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Executive Summary

Introduction of a "Generic Drug Enforcement Act" by Reps. Dingell (D-Mich.) and Bliley (R-Va.) apparently is drawing nearer, as a discussion draft of the legislation was distributed to members of the House Energy & Commerce Committee on April 12. Dingell and Bliley, respectively the chairman and ranking Republican of the House Oversight Subcommittee that has been investigating the generic drug industry since early 1989, have been expected to introduce a generic-specific debarment bill this spring. Sen. Hatch (R-Utah) is expected to introduce a companion bill in the Senate. The House bill is expected to have nearly unanimous support on the Energy & Commerce Committee. One anticipated exception is Rep. Waxman (D-Calif.), who chairs the Health Subcommittee and will choose when to schedule legislative hearings on the measure. Although Waxman has been working with Dingell on the debarment bill, he is said to remain in favor of legislation that would enhance FDA's enforcement authority over all agency-regulated industries. Waxman also has been discussing a broader measure with Sen. Metzenbaum (D-Ohio). Metzenbaum reportedly hopes to introduce a broad FDA enforcement bill soon. Although the Ohio Democrat has not produced a formal draft, he is said to be leaning toward a "white-collar crime" approach to enhancing agency authorities over the industries it regulates. The wild card in the legislative process is Senate Labor & Human Resources Committee Chairman Kennedy (D-Mass.). Kennedy has not committed to the Dingell-Bliley measure as has his committee's ranking Republican, Hatch. Committee member Metzenbaum reportedly has asked the chairman to reserve judgment on the impending House bill until the Ohio Democrat has introduced an agency-wide alternative. A paradox in the preliminary alignments is the association of Hatch with Dingell on the generic-specific bill and the potential association of Metzenbaum and Waxman with the Bush Administration, which consistently has favored the broader approach. FDA recently floated an industry-wide enforcement bill that contained no debarment provisions ("The Pink Sheet" March 25, p. 3), and the Administration proposed an industry-wide measure in 1989. Aside from the generic industry's opposition to its being singled out by the Dingell-Bliley measure, one of the potentially disagreeable aspects of the bill is that the debarment is mandatory and FDA has no discretion. A March 27 draft of the Dingell legislation provides that FDA must debar for three to 10 years any company convicted of bribery, payment of illegal gratuities, fraud, false statements, racketeering, extortion, or blackmail in connection with an ANDA. The draft also provides that two convictions within a 10-year period would result in permanent debarment. Industry reps have urged that the agency have discretionary authority to reduce debarment periods when companies have made efforts to rehabilitate themselves. The industry also has pushed for reductions in periods of permissive debarment. Under the earlier Dingell-Bliley draft, permissive debarment periods would extend one to five years. Grounds for permissive debarment under the bill is a finding by FDA that a person has evaded or subverted pertinent FDA regulations or was convicted within the previous five-year period of a misdemeanor or felony of bribery, payment of illegal gratuities, fraud, perjury, false statements, racketeering, blackmail, extortion or falsification or destruction of records in connection with an ANDA. Permissive debarment also may be imposed under the draft for a conviction within the previous five-year period for obstructing justice or a federal investigation or inspection, for being named within the previous five years as a criminal coconspirator or for employing within the last five years another debarred person, consultant or firm.

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