I

106TH CONGRESS

2D SESSION H. R. 4780

To amend the Federal Food, Drug, and Cosmetic Act and the Internal

Revenue Code of 1986 with respect to drugs for minor animal species,

and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

JUNE 28, 2000

Mr. PICKERING (for himself, Mr. HALL of Texas, Mr. COMBEST, Mr. STENHOLM, and Mr. POMBO) introduced the following bill; which was referred

to the Committee on Commerce, and in addition to the Committee on

Ways and Means, for a period to be subsequently determined by the

Speaker, in each case for consideration of such provisions as fall within

the jurisdiction of the committee concerned

A BILL

To amend the Federal Food, Drug, and Cosmetic Act and

the Internal Revenue Code of 1986 with respect to drugs

for minor animal species, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Minor Animal Species

5 Health and Welfare Act of 2000’’.

6 SEC. 2. FINDINGS.

7 The Congress finds as follows:
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1 (1) There is a severe shortage of approved ani2 mal drugs for use in minor species.

3 (2) There is a severe shortage of approved

4 drugs for treating animal diseases and conditions

5 that occur infrequently or in limited geographic

6 areas.

7 (3) Because of the small market shares, low8 profit margins involved, and capital investment re9 quired, it is generally not economically feasible for

10 animal drug manufacturers to pursue approvals for

11 these species, diseases, and conditions.

12 (4) Because the populations for which such

13 drugs are intended are small and conditions of ani14 mal management may vary widely, it is often dif15 ficult or impossible to design and conduct studies to

16 establish drug safety and effectiveness under tradi17 tional animal drug approval processes.

18 (5) It is in the public interest and in the inter19 est of animal welfare to provide for special proce20 dures to sanction the lawful use and marketing of

21 animal drugs for minor species and minor uses that

22 take into account these special circumstances and

23 that ensure that such drugs do not endanger the

24 public health.
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1 (6) Exclusive marketing rights and tax credits

2 for clinical testing expenses have helped encourage

3 the development of orphan drugs for human use,

4 and comparable incentives will help encourage the

5 development and sanctioning for lawful marketing of

6 animal drugs for minor species and minor uses.

7 SEC. 3. AMENDMENTS AFFECTING THE FOOD AND DRUG

8 ADMINISTRATION.

9 (a) DEFINITIONS.—Section 201 of the Federal Food,

10 Drug, and Cosmetic Act (21 U.S.C. 321) is amended by

11 adding the following new subsections at the end:

12 ‘‘(kk) The term ‘minor species’ means animals other

13 than cattle, horses, swine, chickens, turkeys, dogs, and

14 cats, except that the Secretary may amend this definition

15 by regulation.

16 ‘‘(ll) The term ‘minor use’ means the use of a drug—

17 ‘‘(1) in a minor species, or

18 ‘‘(2) in an animal species other than a minor

19 species for a disease or condition that occurs infre20 quently or in limited geographic areas, except that

21 the Secretary may amend this definition by regula22 tion.

23 ‘‘(mm) The term ‘species with no human food safety

24 concern’ means an animal species, or life stage of an ani-
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1 mal species, that is not customarily used for food for man

2 and does not endanger the public health.’’.

3 (b) MINOR USE ANIMAL DRUGS.—Chapter V of the

4 Federal Food, Drug, and Cosmetic Act is amended by

5 adding at the end the following new subchapter:

6 ‘‘SUBCHAPTER F—ANIMAL DRUGS FOR MINOR

7 USES

8 ‘‘DESIGNATION OF DRUGS FOR MINOR USES

9 ‘‘SEC. 571. (a) The manufacturer or the sponsor of

10 a drug may request the Secretary to designate the drug

11 as a drug for a minor use. A request for designation of

12 a drug shall be made before the submission of an applica13 tion under section 512(b) for the drug. If the Secretary

14 finds that a drug for which a request is submitted under

15 this subsection is being or will be investigated for a minor

16 use and if an application for such drug is approved under

17 section 512, the approval would be for such minor use,

18 the Secretary shall designate the drug as a drug for such

19 minor use. A request for a designation of a drug under

20 this subsection shall contain the consent of the applicant

21 to notice being given by the Secretary under subsection

22 (c) respecting the designation of the drug.

23 ‘‘(b) A designation of a drug under subsection (a)

24 shall be subject to the condition that—
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1 ‘‘(1) if an application was approved for the

2 drug under section 512(c), the manufacturer of the

3 drug will notify the Secretary of any discontinuance

4 of the production of the drug at least one year be5 fore discontinuance; and

6 ‘‘(2) if an application has not been approved for

7 the drug under section 512(c) and if preclinical in8 vestigations or investigations under section 512(j)

9 are being conducted with the drug, the manufacturer

10 or sponsor of the drug will notify the Secretary of

11 any decision to discontinue active pursuit of ap12 proval of an application under section 512(b).

13 ‘‘(c) Notice respecting the designation of a drug

14 under subsection (a) shall be made available to the public.

15 ‘‘PROTECTION FOR DRUGS FOR MINOR USES

16 ‘‘SEC. 572. (a) Except as provided in subsection (b):

17 ‘‘(1) If the Secretary approves an application

18 filed pursuant to section 512 for a drug designated

19 under section 571 for minor uses, no active ingre20 dient (including any salt or ester of the active ingre21 dient) of which has been approved in any other ap22 plication under section 512, the Secretary may not

23 approve or conditionally approve another application

24 submitted under section 512 or section 573 for such

25 drug for such minor use for a person who is not

26 the holder of such approved application until the ex-
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1 piration of ten years from the date of the approval

2 of the application.

3 ‘‘(2) If the Secretary approves an application

4 filed pursuant to section 512 for a drug designated

5 under section 571 for minor uses, which includes an

6 active ingredient (including an ester or salt of the

7 active ingredient) that has been approved in any

8 other application under section 512, the Secretary

9 may not approve or conditionally approve another

10 application submitted under section 512 or section

11 573 for such drug for such minor use for a person

12 who is not the holder of such approved application

13 until the expiration of seven years from the date of

14 approval of the application.

15 ‘‘(b) If an application filed pursuant to section 512

16 is approved for a drug designated under section 571, the

17 Secretary may, during the ten-year or seven-year period

18 beginning on the date of the application approval, approve

19 or conditionally approve another application under section

20 512 or section 573 for such drug for such minor use for

21 a person who is not the holder of such approved applica22 tion if—

23 ‘‘(1) the Secretary finds, after providing the

24 holder notice and opportunity for the submission of

25 views, that in such period the holder of the approved
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1 application cannot assure the availability of suffi2 cient quantities of the drug to meet the needs for

3 which the drug was designated; or

4 ‘‘(2) such holder provides the Secretary in writ5 ing the consent of such holder for the approval or

6 conditional approval of other applications before the

7 expiration of such ten-year or seven-year period.

8 ‘‘CONDITIONAL APPROVAL FOR MINOR USE NEW ANIMAL

9 DRUGS

10 ‘‘SEC. 573. (a)(1) Except as provided in paragraph

11 (2), any person may file with the Secretary an application

12 for conditional approval of a new animal drug for minor

13 use. Such person shall submit to the Secretary as part

14 of an application—

15 ‘‘(A) reports of investigations which have been

16 made to show whether or not such drug is safe for

17 use;

18 ‘‘(B) information to show that there is a rea19 sonable expectation that the drug is effective for its

20 intended use, such as data from a pilot investigation,

21 data from an investigation in a related species; data

22 from a single investigation, data from an investiga23 tion using surrogate endpoints, data based on phar24 macokinetic extrapolations, data from a short-term

25 investigation, or data from the investigation of close26 ly-related diseases;
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1 ‘‘(C) the quantity of drug expected to be manu2 factured and distributed on an annual basis;

3 ‘‘(D) a commitment that the applicant will con4 duct additional investigations to support approval of

5 an application under section 512 within the time

6 frame set forth in subsection (d)(1)(A);

7 ‘‘(E) reasonable data for establishing a condi8 tional dose; and

9 ‘‘(F) the information required by section

10 512(b)(1)(B)–(H).

11 ‘‘(2) A person may not file an application under para12 graph (1) if the person has filed a previous application

13 under paragraph (1) for the same drug and conditions for

14 use that was conditionally approved by the Secretary

15 under subsection (b).

16 ‘‘(b)(1) Within 180 days after the filing of an applica17 tion pursuant to subsection (a), or such additional period

18 as may be agreed upon by the Secretary and the applicant,

19 the Secretary shall either (A) issue an order conditionally

20 approving the application if the Secretary then finds that

21 none of the grounds for denying conditional approval spec22 ified in subsection (c) applies, or (B) give the applicant

23 notice of an opportunity for an expedited informal hearing

24 on the question whether such application is conditionally

25 approvable.
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1 ‘‘(2) A drug manufactured in a pilot or other small

2 facility may be used to demonstrate the safety and effec3 tiveness of the drug and to obtain conditional approval for

4 the drug prior to manufacture of the drug in a larger facil5 ity, unless the Secretary makes a determination that a full

6 scale production facility is necessary to ensure the safety

7 or effectiveness of the drug.

8 ‘‘(c)(1) If the Secretary finds, after due notice to the

9 applicant and giving the applicant an opportunity for an

10 expedited informal hearing, that—

11 ‘‘(A) the investigations, reports of which are re12 quired to be submitted to the Secretary pursuant to

13 subsection (a), do not include adequate tests by all

14 methods reasonably applicable to show whether or

15 not such drug is safe for use under the conditions

16 prescribed, recommended, or suggested in the pro17 posed labeling thereof;

18 ‘‘(B) the results of such tests show that such

19 drug is unsafe for use under such conditions or do

20 not show that such drug is safe for use under such

21 conditions;

22 ‘‘(C) the methods used in, and the facilities and

23 controls used for, the manufacture, processing, and

24 packing of such drug are inadequate to preserve its

25 identity, strength, quality, and purity;
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1 ‘‘(D) upon the basis of the information sub2 mitted to the Secretary as part of the application, or

3 upon the basis of any other information before the

4 Secretary with respect to such drug, the Secretary

5 has insufficient information to determine whether

6 such drug is safe for use under such conditions;

7 ‘‘(E) evaluated on the basis of the information

8 submitted to the Secretary as part of the application

9 and any other information before the Secretary with

10 respect to such drug, there is insufficient informa11 tion to show that there is a reasonable expectation

12 that the drug will have the effect it purports or is

13 represented to have under the conditions of use pre14 scribed, recommended, or suggested in the proposed

15 labeling thereof;

16 ‘‘(F) upon the basis of information submitted to

17 the Secretary as part of the application or any other

18 information before the Secretary with respect to

19 such drug, any use prescribed, recommended, or

20 suggested in labeling proposed for such drug will re21 sult in a residue of such drug in excess of a toler22 ance found by the Secretary to be safe for such

23 drug;
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1 ‘‘(G) based on a fair evaluation of all material

2 facts, such labeling is false or misleading in any par3 ticular; or

4 ‘‘(H) such drug induces cancer when ingested

5 by man or animal or, after tests which are appro6 priate for the evaluation of the safety of such drug,

7 induces cancer in man or animal, except that the

8 foregoing provisions of this subparagraph shall not

9 apply with respect to such drug if the Secretary

10 finds that, under the conditions for use specified in

11 proposed labeling and reasonably certain to be fol12 lowed in practice (i) such drug will not adversely af13 fect the animals for which it is intended, and (ii) no

14 residue of such drug will be found (by methods of

15 examination prescribed or approved by the Secretary

16 by regulations, which regulations shall not be subject

17 to subsections (c)), in any edible portion of such ani18 mals after slaughter or in any food yielded by or de19 rived from the living animals; or

20 ‘‘(I) another person has received approval under

21 section 512 for a drug with the same active ingre22 dient or ingredients and the same conditions of use,

23 and that person is able to assure the availability of

24 sufficient quantities of the drug to meet the needs

25 for which the drug is intended;
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1 the Secretary shall issue an order refusing to conditionally

2 approve the application. If, after such notice and oppor3 tunity for hearing, the Secretary finds that subparagraphs

4 (A) through (I) do not apply, the Secretary shall issue an

5 order conditionally approving the application.

6 ‘‘(2) In determining whether such drug is safe for use

7 under the conditions prescribed, recommended, or sug8 gested in the proposed labeling thereof, the Secretary shall

9 consider, among other relevant factors, (A) the probable

10 consumption of such drug and of any substance formed

11 in or on food because of the use of such drug, (B) the

12 cumulative effect on man or animal of such drug, taking

13 into account any chemically or pharmacologically related

14 substance, (C) safety factors which in the opinion of ex15 perts, qualified by scientific training and experience to

16 evaluate the safety of such drugs, are appropriate for the

17 use of animal experimentation data, and (D) whether the

18 conditions of use prescribed, recommended, or suggested

19 in the proposed labeling are reasonably certain to be fol20 lowed in practice. Any order issued under this subsection

21 refusing to approve an application shall state the findings

22 upon which it is based.

23 ‘‘(d)(1) A conditional approval granted by the Sec24 retary under this section shall be effective for a one-year

25 period. The Secretary shall, upon request, renew a condi-
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1 tional approval for up to four additional one-year terms,

2 unless the Secretary by order makes a finding that—

3 ‘‘(A) the applicant is not making appropriate

4 progress toward meeting approval requirements

5 under section 512, and is unlikely to be able to ful6 fill those requirements and obtain an approval under

7 section 512 before the expiration of the five year

8 maximum term of the conditional approval;

9 ‘‘(B) excessive quantities of the drug have been

10 produced, without adequate explanation; or

11 ‘‘(C) another drug with the same active ingre12 dient or ingredients for the same conditions of use

13 has received approval under section 512, and the

14 holder of the approved application is able to assure

15 the availability of sufficient quantities of the drug to

16 meet the needs for which the drug is intended.

17 ‘‘(2) If the Secretary does not renew a conditional

18 approval, the Secretary shall provide due notice and an

19 opportunity for an expedited informal hearing to the appli20 cant.

21 ‘‘(e)(1) The Secretary shall, after due notice and op22 portunity for an expedited informal hearing to the appli23 cant, issue an order withdrawing conditional approval of

24 an application filed pursuant to subsection (a) if the Sec25 retary finds—
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1 ‘‘(A) that experience or scientific data show

2 that such drug is unsafe for use under the condi3 tions of use upon the basis of which the application

4 was conditionally approved;

5 ‘‘(B) that new evidence not contained in such

6 application or not available to the Secretary until

7 after such application was conditionally approved, or

8 tests by new methods, or tests by methods not

9 deemed reasonably applicable when such application

10 was conditionally approved, evaluated together with

11 the evidence available to the Secretary when the ap12 plication was conditionally approved, shows that

13 such drug is not shown to be safe for use under the

14 conditions of use upon the basis of which the appli15 cation was conditionally approved;

16 ‘‘(C) on the basis of new information before the

17 Secretary with respect to such drug, evaluated to18 gether with the evidence available to the Secretary

19 when the application was conditionally approved,

20 that there is not a reasonable expectation that such

21 drug will have the effect it purports or is rep22 resented to have under the conditions of use pre23 scribed, recommended, or suggested in the labeling

24 thereof;
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1 ‘‘(D) that the application contains any untrue

2 statement of a material fact; or

3 ‘‘(E) that the applicant has made any changes

4 from the standpoint of safety or effectiveness beyond

5 the variations provided for in the application unless

6 the applicant has supplemented the application by

7 filing with the Secretary adequate information re8 specting all such changes and unless there is in ef9 fect a conditional approval of the supplemental ap10 plication, which supplemental application shall be

11 treated in the same manner as the original applica12 tion.

13 If the Secretary finds that there is an imminent hazard

14 to the health of man or of the animals for which such

15 drug is intended, the Secretary may suspend the condi16 tional approval of such application immediately, and give

17 the applicant prompt notice of the Secretary’s action and

18 afford the applicant the opportunity for an expedited in19 formal hearing, but the authority conferred by this sen20 tence to suspend the conditional approval of an application

21 shall not be delegated below the Commissioner of Food

22 and Drugs.

23 ‘‘(2) The Secretary may also, after due notice and

24 opportunity for an expedited informal hearing to the appli25 cant, issue an order withdrawing the conditional approval
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1 of an application with respect to any new animal drug

2 under this section if the Secretary finds—

3 ‘‘(A) that the applicant has failed to establish

4 a system for maintaining required records, or has

5 repeatedly or deliberately failed to maintain such

6 records or to make required reports in accordance

7 with a regulation or order under subsection (h), or

8 the applicant has refused to permit access to, or

9 copying or verification of, such records as required

10 by paragraph (2) of such subsection;

11 ‘‘(B) that on the basis of new information be12 fore the Secretary, evaluated together with the evi13 dence before the Secretary when the application was

14 conditionally approved, the methods used in, or the

15 facilities and controls used for, the manufacture,

16 processing, and packing of such drug are inadequate

17 to assure and preserve its identity, strength, quality,

18 and purity and were not made adequate within a

19 reasonable time after receipt of written notice from

20 the Secretary specifying the matter complained of;

21 or

22 ‘‘(C) that on the basis of new information be23 fore the Secretary, evaluated together with the evi24 dence before the Secretary when the application was

25 conditionally approved, the labeling of such drug,
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1 based on a fair evaluation of all material facts, is

2 false or misleading in any particular and was not

3 corrected within a reasonable time after receipt of

4 written notice from the Secretary specifying the

5 matter complained of.

6 ‘‘(3) Any order under this subsection shall state the

7 findings upon which it is based.

8 ‘‘(f) The decision of the Secretary under subsections

9 (c), (d), or (e) shall constitute a final agency decision for

10 purposes of judicial review.

11 ‘‘(g) When an application filed pursuant to subsection

12 (a) is conditionally approved, the Secretary shall by notice

13 publish in the Federal Register the name and address of

14 the applicant and the conditions and indications of use of

15 the new animal drug covered by such application, includ16 ing any tolerance and withdrawal period or other use re17 striction and, if such new animal drug is intended for use

18 in animal feed, appropriate purposes and conditions of use

19 (including special labeling requirements and any require20 ment that an animal feed bearing or containing the new

21 animal drug be limited to use under the professional su22 pervision of a licensed veterinarian) applicable to any ani23 mal feed for use in which such drug is conditionally ap24 proved, the expiration date of the conditional approval,

25 and such other information, upon the basis of which such
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1 application was conditionally approved, as the Secretary

2 deems necessary to assure the safe and effective use of

3 such drug. Upon withdrawal of conditional approval of

4 such new animal drug application or upon its suspension,

5 the Secretary shall publish a notice in the Federal Reg6 ister.

7 ‘‘(h)(1) In the case of any new animal drug for which

8 a conditional approval of an application filed pursuant to

9 subsection (a) is in effect, the applicant shall establish and

10 maintain such records, and make such reports to the Sec11 retary, of data relating to experience, and other data or

12 information, received or otherwise obtained by such appli13 cant with respect to such drug, or with respect to animal

14 feeds bearing or containing such drug, as the Secretary

15 may by general regulation, or by order with respect to

16 such application, prescribe on the basis of a finding that

17 such records and reports are necessary in order to enable

18 the Secretary to determine, or facilitate a determination,

19 whether there is or may be ground for refusing to renew

20 the conditional approval under subsection (d) or for invok21 ing subsection (e). Such regulation or order shall provide,

22 where the Secretary deems it to be appropriate, for the

23 examination, upon request, by the persons to whom such

24 regulation or order is applicable, of similar information re25 ceived or otherwise obtained by the Secretary.
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1 ‘‘(2) Every person required under this subsection to

2 maintain records, and every person in charge or custody

3 thereof, shall, upon request of an officer or employee des4 ignated by the Secretary, permit such officer or employee

5 at all reasonable times to have access to and copy and

6 verify such records.

7 ‘‘(i)(1) The label and labeling of a drug with a condi8 tional approval under this section shall state that fact

9 prominently and conspicuously.

10 ‘‘(2) Conditions of use that are the subject of an con11 ditional approval under this section shall not be combined

12 in product labeling with any conditions of use approved

13 under section 512.

14 ‘‘(j)(1) Safety and effectiveness data and information

15 which has been submitted in an application filed under

16 subsection (a) for a drug and which has not previously

17 been disclosed to the public shall be made available to the

18 public, upon request, unless extraordinary circumstances

19 are shown—

20 ‘‘(A) if no work is being or will be undertaken

21 to have the application conditionally approved,

22 ‘‘(B) if the Secretary has determined that the

23 application is not conditionally approvable and all

24 legal appeals have been exhausted,
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1 ‘‘(C) if conditional approval of the application

2 under subsection (c) is withdrawn and all legal ap3 peals have been exhausted, or

4 ‘‘(D) if the Secretary has determined that such

5 drug is not a new animal drug.

6 ‘‘(2) Any request for data and information pursuant

7 to paragraph (1) shall include a verified statement by the

8 person making the request that any data or information

9 received under such paragraph shall not be disclosed by

10 such person to any other person—

11 ‘‘(A) for the purpose of, or as part of a plan,

12 scheme, or device for, obtaining the right to make,

13 use, or market, or making, using, or marketing, out14 side the United States, the drug identified in the ap15 plication filed under subsection (a), and

16 ‘‘(B) without obtaining from any person to

17 whom the data and information are disclosed an

18 identical verified statement, a copy of which is to be

19 provided by such person to the Secretary, which

20 meets the requirements of this paragraph.

21 ‘‘(k) To the extent consistent with the public health,

22 the Secretary shall promulgate regulations for exempting

23 from the operation of this section new animal drugs, and

24 animal feeds bearing or containing new animal drugs, in25 tended solely for investigational use by experts qualified
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1 by scientific training and experience to investigate the

2 safety and effectiveness of animal drugs. Such regulations

3 may, in the discretion of the Secretary, among other con4 ditions relating to the protection of the public health, pro5 vide for conditioning such exemption upon the establish6 ment and maintenance of such records, and the making

7 of such reports to the Secretary, by the manufacturer or

8 the sponsor of the investigation of such article, of data

9 (including but not limited to analytical reports by inves10 tigators) obtained as a result of such investigational use

11 of such article, as the Secretary finds will enable the Sec12 retary to evaluate the safety and effectiveness of such arti13 cle in the event of the filing of an application pursuant

14 to this section. Such regulations, among other things, shall

15 set forth the conditions (if any) upon which animals treat16 ed with such articles, and any products of such animals

17 (before or after slaughter), may be marketed for food use.

18 ‘‘INDEX OF LEGALLY MARKETED UNAPPROVED MINOR

19 USE ANIMAL DRUGS FOR MINOR SPECIES WITH NO

20 HUMAN FOOD SAFETY CONCERN

21 ‘‘SEC. 574. (a) The Secretary shall establish an index

22 of unapproved minor use new animal drugs that may be

23 lawfully marketed for use in minor species with no human

24 food safety concern. The index is intended to benefit pri25 marily zoo and wildlife species, aquarium and bait fish,

26 reptiles and amphibians, caged birds, and small pet mam-
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1 mals as well as some commercially produced species such

2 as cricket, earthworms and possibly nonfood life stages of

3 some minor species used for human food such as oysters

4 and shellfish. The index shall conform to the requirements

5 in subsection (d).

6 ‘‘(b)(1) Any person may submit a request to the Sec7 retary for a preliminary determination that a drug may

8 be eligible for inclusion in the index. Such a request shall

9 include—

10 ‘‘(A) information regarding the proposed spe11 cies, conditions of use, and anticipated annual pro12 duction;

13 ‘‘(B) information regarding product formulation

14 and manufacturing; and

15 ‘‘(C) information sufficient for the Secretary to

16 determine that there does not appear to be human

17 food safety, environmental safety, occupational safe18 ty, or bioavailability concerns with the proposed use

19 of the drug.

20 ‘‘(2) Within 90 days after the submission of a request

21 for a preliminary determination under paragraph (1), the

22 Secretary shall grant or deny the request, and notify the

23 submitter of the Secretary’s conclusion. The Secretary

24 shall grant the request if it appears that—
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1 ‘‘(A) the request addresses the need for a minor

2 use animal drug for which there is no approved or

3 conditionally approved drug, and

4 ‘‘(B) the proposed drug use does not appear to

5 raise human food safety, environmental safety, occu6 pational safety, or bioavailability concerns.

7 If the Secretary denies the request, the Secretary shall

8 provide due notice and an opportunity for an expedited

9 informal hearing. If the Secretary does not grant or deny

10 the request within 90 days, the Secretary shall provide the

11 Committee on Commerce of the House of Representatives

12 and the Committee on Health, Education, Labor, and

13 Pensions of the Senate with the reasons action on the re14 quest did not occur within such 90 days. The decision of

15 the Secretary under this paragraph shall constitute a final

16 agency decision for purposes of judicial review.

17 ‘‘(c)(1) With respect to a drug for which the Sec18 retary has made a preliminary determination of eligibility

19 under subsection (b), the submitter of that request may

20 request that the Secretary add the drug to the index estab21 lished by subsection (a). Such a request shall include—

22 ‘‘(A) a copy of the Secretary’s preliminary de23 termination of eligibility issued under subsection (b);

24 ‘‘(B) a qualified expert panel report that meets

25 the requirements in paragraph (2);
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1 ‘‘(C) a proposed index entry;

2 ‘‘(D) proposed labeling;

3 ‘‘(E) anticipated annual production of the drug;

4 and

5 ‘‘(F) a commitment to manufacture, label, and

6 distribute the drug in accordance with the index

7 entry and any additional requirements that the Sec8 retary may prescribe by general regulation or spe9 cific order.

10 ‘‘(2) For purposes of paragraph (1), a ‘qualified ex11 pert panel report’ is a written report that—

12 ‘‘(A) is authored by a panel of individuals quali13 fied by scientific training and experience to evaluate

14 the safety and effectiveness of animal drugs for the

15 intended uses and species in question and operating

16 external to the Food and Drug Administration;

17 ‘‘(B) addresses all available target animal safe18 ty and effectiveness information, including anecdotal

19 information where necessary;

20 ‘‘(C) addresses proposed labeling;

21 ‘‘(D) addresses whether the drug should be lim22 ited to use under the professional supervision of a li23 censed veterinarian; and

24 ‘‘(E) addresses whether, in the expert panel’s

25 opinion, the benefits of using the drug outweigh its
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1 risks, taking into account the harm being caused by

2 the absence of an approved or conditionally approved

3 new animal drug for the minor use in question.

4 ‘‘(3) Within 180 days after the receipt of a request

5 for listing a drug in the index, the Secretary shall grant

6 or deny the request. The Secretary shall grant the request

7 if the Secretary finds, on the basis of the expert panel

8 report and other information available to the Secretary,

9 that the benefits of using the drug outweigh its risks, tak10 ing into account the harm caused by the absence of an

11 approved or conditionally approved new animal drug for

12 the minor use in question. If the Secretary denies the re13 quest, the Secretary shall provide due notice and the op14 portunity for an expedited informal hearing. If the Sec15 retary does not grant or deny the request within 180 days,

16 the Secretary shall provide the Committee on Commerce

17 of the House of Representatives and the Committee on

18 Health, Education, Labor, and Pensions of the Senate

19 with the reasons action on the request did not occur within

20 such 180 days. The decision of the Secretary under this

21 paragraph shall constitute a final agency decision for pur22 poses of judicial review.

23 ‘‘(d)(1) The index established by subsection (a) shall

24 include the following information for each listed drug:
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1 ‘‘(A) The name and address of the sponsor of

2 the index listing.

3 ‘‘(B) The name of the drug, its dosage form,

4 and its strength.

5 ‘‘(C) Labeling.

6 ‘‘(D) Production limits or other conditions the

7 Secretary deems necessary to prevent misuse of the

8 drug.

9 ‘‘(E) Requirements that the Secretary deems

10 necessary for the safe and effective use of the drug.

11 ‘‘(2) The Secretary shall publish the index, and revise

12 it monthly.

13 ‘‘(e)(1) If the Secretary finds, after due notice to the

14 sponsor and an opportunity for an expedited informal

15 hearing, that—

16 ‘‘(A) on the basis of new information before the

17 Secretary, evaluated together with the evidence

18 available to the Secretary when the drug was listed

19 in the index, the benefits of using the drug do not

20 outweigh its risks; or

21 ‘‘(B) the conditions and limitations of use in

22 the index listing have not been followed, the Sec23 retary shall remove the drug from the index. The

24 decision of the Secretary shall constitute final agen25 cy decision for purposes of judicial review.
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1 ‘‘(2) If the Secretary finds that there is an imminent

2 hazard to the health of man or of the animals for which

3 such drug is intended, the Secretary may suspend the list4 ing of such drug immediately, and give the sponsor prompt

5 notice of the Secretary’s action and afford the sponsor the

6 opportunity for an expedited informal hearing, but the au7 thority conferred by this sentence to suspend the listing

8 of a drug shall not be delegated below the Commissioner

9 of Food and Drugs.

10 ‘‘(f)(1) In the case of any new animal drug for which

11 an index listing pursuant to subsection (a) is in effect,

12 the sponsor shall establish and maintain such records, and

13 make such reports to the Secretary, of data relating to

14 experience, and other data or information, received or oth15 erwise obtained by such sponsor with respect to such drug,

16 or with respect to animal feeds bearing or containing such

17 drug, as the Secretary may by general regulation, or by

18 order with respect to such listing, prescribe on the basis

19 of a finding that such records and reports are necessary

20 in order to enable the Secretary to determine, or facilitate

21 a determination, whether there is or may be ground for

22 invoking subsection (e). Such regulation or order shall

23 provide, where the Secretary deems it to be appropriate,

24 for the examination, upon request, by the persons to whom
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1 such regulation or order is applicable, of similar informa2 tion received or otherwise obtained by the Secretary.

3 ‘‘(2) Every person required under this subsection to

4 maintain records, and every person in charge or custody

5 thereof, shall, upon request of an officer or employee des6 ignated by the Secretary, permit such officer or employee

7 at all reasonable times to have access to and copy and

8 verify such records.

9 ‘‘(g) The labeling of a drug that is the subject of an

10 index listing shall state, prominently and conspicuously,

11 that the drug is legally marketed but not approved.

12 ‘‘(h) The Secretary shall promulgate regulations to

13 implement this section. Such regulations shall address,

14 among other subjects, the composition of the expert panel,

15 sponsorship of the expert panel under the auspices of a

16 recognized professional organization, conflict of interest

17 criteria for panel members, and the use of advisory com18 mittees convened by the Food and Drug Administration.

19 ‘‘(i) To the extent consistent with the public health,

20 the Secretary shall promulgate regulations for exempting

21 from the operation of this section new animal drugs in22 tended solely for investigational use by experts qualified

23 by scientific training and experience to investigate the

24 safety and effectiveness of animal drugs. Such regulations

25 may, in the discretion of the Secretary, among other con-
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•HR 4780 IH

1 ditions relating to the protection of the public health, pro2 vide for conditioning such exemption upon the establish3 ment and maintenance of such records, and the making

4 of such reports to the Secretary, by the manufacturer or

5 the sponsor of the investigation of such article, of data

6 (including but not limited to analytical reports by inves7 tigators) obtained as a result of such investigational use

8 of such article, as the Secretary finds will enable the Sec9 retary to evaluate the safety and effectiveness of such arti10 cle in the event of the filing of a request for an index list11 ing pursuant to this section. Such regulations, among

12 other things, shall set forth the conditions (if any) upon

13 which animals treated with such articles, and any products

14 of such animals (before or after slaughter), may be mar15 keted for food use.

16 ‘‘GRANTS AND CONTRACTS FOR DEVELOPMENT OF

17 ANIMAL DRUGS FOR MINOR USES

18 ‘‘SEC. 575. (a) The Secretary may make grants to

19 and enter into contracts with public and private entities

20 and individuals to assist in defraying the costs of qualified

21 testing expenses and manufacturing expenses incurred in

22 connection with the development of drugs for minor uses.

23 ‘‘(b) For purposes of subsection (a) of this section:

24 ‘‘(1) The term ‘qualified testing’ means—

25 ‘‘(A) clinical testing—
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1 ‘‘(i) which is carried out under an ex2 emption for a drug for minor uses under

3 section 512(j), 573(k), or 574(i); and

4 ‘‘(ii) which occurs after the date such

5 drug is designated under section 571 and

6 before the date on which an application

7 with respect to such drug is submitted

8 under section 512; and

9 ‘‘(B) preclinical testing involving a drug

10 for minor use which occurs after the date such

11 drug is designated under section 571 and before

12 the date on which an application with respect to

13 such drug is submitted under section 512.

14 ‘‘(2) The term ‘manufacturing expenses’ means

15 expenses incurred in developing processes and proce16 dures intended to meet current good manufacturing

17 practice requirements which occur after such drug is

18 designated under section 571 and before the date on

19 which an application with respect to such drug is

20 submitted under section 512.

21 ‘‘(c) For grants and contracts under subsection (a),

22 there are authorized to be appropriated $1,000,000 for fis23 cal year 2001, $1,500,000 for fiscal year 2002, and

24 $2,000,000 for fiscal year 2003.’’.
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1 (c) THREE-YEAR EXCLUSIVITY FOR MINOR USE AP2 PROVALS.—Section 512(c)(2)(F)(ii), (iii), and (v) of the

3 Federal Food, Drug, and Cosmetic Act is amended by

4 striking ‘‘(other than bioequivalence or residue studies)’’

5 and inserting the following: ‘‘(other than bioequivalence

6 studies or, except in the case of a new animal drug for

7 minor uses, residue studies)’’.

8 (d) SCOPE OF REVIEW FOR MINOR USE APPLICA9 TIONS.—Section 512(d) of the Federal Food, Drug, and

10 Cosmetic Act is amended by adding the following new

11 paragraph at the end:

12 ‘‘(5) In reviewing a supplement to an approved appli13 cation that seeks a minor use approval, the Secretary shall

14 not reconsider information in the approved application to

15 determine whether it meets current standards for ap16 proval.’’.

17 (e) PRESUMPTION OF NEW ANIMAL DRUG STA18 TUS.—Section 709 of the Federal Food, Drug, and Cos19 metic Act is amended by designating the existing text as

20 subsection (a), and by adding the following new subsection

21 (b):

22 ‘‘(b) In any action to enforce the requirements of this

23 Act respecting a drug for minor use that is not the subject

24 of an approval under section 512, a conditional approval
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1 under section 573, or an index listing under section 574,

2 it shall be presumed that the drug is a new animal drug.’’.

3 (f) CONFORMING AMENDMENTS.—

4 (1) Section 512(a)(1) of the Federal Food,

5 Drug, and Cosmetic Act is amended by striking sub6 paragraphs (A) and (B) and inserting the following:

7 ‘‘(A) there is in effect an approval of an

8 application filed pursuant to subsection (b) with

9 respect to such use or intended use of such

10 drug, and such drug, its labeling, and such use

11 conform to such approved application;

12 ‘‘(B) there is in effect a conditional ap13 proval of an application filed pursuant to sec14 tion 573 with respect to such use or intended

15 use of such drug, and such drug, its labeling,

16 and such use conform to such conditionally ap17 proved application; or

18 ‘‘(C) there is in effect an index listing pur19 suant to section 574 with respect to such use

20 or intended use of such drug, and such drug, its

21 labeling, and such use conform to such index

22 listing.’’.

23 (2) Section 512(a)(4) of the Federal Food,

24 Drug, and Cosmetic Act is amended by adding after

25 ‘‘if an approval of an application filed under sub-
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1 section (b)’’ the following: ‘‘or a conditional approval

2 of an application filed under section 573’’.

3 (3) Section 503(f) of the Federal Food, Drug,

4 and Cosmetic Act is amended as follows:

5 (A) In paragraph (1)(A)(ii) by striking

6 ‘‘512’’ and inserting the following: ‘‘512, a con7 ditionally approved application under subsection

8 (b) of section 573, or an index listing under

9 subsection (a) of section 574.’’.

10 (B) In paragraph (3) by striking ‘‘section

11 512’’ and inserting the following: ‘‘sections 512,

12 573, or 574.’’.

13 (4) Section 504(a)(1) of the Federal Food,

14 Drug, and Cosmetic Act is amended by striking

15 ‘‘512(b)’’ and inserting the following: ‘‘512(b), a

16 conditionally approved application filed pursuant to

17 section 573, or an index listing pursuant to section

18 574.’’.

19 (5) Section 504(a)(2)(B) and (b) of the Federal

20 Food, Drug, and Cosmetic Act are amended by

21 striking ‘‘512(i)’’ and inserting the following:

22 ‘‘512(i) or section 573(g), or the index listing pursu23 ant to section 574.’’.

24 (6) Section 403(a) of the Food and Drug Ad25 ministration Modernization Act (Public Law 105–
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•HR 4780 IH

1 115) is amended by adding the following sentence at

2 the end: ‘‘For purposes of this section, an approved

3 article includes a new animal drug that is the sub4 ject of a conditional approval or an index listing

5 under sections 573 and 574 of the Federal Food,

6 Drug, and Cosmetic Act, respectively.’’.

7 (g) REGULATIONS.—The Secretary of Health and

8 Human Services shall publish proposed regulations to im9 plement amendments to the Federal Food, Drug, and Cos10 metic Act made by this Act within 6 months of the date

11 of enactment, and final regulations within 24 months of

12 the date of enactment.

13 (h) OFFICE OF MINOR USE ANIMAL DRUG DEVEL14 OPMENT.—

15 (1) The Secretary shall establish within the

16 Food and Drug Administration, Center of Veteri17 nary Medicine, an Office of Minor Use Animal Drug

18 Development that reports directly to the Director of

19 the Center for Veterinary Medicine. This office shall

20 be responsible for designating minor use animal

21 drugs under section 571 of the Federal Food, Drug,

22 and Cosmetic Act, for administering grants and con23 tracts for the development of animal drugs for minor

24 uses under section 575 of the Federal Food, Drug,

25 and Cosmetic Act, and for serving as liaison with
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1 any party interested in minor use animal drug devel2 opment.

3 (2) For this office, there are authorized to be

4 appropriated $1,200,000 for each of the fiscal years

5 2001 through 2003.

6 SEC. 4. CREDIT FOR CLINICAL TESTING EXPENSES FOR

7 CERTAIN ANIMAL DRUGS FOR MINOR USES.

8 (a) IN GENERAL.—Subpart D of part IV of sub9 chapter A of chapter 1 of the Internal Revenue Code of

10 1986 is amended by inserting after section 45C the fol11 lowing new section:

12 ‘‘SEC. 45D. CLINICAL TESTING EXPENSES FOR CERTAIN

13 ANIMAL DRUGS FOR MINOR USES.

14 ‘‘(a) GENERAL RULE.—For purposes of section 38,

15 the minor use animal drug credit determined under this

16 section for the taxable year is an amount equal to 50 per17 cent of the qualified animal clinical testing expenses for

18 the taxable year.

19 ‘‘(b) QUALIFIED ANIMAL CLINICAL TESTING EX20 PENSES.—For purposes of this section—

21 ‘‘(1) QUALIFIED ANIMAL CLINICAL TESTING EX22 PENSES.—

23 ‘‘(A) IN GENERAL.—Except as otherwise

24 provided in this paragraph, the term ‘qualified

25 animal clinical testing expenses’ means the
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1 amounts which are paid or incurred by the tax2 payer during the taxable year which would be

3 described in subsection (b) of section 41 if such

4 subsection were applied with the modifications

5 set forth in subparagraph (B).

6 ‘‘(B) MODIFICATIONS.—For purposes of

7 subparagraph (A), subsection (b) of section 41

8 shall be applied—

9 ‘‘(i) by substituting ‘animal clinical

10 testing’ for ‘qualified research’ each place

11 it appears in paragraphs (2) and (3) of

12 such subsection, and

13 ‘‘(ii) by substituting ‘100 percent’ for

14 ‘65 percent’ in paragraph (3)(A) of such

15 subsection.

16 ‘‘(C) EXCLUSION FOR AMOUNTS FUNDED

17 BY GRANTS, ETC.—The term ‘qualified animal

18 clinical testing expenses’ shall not include any

19 amount to the extent such amount is funded by

20 any grant, contract, or otherwise by another

21 person (or any governmental entity).

22 ‘‘(D) SPECIAL RULE.—For purposes of

23 this paragraph:
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1 ‘‘(i) section 41 shall be deemed to re2 main in effect for periods after June 30,

3 2000; and

4 ‘‘(ii) the trade or business require5 ment of section 41(b)(1) shall be deemed

6 to be satisfied in the case of a taxpayer

7 that owns animals and that conducts clin8 ical testing on such animals.

9 ‘‘(2) ANIMAL CLINICAL TESTING.—

10 ‘‘(A) IN GENERAL.—The term ‘animal clin11 ical testing’ means any clinical testing—

12 ‘‘(i) which is carried out under an ex13 emption for a drug being tested for minor

14 use under section 512(j), 573(k), or 574(i)

15 of the Federal Food, Drug, and Cosmetic

16 Act (or regulations issued under such sec17 tions),

18 ‘‘(ii) which occurs—

19 ‘‘(I) after the date such drug is

20 designated under section 571 of such

21 Act, and

22 ‘‘(II) before the date on which an

23 application with respect to such drug

24 is approved under section 512(c) of

25 such Act, and
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1 ‘‘(iii) which is conducted by or on be2 half of—

3 ‘‘(I) the taxpayer to whom the

4 designation under such section 571

5 applies, or

6 ‘‘(II) the owner of the animals

7 that are the subject of clinical testing.

8 ‘‘(B) TESTING MUST BE FOR MINOR

9 USE.—Animal clinical testing shall be taken

10 into account under subparagraph (A) only to

11 the extent such testing is related to the use of

12 a drug for the minor use for which it was des13 ignated under section 571 of the Federal Food,

14 Drug, and Cosmetic Act.

15 ‘‘(c) COORDINATION WITH CREDIT FOR INCREASING

16 RESEARCH EXPENDITURES.—

17 ‘‘(1) IN GENERAL.—Except as provided in para18 graph (2), any qualified animal clinical testing ex19 penses for a taxable year to which an election under

20 this section applies shall not be taken into account

21 for purposes of determining the credit allowable

22 under section 41 for such taxable year.

23 ‘‘(2) EXPENSES INCLUDED IN DETERMINING

24 BASE PERIOD RESEARCH EXPENSES.—Any qualified

25 animal clinical testing expenses for any taxable year
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1 which are qualified research expenses (within the

2 meaning of section 41(b)) shall be taken into ac3 count in determining base period research expenses

4 for purposes of applying section 41 to subsequent

5 taxable years.

6 ‘‘(d) DEFINITION AND SPECIAL RULES.—

7 ‘‘(1) MINOR USE.—For purposes of this section,

8 the term ‘minor use’ has the meaning given such

9 term by section 201(ll) of the Federal Food, Drug,

10 and Cosmetic Act. Determinations under the pre11 ceding sentence with respect to any drug shall be

12 made on the basis of the facts and circumstances as

13 of the date such drug is designated under section

14 571 of the Federal Food, Drug, and Cosmetic Act.

15 ‘‘(2) DENIAL OF CREDIT FOR TESTING CON16 DUCTED BY CORPORATIONS TO WHICH SECTION 936

17 APPLIES.—No credit shall be allowed under this sec18 tion with respect to any animal clinical testing con19 ducted by a corporation to which an election under

20 section 936 applies.

21 ‘‘(3) CERTAIN RULES MADE APPLICABLE.—

22 Rules similar to the rules of paragraphs (1) and (2)

23 of section 41(f) shall apply for purposes of this sec24 tion.
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1 ‘‘(4) ELECTION.—This section shall apply to

2 any taxpayer for any taxable year only if such tax3 payer elects (at such time and in such manner as

4 the Secretary may by regulations prescribe) to have

5 this section apply for such taxable year.’’.

6 (b) CONFORMING AMENDMENTS.—

7 (1) Section 38(b) of such Code is amended—

8 (A) by striking ‘‘plus’’ at end of paragraph

9 (11),

10 (B) by striking the period at the end of

11 paragraph (12) and inserting ‘‘, plus’’, and

12 (C) by adding at the end the following new

13 paragraph:

14 ‘‘(13) the minor use animal drug credit deter15 mined under section 45D(a).’’.

16 (2) Section 280C(b) of such Code is amended—

17 (A) in paragraph (1), by striking ‘‘section

18 45C(b)’’ and inserting ‘‘section 45C(b) or

19 45D(b)’’, and

20 (B) in paragraphs (1) and (2), by striking

21 ‘‘section 45C’’ each place it appears and insert22 ing ‘‘section 45C or 45D’’.

23 (c) CLERICAL AMENDMENT.—The table of sections

24 for subpart D of part IV of subchapter A of chapter 1
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1 of such Code is amended by inserting after the item relat2 ing to section 45C the following new item:

‘‘Sec. 45D. Clinical testing expenses for certain animal drugs for

minor uses.’’.

3 (d) EFFECTIVE DATE.—The amendments made by

4 this section shall apply to taxable years beginning after

5 the date of the enactment of this Act.

6 (e) REGULATIONS.—The Secretary of the Treasury

7 shall publish proposed regulations to implement amend8 ments to the Internal Revenue Code of 1986 made by this

9 Act within 6 months after the date of the enactment of

10 this Act, and final regulations within 24 months after such

11 date.

Æ