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[House Report 104-823]
[From the U.S. Government Publishing Office]

104th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 2d Session                                                     104-823
_______________________________________________________________________

 
                  ANIMAL DRUG AVAILABILITY ACT OF 1996

                                _______
                                

 September 24, 1996.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

  Mr. Bliley, from the Committee on Commerce, submitted the following

                              R E P O R T

                        [To accompany H.R. 2508]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Commerce, to whom was referred the bill 
(H.R. 2508) to amend the Federal Food, Drug, and Cosmetic Act 
to provide for improvements in the process of approving and 
using animal drugs, and for other purposes, having considered 
the same, report favorably thereon with an amendment and 
recommend that the bill as amended do pass.

                                CONTENTS

                                                                   Page
The Amendment....................................................     1
Purpose and Summary..............................................     8
Background and Need for Legislation..............................     9
Hearings.........................................................     9
Committee Consideration..........................................     9
Rollcall Votes...................................................    10
Committee Oversight Findings.....................................    10
Committee on Government Reform and Oversight.....................    10
New Budget Authority and Tax Expenditures........................    10
Committee Cost Estimate..........................................    10
Congressional Budget Office Estimate.............................    11
Inflationary Impact Statement....................................    13
Advisory Committee Statement.....................................    13
Section-by-Section Analysis of the Legislation...................    13
Changes in Existing Law Made by the Bill, as Reported............    18

                               Amendment

    The amendment is as follows:
    Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. SHORT TITLE; REFERENCE.

  (a) Short Title.--This Act may be cited as the ``Animal Drug 
Availability Act of 1996''.
  (b) Reference.--Whenever in this Act an amendment or repeal is 
expressed in terms of an amendment to, or repeal of, a section or other 
provision, the reference shall be considered to be made to a section or 
other provision of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
321 et seq.).

SEC. 2. EVIDENCE OF EFFECTIVENESS.

  (a) Original Applications.--Paragraph (3) of section 512(d) (21 
U.S.C. 360b(d)) is amended to read as follows:
  ``(3) As used in this section, the term `substantial evidence' means 
evidence consisting of one or more adequate and well controlled 
investigations, such as--
          ``(A) a study in a target species;
          ``(B) a study in laboratory animals;
          ``(C) any field investigation that may be required under this 
        section and that meets the requirements of subsection (b)(3) if 
        a presubmission conference is requested by the applicant;
          ``(D) a bioequivalence study; or
          ``(E) an in vitro study;
 by experts qualified by scientific training and experience to evaluate 
the effectiveness of the drug involved, on the basis of which it could 
fairly and reasonably be concluded by such experts that the drug will 
have the effect it purports or is represented to have under the 
conditions of use prescribed, recommended, or suggested in the labeling 
or proposed labeling thereof.''.
  (b) Conforming Amendments.--
          (1) Clauses (ii) and (iii) of section 512(c)(2)(F) (21 U.S.C. 
        360b(c)(2)(F)) are each amended--
                  (A) by striking ``reports of new clinical or field 
                investigations (other than bioequivalence or residue 
                studies) and,'' and inserting ``substantial evidence of 
                the effectiveness of the drug involved, any studies of 
                animal safety, or,''; and
                  (B) by striking ``essential to'' and inserting 
                ``required for''.
          (2) Section 512(c)(2)(F)(v) (21 U.S.C. 360b(c)(2)(F)(v)) is 
        amended--
                  (A) by striking ``subparagraph (B)(iv)'' each place 
                it appears and inserting ``clause (iv)'';
                  (B) by striking ``reports of clinical or field 
                investigations'' and inserting ``substantial evidence 
                of the effectiveness of the drug involved, any studies 
                of animal safety,''; and
                  (C) by striking ``essential to'' and inserting 
                ``required for''.
  (c) Combination Drugs.--Section 512(d) (21 U.S.C. 360b(d)), as 
amended by subsection (a) is amended by adding at the end the 
following:
  ``(4) In a case in which an animal drug contains more than one active 
ingredient, or the labeling of the drug prescribes, recommends, or 
suggests use of the drug in combination with one or more other animal 
drugs, and the active ingredients or drugs intended for use in the 
combination have previously been separately approved for particular 
uses and conditions of use for which they are intended for use in the 
combination--
          ``(A) the Secretary shall not issue an order under paragraph 
        (1)(A), (1)(B), or (1)(D) refusing to approve the application 
        for such combination on human food safety grounds unless the 
        Secretary finds that the application fails to establish that--
                  ``(i) none of the active ingredients or drugs 
                intended for use in the combination, respectively, at 
                the longest withdrawal time of any of the active 
                ingredients or drugs in the combination, respectively, 
                exceeds its established tolerance; or
                  ``(ii) none of the active ingredients or drugs in the 
                combination interferes with the methods of analysis for 
                another of the active ingredients or drugs in the 
                combination, respectively;
          ``(B) the Secretary shall not issue an order under paragraph 
        (1)(A), (1)(B), or (1)(D) refusing to approve the application 
        for such combination on target animal safety grounds unless the 
        Secretary finds that--
                  ``(i)(I) there is a substantiated scientific issue, 
                specific to one or more of the active ingredients or 
                animal drugs in the combination, that cannot adequately 
                be evaluated based on information contained in the 
                application for the combination (including any 
                investigations, studies, or tests for which the 
                applicant has a right of reference or use from the 
                person by or for whom the investigations, studies, or 
                tests were conducted); or
                  ``(II) there is a scientific issue raised by target 
                animal observations contained in studies submitted to 
                the Secretary as part of the application; and
                  ``(ii) based on the Secretary's evaluation of the 
                information contained in the application with respect 
                to the issues identified in clauses (i) (I) and (II), 
                paragraph (1)(A), (B), or (D) apply;
          ``(C) except in the case of a combination that contains a 
        nontopical antibacterial ingredient or animal drug, the 
        Secretary shall not issue an order under paragraph (1)(E) 
        refusing to approve an application for a combination animal 
        drug intended for use other than in animal feed or drinking 
        water unless the Secretary finds that the application fails to 
        demonstrate that--
                  ``(i) there is substantial evidence that any active 
                ingredient or animal drug intended only for the same 
                use as another active ingredient or animal drug in the 
                combination makes a contribution to labeled 
                effectiveness;
                  ``(ii) each active ingredient or animal drug intended 
                for at least one use that is different from all other 
                active ingredients or animal drugs used in the 
                combination provides appropriate concurrent use for the 
                intended target population; or
                  ``(iii) where based on scientific information the 
                Secretary has reason to believe the active ingredients 
                or animal drugs may be physically incompatible or have 
                disparate dosing regimens, such active ingredients or 
                animal drugs are physically compatible or do not have 
                disparate dosing regimens; and
          ``(D) the Secretary shall not issue an order under paragraph 
        (1)(E) refusing to approve an application for a combination 
        animal drug intended for use in animal feed or drinking water 
        unless the Secretary finds that the application fails to 
        demonstrate that--
                  ``(i) there is substantial evidence that any active 
                ingredient or animal drug intended only for the same 
                use as another active ingredient or animal drug in the 
                combination makes a contribution to the labeled 
                effectiveness;
                  ``(ii) each of the active ingredients or animal drugs 
                intended for at least one use that is different from 
                all other active ingredients or animal drugs used in 
                the combination provides appropriate concurrent use for 
                the intended target population;
                  ``(iii) where a combination contains more than one 
                nontopical antibacterial ingredient or animal drug, 
                there is substantial evidence that each of the 
                nontopical antibacterial ingredients or animal drugs 
                makes a contribution to the labeled effectiveness; or
                  ``(iv) where based on scientific information the 
                Secretary has reason to believe the active ingredients 
                or animal drugs intended for use in drinking water may 
                be physically incompatible, such active ingredients or 
                animal drugs intended for use in drinking water are 
                physically compatible.''.
  (d) Presubmission Conference.--Section 512(b) (21 U.S.C. 360b(b)) is 
amended by adding at the end the following:
  ``(3) Any person intending to file an application under paragraph (1) 
or a request for an investigational exemption under subsection (j) 
shall be entitled to one or more conferences prior to such submission 
to reach an agreement acceptable to the Secretary establishing a 
submission or an investigational requirement, which may include a 
requirement for a field investigation. A decision establishing a 
submission or an investigational requirement shall bind the Secretary 
and the applicant or requestor unless (A) the Secretary and the 
applicant or requestor mutually agree to modify the requirement, or (B) 
the Secretary by written order determines that a substantiated 
scientific requirement essential to the determination of safety or 
effectiveness of the animal drug involved has appeared after the 
conference. No later than 25 calendar days after each such conference, 
the Secretary shall provide a written order setting forth a scientific 
justification specific to the animal drug and intended uses under 
consideration if the agreement referred to in the first sentence 
requires more than one field investigation as being essential to 
provide substantial evidence of effectiveness for the intended uses of 
the drug. Nothing in this paragraph shall be construed as compelling 
the Secretary to require a field investigation.''.
  (e) Implementation.--
          (1) In general.--Not later than 6 months after the date of 
        enactment of this Act, the Secretary of Health and Human 
        Services shall issue proposed regulations implementing the 
        amendments made by this Act as described in paragraph (2)(A) of 
        this subsection, and not later than 18 months after the date of 
        enactment of this Act, the Secretary shall issue final 
        regulations implementing such amendments. Not later than 12 
        months after the date of enactment of this Act, the Secretary 
        shall issue proposed regulations implementing the other 
        amendments made by this Act as described in paragraphs (2)(B) 
        and (2)(C) of this subsection, and not later than 24 months 
        after the date of enactment of this Act, the Secretary shall 
        issue final regulations implementing such amendments.
          (2) Contents.--In issuing regulations implementing the 
        amendments made by this Act, and in taking an action to review 
        an application for approval of a new animal drug under section 
        512 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
        360b), or a request for an investigational exemption for a new 
        animal drug under subsection (j) of such section, that is 
        pending or has been submitted prior to the effective date of 
        the regulations, the Secretary shall--
                  (A) further define the term ``adequate and well 
                controlled'', as used in subsection (d)(3) of section 
                512 of such Act, to require that field investigations 
                be designed and conducted in a scientifically sound 
                manner, taking into account practical conditions in the 
                field and differences between field conditions and 
                laboratory conditions;
                  (B) further define the term ``substantial evidence'', 
                as defined in subsection (d)(3) of such section, in a 
                manner that encourages the submission of applications 
                and supplemental applications; and
                  (C) take into account the proposals contained in the 
                citizen petition (FDA Docket No. 91P-0434/CP) jointly 
                submitted by the American Veterinary Medical 
                Association and the Animal Health Institute, dated 
                October 21, 1991.
        Until the regulations required by subparagraph (A) are issued, 
        nothing in the regulations published at 21 C.F.R. 514.111(a)(5) 
        (April 1, 1996) shall be construed to compel the Secretary of 
        Health and Human Services to require a field investigation 
        under section 512(d)(1)(E) of the Federal Food, Drug, and 
        Cosmetic Act (21 U.S.C. 360b(d)(1)(E)) or to apply any of its 
        provisions in a manner inconsistent with the considerations for 
        scientifically sound field investigations set forth in 
        subparagraph (A).
  (f) Minor Species and Uses.--The Secretary of Health and Human 
Services shall consider legislative and regulatory options for 
facilitating the approval under section 512 of the Federal Food, Drug, 
and Cosmetic Act of animal drugs intended for minor species and for 
minor uses and, within 18 months after the date of enactment of this 
Act, announce proposals for legislative or regulatory change to the 
approval process under such section for animal drugs intended for use 
in minor species or for minor uses.

SEC. 3. LIMITATION ON RESIDUES.

  Section 512(d)(1)(F) (21 U.S.C. 360b(d)(1)(F)) is amended to read as 
follows:
          ``(F) upon the basis of information submitted to the 
        Secretary as part of the application or any other information 
        before the Secretary with respect to such drug, any use 
        prescribed, recommended, or suggested in labeling proposed for 
        such drug will result in a residue of such drug in excess of a 
        tolerance found by the Secretary to be safe for such drug;''.

SEC. 4. IMPORT TOLERANCES.

  Section 512(a) (21 U.S.C. 360b(a)) is amended by adding the following 
new paragraph at the end:
  ``(6) For purposes of section 402(a)(2)(D), a use or intended use of 
a new animal drug shall not be deemed unsafe under this section if the 
Secretary establishes a tolerance for such drug and any edible portion 
of any animal imported into the United States does not contain residues 
exceeding such tolerance. In establishing such tolerance, the Secretary 
shall rely on data sufficient to demonstrate that a proposed tolerance 
is safe based on similar food safety criteria used by the Secretary to 
establish tolerances for applications for new animal drugs filed under 
subsection (b)(1). The Secretary may consider and rely on data 
submitted by the drug manufacturer, including data submitted to 
appropriate regulatory authorities in any country where the new animal 
drug is lawfully used or data available from a relevant international 
organization, to the extent such data are not inconsistent with the 
criteria used by the Secretary to establish a tolerance for 
applications for new animal drugs filed under subsection (b)(1). For 
purposes of this paragraph, `relevant international organization' means 
the Codex Alimentarius Commission or other international organization 
deemed appropriate by the Secretary. The Secretary may, under 
procedures specified by regulation, revoke a tolerance established 
under this paragraph if information demonstrates that the use of the 
new animal drug under actual use conditions results in food being 
imported into the United States with residues exceeding the tolerance 
or if scientific evidence shows the tolerance to be unsafe.''.

SEC. 5. VETERINARY FEED DIRECTIVES.

  (a) Section 503.--Section 503(f)(1)(A) (21 U.S.C. 353(f)(1)(A)) is 
amended by inserting after ``other than man'' the following: ``, other 
than a veterinary feed directive drug intended for use in animal feed 
or an animal feed bearing or containing a veterinary feed directive 
drug,''.
  (b) Section 504.--The Federal Food, Drug, and Cosmetic Act is amended 
by inserting after section 503 the following:
                   ``veterinary feed directive drugs
  ``Sec. 504. (a)(1) A drug intended for use in or on animal feed which 
is limited by an approved application filed pursuant to section 512(b) 
to use under the professional supervision of a licensed veterinarian is 
a veterinary feed directive drug. Any animal feed bearing or containing 
a veterinary feed directive drug shall be fed to animals only by or 
upon a lawful veterinary feed directive issued by a licensed 
veterinarian in the course of the veterinarian's professional practice. 
When labeled, distributed, held, and used in accordance with this 
section, a veterinary feed directive drug and any animal feed bearing 
or containing a veterinary feed directive drug shall be exempt from 
section 502(f).
  ``(2) A veterinary feed directive is lawful if it--
          ``(A) contains such information as the Secretary may by 
        general regulation or by order require; and
          ``(B) is in compliance with the conditions and indications 
        for use of the drug set forth in the notice published pursuant 
        to section 512(i).
  ``(3)(A) Any persons involved in the distribution or use of animal 
feed bearing or containing a veterinary feed directive drug and the 
licensed veterinarian issuing the veterinary feed directive shall 
maintain a copy of the veterinary feed directive applicable to each 
such feed, except in the case of a person distributing such feed to 
another person for further distribution. Such person distributing the 
feed shall maintain a written acknowledgment from the person to whom 
the feed is shipped stating that that person shall not ship or move 
such feed to an animal production facility without a veterinary feed 
directive or ship such feed to another person for further distribution 
unless that person has provided the same written acknowledgment to its 
immediate supplier.
  ``(B) Every person required under subparagraph (A) to maintain 
records, and every person in charge or custody thereof, shall, upon 
request of an officer or employee designated by the Secretary, permit 
such officer or employee at all reasonable times to have access to and 
copy and verify such records.
  ``(C) Any person who distributes animal feed bearing or containing a 
veterinary feed directive drug shall upon first engaging in such 
distribution notify the Secretary of that person's name and place of 
business. The failure to provide such notification shall be deemed to 
be an act which results in the drug being misbranded.
  ``(b) A veterinary feed directive drug and any feed bearing or 
containing a veterinary feed directive drug shall be deemed to be 
misbranded if their labeling fails to bear such cautionary statement 
and such other information as the Secretary may by general regulation 
or by order prescribe, or their advertising fails to conform to the 
conditions and indications for use published pursuant to section 512(i) 
or fails to contain the general cautionary statement prescribed by the 
Secretary.
  ``(c) Neither a drug subject to this section, nor animal feed bearing 
or containing such a drug, shall be deemed to be a prescription article 
under any Federal or State law.''.
  (c) Conforming Amendment.--Section 512 (21 U.S.C. 360b) is amended in 
subsection (i) by inserting after ``(including special labeling 
requirements'' the following: ``and any requirement that an animal feed 
bearing or containing the new animal drug be limited to use under the 
professional supervision of a licensed veterinarian''.
  (d) Section 301(e).--Section 301(e) (21 U.S.C. 331(e)) is amended by 
inserting after ``by section 412'' the following: ``, 504,''; and by 
inserting after ``under section 412,'' the following: ``504,''.

SEC. 6. FEED MILL LICENSES.

  (a) Section 512(a).--Paragraphs (1) and (2) of section 512(a) (21 
U.S.C. 360b(a)) are amended to read as follows:
  ``(a)(1) A new animal drug shall, with respect to any particular use 
or intended use of such drug, be deemed unsafe for the purposes of 
section 501(a)(5) and section 402(a)(2)(D) unless --
          ``(A) there is in effect an approval of an application filed 
        pursuant to subsection (b) with respect to such use or intended 
        use of such drug, and
          ``(B) such drug, its labeling, and such use conform to such 
        approved application.
A new animal drug shall also be deemed unsafe for such purposes in the 
event of removal from the establishment of a manufacturer, packer, or 
distributor of such drug for use in the manufacture of animal feed in 
any State unless at the time of such removal such manufacturer, packer, 
or distributor has an unrevoked written statement from the consignee of 
such drug, or notice from the Secretary, to the effect that, with 
respect to the use of such drug in animal feed, such consignee (i) 
holds a license issued under subsection (m) and has in its possession 
current approved labeling for such drug in animal feed; or (ii) will, 
if the consignee is not a user of the drug, ship such drug only to a 
holder of a license issued under subsection (m) .
  ``(2) An animal feed bearing or containing a new animal drug shall, 
with respect to any particular use or intended use of such animal feed 
be deemed unsafe for the purposes of section 501(a)(6) unless--
          ``(A) there is in effect an approval of an application filed 
        pursuant to subsection (b) with respect to such drug, as used 
        in such animal feed,
          ``(B) such animal feed is manufactured at a site for which 
        there is in effect a license issued pursuant to subsection 
        (m)(1) to manufacture such animal feed, and
          ``(C) such animal feed and its labeling, distribution, 
        holding, and use conform to the conditions and indications of 
        use published pursuant to subsection (i).''.
  (b) Section 512(m).--Section 512(m) (21 U.S.C. 360b(m)) is amended to 
read as follows:
  ``(m)(1) Any person may file with the Secretary an application for a 
license to manufacture animal feeds bearing or containing new animal 
drugs. Such person shall submit to the Secretary as part of the 
application (A) a full statement of the business name and address of 
the specific facility at which the manufacturing is to take place and 
the facility's registration number, (B) the name and signature of the 
responsible individual or individuals for that facility, (C) a 
certification that the animal feeds bearing or containing new animal 
drugs are manufactured and labeled in accordance with the applicable 
regulations published pursuant to subsection (i), and (D) a 
certification that the methods used in, and the facilities and controls 
used for, manufacturing, processing, packaging, and holding such animal 
feeds are in conformity with current good manufacturing practice as 
described in section 501(a)(2)(B).
  ``(2) Within 90 days after the filing of an application pursuant to 
paragraph (1), or such additional period as may be agreed upon by the 
Secretary and the applicant, the Secretary shall (A) issue an order 
approving the application if the Secretary then finds that none of the 
grounds for denying approval specified in paragraph (3) applies, or (B) 
give the applicant notice of an opportunity for a hearing before the 
Secretary under paragraph (3) on the question whether such application 
is approvable. The procedure governing such a hearing shall be the 
procedure set forth in the last two sentences of subsection (c)(1).
  ``(3) If the Secretary, after due notice to the applicant in 
accordance with paragraph (2) and giving the applicant an opportunity 
for a hearing in accordance with such paragraph, finds, on the basis of 
information submitted to the Secretary as part of the application, on 
the basis of a preapproval inspection, or on the basis of any other 
information before the Secretary--
          ``(A) that the application is incomplete, false, or 
        misleading in any particular;
          ``(B) that the methods used in, and the facilities and 
        controls used for, the manufacture, processing, and packing of 
        such animal feed are inadequate to preserve the identity, 
        strength, quality, and purity of the new animal drug therein; 
        or
          ``(C) that the facility manufactures animal feeds bearing or 
        containing new animal drugs in a manner that does not accord 
        with the specifications for manufacture or labels animal feeds 
        bearing or containing new animal drugs in a manner that does 
        not accord with the conditions or indications of use that are 
        published pursuant to subsection (i),
the Secretary shall issue an order refusing to approve the application. 
If, after such notice and opportunity for hearing, the Secretary finds 
that subparagraphs (A) through (C) do not apply, the Secretary shall 
issue an order approving the application. An order under this 
subsection approving an application for a license to manufacture animal 
feeds bearing or containing new animal drugs shall permit a facility to 
manufacture only those animal feeds bearing or containing new animal 
drugs for which there are in effect regulations pursuant to subsection 
(i) relating to the use of such drugs in or on such animal feed.
  ``(4)(A) The Secretary shall, after due notice and opportunity for 
hearing to the applicant, revoke a license to manufacture animal feeds 
bearing or containing new animal drugs under this subsection if the 
Secretary finds--
          ``(i) that the application for such license contains any 
        untrue statement of a material fact; or
          ``(ii) that the applicant has made changes that would cause 
        the application to contain any untrue statements of material 
        fact or that would affect the safety or effectiveness of the 
        animal feeds manufactured at the facility unless the applicant 
        has supplemented the application by filing with the Secretary 
        adequate information respecting all such changes and unless 
        there is in effect an approval of the supplemental application.
If the Secretary (or in the Secretary's absence the officer acting as 
the Secretary) finds that there is an imminent hazard to the health of 
humans or of the animals for which such animal feed is intended, the 
Secretary may suspend the license immediately, and give the applicant 
prompt notice of the action and afford the applicant the opportunity 
for an expedited hearing under this subsection; but the authority 
conferred by this sentence shall not be delegated.
  ``(B) The Secretary may also, after due notice and opportunity for 
hearing to the applicant, revoke a license to manufacture animal feed 
under this subsection if the Secretary finds--
          ``(i) that the applicant has failed to establish a system for 
        maintaining required records, or has repeatedly or deliberately 
        failed to maintain such records or to make required reports in 
        accordance with a regulation or order under paragraph (5)(A) of 
        this subsection or section 504(a)(3)(A), or the applicant has 
        refused to permit access to, or copying or verification of, 
        such records as required by subparagraph (B) of such paragraph 
        or section 504(a)(3)(B);
          ``(ii) that on the basis of new information before the 
        Secretary, evaluated together with the evidence before the 
        Secretary when such license was issued, the methods used in, or 
        the facilities and controls used for, the manufacture, 
        processing, packing, and holding of such animal feed are 
        inadequate to assure and preserve the identity, strength, 
        quality, and purity of the new animal drug therein, and were 
        not made adequate within a reasonable time after receipt of 
        written notice from the Secretary, specifying the matter 
        complained of;
          ``(iii) that on the basis of new information before the 
        Secretary, evaluated together with the evidence before the 
        Secretary when such license was issued, the labeling of any 
        animal feeds, based on a fair evaluation of all material facts, 
        is false or misleading in any particular and was not corrected 
        within a reasonable time after receipt of written notice from 
        the Secretary specifying the matter complained of; or
          ``(iv) that on the basis of new information before the 
        Secretary, evaluated together with the evidence before the 
        Secretary when such license was issued, the facility has 
        manufactured, processed, packed, or held animal feed bearing or 
        containing a new animal drug adulterated under section 
        501(a)(6) and the facility did not discontinue the manufacture, 
        processing, packing, or holding of such animal feed within a 
        reasonable time after receipt of written notice from the 
        Secretary specifying the matter complained of.
  ``(C) The Secretary may also revoke a license to manufacture animal 
feeds under this subsection if an applicant gives notice to the 
Secretary of intention to discontinue the manufacture of all animal 
feed covered under this subsection and waives an opportunity for a 
hearing on the matter.
  ``(D) Any order under this paragraph shall state the findings upon 
which it is based.
  ``(5) When a license to manufacture animal feeds bearing or 
containing new animal drugs has been issued--
          ``(A) the applicant shall establish and maintain such 
        records, and make such reports to the Secretary, or (at the 
        option of the Secretary) to the appropriate person or persons 
        holding an approved application filed under subsection (b), as 
        the Secretary may by general regulation, or by order with 
        respect to such application, prescribe on the basis of a 
        finding that such records and reports are necessary in order to 
        enable the Secretary to determine, or facilitate a 
        determination, whether there is or may be ground for invoking 
        subsection (e) or paragraph (4); and
          ``(B) every person required under this subsection to maintain 
        records, and every person in charge or custody thereof, shall, 
        upon request of an officer or employee designated by the 
        Secretary, permit such officer or employee at all reasonable 
        times to have access to and copy and verify such records.
  ``(6) To the extent consistent with the public health, the Secretary 
may promulgate regulations for exempting from the operation of this 
subsection facilities that manufacture, process, pack, or hold animal 
feeds bearing or containing new animal drugs.''.
  (c) Transitional Provision.--A person engaged in the manufacture of 
animal feeds bearing or containing new animal drugs who holds at least 
one approved medicated feed application for an animal feed bearing or 
containing new animal drugs, the manufacture of which was not otherwise 
exempt from the requirement for an approved medicated feed application 
on the date of the enactment of this Act, shall be deemed to hold a 
license for the manufacturing site identified in the approved medicated 
feed application. The revocation of license provisions of section 
512(m)(4) of the Federal Food, Drug, and Cosmetic Act, as amended by 
this Act, shall apply to such licenses. Such license shall expire 
within 18 months from the date of enactment of this Act unless the 
person submits to the Secretary a completed license application for the 
manufacturing site accompanied by a copy of an approved medicated feed 
application for such site, which license application shall be deemed to 
be approved upon receipt by the Secretary.

                          Purpose and Summary

    H.R. 2508, as reported, will facilitate the approval and 
marketing of new animal drugs and medicated feeds. It builds 
needed flexibility into the Food and Drug Administration (FDA) 
animal drug review processes to enable more efficient approval 
and more expeditious marketing of safe and effective animal 
drugs. The legislation accomplishes this without decreasing 
FDA's existing authority to ensure that animal drug products 
are safe for the animals that use them and for the humans who 
consume animal food products.
    By redefining ``substantial evidence,'' H.R. 2508 provides 
FDA with greater flexibility to determine what types of 
studies, including field investigations, are necessary and 
appropriate for demonstrating the effectiveness of any specific 
animal drug product. The bill requires FDA to issue regulations 
defining substantial evidence and the parameters of adequate 
and well-controlled field investigations. Such regulations must 
take into account the practical conditions that exist in the 
field. The bill also requires FDA to hold a presubmission 
conference at the request of a sponsor submitting a new animal 
drug application or a request for an investigational exemption.
    H.R. 2508 creates a streamlined process for the approval of 
combination animal drug products when the individual active 
ingredients or animal drugs used in combination have been 
approved previously for the particular uses and conditions of 
use for which they are intended for use in combination. It also 
authorizes FDA to establish a scientifically-based safe 
tolerance for new animal drugs.
    The bill creates a new class of animal drugs, veterinary 
feed directive drugs, intended for use in feed under the 
professional supervision of a licensed veterinarian. The bill 
eliminates the requirement for feed mills to submit individual 
medicated feed applications to manufacture certain medicated 
feeds and allows any medicated feed containing an approved new 
animal drug to be manufactured at a licensed facility. Finally, 
the bill authorizes FDA to establish import tolerances for new 
animal drugs not approved in the United States.
    The provisions of the bill are consistent with the 
initiatives of the Committee on Commerce and the 
Administration's Reinventing Government proposals to streamline 
regulatory activities of the FDA.

                  Background and Need for Legislation

    The animal health industry is vital to protecting both 
humans and animals. Not only does it keep farm animals healthy 
and protect the food supply, it also safeguards our pets, 
including some 130 million dogs and cats in the United States. 
The animal health products industry in the U.S. has sales of $3 
billion a year; 90 percent of animal drugs have individual 
sales of less than $1 million a year. The animal drug industry 
is one-twentieth the size of the human pharmaceutical industry.
    The number of new products approved by the FDA for use in 
livestock, poultry and pets has dwindled in past years and 
those who seek to keep animals healthy have an increasingly 
limited arsenal available for this purpose. Since 1986 FDA has 
approved only 13 new chemical entities for use in food-
producing animals. The swine and turkey industries have had 
only one new approval in the past decade. This is despite the 
fact that research and development expenditures by industry now 
total more than $420 million a year. Manufacturers spend an 
average of $22 million and 11 years to develop a new animal 
drug for food animals.
    While the law requires a decision on a new animal drug 
application within 6 months, the process has averaged as high 
as almost 5 years. Industry reports that these long review 
times have encouraged a number of pharmaceutical companies to 
divest themselves of animal drug development capability.
    Congress, the Administration, the animal drug industry, 
veterinarians, and animal producer groups all have recognized 
the need to streamline the animal drug review process. Thus, 
representatives of the Administration and affected industries 
worked successfully with the Committee on Commerce to develop 
the reforms contained in H.R. 2508, as reported by the 
Committee. To underscore the success of this negotiation, the 
Secretary of Health and Human Services wrote a letter to the 
Committee Chairman on September 19, 1996, in support of H.R. 
2508, as reported.

                                Hearings

    On February 27, 1996, the Subcommittee on Health and 
Environment held a hearing on The Need for FDA Reform. 
Testimony relating to animal drugs was received from the 
following witnesses: Dr. Kelly F. Lechtenberg, Midwest 
Veterinary Service, Inc.; Mr. Alexander F. Mathews, President 
and Chief Executive Officer, Animal Health Institute; and Mr. 
Brendan P. Fox, President, Elanco Animal Health, on behalf of 
the Coalition for Animal Health. On May 1 and May 2, 1996, the 
Subcommittee held hearings on bills relating to FDA reform 
including H.R. 3200, Title II of which contained legislative 
language substantially similar to H.R. 2508. Testimony 
regarding these provisions was presented by FDA Commissioner 
David A. Kessler and by Mr. Larry Fanella, RoccoTurkeys, Inc., 
on behalf of the Coalition for Animal Health.

                        Committee Consideration

    On September 19, 1996, the Committee on Commerce met in 
open markup session and ordered H.R. 2508, the Animal Drug 
Availability Act of 1996, reported to the House, as amended, by 
a voice vote, a quorum being present.

                             Rollcall Votes

    Clause 2(l)(2)(B) of Rule XI of the Rules of the House of 
Representatives requires the Committee to list the recorded 
votes to report legislation and on amendments thereto. There 
were no recorded votes taken in connection with ordering H.R. 
2508 reported or in adopting the amendment. The voice votes 
taken in Committee are as follows:

           committee on commerce--104th congress voice votes

    Bill: H.R. 2508, Animal Drug Availability Act of 1996.
    Unanimous Consent Request: Unanimous consent request by Mr. 
Bliley to discharge the Subcommittee on Health and Environment 
from further consideration of H.R. 2508 and to proceed to its 
immediate consideration by the full committee.
    Disposition: Agreed to, without objection.
    Amendment: Amendment in the nature of a substitute offered 
by Mr. Klug.
    Disposition: Agreed to, by a voice vote.
    Motion: Motion by Mr. Bliley to order H.R. 2508 reported to 
the House, as amended.
    Disposition: Agreed to, by a voice vote.

                      Committee Oversight Findings

    Pursuant to clause 2(l)(3)(A) of Rule XI of the Rules of 
the House of Representatives, the Subcommittee on Health and 
Environment held legislative and oversight hearings and made 
findings that are reflected in this report.

              Committee on Government Reform and Oversight

    Pursuant to clause 2(l)(3)(D) of Rule XI of the Rules of 
the House of Representatives, no oversight findings have been 
submitted to the Committee by the Committee on Government 
Reform and Oversight.

               New Budget Authority and Tax Expenditures

    In compliance with clause 2(l)(3)(B) of Rule XI of the 
Rules of the House of Representatives, the Committee states 
that H.R 2508 would result in no new or increased budget 
authority or tax expenditures or revenues.

                        Committee Cost Estimate

    In compliance with clause 7(a) of Rule XIII of the Rules of 
the House of Representatives, the Committee believes that 
enactment of H.R. 2508 would result in no additional cost to 
the Federal government. The Committee further adopts as its own 
the cost estimate prepared by the Director of the Congressional 
Budget Office (CBO) pursuant to section 403 of the 
Congressional Budget Act of 1974.

                  Congressional Budget Office Estimate

    Pursuant to clause 2(l)(3)(C) of Rule XI of the Rules of 
the House of Representatives, the following is the cost 
estimate provided by the Congressional Budget Office pursuant 
to section 403 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                Washington, DC, September 20, 1996.
Hon. Thomas J. Bliley, Jr.,
Chairman, Committee on Commerce,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: At your request, the Congressional 
Budget Office (CBO) has reviewed H.R. 2508, the Animal Drug 
Availability Act of 1996, as ordered reported by the House 
Committee on Commerce on September 19, 1996. CBO estimates this 
bill would result in savings to the federal government, 
although these savings would not be substantial. The bill would 
not affect direct spending or receipts and thus would not be 
subject to pay-as-you-go procedures.
    The bill would direct the Secretary of Health and Human 
Services to establish tolerance levels for residues of 
veterinary drugs in imported animal products intended for human 
consumption. It would also change the licensing requirements 
for manufacturers of animal feeds containing veterinary drugs. 
Both of these provisions would impose new private-sector 
mandates, as would a provision imposing new recordkeeping 
requirements on veterinarians and distributors of animal feed 
directive drugs. Only the new recordkeeping requirements would 
be likely to impose any significant costs on the private 
sector, and these costs would be well below the $100 million 
threshold. The bill contains no intergovernmental mandates as 
defined in the Unfunded Mandates Reform Act of 1995 (Public Law 
104-4) and would impose no costs on state, local, or tribal 
governments.
    Tolerance Standards. Section 4 of the bill would require 
that the residues from animal drugs in edible animals imported 
into the United States meet tolerance standards to be set by 
the Secretary. These animal products could not be deemed unsafe 
unless their residue levels exceeded the specified tolerance 
levels. Under current law, the United States Department of 
Agriculture monitors residues in imported animal food products, 
sometimes in consultation with the Food and Drug Administration 
(FDA). However, this section would place a new formal 
requirement on the importation of edible animals. Based on 
information from FDA staff, CBO expects that the tolerance 
standards set by the Secretary would not differ significantly 
from current practice. Thus, this provision would not have 
significant costs for the federal government or the private 
sector.
    Recordkeeping Requirements. Section 5(b) of the bill would 
constitute a private-sector mandate by imposing new 
recordkeeping requirements on the distributors of veterinary 
feed directive drugs and on veterinarians that recommend their 
use. A veterinary feed directive drug is ``a drug intended for 
use in or on animal feed which is limited * * * to use under 
professional supervision of a licensed veterinarian.'' The 
veterinarian and the distributor of a veterinary feed directive 
drug would be required to ``maintain a copy of the veterinary 
feed directive applicable to each such feed.'' Distributors 
would also be required to provide the Secretary with their 
names and places of business. Both veterinarians and 
distributors of veterinary feed directive drugs would be likely 
to increase their current recordkeeping activities to comply 
with this mandate, resulting in a small increase in their cost 
of doing business.
    Licensing Requirements. Additionally, the bill would change 
the licensing requirements for the manufacture of animal feeds 
containing veterinary drugs. Current law requires manufacturers 
to file a separate application with the FDA for each type of 
animal feed they produce that contains a veterinary drug. H.R. 
2508 would require each manufacturer to obtain only one license 
to produce a number of veterinary feed drugs. To apply for this 
license, manufacturers would need to certify that their 
products were manufactured and labeled in accordance with the 
law and good manufacturing practice standards. This change 
should reduce the overall costs of regulatory compliance for 
the industry. The reduction in the number of license 
applications to the FDA would also reduce costs for the federal 
government.
    Drug Approval Process. Two provisions of H.R. 2508 would 
streamline the approval process for veterinary drugs, resulting 
in a small savings to the federal government. One provision 
would require manufacturers of new drugs to submit ``one or 
more adequate and well-controlled investigations'' in support 
of their drugs' efficacy, rather than the multiple 
investigations required under current law. Another provision 
would direct the FDA to approve animal drugs containing a 
combination of drugs, provided each of the individual 
ingredients had already been approved for use. The agency could 
refuse to approve these combination drugs only under limited 
circumstances. These provisions would cut the time needed for 
the drug approval process by reducing the amount of data that 
the FDA must review.
    Additional provisions would increase the cost of approving 
new veterinary drugs by escalating the FDA's administrative 
activities. H.R. 2508 would allow a manufacturer to request one 
or more conferences with the FDA to establish submission or 
investigational requirements prior to submission of an 
application for a new animal drug. The bill would also direct 
the Secretary to issue new regulations regarding the kind of 
investigations that must be submitted in support of a new 
veterinary drug application. CBO estimates that the additional 
costs associated with these activities would be less than the 
savings from other provisions of this bill.
    If you wish further details on this estimate, we will be 
pleased to provide them. The staff contacts for this estimate 
are Anne Hunt (federal cost estimate), John Patterson (state 
and local estimate), and Anna Cook (private sector mandate 
estimate).
            Sincerely,
                                         June E. O'Neill, Director.

                     Inflationary Impact Statement

    Pursuant to clause 2(l)(4) of Rule XI of the Rules of the 
House of Representatives, the Committee finds that the bill 
would have no inflationary impact.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act are created by this 
legislation.

             Section-by-Section Analysis of the Legislation

                   section 1. short title; reference

    Section 1 provides that the short title of the bill is the 
``Animal Drug Availability Act of 1996'' and specifies that the 
provisions in the bill refer to the Federal Food, Drug, and 
Cosmetic Act.

                  section 2. evidence of effectiveness

    Section 2(a) amends the current definition of ``substantial 
evidence'' of effectiveness found in section 512(d)(3). The 
amended definition of substantial evidence permits the FDA more 
flexibility in determining the types of studies required to 
demonstrate that a particular new animal drug is effective for 
its intended uses and conditions of use. The statutory 
requirement for a field investigation has been eliminated, but 
FDA continues to have the authority to require field 
investigations when necessary. As part of its implementing 
regulations for this Act, FDA must define by regulation an 
adequate and well-controlled field investigation, taking into 
account the practical conditions that exist in the field where 
such investigations are conducted. Because a field 
investigation on animal drugs is conducted under actual use 
conditions, e.g., in feed lots, a determination regarding 
whether such an investigation is scientifically sound must take 
into account the differences between field conditions and 
laboratory conditions.
    As in current law, the evidence of effectiveness must 
consist of one or more adequate and well-controlled studies 
conducted by qualified experts on the basis of which qualified 
experts can fairly and reasonably conclude that the drug is 
effective. The individuals who conduct studies to demonstrate 
the effectiveness of a new animal drug and the individuals who 
evaluate those studies must be experts qualified by scientific 
training and experience to do so.
    Section 2(b) makes conforming changes to section 
512(c)(2)(F) to reference the revised definition of substantial 
evidence.
    Section 2(c) adds section 512(d)(4) and establishes a 
streamlined approval process for certain combination animal 
drugs. Specifically, section 512(d)(4) sets forth the grounds 
on which FDA may refuse to approve combination animal drugs 
that contain active ingredients or drugs intended for use in 
combination that previously have been approved separately for 
the particular uses and conditions of use for which they are 
intended for use in the combination.
    To establish the human food safety of such a combination 
animal drug, the application must demonstrate that none of the 
active ingredients or drugs exceeds its previously established 
tolerance at the longest withdrawal time of any of the active 
ingredients or drugs and that none of the active ingredients or 
drugs in the combination interferes with the methods of 
analysis for another of the active ingredients or drugs in the 
combination.
    FDA generally should not require full safety testing of 
such a combination animal drug to establish target animal 
safety. However, if there is a substantiated scientific basis 
for believing that combining the individual ingredients or 
drugs would endanger target animal safety, or if target animal 
observations from studies in the application raise a scientific 
issue regarding animal safety, FDA may require the sponsor of 
the combination animal drug to conduct additional safety 
testing. For example, if a drug or active ingredient to be used 
in combination has a narrow margin of safety to the target 
animal or is known either to stimulate or inhibit drug 
metabolism or drug excretion, then FDA may require the sponsor 
of the combination animal drug to conduct additional safety 
testing of the combination. Similarly, if during testing of the 
combination animal drug, clinical signs of morbidity or 
mortality are observed, FDA may require additional safety 
testing. FDA should explain to the sponsor the scientific 
reason for a request for additional safety testing. Unless 
FDA's substantiation for requiring additional testing is 
contained in the proprietary files that belong to a different 
drug applicant, FDA should provide copies of, or citations to, 
the relevant scientific information.
    To establish the effectiveness of a dosage form combination 
animal drug composed of active ingredients or drugs that 
previously have been approved separately for particular uses 
and conditions of use for which they are intended in 
combination, an application must demonstrate that: (1) there is 
substantial evidence, as newly defined, that each active 
ingredient or animal drug intended only for the same use as 
another active ingredient or animal drug in the combination 
makes a contribution to effectiveness; (2) each active 
ingredient or animal drug intended for a use different from 
that of all other active ingredients or animal drugs in the 
combination provides appropriate concurrent therapy for the 
intended target population; and (3) the active ingredients or 
animal drugs are physically compatible and have compatible 
dosing regimens if such compatibility could affect the 
effectiveness of the combination. The intent of the third 
provision (and a similar provision for drugs administered in 
drinking water) is to authorize FDA to deny approval of a 
combination animal drug if the physical compatibility or 
compatibility of the dosing regimens may affect the 
effectiveness of the combination animal drug and such 
compatibility is not demonstrated.
    In the case of dosage form combination animal drugs that 
contain any nontopical ingredient or drug intended for use as 
an antibacterial, the sponsor of such a drug must demonstrate 
by substantial evidence, as newly defined, that such 
combination animal drug is effective for its intended uses.
    To establish the effectiveness of a combination animal drug 
(composed of active ingredients or drugs that previously have 
been approved separately for particular uses and conditions of 
use for which they are intended in the combination) intended 
for use in animal feed or drinking water, an application must 
demonstrate that: (1) there is substantial evidence, as newly 
defined, that any active ingredient or animal drug intended 
only for the same use as another active ingredient or animal 
drug in the combination makes a contribution to effectiveness; 
(2) each active ingredient or animal drug intended for at least 
one use different from that of all other active ingredients or 
animal drugs used in the combination provides appropriate 
concurrent therapy for the intended target population; (3) when 
a combination contains more than one antibacterial, each 
antibacterial ingredient or drug makes a contribution to 
effectiveness; and (4) if the combination animal drug is 
intended for use in drinking water, the active ingredients or 
animal drugs are physically compatible if FDA has a scientific 
basis to believe they may be incompatible.
    Section 2(d) adds section 512(b)(3) to entitle a person 
intending to file a new animal drug application or a request 
for investigational new animal drug exemption to request a 
presubmission conference. The presubmission conference is a 
forum for the applicant and FDA to discuss what studies the 
applicant needs to conduct to support FDA's finding that the 
new animal drug is safe and effective. When FDA and the sponsor 
reach an agreement on a submission or investigational 
requirement, such requirement is binding on FDA and the sponsor 
unless such agreement is changed by mutual agreement or by an 
FDA order with specific scientific justification. The binding 
nature of the submission or investigational agreement gives the 
sponsor assurance that development time and resources will be 
used efficiently and predictably. As part of a presubmission 
conference agreement, FDA may, but need not, require a sponsor 
to conduct an adequate and well-controlled field investigation 
to demonstrate effectiveness. If FDA concludes that more than 
one field investigation is essential to demonstrate by 
substantial evidence, as newly defined, the effectiveness of 
the specific animal drug and intended uses under consideration, 
FDA must provide within 25 days after such conference written 
justification for requiring more than one field investigation.
    Assessing the safety and effectiveness of new animal drugs 
under conditions of use which closely approximate actual field 
use conditions will remain an important element of many new 
animal drug approvals. However, there are situations, e.g., 
approval of many therapeutic animal drugs, in which the 
effectiveness of the animal drug can be demonstrated without a 
field investigation. In some instances, laboratory animal 
studies in the target species on farm settings controlled by 
the sponsor can fulfill this need. There may be cases in which 
field investigations would yield no more useful information 
with regard to an animal drug's effectiveness than can be 
obtained through laboratory studies. However, there will be 
cases where at least one field investigation will generally be 
required. In most instances in which a field investigation is 
needed, one adequate and well-controlled field investigation 
which adequately represents the intended target population of 
animals and conditions of use will be sufficient.
    Section 2(e) directs FDA to promulgate regulations to 
implement the Animal Drug Availability Act of 1996. FDA is 
directed, within 6 months after enactment, to propose 
regulations to define ``adequate and well-controlled'' and to 
issue final regulations not later than 18 months after 
enactment. FDA is also required to propose regulations within 
12 months and issue final regulations within 24 months to (1) 
define ``substantial evidence'' in a manner that encourages the 
submission of new animal drug applications and supplemental 
applications; and (2) to encourage dose range labeling. This 
section directs FDA, pending the adoption of implementing 
regulations, to implement the Federal Food, Drug, and Cosmetic 
Act, as amended by this Act, in a manner consistent with the 
policies set forth in this bill for all pending and future 
applications and supplemental applications from the date of 
enactment.
    Section 2(f) requires FDA to consider regulatory and 
legislative options for facilitating the approval of animal 
drugs intended for use in minor species and for minor uses, and 
to announce proposals for regulatory or legislative change 
within 18 months of enactment of this Act. Because the 
population for which such drugs are intended is small, it is 
often difficult or impossible to design and conduct studies to 
establish safety and efficacy under the traditional approval 
processes. Furthermore, there may not be economic incentives 
for a sponsor to conduct such studies in light of the potential 
market for the product. FDA is directed to consider regulatory 
and legislative options for implementing an approval process 
that takes into account these special circumstances and ensures 
that more drugs are available for minor species and for minor 
uses and that such drugs do not endanger the public health.

                   section 3. limitation on residues

    Section 3 amends section 512(d)(1)(F) which, under existing 
law, requires FDA not to approve a new animal drug application 
if the tolerance limitation proposed exceeds that reasonably 
required to accomplish the physical or other technical effect 
for which the drug is intended. This provision of the current 
statute derives from similar language relating to the 
regulation of food additives, and directs the agency to (1) 
determine, and to establish as a condition of use for new 
animal drugs intended for use in food animals, the minimum dose 
necessary to accomplish the intended effect; and (2) limit 
tolerances based on such use conditions. The current 
requirement to establish the minimum dose creates a burden on 
the applicant and FDA to determine dose to a level of 
specificity which is not scientifically necessary for the safe 
use of all new animal drugs intended for use in food animals. 
Furthermore, for a number of therapeutic drugs, use of the drug 
at the minimum effective dose is not consistent with the best 
medical practice. The change implemented by section 3 would 
permit FDA to use the concept of dose-ranging in new animal 
drug development and labeling to a greater extent and to 
establish tolerances solely on the basis of scientifically 
valid risk assessment procedures. The safeguards to animal and 
human health built into the current statute will continue.

                      section 4. import tolerances

    Section 4 amends section 512(a) to permit FDA to establish 
a tolerance for residues of an animal drug in human foods, when 
the drug is not approved for use in the United States but 
imported food products of animal origin may contain residues of 
that drug.
    There are appropriate instances in which food producing 
animals raised in other countries are treated with animal drugs 
that are not approved in the United States. For example, the 
disease or condition treated by the drug does not occur in the 
United States. There have been concerns about residues of such 
drugs in food products derived from these animals, imported 
into the United States. This provision authorizes FDA to 
establish a safe tolerance using criteria similar to those that 
it would apply in reviewing the human food safety aspects of an 
animal drug for which approval is sought in the United States. 
FDA may rely on data generated by the drug manufacturer or on 
data from a relevant international organization such as the 
Codex Alimentarius Commission. This is a step in the direction 
of international harmonization of regulatory requirements.
    If an international standard on which FDA relied changes or 
new information (from either experience or scientific data) 
shows the tolerance is no longer safe, FDA may change or revoke 
the tolerance. In addition, section 4 provides that the 
tolerance may be revoked if information shows use of the animal 
drug under actual use conditions results in food being imported 
into the United States with residues exceeding the tolerance.

                 section 5. veterinary feed directives

    Section 5 adds a new section 504, Veterinary Feed Directive 
Drugs. Veterinary feed directive drugs are animal drugs 
intended for use in or on animal feed which are limited, by an 
approved application filed pursuant to section 512(b), to use 
under the professional supervision of a licensed veterinarian 
in the course of the veterinarian's professional practice.
    A significant number of animal drugs are administered 
through animal feed. All commercially available animal drugs 
intended for use in feed are now available to animal owners and 
producers without the involvement of the veterinarian. However, 
FDA has determined that in the future certain animal drugs can 
be approved for feed use only if they are used under a 
veterinarian's supervision. Under the existing law, an animal 
drug limited by an approved application to use under the 
professional supervision of a licensed veterinarian is a 
prescription animal drug. Because the distribution system for 
medicated feeds is more complex than the distribution system 
for dosage form animal drugs, regulation of animal feeds under 
traditional prescription systems is not practical. This bill 
provides that veterinary feed directive drugs and medicated 
feeds containing them are not ``prescription'' articles under 
any Federal or State law.
    Under this bill, the labeling, distribution, holding, or 
use of a veterinary feed directive drug or feed in a manner 
inconsistent with its approval results in the drug or feed 
being deemed adulterated. This bill requires each person 
involved in the distribution or use of a veterinary feed 
directive medicated feed and the veterinarian issuing the 
veterinary feed directive to maintain a copy of the applicable 
feed directive, except that a person distributing the feed to 
another person for further distribution is required to maintain 
a copy of a written acknowledgment from the consignee stating 
that veterinary feed directive distribution limitations will be 
followed. FDA is given correlative authority to inspect and 
copy the veterinary feed directives and written 
acknowledgments. Persons distributing veterinary feed directive 
medicated feeds must provide a one-time notice to FDA.
    While this section authorizes FDA to promulgate 
implementing regulations for veterinary feed directive drugs 
and feeds, FDA should not delay any drug approvals pending the 
promulgation of such regulations. In the absence of such 
regulations, FDA should set forth all necessary conditions 
related to the labeling, advertising, distribution, holding, or 
use of a veterinary feed directive drug or feed in the new 
animal drug approval notice required by section 512(i).

                     section 6. feed mill licenses

    Section 6 amends sections 512(a) and 512(m) to establish a 
new regulatory system for licensing feed mills to manufacture 
any or all medicated feeds that, under existing law, are the 
subject of drug specific medicated feed applications (MFAs). 
The underlying standards for the issuance of a license and for 
revoking a license do not differ substantively from the 
existing standards applicable to MFAs. As under existing law 
dealing with MFAs, the principal criterion for the issuance of 
a feed mill license is whether the establishment is operating 
within current good manufacturing practices, as represented in 
the application filed by the applicant and confirmed by FDA or 
State inspections. But, by requiring a feed mill to submit for 
approval an application for a single license for the facility, 
this section eliminates a paperwork and administrative burden 
on industry to file multiple product specific MFAs.
    Persons holding an approved MFA under existing law are 
deemed to hold a feed mill license for the site identified in 
the MFA. Such license will expire within 18 months from 
enactment of this bill unless the person submits a completed 
license application for the manufacturing site along with a 
copy of an approved MFA for such site.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3 of rule XIII of the Rules of the 
House of Representatives, changes in existing law made by the 
bill, as reported, are shown as follows (existing law proposed 
to be omitted is enclosed in black brackets, new matter is 
printed in italics, existing law in which no change is proposed 
is shown in roman):

                  FEDERAL FOOD, DRUG, AND COSMETIC ACT

          * * * * * * *

               CHAPTER III--PROHIBITED ACTS AND PENALTIES

                            prohibited acts

  Sec. 301. The following acts and the causing thereof are 
hereby prohibited:
  (a) * * *
          * * * * * * *
  (e) The refusal to permit access to or copying of any record 
as required by section 412, 504, or 703; or the failure to 
establish or maintain any record, or make any report, required 
under section 412, 504, 505 (i) or (k), 507(d) or (g), 
512(a)(4)(C), 512 (j), (l) or (m), 515(f), or 519 or the 
refusal to permit access to or verification or copying of any 
such required record.
          * * * * * * *

                      CHAPTER V--DRUGS AND DEVICES

                    Subchapter A--Drugs and Devices

          * * * * * * *

exemptions and consideration for certain drugs, devices, and biological 
                                products

  Sec. 503. (a) * * *
          * * * * * * *
  (f)(1)(A) A drug intended for use by animals other than man, 
other than a veterinary feed directive drug intended for use in 
animal feed or an animal feed bearing or containing a 
veterinary feed directive drug, which--
          (i) because of its toxicity or other potentiality or 
        harmful effect, or the method of its use, or the 
        collateral measures necessary for its use, is not safe 
        for animal use except under the professional 
        supervision of a licensed veterinarian, or
          (ii) is limited by an approved application under 
        subsection (b) of section 512 to use under the 
        professional supervision of a licensed veterinarian,
shall be dispensed only by or upon the lawful written or oral 
order of a licensed veterinarian in the course of the 
veterinarian's professional practice.
          * * * * * * *

                    veterinary feed directive drugs

  Sec. 504. (a)(1) A drug intended for use in or on animal feed 
which is limited by an approved application filed pursuant to 
section 512(b) to use under the professional supervision of a 
licensed veterinarian is a veterinary feed directive drug. Any 
animal feed bearing or containing a veterinary feed directive 
drug shall be fed to animals only by or upon a lawful 
veterinary feed directive issued by a licensed veterinarian in 
the course of the veterinarian's professional practice. When 
labeled, distributed, held, and used in accordance with this 
section, a veterinary feed directive drug and any animal feed 
bearing or containing a veterinary feed directive drug shall be 
exempt from section 502(f).
  (2) A veterinary feed directive is lawful if it--
          (A) contains such information as the Secretary may by 
        general regulation or by order require; and
          (B) is in compliance with the conditions and 
        indications for use of the drug set forth in the notice 
        published pursuant to section 512(i).
  (3)(A) Any persons involved in the distribution or use of 
animal feed bearing or containing a veterinary feed directive 
drug and the licensed veterinarian issuing the veterinary feed 
directive shall maintain a copy of the veterinary feed 
directive applicable to each such feed, except in the case of a 
person distributing such feed to another person for further 
distribution. Such person distributing the feed shall maintain 
a written acknowledgment from the person to whom the feed is 
shipped stating that that person shall not ship or move such 
feed to an animal production facility without a veterinary feed 
directive or ship such feed to another person for further 
distribution unless that person has provided the same written 
acknowledgment to its immediate supplier.
  (B) Every person required under subparagraph (A) to maintain 
records, and every person in charge or custody thereof, shall, 
upon request of an officer or employee designated by the 
Secretary, permit such officer or employee at all reasonable 
times to have access to and copy and verify such records.
  (C) Any person who distributes animal feed bearing or 
containing a veterinary feed directive drug shall upon first 
engaging in such distribution notify the Secretary of that 
person's name and place of business. The failure to provide 
such notification shall be deemed to be an act which results in 
the drug being misbranded.
  (b) A veterinary feed directive drug and any feed bearing or 
containing a veterinary feed directive drug shall be deemed to 
be misbranded if their labeling fails to bear such cautionary 
statement and such other information as the Secretary may by 
general regulation or by order prescribe, or their advertising 
fails to conform to the conditions and indications for use 
published pursuant to section 512(i) or fails to contain the 
general cautionary statement prescribed by the Secretary.
  (c) Neither a drug subject to this section, nor animal feed 
bearing or containing such a drug, shall be deemed to be a 
prescription article under any Federal or State law.
          * * * * * * *

                            new animal drugs

  Sec. 512. [(a)(1) A new animal drug shall, with respect to 
any particular use or intended use of such drug, be deemed 
unsafe for the purposes of section 501(a)(5) and section 
402(a)(2)(D) unless--
          [(A) there is in effect an approval of an application 
        filed pursuant to subsection (b) of this section with 
        respect to such use or intended use of such drug, and
          [(B) such drug, its labeling, and such use conform to 
        such approved application.
A new animal drug shall also be deemed unsafe for such purposes 
in the event of removal from the establishment of a 
manufacturer, packer, or distributor of such drug for use in 
the manufacture of animal feed in any State unless at the time 
of such removal such manufacturer, packer, or distributor has 
an unrevoked written statement from the consignee of such drug, 
or notice from the Secretary, to the effect that, with respect 
to the use of such drug in animal feed, such consignee--
          [(i) is the holder of an approved application under 
        subsection (m) of this section; or
          [(ii) will, if the consignee is not a user of the 
        drug, ship such drug only to a holder of an approved 
        application under subsection (m) of this section.
  [(2) An animal feed bearing or containing a new animal drug 
shall, with respect to any particular use or intended use of 
such animal feed, be deemed unsafe for the purposes of section 
501(a)(6) unless--
          [(A) there is in effect an approval of an application 
        filed pursuant to subsection (b) of this section with 
        respect to such drug, as used in such animal feed,
          [(B) there is in effect an approval of an application 
        pursuant to subsection (m)(1) of this section with 
        respect to such animal feed, and
          [(C) such animal feed, its labeling, and such use 
        conform to the conditions and indications of use 
        published pursuant to subsection (i) of this section 
        and to the application with respect thereto approved 
        under subsection (m) of this section.]
(a)(1) A new animal drug shall, with respect to any particular 
use or intended use of such drug, be deemed unsafe for the 
purposes of section 501(a)(5) and section 402(a)(2)(D) unless--
          (A) there is in effect an approval of an application 
        filed pursuant to subsection (b) with respect to such 
        use or intended use of such drug, and
          (B) such drug, its labeling, and such use conform to 
        such approved application.
A new animal drug shall also be deemed unsafe for such purposes 
in the event of removal from the establishment of a 
manufacturer, packer, or distributor of such drug for use in 
the manufacture of animal feed in any State unless at the time 
of such removal such manufacturer, packer, or distributor has 
an unrevoked written statement from the consignee of such drug, 
or notice from the Secretary, to the effect that, with respect 
to the use of such drug in animal feed, such consignee (i) 
holds a license issued under subsection (m) and has in its 
possession current approved labeling for such drug in animal 
feed; or (ii) will, if the consignee is not a user of the drug, 
ship such drug only to a holder of a license issued under 
subsection (m) .
  (2) An animal feed bearing or containing a new animal drug 
shall, with respect to any particular use or intended use of 
such animal feed be deemed unsafe for the purposes of section 
501(a)(6) unless--
          (A) there is in effect an approval of an application 
        filed pursuant to subsection (b) with respect to such 
        drug, as used in such animal feed,
          (B) such animal feed is manufactured at a site for 
        which there is in effect a license issued pursuant to 
        subsection (m)(1) to manufacture such animal feed, and
          (C) such animal feed bears approved labeling and such 
        use conforms to the conditions and indications of use 
        published pursuant to subsection (i).
          * * * * * * *
  (6) For purposes of section 402(a)(2)(D), a use or intended 
use of a new animal drug shall not be deemed unsafe under this 
section if the Secretary establishes a tolerance for such drug 
and any edible portion of any animal imported into the United 
States does not contain residues exceeding such tolerance. In 
establishing such tolerance, the Secretary shall rely on data 
sufficient to demonstrate that a proposed tolerance is safe 
based on similar food safety criteria used by the Secretary to 
establish tolerances for applications for new animal drugs 
filed under subsection (b)(1). The Secretary may consider and 
rely on data submitted by the drug manufacturer, including data 
submitted to appropriate regulatory authorities in any country 
where the new animal drug is lawfully used or data available 
from a relevant international organization, to the extent such 
data are not inconsistent with the criteria used by the 
Secretary to establish a tolerance for applications for new 
animal drugs filed under subsection (b)(1). For purposes of 
this paragraph, ``relevant international organization'' means 
the Codex Alimenterius Commission or other international 
organization deemed appropriate by the Secretary. The Secretary 
may, under procedures specified by regulation, revoke a 
tolerance established under this paragraph if information 
demonstrates that the use of the new animal drug under actual 
use conditions results in food being imported into the United 
States with residues exceeding the tolerance or if scientific 
evidence shows the tolerance to be unsafe.
  (b)(1) * * *
          * * * * * * *
  (3) Any person intending to file an application under 
paragraph (1) or a request for an investigational exemption 
under subsection (j) shall be entitled to one or more 
conferences prior to such submission to reach an agreement 
acceptable to the Secretary establishing a submission or an 
investigational requirement, which may include a requirement 
for a field investigation. A decision establishing a submission 
or an investigational requirement shall bind the Secretary and 
the applicant or requestor unless (A) the Secretary and the 
applicant or requestor mutually agree to modify the 
requirement, or (B) the Secretary by written order determines 
that a substantiated scientific requirement essential to the 
determination of safety or effectiveness of the animal drug 
involved has appeared after the conference. No later than 25 
calendar days after each such conference, the Secretary shall 
provide a written order setting forth a scientific 
justification specific to the animal drug and intended uses 
under consideration if the agreement referred to in the first 
sentence requires more than one field investigation as being 
essential to provide substantial evidence of effectiveness for 
the intended uses of the drug. Nothing in this paragraph shall 
be construed as compelling the Secretary to require a field 
investigation.
  (c)(1) * * *
  (2)(A) * * *
          * * * * * * *
  (F)(i) * * *
  (ii) If an application submitted under subsection (b)(1) for 
a drug, which includes an active ingredient (including any 
ester or salt of the active ingredient) that has been approved 
in another application approved under such subsection, is 
approved after the date of enactment of this paragraph and if 
such application contains [reports of new clinical or field 
investigations (other than bioequivalence or residue studies) 
and,] substantial evidence of the effectiveness of the drug 
involved, any studies of animal safety, or, in the case of food 
producing animals, human food safety studies (other than 
bioequivalence or residue studies) [essential to] required for 
the approval of the application and conducted or sponsored by 
the applicant, the Secretary may not make the approval of an 
application submitted under subsection (b)(2) for the 
conditions of approval of such drug in the subsection (b)(1) 
application effective before the expiration of 3 years from the 
date of the approval of the application under subsection (b)(1) 
for such drug.
  (iii) If a supplement to an application approved under 
subsection (b)(1) is approved after the date of enactment of 
this paragraph and the supplement contains [reports of new 
clinical or field investigations (other than bioequivalence or 
residue studies) and,] substantial evidence of the 
effectiveness of the drug involved, any studies of animal 
safety, or, in the case of food producing animals, human food 
safety studies (other than bioequivalence or residue studies) 
[essential to] required for the approval of the supplement and 
conducted or sponsored by the person submitting the supplement, 
the Secretary may not make the approval of an application 
submitted under subsection (b)(2) for a change approved in the 
supplement effective before the expiration of 3 years from the 
date of the approval of the supplement.
          * * * * * * *
  (v) If an application (including any supplement to a new 
animal drug application) submitted under subsection (b)(1) for 
a new animal drug for a food-producing animal use, which 
includes an active ingredient (including any ester or salt of 
the active ingredient) which has been the subject of a waiver 
under [subparagraph (B)(iv)] clause (iv) is approved after the 
date of enactment of this paragraph, and if the application 
contains [reports of clinical or field investigations] 
substantial evidence of the effectiveness of the drug involved, 
any studies of animal safety, or human food safety studies 
(other than bioequivalence or residue studies) [essential to] 
required for the new approval of the application and conducted 
or sponsored by the applicant, the Secretary may not make the 
approval of an application (including any supplement to such 
application) submitted under subsection (b)(2) for the new 
conditions of approval of such drug in the subsection (b)(1) 
application effective before the expiration of five years from 
the date of approval of the application under subsection (b)(1) 
for such drug. The provisions of this paragraph shall apply 
only to the first approval for a food-producing animal use for 
the same applicant after the waiver under [subparagraph 
(B)(iv)] clause (iv).
          * * * * * * *
  (d)(1) If the Secretary finds, after due notice to the 
applicant in accordance with subsection (c) and giving him an 
opportunity for a hearing, in accordance with said subsection, 
that--
          (A) * * *
          * * * * * * *
          [(F) upon the basis of the information submitted to 
        him as part of the application or any other information 
        before him with respect to such drug, the tolerance 
        limitation proposed, if any, exceeds that reasonably 
        required to accomplish the physical or other technical 
        effect for which the drug is intended;]
          (F) upon the basis of information submitted to the 
        Secretary as part of the application or any other 
        information before the Secretary with respect to such 
        drug, any use prescribed, recommended, or suggested in 
        labeling proposed for such drug will result in a 
        residue of such drug in excess of a tolerance found by 
        the Secretary to be safe for such drug;
          * * * * * * *
  [(3) As used in this subsection and subsection (e), the term 
``substantial evidence'' means evidence consisting of adequate 
and well-controlled investigations, including field 
investigation, by experts qualified by scientific training and 
experience to evaluate the effectiveness of the drug involved, 
on the basis of which it could fairly and reasonably be 
concluded by such experts that the drug will have the effect it 
purports or is represented to have under the conditions of use 
prescribed, recommended, or suggested in the labeling or 
proposed labeling thereof.]
  (3) As used in this section, the term ``substantial 
evidence'' means evidence consisting of one or more adequate 
and well controlled investigations, such as--
          (A) a study in a target species;
          (B) a study in laboratory animals;
          (C) any field investigation that may be required 
        under this section and that meets the requirements of 
        subsection (b)(3) if a presubmission conference is 
        requested by the applicant;
          (D) a bioequivalence study; or
          (E) an in vitro study;
 by experts qualified by scientific training and experience to 
evaluate the effectiveness of the drug involved, on the basis 
of which it could fairly and reasonably be concluded by such 
experts that the drug will have the effect it purports or is 
represented to have under the conditions of use prescribed, 
recommended, or suggested in the labeling or proposed labeling 
thereof.
  (4) In a case in which an animal drug contains more than one 
active ingredient, or the labeling of the drug prescribes, 
recommends, or suggests use of the drug in combination with one 
or more other animal drugs, and the active ingredients or drugs 
intended for use in the combination have previously been 
separately approved for particular uses and conditions of use 
for which they are intended for use in the combination--
          (A) the Secretary shall not issue an order under 
        paragraph (1)(A), (1)(B), or (1)(D) refusing to approve 
        the application for such combination on human food 
        safety grounds unless the Secretary finds that the 
        application fails to establish that--
                  (i) none of the active ingredients or drugs 
                intended for use in the combination, 
                respectively, at the longest withdrawal time of 
                any of the active ingredients or drugs in the 
                combination, respectively, exceeds its 
                established tolerance; or
                  (ii) none of the active ingredients or drugs 
                in the combination interferes with the methods 
                of analysis for another of the active 
                ingredients or drugs in the combination, 
                respectively;
          (B) the Secretary shall not issue an order under 
        paragraph (1)(A), (1)(B), or (1)(D) refusing to approve 
        the application for such combination on target animal 
        safety grounds unless the Secretary finds that--
                  (i)(I) there is a substantiated scientific 
                issue, specific to one or more of the active 
                ingredients or animal drugs in the combination, 
                that cannot adequately be evaluated based on 
                information contained in the application for 
                the combination (including any investigations, 
                studies, or tests for which the applicant has a 
                right of reference or use from the person by or 
                for whom the investigations, studies, or tests 
                were conducted); or
                  (II) there is a scientific issue raised by 
                target animal observations contained in studies 
                submitted to the Secretary as part of the 
                application; and
                  (ii) based on the Secretary's evaluation of 
                the information contained in the application 
                with respect to the issues identified in 
                clauses (i)(I) and (II), paragraph (1)(A), (B), 
                or (D) apply;
          (C) except in the case of a combination that contains 
        a nontopical antibacterial ingredient or animal drug, 
        the Secretary shall not issue an order under paragraph 
        (1)(E) refusing to approve an application for a 
        combination animal drug intended for use other than in 
        animal feed or drinking water unless the Secretary 
        finds that the application fails to demonstrate that--
                  (i) there is substantial evidence that any 
                active ingredient or animal drug intended only 
                for the same use as another active ingredient 
                or animal drug in the combination makes a 
                contribution to labeled effectiveness;
                  (ii) each active ingredient or animal drug 
                intended for at least one use that is different 
                from all other active ingredients or animal 
                drugs used in the combination provides 
                appropriate concurrent use for the intended 
                target population; or
                  (iii) where based on scientific information 
                the Secretary has reason to believe the active 
                ingredients or animal drugs may be physically 
                incompatible or have disparate dosing regimens, 
                such active ingredients or animal drugs are 
                physically compatible or do not have disparate 
                dosing regimens; and
          (D) the Secretary shall not issue an order under 
        paragraph (1)(E) refusing to approve an application for 
        a combination animal drug intended for use in animal 
        feed or drinking water unless the Secretary finds that 
        the application fails to demonstrate that--
                  (i) there is substantial evidence that any 
                active ingredient or animal drug intended only 
                for the same use as another active ingredient 
                or animal drug in the combination makes a 
                contribution to the labeled effectiveness;
                  (ii) each of the active ingredients or animal 
                drugs intended for at least one use that is 
                different from all other active ingredients or 
                animal drugs used in the combination provides 
                appropriate concurrent use for the intended 
                target population;
                  (iii) where a combination contains more than 
                one nontopical antibacterial ingredient or 
                animal drug, there is substantial evidence that 
                each of the nontopical antibacterial 
                ingredients or animal drugs makes a 
                contribution to the labeled effectiveness; or
                  (iv) where based on scientific information 
                the Secretary has reason to believe the active 
                ingredients or animal drugs intended for use in 
                drinking water may be physically incompatible, 
                such active ingredients or animal drugs 
                intended for use in drinking water are 
                physically compatible.
          * * * * * * *
  (i) When a new animal drug application filed pursuant to 
subsection (b) is approved, the Secretary shall by notice, 
which upon publication shall be effective as a regulation, 
publish in the Federal Register the name and address of the 
applicant and the conditions and indications of use of the new 
animal drug covered by such application, including any 
tolerance and withdrawal period or other use restrictions and, 
if such new animal drug is intended for use in animal feed, 
appropriate purposes and conditions of use (including special 
labeling requirements and any requirement that an animal feed 
bearing or containing the new animal drug be limited to use 
under the professional supervision of a licensed veterinarian) 
applicable to any animal feed for use in which such drug is 
approved, and such other information, upon the basis of which 
such application was approved, as the Secretary deems necessary 
to assure the safe and effective use of such drug. Upon 
withdrawal of approval of such new animal drug application or 
upon its suspension, the Secretary shall forthwith revoke or 
suspend, as the case may be, the regulation published pursuant 
to this subsection (i) insofar as it is based on the approval 
of such application.
          * * * * * * *
  [(m)(1) Any person may file with the Secretary an application 
with respect to any intended use or uses of an animal feed 
bearing or containing a new animal drug. Such person shall 
submit to the Secretary as part of the application (A) a full 
statement of the composition of such animal feed, (B) an 
identification of the regulation or regulations (relating to 
the new animal drug or drugs to be used in such feed), 
published pursuant to subsection (i), on which he relies as a 
basis for approval of his application with respect to the use 
of such drug in such feed, (C) a full description of the 
methods used in, and the facilities and controls used for, the 
manufacture, processing, and packing of such animal feed, (D) 
specimens of the labeling proposed to be used for such animal 
feed, and (E) if so requested by the Secretary, samples of such 
animal feed or components thereof.
  [(2) Within ninety days after the filing of an application 
pursuant to subsection (m)(1), or such additional period as may 
be agreed upon by the Secretary and the applicant, the 
Secretary shall either (A) issue an order approving the 
application if he then finds that none of the grounds for 
denying approval specified in paragraph (3) applies, or (B) 
give the applicant notice of an opportunity for a hearing 
before the Secretary under paragraph (3) on the question 
whether such application is approvable. The procedure governing 
such a hearing shall be the procedure set forth in the last two 
sentences of subsection (c).
  [(3) If the Secretary, after due notice to the applicant in 
accordance with paragraph (2) and giving him an opportunity for 
a hearing in accordance with such paragraph, finds, on the 
basis of information submitted to him as part of the 
application or on the basis of any other information before 
him--
          [(A) that there is not in effect a regulation under 
        subsection (i) (identified in such application) on the 
        basis of which such application may be approved;
          [(B) that such animal feed (including the proposed 
        use of any new animal drug therein or thereon) does not 
        conform to an applicable regulation published pursuant 
        to subsection (i) referred to in the application, or 
        that the purposes and conditions or indications of use 
        prescribed, recommended, or suggested in the labeling 
        of such feed do not conform to the applicable purposes 
        and conditions or indications of use (including 
        warnings) published pursuant to subsection (i) or such 
        labeling omits or fails to conform to other applicable 
        information published pursuant to subsection (i);
          [(C) that the methods used in, and the facilities and 
        controls used for, the manufacture, processing, and 
        packing of such animal feed are inadequate to preserve 
        the identity, strength, quality, and purity of the new 
        animal drug therein; or
          [(D) that, based on a fair evaluation of all material 
        facts, such labeling is false or misleading in any 
        particular;
he shall issue an order refusing to approve the application. 
If, after such notice and opportunity for hearing, the 
Secretary finds that subparagraphs (A) through (D) do not 
apply, he shall issue an order approving the application. An 
order under this subsection approving an application with 
respect to an animal feed bearing or containing a new animal 
drug shall be effective only while there is in effect a 
regulation pursuant to subsection (i), on the basis of which 
such application (or a supplement thereto) was approved, 
relating to the use of such drug in or on such feed.
  [(4)(A) The Secretary shall, after due notice and opportunity 
for hearing to the applicant, issue an order withdrawing 
approval of an application with respect to any animal feed 
under this subsection if the Secretary finds--
          [(i) that the application contains any untrue 
        statement of a material fact; or
          [(ii) that the applicant has made any changes from 
        the standpoint of safety or effectiveness beyond the 
        variations provided for in the application unless he 
        has supplemented the application by filing with the 
        Secretary adequate information respecting all such 
        changes and unless there is in effect an approval of 
        the supplemental application. The supplemental 
        application shall be treated in the same manner as the 
        original application.
If the Secretary (or in his absence the officer acting as 
Secretary) finds that there is an imminent hazard to the health 
of man or of the animals for which such animal feed is 
intended, he may suspend the approval of such application 
immediately, and give the applicant prompt notice of his action 
and afford the applicant the opportunity for an expedited 
hearing under this subsection; but the authority conferred by 
this sentence shall not be delegated.
  [(B) The Secretary may also, after due notice and opportunity 
for hearing to the applicant, issue an order withdrawing the 
approval of an application with respect to any animal feed 
under this subsection if the Secretary finds--
          [(i) that the applicant has failed to establish a 
        system for maintaining required records, or has 
        repeatedly or deliberately failed to maintain such 
        records or to make required reports in accordance with 
        a regulation or order under paragraph (5)(A) of this 
        subsection, or the applicant has refused to permit 
        access to, or copying or verification of, such records 
        as required by subparagraph (B) of such paragraph;
          [(ii) that on the basis of new information before 
        him, evaluated together with the evidence before him 
        when such application was approved, the methods used 
        in, or the facilities and controls used for, the 
        manufacture, processing, and packing of such animal 
        feed are inadequate to assure and preserve the 
        identity, strength, quality, and purity of the new 
        animal drug therein, and were not made adequate within 
        a reasonable time after receipt of written notice from 
        the Secretary, specifying the matter complained of; or
          [(iii) that on the basis of new information before 
        him, evaluated together with the evidence before him 
        when the application was approved, the labeling of such 
        animal feed, based on a fair evaluation of all material 
        facts, is false or misleading in any particular and was 
        not corrected within a reasonable time after receipt of 
        written notice from the Secretary specifying the matter 
        complained of.
  [(C) Any order under paragraph (4) of this subsection shall 
state the findings upon which it is based.
  [(5) In the case of any animal feed for which an approval of 
an application filed pursuant to this subsection is in effect--
          [(A) the applicant shall establish and maintain such 
        records, and make such reports to the Secretary, or (at 
        the option of the Secretary) to the appropriate person 
        or persons holding an approved application filed under 
        subsection (b), as the Secretary may by general 
        regulation, or by order with respect to such 
        application, prescribe on the basis of a finding that 
        such records and reports are necessary in order to 
        enable the Secretary to determine, or facilitate a 
        determination, whether there is or may be ground for 
        invoking subsection (e) or paragraph (4) of this 
        subsection.
          [(B) every person required under this subsection to 
        maintain records, and every person in charge or custody 
        thereof, shall, upon request of an officer or employee 
        designated by the Secretary, permit such officer or 
        employee at all reasonable times to have access to and 
        copy and verify such records.]
  (m)(1) Any person may file with the Secretary an application 
for a license to manufacture animal feeds bearing or containing 
new animal drugs. Such person shall submit to the Secretary as 
part of the application (A) a full statement of the business 
name and address of the specific facility at which the 
manufacturing is to take place and the facility's registration 
number, (B) the name and signature of the responsible 
individual or individuals for that facility, (C) a 
certification that the animal feeds bearing or containing new 
animal drugs are manufactured and labeled in accordance with 
the applicable regulations published pursuant to subsection 
(i), and (D) a certification that the methods used in, and the 
facilities and controls used for, manufacturing, processing, 
packaging, and holding such animal feeds are in conformity with 
current good manufacturing practice as described in section 
501(a)(2)(B).
  (2) Within 90 days after the filing of an application 
pursuant to paragraph (1), or such additional period as may be 
agreed upon by the Secretary and the applicant, the Secretary 
shall (A) issue an order approving the application if the 
Secretary then finds that none of the grounds for denying 
approval specified in paragraph (3) applies, or (B) give the 
applicant notice of an opportunity for a hearing before the 
Secretary under paragraph (3) on the question whether such 
application is approvable. The procedure governing such a 
hearing shall be the procedure set forth in the last two 
sentences of subsection (c)(1).
  (3) If the Secretary, after due notice to the applicant in 
accordance with paragraph (2) and giving the applicant an 
opportunity for a hearing in accordance with such paragraph, 
finds, on the basis of information submitted to the Secretary 
as part of the application, on the basis of a preapproval 
inspection, or on the basis of any other information before the 
Secretary--
          (A) that the application is incomplete, false, or 
        misleading in any particular;
          (B) that the methods used in, and the facilities and 
        controls used for, the manufacture, processing, and 
        packing of such animal feed are inadequate to preserve 
        the identity, strength, quality, and purity of the new 
        animal drug therein; or
          (C) that the facility manufactures animal feeds 
        bearing or containing new animal drugs in a manner that 
        does not accord with the specifications for manufacture 
        or labels animal feeds bearing or containing new animal 
        drugs in a manner that does not accord with the 
        conditions or indications of use that are published 
        pursuant to subsection (i),
the Secretary shall issue an order refusing to approve the 
application. If, after such notice and opportunity for hearing, 
the Secretary finds that subparagraphs (A) through (C) do not 
apply, the Secretary shall issue an order approving the 
application. An order under this subsection approving an 
application for a license to manufacture animal feeds bearing 
or containing new animal drugs shall permit a facility to 
manufacture only those animal feeds bearing or containing new 
animal drugs for which there are in effect regulations pursuant 
to subsection (i) relating to the use of such drugs in or on 
such animal feed.
  (4)(A) The Secretary shall, after due notice and opportunity 
for hearing to the applicant, revoke a license to manufacture 
animal feeds bearing or containing new animal drugs under this 
subsection if the Secretary finds--
          (i) that the application for such license contains 
        any untrue statement of a material fact; or
          (ii) that the applicant has made changes that would 
        cause the application to contain any untrue statements 
        of material fact or that would affect the safety or 
        effectiveness of the animal feeds manufactured at the 
        facility unless the applicant has supplemented the 
        application by filing with the Secretary adequate 
        information respecting all such changes and unless 
        there is in effect an approval of the supplemental 
        application.
If the Secretary (or in the Secretary's absence the officer 
acting as the Secretary) finds that there is an imminent hazard 
to the health of humans or of the animals for which such animal 
feed is intended, the Secretary may suspend the license 
immediately, and give the applicant prompt notice of the action 
and afford the applicant the opportunity for an expedited 
hearing under this subsection; but the authority conferred by 
this sentence shall not be delegated.
  (B) The Secretary may also, after due notice and opportunity 
for hearing to the applicant, revoke a license to manufacture 
animal feed under this subsection if the Secretary finds--
          (i) that the applicant has failed to establish a 
        system for maintaining required records, or has 
        repeatedly or deliberately failed to maintain such 
        records or to make required reports in accordance with 
        a regulation or order under paragraph (5)(A) of this 
        subsection or section 504(a)(3)(A), or the applicant 
        has refused to permit access to, or copying or 
        verification of, such records as required by 
        subparagraph (B) of such paragraph or section 
        504(a)(3)(B);
          (ii) that on the basis of new information before the 
        Secretary, evaluated together with the evidence before 
        the Secretary when such license was issued, the methods 
        used in, or the facilities and controls used for, the 
        manufacture, processing, packing, and holding of such 
        animal feed are inadequate to assure and preserve the 
        identity, strength, quality, and purity of the new 
        animal drug therein, and were not made adequate within 
        a reasonable time after receipt of written notice from 
        the Secretary, specifying the matter complained of;
          (iii) that on the basis of new information before the 
        Secretary, evaluated together with the evidence before 
        the Secretary when such license was issued, the 
        labeling of any animal feeds, based on a fair 
        evaluation of all material facts, is false or 
        misleading in any particular and was not corrected 
        within a reasonable time after receipt of written 
        notice from the Secretary specifying the matter 
        complained of; or
          (iv) that on the basis of new information before the 
        Secretary, evaluated together with the evidence before 
        the Secretary when such license was issued, the 
        facility has manufactured, processed, packed, or held 
        animal feed bearing or containing a new animal drug 
        adulterated under section 501(a)(6) and the facility 
        did not discontinue the manufacture, processing, 
        packing, or holding of such animal feed within a 
        reasonable time after receipt of written notice from 
        the Secretary specifying the matter complained of.
  (C) The Secretary may also revoke a license to manufacture 
animal feeds under this subsection if an applicant gives notice 
to the Secretary of intention to discontinue the manufacture of 
all animal feed covered under this subsection and waives an 
opportunity for a hearing on the matter.
  (D) Any order under this paragraph shall state the findings 
upon which it is based.
  (5) When a license to manufacture animal feeds bearing or 
containing new animal drugs has been issued--
          (A) the applicant shall establish and maintain such 
        records, and make such reports to the Secretary, or (at 
        the option of the Secretary) to the appropriate person 
        or persons holding an approved application filed under 
        subsection (b), as the Secretary may by general 
        regulation, or by order with respect to such 
        application, prescribe on the basis of a finding that 
        such records and reports are necessary in order to 
        enable the Secretary to determine, or facilitate a 
        determination, whether there is or may be ground for 
        invoking subsection (e) or paragraph (4); and
          (B) every person required under this subsection to 
        maintain records, and every person in charge or custody 
        thereof, shall, upon request of an officer or employee 
        designated by the Secretary, permit such officer or 
        employee at all reasonable times to have access to and 
        copy and verify such records.
  (6) To the extent consistent with the public health, the 
Secretary may promulgate regulations for exempting from the 
operation of this subsection facilities that manufacture, 
process, pack, or hold animal feeds bearing or containing new 
animal drugs.
          * * * * * * *
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