II

106TH CONGRESS

2D SESSION S. 3169

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

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

and for other purposes.

IN THE SENATE OF THE UNITED STATES

OCTOBER 5 (legislative day, SEPTEMBER 22), 2000

Mr. SESSIONS (for himself, Mr. BINGAMAN, Mr. ALLARD, Mr. JOHNSON, Mr.

CRAPO, and Mrs. LINCOLN) introduced the following bill; which was read

twice and referred to the Committee on Finance

A BILL

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

the Internal Revenue Code of 1986 with respect to drugs

for minor animal species, and for other purposes.

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

3 SECTION 1. SHORT TITLE.

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

5 Health and Welfare Act of 2000’’.

6 SEC. 2. FINDINGS.

7 The Congress finds as follows:

8 (1) There is a severe shortage of approved ani9 mal drugs for use in minor species.
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1 (2) There is a severe shortage of approved

2 drugs for treating animal diseases and conditions

3 that occur infrequently or in limited geographic

4 areas.

5 (3) Because of the small market shares, low6 profit margins involved, and capital investment re7 quired, it is generally not economically feasible for

8 animal drug manufacturers to pursue approvals for

9 these species, diseases, and conditions.

10 (4) Because the populations for which such

11 drugs are intended are small and conditions of ani12 mal management may vary widely, it is often dif13 ficult or impossible to design and conduct studies to

14 establish drug safety and effectiveness under tradi15 tional animal drug approval processes.

16 (5) It is in the public interest and in the inter17 est of animal welfare to provide for special proce18 dures to sanction the lawful use and marketing of

19 animal drugs for minor species and minor uses that

20 take into account these special circumstances and

21 that ensure that such drugs do not endanger the

22 public health.

23 (6) Exclusive marketing rights and tax credits

24 for clinical testing expenses have helped encourage

25 the development of orphan drugs for human use,
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1 and comparable incentives will help encourage the

2 development and sanctioning for lawful marketing of

3 animal drugs for minor species and minor uses.

4 SEC. 3. AMENDMENTS AFFECTING THE FOOD AND DRUG

5 ADMINISTRATION.

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

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

8 adding at the end the following:

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

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

11 cats, except that the Secretary may amend this definition

12 by regulation.

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

14 ‘‘(1) in a minor species, or

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

16 species for a disease or condition that occurs infre17 quently or in limited geographic areas, except that

18 the Secretary may amend this definition by regula19 tion.

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

21 concern’ means an animal species, or life stage of an ani22 mal species, that is not customarily used for food for hu23 mans and does not endanger the public health.’’.

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

25 Federal Food, Drug, and Cosmetic Act (21 U.S.C. 351
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1 et seq.) is amended by adding at the end the following

2 new subchapter:

3 ‘‘SUBCHAPTER F—ANIMAL DRUGS FOR MINOR

4 USES

5 ‘‘DESIGNATION OF DRUGS FOR MINOR USES

6 ‘‘SEC. 571. (a) Prior to the submission of an applica7 tion for approval of a new animal drug under section

8 512(b), a manufacturer or sponsor of such drug may re9 quest that the Secretary designate such drug as a drug

10 for a minor use. The Secretary shall designate such drug

11 as a drug for minor use if the Secretary finds that such

12 drug is or will be investigated for a minor use and the

13 application for such drug is approved under section 512.

14 A request for a designation of a drug under this subsection

15 shall contain the consent of the applicant to notice being

16 given by the Secretary under subsection (c) respecting the

17 designation of the drug.

18 ‘‘(b) The designation of a drug as a drug for a minor

19 use under subsection (a) shall be subject to the condition

20 that—

21 ‘‘(1) if an application was approved for the

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

23 drug will notify the Secretary of any discontinuance

24 of the production of the drug at least 1 year before

25 discontinuance; and
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1 ‘‘(2) if an application has not been approved for

2 the drug under section 512(c) and if preclinical in3 vestigations or investigations under section 512(j)

4 are being conducted with the drug, the manufacturer

5 or sponsor of the drug will notify the Secretary of

6 any decision to discontinue active pursuit of ap7 proval of an application under section 512(b).

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

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

10 ‘‘PROTECTION FOR DRUGS FOR MINOR USES

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

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

13 filed pursuant to section 512 for a drug designated

14 under section 571 for a minor use, no active ingre15 dient (including any salt or ester of the active ingre16 dient) of which has been approved in any other ap17 plication under section 512, the Secretary may not

18 approve or conditionally approve another application

19 submitted under section 512 or section 573 for such

20 drug for such minor use for a person who is not the

21 holder of such approved application until the expira22 tion of 10 years from the date of the approval of the

23 application.

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

25 filed pursuant to section 512 for a drug designated

26 under section 571 for a minor use, which includes
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1 an active ingredient (including an ester or salt of

2 the active ingredient) that has been approved in any

3 other application under section 512, the Secretary

4 may not approve or conditionally approve another

5 application submitted under section 512 or section

6 573 for such drug for such minor use for a person

7 who is not the holder of such approved application

8 until the expiration of 7 years from the date of ap9 proval of the application.

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

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

12 Secretary may, during the 10-year or 7-year period begin13 ning on the date of the application approval, approve or

14 conditionally approve another application under section

15 512 or section 573 for such drug for such minor use for

16 a person who is not the holder of such approved applica17 tion if—

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

19 holder notice and opportunity for the submission of

20 views, that in such period the holder of the approved

21 application cannot assure the availability of suffi22 cient quantities of the drug to meet the needs for

23 which the drug was designated; or

24 ‘‘(2) such holder provides the Secretary in writ25 ing the consent of such holder for the approval or
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1 conditional approval of other applications before the

2 expiration of such 10-year or 7-year period.

3 ‘‘CONDITIONAL APPROVAL FOR MINOR USE NEW ANIMAL

4 DRUGS

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

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

7 for conditional approval of a new animal drug for a minor

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

9 of an application—

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

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

12 use;

13 ‘‘(B) information to show that there is a rea14 sonable expectation that the drug is effective for its

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

16 data from an investigation in a related species, data

17 from a single investigation, data from an investiga18 tion using surrogate endpoints, data based on phar19 macokinetic extrapolations, data from a short-term

20 investigation, or data from the investigation of close21 ly-related diseases;

22 ‘‘(C) the quantity of drug expected to be manu23 factured and distributed on an annual basis;

24 ‘‘(D) a commitment that the applicant will con25 duct additional investigations to support approval of
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1 an application under section 512 within the time

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

3 ‘‘(E) reasonable data for establishing a condi4 tional dose; and

5 ‘‘(F) the information required by section

6 512(b)(1)(B)–(H).

7 ‘‘(2) A person may not file an application under para8 graph (1) if the person has filed a previous application

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

10 use that was conditionally approved by the Secretary

11 under subsection (b).

12 ‘‘(b)(1) Within 180 days after the filing of an applica13 tion pursuant to subsection (a), or such additional period

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

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

16 approving the application if the Secretary then finds that

17 none of the grounds for denying conditional approval spec18 ified in subsection (c) applies, or (B) give the applicant

19 notice of an opportunity for an expedited informal hearing

20 on the question whether such application is conditionally

21 approvable.

22 ‘‘(2) A drug manufactured in a pilot or other small

23 facility may be used to demonstrate the safety and effec24 tiveness of the drug and to obtain conditional approval for

25 the drug prior to manufacture of the drug in a larger facil-
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1 ity, unless the Secretary makes a determination that a full

2 scale production facility is necessary to ensure the safety

3 or effectiveness of the drug.

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

5 applicant and giving the applicant an opportunity for an

6 expedited informal hearing, that—

7 ‘‘(A) the investigations, reports of which are re8 quired to be submitted to the Secretary pursuant to

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

10 methods reasonably applicable to show whether or

11 not such drug is safe for use under the conditions

12 prescribed, recommended, or suggested in the pro13 posed labeling;

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

15 drug is unsafe for use under such conditions or do

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

17 conditions;

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

19 controls used for, the manufacture, processing, and

20 packing of such drug are inadequate to preserve its

21 identity, strength, quality, and purity;

22 ‘‘(D) upon the basis of the information sub23 mitted to the Secretary as part of the application, or

24 upon the basis of any other information before the

25 Secretary with respect to such drug, the Secretary
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1 has insufficient information to determine whether

2 such drug is safe for use under such conditions;

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

4 submitted to the Secretary as part of the application

5 and any other information before the Secretary with

6 respect to such drug, there is insufficient informa7 tion to show that there is a reasonable expectation

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

9 represented to have under the conditions of use pre10 scribed, recommended, or suggested in the proposed

11 labeling;

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

13 the Secretary as part of the application or any other

14 information before the Secretary with respect to

15 such drug, any use prescribed, recommended, or

16 suggested in labeling proposed for such drug will re17 sult in a residue of such drug in excess of a toler18 ance found by the Secretary to be safe for such

19 drug;

20 ‘‘(G) based on a fair evaluation of all material

21 facts, such labeling is false or misleading in any par22 ticular;

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

24 by humans or animal or, after tests which are appro25 priate for the evaluation of the safety of such drug,
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1 induces cancer in humans or animal, unless the Sec2 retary finds that, under the conditions for use speci3 fied in proposed labeling and reasonably certain to

4 be followed in practice—

5 ‘‘(i) such drug will not adversely affect the

6 animals for which it is intended; and

7 ‘‘(ii) no residue of such drug will be found

8 (by methods of examination prescribed or ap9 proved by the Secretary by regulations, which

10 regulations shall not be subject to subsections

11 (c)) in any edible portion of such animals after

12 slaughter or in any food yielded by or derived

13 from the living animals; or

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

15 section 512 for a drug with the same active ingre16 dient or ingredients and the same conditions of use,

17 and that person is able to assure the availability of

18 sufficient quantities of the drug to meet the needs

19 for which the drug is intended;

20 the Secretary shall issue an order refusing to conditionally

21 approve the application. If, after such notice and oppor22 tunity for hearing, the Secretary finds that subparagraphs

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

24 order conditionally approving the application.
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1 ‘‘(2) In determining whether such drug is safe for use

2 under the conditions prescribed, recommended, or sug3 gested in the proposed labeling thereof, the Secretary shall

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

5 consumption of such drug and of any substance formed

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

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

8 into account any chemically or pharmacologically related

9 substance, (C) safety factors which in the opinion of ex10 perts, qualified by scientific training and experience to

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

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

13 conditions of use prescribed, recommended, or suggested

14 in the proposed labeling are reasonably certain to be fol15 lowed in practice. Any order issued under this subsection

16 refusing to approve an application shall state the findings

17 upon which it is based.

18 ‘‘(d)(1) A conditional approval granted by the Sec19 retary under this section shall be effective for a 1-year

20 period. The Secretary shall, upon request, renew a condi21 tional approval for up to 4 additional 1-year terms, unless

22 the Secretary by order makes a finding that—

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

24 progress toward meeting approval requirements

25 under section 512, and is unlikely to be able to ful-
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1 fill such requirements and obtain such approval

2 under such section before the 5 year maximum term

3 of the conditional approval expires;

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

5 produced, without adequate explanation; or

6 ‘‘(C) another drug with the same active ingre7 dient or ingredients for the same conditions of use

8 has received approval under section 512, and the

9 holder of the approved application is able to assure

10 the availability of sufficient quantities of the drug to

11 meet the needs for which the drug is intended.

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

13 approval, the Secretary shall provide due notice and an

14 opportunity for an expedited informal hearing to the appli15 cant.

16 ‘‘(e)(1) The Secretary shall, after due notice and op17 portunity for an expedited informal hearing to the appli18 cant, issue an order withdrawing conditional approval of

19 an application filed pursuant to subsection (a) if the Sec20 retary finds—

21 ‘‘(A) that experience or scientific data show

22 that such drug is unsafe for use under the condi23 tions of use upon the basis of which the application

24 was conditionally approved;
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1 ‘‘(B) that new evidence not contained in such

2 application or not available to the Secretary until

3 after such application was conditionally approved, or

4 tests by new methods, or tests by methods not

5 deemed reasonably applicable when such application

6 was conditionally approved, evaluated together with

7 the evidence available to the Secretary when the ap8 plication was conditionally approved, shows that

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

10 conditions of use upon the basis of which the appli11 cation was conditionally approved;

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

13 Secretary with respect to such drug, evaluated to14 gether with the evidence available to the Secretary

15 when the application was conditionally approved,

16 that there is not a reasonable expectation that such

17 drug will have the effect it purports or is rep18 resented to have under the conditions of use pre19 scribed, recommended, or suggested in the labeling;

20 ‘‘(D) that the application contains any untrue

21 statement of a material fact; or

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

23 from the standpoint of safety or effectiveness beyond

24 the variations provided for in the application unless

25 the applicant has supplemented the application by
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1 filing with the Secretary adequate information re2 specting all such changes and unless there is in ef3 fect a conditional approval of the supplemental ap4 plication, which supplemental application shall be

5 treated in the same manner as the original applica6 tion.

7 If the Secretary finds that there is an imminent hazard

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

9 drug is intended, the Secretary may suspend the condi10 tional approval of such application immediately, and give

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

12 afford the applicant the opportunity for an expedited in13 formal hearing. Authority to suspend the conditional ap14 proval of an application shall not be delegated below the

15 Commissioner of Food and Drugs.

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

17 opportunity for an expedited informal hearing to the appli18 cant, issue an order withdrawing the conditional approval

19 of an application with respect to any new animal drug

20 under this section if the Secretary finds—

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

22 a system for maintaining required records, or has

23 repeatedly or deliberately failed to maintain such

24 records or to make required reports in accordance

25 with a regulation or order under subsection (h), or
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1 the applicant has refused to permit access to, or

2 copying or verification of, such records as required

3 by paragraph (2) of such subsection;

4 ‘‘(B) that on the basis of new information be5 fore the Secretary, evaluated together with the evi6 dence before the Secretary when the application was

7 conditionally approved, the methods used in, or the

8 facilities and controls used for, the manufacture,

9 processing, and packing of such drug are inadequate

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

11 and purity and were not made adequate within a

12 reasonable time after receipt of written notice from

13 the Secretary specifying the matter complained of;

14 or

15 ‘‘(C) that on the basis of new information be16 fore the Secretary, evaluated together with the evi17 dence before the Secretary when the application was

18 conditionally approved, the labeling of such drug,

19 based on a fair evaluation of all material facts, is

20 false or misleading in any particular and was not

21 corrected within a reasonable time after receipt of

22 written notice from the Secretary specifying the

23 matter complained of.

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

25 findings upon which it is based.
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1 ‘‘(f) The decision of the Secretary under subsections

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

3 purposes of judicial review.

4 ‘‘(g)(1) When an application filed pursuant to sub5 section (a) is conditionally approved, the Secretary shall

6 by notice publish in the Federal Register the name and

7 address of the applicant and the conditions and indications

8 of use of the new animal drug covered by such application,

9 including any tolerance and withdrawal period or other use

10 restriction and, if such new animal drug is intended for

11 use in animal feed, appropriate purposes and conditions

12 of use (including special labeling requirements and any re13 quirement that an animal feed bearing or containing the

14 new animal drug be limited to use under the professional

15 supervision of a licensed veterinarian) applicable to any

16 animal feed for use in which such drug is conditionally

17 approved, the expiration date of the conditional approval,

18 and such other information, upon the basis of which such

19 application was conditionally approved, as the Secretary

20 deems necessary to assure the safe and effective use of

21 such drug.

22 ‘‘(2) Upon withdrawal of conditional approval of such

23 new animal drug application or upon its suspension, the

24 Secretary shall publish a notice in the Federal Register.
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1 ‘‘(h)(1) In the case of any new animal drug for which

2 a conditional approval of an application filed pursuant to

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

4 maintain such records, and make such reports to the Sec5 retary, of data relating to experience, and other data or

6 information, received or otherwise obtained by such appli7 cant with respect to such drug, or with respect to animal

8 feeds bearing or containing such drug, as the Secretary

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

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

11 such records and reports are necessary in order to enable

12 the Secretary to determine, or facilitate a determination,

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

14 the conditional approval under subsection (d) or for invok15 ing subsection (e). Such regulation or order shall provide,

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

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

18 regulation or order is applicable, of similar information re19 ceived or otherwise obtained by the Secretary.

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

21 maintain records, and every person in charge or custody

22 thereof, shall, upon request of an officer or employee des23 ignated by the Secretary, permit such officer or employee

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

25 verify such records.
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1 ‘‘(i)(1) The label and labeling of a drug with a condi2 tional approval under this section shall state that fact

3 prominently and conspicuously.

4 ‘‘(2) Conditions of use that are the subject of a condi5 tional approval under this section shall not be combined

6 in product labeling with any conditions of use approved

7 under section 512.

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

9 which has been submitted in an application filed under

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

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

12 public, upon request, unless extraordinary circumstances

13 are shown—

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

15 to have the application conditionally approved,

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

17 application is not conditionally approvable and all

18 legal appeals have been exhausted,

19 ‘‘(C) if conditional approval of the application

20 under subsection (c) is withdrawn and all legal ap21 peals have been exhausted, or

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

23 drug is not a new animal drug.

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

25 to paragraph (1) shall include a verified statement by the
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1 person making the request that any data or information

2 received under such paragraph shall not be disclosed by

3 such person to any other person—

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

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

6 use, or market, or making, using, or marketing, out7 side the United States, the drug identified in the ap8 plication filed under subsection (a), and

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

10 whom the data and information are disclosed an

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

12 provided by such person to the Secretary, which

13 meets the requirements of this paragraph.

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

15 the Secretary shall promulgate regulations for exempting

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

17 animal feeds bearing or containing new animal drugs, in18 tended solely for investigational use by experts qualified

19 by scientific training and experience to investigate the

20 safety and effectiveness of animal drugs. Such regulations

21 may, in the discretion of the Secretary, among other con22 ditions relating to the protection of the public health, pro23 vide for conditioning such exemption upon the establish24 ment and maintenance of such records, and the making

25 of such reports to the Secretary, by the manufacturer or
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1 the sponsor of the investigation of such article, of data

2 (including but not limited to analytical reports by inves3 tigators) obtained as a result of such investigational use

4 of such article, as the Secretary finds will enable the Sec5 retary to evaluate the safety and effectiveness of such arti6 cle in the event of the filing of an application pursuant

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

8 set forth the conditions (if any) upon which animals treat9 ed with such articles, and any products of such animals

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

11 ‘‘INDEX OF LEGALLY MARKETED UNAPPROVED MINOR

12 USE ANIMAL DRUGS FOR MINOR SPECIES WITH NO

13 HUMAN FOOD SAFETY CONCERN

14 ‘‘SEC. 574. (a)(1) The Secretary shall establish an

15 index of unapproved minor use new animal drugs that may

16 be lawfully marketed for use in minor species with no

17 human food safety concern.

18 ‘‘(2) Such index is intended to benefit primarily zoo

19 and wildlife species, aquarium and bait fish, reptiles and

20 amphibians, caged birds, and small pet mammals as well

21 as some commercially produced species such as cricket,

22 earthworms and possibly nonfood life stages of some minor

23 species used for human food such as oysters and shellfish.

24 ‘‘(3) Such index shall conform to the requirements

25 in subsection (d).
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1 ‘‘(b)(1) Any person may submit a request to the Sec2 retary for a preliminary determination that a drug may

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

4 include—

5 ‘‘(A) information regarding the proposed spe6 cies, conditions of use, and anticipated annual pro7 duction;

8 ‘‘(B) information regarding product formulation

9 and manufacturing; and

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

11 determine that there does not appear to be human

12 food safety, environmental safety, occupational safe13 ty, or bioavailability concerns with the proposed use

14 of the drug.

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

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

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

18 submitter of the Secretary’s conclusion. The Secretary

19 shall grant the request if it appears that—

20 ‘‘(A) the request addresses the need for a minor

21 use animal drug for which there is no approved or

22 conditionally approved drug, and

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

24 raise human food safety, environmental safety, occu25 pational safety, or bioavailability concerns.
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1 ‘‘(3) If the Secretary denies the request, the Sec2 retary shall provide due notice and an opportunity for an

3 expedited informal hearing.

4 ‘‘(4) If the Secretary does not grant or deny the re5 quest within 90 days, the Secretary shall provide the Com6 mittee on Commerce of the House of Representatives and

7 the Committee on Health, Education, Labor, and Pen8 sions of the Senate with the reasons action on the request

9 did not occur within such 90 days.

10 ‘‘(5) The decision of the Secretary under this sub11 section shall constitute a final agency decision for pur12 poses of judicial review.

13 ‘‘(c)(1) With respect to a drug for which the Sec14 retary has made a preliminary determination of eligibility

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

16 request that the Secretary add the drug to the index estab17 lished by subsection (a). Such a request shall include—

18 ‘‘(A) a copy of the Secretary’s preliminary de19 termination of eligibility issued under subsection (b);

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

21 the requirements in paragraph (2);

22 ‘‘(C) a proposed index entry;

23 ‘‘(D) proposed labeling;

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

25 and
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1 ‘‘(F) a commitment to manufacture, label, and

2 distribute the drug in accordance with the index

3 entry and any additional requirements that the Sec4 retary may prescribe by general regulation or spe5 cific order.

6 ‘‘(2) For purposes of paragraph (1), a ‘qualified ex7 pert panel report’ is a written report that—

8 ‘‘(A) is authored by a panel of individuals quali9 fied by scientific training and experience to evaluate

10 the safety and effectiveness of animal drugs for the

11 intended uses and species in question and operating

12 external to the Food and Drug Administration;

13 ‘‘(B) addresses all available target animal safe14 ty and effectiveness information, including anecdotal

15 information where necessary;

16 ‘‘(C) addresses proposed labeling;

17 ‘‘(D) addresses whether the drug should be lim18 ited to use under the professional supervision of a li19 censed veterinarian; and

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

21 opinion, the benefits of using the drug outweigh its

22 risks, taking into account the harm being caused by

23 the absence of an approved or conditionally approved

24 new animal drug for the minor use in question.
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1 ‘‘(3) Within 180 days after the receipt of a request

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

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

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

5 report and other information available to the Secretary,

6 that the benefits of using the drug outweigh its risks, tak7 ing into account the harm caused by the absence of an

8 approved or conditionally approved new animal drug for

9 the minor use in question. If the Secretary denies the re10 quest, the Secretary shall provide due notice and the op11 portunity for an expedited informal hearing. If the Sec12 retary does not grant or deny the request within 180 days,

13 the Secretary shall provide the Committee on Commerce

14 of the House of Representatives and the Committee on

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

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

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

18 paragraph shall constitute a final agency decision for pur19 poses of judicial review.

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

21 include the following information for each listed drug:

22 ‘‘(A) The name and address of the sponsor of

23 the index listing.

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

25 and its strength.
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1 ‘‘(C) Labeling.

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

3 Secretary deems necessary to prevent misuse of the

4 drug.

5 ‘‘(E) Requirements that the Secretary deems

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

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

8 it monthly.

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

10 sponsor and an opportunity for an expedited informal

11 hearing, that—

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

13 Secretary, evaluated together with the evidence

14 available to the Secretary when the drug was listed

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

16 outweigh its risks, or

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

18 the index listing have not been followed,

19 the Secretary shall remove the drug from the index. The

20 decision of the Secretary shall constitute final agency deci21 sion for purposes of judicial review.

22 ‘‘(2) If the Secretary finds that there is an imminent

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

24 such drug is intended, the Secretary may suspend the list25 ing of such drug immediately, and give the sponsor prompt
27

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

2 opportunity for an expedited informal hearing. Authority

3 to suspend the listing of a drug shall not be delegated

4 below the Commissioner of Food and Drugs.

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

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

7 the sponsor shall establish and maintain such records, and

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

9 experience, and other data or information, received or oth10 erwise obtained by such sponsor with respect to such drug,

11 or with respect to animal feeds bearing or containing such

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

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

14 of a finding that such records and reports are necessary

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

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

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

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

19 for the examination, upon request, by the persons to whom

20 such regulation or order is applicable, of similar informa21 tion received or otherwise obtained by the Secretary.

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

23 maintain records, and every person in charge or custody

24 thereof, shall, upon request of an officer or employee des25 ignated by the Secretary, permit such officer or employee
28

•S 3169 IS

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

2 verify such records.

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

4 index listing shall state, prominently and conspicuously,

5 that the drug is legally marketed but not approved.

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

7 implement this section. Such regulations shall address,

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

9 sponsorship of the expert panel under the auspices of a

10 recognized professional organization, conflict of interest

11 criteria for panel members, and the use of advisory com12 mittees convened by the Food and Drug Administration.

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

14 the Secretary shall promulgate regulations for exempting

15 from the operation of this section new animal drugs in16 tended solely for investigational use by experts qualified

17 by scientific training and experience to investigate the

18 safety and effectiveness of animal drugs. Such regulations

19 may, in the discretion of the Secretary, among other con20 ditions relating to the protection of the public health, pro21 vide for conditioning such exemption upon the establish22 ment and maintenance of such records, and the making

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

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

25 (including but not limited to analytical reports by inves-
29

•S 3169 IS

1 tigators) obtained as a result of such investigational use

2 of such article, as the Secretary finds will enable the Sec3 retary to evaluate the safety and effectiveness of such arti4 cle in the event of the filing of a request for an index list5 ing pursuant to this section. Such regulations, among

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

7 which animals treated with such articles, and any products

8 of such animals (before or after slaughter), may be mar9 keted for food use.

10 ‘‘GRANTS AND CONTRACTS FOR DEVELOPMENT OF

11 ANIMAL DRUGS FOR MINOR USES

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

13 and enter into contracts with public and private entities

14 and individuals to assist in defraying the costs of qualified

15 testing expenses and manufacturing expenses incurred in

16 connection with the development of drugs for minor uses.

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

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

19 ‘‘(A) clinical testing—

20 ‘‘(i) which is carried out under an ex21 emption for a drug for minor uses under

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

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

24 drug is designated under section 571 and

25 before the date on which an application
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•S 3169 IS

1 with respect to such drug is submitted

2 under section 512; and

3 ‘‘(B) preclinical testing involving a drug

4 for minor use which occurs after the date such

5 drug is designated under section 571 and before

6 the date on which an application with respect to

7 such drug is submitted under section 512.

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

9 expenses incurred in developing processes and proce10 dures intended to meet current good manufacturing

11 practice requirements which occur after such drug is

12 designated under section 571 and before the date on

13 which an application with respect to such drug is

14 submitted under section 512.

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

16 there are authorized to be appropriated $1,000,000 for fis17 cal year 2001, $1,500,000 for fiscal year 2002, and

18 $2,000,000 for fiscal year 2003.’’.

19 (c) THREE-YEAR EXCLUSIVITY FOR MINOR USE AP20 PROVALS.—Section 512(c)(2)(F)(ii), (iii), and (v) of the

21 Federal Food, Drug, and Cosmetic Act (21 U.S.C.

22 360b(c)(2)(F)(ii), (iii), and (v)) is amended by striking

23 ‘‘(other than bioequivalence or residue studies)’’ and in24 serting ‘‘(other than bioequivalence studies or, except in
31

•S 3169 IS

1 the case of a new animal drug for minor uses, residue

2 studies)’’.

3 (d) SCOPE OF REVIEW FOR MINOR USE APPLICA4 TIONS.—Section 512(d) of the Federal Food, Drug, and

5 Cosmetic Act (21 U.S.C. 360b(d)) is amended by adding

6 at the end the following:

7 ‘‘(5) In reviewing a supplement to an approved appli8 cation that seeks a minor use approval, the Secretary shall

9 not reconsider information in the approved application to

10 determine whether it meets current standards for ap11 proval.’’.

12 (e) PRESUMPTION OF NEW ANIMAL DRUG STA13 TUS.—Section 709 of the Federal Food, Drug, and Cos14 metic Act (21 U.S.C. 379a) is amended by designating

15 the existing text as subsection (a), and by adding after

16 such new subsection the following:

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

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

19 of an approval under section 512, a conditional approval

20 under section 573, or an index listing under section 574,

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

22 (f) CONFORMING AMENDMENTS.—

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

24 Drug, and Cosmetic Act (21 U.S.C. 360b(a)(1)) is
32

•S 3169 IS

1 amended by striking subparagraphs (A) and (B) and

2 inserting the following:

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

4 application filed pursuant to subsection (b) with

5 respect to such use or intended use of such

6 drug, and such drug, its labeling, and such use

7 conform to such approved application;

8 ‘‘(B) there is in effect a conditional ap9 proval of an application filed pursuant to sec10 tion 573 with respect to such use or intended

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

12 and such use conform to such conditionally ap13 proved application; or

14 ‘‘(C) there is in effect an index listing pur15 suant to section 574 with respect to such use

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

17 labeling, and such use conform to such index

18 listing.’’.

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

20 Drug, and Cosmetic Act (21 U.S.C. 360b(a)(4)) is

21 amended by adding after ‘‘if an approval of an appli22 cation filed under subsection (b)’’ the following: ‘‘or

23 a conditional approval of an application filed under

24 section 573’’.
33

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

2 and Cosmetic Act (21 U.S.C. 353(f)) is amended as

3 follows:

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

5 ‘‘512’’ and inserting the following: ‘‘512, a con6 ditionally approved application under subsection

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

8 subsection (a) of section 574.’’.

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

10 512’’ and inserting the following: ‘‘sections 512,

11 573, or 574.’’.

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

13 Drug, and Cosmetic Act (21 U.S.C. 354(a)(1)) is

14 amended by striking ‘‘512(b)’’ and inserting

15 ‘‘512(b), a conditionally approved application filed

16 pursuant to section 573, or an index listing pursu17 ant to section 574.’’.

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

19 Food, Drug, and Cosmetic Act (21 U.S.C.

20 354(a)(2)(B), and 354(b)) are amended by striking

21 ‘‘512(i)’’ and inserting ‘‘512(i) or section 573(g), or

22 the index listing pursuant to section 574.’’.

23 (6) Section 403(a) of the Food and Drug Ad24 ministration Modernization Act of 1997 (21 U.S.C.

25 371(a)) is amended by adding at the end ‘‘For pur-
34

•S 3169 IS

1 poses of this section, an approved article includes a

2 new animal drug that is the subject of a conditional

3 approval or an index listing under sections 573 and

4 574 of the Federal Food, Drug, and Cosmetic Act,

5 respectively.’’.

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

7 Human Services shall promulgate proposed regulations to

8 implement amendments to the Federal Food, Drug, and

9 Cosmetic Act made by this Act within 6 months of the

10 date of enactment of this Act, and final regulations within

11 24 months of the date of enactment of this Act.

12 (h) OFFICE OF MINOR USE ANIMAL DRUG DEVEL13 OPMENT.—

14 (1) The Secretary of Health and Human Serv15 ices shall establish within the Center of Veterinary

16 Medicine of the Food and Drug Administration an

17 Office of Minor Use Animal Drug Development (re18 ferred to in this subsection as the ‘‘Office’’). The

19 Secretary of Health and Human Services shall select

20 an individual to serve as the Director of such Office.

21 The Director of such Office shall report directly to

22 the Director of the Center for Veterinary Medicine.

23 The Office shall be responsible for designating minor

24 use animal drugs under section 571 of the Federal

25 Food, Drug, and Cosmetic Act, for administering
35

•S 3169 IS

1 grants and contracts for the development of animal

2 drugs for minor uses under section 575 of the Fed3 eral Food, Drug, and Cosmetic Act, and for serving

4 as liaison with any party interested in minor use

5 animal drug development.

6 (2) For the Office described under paragraph

7 (1), there are authorized to be appropriated

8 $1,200,000 for each of the fiscal years 2001 through

9 2003.

10 SEC. 4. CREDIT FOR CLINICAL TESTING EXPENSES FOR

11 CERTAIN ANIMAL DRUGS FOR MINOR USES.

12 (a) IN GENERAL.—Subpart D of part IV of sub13 chapter A of chapter 1 of the Internal Revenue Code of

14 1986 is amended by inserting after section 45C the fol15 lowing new section:

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

17 ANIMAL DRUGS FOR MINOR USES.

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

19 the minor use animal drug credit determined under this

20 section for the taxable year is an amount equal to 50 per21 cent of the qualified animal clinical testing expenses for

22 the taxable year.

23 ‘‘(b) QUALIFIED ANIMAL CLINICAL TESTING EX24 PENSES.—For purposes of this section—
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•S 3169 IS

1 ‘‘(1) QUALIFIED ANIMAL CLINICAL TESTING EX2 PENSES.—

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

4 provided in this paragraph, the term ‘qualified

5 animal clinical testing expenses’ means the

6 amounts which are paid or incurred by the tax7 payer during the taxable year which would be

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

9 subsection were applied with the modifications

10 set forth in subparagraph (B).

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

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

13 shall be applied—

14 ‘‘(i) by substituting ‘animal clinical

15 testing’ for ‘qualified research’ each place

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

17 such subsection, and

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

19 ‘65 percent’ in paragraph (3)(A) of such

20 subsection.

21 ‘‘(C) EXCLUSION FOR AMOUNTS FUNDED

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

23 clinical testing expenses’ shall not include any

24 amount to the extent such amount is funded by
37

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1 any grant, contract, or otherwise by another

2 person (or any governmental entity).

3 ‘‘(D) SPECIAL RULE.—For purposes of

4 this paragraph:

5 ‘‘(i) section 41 shall be deemed to re6 main in effect for periods after June 30,

7 2000; and

8 ‘‘(ii) the trade or business require9 ment of section 41(b)(1) shall be deemed

10 to be satisfied in the case of a taxpayer

11 that owns animals and that conducts clin12 ical testing on such animals.

13 ‘‘(2) ANIMAL CLINICAL TESTING.—

14 ‘‘(A) IN GENERAL.—The term ‘animal clin15 ical testing’ means any clinical testing—

16 ‘‘(i) which is carried out under an ex17 emption for a drug being tested for minor

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

19 of the Federal Food, Drug, and Cosmetic

20 Act (or regulations issued under such sec21 tions),

22 ‘‘(ii) which occurs—

23 ‘‘(I) after the date such drug is

24 designated under section 571 of such

25 Act, and
38

•S 3169 IS

1 ‘‘(II) before the date on which an

2 application with respect to such drug

3 is approved under section 512(c) of

4 such Act, and

5 ‘‘(iii) which is conducted by or on be6 half of—

7 ‘‘(I) the taxpayer to whom the

8 designation under such section 571

9 applies, or

10 ‘‘(II) the owner of the animals

11 that are the subject of clinical testing.

12 ‘‘(B) TESTING MUST BE FOR MINOR

13 USE.—Animal clinical testing shall be taken

14 into account under subparagraph (A) only to

15 the extent such testing is related to the use of

16 a drug for the minor use for which it was des17 ignated under section 571 of the Federal Food,

18 Drug, and Cosmetic Act.

19 ‘‘(c) COORDINATION WITH CREDIT FOR INCREASING

20 RESEARCH EXPENDITURES.—

21 ‘‘(1) IN GENERAL.—Except as provided in para22 graph (2), any qualified animal clinical testing ex23 penses for a taxable year to which an election under

24 this section applies shall not be taken into account
39

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1 for purposes of determining the credit allowable

2 under section 41 for such taxable year.

3 ‘‘(2) EXPENSES INCLUDED IN DETERMINING

4 BASE PERIOD RESEARCH EXPENSES.—Any qualified

5 animal clinical testing expenses for any taxable year

6 which are qualified research expenses (within the

7 meaning of section 41(b)) shall be taken into ac8 count in determining base period research expenses

9 for purposes of applying section 41 to subsequent

10 taxable years.

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

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

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

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

15 and Cosmetic Act. Determinations under the pre16 ceding sentence with respect to any drug shall be

17 made on the basis of the facts and circumstances as

18 of the date such drug is designated under section

19 571 of the Federal Food, Drug, and Cosmetic Act.

20 ‘‘(2) DENIAL OF CREDIT FOR TESTING CON21 DUCTED BY CORPORATIONS TO WHICH SECTION 936

22 APPLIES.—No credit shall be allowed under this sec23 tion with respect to any animal clinical testing con24 ducted by a corporation to which an election under

25 section 936 applies.
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1 ‘‘(3) CERTAIN RULES MADE APPLICABLE.—

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

3 of section 41(f) shall apply for purposes of this sec4 tion.

5 ‘‘(4) ELECTION.—This section shall apply to

6 any taxpayer for any taxable year only if such tax7 payer elects (at such time and in such manner as

8 the Secretary may by regulations prescribe) to have

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

10 (b) CONFORMING AMENDMENTS.—

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

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

13 (11),

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

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

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

17 paragraph:

18 ‘‘(13) the minor use animal drug credit deter19 mined under section 45D(a).’’.

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

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

22 45C(b)’’ and inserting ‘‘section 45C(b) or

23 45D(b)’’, and
41

•S 3169 IS

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

2 ‘‘section 45C’’ each place it appears and insert3 ing ‘‘section 45C or 45D’’.

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

5 for subpart D of part IV of subchapter A of chapter 1

6 of such Code is amended by inserting after the item relat7 ing to section 45C the following new item:

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

minor uses.’’.

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

9 this section shall apply to taxable years beginning after

10 the date of the enactment of this Act.

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

12 shall publish proposed regulations to implement amend13 ments to the Internal Revenue Code of 1986 made by this

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

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

16 date.

Æ