According to the American Academy of Pediatrics, only about a quarter of all approved drugs marketed in the United States have had clinical trials performed involving pediatric patients. FDA’s January 2001 report to Congress on the pediatric exclusivity provision noted that evidence from several studies conducted since 1973 showed that between 71 and 81 percent of drugs were inadequately labeled for use in pediatric patients. According to the legislative history of FDAMA, several factors appear to have contributed to the lack of pediatric studies. Drug companies indicated that they had little incentive to perform pediatric studies on drugs they intended to market primarily to adults and that these drugs would provide little additional revenue from use in children. Companies also said they were concerned about liability and malpractice issues and the difficulty of attracting enough pediatric patients for studies because of the small number of children with a particular disease. Previous FDA efforts to address the problem of inadequate pediatric testing and drug labeling information had been unsuccessful. For example, in 1994 FDA tried to encourage sponsors to provide more pediatric information and conduct new studies. However, it did not require sponsors to conduct new pediatric studies, and pediatric use information did not substantially increase. In 1997, the Congress recognized the importance of learning more about how drugs work in children by including in FDAMA a financial incentive for pharmaceutical manufacturers and drug sponsors to conduct pediatric studies and submit the results to FDA. The pediatric exclusivity provision offered 6 months of additional marketing exclusivity for drugs tested by manufacturers and other sponsors for use in children. This provision also required FDA to develop, prioritize, and publish an annual list of approved drugs for which new pediatric information may produce health benefits in the pediatric population. FDA’s initial priority list, issued in May 1998, was developed based on recommendations from experts in pediatric research from the American Academy of Pediatrics, PhRMA, GPhA, the National Institutes of Health, the Pediatric Pharmacology Research Units Network,the U.S. Pharmacopoeia, and several others. To be included on FDA’s priority list, a drug had to meet one of the following criteria: The drug would be a significant improvement compared to marketed products labeled for use in the treatment, diagnosis, or prevention of a disease in the relevant pediatric population. The drug is widely used in the pediatric population, with at least 50,000 projected uses per year. The drug is in a class or for an indication for which additional therapeutic or diagnostic options are needed for pediatric patients. The process for obtaining the pediatric exclusivity extension usually begins when a sponsor submits a proposal to conduct pediatric studies to FDA. If FDA officials believe the studies will provide useful information, the agency issues a formal written request for sponsors to conduct the studies. FDA also issues written requests without sponsor proposals. The written request addresses, among other things, the type of studies to be performed, study design, appropriate study age groups, and clinical endpoints. The sponsor then decides whether to conduct studies requested by FDA. Once the sponsor submits the results of the studies to FDA, the agency generally has 90 days to determine whether the completed studies reported meet the terms of the written request and were conducted properly. If FDA officials determine that the sponsor’s efforts were sufficient, the 6-month marketing exclusivity extension is granted. There has been a substantial increase in pediatric drug research compared to the very limited amount of such research before enactment of FDAMA. As of April 1, 2001, FDA had issued 188 written requests covering 155 drugs already on the market and 33 new drugs not yet approved. About 73 percent of the written requests were for drugs that treat anti-inflammatory, cardiovascular, anti-viral, oncology, neurology, or endocrine diseases or conditions. A written request can ask for more than one study of a drug, and the 188 requests include 414 studies involving potentially more than 23,200 children as research subjects. Of the 414 studies requested, 33 percent were to examine drug safety and efficacy in pediatric patients, about 30 percent were to examine both a drug’s safety and its pharmacokinetics, or how it is absorbed, distributed, and eliminated from the body. Another 20 percent of the studies were to examine only a drug’s safety in pediatric patients, and about 9 percent were to study both pharmacokinetics and pharmacodynamics, or how different individuals, such as children at various stages of development, respond to a drug. Precise data on study costs is not publicly available. The estimates we were provided vary considerably. Officials at NICHD, which has conducted many pediatric drug studies, said costs vary depending on the number of children participating and type of drug being studied. They estimated that a safety and efficacy study may cost between $1 million and $7.5 million, while the cost of a pharmacokinetic study can range from $250,000 to $750,000 per age group. Limited data provided by PhRMA suggested higher study costs, ranging from under $5 million to more than $35 million. Another study indicated that, based on a survey of drug companies, the cost of pediatric studies averaged $3.87 million per written request. As of April 1, 2001, 28 drugs had been granted marketing extensions based on research conducted in accordance with FDA’s written requests. The drugs granted extensions treat a variety of diseases or conditions that afflict children. Table 1 provides some overall population information on the prevalence of diseases in pediatric patients that may be treated by some of the drugs granted market extensions. There has been some concern that exclusivity may be sought and granted primarily for drugs that generate substantial revenue. Our analysis found that sales revenue varied widely for the 155 approved drugs for which FDA has issued written requests. As shown in figure 1, while 7.7 percent of the drugs covered by written requests had sales exceeding $1 billion in 1999, 53.5 percent had sales under $120 million in 1999. Another 14.8 percent of the drugs had sales that were more than $120 million but less than $200 million. Research conducted under the pediatric exclusivity provision is providing new and useful information about whether and how drugs work in children. As of April 1, 2001, labels for 18 of the 28 drugs granted marketing extensions had been changed to incorporate findings from research conducted to obtain the extensions. Some of these label changes include new statements that the drug can be used for younger children or for a new use. Other label changes provide additional and more specific guidance regarding the effective dose or additional warnings about adverse events in children or information on related medications. In addition to making label changes, sponsors for three drugs developed new formulations that are easier to administer to children. A few examples will help illustrate the new information derived from these studies. Ibuprofen: this commonly used drug to reduce fever had no dosing information for children under 2 years of age. Studies in thousands of infants established a safe and effective dose in infants and children from 6 months to 2 years. Ranitidine: studies in neonates provided accurate dosing information for safer and more effective use of this drug in the management of reflux of stomach contents—a life-threatening event in seriously ill neonates—and the label now says the drug can be prescribed to newborns and 1-month- olds. Fluvoxamine: studies with this drug, used to treat children with obsessive compulsive disorder, indicated that the dose in adolescents may need to be as high as in adults but may need to be lower for girls ages 8 to 11 years. Etodolac: study results allowed for indication on the label that the drug can be used to treat juvenile rheumatoid arthritis in children 6 to 16 years old. Midazolam: studies with this drug, used as a sedative, led to a new oral formulation for use in infants and children. In addition, the study results showed that this drug has a high risk for an adverse event in children with congenital heart disease and pulmonary hypertension. Experts agree that, since FDAMA, there also has been significant growth in the infrastructure necessary to conduct pediatric studies. For example, NICHD has expanded the number of PPRUs from 7 to 13. These units, located in children’s hospitals and academic research centers specializing in pediatric research, have conducted an increasing number of pediatric drug studies. Prior to FDAMA, the PPRU Network had conducted 17 studies in collaboration with drug sponsors. By 2000, the PPRUs were conducting 73 pediatric drug studies in collaboration with drug sponsors. The pharmaceutical industry also has increased its capacity to conduct pediatric studies since enactment of FDAMA. According to a recent survey, contract research organizations, which conduct pediatric trials for drug sponsors, are working on over 100 pediatric studies involving 7,000 patients. In addition, two of the largest contract research groups have established pediatric-specific research ventures, which collectively can call on the services of 500 doctors with pediatric training and nearly 2000 investigators. While the new information generated by the increasing number of pediatric studies has resulted in a variety of benefits, the cost of granting additional market exclusivity can be very large. The cost to the public of providing the brand named drugs with an additional 6 months of market exclusivity presents a delay in consumer access to lower-cost generic drugs. Delaying access to lower cost generic drugs increases health care spending overall and may be particularly burdensome for those without prescription drug coverage that must pay for the drugs out-of-pocket. FDA estimates that the delay in availability of generic drugs could increase national drug spending by about one half of one percent, or on average about $695 million per year over a 20-year period. The Agency did not attempt to develop a quantitative estimate of cost savings from improved health outcomes at this time. While the pediatric exclusivity provision is working better than previous efforts to stimulate pediatric drug research, two important challenges remain. First, the law does not ensure that research results are incorporated into labels in a timely manner for drugs that are already on the market once marketing extensions have been granted. Second, the law provides no incentive to conduct pediatric research on drugs for which patents and marketing exclusivity have expired.