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Executive Summary

Sen. Kennedy (D-Mass.) is expected to introduce his own legislation to enhance FDA's enforcement powers during the week of June 11, Stephen Keith, MD, health policy advisor to the senator's Labor & Human Resources Committee, announced June 8 at the National Association of Pharmaceutical Manufacturers mid-year meeting in Washington. Unlike House legislation (HR 4810) introduced by Rep. Dingell (D-Mich.) May 15, Kennedy's bill would not be generic industry-specific but would apply to all industries whose products are subject to premarket review by FDA, Keith said. "The scope" of the legislation "should be all FDA-regulated industries," he asserted. "Therefore, we are working on legislation to be introduced within the next week that will involve similar kinds of efforts that you see in the Dingell bill but opened up to all the FDA-regulated industries." Sen. Hatch (R-Utah), ranking minority member on the Labor & Human Resources Committee, reportedly hopes to work with Chairman Kennedy to introduce a committee bill based on an Administration proposal introduced by the Republican senator on May 24. Hatch introduced the legislation (S 2683) at the Administration's request. Keith said Kennedy chose not to cosponsor S 2683 due to its "many flaws." However, Keith noted that the bill's broad application across all FDA-regulated industries is a major area of agreement between Kennedy and Hatch. * Aside from the Dingell bill's limited focus on the generic industry, Kennedy has two concerns with HR 4810, Keith said: the debarment provisions and the bill's retroactivity. The two concerns presumably would also apply to S 2683. Kennedy is concerned that the bill's retroactive provision may present a constitutionality problem in that companies or their officials who have been or are being prosecuted under current law would be subject to further penalties under future legislation. The Dingell bill states that its provision regarding FDA's authority to suspend drug marketing approvals of convicted companies applies to convictions "regardless of when such offenses or acts occurred." The Administration proposal states that the provision applies to convictions and approvals occurring "prior to enactment." Regarding the two bills' debarment provisions, Kennedy is said to be concerned about the severity of the penalty. He reportedly questions the wisdom and fairness of a penalty that potentially could put a manufacturer out of business because of the crimes of a single official. Hatch reportedly has heard concerns about the whistleblower provisions in his and the Dingell bills. Current legislation would give whistleblowers either the lower of $250,000 or one-half of any civil monetary fines imposed against companies shown to have: bribed FDAers; submitted fraudulent information in marketing applications; destroyed, altered or removed material evidence pertinent to an investigation; or been debarred or employed a debarred person. The measures provide that informant awards may be given to "any individual, including employees of competing firms but not government employees, who provides information leading to a civil monetary penalty. Keith predicted that the bill will be reported out of Kennedy's committee with bipartisan support but will face a fight on the Senate floor due to the lobbying efforts of the Pharmaceutical Manufacturers Association. "We're anticipating fairly quick action on this bill" in the Labor & Human Resources Committee, and referral to the floor "with bipartisan support," he said. However, he noted that "there are predictions that we're going to have a fairly difficult time getting the bill through the Senate" because of the measure's broad scope. "The brandname drug industry is going to be out in force in opposition to this," he predicted. The Labor Committee probably will not hold a hearing on the legislation due to time constraints, the staffer said. "We're now down to 34 legislative days" remaining in the 101st Congress, "and it's pretty tough to get time for a hearing." Keith noted, however, that if Kennedy's broad bill dies in the Senate but Dingell's bill passes the House, Kennedy would then support the House approach. "There may be some changes we would wait to make in HR 4810 along the lines of the retroactivity and debarment provisions, but we would be willing to accept the narrow scope now with the full intent of going back next year and trying to extend it to the other industries," he said. Dingell's position is that HR 4810 must remain generic industry-specific if it is to be passed this year, and that enactment is crucial to the health of the industry. House Oversight Subcommittee staff investigator David Nelson has contended that the FDA "reform legislation has to be passed this year." Speaking to a May 30-June 2 NARD meeting in Orlando, Fla., Nelson noted that generic drug companies' market shares are falling "for the first time since the passage of Waxman-Hatch" legislation in 1984. The congressional aide added that the Administration bill introduced by Hatch is "so broad that it can't be passed," and he hinted that the Administration does not want FDA reform legislation enacted. Oversight Subcommittee Ranking Minority Member Bliley urged NAPM to support HR 4810. "You can circle the wagons and attack the subcommittee, as Bolar did in full-page newspaper ads last fall, or you can put some distance between yourselves and the wrongdoers," the congressman said. "I recommend the latter," and "a good place to start would be by supporting the Dingell-Bliley" bill. Industry players "who have done no wrong have nothing to fear from our bill," Bliley maintained. Although its "provisions are tough," they "are also fair," he said. "Five of the top 10 generic drug firms, ranked by number of approvals, have been implicated to date" in the congressional and criminal investigations. Although many generic companies "no doubt feel that the entire generic drug industry has been unfairly singled out by the subcommittee," Bliley continued, the industry "will be judged by how it responds to misdeeds, whether those of a few bad apples or many." * Two hearings pertaining to HR 4810 were recently scheduled. Rep. Waxman (D-Calif.) reportedly will hold a legislative hearing June 28 before his House Health Subcommittee. Waxman opposes the generic-specific legislation and its provision of expanded enforcement authority for the HHS Inspector General. Dingell will hold an oversight hearing June 20 on HHS rescission of the Inspector General's authority to investigate felony violations of the FD&C Act. Congress' interest in the generic industry has been sharpened by budget deficit concerns, Bliley said. "As custodians of the federal Treasury, we are as interested as insurance companies and consumers in seeing to it that lower-priced generic drug competition is alive and well. For that reason alone -- and in light of the patents on brandname drugs with sales in excess of$10 bil. that will expire in 1995 -- Congress wants a viable generic drug industry just as much as you do," he said.

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