Executive Summary

REP. WAXMAN's DRUG EXPORT BILL MAKES HHS FINAL ARBITOR on violations involving transshipment or mislabeling. Although the legislation permits anyone to initiate a court action against a company whose unapproved product is found in countries unauthorized for import or whose labeling is found violative, such a plaintiff must first notify HHS. Suit may be filed only if the department has not reached a determination within 60 days of notification. "No civil action may be commenced . . . to restrain an export of a drug before the expiration of 60 days after the plaintiff has given notice of such action to the secretary," the bill states. If within the 60-day deadline, the department makes a determination regarding the allegation, "such civil action may not be commenced," the measure stipulates. Only if HHS "makes no finding" may litigation be pursued. The California Democrat introduced his bill (HR 3962) on Dec. 16 ("The Pink Sheet" Dec. 23, p. 3), expressing skepticism about the justification for drug export legislation that has been advanced by the drug industry. Waxman said that he plans to hold hearings to examine all elements of the drug export issue. Waxman's proposed legislation is more restrictive than the Senate version drafted by Sen. Hatch (R-Utah) and backed in the House by a group of 21 members headed by Rep. Madigan (R-Ill.) and Rep. Scheuer (D-NY). Waxman may want to work toward a middle ground between the two current proposals. Under HR 3962, a company must suspend exports for 90 days if its product is found in "substantial quantity" in an unauthorized country. A second violation would be penalized by a permanent prohibition against the export of the drug by the company. The Hatch version (S 1848), which is expected to arrive at the Senate floor for a vote in February, contains no provision for litigation and provides no penalties against an exporter specifically for the discovery of its product in a country unauthorized to receive it. Waxman's measure also differs from the Senate bill in the number of countries that would be authorized to receive exports. The House measure lists only seven countries that could import U.S. drugs not approved by FDA: Canada, France, Japan, Norway, Sweden, the U.K., and Germany. The Senate version lists 15 countries in a "first tier"; additionally, a "second tier" of countries may receive the exports if they are approved in a first-tier country. Only "third-tier" countries are prohibited from receiving exports under the Hatch bill. In introducing HR 3962, Waxman attacked the Senate bill's three-tier categorization of importing countries.