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[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1742 Introduced in House (IH)]

  1st Session
                                H. R. 1742

To amend the Federal Food, Drug, and Cosmetic Act to revise the process 
           for the approval of drugs and for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                              June 6, 1995

  Mr. Wyden introduced the following bill; which was referred to the 
                         Committee on Commerce

_______________________________________________________________________

                                 A BILL

 
To amend the Federal Food, Drug, and Cosmetic Act to revise the process 
           for the approval of drugs and for other purposes.
    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; REFERENCE; TABLE OF CONTENTS.

    (A) Short Title.--This Act may be cited as the ``FDA Modernization 
Act of 1995''.
    (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.
    (c) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; reference; table of contents.
Sec. 2. Findings.
Sec. 3. Responsibility of the Secretary.
Sec. 4. Conditional approval.
Sec. 5. Use of institutional review boards.
Sec. 6. Review by independent testing organizations.
Sec. 7. Limitations on authority over legitimate labeling and 
                            advertising.
Sec. 8. Review by expert advisory panel.
Sec. 9. Rationalizing good manufacturing practices.
Sec. 10. Export of drugs and devices.
Sec. 11. Regulation of biological products.
Sec. 12. Initial reporting of devices.
Sec. 13. FDA response to G.M.P. violations.
SEC. 2. FINDINGS.

    The Congress finds the following:
            (1) The Food and Drug Administration has primary 
        responsibility to ensure the safety and effectiveness of drugs 
        and medical devices.
            (2) Within the scope of that mission, the Food and Drug 
        Administration also has a public mandate to help speed the 
        introduction of life-saving and life-enhancing new products to 
        the marketplace.
            (3) The United States medical products industry is a 
        nationally important employer, and a major, positive balance-
        of-trade factor in our economy.
            (4) It is apparent to persons both within and outside of 
        the agency that certain Food and Drug Administration practices, 
        policies, and systems may--
                    (A) needlessly delay the introduction of new 
                products,
                    (B) withhold new health care benefits to American 
                citizens,
                    (C) erode job development in an important United 
                States industry, and
                    (D) reduce our effective competitiveness in 
                international markets.
            (5) These problems are compounded by the twin pressures of 
        an increasing agenda of regulatory mandates for which the Food 
        and Drug Administration has been made responsible, and budget 
        limitations which have restricted the agency's ability to 
        properly address all functions in an expeditious manner.
            (6) The agency is hamstrung by some regulatory processes 
        which are outdated, and by systems, policies, technical 
        knowledge, and philosophies which have not, in every case, kept 
        up with revolutionary changes in the underlying science now 
        creating 21st century drug and medical device breakthroughs. 
        Among other problems, these policies and philosophies may 
        unnecessarily restrict the appropriate and
         free flow of credible scientific knowledge between clinicians, 
researchers, and manufacturers.
            (7) Better health care for all Americans is the ultimate 
        goal as the Food and Drug Administration is reshaped to meet 
        the challenges of regulating a rapidly growing, and changing, 
        health care products industry.

SEC. 3. RESPONSIBILITY OF THE SECRETARY.

    Section 903(b)(2) (21 U.S.C. 393(b)(2)) is amended by redesignating 
subparagraphs (A), (B), (C), (D), and (E) as subparagraphs (B), (C), 
(D), (E), and (F), respectively and by adding before subparagraph (B) 
(as so redesignated) the following:
                    ``(A) consistent with the public health, rapidly 
                making decisions on the approval of drugs and devices 
                in accordance with this Act and biological products in 
                accordance with section 351 of the Public Health 
                Service Act;''.

SEC. 4. CONDITIONAL APPROVAL.

    (a) Drugs and Biological Products.--Section 505 (21 U.S.C. 355) is 
amended by adding at the end the following:
    ``(n) A new drug to treat life-threatening or serious conditions 
for which an application has been submitted under subsection (b) may, 
if the new drug is otherwise approvable, receive a conditional approval 
on the basis of valid scientific evidence demonstrating a reasonable 
assurance of safety and effectiveness. A conditional approval shall 
become a final section 505 approval unless conditions set forth in such 
approval have not been met within a time certain as set by the 
Secretary in consultation with the applicant. If such conditions have 
not been fulfilled within such time, the conditional approval shall 
terminate. A new drug which has a conditional approval shall for 
purposes of this Act be considered an approved new drug. A conditional 
approval shall terminate upon the expiration of the period applicable 
to such approval.''.
    (b) Medical Devices.--Section 515 (21 U.S.C 360e) is amended by 
adding at the end the following:

                         ``conditional approval

    ``(j) A a class III device to treat life-threatening or serious 
health conditions for which an application for premarket approval has 
been submitted under subsection (c) may, if the device is otherwise 
approvable, receive a conditional approval on the basis of valid 
scientific evidence demonstrating a reasonable assurance of safety and 
effectiveness. A conditional approval shall be for such period as the 
Secretary designates in granting such approval. A device which has a 
conditional approval shall for purposes of this Act be considered an 
approved device. A conditional approval shall terminate upon the 
expiration of the period applicable to such approval.''.

SEC. 5. USE OF INSTITUTIONAL REVIEW BOARDS.

    (a) Approval of I.N.D. for Drugs.--Section 505(i) (21 U.S.C. 355(i) 
is amended by inserting ``(1)'' after ``(i)'' and by adding at the end 
the following:
    ``(2)(A) An application (including an amendment or supplement 
thereto) for an exemption for a new drug for investigational use shall 
be deemed approved on the 30th day after the submission of the 
application to the Secretary unless on or before such day--
            ``(i) the Secretary, or
            ``(ii) the Secretary acting upon the recommendation of an 
        institutional review board certified under paragraph (3)(C),
by order disapproves the application and notifies the applicant in 
writing of the disapproval and the reasons for disapproval and affords 
the applicant an opportunity for an informal hearing on the 
disapproval.
    ``(B) Personnel of the Secretary shall meet with any person who 
wishes to submit an application for a drug under paragraph (1) for the 
purpose of reaching agreement on the design and size of clinical trials 
in order to facilitate expeditious review of an application under 
subsection (b). Meetings shall be held within 30 days of any reasonable 
request therefor. Minutes of any such meeting shall be exchanged.''.
    (b) Investigational Devices.--Section 520(g)(4)(A) (21 U.S.C. 
360j(g)(4)(A)) is amended by striking ``unless'' and all that follows 
and inserting ``unless on or before such day--
            ``(i) the Secretary, or
            ``(ii) the Secretary acting upon the recommendation of an 
        institutional review board certified under section 
        505(i)(3)(C),
by order disapproves the application and notifies the applicant in 
writing of the disapproval and the reasons for disapproval and affords 
the applicant an opportunity for an informal hearing on the 
disapproval. Personnel of the Secretary shall meet with any person who 
wishes to submit an application for a device under paragraph (1) for 
the purpose of reaching agreement on the design and size of clinical 
trials in order to facilitate expeditious review of an application 
under section 515(c). Meetings shall be held within 30 days of any 
reasonable request therefor. Minutes of any such meeting shall be 
exchanged.''.
    (c) Review of Certain Clinical Investigations.--Section 505(i) (21 
U.S.C. 355(i), as amended by subsection (a), is amended by adding at 
the end the following:
    ``(3)(A) The Secretary shall use institutional review boards, 
approved by the Secretary, to review and approve the initiation and 
conduct of Phase I clinical investigations under paragraph (1). The 
Secretary shall certify an institutional review board as qualified to 
review and approve a Phase I clinical investigation upon a 
determination that the board meets the criteria established under 
subparagraph (C).
    ``(B)(i) The Secretary shall require private sponsors to submit 
proposed Phase I clinical investigations to be conducted under an 
exemption under this subsection to an institutional review board 
certified under subparagraph (A) in lieu of submission to the 
Secretary.
    ``(ii) The Secretary may, upon request, authorize commercial 
sponsors to submit proposed Phase I clinical investigations to be 
conducted under an exemption under this subsection to an institutional 
review board certified under subparagraph (A) in lieu of submission to 
the Secretary.
    ``(C) The Secretary, acting through the Commissioner of Food and 
Drugs and the Director of the National Institutes of Health, shall 
establish criteria for certification by the Commissioner of 
institutional review boards as qualified to approve the initiation and 
conduct of Phase I clinical investigations. Applicants shall apply to a 
certified institutional review board for approval to conduct a Phase I 
clinical investigation.
    ``(D) An institutional review board may approve a Phase I clinical 
investigation if it determines the investigation meets the requirements 
of paragraph (1) and is to be conducted in accordance with standards 
which provide reasonable protection of human subjects, including 
informed consent procedures.
    ``(E) For purposes of this paragraph, the term `Phase I clinical 
investigations' means one or more clinical investigations that involve 
the introduction of an investigational new drug into human beings. Such 
an investigation shall be designed to determine parameters such as the 
following: the safety profile of the drug, the metabolism and 
pharmacologic actions of the drug in humans, the side effects 
associated with increasing doses of the drug, early evidence of 
effectiveness of the drug, and information about the drug's rate and 
extent to absorption.
    ``(4)(A) The Secretary (or an institutional review board with 
respect to a Phase I clinical investigation which it has approved) may 
place a clinical hold on any proposed or ongoing clinical investigation 
if the Secretary determines that such action is necessary for the 
protection of human subjects or that the clinical investigations are 
poorly supervised or executed, produce inaccurate or materially 
insufficient data, or are based on clearly deficient protocols.
    ``(B) If an institutional review board places a clinical hold on an 
investigation under subparagraph (A), it shall immediately notify the 
Secretary of such action.
    ``(5)(A) Information otherwise protected from disclosure to the 
public under section 301(j) or 520(c) may be disclosed, under such 
conditions as the Secretary may specify, to members of an institutional 
review board and its staff if, in the opinion of the Secretary, such 
disclosure is necessary to protect the public safety and for the 
satisfactory performance by the institutional review board of its 
functions under paragraph (3).
    ``(B) The Secretary shall, in writing, require as a condition to 
the disclosure of information under this paragraph that the person 
receiving such information take such security precautions respecting 
the information as the Secretary shall by regulation prescribe. 
Disclosure by such person of such information to a person not 
authorized to receive it shall constitute a violation of section 301(j) 
and of section 1905 of title 18, United States Code.
    ``(6)(A) Any member of an institutional review board certified by 
the Secretary under paragraph (3)(C) shall, by reason of the member's 
performance of any duty, function, or activity required of, or 
authorized to be undertaken by, the institutional review board under 
this subsection, be considered to be an employee of the Government 
under section 2671 of title 28, United States Code.
    ``(B) Any personnel of a hospital, university, or other institution 
under which an institutional review board certified by the Secretary 
under paragraph (3)(C) was organized shall, by reason of the 
personnel's performance of any duty, function, or activity required of, 
or authorized to be undertaken by, the institutional review board under 
this subsection, be considered to be an employee of the Government 
under section 2671 of title 28, United States Code.
    ``(7) The Secretary may make grants to institutional review boards 
to defray, in whole or in part, the costs associated with the approval 
of Phase I clinical investigations.''.
    (b) Report.--Not later than the expiration of 5 years from the date 
of the enactment of this Act, the Secretary of Health and Human 
Services shall report to the Congress on the use the Secretary has made 
under paragraphs (3) through (7) of section 505(i) of the Federal Food, 
Drug, and Cosmetic Act of institutional review boards and any 
difficulties the Secretary has encountered in using such boards.
    (c) Effective Date.--The amendments made by subsections (a), (b), 
and (c) with respect to review of clinical investigations under section 
505(i) of the Federal Food, Drug, and Cosmetic Act by institutional 
review boards shall take effect upon the expiration of 36 months after 
the date of the enactment of this Act

SEC. 6. REVIEW BY INDEPENDENT TESTING ORGANIZATIONS.

    (a) Amendment.--Chapter IX is amended by adding after section 905 
(21 U.S.C. 395) the following:

                 ``privatization of approval functions

    ``Sec. 906. (a) The Secretary, acting through the Commissioner of 
Food and Drugs, may establish and implement a program under which the 
Commissioner will contract, in whole or in significant part, with 
individuals and laboratories certified under subsection (b) to conduct, 
under such conditions as the Secretary may specify to assure unbiased 
scientifically valid results, the following activities and 
responsibilities of the Food and Drug Administration in connection with 
the approval of drugs and devices under sections 505 and 515 and with 
reviewing notifications required under section 510(k) and making 
written recommendations of initial classification under section 
513(f)(1) of devices:
            ``(1) Toxicology reviews to determine if applicable 
        requirements are being met.
            ``(2) Chemistry reviews to determine if applicable 
        requirements are being met.
            ``(3) Statistical analysis to determine if applicable 
        requirements are being met.
            ``(4) Preapproval manufacturing practice inspections to 
        determine if applicable requirements are being met.
            ``(5) Any other function of the Food and Drug 
        Administration relating to the review and approval of drugs or 
        devices that the Secretary determines can be adequately 
        performed under contract with qualified individuals and 
        laboratories.
    ``(b) The Secretary, acting through the Commissioner of Food and 
Drugs, shall certify individuals and laboratories as qualified to carry 
out the functions described in paragraphs (1) through (6) of subsection 
(a) under a contract with the Commissioner of Food and Drugs.
    ``(c)(1) Information otherwise protected from disclosure to the 
public under section 301(j) or 520(c) may be disclosed to--
            ``(A) contractors certified under subsection (b), and
            ``(B) employees of such contractors,
if, in the opinion of the Secretary, such disclosure is necessary for 
the satisfactory performance by the contractor of work under a contract 
under subsection (a).
    ``(2) The Secretary shall, in writing, require as a condition to 
the disclosure of information under paragraph (1) that the person 
receiving such information take such security precautions respecting 
the information as the Secretary shall by regulation prescribe. 
Disclosure by such person of such information to a person not 
authorized to receive it shall constitute a violation of section 301(j) 
and of section 1905 of title 18, United States Code.
    ``(e) The review of an application for approval of a new drug or 
device under this Act or a biological product under section 351 of the 
Public Health Service Act shall not include the review of the 
environmental impact of such drug, device, or biological product under 
the Environmental Quality Improvement Act of 1970 (42 U.S.C. 4371 et 
seq.).''.
    (b) Report.--Not later than the expiration of one year from the 
date of the enactment of this Act, the Secretary of Health and Human 
Services shall report to the Congress on--
            (1) the use the Secretary has made under section 906 of the 
        Federal Food, Drug, and Cosmetic Act of the authority to 
        contract for individuals and laboratories to perform duties of 
        the Food and Drug Administration, and
            (2) any difficulties encountered in contracting under such 
        section 906.

SEC. 7. LIMITATIONS ON AUTHORITY OVER LEGITIMATE LABELING AND 
              ADVERTISING.

    (a) Section 201(m).--Section 201(m) (21 U.S.C. 321(m)) is amended 
to read as follows:
    ``(m)(1) The term `labeling' means all labels and other written, 
printed, or graphic material upon any article or any of its containers 
or wrappers, or accompanying any such article.
    ``(2) Such term does not include scientifically valid--
            ``(A) reprints of articles published in peer-reviewed 
        scientific publications, other generally recognized scientific 
        materials such as medical textbooks, official compendia, 
        abstracts and proceedings of scientific meetings, or 
        information concerning decisions about drug utilization review 
        or formulary decisions if--
                    ``(i) such reprints, materials, or information are 
                disseminated in a meeting to health professionals or to 
                persons involved in the insurance of, or reimbursement 
                for, drugs and devices approved under this Act and 
                section 351 of the Public Health Service Act, and
                    ``(ii) the dissemination of such reprints, 
                materials, or information was not required, directly or 
                indirectly, by a pharmaceutical company or device 
                manufacturer as a condition of financial support of the 
                development of such materials or of such meeting;
            ``(B) materials used to fulfill the disclosure requirements 
        of the Securities and Exchange Commission; or
            ``(C) other information intended primarily for distribution 
        to shareholders (and potential shareholders);
if such information is reported to the Secretary at least 60 days 
before its dissemination.
    ``(3) If labeling contains information described in paragraph 
(2)(A) along with related data as may be deemed appropriate by the 
Secretary, the Secretary may require that persons disseminating such 
labeling include in the labeling a statement prescribed by the 
Secretary concerning such information if the Secretary finds that the 
information is scientifically insufficient, inaccurate, or 
misleading.''.
    (b) Section 201(n).--Section 201(n) (21 U.S.C. 321(n)) is amended--
            (1) by inserting ``(1)'' after ``(n)''; and
            (2) by inserting the following at the end thereof:
    ``(2) For purposes of this subsection, the term `advertising' does 
not include scientifically valid--
            ``(A) reprints of articles published in peer-reviewed 
        scientific publications, other generally recognized scientific 
        materials such as medical textbooks, official compendia, 
        abstracts, and proceedings of scientific meetings, or 
        information concerning decisions about drug utilization review 
        of formulary decision if--
                    ``(i) such reprints, materials, or information are 
                disseminated in a meeting to health professionals or 
                persons involved in the insurance of, or reimbursement 
                for, drugs and devices regulated under this Act and 
                section 351 of the Public Health Service Act, and
                    ``(ii) the dissemination of such reprints, 
                materials, or information was not required, directly or 
                indirectly, by a pharmaceutical company or device 
                manufacturer as a condition of financial support of the 
                development of such materials or of such meeting;
            ``(B) materials used to fulfill the disclosure requirements 
        of the Securities and Exchange Commission or the Securities Act 
        of 1933 and the Securities Exchange Act of 1934 and regulations 
        promulgated thereunder; or
            ``(C) other information intended primarily for distribution 
        to shareholders (and potential shareholders);
if such information is reported to the Secretary at least 60 days 
before its dissemination.
    ``(3) If advertising contains information described in paragraph 
(2)(A) along with related data as may be deemed appropriate by the 
Secretary, the Secretary may require that persons disseminating such 
advertising include in the advertising a statement prescribed by the 
Secretary concerning such information if the Secretary finds that the 
information is scientifically insufficient, inaccurate, or 
misleading.''.
    (c) Section 201(p).--Section 201(p)(1) (21 U.S.C. 321(p)(1)) is 
amended by striking ``labeling thereof'' and inserting ``drug's 
labeling (as defined in paragraph (m))''.
    (d) Section 502(a).--Section 502(a) (21 U.S.C. 352(a)) is amended 
by inserting ``(1)'' after ``(a)'' and inserting at the end thereof the 
following:
    ``(2) The Secretary does not have authority to require approval of 
promotional labeling prior to use or dissemination of such labeling. 
This paragraph does not apply to the regulation of tobacco products.
    ``(3) The dissemination of scientifically valid information as 
defined in section 201(m)(2)(A) is not a violation of this section, 
provided that (a) it is reported to the Secretary 60 days prior to 
dissemination, and (b) subject to provisions of Section 201(m)(3).''
    (e) Section 502(n).--The first sentence of section 502(n) (21 
U.S.C. 352(n) is amended by striking ``, and (B)'' and inserting before 
the period at the end the following: ``, and (C) no advertising shall 
be subject to approval prior to use or dissemination''.
    (f) Application.--The amendments made by this section apply to the 
labeling and advertising of drugs, biological products, and devices 
which have been approved for at least one indication.

SEC. 8. REVIEW BY EXPERT ADVISORY PANEL.

    Chapter IX is amended by adding at the end the following:

                   ``review by expert advisory panel

    ``Sec. 906. (a)(1) In the case of--
            ``(A) any person who has submitted an application under 
        section 505(a) for approval of a new drug, or
            ``(B) any person who has submitted a product license 
        application for a biological product under section 351(a) of 
        the Public Health Service Act,
which the Secretary determines is to be used for the purpose of 
treating a serious or life-threatening disease or other health 
condition, such person (hereinafter in this
 section referred to as the `applicant') may, not sooner than 90 days 
after submitting such application, request review of such application 
by an expert advisory panel under this section.
    ``(2) If an expert advisory panel appointed by the Secretary under 
subsection (b) recommends under subsection (d) that the drug reviewed 
should be approved under section 505 or that the biological product 
reviewed should have a product license issued for it under section 351 
of the Public Health Service Act, then, within 45 days of receipt of 
the recommendation, the drug shall be deemed approved or the biological 
product shall be deemed to have a product license issued for it unless 
the Secretary determines that the applicant has not met standards of 
section 505 or 351, whichever is applicable.
    ``(b)(1) The Secretary may appoint expert advisory panels for 
review of applications under this section according to the various 
fields of clinical medicine and fundamental sciences in which drugs or 
biological products are used.
    ``(2)(A) Members of an advisory panel shall be selected from a list 
of persons submitted to the Secretary under subsection (e), and the 
Secretary shall designate the chairperson of each panel. Each advisory 
panel shall consist of 5 or more persons with training and experience 
in the fields of medicine and science applicable to the drug which is 
the subject of the application to be reviewed and who are otherwise 
qualified to review such applications.
    ``(B) Members of advisory panels appointed under this subsection 
shall be compensated at a rate not to exceed the daily equivalent of 
the rate in effect for GS-18 of the General Schedule for each day 
(including travel time) they are engaged in the performance of their 
duties as members of the advisory panel. All members, while so serving 
away from their homes or regular places of business, may be allowed 
travel expenses, including per diem in lieu of subsistence, in the same 
manner as such expenses are authorized by section 5703, title 5, United 
States Code, for employees serving intermittently.
    ``(c)(1) The Secretary shall, within 60 days of the receipt of a 
request under subsection (a)(1), refer an eligible application to an 
advisory panel, appointed under subsection (b), for the purpose of 
reviewing such application and shall provide to the panel such 
information as the Secretary determines will facilitate review of such 
application by the panel.
    ``(2)(A) Information provided under paragraph (1) which is 
otherwise protected from disclosure to the public under section 301(j) 
or 520(c) shall be disclosed to members of advisory panels only under 
the conditions specified in subparagraph (B).
    ``(B) The Secretary shall, in writing, require as a condition to 
the disclosure of information under subparagraph (A) that the person 
receiving it take such security precautions respecting the information 
as the Secretary shall by regulation prescribe. Disclosure by such 
person of such information to a person not authorized to receive it 
shall constitute a violation of section 301(j) and of section 1905 of 
title 18, United States Code.
    ``(d)(1) Within 60 days of the date information is provided to the 
expert advisory panel under subsection (c)(1), the expert advisory 
panel shall complete its review of the information received under 
subsection (c) with respect to an application being reviewed by the 
panel and shall submit to the Secretary and the applicant a 
recommendation as to whether the drug included in the application 
should be approved in accordance with section 505 or whether a product 
license should be issued under section 351 of the Public Health Service 
Act for the biological product included in the application. A 
recommendation for approval of the drug or issuance of a license for a 
biological product shall specify the indication for which the drug or 
biological product is recommended for approval.
    ``(2) A summary of the recommendation submitted to the Secretary 
under paragraph (1) shall be made available to the public on the day it 
is so submitted, but no information which is described in section 
552(b)(4) of title 5, United States Code, shall be included in the 
summary or otherwise released to the public.
    ``(e)(1) The Secretary shall request a nongovernmental scientific 
body to submit to the Secretary a list of names of persons, together 
with their qualifications, who such body believes to be qualified to 
serve on expert advisory panels appointed under subsection (f). Such 
list shall be revised on an annual basis.
    ``(2) Any person may submit to such nongovernmental body 
recommendations of persons to be included on the list submitted under 
paragraph (1).
    (c) Report.--Not later than the expiration of one year from the 
date of the enactment of this Act, the Secretary of Health and Human 
Services shall report to the Congress on the Secretary's implementation 
of sections 505(i)(7) and 520(g)(6) of the Federal Food, Drug, and 
Cosmetic Act and the use the Secretary has made of institutional review 
boards. Such report shall include any difficulties the Secretary has 
encountered in the implementation of such sections and the use of 
institutional review boards.

SEC. 9. RATIONALIZING GOOD MANUFACTURING PRACTICES.

    Section 501 (21 U.S.C. 351(a)) is amended--
            (1) by inserting ``(A)'' after ``(a)(1)'' and redesignating 
        ``(2)(A)'' as ``(B)(i)'', ``(B)'' as ``(ii)'' both times it 
        appears, ``(3)'' as ``(C)'', ``(4)'' as ``(D)'', ``(5)'' as 
        ``(E)'', ``(6)'' as ``(F)'', and ``(A)'' as ``(i)'' the second 
        time it appears; and
            (2) by inserting the following at the end of subsection 
        (a):
    ``(B) The Secretary shall by regulation establish good 
manufacturing practices applicable to drugs subject to section 505 of 
this Act and biological products (other than blood, blood products and 
blood components, and vaccines that cannot adequately be characterized 
by physical or chemical methods) subject to section 351 of the Public 
Health Service Act as follows:
            ``(i) One set of regulations shall apply only to drugs and 
        biological products which cannot be characterized adequately by 
        physical or chemical methods.
            ``(ii) A second set of regulations shall apply only to 
        drugs and biological products which can be characterized 
        adequately by physical or chemical methods.
    ``(C) Regulations established under subparagraph (B) shall 
establish requirements for submissions to the Secretary of changes in 
manufacturing practices by the applicant or holder. Such regulations 
shall provide as follows:
            ``(i) In the case of drugs and biological products which 
        can adequately be characterized by physical or chemical 
        methods, approval of manufacturing changes shall be required 
        prior to implementation of such changes only if such 
        manufacturing changes are specified in regulations as 
        substantially affecting the safety or efficacy of such drugs 
        and biological products.
            ``(ii) In the case of drugs and biological products which 
        cannot be characterized adequately by physical or chemical 
        methods, approval of such manufacturing changes before 
        implementation shall be required--
                    ``(I) in the case of a drug or a biological product 
                which is required under section 351(a)(1)(B) of the 
                Public Health Service Act to have a product license, 
                only if such manufacturing changes are specified in 
                regulations as potentially affecting the safety or 
                efficacy of such drug or biological product; or
                    ``(II) in the case of a biological product which is 
                subject to standards as determined under section 
                351(a)(1)(B) of the Public Health Service Act, only if 
                such manufacturing changes are specified in the 
                regulations as substantially affecting the safety, 
                purity, or potency (or, in the case of tissue, safety, 
                and integrity) of such biological products.
            ``(iii) Such regulations shall specify the types of 
        manufacturing changes that must be submitted in writing to the 
        Secretary (but not required to be approved prior to 
        implementation). A request to make such changes must be 
        submitted by the applicant or holder at least 30 days prior to 
        implementation of such changes. Such request may be implemented 
        on the 31st day after submission unless on or before such day 
        the Secretary disapproves such request and notifies the 
        applicant or holder in writing of such disapproval. Such 
        notification shall include a complete statement of the reasons 
        for not allowing implementation.
            ``(iv) If upon further review, the Secretary identifies 
        problems that would affect product safety, efficacy, purity, or 
        potency or tissue integrity, the Secretary may disapprove the 
        manufacturing changes. Taking into consideration risks 
        involved, reasonable time shall be given the applicant or 
        holder to comply with the disapproval.
            ``(v) A description of manufacturing changes not covered by 
        clauses (i) or (iii) shall be submitted by the applicant or 
        holder to the Secretary on an annual basis.
    ``(D)(i) The Secretary shall, after notice and opportunity for 
public comment pursuant to section 553 of title 5, United States Code, 
establish not later than December 31. 1998, regulations to be used in 
determining whether a drug or a biological product can adequately be 
characterized by physical or chemical methods.
    ``(ii) If the applicant disagrees with a determination by the 
Secretary that the drug or biological product which is the subject of 
an application cannot be adequately characterized by physical or 
chemical methods, such applicant may contest such determination by 
requesting an informal hearing.
    ``(E) For purposes of subparagraphs (B) through (D)--
            ``(i) the term `changes in manufacturing practices' means--
                    ``(I) changes in manufacturing procedures generally 
                applicable throughout the facility, such as changes in 
                recordkeeping procedures, validation processes, methods 
                of training of personnel, and methods of qualification 
                of equipment;
                    ``(II) changes in the manufacturing facility or 
                equipment; and
                    ``(III) changes in manufacturing procedures of 
                specific applicability to a biological product;
            ``(ii) the term `holder' means a person whose drug 
        application submitted under section 505 or product license 
        application submitted under section 351 of the Public Health 
        Service Act has been approved; and
            ``(iii) the term `applicant' means a person whose 
        application described under clause (ii) has been submitted to, 
        but not approved by, the Secretary.''.

SEC. 10. EXPORT OF DRUGS AND DEVICES.

    (a) Section 801(e).--Section 801(e) (21 U.S.C. 381(e)) is amended--
            (1) in paragraph (1), by inserting after ``under this Act'' 
        the following: ``or in violation of section 505 or section 351 
        of the Public Health Service Act'';
            (2) in paragraph (1), by amending subparagraph (B) to read 
        as follows:
                    ``(B) has been accepted or requested for import by 
                the country to which it is intended for export and will 
                be sold, tested, or otherwise used in such country'';
            (3) in paragraph (1), by striking the last sentence;
            (4) by amending paragraph (2) to read as follows:
    ``(2) Paragraph (1) does not apply to the export of--
            ``(A) any device--
                    ``(i) which does not comply with an applicable 
                requirement under section 514 or 515; or
                    ``(ii) which under section 520(g) is exempt from 
                either such section, or
            ``(B) any drug which does not comply with an applicable 
        requirement under section 505 or 512 or section 351 of the 
        Public Health Service Act,
unless the device or drug is in compliance with the requirements of 
paragraph (1) and if the device or drug is to be exported to a country 
which is not a member of the World Trade Organization, the person 
exporting it has notified the Secretary of the export at least 30 days 
before the export and has included in such notice the name of the 
product, the country to which the product is being exported and a brief 
description of the medical need for such device or drug in such 
country. In the case of a device or drug for which an export notice is 
required under this paragraph, the Secretary may prohibit the export of 
such device or drug if the Secretary determines that the possibility of 
the reimportation of the device or drug into the United States presents 
an imminent hazard to the public health and safety of the United States 
and the only means of limiting the hazard is to prohibit the export of 
the device or drug.''; and
            (5) by adding the following at the end thereof:
    ``(f) The Secretary shall not exercise jurisdiction.--
            ``(1) over the labeling of drugs or devices intended for 
        export in order to comply with requirements of foreign 
        countries''; or
            ``(2) over drugs or devices not subject to subsection (e) 
        which are intended for export and which are not intended for 
        commercial sale or are intended for investigational use 
        only.''.
    (b) Section 802.--Section 802 (21 U.S.C. 382) is repealed.

SEC. 11. REGULATION OF BIOLOGICAL PRODUCTS.

    Section 351(a) of the Public Health Service Act (42 U.S.C. 262(a)) 
is amended by inserting ``(1)(A)'' after ``(a)'' and by striking ``any 
virus'' and all that appears thereafter and inserting in lieu thereof 
the following: ``a biological product to which this section applies 
unless--
            ``(i) such biological product has been propagated, 
        manufactured, or prepared in accordance with good manufacturing 
        practices;
            ``(ii) such biological product is the subject of an 
        approved product license or complies with a standard 
        established by the Secretary; and
            ``(iii) each package of such biological product is plainly 
        marked with the proper name of the biological product contained 
        therein, the name, address, and establishment number of the 
        manufacturer, and the date beyond which the contents cannot be 
        expected to yield their specific results.
    ``(B) The Secretary shall by regulation specify which biological 
products shall be required to have a product license or shall be 
subject to standards established under subparagraph (A)(ii), except 
that tissue, blood and blood components and derivatives (other than 
blood test kits) shall be subject to standards under paragraph (4).
    ``(2)(A) The Secretary shall establish, by regulation, requirements 
for product license applications. The Secretary shall approve a product 
license application upon a demonstration that there exists reasonable 
assurance that
 the biological product which is the subject of the application is safe 
and effective.
    ``(B)(i) The Secretary shall establish, by regulation, standards 
for biological products subject to such standards under paragraph 
(1)(B), except that tissue, blood, and blood components or derivatives 
(other than blood test kits) shall be subject to standards established 
under paragraph (4). Standards shall, as appropriate, reasonably assure 
the safety, purity, and potency of the biological product or class of 
biological products subject to such standard.
    ``(3)(A) A product license approved by the Secretary under 
paragraph (2)(A) and regulations established by the Secretary under 
paragraph (2)(B) may require that lots or batches of a biological 
product be released only after certification that such lots or batches 
have the characteristics of safety, purity, and potency which the 
biological product purports or is represented to possess.
    ``(B)(i) A product license shall specify whether certification 
under subparagraph (A) will be by the manufacturer of the biological 
product, by the Secretary, or by a certified individual or independent 
laboratory under section 906 of the Federal Food, Drug, and Cosmetic 
Act.
    ``(ii) Certification of lots or batches by the Secretary or 
independent laboratory shall be required only for a period of not more 
than 6 months or until satisfactory history of consistent acceptable 
production has been established, which period will not be extended 
unless the Secretary determines in writing that continuing such 
certification is required to assure the safety and efficacy of the 
biological product.''.
    ``(iii) The Secretary may at any time, upon petition by the 
manufacturer or upon the Secretary's own initiative, terminate any 
requirement for certification.
    ``(4)(A) The Secretary shall by regulation establish standards for 
tissue, blood, and blood components or blood derivatives (other than 
blood test kits). Such standards shall assure the safety and integrity 
of the tissue, blood, and blood components or derivatives (other than 
blood test kits). The Secretary shall solicit the submission of one or 
more proposed standards, applicable to tissue, blood, and blood 
components or derivatives (other than blood test kits) and approved by 
the Secretary as appropriate for purposes of this section, from 
professional and scientific organizations. The Secretary shall publish 
such standards as a notice of proposed rulemaking in accordance with 
paragraph (2)(B)(ii).
    ``(B) Tissue subject to this paragraph shall be processed in 
accordance with good manufacturing practices established by the 
Secretary under section 501.
    ``(C) The Secretary may use--
            ``(i) professional and scientific organizations, and
            ``(ii) accrediting bodies used to assure compliance with 
        the standards of such organizations,
to assist in the implementation of subparagraph (A) and to assure that 
tissue meets the requirements of subparagraph (B).
    ``(D) For blood, blood products and blood components, and vaccines 
which cannot be adequately characterized by physical or chemical 
methods, the Secretary shall continue to implement the existing 
requirements for facilities where such blood, blood products, and blood 
components are drawn processed, stored, or otherwise maintained for 
distribution or in which such vaccines are manufactured or propagated.
    ``(5) The requirements of paragraph (1) do not apply to a 
biological product--
            ``(A) for which there is in effect an investigational new 
        drug application under section 505(i) of the Federal Food, 
        Drug, and Cosmetic Act, or
            ``(B) for which there is in effect under paragraph (6) a 
        provisional standards license.
    ``(6)(A) Each person who proposes to begin the introduction or 
delivery for introduction into interstate commerce for commercial 
distribution of a biological product which will require a standards 
license shall, at least 30 days before making such introduction or 
delivery submit to the Secretary (in such form and manner as the 
Secretary shall by regulation prescribe) a report that includes--
            ``(i) a description of the biological product;
            ``(ii) a statement of reasons satisfactory to the Secretary 
        that the biological product will require a standards license 
        (and not a product license);
            ``(iii) assurances by such person which are satisfactory to 
        the Secretary that such biological product will be manufactured 
        in accordance with good manufacturing practices described in 
        paragraph (1)(A)(i); and
            ``(iv) such other information as the Secretary may by 
        regulation require.
    ``(B) Upon the expiration of 30 days after the receipt by the 
Secretary of a report under subparagraph (A), the biological product 
for which the report was submitted shall be deemed to have a 
provisional standards license unless before the expiration of such days 
the Secretary determines that a requirement of such subparagraph (A) 
has not been met. If the Secretary determines that such a requirement 
has not been met, the Secretary shall provide to the person who 
submitted the report on which such determination was made an 
opportunity for an informal hearing.
    ``(C) A provisional standards license under subparagraph (A) shall 
expire upon the issuance of a standards license under paragraph (2).
    ``(7) For purposes of this subsection--
            ``(A) the term `tissue' means a collection of human cells 
        which are similar or the intercellular substances surrounding 
        them, or both, which--
                    ``(i) are intended for administration to a human 
                being for the diagnosis, cure, mitigation, treatment, 
                or prevention of any disease or condition;
                    ``(ii) are procured, processed, stored, or 
                distributed by methods to prevent the transmission of 
                infectious disease and to preserve or enhance clinical 
                usefulness;
                    ``(iii) may be processed to remove some of its 
                constituents but have not been modified chemically;
                    ``(iv) may be combined with substances such as 
                excipients, fillers, or carriers that are not devices 
                or pharmacologically active;
                    ``(v) if subjected to expansion, manipulation, or 
                other processing (which may include modification of 
                physical form or structure) before being transplanted 
                or implanted, are not thereby substantially altered in 
                their inherent structural or functional 
                characteristics; and
                    ``(vi) achieve their principal intended purposes 
                through structural or functional support and not 
                systemic action;
        but such term does not include vascularized human organs.
            ``(B) the term `biological product to which this section 
        applies' means a virus, therapeutic serum, toxin, antitoxin, 
        tissue, blood, component or derivative, allergenic biological 
        product, or an other analogous biological product or 
        arsphenamine or its derivative applicable to the prevention, 
        treatment, or cure of diseases or conditions of human 
        beings.''.

SEC. 12. INITIAL REPORTING OF DEVICES.

    (a) Class I Devices.--Section 510(k) (21 U.S.C. 360(k)) is amended 
by adding after paragraph (2) the following: ``No person shall be 
required to make a report under this subsection with respect to a class 
I device or a class II device which the Secretary has designated after 
notice and comment rulemaking to be exempt from such requirement.''.
    (b) Rulemaking.--Within 30 days of the date of the enactment of 
this Act, the Secretary of Health and Human Services shall publish a 
notice requesting identification of class II devices which should be 
placed in class I. Upon the expiration of 30 days after the date of 
such notice, the Secretary shall publish a proposal to exempt from the 
notification required under section 510(k) of the Federal Food, Drug, 
and Cosmetic Act the class II devices identified in response to the 
notice. Within 60 days of such publication, the Secretary shall publish 
a final regulation exempting the specified class II devices from such 
notification requirement. If the Secretary does not publish a final 
regulation, the devices contained in the proposed regulation shall be 
deemed exempt from such notification requirement.
    (c) Device Modifications.--Section 510(k) (21 U.S.C. 360(k)), as 
amended by subsection (a), is amended by adding at the end the 
following: ``A person who modifies a device in such a manner that has 
no substantive effect on the character, utility, or therapeutic nature 
of the device shall not be required to make a report under this 
subsection because of such modification and shall maintain data or 
information that demonstrates that a report under this subsection is 
not required in such person's good manufacturing practice document 
file. Such data or information shall be available upon request to the 
Secretary.''.
SEC. 13. FDA RESPONSE TO G.M.P. VIOLATIONS.

    Section 520(f) (21 U.S.C. 360j) is amended by adding at the end the 
following:
    ``(4) The Secretary may not delay the approval of a device under a 
section 510(k) report because the person who made the report is in 
violation of a requirement prescribed under paragraph (1) unless the 
Secretary determines that the violation is reasonably related to such 
device or is related to all the operations of such person. If the 
Secretary delays such approval because of such a violation, the 
Secretary shall, within 60 days of being notified that corrective 
actions have been taken, reinspect for such violations or remove the 
delay. The Secretary shall prepare information for persons making 
reports under section 510(k) to inform them of the provisions of this 
paragraph.''.
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