```

[Senate Report 107-129]
[From the U.S. Government Publishing Office]

                                                       Calendar No. 298
107th Congress                                                   Report
                                 SENATE
 1st Session                                                    107-129

======================================================================

 
                       RARE DISEASES ACT OF 2001

                                _______
                                

               December 18, 2001.--Ordered to be printed

                                _______
                                

   Mr. Kennedy, from the Committee on Health, Education, Labor, and 
                   Pensions, submitted the following

                              R E P O R T

                         [To accompany S. 1379]

    The Committee on Health, Education, Labor, and Pensions, to 
which was referred the bill (S. 1379) to amend the Public 
Health Service Act to establish an Office of Rare Diseases at 
the National Institutes of Health, and for other purposes, 
having considered the same, reports favorably thereon with an 
amendment and recommends that the bill (as amended) do pass.

                                CONTENTS

                                                                   Page
  I. Purpose and summary of the bill..................................1
 II. Background and need for the legislation..........................3
III. Legislative history and committee action.........................5
 IV. Explanation of the legislation and committee views...............5
  V. Cost estimate....................................................6
 VI. Application of law to the legislative branch.....................8
VII. Regulatory impact statement......................................8
VIII.Section-by-section analysis......................................8

 IX. Changes in existing law.........................................11

                     I. Purpose and Summary of Bill

    To address a longstanding unmet need to develop new 
treatments, diagnostics, and cures for rare diseases and 
disorders, Congress enacted the Orphan Drug Act of 1983 (Pub. 
L. 97-414). This Act created financial incentives, such as 
market exclusivity, tax credits, and research grants, for the 
research and production of orphan drugs, and established the 
Orphan Products Board at the Food and Drug Administration 
(FDA). Congress sought through the Act to encourage the 
development of new ``orphan'' treatments, diagnostics, and 
cures for the millions of Americans with rare diseases who did 
not have access to effective medicines because prescription 
drug manufacturers were unlikely to develop and market drugs 
for such small groups of patients. The term ``orphan drug'' 
refers to a product that treats a rare disease or disorder 
affecting fewer than 200,000 Americans. Although the prevalence 
of each disease is rare, approximately 25 million Americans 
suffer from at least one of the 6,000 known rare diseases and 
disorders. Increasing our knowledge of these diseases deepens 
our understanding of the human body, and serves to benefit all 
Americans.
    Before the Orphan Drug Act, approximately 38 drugs existed 
that were considered orphan drugs. Passage and implementation 
of the Orphan Drug Act has led to the development of over 220 
treatments for rare diseases and disorders. However, patients 
with rare diseases or disorders face continuing challenges in 
receiving appropriate and adequate treatment. Despite dramatic 
increases in behavioral and biomedical research funding from 
Congress for the National Institutes of Health (NIH) since 
1998, significant opportunities for rare disease research 
remain unmet. The Rare Diseases Act of 2001 (S. 1379) is 
intended to build on the successes of, and improve upon, 
current law in generating urgently needed treatments, 
diagnostics, and cures for rare diseases and disorders. The Act 
seeks to further stimulate the research and development of 
orphan drugs, by giving statutory authorization to the Office 
of Rare Diseases (ORD) at the NIH, and authorizing new funds 
for rare disease research centers of excellence and the FDA's 
Orphan Products Grant program.

 1. THE LEGISLATION AUTHORIZES THE ESTABLISHMENT OF AN OFFICE OF RARE 
                                DISEASES

    The Office of Rare Diseases (ORD) was established in 1993 
within the Office of the Director at the NIH to promote 
research and collaboration on orphan diseases and respond to 
requests for information. The ORD also has developed and 
maintains a centralized database on rare diseases. The office 
serves to bridge the gap between basic and translational 
research, and to stimulate new research on rare diseases.
    The Rare Diseases Act of 2001 provides a statutory 
authorization for this important office. It authorizes the ORD 
to recommend a research agenda through the national research 
institutes and centers, and provide a broad range of research 
and education activities, including scientific workshops and 
symposia to identify research opportunities for rare diseases. 
In addition, the Director of the ORD shall promote coordination 
and cooperation among thenational research institutes and 
collaboration among the directors of the relevant institutes and 
centers of NIH. The Act doubles the authorization for the ORD's budget 
to $4 million for FY02 and such sums as may be necessary for each 
subsequent fiscal year.

 2. THE LEGISLATION AUTHORIZES REGIONAL CENTERS OF EXCELLENCE FOR RARE 
                     DISEASE RESEARCH AND TRAINING

    The Act authorizes the NIH to make cooperative agreements 
with, and make grants to, public or private nonprofit entities 
for regional centers of excellence for clinical research into, 
training in, and demonstration of diagnostic, prevention, 
control, and treatment methods for rare diseases. It authorizes 
$20 million for FY02 and such sums as may be necessary for each 
subsequent fiscal year. Support of a center may not exceed 5 
years, though extensions of not more than 5 years may be 
granted.

 3. THE LEGISLATION INCREASES FUNDING FOR THE ORPHAN PRODUCT RESEARCH 
                             GRANT PROGRAM

    The Act doubles the funding authorization for the FDA's 
Orphan Product Research Grant program from $12.5 million 
currently to $25 million for fiscal year 2002 and such sums as 
may be necessary for each subsequent fiscal year. This will 
provide crucial additional support for clinical research on new 
treatments for rare diseases and disorders.

4. THE LEGISLATION INCLUDES A TECHNICAL AMENDMENT TO THE FEDERAL FOOD, 
                         DRUG, AND COSMETIC ACT

    The Act includes a technical amendment to section 527(a) of 
the Federal Food, Drug, and Cosmetic Act.

              II. Background and Need for the Legislation

    Prior to the passage of the Orphan Drug Act in 1983, 
Americans suffering from any of the 6,000 known rare diseases 
largely did not have access to effective medicines because 
prescription drug manufacturers did not have adequate 
incentives to develop or market drugs for such small groups of 
patients. Patients with rare diseases, such as Lou Gehrig's 
disease and urea cycle disorders, went without treatment or 
hope for a cure. Despite the need for these medicines, they 
came to be known as ``orphan drugs'' because companies would 
not or could not commercialize them.
    The Orphan Drug Act provided seven years of market 
exclusivity and expanded tax credits to companies for the 
development and marketing of orphan drugs. The Act also 
established the Office of Orphan Product Development at the 
Food and Drug Administration, and created the Orphan Products 
Grant Program, providing financial incentives to small 
companies and research grants to academic scientists to support 
pivotal clinical trials, research, and production of orphan 
drugs, biologics, and devices. New programs at the National 
Institutes of Health (NIH) and the Food and Drug Administration 
(FDA) were created to encourage clinical research and 
commercial product development of products that target rare 
diseases. Since 1983, the Orphan Drug Act has been amended five 
times to clarify terms, improve the implementation and 
effectiveness of the Act, and convene a National Commission on 
Orphan Diseases to assess the activities of public and private 
agencies related to rare diseases.
    The Orphan Drug Act is widely recognized as having 
successfully encouraged greater research and the development of 
new treatments of rare diseases. This has had substantial 
benefits for the health and well-being of patients, improving 
their quality of life and allowing them to return to school or 
work, while reducing long-term health care costs. In the decade 
before 1983, less than ten orphan drugs had been marketed; 
since enactment of the Orphan Drug Act, more than 220 new 
orphan drugs have been approved and marketed in the United 
States and more than 800 additional drugs are under 
development.
    The FDA's Orphan Products Research Grants generally support 
small clinical trials at academic institutions throughout the 
nation to develop the preliminary evidence that is necessary to 
attract commercial sponsors. It is a model of successful 
government-industry partnership, and fills a major gap between 
academic research and the private sector. The grants help to 
create lifesaving products that are needed throughout the 
world. Drug treatments for sickle-cell anemia and narcolepsy 
are on the market today only because these grants supported 
some of their research.
    The creation of the Office of Rare Diseases (ORD) in 1993 
formalized a mechanism within the NIH to stimulate research, 
bridge the gap between basic and translational research, and 
encourage the exchange of ideas among investigators, voluntary 
patient support groups and NIH staff. In 1995, recognizing a 
need to enhance ORD's operations, Senator Mark Hatfield 
introduced the Office for Rare Disease Research Act, a bill to 
formally establish this office at the NIH. This bill passed 
through the Senate, but was not enacted into law.
    The Orphan Drug Act both laid the foundation for, and 
initiated a major leap in, our understanding and treatment of 
rare diseases. Yet, more needs to be done. Without statutory 
authorization, the Office of Rare Diseases and its mission have 
received less attention than an NIH office might otherwise 
receive from the biomedical research community. While the NIH 
has received a substantial increase in funding from Congress 
for the purpose of expanding the national investment of the 
United States in behavioral and biomedical research, 
significant opportunities for rare disease research remain 
unmet.
    Moreover, although the Orphan Products Grant Program 
continues to attract research proposals, the funding for this 
program is insufficient. Today, about 100 grant applications 
are received annually, but those that would otherwise be funded 
are not funded because of limited resources. The investment 
necessary for research and development of new drugs and devices 
is large in comparison to the size of the potential market for 
a rare disease. For example, only 30,000 people suffer from 
cystic fibrosis, and 600 from cystinosis; yet, for each of 
these people, the need for treatment is urgent. Investing in 
research on rare diseases is an important health priority. When 
the Orphan Drug Act passed in 1983, only a few thousand people 
had been diagnosed with AIDS. According to former Health and 
Human Services Secretary Louis Sullivan, the response to the 
HIV/AIDS pandemic, in terms of research and drug development, 
was likely enhanced by the incentives authorized by the Orphan 
Drug Act.
    The Rare Diseases Act of 2001, which was introduced in 
conjunction with legislation to expand the orphan drug tax 
credit (S. 1341), addresses current obstacles in combating rare 
diseases by providing statutory authorization and increasing 
funding for the ORD to promote research and develop our 
understanding and treatment of rare diseases; authorizing $20 
million for regional centers of excellence to further stimulate 
research and diagnose diseases; and increasing funding for the 
Orphan Products Research Grant program to $25 million to fund 
clinical trials that translate research into treatment and 
cures.

             III. Legislative History and Committee Action

    On August 3rd, 2001, Senator Kennedy and Senator Hatch 
introduced S. 1379, the ``Rare Diseases Act of 2001.'' The bill 
was referred to the Senate Committee on Health, Education, 
Labor, and Pensions.
    On October 16, 2001, the committee held an executive 
session to consider S. 1379, and ordered the bill to be 
reported favorably with an amendment in the nature of a 
substitute. The committee approved S. 1379, as amended, by 
unanimous voice vote.

         IV. Explanation of the Legislation and Committee Views

    The committee recognizes that approximately 25 million 
Americans suffer from rare diseases every day. The pain and 
suffering from these diseases are compounded by well-grounded 
concerns that research on, and the ongoing development of, new 
cures and treatments for rare diseases is limited and needs to 
be accelerated.

Statutory authorization for the Office of Rare Disorders

    Before the creation of the Office or Rare Diseases (ORD) in 
1993, information regarding rare diseases was spread throughout 
the NIH based upon disease type and classification. As many 
rare diseases affect multiple systems in the human body, 
funding and responsibility often was diffused across different 
institutes. In 1989, the National Commission on Orphan 
Diseases, recommended that Congress establish a ``Central 
Office of Orphan and Rare Diseases'' at the NIH. In response to 
concerns raised by the Congress and patient advocates, the 
Director of the NIH created the ORD to develop a research 
agenda and clinical database to promote orphan drug product 
research and development.
    In January 2001, the NIH issued a report on steps to expand 
and coordinate rare disease research, which included 
recommendations of an NIH Special Emphasis Panel (SEP) on the 
coordination of this research. The SEP recommended that the NIH 
``establish a permanent presence for the ORD and its activities 
at the NIH.'' The committee supports this recommendation. The 
Rare Diseases Act of 2001 provides the ORD with increased 
funding and statutory authorization to help meet these goals.

Grants for Centers of Excellence

    The NIH Special Emphasis Panel also recommended that ``the 
NIH should support the establishment of Specialized Research 
and Diagnostic Centers of Excellence for Rare Diseases to 
stimulate research and aid in the diagnosis of rare diseases.'' 
The Rare Diseases Act of 2001 authorizes the creation of, and 
$20 million in funding for, such regional centers of 
excellence. The committee supports this provision, which was 
proposed in the Administration's FY 2002 budget request. 
Regional centers of excellence provide critical opportunities 
for research and collaboration throughout the country, which 
are of particular importance to the study and treatment of rare 
diseases where researchers may not be aware of each others' 
efforts. These centers would also help patients receive an 
accurate diagnosis, which often takes years. In 1989, the 
National Commission on Orphan Diseases estimated that only a 
third of patients receive an accurate diagnosis in the 3 to 5 
years after the onset of symptoms; 15 percent of the population 
is not accurately diagnosed until 7 or more years after the 
onset of symptoms.

Orphan Products Grant Program

    The FDA's Orphan Products Grant Program plays a critical 
role in securing commercial sponsors for developing drugs. The 
grants fund small clinical trials at academic institutions 
throughout the nation to develop preliminary evidence, and are 
a model of a successful government-industry partnership. 
However, the funding for this program has not met the demand 
created by qualified proposals. For these reasons, the 
committee supports the provision in the Rare Diseases Act of 
2001 that increases the funding for the Orphan Products Grant 
Program from $12.5 million to $25 million for fiscal year 2002 
and such sums as may be necessary for each subsequent fiscal 
year. This will provide needed additional support for clinical 
research on new treatments for rare diseases and disorders.

                            V. Cost Estimate

                                     U.S. Congress,
                               Congressional Budget Office,
                                  Washington, DC, December 5, 2001.
Hon. Edward M. Kennedy,
Chairman, Committee on Health, Education, Labor, and Pensions, U.S. 
        Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed estimate of S. 1379, the Rare Diseases 
Act of 2001.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Christopher 
J. Topoleski.
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

               CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

S. 1379--Rare Diseases Act of 2001

    Summary: S. 1379 would provide for a statutory 
authorization of the Office of Rare Diseases (ORD) within the 
Office of the Director of the National Institutes of Health 
(NIH). The bill would authorize NIH to provide grants to 
regional ``Centers of Excellence'' to conduct research and 
training related to rare diseases and it would authorize 
funding for an existing grant program administered by the Food 
and Drug Administration (FDA) that sponsors clinical testing of 
the safety and effectiveness of new products to treat or 
diagnose rare diseases.
    CBO estimates that implementing S. 1379 would cost $6 
million in 2002 ad $190 million over the 2002-2006 period, 
assuming the appropriation of the necessary amounts including 
annual adjustments for inflation. (The five-year total would be 
$181 million if such inflation adjustments are not made.) The 
legislation would not affect direct spending or receipts; 
therefore, pay-as-you-go procedures would not apply.
    S. 1379 contains no intergovernmental or private sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA). 
State, local, and tribal governments could apply for and 
receive grants authorized by the bill, and any costs they incur 
would be voluntary.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of S. 1379 is shown in the following table. 
The costs of this legislation fall within budget function 550 
(health).

----------------------------------------------------------------------------------------------------------------
                                                                       By fiscal year in millions of dollars--
                                                                    --------------------------------------------
                                                                       2002     2003     2004     2005     2006
----------------------------------------------------------------------------------------------------------------
                                CHANGES IN SPENDING SUBJECT TO APPROPRIATION \1\

Estimated Authorization Level:
    National Institutes of Health \2\..............................       24       25       25       26       27
    Food and Drug Administration \3\...............................       12       26       27       28       28
                                                                    --------------------------------------------
      Total........................................................       36       51       52       54       55
                                                                    ============================================
Estimated Outlays:
    National Institutes of Health..................................        4       14       23       25       27
    Food and Drug Administration...................................        2       16       26       27       26
                                                                    --------------------------------------------
      Total........................................................        6       30       49       52       53
----------------------------------------------------------------------------------------------------------------
\1\ The amounts shown reflect adjustments for anticipation for those activities for which the bill would
  authorize such sums as necessary. Without such inflation adjustments, the five-year changes in authorization
  levels would total $232 million (instead of $248 million) and the changes in outlays would total $181 million
  (instead of $190 million).
\2\ The 2002-2006 levels are CBO baseline projections, including adjustments for anticipated inflation, for the
  NIH.
\3\ Estimated authorization level includes the incremental change from amounts appropriated thus far for 2002
  for the FDA. The 2003-2006 levels are CBO baseline projections of the change in FDA authorization adjustments
  for anticipated inflation.

    Basis of estimate: The bill would provide statutory 
authorization for the ORD, which was established in 1993 within 
the Office of the Director at the NIH. The ORD was established 
to respond to the reporting requirements of the Orphan Drug 
Act, to implement the recommendations of the National 
Commission on Orphan Diseases, and to respond to requests for 
information on rate diseases. A rare disease is one which 
typically affects fewer than 200,000 individuals in the United 
States.
    The bill would require ORD to promote the establishment of 
a centralized clearinghouse to make data and information on 
rare diseases available to the public, researchers, and 
clinicians. The director of the ORD would be responsible for 
preparing biennial and annual reports on the activities of the 
office, its Centers for Excellence, and future research 
opportunities.
    The bill would authorize NIH to award grants and contracts 
to public and nonprofit private entities known as Centers of 
Excellence to conduct clinical research, training, diagnostic 
prevention, control, and or treatment activities with respect 
to rare diseases. The centers would be awarded renewable 
contracts for up to five years for each contract period.
    S. 1379 would authorize appropriation of $24 million for 
those activities in 2002 and such sums as necessary for each 
subsequent year. CBO estimates that implementing the provisions 
affecting NIH would cost $2 million in 2002 and $97 million 
over the 2002-2006 period, assuming appropriations of the 
necessary amounts.
    S. 1379 also would authorize funding for an existing grant 
program administered by FDA that sponsors clinical studies on 
the safety and effectiveness of new products to treat or 
diagnose rare diseases. The amount appropriated thus far for 
fiscal year 2002 for the current program is $13 million. The 
bill would authorize the appropriation of $25 million in 2002 
and such sums as necessary for each subsequent fiscal year.
    Research grants awarded under the program would defray some 
of the costs associated with clinical testing of certain orphan 
drugs, biological, medical devices, and medical foods. An 
orphan drug is a drug or biological that is used to treat or 
diagnose an illness usually affecting fewer than 200,000 people 
in the United States. Eligible medical devices and medical 
foods include products for which there is no reasonable 
expectation development without grant assistance because the 
condition occurs relatively infrequently in the United States.
    CBO estimates that implementing this provision for FDA 
grants would cost an additional $4 million in 2002 and $93 
million over the 2002-2006 period, assuming appropriation of 
the necessary amounts.
    Pay-as-you-go considerations: None.
    Estimated impact on state, local, and tribal governments: 
S. 1379 contains no intergovernmental mandates as defined in 
UMRA. State, local, and tribal governments could apply for and 
receive grants authorized by the bill, and any costs they incur 
would be voluntary.
    Estimated impact on the private sector: The bill contains 
no private-sector mandates as defined in UMRA.
    Estimates prepared by: Federal Costs: Christopher J. 
Topoleski and Julia Christensen. Impact on State, Local, and 
Tribal Governments: Leo Lex. Impact on the Private Sector: 
Jennifer Bowman.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

            VI. Application of Law to the Legislative Branch

    The Rare Diseases Act of 2001 authorizes and amends 
sections of the Public Health Service Act and the Federal Food, 
Drug, and Cosmetic Act. As such, it has no application to the 
legislative branch.

                    VII. Regulatory Impact Statement

    The committee has determined that this bill is unlikely to 
impose any new increases in the regulatory burden of paperwork.

                   VIII. Section-by-Section Analysis

Section 1. Short title

    This section provides the short title of the bill, the 
``Rare Diseases Act of 2001.''

Section 2. Findings and purposes

    Subsection (a) Findings. This subsection finds that: (1) 
rare diseases affect small patient populations, typically less 
than 200,000; (2) treatments for rare diseases were not 
researched and developed by prescription drug manufacturers in 
the past because the industry could rarely make a profit from 
marketing such ``orphan drugs'' to small groups of patients; 
(3) the National Organization for Rare Disorders (NORD) was 
instrumental in pressing Congress for legislation to encourage 
the development of orphan drugs; (4) The Orphan Drug Act and 
new federal programs at NIH and FDA encouraged the development 
of drugs for rare diseases; (5) since enactment of the Orphan 
Drug Act, more than 220 new orphan drugs have been approved and 
more than 800 other such drugs are in the research pipeline; 
(6) rare diseases deserve greater emphasis and the Office of 
Rare Diseases at NIH, created in 1993, lacks statutory 
authorization; (7) NIH has received substantial increases in 
research funding; (8) funding for rare disease at NIH has not 
increased appreciably; (9) to redress this oversight, HHS has 
proposed establishing a network of regional centers of 
excellence for research on rare diseases; (10) the Orphan 
Products Research Grants funded by FDA have led to the 
development of 23 drugs and 4 medical devices for rare 
diseases, yet the appropriation in FY2001 for such grants was 
less than in FY1995.
    Subsection (b) Purposes. This subsection states that the 
purposes of the Act are to: (1) amend the Public Health Service 
Act to establish an Office of Rare Diseases at NIH; and, (2) 
increase the national investment in the development of 
diagnostics and treatments for patients with rare diseases.

                 TITLE I--NATIONAL INSTITUTES OF HEALTH

Section 101. NIH Office of Rare Diseases

    The act adds a new section 404E to Title IV of the Public 
Health Service Act. The new section 404E establishes, within 
the Office of the Director of NIH, the Office of Rare Diseases 
which would be headed by a Director appointed by the Director 
of NIH.
    The Director of the Office of Rare Diseases would recommend 
an agenda for conducting and supporting research on rare 
diseases, including scientific workshops and symposia. The 
Director would promote coordination and cooperation on the 
topic of rare diseases research among the national research 
institutes and centers and entities whose research is supported 
by such institutes. The Director, in collaboration with the 
directors of the other relevant institutes and centers of the 
NIH, would enter into cooperative agreements with and make 
grants for regional centers of excellence on rare diseases. 
Sufficient allocation of NIH resources for research on rare 
diseases would be promoted by the Director. A centralized 
clearinghouse for rare and genetic disease information would be 
established to provide information about these diseases to the 
public and medical professionals. The Director would biennially 
prepare a report that describes the research and education 
activities on rare diseases being conducted or supported 
through the national research institutes andcenters, and that 
identifies particular projects or types of projects that should in the 
future be conducted or supported by these institutes and centers, or 
other entities in the field of research on rare diseases. An annual 
report to Congress would be prepared on rare disease research conducted 
or supported by NIH. The Director of the Office of Rare Diseases would 
serve as the principal advisor to the Director of NIH on the topic of 
rare diseases and would serve as a liaison with outside organizations.
    Rare diseases are defined as any disease or condition that 
affects less than 200,000 persons in the United States.
    An appropriation of $4,000,000 is authorized for fiscal 
year 2002 and such sums as may be necessary for subsequent 
fiscal years.

Section 102. Rare Disease Regional Centers of Excellence

    The act adds a new section 404F to Title IV of the Public 
Health Service Act. The new section 404F establishes the Rare 
Disease Regional Centers of Excellence.
    The Director of the Office of Rare Diseases, along with the 
Directors of other relevant NIH institutes and centers, would 
enter into cooperative agreements and make grants to public and 
private nonprofit entities to plan, establish, or strengthen, 
and provide basic operating support for regional centers of 
excellence for clinical research on rare diseases. Such 
clinical research would include training in and demonstration 
of diagnostic, prevention, control, and treatment methods for 
rare diseases.
    The Director of the Office of Rare Disease would coordinate 
the activities under section 404F with similar activities 
conducted by the other national research institutes, centers, 
and agencies of the NIH and by the FDA to the extent that such 
institutes, centers, and agencies have responsibilities that 
are related to rare diseases.
    Federal payments made under such cooperative agreements or 
grants may be used for staffing, administrative, and other 
basic operating costs including such patient care costs as are 
required for research. Federal payments may also be used for 
clinical training, continuing education for health 
professionals, and information programs for the public on rare 
diseases, as well as clinical research and demonstration 
programs.
    Support of such centers would not exceed a period of 5 
years. The Director may extend support for additional periods 
of not more than 5 years if the operations of such a center 
have been peer reviewed by an appropriate technical and 
scientific group established by the Director, and the group has 
recommended that support should be extended.
    An appropriation of $20,000,000 is authorized for fiscal 
year 2002 and such sums as may be necessary for subsequent 
fiscal years.

                 TITLE II--FOOD AND DRUG ADMINISTRATION

Section 201. Grants and contracts for the development of orphan drugs

    The act amends subsection (c) of section 5 of the Orphan 
Drug Act, authorizing $25,000,000 for fiscal year 2002 for 
grants and contracts, and such sums as may be necessary for 
subsequent fiscal years.

Section 202. Technical amendment

    In section 527(a) of the Federal Food, Drug, and Cosmetic 
Act, two phrases containing the word ``certification'' are 
struck from the matter following paragraph (2).

                      IX. Changes in Existing Law

    In compliance with rule XXVI paragraph 12 of the Standing 
Rules of the Senate, the following provides a print of the 
statute or the part or section thereof to be amended or 
replaced (existing law proposed to be omitted is enclosed in 
black brackets, new matter is printed in italic, existing law 
in which no change is proposed is shown in roman):

PUBLIC HEALTH SERVICE ACT

           *       *       *       *       *       *       *

                        OFFICE OF RARE DISEASES

    Sec. 404E. (a) Establishment.--There is established within 
the Office of the Director of NIH an office to be known as the 
Office of Rare Diseases (in this section referred to as the 
``Office''), which shall be headed by a Director (in this 
section referred to as the ``Director''), appointed by the 
Director of NIH.
    (b) Duties.--
          (1)In general.--The Director of the Office shall 
        carry out the following:
                  (A) The Director shall recommend an agenda 
                for conducting and supporting research on rare 
                diseases through the national research 
                institutes and centers. The agenda shall 
                provide for a broad range of research and 
                education activities, including scientific 
                workshops and symposia to identify research 
                opportunities for rare diseases.
                  (B) The Director shall, with respect to rare 
                diseases, promote coordination and cooperation 
                among the national research institutes and 
                centers and entities whose research is 
                supported by such institutes.
                  (C) The Director, in collaboration with the 
                directors of the other relevant institutes and 
                centers of the National Institutes of Health, 
                shall enter into cooperative agreements with 
                and make grants for regional centers of 
                excellence on rare diseases in accordance with 
                section 404F.
                  (D) The Director shall promote the sufficient 
                allocation of the resources of the National 
                Institutes of Health for conducting and 
                supporting research on rare diseases.
                  (E) The Director shall promote and encourage 
                the establishment of a centralized 
                clearinghouse for rare and genetic disease 
                information that will provide understandable 
                information about these disease to the public, 
                medical professionals, patients and families.
                  (F) The Director shall biennially prepare a 
                report that describes the research and 
                education activities on rare diseases being 
                conducted or supported through the national 
                research institutes and centers, and that 
                identifies particular projects or types of 
                projects that should in the future be conducted 
                or supported by the national research 
                institutes and centers or other entities in the 
                field of research on rare diseases.
                  (G) The Director shall prepare the NIH 
                Director's annual report to Congress on rare 
                disease research conducted by or supported 
                through the national research institutes and 
                centers.
          (2) Principal advisor regarding orphan diseases.--
        With respect to rare diseases, the Director shall serve 
        as the principal advisor to the Director of NIH and 
        shall provide advice to other relevant agencies. The 
        Director shall provide liaison with national and 
        international patient, health and scientific 
        organizations concerned with rare diseases.
    (c) Definition.--For purposes of this section, the term 
``rare disease:'' means any disease or condition that affects 
less than 200,000 persons in the United States.
    (d) Authorization of Appropriations.--For the purpose of 
carrying out this section, there are authorized to be 
appropriated $4,000,000 for fiscal year 2002, andsuch sums as 
may be necessary for each subsequent fiscal year.

              RARE DISEASE REGIONAL CENTERS OF EXCELLENCE

    Sec. 404F. (a) Cooperative Agreements and Grants.--
          (1) In general.--The Director of the Office of Rare 
        Diseases (in this section referred to as the 
        `Director') shall, in collaboration with the directors 
        of the other relevant institutes and centers of the 
        National Institutes of Health, enter into cooperative 
        agreements with and make grants to public or private 
        nonprofit entities to pay all or part of the cost of 
        planning, establishing, or strengthening, and providing 
        basic operating support for regional centers of 
        excellence for clinical research into, training in, and 
        demonstration of diagnostic, prevention, control, and 
        treatment methods for rare diseases.
          (2) Policies.--A cooperative agreement or grant under 
        paragraph (1) shall be entered into in accordance with 
        policies established by the Director of NIH.
    (b) Coordination With Other Institutes.--The Director shall 
coordinate the activities under this section with similar 
activities conducted by other national research institutes, 
centers and agencies of the National Institutes of Health and 
by the Food and Drug Administration to the extent that such 
institutes, centers and agencies have responsibilities that are 
related to rare diseases.
    (c) Uses for Federal Payments Under Cooperative Agreements 
or Grants.--Federal payments made under a cooperative agreement 
or grant under subsection (a) may be used for--
          (1) staffing, administrative, and other basic 
        operating costs, including such patient care costs as 
        are required for research;
          (2) clinical training including training for allied 
        health professionals, continuing education for health 
        professionals and allied health professions personnel, 
        and information programs for the public with respect to 
        rare diseases; and
          (3) clinical research and demonstration programs.
    (d) Period of Support; Additional Periods.--Support of a 
center under subsection (a) may be for a period of not to 
exceed 5 years. Such period may be extended by the Director for 
additional periods of not more than 5 years if the operations 
of such center have been reviewed by an appropriate technical 
and scientific peer review group established by the Director 
and if such group has recommended to the Director that such 
period should be extended.
    (3) Authorization of Appropriations.--For the purpose of 
carrying out this section, there are authorized to be 
appropriated $20,000,000 for fiscal year 2002, and such sums as 
may be necessary for each subsequent fiscal year.

                    SECTION 5 OF THE ORPHAN DRUG ACT

  GRANTS AND CONTRACTS FOR DEVELOPMENT OF DRUGS FOR RARE DISEASES AND 
                               CONDITIONS

    Sec. 5. [21 U.S.C. 360ee] (a) * * *

           *       *       *       *       *       *       *

    [(c) For grants and contracts under subsection (a) there 
are authorized to be appropriated $10,000,000 for fiscal year 
1988, $12,000,000 for fiscal year 1989, $14,000,000 for fiscal 
year 1990.]
    (c) For grants and contracts under subsection (a) there are 
authorized to be appropriated $25,000,000 for fiscal year 2002, 
and such sums as may be necessary for each subsequent fiscal 
year.

           *       *       *       *       *       *       *

FEDERAL FOOD, DRUG, AND COSMETIC ACT

           *       *       *       *       *       *       *

          protection for drugs for rare diseases or conditions

    Sec. 527. [21 U.S.C. 360cc] (a) Except as provided in 
subsection (b), if the Secretary--
          (1) * * *

           *       *       *       *       *       *       *

for a drug designated under section 526 for a rare disease or 
condition, the Secretary may not approve another aplication 
under section 505 or issue another license under section 351 of 
the Public Health Service Act for such drug for such disease or 
condition for a person who is not the holder of such approved 
application[, of such certification,] or of such license until 
the expiration of seven years from the date of the approval of 
the approved application[, the issuance of the certification,] 
or the issuance of the license. Section 505(c)(2) does not 
apply to the refusal to approve an application under the 
preceding sentence.

           *       *       *       *       *       *       *

                                

```