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Executive Summary

The FDA enforcement bill (HR 2597) has cleared Chairman Waxman's (D-Calif.) House Energy & Commerce/Health Subcommittee; the next legislative stop is Chairman Dingell's (D-Mich.) Energy & Commerce Committee. Approved by the Waxman subcommittee on a voice vote Oct. 10, the bill is on a schedule which may make it possible for it to make it through the House this session. Energy & Commerce Committee Chairman Dingell (D-Mich.) has not yet scheduled a markup; however, he reportedly hopes to be able to move the legislation before the end of the current session of Congress, now anticipated around Thanksgiving. The Dingell full committee may be the best stop along the legislative route for the pharmaceutical industry to get its concerns heard. In the Senate, the bill will come under the aegis of Sen. Kennedy, who is expected to introduce a Senate version of the bill later this fall. Sen. Metzenbaum (D-Ohio) has also expressed previous interest in the bill on the Senate side. The Pharmaceutical Manufacturers Association and a number of individual companies have already begun to talk with Dingell about the bill. PMA, which has espoused outright opposition until now, may be taking the first steps towards working with Capitol Hill to reshape the bill into a more amenable form. Although the association has not yet proposed specific amendments, industry lawyers reportedly have put together at least one laundry list of desired changes. The size of civil penalties and the occasions for their use are shaping up as one clear point of contention between the current Hill versions and industry. Several individual PMA member firms have offered qualified support or a willingness to work with the committee to develop a bill. In addition to Upjohn, Searle and Merck which announced their intentions to work with Dingell at the beginning of October, Pfizer has now come forward in writing as willing to participate in the development of legislation. Pfizer's support for legislation in recent years has been a good touchstone for the prospects for a bill. In an Oct. 9 letter to Waxman, Pfizer President William Steere, Jr. said his company "does not oppose in principle legislation to strengthen and expand enforcement authorities under the FD&C Act," and he added that Pfizer is "encouraged by provisions which recognize the need to provide clear statutory procedural protections to safeguard the rights of affected persons." Steere noted that the firm still has "major concerns" regarding "broad new subpoena authority . . . and new civil monetary penalty provisions." The company believes "the proposed modifications represent a positive step in the process of enacting fair and balanced legislation," and it hopes "that further changes will be made consistent with our remaining concerns." Other groups that have expressed support for the legislation include the medical device manufacturer, C.R. Bard, NARD, the American Academy of Pediatrics, the National Organization for Rare Disorders and the Center for Science in the Public Interest. The bill as reported out of Waxman's subcommittee was a redraft completed on Oct. 7. The new draft would limit the FDA officials who may order a subpoena of company records. It authorizes the commissioner, his deputy, an associate commissioner, the chief counsel or the agency's administrative law judge to issue subpoenas. The previous version would have provided subpoena authority to heads of "major" FDA divisions as well. The new draft also stipulates that records to which FDA inspectors may have access does not include financial and pricing information, medical records of study subjects and trade secret information identifying flavors, spices and certain colors. Although a vote count was not taken, opening statements by nearly all subcommittee members made it clear that they were split along party lines. The tone of opposition from the Republicans was much more subdued than at the subcommittee's hearing on the bill last summer ("The Pink Sheet" July 22, p. 12). Subcommittee Republicans reiterated their opposition to the bill but expressed a willingness to work with the majority to negotiate further amendments. Rep. Dannemeyer (R-Calif.), the subcommittee's ranking Republican who suggested HR 2597 would turn the FDA into the KGB, appears to be the only minority member remaining unwaveringly opposed to the bill. Reps. Lent (R-N.Y.) and MacMillan (R-N.C.) both called the substitute an improvement over HR 2597 as introduced but that it needs further amendment before they can support it. MacMillan expressed concern that FDA-regulated companies with the best quality control programs would provide inspectors with a "road map" to uncovering violations and that the legislation therefore actually would discourage establishment of such procedures. Consequently, he said he hopes "we can iron out these differences before the full committee markup." Because of Dingell's and Health Subcommittee Chairman Waxman's (D-Calif.) interest in moving the bill, their staffs are scheduled to negotiate further amendments with the staffs of other members of the full committee beginning the week of Oct. 14. The two versions of the bill circulating this autumn were drafted solely by Waxman and Dingell staffers in response to comments they had received about HR 2597. The Bush Administration continues to oppose the FDA enforcement bill. Regulated industry successfully sought the help of officials above HHS to slow the bill's progress this spring. In an Oct. 8 letter to Waxman, HHS Secretary Sullivan said he opposes the Oct. 7 substitute amendment and would recommend that it be vetoed if it were passed by Congress in its current form. "It is evident," Sullivan observed, "that changes have been made to the bill as introduced to narrow some authorities and guard against abuse or unauthorized use of these authorities." The Administration has "very strong reservations about the broad scope of the bill and feel that it proposes extending enforcement authorities further than necessary," the secretary said. In addition, Sullivan said the Administration has "some specific concerns about several provisions" in the bill, including its record-keeping and reporting requirements, the amounts of the civil money penalties and its subpoena power and recall authority. Civil money penalties should be assessed only for "significant or repeated violations" of the FD&C Act, he said, and "we oppose the unnecessarily high monetary limits." The secretary further argued that subpoena authority for FDA is unnecessary and that he objects to administrative recall power because the agency is "able to achieve more than 90%" of market recalls through "voluntary compliance." On the Democratic side of the aisle, several members indicated they were supporting the measure only with the understanding that additional changes will be made as the bill moves through the legislative process. Rep. Richardson (D-N.M.) said he "will be supporting" subcommittee Chairman Waxman and full committee Chairman Dingell "in this effort with the understanding that I perceive from both that the objective is to get the industry to negotiate." Richardson suggested that the bill provides penalties that are draconian for minor regulatory violations. "The initial draft of HR 2597 trampled upon many due process protections," and, after "substantive discussions at the staff level, "some of these concerns have been addressed in [latest] substitute amendment," the congressman said. However, he said he is sympathetic to the continuing "concerns about overly punitive penalties for minor offenses" of the FD&C Act and due process concerns.

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