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Executive Summary

For the second time in three years, Rep. Waxman (D-Calif.) stands in the way of a major piece of drug legislation: the Senate-passed drug export bill now moves to the House Health Subcmte; where Chairman Waxman has begun serious negotiations with the drug industry to work out the final form. A preliminary exchange of positions has already occurred. The PMA board rejected, however, a Waxman drug exports proposal between PMA and Waxman on May 12. The initial Waxman offer reportedly was unacceptable to the board because of a provision requiring the Office of Technology Assessment to conduct a study of drug labeling in foreign countries compared to U.S. labeling. Waxman may have been offering PMA a way to sign on to the bill by suggesting an OTA study. Waxman needs to get something to modify the Hatch bill to satisfy his anti-brandname constituency among lobby groups. The OTA study could have been a relatively minor trade-off. In the world of Washington studies, the OTA reports are generally unbiased. However, PMA's board is apparently reluctant to adopt any deal with Waxman based on the 1984 ANDA/patent negotiations. PMA is trying to make changes both in Waxman's original proposal and in the bill which passed the Senate by a 91-7 count on May 14. The Senate measure, which was supported by PMA as it came out of Sen. Hatch's Senate Labor & Human Resources Cmte., picked up a couple of amendments on the Senate floor which the assn. does not want to accept. PMA is in about the same position now with the drug export bill as it was two years ago with the ANDA/patent bill. The margin by which Hatch's bill (S 1848) passed the Senate reflects substantial support not only for the measure but also for two amendments which PMA finds particularly troubling. A nongermane amendment, which was offered by Sen. Metzenbaum (D-Ohio) and passed by 66-29 on May 13, would tighten restrictions of the Infant Formula Act of 1980. Cosponsored by Sens. Kennedy (D-Mass.), Gore (D-Tenn.), Matsunaga (D-Hawaii), and Sarbanes (D-Md.), the amendment would require pre-marketing approval of all new infant formula products by FDA. It would also mandate that each batch of formula be tested for each nutrient listed on the product label. Testing of formula samples also would be required throughout the product's self life, Metzenbaum explained. Mfrs. would be required to retain records on each batch for at least one year beyond its shelf life. The amendment would also strengthen FDA's recall authority for formulas, he added. Another amendment, which was offered by Sen. Glenn (D-Ohio) and accepted by Hatch without a vote, requires annual notification to the public and to foreign govts. regarding "banned or severely restricted substances," which includes unapproved drugs, antibiotics, and biologicals. Cosponsored by Sen. Proxmire (D-Wis.), the Glenn amendment specifically requires that by Dec. 31 of each year the Administration will provide a report summarizing "all final agency actions taken during the preceding fiscal year with respect to banned or severely restricted substances." The measure's definition of a "banned or severely restricted substance" includes a "drug for which an approval is not in effect," an "antibiotic drug which has not been certified," uncertified insulin, an unlicensed biological, an unapproved device, and any "product which is a banned hazardous substance." The amendment stipulates that before it may ship an unapproved drug, a mfr. must first inform FDA in writing of its "intent to export the substance and the intended country of destination" and notify the embassies of the importing nations "of all final regulatory actions taken." Initially opposed to any amendments to S 1848, Hatch accepted three without subjecting them to a vote. The second amendment accepted without vote was offered by Gore and makes FDA an independent, statutory agency and requires Senate confirmation of the commissioner. The third was offered by Metzenbaum and provides that before a country can be added to the second "tier" as a permissable destination for unapproved exports, it must be able to "obtain adequate information about" the exported drugs and their U.S. status. Introducing his amendment, Glenn said it simply "regularizes notification procedures currently required by law for the export of a hazardous product or substance. It also mandates prior notification of foreign officials and provides a common format, containing minimum information about the nature of the product and why it was banned or restricted in the U.S." Glenn emphasized his support for S 1848 and said he did "not intend to obstruct its progress with this amendment or in any other way." Hatch called Glenn's measure "very broad" and said "a number of branches of govt. . . . are going to be very upset with this amendment." However, he continued, "I have not had nearly enough time to study it as I should have had." Hatch said he did "not know the ramifications of this amendment well enough to know whether it is going to cause a lot of problems or not." The draft proposal floated by Waxman included a feature he considers crucial to export legislation: it eliminates the "multi-tier" categorization of countries to which unapproved drugs could be exported. Waxman's proposal would allow exports to a single group of countries in Western Europe, Canada, and Japan. Specifically, Waxman proposed to expand the first tier of importing countries to 22 from 15 but eliminate the second tier. PMA is said to be willing to accept this change from the Hatch bill. Countries permitted to receive drugs unapproved by FDA would be expanded to include Iceland, Ireland, Israel, Italy, Luxembourg, Portugal, and Spain. Those listed in the first tier of Hatch's bill -- Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Japan, the Netherlands, New Zealand, Norway, Sweden, Switzerland, and the United Kingdom -- would also be allowed to receive unapproved exports. Waxman's proposed OTA study reportedly was developed as a side agreement and was to be incorporated in a separate bill from the export legislation. It would include a comparison of labeled indications and precautionary information for drugs sold in 15-20 undeveloped countries with those marketed in the U.S. or, if not approved, in other medically advanced nations. PMA firms reportedly considered the provision potentially dangerous. Noting that labeling policy differs from country to country and company to company. The OTA findings could be a potential public relations liability if publicized by consumer advocacy groups. The OTA proposal is similar to a Metzenbaum amendment that failed in the Senate by a 62-29 vote. Metzenbaum's measure would have required OTA to compare labeling approved by FDA and tier one countries to that used in 11 Third World nations: Chile, Egypt, Greece, Malaysia, Mexico, Nigeria, Panama, South Korea, Tanzania, Thailand, and Turkey.

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