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SEN. KENNEDY's COMPROMISE DEBARMENT PROPOSAL STALLED

Executive Summary

SEN. KENNEDY's COMPROMISE DEBARMENT PROPOSAL STALLED after Sen. Durenberger (R-Minn.) placed a hold on the proposal at the request of the Pharmaceutical Manufacturers Association. Although quick resolution of Senate debarment legislation through expedited means is not out of the question, the greater likelihood is that enactment will involve the full legislative process, including a hearing and markup in Kennedy's (D-Mass.) Labor & Human Resources Committee. PMA's request reflects a reversal of the association's previous support, though tentative, for the bill. Kennedy floated his proposal Nov. 10 as a compromise between the House-passed generic-only bill and broader legislation proposed by Sen. Metzenbaum (D-Ohio), who prefers that debarment sanctions apply to manufacturers of brandname drugs and medical devices, as well as generics ("The Pink Sheet" Nov. 25, T&G-16). The compromise provided that corporate debarment applies only to generic drug operations but that individuals from any human drug manufacturer could be debarred. No other company sanctions included in the Metzenbaum debarment bill -- such as suspension of approval and temporary denial of application reviews -- would have applied to brandname drug firms under Kennedy's proposal. General counsels of PMA member companies reportedly were surveyed and tentatively approved the proposal on Nov. 21. Early in the week of Nov. 25, the bill appeared to have green lights from the generic and brandname industries, Metzenbaum and the House bill's principal authors, Reps. Dingell (D-Mich.) and Waxman (D-Calif.). However, PMA had a primary concern about protections for "high managerial agents" within companies and offered to draft alternative language but has not done so to date. The proposal provided that brandname company officers would be debarred if they know of but do not report activities by company representatives that result in felony convictions involving the NDA review process. The industry determined that such "high managerial agents" should be provided due process protections, such as a jury trial, and should be permitted to remain with their companies, though reassigned to positions unrelated to the NDA process. PMA contacted Kennedy late on Nov. 26 to withdraw support of the compromise, indicating that several senators had holds on it. Kennedy and his staff contacted the other senators to discuss the bill, and all but Durenberger withdrew their objections. While PMA succeeded in holding up the bill, the association's change of position risks ill will in Congress. Perhaps significantly, on Nov. 27 Kennedy introduced an FDA enforcement bill as a companion measure to HR 3642, which is pending in the House Energy & Commerce Committee. The industry now will be fighting three fires in the Labor & Human Resources Committee -- legislation involving enforcement, debarment and Kennedy's Public Health Service-funded clinics. A Senate enforcement bill would have been introduced even if debarment legislation had been moved through the Senate by unanimous consent; however, Kennedy arguably would have been more receptive to PMA concerns in considering the enforcement bill had the industry not blocked his debarment proposal. Metzenbaum, Dingell and Waxman are likely to be less accommodating to the association regarding the debarment issue if unanimous consent is not needed for quick enactment.

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