the regulated inustry in developing 
     recommendations for PDUFA reauthorization. We have complied 
     with these requirements in preparing our PDUFA IV proposal, 
     and we are pleased that the draft bill reflects the 
     Administration's PDUFA IV proposal. We believe that the 
     proposal places PDUFA on a sound financial footing, enhance 
     premarket review, and create a modern post-market drug safety 
     system that follows products across their life cycle. 
     Importantly, the proposal also supports new user fees to 
     support the review of direct-to-consumer television 
     advertisements voluntarily submitted to FDA for review prior 
     to airing.

                         Title II--Drug Safety


      Subtitle A--Risk Evaluation and Mitigation Strategies [REMS]

       New drugs, biologics, devices, and diagnostics present the 
     greatest opportunities currently available to improve health 
     care and the way medicine is practiced. The number of lives 
     saved are prolonged by new therapies outweighs the risks that 
     the treatments themselves pose. It is also true that all such 
     products pose potential risks. Thus, a drug safety system of 
     the highest possible quality should not be confused with a 
     system in which drugs are risk free. Because there are risks 
     whenever anyone uses a medication, safety considerations 
     involve complex judgments by the healthcare provider 
     community, patients, and consumers, who must constantly weigh 
     the benefits and assess the risks before deciding to use a 
     medical product.
       Attempts to address these risks must balance access and 
     innovation with regulatory steps to improve the approach to 
     safety issues. We need to make sure that such steps do not 
     impede access to new medical products that can be used safely 
     and effectively by patients suffering from unmet medical 
     needs today. Many of these bill provisions seem fixed on 
     process changes and structural changes in government 
     programs, and not on making fundamental improvements in the 
     science of drug safety. Some changes prescribe specific 
     Agency action when the science of drug safety may not require 
     such intervention, such as the requirement to present all new 
     molecular entities to advisory committees for discussion. 
     Such changes could limit access to needed medicines and slow 
     down new innovations while doing little to address the core 
     issues of drug safety.
       Improved drug safety is not simply a matter of extending 
     new legal authorities to FDA or requiring the Agency to 
     engage in certain detailed activity. Indeed, extending these 
     interventions or expanding the use of REMS is unlikely to 
     result in improvements in drug safety as desired by the 
     bill's sponsors.
       The better overall strategy is to ensure that FDA has 
     appropriate resources and the capacity to develop better 
     scientific tools and approaches to drug review, including (1) 
     improving information available to the Agency; (2) improving 
     its ability to evaluate this information; and (3) improving 
     how that evaluation is communicated to the public.
       Accordingly, the Administration's proposed PDUFA IV 
     recommendations support improvements with respect to: the 
     information that the Agency receives, and with which it makes 
     drug-safety related decisions, including the spontaneous 
     reports we get from sponsors and providers as well as our 
     ability to tap into epidemiological data sets to probe more 
     routine questions; our analytical tools and approaches for 
     evaluating this information and turning raw data about drug-
     safety related questions into practical medical facts that 
     can be communicated to providers and patients to help them 
     better inform their decision making; and the way in which we 
     can effectively communicate these findings, as well as 
     communicate the Agency's response once we draw a conclusion 
     about the data we have, or we are made aware of a potential 
     drug safety problem or an emerging safety issue.
       We support the addition of provisions for an active drug 
     safety surveillance system that would be established through 
     a public-private partnership and we want to work with you on 
     this provision to ensure the most effective implementation.
       We continue to oppose the breadth of the proposed 
     requirements for risk evaluation and mitigation strategies 
     outlined in the bill. We believe it is unnecessarily 
     burdensome on FDA and industry to require routine active 
     surveillance and periodic reassessments for all drugs, as the 
     legislation now does.
       Even as modified in the substitute bill, the REMS approach 
     would duplicate and overlap elements of the extensive adverse 
     event reporting system already required by FDA (which 
     includes incident-specific, quarterly, and annual reporting). 
     It would also duplicate existing FDC Act labeling 
     requirements, which provide for MedGuides, package inserts, 
     and other materials which convey information to physicians 
     and pharmacists (as well as patients) to address and minimize 
     risk. Moreover, FDA and industry already engage in efforts 
     with respect to implementation of risk minimization action 
     plans (``RiskMAPs'') for those products that warrant such 
     additional risk minimization protocols. In addition, FDA 
     already has authority to require post-approval studies in 
     select circumstances. Codifying new authority to these same 
     ends is unnecessary and redundant.
       We are also concerned about the adequacy of resources 
     proposed for the significant increase in work that the 
     legislation would entail (e.g., active surveillance, REMS-
     related activities, the Drug Safety Oversight Board 
     activities, compliance work, and public meetings). Moreover, 
     we are particularly concerned that the proposal would support 
     all of these activities by PDUFA user fees, although this was 
     not part of the industry agreement. Reopening negotiations at 
     this time would risk the timely reauthorization of PDUFA.
       Finally, the Drug Safety Oversight Board [DSOB] would be 
     used to review disputes between the sponsor and the FDA 
     concerning REMS. Not only does the DSOB not have the 
     necessary expertise to handle dispute resolutions, the bill 
     proposes the disputes be raised directly to the DSOB 
     bypassing the existing dispute resolution process specified 
     in current law [Section 562 of the Act] thus eliminating the 
     possibility of resolving disputes at a lower level. Since the 
     DSB would be the primary source of dispute resolution, this 
     requirement would so overburden the DSB that they will be 
     unable to conduct their other important functions.


       subtitle b--reagan-udall foundation for the food and drug 
                             administration

       This subtitle would amend chapter VII of the Federal Food, 
     Drug and Cosmetic Act to establish the Reagan-Udall 
     Foundation for the Food and Drug Administration, for purposes 
     of advancing the FDA's mission to modernize the medical, 
     veterinary, food, food ingredient, and cosmetic product 
     development, accelerate innovation, and enhance product 
     safety. We believe that the proposed Foundation may 
     accelerate the national effort to modernize product-related 
     sciences with some additional changes. Another se10us concern 
     is the creation in statute of the Office of the Chief 
     Scientist. This is redundant and the functions would 
     duplicate and conflict with the functions of the current 
     Chief Medical Office position. We look forward to working 
     with you to continue to refine this section.


                      subtitle c--clinical trials

       Subtitle C would establish a publicly available database to 
     improve opportunities for enrollment in clinical trials and 
     to enhance access to clinical trials results for the benefit 
     of patients, health care providers and researchers.
       We support the goal and concept of enhancing access to 
     information on clinical trials and providing a mechanism to 
     enable health care professionals and the public to obtain 
     information about trial results. We believe that such efforts 
     should: emphasize transparency; minimize costs and 
     administrative burdens and build on current efforts; utilize 
     available technology to streamline and minimize the need for 
     new funding; ensure that such activities improve the public 
     health; and recognize legal or funding limitations of the 
     affected federal agencies.
       In addition, we have concerns with the mandated negotiated 
     rule making process which is time consuming and resource 
     intensive.
       The draft language takes important steps to addressing 
     concerns previously raised by the department, and we look 
     forward to continuing to work with the Committee on these 
     issue.


                   subtitle d--conflicts of interest

       FDA's advisory committees play an essential role in FDA's 
     activities to protect and promote public health through the 
     regulation of human and animal drugs, biological products, 
     medical devices, and. foods: It is important that any 
     legislation concerning review of conflicts of interest for 
     advisory committee members and criteria for eligibility for 
     participation in meetings afford FDA the flexibility to 
     obtain needed external expertise while minimizing the 
     potential for a conflict of interest. We appreciate the 
     improvements to the draft legislation to address these 
     important issues. We note that some concerns remain regarding 
     the scope and applicability of the waiver provision, the 
     limitation on waivers if a member's own scientific work is 
     under consideration, prescreening requirements and the scope 
     of

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     financial disclosures by advisory Committee candidates and 
     members. We hope to work further with the Committee to 
     address these remaining issues.

                  Title III--Medical Device User Fees

       FDA's review of medical device applications is essential to 
     FDA's mission to protect and promote the public health. In 
     2002 Congress enacted MDUFMA, intending to reduce the time 
     necessary for new medical device application review. As you 
     know, the current user fee program is scheduled to expire on 
     September 30, 2007.
       Similar to PDUFA, FDA was directed to consult with 
     stakeholders in developing recommendations for MDUFMA 
     reauthorization. We have complied with these requirements in 
     preparing our MDUFMA II proposal, and we are pleased that the 
     draft bill is consistent with the Administration's draft 
     MDUFMA II recommendations as laid out in the Federal Register 
     notice.
       As we announced on April 16, FDA is holding a public 
     meeting on April 30 and providing the public with a 30-day 
     period in which to comment on the Administration's 
     legislative recommendations in accordance with Section 105 of 
     MDUFMA. We look forward to sending you the Administration's 
     final recommendations shortly after the public comment period 
     closes.

                  Title IV--Pediatric Medical Products


             Subtitle A--Best Pharmaceuticals for Children

       The Administration supports reauthorization of the Best 
     Pharmaceuticals for Children Act. The incentive for pediatric 
     studies provided in this legislation has had a powerful 
     impact on providing important safety, efficacy, and dosing 
     information for drugs used in children. It has created an 
     environment that promotes the study of drugs in children, 
     fostered an infrastructure for pediatric clinical trials that 
     was previously non-existent, and enabled FDA to obtain 
     important pediatric information and numerous labeling 
     changes.
       However, the substitute bill contains several provisions 
     that we believe will have a severe negative impact on this 
     successful program. The incentive to conduct clinical trials 
     for children will be compromised and the creation of an 
     internal review committee and other program changes will make 
     the BPCA virtually unworkable. For this reason, the 
     Administration would favor a straight reauthorization over 
     the enactment of these provisions. I will now review some of 
     our specific concerns.
       First, as mentioned above, the current incentive of the 6 
     month period of exclusivity has worked well and should be 
     maintained. Through this legislation, FDA has been able to 
     effect important labeling changes on 122 different products. 
     Any weakening of this incentive can only have the effect of 
     reducing its effectiveness. Accordingly, the proposal to 
     shorten this incentive or to only provide exclusivity to 
     drugs with one or more year left of patents and exclusivity 
     life are of significant concern.
       FDA supports greater internal cooperation; however, the 
     draft bill's creation of an internal review committee is of 
     concern for a number of reasons. First, a legislative 
     requirement for what are primarily staff functions is in 
     direct conflict with the expertise, flexibility and 
     efficiency needed to ensure rapid review of pediatric product 
     development. We have concerns about the structure and 
     composition of the committee. Second, the proposal assigns 
     the dual function of approving written requests and granting 
     exclusivity, which may result in conflicts between the 
     subjective intent of the written request and the objective 
     evaluation as to whether the studies fairly respond to the 
     actual terms of written request. We recommend keeping the two 
     functions separate. Third, we believe that tracking pediatric 
     studies are responsibilities more appropriately assigned to 
     agency staff, since they are routine functions that do not 
     require a decision-making body.
       There are a number of critical technical provisions which 
     affect the submission of reports, labeling changes, and 
     disclosure of information which needs to be modified to 
     ensure the process works as intended.


             Subtitle B--Pediatric Research Improvement Act

       As noted above, we support the efforts to improve internal 
     consistency and efficiency. However, the bill's creation of 
     an internal review committee for Pediatric Research Equity 
     Act [PREA] assessments is also of concern similar to the 
     reasons stated above. A legislative requirement for what are 
     primarily staff functions is in direct conflict with the 
     expertise, flexibility and efficiency needed to ensure rapid 
     review of pediatric product development. We do have serious 
     concerns about the structure and composition of the committee 
     as well as the potential impact on the current process given 
     the number and extent of assessments.
       There are technical provisions which affect the submission 
     of reports, labeling changes, and disclosure of information 
     which needs to be modified to ensure the process works as 
     intended. As stated above with regard to BPCA, we feel that 
     the changes in the substitute bill will make the Pediatric 
     Research Equity Act program unworkable and the Administration 
     would rather have a straight reauthorization of PREA than 
     enactment of the substitute bill.


                 Subtitle C--Pediatric Medical Devices

       With regard to Subtitle C-Pediatric Medical Devices, while 
     we support measures to stimulate the increase availability of 
     pediatric devices, we have major concerns with these 
     provisions.
       In the area of pediatric device research, NIH has a number 
     of research efforts underway in this area and we believe it 
     would be more efficient and effective to utilize current 
     research initiatives at NIH rather than embark on a new 
     private sector initiative. The funding of a private consortia 
     would siphon off dollars for administrative expenses [that 
     could otherwise go for pediatric device research. In 
     addition, we oppose having a private entity making the 
     decisions on research priorities.
       The amendment to the Humanitarian Device Exemption would 
     remove the profit-making restriction for HDEs approved for 
     pediatric indications on the theory that allowing profit will 
     stimulate the production of more pediatric devices for 
     limited populations. Allowing profits up to a sales cap is an 
     impractical policy tool. Our view is that this amendment to 
     the HDE exemption would be administratively burdensome and 
     costly for industry and the FDA, and would have a 
     questionable impact on the incentive to develop new pediatric 
     devices.


                               Conclusion

       In conclusion, this letter has cited many problems with 
     provisions included in this bill--some we believe will not 
     achieve their policy objectives; some are unduly burdensome 
     on the industry and the FDA. Still others appear to be 
     unworkable or potentially costly. In addition to these 
     concerns, the Administration may have additional concerns in 
     connection with this legislation.
       We have raised many serious objections in our comments 
     above and it is our hope that we can work with you and others 
     to resolve these before the bill is considered on the floor. 
     Our support of this legislation is contingent on the 
     satisfactory resolution of these concerns.
       OMB advises that from the standpoint of the 
     Administration's program there is no objection to the 
     transmittal of this letter. We look forward to our 
     collaboration with you on this legislation.
           Sincerely,
     Michael O. Leavitt.

                          ____________________