I
107TH CONGRESS
1ST SESSION
H. R. 1956
To amend the Federal Food, Drug, and Cosmetic Act with regard to new
animal drugs, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
MAY 23, 2001
Mr. PICKERING (for himself, Mr. COMBEST, Mr. SIMPSON, Mr. OTTER, Mrs.
THURMAN, and Mr. HAYES) introduced the following bill; which was re-
ferred to the Committee on Energy and Commerce, and in addition to
the Committee on Ways and Means, for a period to be subsequently de-
termined by the Speaker, in each case for consideration of such provisions
as fall within the jurisdiction of the committee concerned
A BILL
To amend the Federal Food, Drug, and Cosmetic Act with
regard to new animal drugs, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Minor Use and Minor
Species Animal Health Act of 2001’’.
SEC. 2. FINDINGS.
Congress makes the following findings:
(1) There is a severe shortage of approved new
animal drugs for use in minor species.
(2) There is a severe shortage of approved new
animal drugs for treating animal diseases and condi-
tions that occur infrequently or in limited geographic
areas.
(3) Because of the small market shares, low-
profit margins involved, and capital investment re-
quired, it is generally not economically feasible for
new animal drug sponsors to pursue approvals for
these species, diseases, and conditions.
(4) Because the populations for which such new
animal drugs are intended may be small and condi-
tions of animal management may vary widely, it is
often difficult to design and conduct studies to es-
tablish drug safety and effectiveness under tradi-
tional new animal drug approval processes.
(5) It is in the public interest and in the inter-
est of animal welfare to provide for special proce-
dures to allow the lawful use and marketing of cer-
tain new animal drugs for minor species and minor
uses that take into account these special cir-
cumstances and that ensure that such drugs do not
endanger animal or public health.
(6) Exclusive marketing rights and tax credits
for clinical testing expenses have helped encourage
the development of ‘orphan’ drugs for human use,
and comparable incentives should encourage the de-
velopment of new animal drugs for minor species
and minor uses.
SEC. 3. AMENDMENTS TO THE FEDERAL FOOD, DRUG, AND
COSMETIC ACT.
(a) DEFINITIONS.—Section 201 of the Federal, Food,
Drug, and Cosmetic Act (21 U.S.C. 321) is amended by
adding at the end the following:
‘‘(kk) The term ‘major species’ means cattle, horses,
swine, chickens, turkeys, dogs, and cats, except that the
Secretary may revise this definition by regulation.
‘‘(ll) The term ‘minor species’ means animals other
than humans that are not major species.
‘‘(mm) The term ‘minor use’ means the intended use
of a drug in a major species for an indication that occurs
infrequently or in limited geographical areas.’’.
(b) THREE-YEAR EXCLUSIVITY FOR MINOR USE AND
MINOR SPECIES APPROVALS.—Section 512(c)(2)(F) (ii),
(iii), and (v) of the Federal Food, Drug, and Cosmetic
Act is amended by striking ‘‘(other than bioequivalence or
residue studies)’’ and inserting ‘‘(other than bioequiva-
lence studies or final residue depletion studies, except final
residue depletion studies for minor uses or minor species)’’
every place it appears.
(c) SCOPE OF REVIEW FOR MINOR USE AND MINOR
SPECIES APPLICATIONS.— Section 512(d) of the Federal
Food, Drug, and Cosmetic Act is amended by adding at
the end the following new paragraph:
‘‘(5) In reviewing an application that proposes
a change to add an intended use for a minor use or
a minor species to an approved new animal drug ap-
plication, the Secretary shall reevaluate only the rel-
evant information in the approved application to de-
termine whether the application for the minor use or
minor species can be approved. A decision to ap-
prove the application for the minor use or minor
species is not, implicitly or explicitly, a reaffirmation
of the approval of the original application.’’.
(d) MINOR USE AND MINOR SPECIES NEW ANIMAL
DRUGS.—Chapter V of the Federal Food, Drug, and Cos-
metic Act (21 U.S.C. 351 et seq.) is amended by adding
at the end the following:
‘‘Subchapter F—New Animal Drugs
For Minor Use And Minor Species
‘‘SEC. 571. CONDITIONAL APPROVAL OF NEW ANIMAL
DRUGS FOR MINOR USE AND MINOR SPECIES.
‘‘(a)(1) Except as provided in paragraph (3) of this
section, any person may file with the Secretary an applica-
tion for conditional approval of a new animal drug in-
tended for a minor use or a minor species. Such an appli-
cation may not be a supplement to an application ap-
proved under section 512. Such application must comply
in all respects with the provisions of section 512 of this
Act except 512(b)(2), 512(c)(1), 512(c)(2), 512(c)(3),
512(d)(1), 512(e), 512(h), and 512(n) unless otherwise
stated in this section, and any additional provisions of this
section.
‘‘(2) The applicant shall submit to the Secretary as
part of an application for the conditional approval of a
new animal drug—
‘‘(A) all information necessary to meet the re-
quirements of section 512(b)(1) except 512(b)(1)(A);
‘‘(B) full reports of investigations which have
been made to show whether or not such drug is safe
and there is a reasonable expectation of effectiveness
for use;
‘‘(C) data for establishing a conditional dose;
‘‘(D) projections of expected need and the jus-
tification for that expectation based on the best in-
formation available;
‘‘(E) information regarding the quantity of
drug expected to be distributed on an annual basis
to meet the expected need; and
‘‘(F) a commitment that the applicant will con-
duct additional investigations to meet the require-
ments for the full demonstration of effectiveness
under section 512(d)(1)(E) within 5 years.
‘‘(3) A person may not file an application under para-
graph (1) if without adequate justification—
‘‘(A) the person has previously filed an applica-
tion for conditional approval under paragraph (1)
for the same drug, conditions of use, and dosage
form whether or not subsequently conditionally ap-
proved by the Secretary under subsection (b), or
‘‘(B) the person obtained the application, or
data or other information contained therein, directly
or indirectly from the person who filed for condi-
tional approval under paragraph (1) for the same
drug and conditions of use whether or not subse-
quently conditionally approved by the Secretary
under subsection (b).
‘‘(b) Within 180 days after the filing of an applica-
tion pursuant to subsection (a), or such additional period
as may be agreed upon by the Secretary and the applicant,
the Secretary shall either—
‘‘(1) issue an order, effective for one year, con-
ditionally approving the application if the Secretary
finds that none of the grounds for denying condi-
tional approval, specified in subsection (c) of this
section applies, or
‘‘(2) give the applicant notice of an opportunity
for an informal hearing on the question whether
such application can be conditionally approved.
‘‘(c) If the Secretary finds, after giving the applicant
notice and an opportunity for an informal hearing, that—
‘‘(1) 
any 
of 
the 
provisions 
of 
section
512(d)(1)(A) through (D) or (F) through (I) are ap-
plicable;
‘‘(2) the information submitted to the Secretary
as part of the application and any other information
before the Secretary with respect to such drug, is in-
sufficient to show that there is a reasonable expecta-
tion that the drug will have the effect it purports or
is represented to have under the conditions of use
prescribed, recommended, or suggested in the pro-
posed labeling thereof; or
‘‘(3) another person has received approval
under section 512 for a drug with the same active
ingredient or ingredients, the same conditions of use,
and the same dosage form and that person is able
to assure the availability of sufficient quantities of
the drug to meet the needs for which the drug is in-
tended;
the Secretary shall issue an order refusing to conditionally
approve the application.
‘‘If, after such notice and opportunity for an informal
hearing, the Secretary finds that subparagraphs (1)
through (3) do not apply, the Secretary shall issue an
order conditionally approving the application effective for
one year. Any order issued under this subsection refusing
to conditionally approve an application shall state the find-
ings upon which it is based.
‘‘(d) A conditional approval under this section is ef-
fective for a 1-year period and is thereafter renewable by
the Secretary annually for up to 4 additional 1-year terms.
A conditional approval shall be in effect for no more than
5 years from the date of approval under subsections (b)(1)
or (c) of this section unless extended as provided for in
subsection (h) of this section. The following shall also
apply:
‘‘(1) No later than 90 days from the end of the
1-year period for which the original or renewed con-
ditional approval is effective, the applicant may sub-
mit a request to renew a conditional approval for an
additional 1-year term.
‘‘(2) If the renewal request is submitted no
later than 90-days from the end of the 1-year pe-
riod, a conditional approval shall be deemed renewed
at the end of the 1-year period, or at the end of an
additional 90-day extension when deemed necessary
to complete review of an application, unless the Sec-
retary makes a written determination before the ex-
piration of the 1-year period or the 90-day extension
that—
‘‘(A) the request fails to contain sufficient
information to show that—
‘‘(i) the applicant is making sufficient
progress toward meeting approval require-
ments under section 512(d)(1)(E), and is
likely to be able to fulfill those require-
ments and obtain an approval under sec-
tion 512 before the expiration of the 5-year
maximum term of the conditional approval;
‘‘(ii) the quantity of the drug that has
been distributed is consistent with the in-
tended use, unless there is adequate expla-
nation that ensures that the drug is only
used for its intended purpose; or
‘‘(iii) no other drug with the same ac-
tive ingredient or ingredients, for the same
conditions of use, and dosage form has re-
ceived approval under section 512, or if
such a drug has been approved, that the
holder of the approved application is un-
able to assure the availability of sufficient
quantities of the drug to meet the needs
for which the drug is intended; or
‘‘(B) 1 or more of the conditions of sub-
section 512(e)(1)(A) through (B) and (D)
through (F) are met.
‘‘(3) If the Secretary makes a timely written
determination that a conditional approval should not
be renewed, or the applicant fails to submit a timely
renewal request, the Secretary shall issue an order
refusing to renew the conditional approval, and such
conditional approval shall be deemed withdrawn and
no longer in effect. The Secretary shall thereafter
provide an opportunity for an informal hearing to
the applicant on the issue whether the conditional
approval shall be reinstated.
‘‘(e)(1) The Secretary shall issue an order with-
drawing conditional approval of an application filed pursu-
ant to subsection (a) if the Secretary finds that another
person has received approval under section 512 for a drug
with the same active ingredient or ingredients, the same
conditions of use, and dosage form, and that person is able
to assure the availability of sufficient quantities of the
drug to meet the needs for which the drug is intended.
‘‘(2) The Secretary shall, after due notice and oppor-
tunity for an informal hearing to the applicant, issue an
order withdrawing conditional approval of an application
filed pursuant to subsection (a) if the Secretary finds
that—
‘‘(A) 
any 
of 
the 
provisions 
of 
section
512(e)(1)(A) through (B) or (D) through (F) are
applicable; or
‘‘(B) on the basis of new information before the
Secretary with respect to such drug, evaluated to-
gether with the evidence available to the Secretary
when the application was conditionally approved,
that there is not a reasonable expectation that such
drug will have the effect it purports or is rep-
resented to have under the conditions of use pre-
scribed, recommended, or suggested in the labeling
thereof;
‘‘(3) The Secretary may also, after due notice and
opportunity for an informal hearing to the applicant, issue
an order withdrawing conditional approval of an applica-
tion filed pursuant to subsection (a) if the Secretary finds
that any of the provisions of section 512(e)(2) are applica-
ble.
‘‘(f)(1) The label and labeling of a new animal drug
with a conditional approval under this section shall—
‘‘(A) bear the statement, ‘conditionally ap-
proved by FDA pending a full demonstration of ef-
fectiveness under application number’; and
‘‘(B) contain such other information as pre-
scribed by the Secretary.
‘‘(2) An intended use that is the subject of a condi-
tional approval under this section shall not be included
in the same product label with any intended use approved
under section 512.
‘‘(g) A conditionally-approved new animal drug appli-
cation may not be amended or supplemented to add indi-
cations for use.
‘‘(h) 180 days prior to the termination date estab-
lished under subsection (d)(1) of this section, a sponsor
shall have submitted all the information necessary to sup-
port a complete new animal drug application in accordance
with section 512(b)(1) or the conditional approval issued
under this section is no longer in effect. Upon receipt of
this information, the Secretary shall either—
‘‘(1) issue an order approving the application if
the Secretary finds that none of the grounds for de-
nying approval specified in 512(d)(1) applies, or
‘‘(2) give the sponsor an opportunity for a hear-
ing before the Secretary under 512(d) on the ques-
tion whether such application can be approved. Upon
issuance of an order approving the application, prod-
uct labeling and administrative records of approval
shall be modified accordingly. If the Secretary has
not issued an order under section 512(c) approving
such application prior to the termination date estab-
lished under subsection (d)(1) of this section, the
conditional approval issued under this section is no
longer in effect unless the Secretary grants an ex-
tension of an additional 180-day period so that the
Secretary can complete review of the application.
The decision to grant an extension is committed to
Agency discretion and not subject to judicial review.
‘‘(i) The decision of the Secretary under subsections
(c), (d), or (e) of this section, refusing or withdrawing con-
ditional approval of an application shall constitute final
agency action subject to judicial review.
‘‘SEC. 572. INDEX OF LEGALLY-MARKETED UNAPPROVED
NEW ANIMAL DRUGS FOR MINOR SPECIES.
‘‘(a) The Secretary shall establish an index of unap-
proved minor species new animal drugs that may be law-
fully marketed for use in minor species. The index shall
be limited to—
‘‘(1) new animal drugs intended for use in a
minor species for which there is a reasonable cer-
tainty that the animal or edible products from the
animal will not be consumed by humans, and
‘‘(2) new animal drugs intended for use in an
early life stage of a food-producing minor species
where human food safety can be demonstrated in ac-
cordance with the standard of section 512(d) by
showing that—
‘‘(A) there is no significant likelihood that
harmful residues will be present in the animal
presented as food for humans as a result of
treatment at the early life stage;
‘‘(B) there is no significant likelihood that
harmful residues will be present in the animal
presented as food for food-producing animals as
a result of treatment at the early life stage; and
‘‘(C) there are no concerns about the use
of the drug at later life stages because a toler-
ance and regulatory method to test for the drug
at later life stages are available or there is no
practical use for the drug in later life stages.
‘‘(b) Any person intending to file a request under this
section shall be entitled to one or more conferences to dis-
cuss the requirements for indexing a new animal drug.
‘‘(c)(1) Any person may submit a request to the Sec-
retary for a determination whether a new animal drug
may be eligible for inclusion in the index. Such a request
shall include—
‘‘(A) information regarding the need for the
new animal drug, the species for which the new ani-
mal drug is intended, the proposed intended use and
conditions of use, and anticipated annual distribu-
tion;
‘‘(B) information to support the conclusion that
the proposed use meets the conditions of subsections
(a)(1) or (a)(2) of this section;
‘‘(C) information regarding the components and
composition of the new animal drug;
‘‘(D) a description of the methods used in, and
the facilities and controls used for, the manufacture,
processing, and packing of such new animal drug;
‘‘(E) an environmental assessment or informa-
tion to support a categorical exclusion from the re-
quirement to prepare an environmental assessment;
‘‘(F) information sufficient to support the con-
clusion that the proposed use of the new animal
drug does not present a threat to the safety of indi-
viduals exposed to the new animal drug through its
manufacture or use; and
‘‘(G) such other information as the Secretary
may deem necessary to make this eligibility deter-
mination.
‘‘(2) Within 90 days after the submission of a request
for a determination of eligibility for indexing based on
paragraph (a)(1) of this section, or 180 days for a request
submitted based on paragraph (a)(2) of this section, the
Secretary shall grant or deny the request, and notify the
person who requested such determination of the Sec-
retary’s decision. The Secretary shall grant the request if
the Secretary finds that—
‘‘(A) no new animal drug, including the same
active ingredient or any salt or ester thereof is ap-
proved or conditionally approved in the same dosage
form for the same intended use;
‘‘(B) the proposed use does not raise concerns
related to safety; and
‘‘(C) the person requesting the determination
has established appropriate specifications for the
manufacture and control of the new animal drug
and has demonstrated an understanding of the re-
quirements of current good manufacturing practices.
If the Secretary denies the request, the Secretary shall
thereafter provide due notice and an opportunity for an
informal conference. The decision of the Secretary fol-
lowing an informal conference shall constitute final agency
action subject to judicial review.
‘‘(d)(1) With respect to a new animal drug for which
the Secretary has made a determination of eligibility
under subsection (b), the person who made such a request
may ask that the Secretary add the new animal drug to
the index established under subsection (a). The request
for addition to the index shall include—
‘‘(A) a copy of the Secretary’s determination of
eligibility issued under subsection (b);
‘‘(B) a written report that meets the require-
ments in subparagraph (d)(2) of this section;
‘‘(C) a proposed index entry;
‘‘(D) facsimile labeling;
‘‘(E) anticipated annual distribution of the new
animal drug;
‘‘(F) a written commitment to manufacture the
new animal drug according to current good manu-
facturing practices;
‘‘(G) a written commitment to label, distribute,
and promote the new animal drug only in accordance
with the index entry;
‘‘(H) upon specific request of the Secretary, in-
formation submitted to the expert panel described in
subparagraph (3); and
‘‘(I) any additional requirements that the Sec-
retary may prescribe by general regulation or spe-
cific order.
‘‘(2) The report required in subparagraph (1) shall:
‘‘(A) be authored by a qualified expert panel;
‘‘(B) include an evaluation of all available tar-
get animal safety and effectiveness information, in-
cluding anecdotal information;
‘‘(C) State the expert panel’s opinion regarding
whether the benefits of using the new animal drug
for the proposed use in a minor species outweigh its
risks, taking into account the harm being caused by
the absence of an approved or conditionally-approved
new animal drug for the minor species in question;
‘‘(D) include information upon which labeling
can be written; and
‘‘(E) include a recommendation regarding
whether the new animal drug should be limited to
use under the professional supervision of a licensed
veterinarian.
‘‘(3) A qualified expert panel, as used in this section,
is a panel that—
‘‘(A) is composed of experts qualified by sci-
entific training and experience to evaluate the target
animal safety and effectiveness of the new animal
drug under consideration;
‘‘(B) operates external to FDA; and
‘‘(C) is not subject to the Federal Advisory
Committee Act, 5 U.S.C. App. 2.
The Secretary shall define the criteria for selection of a
qualified expert panel and the procedures for the operation
of the panel by regulation.
‘‘(4) Within 180 days after the receipt of a request
for listing a new animal drug in the index, the Secretary
shall grant or deny the request. The Secretary shall grant
the request if the request for indexing continues to meet
the eligibility criteria in subsection (a) and the Secretary
finds, on the basis of the report of the qualified expert
panel and other information available to the Secretary,
that the benefits of using the new animal drug for the
proposed use in a minor species outweigh its risks, taking
into account the harm caused by the absence of an ap-
proved or conditionally-approved new animal drug for the
minor species in question. If the Secretary denies the re-
quest, the Secretary shall thereafter provide due notice
and the opportunity for an informal conference. The deci-
sion of the Secretary following an informal conference
shall constitute final agency action subject to judicial re-
view.
‘‘(e)(1) The index established under subsection (a)
shall include the following information for each listed
drug—
‘‘(A) the name and address of the person who
holds the index listing;
‘‘(B) the name of the drug and the intended
use and conditions of use for which it is being in-
dexed;
‘‘(C) product labeling; and
‘‘(D) conditions and any limitations that the
Secretary deems necessary regarding use of the
drug.
‘‘(2) The Secretary shall publish the index, and revise
it periodically.
‘‘(3) The Secretary may establish by regulation a
process for reporting changes in the conditions of manu-
facturing or labeling of indexed products.
‘‘(f)(1) If the Secretary finds, after due notice to the
person who requested the index listing and an opportunity
for an informal conference, that—
‘‘(A) the expert panel failed to meet the re-
quirements as set forth by the Secretary by regula-
tion;
‘‘(B) on the basis of new information before the
Secretary, evaluated together with the evidence
available to the Secretary when the new animal drug
was listed in the index, the benefits of using the new
animal drug for the indexed use do not outweigh its
risks;
‘‘(C) the conditions of subsection (c)(2) of this
section are no longer satisfied;
‘‘(D) the manufacture of the new animal drug
is not in accordance with current good manufac-
turing practices;
‘‘(E) the labeling, distribution, or promotion of
the new animal drug is not in accordance with the
index entry;
‘‘(F) the conditions and limitations of use asso-
ciated with the index listing have not been followed;
or
‘‘(G) the request for indexing contains any un-
true statement of material fact;
the Secretary shall remove the new animal drug from the
index. The decision of the Secretary following an informal
conference shall constitute final agency action subject to
judicial review.
‘‘(2) If the Secretary finds that there is a reasonable
probability that the use of the drug would adversely affect
the health of humans or other animals, the Secretary may:
‘‘(A) suspend the listing of such drug imme-
diately;
‘‘(B) give the person listed in the index prompt
notice of the Secretary’s action; and
‘‘(C) afford that person the opportunity for an
informal conference.
The decision of the Secretary following an informal con-
ference shall constitute final agency action subject to judi-
cial review.
‘‘(g) For purposes of indexing new animal drugs
under this section, to the extent consistent with the public
health, the Secretary shall promulgate regulations for ex-
empting from the operation of section 512 minor species
new animal drugs and animal feeds bearing or containing
new animal drugs intended solely for investigational use
by experts qualified by scientific training and experience
to investigate the safety and effectiveness of minor species
animal drugs. Such regulations may, at the discretion of
the Secretary, among other conditions relating to the pro-
tection of the public health, provide for conditioning such
exemption upon the establishment and maintenance of
such records, and the making of such reports to the Sec-
retary, by the manufacturer or the sponsor of the inves-
tigation of such article, of data (including but not limited
to analytical reports by investigators) obtained as a result
of such investigational use of such article, as the Secretary
finds will enable the Secretary to evaluate the safety and
effectiveness of such article in the event of the filing of
a request for an index listing pursuant to this section.
‘‘(h) The labeling of a new animal drug that is the
subject of an index listing shall state, prominently and
conspicuously—
‘‘(1) ‘NOT APPROVED BY FDA.—Legally mar-
keted as an FDA indexed product. Extra-label use
is prohibited.’;
‘‘(2) except in the case of new animal drugs in-
dexed for use in an early life stage of a food pro-
ducing animal, ‘This product is not to be used in
animals intended for use as food for humans or
other animals.’; and
‘‘(3) such other information as may be pre-
scribed by the Secretary in the index listing.
‘‘(i)(1) In the case of any new animal drug for which
an index listing pursuant to subsection (a) is in effect,
the person who has an index listing shall establish and
maintain such records, and make such reports to the Sec-
retary, of data relating to experience, and other data or
information, received or otherwise obtained by such person
with respect to such drug, or with respect to animal feeds
bearing or containing such drug, as the Secretary may by
general regulation, or by order with respect to such listing,
prescribe on the basis of a finding that such records and
reports are necessary in order to enable the Secretary to
determine, or facilitate a determination, whether there is
or may be ground for invoking subsection (f). Such regula-
tion or order shall provide, where the Secretary deems it
to be appropriate, for the examination, upon request, by
the persons to whom such regulation or order is applica-
ble, of similar information received or otherwise obtained
by the Secretary.
‘‘(2) Every person required under this subsection to
maintain records, and every person in charge or custody
thereof, shall, upon request of an officer or employee des-
ignated by the Secretary, permit such officer or employee
at all reasonable times to have access to and copy and
verify such records.
‘‘(j)(1) Safety and effectiveness data and information
which has been submitted in support of a request for a
new animal drug to be indexed under this section and
which has not been previously disclosed to the public shall
be made available to the public, upon request, unless ex-
traordinary circumstances are shown—
‘‘(A) if no work is being or will be undertaken
to have the drug indexed in accordance with the re-
quest,
‘‘(B) if the Secretary has determined that such
drug cannot be indexed and all legal appeals have
been exhausted,
‘‘(C) if the indexing of such drug is terminated
and all legal appeals have been exhausted, or
‘‘(D) if the Secretary has determined that such
drug is not a new animal drug.
‘‘(2) Any request for data and information pursuant
to paragraph (1) shall include a verified statement by the
person making the request that any data or information
received under such paragraph shall not be disclosed by
such person to any other person—
‘‘(A) for the purpose of, or as part of a plan,
scheme, or device for, obtaining the right to make,
use, or market, or making, using, or marketing, out-
side the United States, the drug identified in the re-
quest for indexing; and
‘‘(B) without obtaining from any person to
whom the data and information are disclosed an
identical verified statement, a copy of which is to be
provided by such person to the Secretary, which
meets the requirements of this paragraph.
‘‘SEC. 573. DESIGNATED NEW ANIMAL DRUGS FOR MINOR
USE OR MINOR SPECIES.
‘‘(a) DESIGNATION.—
‘‘(1) The manufacturer or the sponsor of a new
animal drug for a minor use or use in a minor spe-
cies may request that the Secretary declare that
drug a ‘designated new animal drug’. A request for
designation of a new animal drug shall be made be-
fore the submission of an application under section
512(b) or section 571 for the new animal drug.
‘‘(2) The Secretary may declare a new animal
drug a ‘designated new animal drug’ for an intended
use if—
‘‘(A) it is intended for a minor use or use
in a minor species; and
‘‘(B) a new animal drug containing the
same active ingredient, including any salt or
ester of the active ingredient, for the same in-
tended use, in the same species, and in the
same dosage form is not approved under section
512 or section 571 or designated for the in-
tended use at the time the request is made.
‘‘(3) 
Regarding 
the 
termination 
of 
a
designation—
‘‘(A) the sponsor of a new animal drug
shall notify the Secretary of any decision to dis-
continue active pursuit of approval under sec-
tions 512 or 571 of an application for a des-
ignated new animal drug. The Secretary shall
terminate the designation upon such notifica-
tion;
‘‘(B) the Secretary may also terminate des-
ignation if the Secretary independently deter-
mines that the sponsor is not actively pursuing
approval under sections 512 or 571 with due
diligence;
‘‘(C) the sponsor of an approved des-
ignated new animal drug shall notify the Sec-
retary of any discontinuance of the manufac-
ture of such new animal drug at least one year
before discontinuance. The Secretary shall ter-
minate the designation upon such notification;
and
‘‘(D) the designation shall terminate upon
the expiration of any applicable exclusivity pe-
riod under subsection (c).
‘‘(4) Notice respecting the designation or termi-
nation of designation of a new animal drug shall be
made available to the public.
‘‘(b) GRANTS AND CONTRACTS FOR DEVELOPMENT
OF DESIGNATED NEW ANIMAL DRUGS.—
‘‘(1) The Secretary may make grants to and
enter into contracts with public and private entities
and individuals to assist in defraying the costs of
qualified safety and effectiveness testing expenses
and manufacturing expenses incurred in connection
with the development of designated new animal
drugs.
‘‘(2) For purposes of subsection (1) of this
section—
‘‘(A) The term ‘qualified safety and effec-
tiveness testing’ means testing—
‘‘(i) which occurs after the date such
new animal drug is designated under this
section and before the date on which an
application with respect to such drug is
submitted under section 512 or 571; and
‘‘(ii) which is carried out under an in-
vestigational 
exemption 
under 
section
512(j).
‘‘(B) The term ‘manufacturing expenses’
means expenses incurred in developing proc-
esses and procedures associated with manufac-
ture of the designated new animal drug which
occur after the new animal drug is designated
under this section and before the date on which
an application with respect to such new animal
drug is submitted under section 512 or section
571.
‘‘(3) There is authorized to be appropriated to
carry out this subsection $1,000,000 for the fiscal
year following publication of final implementing reg-
ulations, $2,000,000 for the subsequent fiscal year
and such sums as may be necessary for each fiscal
year thereafter.
‘‘(c) EXCLUSIVITY FOR DESIGNATED NEW ANIMAL
DRUGS.—
‘‘(1) Except as provided in subsection (c)(2), if
the Secretary—
‘‘(A) approves or conditionally approves an
application for a designated new animal drug,
and no active ingredient (including any salt or
ester of the active ingredient) of that des-
ignated new animal drug has been approved or
conditionally approved previously, the Secretary
may not approve or conditionally approve an-
other application submitted for a new animal
drug with the same active ingredient and in-
tended use as the designated new animal drug
for another applicant before the expiration of
ten years from the date of the approval or con-
ditional approval of the application.
‘‘(B) approves or conditionally approves an
application for a designated new animal drug,
and an active ingredient (including an ester or
salt of the active ingredient) of that designated
new animal drug has been approved or condi-
tionally approved previously, the Secretary may
not approve or conditionally approve another
application submitted for a new animal drug
with the same active ingredient and intended
use as the designated new animal drug for an-
other applicant before the expiration of seven
years from the date of approval or conditional
approval of the application.
‘‘(2) If an application filed pursuant to section
512 or section 571 is approved for a designated new
animal drug, the Secretary may, during the 10-year
or 7-year exclusivity period beginning on the date of
the application approval or conditional approval, ap-
prove or conditionally approve another application
under section 512 or section 571 for such drug for
such minor use or minor species for another appli-
cant if—
‘‘(A) the Secretary finds, after providing
the holder of such an approved application no-
tice and opportunity for the submission of
views, that in the granted exclusivity period the
holder of the approved application cannot as-
sure the availability of sufficient quantities of
the drug to meet the needs for which the drug
was designated; or
‘‘(B) such holder provides written consent
to the Secretary for the approval or conditional
approval of other applications before the expira-
tion of such exclusivity period.’’.
(e) CONFORMING AMENDMENTS.—
(1) Section 201(u) of the Federal Food, Drug,
and Cosmetic Act is amended by striking ‘‘512’’ and
inserting ‘‘512, 571’’.
(2) Section 201(v) of the Federal Food, Drug,
and Cosmetic Act is amended by inserting the fol-
lowing after paragraph (2): ‘‘Provided that any drug
intended for minor use or use in a minor species
that is not the subject of a final regulation published
by the Secretary through notice and comment rule-
making finding that the criteria of paragraphs (1)
and (2) or of section 108 of Public Law 90–399
have been met is a new animal drug.’’
(3) Section 301(e) of the Federal Food, Drug,
and 
Cosmetic 
Act 
is 
amended 
by 
striking
‘‘512(a)(4)(C), 512(j), (l) or (m)’’ and inserting
‘‘512(a)(4)(C), 512(j), (l) or (m), 572(i).’’
(4) Section 301(j) of the Federal Food, Drug,
and Cosmetic Act is amended by deleting ‘‘520’’ and
inserting ‘‘520, 571, 572, 573.’’
(5) Section 502 of the Federal Food, Drug, and
Cosmetic Act is amended by adding at the end the
following new subsection:
‘‘(u) If it is a new animal drug—
‘‘(1) that is conditionally approved under sec-
tion 571 and its labeling does not conform with the
approved application or section 571(f), or that is not
conditionally approved under section 571 and its
label bears the statement set forth in section
571(f)(1)(A); or
‘‘(2) that is indexed under section 572 and its
labeling does not conform with the index listing
under section 572(e) or 572(h), or that has not been
indexed under section 572 and its label bears the
statement set forth in section 572(h).’’
(6) Section 503(f) of the Federal Food, Drug,
and Cosmetic Act is amended by—
(A) in paragraph (1)(A)(ii) by striking
‘‘512’’ and inserting ‘‘512, a conditionally-ap-
proved application under section 571, or an
index listing under section 572’’; and
(B) in paragraph (3) by striking ‘‘section
512’’ and inserting ‘‘sections 512, 571, or
572’’.
(7) Section 504(a)(1) of the Federal Food,
Drug, and Cosmetic Act is amended by striking
‘‘512(b)’’ and inserting ‘‘512(b), a conditionally-ap-
proved application filed pursuant to section 571, or
an index listing pursuant to section 572’’.
(8) Sections 504(a)(2)(B) and 504(b) of the
Federal Food, Drug, and Cosmetic Act are amended
by striking ‘‘512(i)’’ each place it appears and in-
serting ‘‘512(i), or the index listing pursuant to sec-
tion 572(e)’’.
(9) Section 512(a) of the Federal Food, Drug,
and Cosmetic Act is amended by striking paragraphs
(1) and (2) and inserting the following:
‘‘(1) A new animal drug shall, with respect to any
particular use or intended use of such drug, be deemed
unsafe for purposes of section 501(a)(5) and section
402(a)(2)(C)(ii) unless—
‘‘(A) there is in effect an approval of an appli-
cation filed pursuant to subsection (b) with respect
to such use or intended use of such drug, and such
drug, its labeling, and such use conform to such ap-
proved application;
‘‘(B) there is in effect a conditional approval of
an application filed pursuant to section 571 with re-
spect to such use or intended use of such drug, and
such drug, its labeling, and such use conform to
such conditionally-approved application; or
‘‘(C) there is in effect an index listing pursuant
to section 572 with respect to such use or intended
use of such drug in a minor species, and such drug,
its labeling, and such use conform to such index list-
ing.
A new animal drug shall also be deemed unsafe for such
purposes in the event of removal from the establishment
of a manufacturer, packer, or distributor of such drug for
use in the manufacture of animal feed in any State unless
at the time of such removal such manufacturer, packer,
or distributor has an unrevoked written statement from
the consignee of such drug, or notice from the Secretary,
to the effect that, with respect to the use of such drug
in animal feed, such consignee (i) holds a license issued
under subsection (m) and has in its possession current ap-
proved labeling for such drug in animal feed; or (ii) will,
if the consignee is not a user of the drug, ship such drug
only to a holder of a license issued under subsection (m).
‘‘(2) An animal feed bearing or containing a new ani-
mal drug shall, with respect to any particular use or in-
tended use of such animal feed be deemed unsafe for pur-
poses of section 501(a)(6) unless—
‘‘(A) there is in effect—
‘‘(i) an approval of an application filed
pursuant to subsection (b) with respect to such
drug, as used in such animal feed, and such
animal feed and its labeling, distribution, hold-
ing, and use conform to such approved applica-
tion;
‘‘(ii) a conditional approval of an applica-
tion filed pursuant to section 571 with respect
to such drug, as used in such animal feed, and
such animal feed and its labeling, distribution,
holding, and use conform to such conditionally-
approved application; or
‘‘(iii) an index listing pursuant to section
572 with respect to such drug, as used in such
animal feed, and such animal feed and its label-
ing, distribution, holding, and use conform to
such index listing; and
‘‘(B) such animal feed is manufactured at a site
for which there is in effect a license issued pursuant
to subsection (m)(1) to manufacture such animal
feed.’’.
(10) Section 512(b)(3) of the Federal Food,
Drug, and Cosmetic Act is amended by striking
‘‘under paragraph (1) or a request for an investiga-
tional exemption under subsection (j)’’ and inserting
‘‘under paragraph (1), section 571, or a request for
an investigational exemption under subsection (j)’’.
(11) Section 512(d)(4) of the Federal Food,
Drug, and Cosmetic Act is amended by striking
‘‘have previously been separately approved’’ and in-
serting ‘‘have previously been separately approved
pursuant to an application submitted under section
512(b)(1)’’.
(12) Section 512(f) of the Federal Food, Drug,
and Cosmetic Act is amended by striking ‘‘sub-
section (d), (e), or (m)’’ and inserting ‘‘subsection
(d), (e), or (m), or section 571(c), (d), or (e)’’.
(13) Section 512(g) of the Federal Food, Drug,
and Cosmetic Act is amended by striking ‘‘this sec-
tion’’ and inserting ‘‘this section, or section 571’’.
(14) Section 512(i) of the Federal Food, Drug,
and Cosmetic Act is amended by striking ‘‘sub-
section (b)’’ and inserting ‘‘subsection (b) or section
571’’ and by inserting ‘‘or upon failure to renew a
conditional approval under section 571’’ after ‘‘or
upon its suspension’’.
(15) Section 512(l)(1) of the Federal Food,
Drug, and Cosmetic Act is amended by striking
‘‘subsection (b)’’ and inserting ‘‘subsection (b) or
section 571’’.
(16) Section 512(m)(1)(C) of the Federal Food,
Drug, and Cosmetic Act is amended by striking ‘‘ap-
plicable regulations published pursuant to subsection
(i)’’ and inserting ‘‘applicable regulations published
pursuant to subsection (i) or for indexed new animal
drugs in accordance with the index listing published
pursuant to section 572(e)(2) and the labeling re-
quirements set forth in section 572(h)’’.
(17) Section 512(m)(3) of the Federal Food,
Drug, and Cosmetic Act is amended by inserting ‘‘or
an index listing pursuant to section 572(e)’’ after
‘‘subsection (i)’’.
(18) Section 512(p)(1) of the Federal Food,
Drug, and Cosmetic Act is amended by striking
‘‘subsection (b)(1)’’ and inserting ‘‘subsection (b)(1)
or section 571(a)’’.
(19) Section 512(p)(2) of the Federal Food,
Drug, and Cosmetic Act is amended by striking
‘‘subsection (b)(1)’’ and inserting ‘‘subsection (b)(1)
or section 571(a)’’.
SEC. 4. INTERNAL REVENUE CODE AMENDMENTS.
The Internal Revenue Code of 1986 is amended by
adding the following new section after section 45C:
‘‘SEC. 45D. SAFETY AND EFFECTIVENESS TESTING EX-
PENSES 
FOR 
DESIGNATED 
NEW 
ANIMAL
DRUGS FOR MINOR USES AND MINOR SPE-
CIES.
‘‘(a) For purposes of section 38, the credit deter-
mined under this section for the taxable year is an amount
equal to 50 percent of the qualified safety and effective-
ness testing expenses for the designated new animal drug
for the taxable year.
‘‘(b) For purposes of this section—
‘‘(1) Qualified safety and effectiveness testing
expenses—
‘‘(A) Except as otherwise provided in this
paragraph, the term ‘qualified safety and effec-
tiveness testing expenses’ means the amounts
which are paid or incurred by the taxpayer dur-
ing the taxable year which would be described
in subsection (b) of section 41 if such sub-
section were applied with the modifications set
forth in subparagraph (B).
‘‘(B) For purposes of subparagraph (A),
subsection (b) of section 41 shall be applied—
‘‘(i) by substituting ‘safety and effec-
tiveness testing’ for ‘qualified research’
each place it appears in paragraphs (2)
and (3) of such subsection; and
‘‘(ii) by substituting ‘100 percent’ for
‘65 percent’ in paragraph (3)(A) of such
subsection.
‘‘(C) The term ‘qualified safety and effec-
tiveness testing expenses’ shall not include any
amount to the extent such amount is funded by
any grant, contract, or otherwise by another
person (or any governmental entity).
‘‘(D) For purposes of this paragraph—
‘‘(i) section 41 shall be deemed to re-
main in effect for periods after June 30,
2001; and
‘‘(ii) the ‘trade or business of the tax-
payer’ requirement of section 41(b)(1)
shall be deemed to be satisfied in the case
of a taxpayer that owns animals that are
the subject of safety and effectiveness test-
ing.
‘‘(2)(A) The term ‘safety and effectiveness test-
ing’ means any safety and effectiveness testing—
‘‘(i) which is carried out under an exemp-
tion for a new animal drug being tested for
minor use or a minor species under section
512(j) of the Federal Food, Drug, and Cos-
metic Act (or regulations issued under such sec-
tion);
‘‘(ii) which occurs—
‘‘(I) after the date such new animal
drug request is filed for designation under
section 573 of such Act, and
‘‘(II) before the date on which an ap-
plication with respect to such drug is ap-
proved under section 512(c) of such Act;
and
‘‘(iii) which is conducted by or on behalf
of—
‘‘(I) the taxpayer who applied for the
designation under section 573; or
‘‘(II) the owner of the animals that
are the subject of safety and effectiveness
testing.
‘‘(B) Safety and effectiveness testing shall be
taken into account under subparagraph (A) only to
the extent such testing is related to the use of a new
animal drug for the minor use or minor species for
which it was designated under section 573 of the
Federal Food, Drug, and Cosmetic Act.
‘‘(c)(1) Except as provided in paragraph (2), any
qualified safety and effectiveness testing expenses for a
taxable year to which an election under this section applies
shall not be taken into account for purposes of deter-
mining the credit allowable under section 41 for such tax-
able year.
‘‘(2) Any qualified safety and effectiveness testing ex-
penses for any taxable year which are qualified research
expenses (within the meaning of section 41(b)) shall be
taken into account in determining base period research ex-
penses for purposes of applying section 41 to subsequent
taxable years.
‘‘(d)(1) For purposes of this section, the term ‘minor
use’ is defined in section 201(mm) of the Federal Food,
Drug, and Cosmetic Act and ‘minor species’ is defined in
section 201(ll). Determinations under the preceding sen-
tence with respect to any new animal drug shall be made
on the basis of the facts and circumstances as of the date
such new animal drug is designated under section 573 of
the Federal Food, Drug, and Cosmetic Act.
‘‘(2) No credit shall be allowed under this section
with respect to any safety and effectiveness testing con-
ducted by a corporation to which an election under section
936 applies.
‘‘(3) Rules similar to the rules of paragraphs (1) and
(2) of section 41(f) shall apply for purposes of this section.
‘‘(4) This section shall apply to any taxpayer for any
taxable year only if such taxpayer elects (at such time and
in such manner as the Secretary may by regulations pre-
scribe) to have this section apply for such taxable year.’’.
(b) CONFORMING AMENDMENTS.—
(1) Section 38(b) of the Internal Revenue Code
is amended—
(A) by deleting ‘‘plus’’ at end of paragraph
(11);
(B) by deleting the period at the end of
paragraph (12) and replacing it with the fol-
lowing: ‘‘, plus’’; and
(C) by adding the following new paragraph
at the end: ‘‘the minor use and minor species
new animal drug credit determined under sec-
tion 45D(a)’’.
(2) Section 280C(b) of the Internal Revenue
Code is amended—
(A) in paragraph (1), by deleting ‘‘section
45C(b)’’ and substituting the following: ‘‘section
45C(b) or 45D(b)’’; and
(B) in paragraphs (1) and (2), by deleting
‘‘section 45C’’ wherever it appears and sub-
stituting the following: ‘‘section 45C or 45D’’.
(c) REGULATIONS.—The Secretary of the Treasury
shall publish proposed regulations to implement amend-
ments to the Internal Revenue Code made by this Act
within 6 months of the date of enactment, and final regu-
lations within 24 months of the date of enactment.
SEC. 5. REGULATIONS.
Not later than 18 months after the date of enactment
of this Act, the Secretary of Health and Human Services
shall issue proposed regulations to implement section 572
of the Federal Food, Drug, and Cosmetic Act (as added
by this Act), and not later than 36 months after the date
of enactment of this Act, the Secretary shall issue final
regulations implementing such amendments. Not later
than 12 months after the date of enactment of this Act,
the Secretary of Health and Human Services shall issue
proposed regulations to implement section 573 of the Fed-
eral Food, Drug, and Cosmetic Act (as added by this Act),
and not later than 24 months after the date of enactment
of this Act, the Secretary shall issue final regulations im-
plementing such amendments; provided that these time-
frames shall be extended by 12 months for each fiscal year
in which the funds authorized to be appropriated by this
Act are not in fact appropriated. The Secretary shall im-
plement section 571 of the Federal Food, Drug, and Cos-
metic Act (as added by this Act) on the date of enactment
of this Act and subsequently publish any needed imple-
menting regulations.
SEC. 6. OFFICE OF MINOR USE AND MINOR SPECIES ANI-
MAL DRUG DEVELOPMENT.
The Secretary of Health and Human Services shall
establish within the Center of Veterinary Medicine (of the
Food and Drug Administration), an Office of Minor Use
and Minor Species Animal Drug Development that reports
directly to the Director of the Center for Veterinary Medi-
cine. This office shall be responsible for overseeing the de-
velopment and legal marketing of new animal drugs for
minor uses and minor species. There is authorized to be
appropriated to carry out this subsection $1,200,000 for
fiscal year 2002 and such sums as may be necessary for
each fiscal year thereafter.
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