I
104TH CONGRESS
1ST SESSION
H. R. 1742
To amend the Federal Food, Drug, and Cosmetic Act to revise the process
for the approval of drugs and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JUNE 6, 1995
Mr. WYDEN introduced the following bill; which was referred to the Committee
on Commerce
A BILL
To amend the Federal Food, Drug, and Cosmetic Act to
revise the process for the approval of drugs and for
other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; REFERENCE; TABLE OF CON-
TENTS.
(A) SHORT TITLE.—This Act may be cited as the
‘‘FDA Modernization Act of 1995’’.
(b) REFERENCE.—Whenever in this Act an amend-
ment or repeal is expressed in terms of an amendment
to, or repeal of, a section or other provision, the reference
shall be considered to be made to a section or other provi-
sion of the Federal Food, Drug, and Cosmetic Act.
(c) TABLE OF CONTENTS.—The table of contents of
this Act is as follows:
Sec. 1. Short title; reference; table of contents.
Sec. 2. Findings.
Sec. 3. Responsibility of the Secretary.
Sec. 4. Conditional approval.
Sec. 5. Use of institutional review boards.
Sec. 6. Review by independent testing organizations.
Sec. 7. Limitations on authority over legitimate labeling and advertising.
Sec. 8. Review by expert advisory panel.
Sec. 9. Rationalizing good manufacturing practices.
Sec. 10. Export of drugs and devices.
Sec. 11. Regulation of biological products.
Sec. 12. Initial reporting of devices.
Sec. 13. FDA response to G.M.P. violations.
SEC. 2. FINDINGS.
The Congress finds the following:
(1) The Food and Drug Administration has pri-
mary responsibility to ensure the safety and effec-
tiveness of drugs and medical devices.
(2) Within the scope of that mission, the Food
and Drug Administration also has a public mandate
to help speed the introduction of life-saving and life-
enhancing new products to the marketplace.
(3) The United States medical products indus-
try is a nationally important employer, and a major,
positive balance-of-trade factor in our economy.
(4) It is apparent to persons both within and
outside of the agency that certain Food and Drug
Administration practices, policies, and systems
may—
(A) needlessly delay the introduction of
new products,
(B) withhold new health care benefits to
American citizens,
(C) erode job development in an important
United States industry, and
(D) reduce our effective competitiveness in
international markets.
(5) These problems are compounded by the
twin pressures of an increasing agenda of regulatory
mandates for which the Food and Drug Administra-
tion has been made responsible, and budget limita-
tions which have restricted the agency’s ability to
properly address all functions in an expeditious man-
ner.
(6) The agency is hamstrung by some regu-
latory processes which are outdated, and by systems,
policies, technical knowledge, and philosophies which
have not, in every case, kept up with revolutionary
changes in the underlying science now creating 21st
century drug and medical device breakthroughs.
Among other problems, these policies and philoso-
phies may unnecessarily restrict the appropriate and
free flow of credible scientific knowledge between cli-
nicians, researchers, and manufacturers.
(7) Better health care for all Americans is the
ultimate goal as the Food and Drug Administration
is reshaped to meet the challenges of regulating a
rapidly growing, and changing, health care products
industry.
SEC. 3. RESPONSIBILITY OF THE SECRETARY.
Section 903(b)(2) (21 U.S.C. 393(b)(2)) is amended
by redesignating subparagraphs (A), (B), (C), (D), and
(E) as subparagraphs (B), (C), (D), (E), and (F), respec-
tively and by adding before subparagraph (B) (as so redes-
ignated) the following:
‘‘(A) consistent with the public health, rap-
idly making decisions on the approval of drugs
and devices in accordance with this Act and bio-
logical products in accordance with section 351
of the Public Health Service Act;’’.
SEC. 4. CONDITIONAL APPROVAL.
(a) DRUGS AND BIOLOGICAL PRODUCTS.—Section
505 (21 U.S.C. 355) is amended by adding at the end
the following:
‘‘(n) A new drug to treat life-threatening or serious
conditions for which an application has been submitted
under subsection (b) may, if the new drug is otherwise
approvable, receive a conditional approval on the basis of
valid scientific evidence demonstrating a reasonable assur-
ance of safety and effectiveness. A conditional approval
shall become a final section 505 approval unless conditions
set forth in such approval have not been met within a time
certain as set by the Secretary in consultation with the
applicant. If such conditions have not been fulfilled within
such time, the conditional approval shall terminate. A new
drug which has a conditional approval shall for purposes
of this Act be considered an approved new drug. A condi-
tional approval shall terminate upon the expiration of the
period applicable to such approval.’’.
(b) MEDICAL DEVICES.—Section 515 (21 U.S.C
360e) is amended by adding at the end the following:
‘‘CONDITIONAL APPROVAL
‘‘(j) A a class III device to treat life-threatening or
serious health conditions for which an application for pre-
market approval has been submitted under subsection (c)
may, if the device is otherwise approvable, receive a condi-
tional approval on the basis of valid scientific evidence
demonstrating a reasonable assurance of safety and effec-
tiveness. A conditional approval shall be for such period
as the Secretary designates in granting such approval. A
device which has a conditional approval shall for purposes
of this Act be considered an approved device. A conditional
approval shall terminate upon the expiration of the period
applicable to such approval.’’.
SEC. 5. USE OF INSTITUTIONAL REVIEW BOARDS.
(a) APPROVAL
OF I.N.D. FOR DRUGS.—Section
505(i) (21 U.S.C. 355(i) is amended by inserting ‘‘(1)’’
after ‘‘(i)’’ and by adding at the end the following:
‘‘(2)(A) An application (including an amendment or
supplement thereto) for an exemption for a new drug for
investigational use shall be deemed approved on the 30th
day after the submission of the application to the Sec-
retary unless on or before such day—
‘‘(i) the Secretary, or
‘‘(ii) the Secretary acting upon the rec-
ommendation of an institutional review board cer-
tified under paragraph (3)(C),
by order disapproves the application and notifies the appli-
cant in writing of the disapproval and the reasons for dis-
approval and affords the applicant an opportunity for an
informal hearing on the disapproval.
‘‘(B) Personnel of the Secretary shall meet with any
person who wishes to submit an application for a drug
under paragraph (1) for the purpose of reaching agree-
ment on the design and size of clinical trials in order to
facilitate expeditious review of an application under sub-
section (b). Meetings shall be held within 30 days of any
reasonable request therefor. Minutes of any such meeting
shall be exchanged.’’.
(b) 
INVESTIGATIONAL
DEVICES.—Section
520(g)(4)(A) (21 U.S.C. 360j(g)(4)(A)) is amended by
striking ‘‘unless’’ and all that follows and inserting ‘‘un-
less on or before such day—
‘‘(i) the Secretary, or
‘‘(ii) the Secretary acting upon the rec-
ommendation of an institutional review board cer-
tified under section 505(i)(3)(C),
by order disapproves the application and notifies the appli-
cant in writing of the disapproval and the reasons for dis-
approval and affords the applicant an opportunity for an
informal hearing on the disapproval. Personnel of the Sec-
retary shall meet with any person who wishes to submit
an application for a device under paragraph (1) for the
purpose of reaching agreement on the design and size of
clinical trials in order to facilitate expeditious review of
an application under section 515(c). Meetings shall be held
within 30 days of any reasonable request therefor. Minutes
of any such meeting shall be exchanged.’’.
(c) REVIEW
OF
CERTAIN
CLINICAL
INVESTIGA-
TIONS.—Section 505(i) (21 U.S.C. 355(i), as amended by
subsection (a), is amended by adding at the end the
following:
‘‘(3)(A) The Secretary shall use institutional review
boards, approved by the Secretary, to review and approve
the initiation and conduct of Phase I clinical investigations
under paragraph (1). The Secretary shall certify an insti-
tutional review board as qualified to review and approve
a Phase I clinical investigation upon a determination that
the board meets the criteria established under subpara-
graph (C).
‘‘(B)(i) The Secretary shall require private sponsors
to submit proposed Phase I clinical investigations to be
conducted under an exemption under this subsection to
an institutional review board certified under subparagraph
(A) in lieu of submission to the Secretary.
‘‘(ii) The Secretary may, upon request, authorize
commercial sponsors to submit proposed Phase I clinical
investigations to be conducted under an exemption under
this subsection to an institutional review board certified
under subparagraph (A) in lieu of submission to the Sec-
retary.
‘‘(C) The Secretary, acting through the Commis-
sioner of Food and Drugs and the Director of the National
Institutes of Health, shall establish criteria for certifi-
cation by the Commissioner of institutional review boards
as qualified to approve the initiation and conduct of Phase
I clinical investigations. Applicants shall apply to a cer-
tified institutional review board for approval to conduct
a Phase I clinical investigation.
‘‘(D) An institutional review board may approve a
Phase I clinical investigation if it determines the investiga-
tion meets the requirements of paragraph (1) and is to
be conducted in accordance with standards which provide
reasonable protection of human subjects, including in-
formed consent procedures.
‘‘(E) For purposes of this paragraph, the term ‘Phase
I clinical investigations’ means one or more clinical inves-
tigations that involve the introduction of an investigational
new drug into human beings. Such an investigation shall
be designed to determine parameters such as the follow-
ing: the safety profile of the drug, the metabolism and
pharmacologic actions of the drug in humans, the side ef-
fects associated with increasing doses of the drug, early
evidence of effectiveness of the drug, and information
about the drug’s rate and extent to absorption.
‘‘(4)(A) The Secretary (or an institutional review
board with respect to a Phase I clinical investigation which
it has approved) may place a clinical hold on any proposed
or ongoing clinical investigation if the Secretary deter-
mines that such action is necessary for the protection of
human subjects or that the clinical investigations are poor-
ly supervised or executed, produce inaccurate or materially
insufficient data, or are based on clearly deficient proto-
cols.
‘‘(B) If an institutional review board places a clinical
hold on an investigation under subparagraph (A), it shall
immediately notify the Secretary of such action.
‘‘(5)(A) Information otherwise protected from disclo-
sure to the public under section 301(j) or 520(c) may be
disclosed, under such conditions as the Secretary may
specify, to members of an institutional review board and
its staff if, in the opinion of the Secretary, such disclosure
is necessary to protect the public safety and for the satis-
factory performance by the institutional review board of
its functions under paragraph (3).
‘‘(B) The Secretary shall, in writing, require as a con-
dition to the disclosure of information under this para-
graph that the person receiving such information take
such security precautions respecting the information as
the Secretary shall by regulation prescribe. Disclosure by
such person of such information to a person not author-
ized to receive it shall constitute a violation of section
301(j) and of section 1905 of title 18, United States Code.
‘‘(6)(A) Any member of an institutional review board
certified by the Secretary under paragraph (3)(C) shall,
by reason of the member’s performance of any duty, func-
tion, or activity required of, or authorized to be under-
taken by, the institutional review board under this sub-
section, be considered to be an employee of the Govern-
ment under section 2671 of title 28, United States Code.
‘‘(B) Any personnel of a hospital, university, or other
institution under which an institutional review board cer-
tified by the Secretary under paragraph (3)(C) was orga-
nized shall, by reason of the personnel’s performance of
any duty, function, or activity required of, or authorized
to be undertaken by, the institutional review board under
this subsection, be considered to be an employee of the
Government under section 2671 of title 28, United States
Code.
‘‘(7) The Secretary may make grants to institutional
review boards to defray, in whole or in part, the costs asso-
ciated with the approval of Phase I clinical investiga-
tions.’’.
(b) REPORT.—Not later than the expiration of 5
years from the date of the enactment of this Act, the Sec-
retary of Health and Human Services shall report to the
Congress on the use the Secretary has made under para-
graphs (3) through (7) of section 505(i) of the Federal
Food, Drug, and Cosmetic Act of institutional review
boards and any difficulties the Secretary has encountered
in using such boards.
(c) EFFECTIVE DATE.—The amendments made by
subsections (a), (b), and (c) with respect to review of clini-
cal investigations under section 505(i) of the Federal
Food, Drug, and Cosmetic Act by institutional review
boards shall take effect upon the expiration of 36 months
after the date of the enactment of this Act
SEC. 6. REVIEW BY INDEPENDENT TESTING ORGANIZA-
TIONS.
(a) AMENDMENT.—Chapter IX is amended by adding
after section 905 (21 U.S.C. 395) the following:
‘‘PRIVATIZATION OF APPROVAL FUNCTIONS
‘‘SEC. 906. (a) The Secretary, acting through the
Commissioner of Food and Drugs, may establish and im-
plement a program under which the Commissioner will
contract, in whole or in significant part, with individuals
and laboratories certified under subsection (b) to conduct,
under such conditions as the Secretary may specify to as-
sure unbiased scientifically valid results, the following ac-
tivities and responsibilities of the Food and Drug Adminis-
tration in connection with the approval of drugs and de-
vices under sections 505 and 515 and with reviewing noti-
fications required under section 510(k) and making writ-
ten recommendations of initial classification under section
513(f)(1) of devices:
‘‘(1) Toxicology reviews to determine if applica-
ble requirements are being met.
‘‘(2) Chemistry reviews to determine if applica-
ble requirements are being met.
‘‘(3) Statistical analysis to determine if applica-
ble requirements are being met.
‘‘(4) Preapproval manufacturing practice in-
spections to determine if applicable requirements are
being met.
‘‘(5) Any other function of the Food and Drug
Administration relating to the review and approval
of drugs or devices that the Secretary determines
can be adequately performed under contract with
qualified individuals and laboratories.
‘‘(b) The Secretary, acting through the Commissioner
of Food and Drugs, shall certify individuals and labora-
tories as qualified to carry out the functions described in
paragraphs (1) through (6) of subsection (a) under a con-
tract with the Commissioner of Food and Drugs.
‘‘(c)(1) Information otherwise protected from disclo-
sure to the public under section 301(j) or 520(c) may be
disclosed to—
‘‘(A) contractors certified under subsection (b),
and
‘‘(B) employees of such contractors,
if, in the opinion of the Secretary, such disclosure is nec-
essary for the satisfactory performance by the contractor
of work under a contract under subsection (a).
‘‘(2) The Secretary shall, in writing, require as a con-
dition to the disclosure of information under paragraph
(1) that the person receiving such information take such
security precautions respecting the information as the Sec-
retary shall by regulation prescribe. Disclosure by such
person of such information to a person not authorized to
receive it shall constitute a violation of section 301(j) and
of section 1905 of title 18, United States Code.
‘‘(e) The review of an application for approval of a
new drug or device under this Act or a biological product
under section 351 of the Public Health Service Act shall
not include the review of the environmental impact of such
drug, device, or biological product under the Environ-
mental Quality Improvement Act of 1970 (42 U.S.C. 4371
et seq.).’’.
(b) REPORT.—Not later than the expiration of one
year from the date of the enactment of this Act, the Sec-
retary of Health and Human Services shall report to the
Congress on—
(1) the use the Secretary has made under sec-
tion 906 of the Federal Food, Drug, and Cosmetic
Act of the authority to contract for individuals and
laboratories to perform duties of the Food and Drug
Administration, and
(2) any difficulties encountered in contracting
under such section 906.
SEC. 7. LIMITATIONS ON AUTHORITY OVER LEGITIMATE
LABELING AND ADVERTISING.
(a) SECTION 201(m).—Section 201(m) (21 U.S.C.
321(m)) is amended to read as follows:
‘‘(m)(1) The term ‘labeling’ means all labels and
other written, printed, or graphic material upon any arti-
cle or any of its containers or wrappers, or accompanying
any such article.
‘‘(2) Such term does not include scientifically valid—
‘‘(A) reprints of articles published in peer-re-
viewed scientific publications, other generally recog-
nized scientific materials such as medical textbooks,
official compendia, abstracts and proceedings of sci-
entific meetings, or information concerning decisions
about drug utilization review or formulary decisions
if—
‘‘(i) such reprints, materials, or informa-
tion are disseminated in a meeting to health
professionals or to persons involved in the in-
surance of, or reimbursement for, drugs and de-
vices approved under this Act and section 351
of the Public Health Service Act, and
‘‘(ii) the dissemination of such reprints,
materials, or information was not required, di-
rectly or indirectly, by a pharmaceutical com-
pany or device manufacturer as a condition of
financial support of the development of such
materials or of such meeting;
‘‘(B) materials used to fulfill the disclosure re-
quirements of the Securities and Exchange Commis-
sion; or
‘‘(C) other information intended primarily for
distribution to shareholders (and potential share-
holders);
if such information is reported to the Secretary at least
60 days before its dissemination.
‘‘(3) If labeling contains information described in
paragraph (2)(A) along with related data as may be
deemed appropriate by the Secretary, the Secretary may
require that persons disseminating such labeling include
in the labeling a statement prescribed by the Secretary
concerning such information if the Secretary finds that the
information is scientifically insufficient, inaccurate, or
misleading.’’.
(b) SECTION 201(n).—Section 201(n) (21 U.S.C.
321(n)) is amended—
(1) by inserting ‘‘(1)’’ after ‘‘(n)’’; and
(2) by inserting the following at the end there-
of:
‘‘(2) For purposes of this subsection, the term ‘adver-
tising’ does not include scientifically valid—
‘‘(A) reprints of articles published in peer-re-
viewed scientific publications, other generally recog-
nized scientific materials such as medical textbooks,
official compendia, abstracts, and proceedings of sci-
entific meetings, or information concerning decisions
about drug utilization review of formulary decision
if—
‘‘(i) such reprints, materials, or informa-
tion are disseminated in a meeting to health
professionals or persons involved in the insur-
ance of, or reimbursement for, drugs and de-
vices regulated under this Act and section 351
of the Public Health Service Act, and
‘‘(ii) the dissemination of such reprints,
materials, or information was not required, di-
rectly or indirectly, by a pharmaceutical com-
pany or device manufacturer as a condition of
financial support of the development of such
materials or of such meeting;
‘‘(B) materials used to fulfill the disclosure re-
quirements of the Securities and Exchange Commis-
sion or the Securities Act of 1933 and the Securities
Exchange Act of 1934 and regulations promulgated
thereunder; or
‘‘(C) other information intended primarily for
distribution to shareholders (and potential share-
holders);
if such information is reported to the Secretary at least
60 days before its dissemination.
‘‘(3) If advertising contains information described in
paragraph (2)(A) along with related data as may be
deemed appropriate by the Secretary, the Secretary may
require that persons disseminating such advertising in-
clude in the advertising a statement prescribed by the Sec-
retary concerning such information if the Secretary finds
that the information is scientifically insufficient, inac-
curate, or misleading.’’.
(c) SECTION 201(p).—Section 201(p)(1) (21 U.S.C.
321(p)(1)) is amended by striking ‘‘labeling thereof’’ and
inserting ‘‘drug’s labeling (as defined in paragraph (m))’’.
(d) SECTION 502(a).—Section 502(a) (21 U.S.C.
352(a)) is amended by inserting ‘‘(1)’’ after ‘‘(a)’’ and in-
serting at the end thereof the following:
‘‘(2) The Secretary does not have authority to require
approval of promotional labeling prior to use or dissemina-
tion of such labeling. This paragraph does not apply to
the regulation of tobacco products.
‘‘(3) The dissemination of scientifically valid informa-
tion as defined in section 201(m)(2)(A) is not a violation
of this section, provided that (a) it is reported to the Sec-
retary 60 days prior to dissemination, and (b) subject to
provisions of Section 201(m)(3).’’
(e) SECTION 502(n).—The first sentence of section
502(n) (21 U.S.C. 352(n) is amended by striking ‘‘, and
(B)’’ and inserting before the period at the end the follow-
ing: ‘‘, and (C) no advertising shall be subject to approval
prior to use or dissemination’’.
(f) APPLICATION.—The amendments made by this
section apply to the labeling and advertising of drugs, bio-
logical products, and devices which have been approved for
at least one indication.
SEC. 8. REVIEW BY EXPERT ADVISORY PANEL.
Chapter IX is amended by adding at the end the fol-
lowing:
‘‘REVIEW BY EXPERT ADVISORY PANEL
‘‘SEC. 906. (a)(1) In the case of—
‘‘(A) any person who has submitted an applica-
tion under section 505(a) for approval of a new
drug, or
‘‘(B) any person who has submitted a product
license application for a biological product under sec-
tion 351(a) of the Public Health Service Act,
which the Secretary determines is to be used for the pur-
pose of treating a serious or life-threatening disease or
other health condition, such person (hereinafter in this
section referred to as the ‘applicant’) may, not sooner than
90 days after submitting such application, request review
of such application by an expert advisory panel under this
section.
‘‘(2) If an expert advisory panel appointed by the Sec-
retary under subsection (b) recommends under subsection
(d) that the drug reviewed should be approved under sec-
tion 505 or that the biological product reviewed should
have a product license issued for it under section 351 of
the Public Health Service Act, then, within 45 days of re-
ceipt of the recommendation, the drug shall be deemed ap-
proved or the biological product shall be deemed to have
a product license issued for it unless the Secretary deter-
mines that the applicant has not met standards of section
505 or 351, whichever is applicable.
‘‘(b)(1) The Secretary may appoint expert advisory
panels for review of applications under this section accord-
ing to the various fields of clinical medicine and fun-
damental sciences in which drugs or biological products
are used.
‘‘(2)(A) Members of an advisory panel shall be se-
lected from a list of persons submitted to the Secretary
under subsection (e), and the Secretary shall designate the
chairperson of each panel. Each advisory panel shall con-
sist of 5 or more persons with training and experience in
the fields of medicine and science applicable to the drug
which is the subject of the application to be reviewed and
who are otherwise qualified to review such applications.
‘‘(B) Members of advisory panels appointed under
this subsection shall be compensated at a rate not to ex-
ceed the daily equivalent of the rate in effect for GS–18
of the General Schedule for each day (including travel
time) they are engaged in the performance of their duties
as members of the advisory panel. All members, while so
serving away from their homes or regular places of busi-
ness, may be allowed travel expenses, including per diem
in lieu of subsistence, in the same manner as such ex-
penses are authorized by section 5703, title 5, United
States Code, for employees serving intermittently.
‘‘(c)(1) The Secretary shall, within 60 days of the re-
ceipt of a request under subsection (a)(1), refer an eligible
application to an advisory panel, appointed under sub-
section (b), for the purpose of reviewing such application
and shall provide to the panel such information as the Sec-
retary determines will facilitate review of such application
by the panel.
‘‘(2)(A) Information provided under paragraph (1)
which is otherwise protected from disclosure to the public
under section 301(j) or 520(c) shall be disclosed to mem-
bers of advisory panels only under the conditions specified
in subparagraph (B).
‘‘(B) The Secretary shall, in writing, require as a con-
dition to the disclosure of information under subparagraph
(A) that the person receiving it take such security pre-
cautions respecting the information as the Secretary shall
by regulation prescribe. Disclosure by such person of such
information to a person not authorized to receive it shall
constitute a violation of section 301(j) and of section 1905
of title 18, United States Code.
‘‘(d)(1) Within 60 days of the date information is
provided to the expert advisory panel under subsection
(c)(1), the expert advisory panel shall complete its review
of the information received under subsection (c) with re-
spect to an application being reviewed by the panel and
shall submit to the Secretary and the applicant a rec-
ommendation as to whether the drug included in the appli-
cation should be approved in accordance with section 505
or whether a product license should be issued under sec-
tion 351 of the Public Health Service Act for the biological
product included in the application. A recommendation for
approval of the drug or issuance of a license for a biologi-
cal product shall specify the indication for which the drug
or biological product is recommended for approval.
‘‘(2) A summary of the recommendation submitted
to the Secretary under paragraph (1) shall be made avail-
able to the public on the day it is so submitted, but no
information which is described in section 552(b)(4) of title
5, United States Code, shall be included in the summary
or otherwise released to the public.
‘‘(e)(1) The Secretary shall request a nongovern-
mental scientific body to submit to the Secretary a list
of names of persons, together with their qualifications,
who such body believes to be qualified to serve on expert
advisory panels appointed under subsection (f). Such list
shall be revised on an annual basis.
‘‘(2) Any person may submit to such nongovern-
mental body recommendations of persons to be included
on the list submitted under paragraph (1).
(c) REPORT.—Not later than the expiration of one
year from the date of the enactment of this Act, the Sec-
retary of Health and Human Services shall report to the
Congress on the Secretary’s implementation of sections
505(i)(7) and 520(g)(6) of the Federal Food, Drug, and
Cosmetic Act and the use the Secretary has made of insti-
tutional review boards. Such report shall include any dif-
ficulties the Secretary has encountered in the implementa-
tion of such sections and the use of institutional review
boards.
SEC. 9. RATIONALIZING GOOD MANUFACTURING PRAC-
TICES.
Section 501 (21 U.S.C. 351(a)) is amended—
(1) by inserting ‘‘(A)’’ after ‘‘(a)(1)’’ and redes-
ignating ‘‘(2)(A)’’ as ‘‘(B)(i)’’, ‘‘(B)’’ as ‘‘(ii)’’ both
times it appears, ‘‘(3)’’ as ‘‘(C)’’, ‘‘(4)’’ as ‘‘(D)’’,
‘‘(5)’’ as ‘‘(E)’’, ‘‘(6)’’ as ‘‘(F)’’, and ‘‘(A)’’ as ‘‘(i)’’
the second time it appears; and
(2) by inserting the following at the end of sub-
section (a):
‘‘(B) The Secretary shall by regulation establish good
manufacturing practices applicable to drugs subject to sec-
tion 505 of this Act and biological products (other than
blood, blood products and blood components, and vaccines
that cannot adequately be characterized by physical or
chemical methods) subject to section 351 of the Public
Health Service Act as follows:
‘‘(i) One set of regulations shall apply only to
drugs and biological products which cannot be char-
acterized adequately by physical or chemical meth-
ods.
‘‘(ii) A second set of regulations shall apply
only to drugs and biological products which can be
characterized adequately by physical or chemical
methods.
‘‘(C) Regulations established under subparagraph
(B) shall establish requirements for submissions to the
Secretary of changes in manufacturing practices by the
applicant or holder. Such regulations shall provide as fol-
lows:
‘‘(i) In the case of drugs and biological products
which can adequately be characterized by physical or
chemical 
methods, 
approval 
of 
manufacturing
changes shall be required prior to implementation of
such changes only if such manufacturing changes
are specified in regulations as substantially affecting
the safety or efficacy of such drugs and biological
products.
‘‘(ii) In the case of drugs and biological prod-
ucts which cannot be characterized adequately by
the 31st day after submission unless on or before
such day the Secretary disapproves such request and
notifies the applicant or holder in writing of such
disapproval. Such notification shall include a com-
plete statement of the reasons for not allowing im-
plementation.
‘‘(iv) If upon further review, the Secretary iden-
tifies problems that would affect product safety, effi-
cacy, purity, or potency or tissue integrity, the Sec-
retary may disapprove the manufacturing changes.
Taking into consideration risks involved, reasonable
time shall be given the applicant or holder to comply
with the disapproval.
‘‘(v) A description of manufacturing changes
not covered by clauses (i) or (iii) shall be submitted
by the applicant or holder to the Secretary on an an-
nual basis.
‘‘(D)(i) The Secretary shall, after notice and oppor-
tunity for public comment pursuant to section 553 of title
5, United States Code, establish not later than December
31. 1998, regulations to be used in determining whether
a drug or a biological product can adequately be character-
ized by physical or chemical methods.
‘‘(ii) If the applicant disagrees with a determination
by the Secretary that the drug or biological product which
is the subject of an application cannot be adequately char-
acterized by physical or chemical methods, such applicant
may contest such determination by requesting an informal
hearing.
‘‘(E) For purposes of subparagraphs (B) through
(D)—
‘‘(i) the term ‘changes in manufacturing prac-
tices’ means—
‘‘(I) changes in manufacturing procedures
generally applicable throughout the facility,
such as changes in recordkeeping procedures,
validation processes, methods of training of per-
sonnel, and methods of qualification of equip-
ment;
‘‘(II) changes in the manufacturing facility
or equipment; and
‘‘(III) changes in manufacturing proce-
dures of specific applicability to a biological
product;
‘‘(ii) the term ‘holder’ means a person whose
drug application submitted under section 505 or
product license application submitted under section
351 of the Public Health Service Act has been ap-
proved; and
‘‘(iii) the term ‘applicant’ means a person
whose application described under clause (ii) has
been submitted to, but not approved by, the Sec-
retary.’’.
SEC. 10. EXPORT OF DRUGS AND DEVICES.
(a) SECTION 801(e).—Section 801(e) (21 U.S.C.
381(e)) is amended—
(1) in paragraph (1), by inserting after ‘‘under
this Act’’ the following: ‘‘or in violation of section
505 or section 351 of the Public Health Service
Act’’;
(2) in paragraph (1), by amending subpara-
graph (B) to read as follows:
‘‘(B) has been accepted or requested for
import by the country to which it is intended
for export and will be sold, tested, or otherwise
used in such country’’;
(3) in paragraph (1), by striking the last sen-
tence;
(4) by amending paragraph (2) to read as fol-
lows:
‘‘(2) Paragraph (1) does not apply to the export of—
‘‘(A) any device—
‘‘(i) which does not comply with an appli-
cable requirement under section 514 or 515; or
‘‘(ii) which under section 520(g) is exempt
from either such section, or
‘‘(B) any drug which does not comply with an
applicable requirement under section 505 or 512 or
section 351 of the Public Health Service Act,
unless the device or drug is in compliance with the require-
ments of paragraph (1) and if the device or drug is to
be exported to a country which is not a member of the
World Trade Organization, the person exporting it has no-
tified the Secretary of the export at least 30 days before
the export and has included in such notice the name of
the product, the country to which the product is being ex-
ported and a brief description of the medical need for such
device or drug in such country. In the case of a device
or drug for which an export notice is required under this
paragraph, the Secretary may prohibit the export of such
device or drug if the Secretary determines that the possi-
bility of the reimportation of the device or drug into the
United States presents an imminent hazard to the public
health and safety of the United States and the only means
of limiting the hazard is to prohibit the export of the de-
vice or drug.’’; and
(5) by adding the following at the end thereof:
‘‘(f) The Secretary shall not exercise jurisdiction.—
‘‘(1) over the labeling of drugs or devices in-
tended for export in order to comply with require-
ments of foreign countries’’; or
‘‘(2) over drugs or devices not subject to sub-
section (e) which are intended for export and which
are not intended for commercial sale or are intended
for investigational use only.’’.
(b) SECTION 802.—Section 802 (21 U.S.C. 382) is
repealed.
SEC. 11. REGULATION OF BIOLOGICAL PRODUCTS.
Section 351(a) of the Public Health Service Act (42
U.S.C. 262(a)) is amended by inserting ‘‘(1)(A)’’ after
‘‘(a)’’ and by striking ‘‘any virus’’ and all that appears
thereafter and inserting in lieu thereof the following: ‘‘a
biological product to which this section applies unless—
‘‘(i) such biological product has been propa-
gated, manufactured, or prepared in accordance with
good manufacturing practices;
‘‘(ii) such biological product is the subject of an
approved product license or complies with a stand-
ard established by the Secretary; and
‘‘(iii) each package of such biological product is
plainly marked with the proper name of the biologi-
cal product contained therein, the name, address,
and establishment number of the manufacturer, and
the date beyond which the contents cannot be ex-
pected to yield their specific results.
‘‘(B) The Secretary shall by regulation specify which
biological products shall be required to have a product li-
cense or shall be subject to standards established under
subparagraph (A)(ii), except that tissue, blood and blood
components and derivatives (other than blood test kits)
shall be subject to standards under paragraph (4).
‘‘(2)(A) The Secretary shall establish, by regulation,
requirements for product license applications. The Sec-
retary shall approve a product license application upon a
demonstration that there exists reasonable assurance that
the biological product which is the subject of the applica-
tion is safe and effective.
‘‘(B)(i) The Secretary shall establish, by regulation,
standards for biological products subject to such stand-
ards under paragraph (1)(B), except that tissue, blood,
and blood components or derivatives (other than blood test
kits) shall be subject to standards established under para-
graph (4). Standards shall, as appropriate, reasonably as-
sure the safety, purity, and potency of the biological prod-
uct or class of biological products subject to such stand-
ard.
‘‘(3)(A) A product license approved by the Secretary
under paragraph (2)(A) and regulations established by the
Secretary under paragraph (2)(B) may require that lots
or batches of a biological product be released only after
certification that such lots or batches have the characteris-
tics of safety, purity, and potency which the biological
product purports or is represented to possess.
‘‘(B)(i) A product license shall specify whether certifi-
cation under subparagraph (A) will be by the manufac-
turer of the biological product, by the Secretary, or by a
certified individual or independent laboratory under sec-
tion 906 of the Federal Food, Drug, and Cosmetic Act.
‘‘(ii) Certification of lots or batches by the Secretary
or independent laboratory shall be required only for a pe-
riod of not more than 6 months or until satisfactory his-
tory of consistent acceptable production has been estab-
lished, which period will not be extended unless the Sec-
retary determines in writing that continuing such certifi-
cation is required to assure the safety and efficacy of the
biological product.’’.
‘‘(iii) The Secretary may at any time, upon petition
by the manufacturer or upon the Secretary’s own initia-
tive, terminate any requirement for certification.
‘‘(4)(A) The Secretary shall by regulation establish
standards for tissue, blood, and blood components or blood
derivatives (other than blood test kits). Such standards
shall assure the safety and integrity of the tissue, blood,
and blood components or derivatives (other than blood test
kits). The Secretary shall solicit the submission of one or
more proposed standards, applicable to tissue, blood, and
blood components or derivatives (other than blood test
kits) and approved by the Secretary as appropriate for
purposes of this section, from professional and scientific
organizations. The Secretary shall publish such standards
as a notice of proposed rulemaking in accordance with
paragraph (2)(B)(ii).
‘‘(B) Tissue subject to this paragraph shall be proc-
essed in accordance with good manufacturing practices es-
tablished by the Secretary under section 501.
‘‘(C) The Secretary may use—
‘‘(i) professional and scientific organizations,
and
‘‘(ii) accrediting bodies used to assure compli-
ance with the standards of such organizations,
to assist in the implementation of subparagraph (A) and
to assure that tissue meets the requirements of subpara-
graph (B).
‘‘(D) For blood, blood products and blood compo-
nents, and vaccines which cannot be adequately character-
ized by physical or chemical methods, the Secretary shall
continue to implement the existing requirements for facili-
ties where such blood, blood products, and blood compo-
nents are drawn processed, stored, or otherwise main-
tained for distribution or in which such vaccines are man-
ufactured or propagated.
‘‘(5) The requirements of paragraph (1) do not apply
to a biological product—
‘‘(A) for which there is in effect an investiga-
tional new drug application under section 505(i) of
the Federal Food, Drug, and Cosmetic Act, or
‘‘(B) for which there is in effect under para-
graph (6) a provisional standards license.
‘‘(6)(A) Each person who proposes to begin the intro-
duction or delivery for introduction into interstate com-
merce for commercial distribution of a biological product
which will require a standards license shall, at least 30
days before making such introduction or delivery submit
to the Secretary (in such form and manner as the Sec-
retary shall by regulation prescribe) a report that in-
cludes—
‘‘(i) a description of the biological product;
‘‘(ii) a statement of reasons satisfactory to the
Secretary that the biological product will require a
standards license (and not a product license);
‘‘(iii) assurances by such person which are sat-
isfactory to the Secretary that such biological prod-
uct will be manufactured in accordance with good
manufacturing practices described in paragraph
(1)(A)(i); and
‘‘(iv) such other information as the Secretary
may by regulation require.
‘‘(B) Upon the expiration of 30 days after the receipt
by the Secretary of a report under subparagraph (A), the
biological product for which the report was submitted shall
be deemed to have a provisional standards license unless
before the expiration of such days the Secretary deter-
mines that a requirement of such subparagraph (A) has
not been met. If the Secretary determines that such a re-
quirement has not been met, the Secretary shall provide
to the person who submitted the report on which such de-
termination was made an opportunity for an informal
hearing.
‘‘(C) A provisional standards license under subpara-
graph (A) shall expire upon the issuance of a standards
license under paragraph (2).
‘‘(7) For purposes of this subsection—
‘‘(A) the term ‘tissue’ means a collection of
human cells which are similar or the intercellular
substances surrounding them, or both, which—
‘‘(i) are intended for administration to a
human being for the diagnosis, cure, mitigation,
treatment, or prevention of any disease or con-
dition;
‘‘(ii) are procured, processed, stored, or
distributed by methods to prevent the trans-
mission of infectious disease and to preserve or
enhance clinical usefulness;
‘‘(iii) may be processed to remove some of
its constituents but have not been modified
chemically;
‘‘(iv) may be combined with substances
such as excipients, fillers, or carriers that are
not devices or pharmacologically active;
‘‘(v) if subjected to expansion, manipula-
tion, or other processing (which may include
modification of physical form or structure) be-
fore being transplanted or implanted, are not
thereby substantially altered in their inherent
structural or functional characteristics; and
‘‘(vi) achieve their principal intended pur-
poses through structural or functional support
and not systemic action;
but such term does not include vascularized human
organs.
‘‘(B) the term ‘biological product to which this
section applies’ means a virus, therapeutic serum,
toxin, antitoxin, tissue, blood, component or deriva-
tive, allergenic biological product, or an other analo-
gous biological product or arsphenamine or its deriv-
ative applicable to the prevention, treatment, or cure
of diseases or conditions of human beings.’’.
SEC. 12. INITIAL REPORTING OF DEVICES.
(a) CLASS I DEVICES.—Section 510(k) (21 U.S.C.
360(k)) is amended by adding after paragraph (2) the fol-
lowing: ‘‘No person shall be required to make a report
under this subsection with respect to a class I device or
a class II device which the Secretary has designated after
notice and comment rulemaking to be exempt from such
requirement.’’.
(b) RULEMAKING.—Within 30 days of the date of the
enactment of this Act, the Secretary of Health and
Human Services shall publish a notice requesting identi-
fication of class II devices which should be placed in class
I. Upon the expiration of 30 days after the date of such
notice, the Secretary shall publish a proposal to exempt
from the notification required under section 510(k) of the
Federal Food, Drug, and Cosmetic Act the class II devices
identified in response to the notice. Within 60 days of such
publication, the Secretary shall publish a final regulation
exempting the specified class II devices from such notifica-
tion requirement. If the Secretary does not publish a final
regulation, the devices contained in the proposed regula-
tion shall be deemed exempt from such notification re-
quirement.
(c) DEVICE MODIFICATIONS.—Section 510(k) (21
U.S.C. 360(k)), as amended by subsection (a), is amended
by adding at the end the following: ‘‘A person who modi-
fies a device in such a manner that has no substantive
effect on the character, utility, or therapeutic nature of
the device shall not be required to make a report under
this subsection because of such modification and shall
maintain data or information that demonstrates that a re-
port under this subsection is not required in such person’s
good manufacturing practice document file. Such data or
information shall be available upon request to the Sec-
retary.’’.
SEC. 13. FDA RESPONSE TO G.M.P. VIOLATIONS.
Section 520(f) (21 U.S.C. 360j) is amended by add-
ing at the end the following:
‘‘(4) The Secretary may not delay the approval of a
device under a section 510(k) report because the person
who made the report is in violation of a requirement pre-
scribed under paragraph (1) unless the Secretary deter-
mines that the violation is reasonably related to such de-
vice or is related to all the operations of such person. If
the Secretary delays such approval because of such a viola-