99–010

Calendar No. 298

107TH CONGRESS REPORT

1st Session " ! SENATE 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

2

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 the national 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,

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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 longterm 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

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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 proVerDate 11-MAY-2000 05:33 Jan 03, 2002 Jkt 099010 PO 00000 Frm 00004 Fmt 6659 Sfmt 6602 E:\HR\OC\SR129.XXX pfrm04 PsN: SR129
5

gram 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

6

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

7

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.

8

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

9

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 and centers, 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

10

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).

11

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

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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, and such 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.

13

(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. ø21 U.S.C. 360ee¿ (a) * * *

* * * * * * *

ø(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. ø21 U.S.C. 360cc¿ (a) Except as provided in subsection

(b), if the Secretary—

(1) * * *

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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 applicationø, of

such certification,¿ or of such license until the expiration of seven

years from the date of the approval of the approved applicationø,

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.

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