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    "ocrText": "Withdrawal/Redaction Sheet\nClinton Library\nDOCUMENT NO.\nSUBJECT/TITLE\nDATE\nRESTRICTION\nAND TYPE\n001. note\nre: FDA Reform [partial] (1 page)\n07/12/1996\nb(6)\nCOLLECTION:\nClinton Presidential Records\nDomestic Policy Council\nElizabeth Drye\nOA/Box Number: 10452\nFOLDER TITLE:\nFDA Reform 1996 [2]\n2014-0046-S\nrc1402\nRESTRICTION CODES\nPresidential Records Act - - |44 U.S.C. 2204(a)|\nFreedom of Information Act - 15 U.S.C. 552(b)]\nP1 National Security Classified Information [(a)(1) of the PRA]\nb(1) National security classified information |(b)(1) of the FOIA]\nP2 Relating to the appointment to Federal office |(a)(2) of the PRA]\nb(2) Release would disclose internal personnel rules and practices of\nP3 Release would violate a Federal statute [(a)(3) of the PRAJ\nan agency [(b)(2) of the FOIA]\nP4 Release would disclose trade secrets or confidential commercial or\nb(3) Release would violate a Federal statute [(b)(3) of the FOIA]\nfinancial information [(a)(4) of the PRA]\nb(4) Release would disclose trade secrets or confidential or financial\nP5 Release would disclose confidential advice between the President\ninformation [(b)(4) of the FOIA]\nand his advisors, or between such advisors [a)(5) of the PRA|\nb(6) Release would constitute a clearly unwarranted invasion of\nP6 Release would constitute a clearly unwarranted invasion of\npersonal privacy |(b)(6) of the FOIA]\npersonal privacy [(a)(6) of the PRA]\nb(7) Release would disclose information compiled for law enforcement\npurposes |(b)(7) of the FOIA]\nC. Closed in accordance with restrictions contained in donor's deed\nb(8) Release would disclose information concerning the regulation of\nof gift.\nfinancial institutions [(b)(8) of the FOIA]\nPRM. Personal record misfile defined in accordance with 44 U.S.C.\nb(9) Release would disclose geological or geophysical information\n2201(3).\nconcerning wells |(b)(9) of the FOIA]\nRR. Document will be reviewed upon request.\nCreation of Food Safety Panel Criticized\nhttp://www.nytimes.com/yr/mo/day/politics/farm-bill-meat-exclusive.html\nPage 1\nForget bookmarks.\nThe New York Times\nBuild your library.\nCLICK HERE TO CREATE\nYOUR CUSTOM START PAGE.\nHome\nSections\nContents\nSearch\nForums\nHelp\nApril 1, 1996\nCreation of Food Safety Panel Criticized\nRelated Articles\nPolitical Points: A Guide to Web Resources\nPolitics Index\nBy MARIAN BURROS\nA\nlittle-noted amendment to the farm bill approved by the Congress last week is causing an uproar among\nconsumer groups and even some producers of meat and poultry. But the framers of the amendment,\nRepublican staff members of the House Agriculture Committee, say they cannot understand what all the\nfuror is about.\nThe amendment creates a Safe Meat and Poultry Inspection Panel, with broad powers to review the decisions by the\nDepartment of Agriculture's Food Safety and Inspection Service on such matters as inspection procedures, food\nsafety standards and practices in meat and poultry plants as well as work rules and labor relations.\nBackers say the review panel would improve food safety by requiring more scientists to be involved in the\ndecisions. Opponents say the panel's mandate will be too comprehensive. \"We would grind to a halt,\" said Mike\nTaylor, acting under secretary for food safety and inspection services. \"An incredible array of almost all the\ndecisions we make would be put through this committee.\"\nThe creation of the panel comes at a time when the Agriculture Department is about to replace the current system\nof visual inspections of meat and poultry with a more scientific approach that includes microbial testing and\nperformance standards.\nWhile the industry does not agree with all provisions of the new system, called Hazard Analysis Critical Control\nPoint, most in the industry are eager for it to begin.\nFaced with an avalanche of reports of tainted meat and poultry that have caused thousands of cases of illness and\nhundreds of deaths each year, the industry sees the new system as a way to improve the public's perception of its\nproducts. The reports of the spread of what is known as mad cow disease in Britain have heightened their interest.\nCarol Tucker Foreman, assistant secretary of agriculture for food and consumer services in the Carter\nadministration who now works as a consultant on food issues, said the amendment was being treated as though it\nwere an honest contribution to the safety process, but \"it is not.\"\n\"It's intention,\" Mrs. Foreman said, \"is to stop the implementation of performance standards and microbial testing.\"\nThe department's scientific methods seem to be under attack, she said, adding, \"Some members of Congress didn't\nlike USDA's science about harmful bacteria, so they are going to set up a panel to try to get the science they do\nlike.\"\nWilliam O'Conner, the policy director of the House Agriculture Committee, which added the amendment, said the\npanel was \"not designed to slow down the process\" and was only advisory.\nBesides, O'Conner said, \"the HACCP rule is purported to be science-based, but it seemed clear that some of the\nregulatory decisions have no scientific validity. The regulations should never have gotten to this stage.\"\nCreation of Food Safety Panel Criticized\nhttp://www.nytimes.com/yr/mo/day/politics/farm-bill-meat-exclusive.html\nPage 2\nO'Conner said the review panel was necessary because the inspection service devised its new system without\nconsulting its existing advisory panel, the National Advisory Committee for Microbiological Criteria for Meat and\nPoultry.\nTaylor said, however, that was not true and provided documentation of the committee's meetings. \"HACCP is based\non the recommendations of that committee,\" he said.\nAt the largest producer of beef and pork in the world, IBP of Dakota City, Neb., officials say they have serious\nconcerns about the review panel.\n\"It adds another layer of bureaucracy and potentially would delay innovations aimed at enhancing food safety\nregulations,\" said Gary Mickelson, an IBP spokesman.\nThe amendment would require the secretary of agriculture to submit formal regulations and informal directives to\nthe review panel and respond in writing in the Federal Register to any panel report. The secretary would then have\nto allow an additional 90 days for public comment. If the secretary ignored a panel report, Mrs. Foreman said, the\nAgriculture Department could face a reduction in appropriations.\nThis system would make speedy decisions impossible, Taylor said. It would also hamper actions like the agency's\nrecent directive to the beef industry for increased surveillance of cattle before slaughter because of an increase in\nwhat is known as mad cow disease in Britain and concern about a possible human form of the disease.\n\"We're dealing with an emergency situation,\" Taylor said. \"With the panel in place, instead of being able to issue\ndirections we'd be subject to the panel review process.\"\nUnlike outside advisory panels at other agencies that are convened at the discretion of the agency head, the\nAgriculture review panel would decide which Food Safety and Inspection Service decisions it wanted to examine.\nIn addition, it could meet in secret.\n\"Outside scientists can be quite useful,\" Taylor said, \"but I don't know of any other advisory panel that decides how\na department does business.\"\nThe amendment would also require the Agriculture Department to pay the travel and per diem costs for the\nseven-member panel out of the existing budget at a time when the inspection service is seeking additional money to\nrun its food safety program. At least five of the panel members would have to be food, meat and poultry scientists.\n\"Why would you create a panel for a human health program and require that a majority of them be experts on\nanimal health?\" Mrs. Foreman asked.\nTaylor said: \"The provisions of the amendment are so poorly thought through that it has given food, meat and\npoultry scientists a charge that is so broad it is beyond their expertise. It is severe overkill.\"\nAmong the decisions the panel could examine under the amendment are work rules and labor relations, but\nO'Conner said the panel would not be involved in such work rules as whether plant workers could have \"two or\nthree bathroom visits.\"\nThe amendment was added to the farm bill at the House-Senate conference, an occasional way of passing\ncontroversial legislation without attracting attention or opposition.\n\"An ordinary bill becomes law by holding hearings,\" Mrs. Foreman said, \"but there were no hearings. Now it is a\ntypical congressional mess because they decided they wanted to slip something in under the cover of night. We're\ngoing to end up in court for years.\"\nO'Conner disagreed. \"I don't consider that much of a criticism,\" he said.\nPresident Clinton is expected to sign the bill, but a senior administrative official said: \"The administration has\nserious concerns about the effect the amendment would have in delaying modernization of food safety inspection.\"\nCritic Calls Anti-Smoking Drive Off Course\nhttp://www.nytimes.com/yr/mo/dav/news/national/teen-smokers.html\nPage 1\nThe New York Times\nHome\nSections\nContents\nSearch\nForums\nHelp\nApril 1, 1996\nCritic Calls Anti-Smoking Drive Off Course\nBy BARNABY J. FEDER\nc\nHICAGO -- Everyone from President Clinton to tobacco companies is preaching these days that teen-agers\nshould be kept from smoking, and that has some anti-tobacco advocates worried.\n\"The anti-tobacco movement has careened off on this narrow path because they know it's noncontroversial,\"\nsaid Stanton Glantz, a cardiology professor at the University of California in San Francisco. \"But it's probably\ncounterproductive. A kid-centered program is doomed to fail.\"\nGlantz fears the focus on trying to stop the 3 million teen-agers under the age of 18 who become smokers each year is\ndiverting too much attention from the nation's 40 million adult smokers. He argues that any letup in the pressure on\nadult smokers to quit or at least cut back will end up reinforcing the industry's message that smoking is a pleasure to\nbe enjoyed by adults.\nThe result: naturally rebellious teen-agers will be seduced into becoming the tobacco companies' next generation of\ncustomers at the same time the industry is claiming public relations credit for saying \"kids shouldn't smoke.\"\nGlantz's views, which were spelled out in a recent editorial published by the American Journal of Public Health,\nangered some anti-tobacco advocates.\nMany were even more upset when he attacked plans announced last month by the Robert Wood Johnson Foundation\nand other groups to finance a new clearinghouse called the National Center for Tobacco-Free Kids, calling it \"a total\nwaste of money.\"\nThe bigger danger as they see it is that Glantz is sowing doubt and sapping momentum among groups that need all\nthe unity they can get to battle the $45 billion tobacco industry.\n\"You don't need to have someone saying you should focus on something else just when you are about to achieve some\nof your goals,\" said Bill Godshall, who is head of SmokeFree Pennsylvania, in Pittsburgh, and a firm believer that a\ndirect attack on teen-age access to cigarettes could have a big impact.\nThe squabbling among the anti-smoking forces has been largely confined to private conversations and E-mail on\nScarcnet, an electronic bulletin board used by anti-tobacco groups.\nBut it underscores the diversity among anti-tobacco groups and experts that often undercuts their efforts to counter the\nmoney and lobbying skills of the tobacco companies.\nThe divisiveness showed up this year in Kentucky when the state passed a law aimed at reducing teen-age smoking,\nwith the support of the tobacco industry, retailers and tobacco growers. The law included penalties for teen-age\nsmokers and money for inspections of retail establishments.\nThe bill was endorsed by the Kentucky Medical Association on the grounds, as an association spokesman put it, \"It\nwas the best you could expect from a tobacco state.\"\nOther members of the state's coalition of anti-tobacco groups were furious at the Kentucky Medical Association. They\nthought group's endorsement undercut their chances, however remote, of forcing the Legislature to turn out a stronger\nlaw, such as one that would ban cigarette vending machines.\nCritic Calls Anti-Smoking Drive Off Course\nhttp://www.nytimes.com/yr/mo/dav/news/national/teen-smokers.html\nPage 2\n\"The argument over the focus on kids is fairly new but there is always a split of one kind or another,\" said Phillip\nWilbur, a spokesman for the Advocacy Institute, a Washington lobbying group.\nThe most common disputes, like those in Kentucky, are over tactics and which changes to emphasize. But tobacco\ncritics are also at odds over fundamental goals.\nAlthough many health experts see cigarettes as socially tolerable for adults if smoking is more strictly regulated, like\nalcohol, others active in the anti-tobacco effort want total prohibition.\n\"There are some real zealots,\" said Dr. Kenneth Warner of the Michigan School of Public Health, who favors\ntoleration. \"They're a minority but they are vocal and visible.\"\nThe tobacco companies, which typically refer to critics as the \"anti-tobacco industry,\" maintain that prohibition is the\ngoal of all of their important critics, whether stated openly or not.\nWalker Merryman, the chief spokesman for the Tobacco Institute, the Washington-based trade group, said, \"If\nsomeone in the industry came to me and said we have to open a dialogue with these people, I don't know who I'd\nspeak with.\"\nThe toughest question for tobacco critics may be one that is rarely openly discussed: Should they encourage tobacco\ncompanies to produce and market safer cigarettes? Some health experts argue that such products would be beneficial\nto society because 46 million Americans are addicted smokers. Others say that such products would make it harder to\ncombat smoking.\nSo far, the tobacco critics have been spared an all-out civil war because no company has successfully introduced an\nobviously safer product. The closest test came in 1988 when R.J. Reynolds Tobacco Co. tried to market a smokeless\ncigarette called Premier.\nThe company and most tobacco critics presumed it was healthier because of low-tar levels and virtually no secondhand\nexposure to smoke, although Reynolds refrained from making any explicit health claims.\nA few industry critics expressed interest in the potential benefits, but they were drowned out by attacks on the\ncompany. As it turned out, though, there was little chance for debate because Premier was quickly pulled from the\nmarket after being rejected by smokers.\n\"There was only one politically correct side in the tobacco-control movement when Premier came out,\" Warner said.\n\"I don't think that would be true now.\"\nFor now, there is plenty to disagree over concerning teen-age smoking, an issue ushered onto center stage by\nCongress' passage in 1992 of the Synar Amendment. That measure, named after former Rep. Mike Synar, D-Okla.,\nrequired states to clamp down on teen-age access to cigarettes or lose federal grants for programs to fight drugs.\nFinal regulations spelling out how states should prove they were complying were published in February. By then,\nhowever, the spotlight had shifted to the Food and Drug Administration's proposal to attack teen-age smoking with\nnationwide restrictions on the sale, distribution and marketing of cigarettes.\nGlantz and some supporters argue that preoccupation with the FDA rule and other so-called youth-access measures\nhas made it easier for the industry to divert broad, aggressive anti-tobacco advertising campaigns in states like\nCalifornia and Massachusetts toward less effective youth-oriented advertising.\nGlantz says the switch is at least partly to blame for a slowing in the decline of adult smoking and a rise in teen-age\nsmoking in California.\nThe same preoccupation, he said, diverted the attention of most tobacco control groups from the Occupational Safety\nand Health Administration's proposal for a nationwide ban on smoking in public workplaces. Restrictions exist in\nmany municipalities, including New York City. They are cited by Glantz as a means of reducing the number of\nsmoking workers by 25 percent (others say evidence of the impact of these measures is mixed) and cutting\nsecond-hand exposure.\nThe outlook is now bleak for the OSHA proposal. While most tobacco-control groups kept their attention on the Food\nCritic Calls Anti-Smoking Drive Off Course\nhttp://www.nytimes.com/yr/mo/day/news/national/teen-smokers.html\nPage 3\nand Drug Administration, the tobacco industry managed to get the ban proposed by OSHA merged into a far broader\ngroup of proposed regulations, which are now stalled by widespread criticism.\n\"When you reframe the goal from a smoke-free society to not wanting kids to smoke, it really narrows what you can\ndo about issues like second-hand smoke,\" said Robin Hobart, associate director of Americans for Non-Smoker Rights\nin Berkeley, Calif.\nBut others say the focus on youth can help draw attention to the whole range of tobacco control issues.\n\"One of the ways you get adults concerned is by focusing on kids,\" said Dr. David Burns of the University of\nCalifornia at San Diego. \"There's a lot more people involved in smoking control in 1996 than in 1993 because we\nhave a theme that a lot of people can identify with.\"\nHome I Sections I Contents I Search I Forums I Help\nCopyright 1996 The New York Times Company\nFDA Reform 3/22/96- -\nFOA D\n-Wed- night mer w/Hill staff - they ro Set\nJerry jemb\nkleps Manda\nbetter understanding w/staff,\nPut in what FDA's proposed fix would be.\nDave\n- Gave them marhed upbill. -\nBill\nthis Pracy sally Jemas\nKassebann - Mikersh, Dodd, Welstone, Kameds -\nagreed to meet with\n- to have fursher discussors about Siparmsan\nfix to her bill\nV\nDevices - # of was - comparies can mahe\nchanges w/out coming to us\n\" Dence changes which affect\n2\nofficace std. - # drugs of ways. clerice\nDevice area- change defn. of stel\n1/3 { duries never come to FDA\n98% go Through 510 (k) - \"as good as\n3\nDeadlines w/out resources - how That currerfends\nw/ PDUFA\nInduary will 50g more if Devoccements are\nunified\nMembers are may. Mondey\nEXECUTIVE OFFICE OF THE PRESIDENT\n19-Mar-1996 06:38pm\nTO:\nElizabeth E. Drye\nFROM:\nJeremy D. Benami\nDomestic Policy Council\nSUBJECT: Schall letter\nThoughts on the Schall response:\nDear Ellen:\nThank you SO much for your letter and for your offer to pull\ntogether some leaders of non-profits to meet with the President. I\nam sorry it has taken me a little while to get back to you.\nI am very interested in continuing the dialogue on how best to\ninvolve the President and the Administration in the consideration\nof the role of non-profits in these turbulent times. There are\nsome discussions going on among White House staff on this very\ntopic, and I will certainly keep your offer in mind as these\nproceed. Also, if we decide to sponsor a meeting here in\nWashington, I may be back in touch with you for ideas regarding\npossible attendees and the agenda.\nOnce again, I enjoyed my visit in New York immensely and I\nappreciate your offer of assistance.\nSincerely,\nFile I=1dpc\\data\\ Schall. Itr\nIn early January, the local Million\nDenver Is Proving Fertile Ground\nMan March organizing committee\ndecided to hold the black men's con-\nference at the Macedonia Baptist\nFor Theme of Million Man March\nChurch. Four firebombings in the\nprevious two weeks served to sweil\nthe crowd when the conference was\nHaynor may ideas be some for\nAI\nheld on Jan. 27.\nBy JAMES BROOKE\n\"We expected only. 400 people,\"\nDENVER, March 24 - After a 3.\n\"Our youths are killing each oth-\nrecalled Mr. Simmons, executive di-\nyear-old boy was killed in a drive-by\ner,\" Mr. Muhammad told a rapt au-\nrector of the organizing committee.\nshooting in December, 100 black\ndience at a predominantly black high\n\"We had 1,100 people Inside - and\nmen fanned out through a black\nschool here last month. \"You can't\n200 people trying to get in.\"\nneighborhood here. They knocked on\nblame that on the white man. You\nMr. Simmons, a former mayoral\ndoors until leads resulted in three\nbetter take responsibility, black\naide for gang liaison, recalled the\narrests several days later.\nman.\"\nangry words Inside the packed\nAfter rival gangs firebombed four\nMr. Rogers sounded a similar\nchurch. \"We gave them an edict,\" he\nhouses in the same northeast Denver\ntheme in a recent interview. \"We\nsaid, referring to the gangs. \"We will\nhere\nneighborhood in January, more than\nhave to go forward to a basic set of\nhelp you get a job, but our babies'\n1,000 men turned out for a five-hour\nvalues: hard work, family responsi-\nlives are not negotiable.\"\nprotest rally, the All Black Men Con-\nbility, social responsibility,' he said.\nEveryone agrees on what hap-\nference. The firebombings stopped.\n\"There is a movement taking place\npened afterward. Gang-related fire-\nIt has been nearly six months\nin northeast Denver that says, 'It's\nbombings stopped in Denver's black\nsince the Million Man March, the\ntime to wake up.\nneighborhoods.\ngathering of hundreds of thousands\nIn Denver, there is no white politi-\nof black men in October in Washing-\ncal power structure to blame. In-\nNot everyone agrees on why.\n\"We had a task force out - the\nton organized by the Nation of Islam\nstead, there is a nascent black busi-\ngangs felt the pressure on the\nand its leader, Louis Farrakhan. Far\nness class to emulate.\nstreet,\" Police Chief David Michaud\nfrom fading away, the march's mes-\nAlthough blacks account for only 5\nsaid in an interview. The anti-arson\nsages of moral renewal and personal\npercent of the two million people who\ntask force conducted hundreds of in-\nresponsibility have found particular-\nlive in the Denver metropolitan area,\nterviews and arrested two teen-\nly fertile ground among the 100,000\nthe city's Mayor, Wellington E.\nagers. They were charged with the\nblacks in the Denver area, the larg-\nWebb, is black, as is the president of\nJan. 25 bombing, a fire that caused\nest such community in the Rocky\nMountain West. Denver's black\nthe school board, Aaron Gray.\nHardly ghettos, Denver's black\n$25,000 in damage, leaving a family\nneighborhoods seem changed by the\nneighborhoods include low-rise hous-\nwith five children homeless.\nevent, in ways tangible and intangi-\nble.\ning projects, working-class bunga-\nCommunity leaders argued that\nlows and suburban ranch homes.\npublic pressure had curbed the\n\"Men are getting more involved\non their blocks; traditionally, it was\nBolstering a black middle class,\ngangs.\nthere are about 4,000 black-owned\nMr. Simmons, who received tele-\nonly the women,\" said Alvertis Sim-\nbusinesses in greater Denver.\nphoned death threats from the gangs\nmons, who is organizing a local fol-\n\"Denver has so many good things\nbefore the conference, said, \"I want\nlow-up rally to the Million Man\ngoing for it - we've elected a black\nthem to have in the back of their\nMarch to be held here next month.\nMayor and re-elected a black May-\nminds, 'If I firebomb that house the\nRecalling his efforts to set up anti-\ncrime groups three years ago, he\nor,\" said the Rev. James Peters,\nneighbors will see me and put me\nsaid: \"Before, there were hardly\npastor of the New Hope Baptist\naway for 30 years.'\nany men in the neighborhood watch\nChurch. \"The gangs are not repre-\ngroups. Last week, I heard of a black\nsentative of black people in Denver.\nNext month, Denver's rally for\nYou've had retired people from the\n\"people of color\" will keep pressure\nman setting up one on his block.\"\nThe march has inspired a similar\nmilitary, working two jobs and buy-\non the gangs, predicted Chet Whye\ning nice homes here.\"\nJr., the local director of the National\nlevel of activity in other black neigh-\nBut, as the 63-year-old pastor\nRainbow Coalition, which is helping\nborhoods around the nation. From\nspoke one recent Saturday, police\noragnize the rally.\nNew York to Los Angeles, black men\nofficers stationed in his vestibule\n\"There is a different attitude now\nare becoming more involved.\nhanded out basketball tickets to men\nthat people are coming out,\" said Mr.\nAt Northeast High School in Kan-\nwho turned in handguns, no questions\nWhye, who moved here from Balti-\nsas City, Mo., for example, several\nasked.\nmore 10 years ago. \"The atmosphere\ndozen are volunteering as tutors,\n\"Denver's like a comfort zone,\"\nhas sparked some people to make\ncounselors and cafeteria monitors in\nwarned Mr. Muhammad, who was\nreal changes in their lives.\"\na program to provide a positive male\nsent here last year from Los Angeles\nby Mr. Farrakhan. \"A lot of black\nimage for teen-agers. In Chicago, a\nsimilar mentor program has attract-\npeople, and a lot of white people,\ncome here to get away from urban\ned about 100 black men, many of\nproblems.\"\nwhom took part in the Washington\nBut he noted that the Crips and the\nmarch in October. And in Detroit\nBloods, two national street gangs,\nand Los Angeles, agencies that help\nhad recruited here and warned that\nTHE NEW YORK TIMES\n\"Denver could end up like L.A.\"\nContinued on Page A12. Column 1\nTwo-thirds of the area's homicides\nMONDAY, MARCH 25, 1996\nhave occurred in Denver's urban\nContinued from Page Al\ncore even though it has only a fifth of\nthe greater metropolitan area's pop-\nin the adoption of black children are\nulation. But the surge in youth vio-\nreporting a surge of interest.\nlence was driven home this winter\nAbout 350 communities now have\nwhen the Denver Fire Department\nMillion Man March organizing com-\nannounced that there were 51 fire-\nmittees, said Benjamin F. Chavis Jr.,\nbombings in the city in 1995, up from\nnational director of the Million Man\n39 the previous year.\nMarch Organizing Committee, which\nOf the firebombings, 13 are be-\nis based in Washington.\nlieved to be gang-related. Arrests\nIn Atlanta, he said, march organ-\nwere made in only one of the 13\nizers have registered 28,000 people to\ncases. More than two-thirds of the\nvote and have directed a campaign\nfirebombings occurred in the last six\nthat increased deposits in black-\nmonths of 1995.\nowned banks by $2 million, Mr. Cha-\n\"Getting leads from the communi-\nvis said in a telephone interview\nty is like pulling teeth,\" Lieut. Joe\nHe said Denver was \"typical of\nSarconi, chief of the department's\nwhat is happening in numerous\nArson Bureau, said in an interview.\nareas around the country.\"\n\"The community is terribly intimi-\nIn political discourse here, there\ndated by these gang members.\"\nhas been an overwhelming shift to\nAlthough no one has been killed in\nthe march's themes. Prominent\nthe firebombings, Lieutenant Sar-\nblacks as diverse as Jamal Muham-\nconi said that was only a matter of\nmad, a local Nation of Islam minis-\nluck. \"These are more indiscrimi-\nter, and Joe Rogers, a Republican\nnate than drive-by shootings,\" he\nlawyer who became the first black to\nsaid. \"The potential to kill groups of\nrun for Congress in Colorado, both\npeople is greater.\"\nemphasize responsibility.\n\"The bodies were often slashed\nFrom One Serbian Militia Chief,\nBut in a move that probably meant\nwith knife marks and were black and\ndeath for Mr. Obradovic, he was re-\nblue,\" he said. \"The young women\nleased in a prisoner exchange. He\nA Trail of Plunder and Slaughter\nwere wrapped in blankets that were\nhas since disappeared.\ntied at each end. These female\nMr. Lukic, witnesses said, began to\ndrive his captives to the center of the\ncorpses were always naked. We bur-\nBy CHRIS HEDGES\nAI\nbridge. Women and men said they\nled several children, including two\nhad turned their heads as Mr. Lukic\nboys 18 months old. We found one\nVISEGRAD, Bosnia and Herzego-\nof the 14,500 Muslims who lived in\nand his men taunted their victims,\nman crucified to the back of a door.\nvina, March 21 - For the thousands\nVisegrad before the war, 3,000 are\nwho were made to stand on the walls\nOnce we picked up a garbage bag\nof Muslims who fled from this town\nnow missing or dead. The others are\nof the bridge, before pushing them\nfilled with 12 human heads.\"\nin eastern Bosnia, and for the Serbs\nscattered around Bosnia, many liv-\ninto the water and opening fire with\nBy the autumn, with Visegrad\nwho remained, the war has bound\ning in poverty in overcrowded\nnearly emptied of Muslims, the kill-\nautomatic weapons.\nthis generation and the next to a\nrooms. Most shudder when they\nMuslims in Visegrad were desper-\nings subsided but did not end.\nSerbian militia leader named Milan\nspeak of this bridge. And even the\nate to leave. But the city officials\nThose who survived the Serbian\nLukic.\nSerbs in the town speak of what\nrefused to give them papers to leave\ncapture In July 1995 of the United\nWitnesses and survivors say Mr.\nuntil they had stripped them of their\nNations \"safe areas\" of Srebrenica\nLukic, 29, killed scores of Muslims in\nhappened in hushed and enigmatic\nthis region from 1992 to 1995. He has\nsentences.\nproperty and wealth.\nand Zepa say they saw Mr. Lukic\nnot been indicted by the United Na-\n\"I read again Ivo Andric's novel\nOn June 7. 1992, Hasan Ajanovic\nwith the Bosnian Serb troops. Mr.\nwas picked up with five friends and\nLukic, they said, took away 65 Vise-\ntions' war crimes tribunal in The\nduring the war,\" said Boshko Polic,\ndriven to the river by Mr. Lukic and\ngrad natives who had moved to the\nHague, and the Serbs in Visegrad\n68, the retired principle of the Ivo\nAndric High School, now taken over\ntwo other men, including Mr. Vasilje-\nUnited Nations \"protected\" en-\nsay they do not know his where-\nabouts.\nby Serbian families displaced from\nvic, the former waiter. One of the\nclaves.\nSarajevo. \"I would look up from the\nvictims, Meho Djafic, had worked for\nBeyond Visegrad, his name and\npages and see what he was describ-\n20 years in the Panos restaurant with\nstory are largely unknown. But de-\ning around me.\"\nMr. Vasiljevic.\nCapture, Killing,\ntailed accounts collected over the\nlast two weeks from witnesses,\nIn April 1992, when the conflict\n\"Lukic told us to wade out into the\nbetween the Bosnian Serbs and Mus-\nwater,\" he said, Interviewed by tele-\nThen a Coca-Cola\nmany of them now dispersed around\nBosnia, provide a picture of slaugh-\nlims began, Mr. Lukic returned from\nphone from a Western European\nSerbia to his hometown. He gathered\ncountry that he asked not be Identi-\nJasmin Kulovac, a young Muslim\nter, pillage and abuse condoned by\ntogether a group of men, including\nfied. \"I did not hear the first shot, 1\nfighter from Zepa who now lives in\nthe local authorities and Serbian\nsuspect because Lukic's gun had a\nSarajevo, tried to escape from Zepa\ncommanders from Belgrade.\nhis brother Milos, his cousin Sredoje\nsilencer. But I heard the screams\nthrough the woods toward Montene-\nMr. Lukic (pronounced LOO-kich)\nand a waiter, Mitar Vasiljevic. Mr.\nis emblematic of dozens of Serbian\nLukic, who often went barefoot,\nand then the other shots. Meho's\ngro after the enclave was captured\nmilitia leaders who rose to promi-\nnamed the group the Wolves. He set\nbody fell on top of me. I lay with my\nin July. But he was arrested with\nnence in the war in Bosnia, who used\nabout pillaging and looting Muslim\nface in the sand until night. I swam\neight companions on Aug. 4 by the\nhomes, witnesses said.\nacross the river and escaped. The\nSerbian police along the border near\nthe call for an ethnically pure Serbi-\nThe Uzice Corps, the Yugoslav\nwater stank of death.\"\nZemlica.\nan state to drive tens of thousands of\nArmy unit that moved into Visegrad\nKillings were occurring each day.\nThe Serbs drove the men to Vise-\nMuslim families from their homes\ngrad and turned them over to Mr.\nand eventually turned their weapons\nOn the afternoon of July 19, 1992,\nLukic. Mr. Kulovac said he had seen\nand kill thousands of others.\nover to the Bosnian Serbs, did noth-\nMilos Lukic kicked down the door\none companion gunned down along\nThe legacy he and others left of\ning to intervene, survivors said.\nwhere Hasena Muharemovic lived\nthe banks of the Drina and heard\nhatred, loss and pain - is something\nThe plunder quickly turned to kill-\nwith her sister, mother, invalid fa-\nshots that he suspects indicated the\nno peace agreement seems likely to\ning. On May 18 Mr. Lukic burst into\nther and two small girls, Mrs. Mu-\nDzemo Zukic's home and shot his\nkilling of the others.\nerase. It helps explain why Muslims,\nharemovic said. Her husband had\n\"Lukic took me to the middle of\nCroats and Serbs refuse to return to\nwife, Bakha, in the back, according to\nbeen abducted and had disappeared\nVisegrad to have a Coke afterward,\"\nhomes controlled by other ethnic\nneighbors who saw the shooting. He\ndrove the terrified husband away in\ntwo weeks earlier. She swept up Ner-\nhe said. \"As we sat in the cafe, the\ngroups, as called for in the peace\nmina, 6, and her older girl and hid.\nagreement reached last year in Day-\nthe family car, a red Volkswagen\nother Serbs spat at me. He walked\nPassat. Mr. Zukic was never seen\naround the town like a god.\"\nton, Ohio. And It fuels the yearning\nfor vengeance that could in time\nagain. But the car became a harbin-\nMrs. Muharemovic, who lives in a\nunleash another conflict.\nger of death.\nMother and Sister\ntiny Sarajevo apartment with her\n\"The sight of the Passat sent ter-\ndaughters, is gaunt and nervous.\n\"Every child from Visegrad, even\nror into our hearts,\" said Hajdra\nAre Shot on Bridge\n\"I do not sleep much,\" she said. \"I\nthose too young to remember, knows\nthe name Milan Lukic,\" said Meh-\nKarahodsic, whose husband was tak-\nBut her mother, Ramiza, and her\nam plagued by the same dream. My\nmet Prtkovic, the leader of the dis-\nen away by Mr. Lukic and who now\nsister, Asima, were driven to the\nroom is filled with water. 1 am fight-\nplaced Muslims from Visegrad who\nlives in Gorazde. \"We all prayed that\ncenter of the bridge. Mrs. Muhare-\ning to get to the surface. I see the\nnow lives in the isolated Muslim\nIt would not stop in front of our\nmovic crept from her hiding place\nbodies of my mother and my sister\nenclave of Gorazde. \"Our communi-\nhomes.\"\nand saw her mother and sister sit-\nswirling past me in the current. I\nty will never forget. We will never\nSurvivors said the killings quickly\nting astride the wall.\nburst to the surface.\"\nallow our children to forget.\"\nbecame frenzied and common. On\n\"Milan Lukic and his brother shot\nHer voice went low and hoarse.\nIn Visegrad there is a graceful\none occasion, witnesses said, Mr. Lu-\nthem in the stomach,\" she said.\n\"I can always see It above me,\"\n400-year-old bridge, hewn of large\n\"When they fell in the water, the men\nshe said. \"The bridge. The bridge.\nkic tied a man with a rope to his car\noff-white stones, that spans the em-\nand dragged him through the streets\nleaned over and laughed.\"\nThe bridge.\"\nerald-green waters of the Drina Riv-\nuntil he died.\nThat night she huddled in an aban-\ner The Nobel laureate Ivo Andric\nThey said that on at least two\ndoned house with her daughters. At\ncentered his novel 'The Bridge on\noccasions, Mr. Lukic herded large\ndawn she went to see her father.\ngroups of Muslims into houses and\n\"My father told me to take the\nContinued on Page A8, Column 1\nset the buildings on fire. Zahra Tur-\ngirls and run away, that if we stayed\njacanin, her face and arms badly\nwe would all be killed,\" she said. \"I\nContinued from Page Al\nmarred by the flames, escaped from\ncannot go, he said. I will stay until\none burning house on June 27 and\nthey come for me. \"Nermina,\" he said\nTHE NEW YORK TIMES\nthe Drina\" around the purnice struc-\nraced screaming through the streets.\nto my daughter, 'come kiss your\nture, which he could see from his\nTownspeople said she was the only\ngrandfather goodbye for the last\nMONDAY, MARCH 25, 1996\nwindow as a boy.\nsurvivor of 71 people inside. She now\ntime.' Then we fled.\"\nThe book chronicles, over 350\nlives in France.\nThe mother and two girls were\nyears, the surbulent and often violent\n\"We watched all these things,\"\npicked up by Serbs and taken for two\nhistory of Visegrad and Bosnia. And\nsaid Fadila Mujakic, 46, who now\nmonths to a house with six other\nas the novel points out, the bridge has\nlives in Gorazde. \"But when we saw\nserved as a kind of public theater in\npoor Zahra yelling in terror and pain,\nwomen, Mrs. Muharemovic said. But\ntimes of war and upheaval. Brigands\nwe knew Visegrad had descended\nshe would not talk about the experi-\ninto some kind of hell. I gathered my\nence.\nand criminals were once impaled\nfamily, and we snuck out that same\nIn September the mother and her\nand executed on its stone flanks. Mr.\nnight.\"\ndaughters where sent to work on a\nAndric wrote in the book, \"In all\nfarm with dozens of other captives.\ntales about personal, family or public\n\"Lukic would come to stuff pieces\nevents, the words 'on the bridge'\ncould always be heard.\"\nCaptured Serb\nof pork in our mouths,\" she said.\n(Pork is forbidden under Islamic di-\nTestifies on Lukic\netary rules.) \"He beat people with\nA Long History\nmetal rods and took many away.\"\nOn Aug. 5, 1994, a United Nations\nIn October 1995 Mrs. Muharemo-\npoliceman, Sgt. T. Cameron, inter-\nOf Major Killers\nvic and her daughters were freed in a\nviewed a captured Serbian soldier\nprisoner exchange.\nThe steep wooded hillsides that\nfrom Visegrad, and gathered the\nThe killings here, witnesses said,\nplunge to the river have for centuries\nonly known Serbian testimony of Mr.\nfilled the waters of the river with\nLukic's actions.\nalso produced killers of appalling\nmagnitude. Mr. Lukic, along with his\nThe soldier, Milomir Obradovic,\nbloated and mangled bodies.\nMesud Cocalic lived about 12 miles\ngroup of some 15 well-armed com-\ntold how fleeing Muslims were\nhauled off buses, lined up and shot by\ndown river from Visegrad in the vil-\npanions, was the latest, according to\nMr. Lukic and his companions. He\nlage of Slap, which did not fall to the\nmore than two dozen survivors and\nidentified the sites of two mass\nSerbs until last summer. He said he\nwitnesses. According to their ac-\ngraves, but neither have yet been\nand a group of neighbors had buried\ncounts, he too used the bridge as a\ninvestigated He said Mr. Lukic and\n180 bodies they had retrieved from\nprop to extinguish a Muslim commu-\nhis followers raped young girls held\nthe water. The men identified 82 of\nnity that had been here for centuries.\ncaptive at the Vilina Vlas spa outside\nthe bodies and wrote out detailed\nVisegrad. And he said Jasna Ahmed-\ndescriptions of the others.\nspahic, a young woman, jumped to\nher death from a window of the spa\nafter being raped for four days.\nAMENDMENT NO\nCalendar No\nPurpose: To reduce overly burdensome, bureaucratic, and unnecessary\nrequirements.\nIN THE SENATE OF THE UNITED STATES-- 104th Cong., 2d Sess.\nAn Amendment to the amendment offered by Mrs. Kassebaum\nto S. 1477\nTo amend the Federal Food, Drug, and Cosmetic Act and Public Health\nService Act to improve the regulation of food, drugs, devices, and\nbiological products, and for other purposes.\nReferred to the Committee on\nand ordered to be printed\nOrdered to lie on the table and to be printed\nAMENDMENTS intended to be proposed by Mr. Kennedy\n1\nOn page XX, strike lines XX-XX and replace with:\n2\n\"(ii) requests for meetings and the scheduling of meetings relating to\n3 reviews of protocols and relating to review of applications or submissions\n4 (including petitions or notifications) for product approval or clearance;\n5 and\";\n5\nline\n22\nthrough\nP.\n22\n6\nOn page XX, strike lines XX through ** and replace with:\n7\n\"(2)(A) A clinical investigation of a new drug (including a biological\n8 product) may begin thirty days after the date the Secretary receives from\n9 the sponsor a notification containing information about the drug and the\n10 clinical investigation unless, prior to the thirtieth day, the Secretary\n1 informs the sponsor that the investigation may not begin and specifies the\n2 basis for the decision. Within an additional twenty days, the Secretary\n3 shall specify in writing the deficiencies and the information needed in\n4 order for the clinical investigation to commence.\n24\nline\n\\\nthrough\n24\n24\n25\nstrike\npage\nlinez\n5\nOn page **, strike lines ** through XX and replace with:\n6\n\"(3)(A) The Secretary may place a clinical hold on any ongoing\n7 clinical investigation if the Secretary determines that such action is\n8 necessary for the protection of human subjects or for other reasons set\n9 forth by the Secretary in regulations.\n10\n\"(B) If the Secretary places a clinical hold on an ongoing\n11 investigation, the Secretary shall immediately advise the sponsor of such\n12 investigation in writing of such action, and provide such sponsor an\n13 opportunity to confer within ten working days of receipt of such\n14 communication to discuss the basis for the clinical hold. Within ten\n15 working days of such conference, the Secretary shall provide to the\n16 sponsor a written list of conditions for the withdrawal of the clinical hold.\n17 Any written request from the sponsor requesting that a clinical hold be\n18 withdrawn shall receive a decision in writing and specifying the reasons\n19 therefor, within twenty working days of the receipt of the request.\"\n16\n/\n10\n20\nOn page **, strike lines ** through line ** and replace with:\n21 \"(b) REVIEW BY SCIENTIFIC REVIEW GROUP\n1\n\"(1) In General The product sponsor or applicant shall have a right\n2\nto request an evaluation by an appropriate scientific review group\n3\nestablished under section 904 of any significant scientific decisions made\n4 by the Secretary under this Act. In addition, a product sponsor or\n5\napplicant shall have a right to request an evaluation by an appropriate\n6\nscientific review group established under section 904 of any significant\n7\nscientific issue under this Act appealed by such person under subsection\n8\n(a) that has been pending before the Secretary, without final resolution, for\n9\nmore than 180 days.\"\nAdministration Marries Policy Initiatives to Political Message\nCLINTON, From A1\nwanted to expand benefits to people\nexposed to Agent, Orange in Vietnam,\nthe White House quickly approved the\nproposal and Clinton scheduled a\nspeech to announce the move. The\nreal-world impact of these initia-\ntives-a sample of more than a dozen\nexamples so far this year-varies\nwidely.\nSix weeks after Clinton unveiled the\neducation tax-credit proposal, for in-\nstance, the administration has yet to\nsend a bill to Capitol Hill to implement\nthe idea, and aides say they have yet to\nmake some basic decisions about how\nthe tax credit would work. Even so,\nClinton weaves mentions of the plan in-\nto almost every campaign speech.\nThe Agent Orange decision, by con-\ntrast, quickly disappeared from view\nBY RUTH\nafter a round of headlines the day it\nPresident Clinton, with daughter Chelsea, left, and wife Hillary, leaves for\nwas announced. The administration of-\nCamp David. Clinton uses agenda-setting power to \"define himself.\"\nfered no precise cost estimates. But\nmedical experts say the decision to\nnew rules requiring women to provide\nby juveniles was largely a presidential\ncompensate every Vietnam veteran\nmore information about who fathered\nrestatment of something the Bureau of\nwho gets prostate cancer could eventu-\ntheir children before receiving welfare\nAlcohol, Tobacco and Firearms an-\nally cost the federal government far\nbenefits. The move, White House offi-\nnounced more than two years ago.\nmore than $1 billion, although the big\ncials said, would help show Clinton as a\nBut sometimes Clinton's pronounce-\nbills won't come due until many years\ntough-minded innovator, and help blunt\nments involve important policy. The\nfrom now as veterans grow older.\nthe GOP charge that by vetoing two\nAgriculture Department had been\nThe VA made its decision despite a\nRepublican bills Clinton had reneged\nworking for years on a compromise\nlack of scientific evidence showing any-\non his 1992 promise to \"end welfare as\nplan for more rigorous meat inspec-\nthing more than a possible link be-\nwe know it.\"\ntions. The final announcement was has-\ntween Agent Orange exposure and\nIn March, Clinton announced that\ntened by several days last week, ad-\nprostate cancer, which more than 10\nHousing and Urban Development De-\nministration officials said, in time for\npercent of all males will get regardless\npartment aid to local housing authori-\nClinton's weekly radio address, domi-\nof whether they served in Vietnam.\nties would be weighted in favor of pro-\nnating the Sunday papers a week ago.\nThe presidential campaign of former\njects that evict tenants accused of a\nThe relationship between the execu-\nSenate majority leader Robert J. Dole\nsingle crime, even if the tenants have\ntive branch and Clinton's political ad-\naccuses Clinton of politicizing the gov-\nyet to be convicted. HUD and Justice\nvisers works in both directions. Some-\nernment and campaigning at taxpayer\nDepartment officials helped draft the\ntimes the campaign takes advantage of\nexpense. But White House aides are\ninitiative, which a spokesman for the\nan idea the bureaucracy had been\nunapologetic about their determination\nAmerican Civil Liberties Union called\nworking on. Other times, the political\nto merge government policy and cam-\n\"political grandstanding at the expense\nteam orders the bureaucracy to work\npaign message, and claim they are\nof the poor.\"\non a proposal that Clinton campaign\npracticing sensible incumbency politics.\nThe next day, Clinton announced\nconsultant Dick Morris or some other\nPoor coordination between the\nthat the Food and Drug Administration\nadviser believes will prove popular.\nWhite House and the reelection cam-\nwas streamlining rules to bring anti-\nIn the Agent Orange decision last\npaign contributed significantly to Presi-\ncancer drugs to market. Clinton said it\nMay, Clinton seized upon a policy deci-\ndent George Bush's defeat in 1992 by\nwas an example of how the administra-\nsion that as a practical matter had al-\nmaking him vulnerable to the charge\ntion's \"reinventing government\" cam-\nready been made. Congress in 1991\nthat he had no message or philosophy,\npaign was helping individuals. But it al-\npassed legislation requiring the gov-\nClinton aides contend. They are eager\nSO responded to Republican complaints\nernment to give the benefit of the\nnot to let Dole benefit the same way\nthat the FDA is too slow and bureau-\ndoubt to veterans in cases where the\nthey did.\ncratic.\nscientific evidence is murky about\n\"We are determined to speak with\nIn April, Clinton answered consumer\nwhether Agent Orange causes a partic-\none voice and not have a disconnect,\"\nfears that gasoline prices were rising\nular health problem. A scientific panel\nsaid White House senior adviser\ntoo high by ordering the Energy De-\nfound there was \"suggestive\" but in-\nGeorge Stephanopoulos.\npartment to sell some of the strategic\nconclusive evidence of a link between\nNew examples keep springing forth,\npetroleum reserve. The next day, he\nprostate cancer and exposure to the\nanswered ranchers' fears that beef\nsometimes two or three a week.\nherbicide and recommended the dis-\nThis spring, with campaign polling\nprices were falling too low by enlisting\nease be added to a list of others for\nshowing that people want to get tough\nthe Agriculture Department to speed\nwhich Vietnam veterans receive bene-\non wayward youths, the White House\nup school lunch program purchases.\nfits.\nordered the Justice Department to de-\nSometimes, the effort to put Clinton\nOnce the panel made its decision,\nvelop guidelines to be mailed to locali-\nforward with a campaign message of\naccording to interviews with officials at\nties to encourage them to impose night\nthe day involves initiatives that amount\nthe White House and Department of\nto little. Last week's announcement of\ncurfews. The Education Department\nVeterans Affairs, there was no serious\nput together a similar manual on how\na program to track guns used in crimes\ndiscussion of the considerable costs in\nschools can stop truancy.\nLast month, the Heath and Human\nServices Department came up with\nTHE WASHINGTON POST\n`A16\nSUNDAY, JULY 14, 1996\nPHOTOCOPY\nPRESERVATION\nfuture years or any possibility that\nClinton might not approve.\nInstead, according to officials there\nwas considerable discussion of how\nClinton should announce the decision.\nSome thought a Memorial Day address\nwould be appropriate, but others\nTHE WASHINGTON POST\nthought that would look too political.\nA16 SUNDAY, JULY 14 1996\nClinton made his announcement the\nday after the holiday surroundeduby\nveterans.\nThe education tax credit by con-\ntrast, was conceived at the White\nHouse Clinton, according to an alde\nwas eager for \"a big idea on education\nthat would help \"define what the sec-\nond term would be about,' and had\nlong been intrigued by a Georgia pro-\ngramito subsidize the first two:years of\ncollege.\nThe problem was meshing it with\nthe realities of budgeting. Economic\nadviser Laura D' Andrea Tyson and one\nother deputies, Clinton campaign vet\neran Gene Sperling, supervised a pro-\ncess of extended wrangling among the\nWhite House and Departments of Edu-\ncation and Treasury over how big to\nmake the credit, and how to pay for it.\nAides said the scope and cost of Clin-\nton's was scaled back as it went\nthrough the policy process. And some\nquestions, such as whether the tax\ncredit should be paid to the college or\nto the individual student, ar unan\nswered\nWhite House press secretary Mi-\nchael McCurry said Clinton agrees that\nthe tax credit proposal is in part politi-\ncal, but that it is appropriate for a pres-\nident to offer new policies in ancelec\ntion year to highlight what he would do\nin a second term.\nBut Christina Martin, a spokes vom\nan for Dole, said Clinton is the\npowers of incumbency on several\nfronts to unfair advantage. \"Whether\nit's travel, events staging, war rooms\nin the White House, or taxpayer fund\ned policy experts being used for Bill\nClinton's political gain, it is abusive and\nwrong, Martin said.\nMary Matalin, a veteran of Bush's\ncampaign, said if Clinton thought the\ntax credit or other proposals were\ngood ideas, he should have pushed\nthem when Democrats had control of\nCongressitwo years ago.\nBut Martha Joynt Kumar, a Towson\nState University political scientist said\nClinton is shrewdly using the agenda-\nsetting powers of the presidency. By\nannouncing even a modest propo sale\n\"He can immediately get on the news;\nand that public exposure gives him a\nchance \"to define himself\nPHOTOCOPY\nPRESERVATION\nStaff writers Bill McAllister and\nRick Weiss contributed to this\nreport.\nTHE WASHINGTON POST\nSUNDAY, 4. 1996 A 11\nCongress May End Funding for Agriculture's Pesticide Testing Program\nAssociated Press\nthresholds set by the Environmental Pro\nbudget,\" said Jay J. Vroom, the group's\nThe Environmental Protection Agency\nresidues were found, although only two ap-\ntection Agency.\npresident.\nadvises the Agriculture Department on\nples had that many pesticides.\nThe Agriculture Department's Pesticide\nAbout 39 percent of the nearly 7,600\nConversely, the House decided that if\nwhich pesticides to examine. Because of a\nActivist organizations such as the Envi-\nData Program, created in 1991 to test pro-\nsamples tested in 1994 had no detectable\npesticide were so low, the program\n1993 report by the National Academy of\nronmental Working Group also say the pro-\nduce in the wake of theiscare over the pesti-\nresidues, even though scientists can meas\nwasn needed. After all, the Food and\nScientists, the government has been look\ngram should be kept, especially because of\ncide Alar in apples, faces possible extinction.\nure down to the tiniest part Just under 2\nDrug Administration already enforces pes,\nThe House passed a spending bill for the\ning more closely at the special impact of\ngrowing concern over exposure to multiple\npercent of imported produce and just over\nticide laws testing 10,000 food samples a\nAgriculture Department in June that cut\npesticides in the diets of infants and chil-\nresidues.\n1 percent of U.S. grown produce had resi-\nyear.\nout the $11.5 million needed to the\ndren.\nAlthough the allowed pesticide levels\ndues that would violate standards\nThe EPA says the data help it do a bet\nThe agency is also beginning the difficult\nmay be too high by their reckoning, the\nprogram in l 997. The Senate bill, awaiting\nThe data hasibeen our friend,\" said Den-\nof calculating the health risk from\nnis Stolte, pesticide specialist with the\ntask of looking at total exposure from all\ngroup says, at least there would be knowl-\nfinal,passage, restores the money. Negotia-\npesticides\nedge of the situation.\ntors will have to decide the program's fu-\nAmerican Farm Bureau Federation. The\nThe fruits and vegetables are taken from\npesticides rather than regulating each pes-\nWith a little bit more refinement, and a\nture.\nAmerican Crop Protection Association,\nwarehouses and tested after they been\nticide as though it were the only one being\nlittle bit harder looking by this program,\nThe arguments for ending the program\nwhich represents pesticide makers agreed.\npeeled; scrubbed and otherwise prepared\nused. About 36 percent of the samples had\nyou could really get a pretty good picture\nlook like those for keeping it.\nTo the extent this information is valu-\nfor consumption: Without the data the\ntraces of more than one pesticide\nof what pesticides are on these fruits and\nFarm groups and pesticide makers want\nable in reassuring public confidence in the\nEPA has to assume that the maximum al-\nCompared with previous years samples,\nvegetables when people eat them,\" said\nit because it shows the food supply/has very\nsafety of the food supply ACPA would be\nlowable levels set for crops ready to har\nthere were more multiple residues, and\nRichard Wiles, the group's pesticide spe-\nlow levels of pesticides well below\nsad to see this program removed from the\nvest rather than are in the food.\n1994 was the time that as many as 10\ncialist\nPHOTOCOPY\nPRESERVATION\n07-29-96 10:24AM FROM 00 HF-1 FB-8\nTO 94567028\nP002/004\nHouse\n19 SEC. 23. ENVIRONMENTAL IMPACT REVIEW.\n20\nChapter VII is amended by adding at the end the\n21 following:\n22\n\"SUBCHAPTER D-ENVIRONMENTAL IMPACT REVIEW\n23 \"SEC. 741. ENVIRONMENTAL IMPACT REVIEW.\n24\n\"No action by the Secretary proposed to be taken\n25 pursuant to this Act shall require the preparation of an\n1 environmental assessment or environmental impact state-\n2 ment under the National Environmental Policy Act of\n3 1969 unless the Secretary finds that because of extraor-\n4 dinary circumstances the proposed action may have a sig-\n5 nificant effect, either directly or cumulatively, on the\n6 human environment.\"\n07-29-96 10:24AM FROM 0C/HF-1/FB-8\nTO 94567028\nP003/004\nSenate\n4 SEC. 406. ENVIRONMENTAL IMPACT REVIEW.\n5\nChapter VII (21 U.S.C. 371 et seq.), as amended by\n6 section 405, is further amended by adding at the end thereof\n7. the following new section:\n8 \"SEC. 745. ENVIRONMENTAL IMPACT REVIEW.\n9\n\"Notwithstanding any other provision of law, no ac-\n10 tion by the Secretary pursuant to this Act shall be subject\n11 to an environmental assessment, an environmental impact\n12 statement, or other environmental consideration unless the\n13 director of the office responsible for the action demonstrates,\n14 in writing-\n15\n\"(1) that there is a reasonable probability that\n16\nthe environmental impact of the action is sufficiently\n17\nsubstantial and within the factors that the Secretary\n18\nis authorized to consider under this Act; and\n19\n\"(2) that consideration of the environmental im-\n20\npact will directly affect the decision on the action.\".\nBy regulation - proposed nub they we\nvisals reduced # of env. analysis\nNERA\n07-29-96 10:24AM FROM 00/HR-1/FB-8\nTO 94567028\nP004/004\n4 SEC. 406. ENVIRONMENTAL IMPACT REVIEW.\n5\nChapter VII (21 U.S.C. 371 et seq.), as amended by\n6 section 405, is further amended by adding at the end thereof\n7 the following new section:\n8 \"SEC. 745. ENVIRONMENTAL IMPACT REVIEW.\n9\n\"Notwithstanding any other provision of law, no ac-\n10 tion by the Secretary pursuant to this Act shall be subject\n11 to an environmental assessment, an environmental impact\n12 statement, or other environmental consideration unless the\n13 director of the office responsible for the action demonstrates,\nAufos burden\n14 in writing\nshows\n\"(1) there is U. reasonable probability that\nthe environmental impact of the action is sufficiently\nwas burden why. as 18 17\ntojustify such an assessment,\nsubstantial and within the factors that the Secretary\nis authorized to consider under this Act; and\n19\n\"(2) that consideration of the environmental im-\n20\npact will directly affect the decision on the action.\".\nPossible\nEXECUTIVE OFFICE OF THE PRESIDENT\n02-Aug-1996 10:38am\nTO:\nJonathan Winer\nTO:\nSally Katzen\nTO:\nElizabeth E. Drye\nTO:\nJohn F. Morrall, III\nTO:\nMichael A. Fitzpatrick\nFROM:\nDaniel J. Chenok\nOffice of Mgmt and Budget, OIRA\nSUBJECT: DELAY OF MARKUP ON FDA REFORM BILLS SEEN AS IMPROVING PROSPE\nDELAY OF MARKUP ON FDA REFORM BILLS SEEN AS IMPROVING PROSPECTS FOR\nThe House Commerce Committee's decision to delay its scheduled markup of\nFood and Drug Administration reform legislation in favor of continued\nnegotiations with the Clinton administration actually improves the prospects\nfor congressional action, a drug industry source told BNA Aug. 1.\nThe House Commerce Health and Environment Subcommittee had been expected to\nconsider three FDA reform bills (HR 3199, 3200, 3201) beginning Aug. 1, but\nannounced July 30 that markup would be postponed to allow discussions to\nproceed through August.\nAccording to the source, both Republican and Democratic staffers have\nrepresented the postponement as a positive step, not a reason for\ndisappointment. If the negotiations had broken off for subcommittee markup\nthere would have been more confrontation, rather than less, brought about by\namendments being offered on controversial issues, the source said.\nIt appears that reform bills will be brought to the House floor in\nSeptember under suspension of the rules, the source added, which means the\nleadership considers them to be non-controversial and few amendments will be\nallowed.\nRoles Of Bliley, Greenwood\nMoreover, the bills currently have approximately 208 cosponsors from\nboth parties, SO passage by the House seems assured. The source credited Rep.\nJim Greenwood (R-Pa), head of the Republican task force appointed by Commerce\nCommittee Chairman Thomas Bliley Jr. (R-Va), with garnering ``90 percent' of\nthe cosponsors for the bills.\nGreenwood initially took the lead on meeting with FDA Commissioner David\nKessler and his staff as well as industry, patient, and medical groups to\nreach agreement on controversial issues before proceeding to mark up.\nBliley and his staff have moved to the forefront now, however, since Health\nand Human Services Secretary Donna E. Shalala asked that meetings be held\nprior to mark up to work out differences between Congress and the\nadministration.\nThe drug industry source said Bliley wanted one more ``legislative\nsuccess' before the end of this congressional session. Bliley's involvement\nagain underscores the probability of the bills will pass in September because\nTHE WHITE HOUSE\nWASHINGTON\nElizabeth,\nThis was givento\nChris by Genentech\nHe is inlerested in your\nViews -- they believe it's\na sign of movement & hope\nwe can help to push\nthrough an acceptable\nagreement.\n-Sandy\nSENT BY:GENENTECH, INC.\n; 8- 8-96 ; 9:49AM ; GENENTECH-WASH: DC-\n2024566487;; # 2/ 2\nDISSEMINATION OF INFORMATION\nCURRENT LAW\n1) Only when fundamentally consistent with approved label\nMACK/FRIST/DODD\n1) Only independent journals and texts\n2) Only information that is scientifically reliable\n3) All information reviewed by FDA for balance\n4) Disclaimers\n5) Obligation to update by companies\n6) Secretary has no authority with respect to cost and cost effectiveness of drug claims\nFDA POSITION\n1) Dissemination only after a company has filed a supplement\n2) Unclear position on other issues\n\"A THIRD WAY\"\n1) Limit journals to those approved by the Secretary\n2) Create three categories of FDA reviewable documents. Those which relate to:\na) filed supplemental applications;\nb) those consistent with recommendations of federal health agencies; and\nc) those consistent with medical practice guidelines. These determinations to be made by\nthe Secretary.\n3) Limit application of a pending \"Guidance document\", negotiated rule making, and authority for the\nFDA to regulate false and misleading claims pending a final rule.\nTHE WHITE HOUSE\nWASHINGTON\nAugust 6, 1996\nMEMORANDUM FOR THE PRESIDENT\nFROM:\nElizabeth Drye, 848 DPC\nSUBJECT: Update on FDA Reform Legislation\nMany biotechnology, pharmaceutical, and medical device\ncompanies would like to see FDA reform legislation pass this\nyear. California biotechnology leaders may raise the issue with\nyou. Senator Kassebaum has moved a bill out of the Labor\nCommittee with some Democratic support. The House Commerce\nCommittee has held hearings on three separate bills addressing\nFDA's regulation of food, drugs, and medical devices.\nAs you know, FDA has already made substantial changes under\nVice President Gore's National Performance Review to speed drug\nand device approval times, provide patients earlier access to new\ndrugs for cancer and other life-threatening diseases, and ease\nregulatory burdens for manufactures. In November of 1995 FDA\nannounced and biotechnology leaders applauded a package of six\nreforms that help the biotechnology industry. FDA has also\nproposed a third-party review pilot to test private review of\nlow-risk medical devices.\nDemocrats have been divided on pending legislation.\nSenators Dodd, Harkin and Mikulski voted to report Senator\nKassebaum's bill out of Committee while noting the need for\nimprovements. Senator Kennedy, however, wrote a scathing op-ed\ncalling the Senate bill a \"prescription for disaster.\" FDA has\ntestified that numerous provisions in both the House and Senate\nbills undermine safety and efficacy standards.\nHHS and FDA staff, in consultation with White House staff,\nhave been working with both House and Senate Committee members\nand staff toward developing legislation the Administration can\nsupport. We have sought to be responsive to industry's concerns\nwhile preserving safety and efficacy standards. Key remaining\nissues include provisions establishing expansive private review\nof medical devices, unrealistic review deadlines with \"hammers\"\nthat kick products into private review, and rules governing the\ndistribution of promotional material for \"off-label\" drug uses\n(uses for which a drug is not explicitly approved).\nWe are working to reach agreement on an FDA reform bill that\ndoes not undermine safety and efficacy. Given the limited number\nof legislative days remaining, this Congress is not likely to\npass legislation unless Democrats, Republicans, and the\nAdministration achieve consensus soon on outstanding issues.\nTHE NEW YORK TIMES\nFRIDAY, MAY 24, 1996\nSenators Offer Bipartisan Plan\nTo Cut Taxes in Washington\nBy MICHAEL JANOFSKY\nwould cost $700 million to $800 mil-\nWASHINGTON, May 23 - In an\nlion a year for up to six years.\neffort to reverse years of population\nThe proposed tax cuts have be-\nand economic decline in the District\ncome the latest in a series of efforts\nof Columbia, two Senators said today\nto restore the District's economy.\nthat they would introduce a bill on\nCongress last year created a finan-\nFriday that would substantially cut\ncial control board to help the city\nthe Federal taxes paid by District\ncurb spending. The White House has\nresidents.\nappointed a task force to work with\nThe measure, co-sponsored by\ncity agencies to solve problems. And\nConnie Mack, a Florida Republican,\nMayor Marion S. Barry Jr. has be-\nand Joseph 1. Lieberman, a Connecti-\ngun work on a four-year plan to\ncut, Democrat, is almost identical to\nreduce the size of city government\na House bill introduced last month by\nby 25 percent.\nthe District's representative, Elea-\nBut the tax cuts would appear to be\nnor Holmes Norton, a Democrat,\nthe most dramatic of the initiatives.\nwhich she said was the only viable\nStressing the bipartisan nature of\nway of saving the city from ruin.\ntheir efforts, Mr. Kemp nodded to-\nThe House and Senate bills would\nward Ms. Norton and said: \"We've\nboth create a flat Federal income tax\njoined together in a bleeding heart\nrate for District residents of 15 per-\nissue to save the nation's capital.\ncent, down from as high as 39.6 per-\nThis is an urgent plea to the White\ncent. Standard deductions would rise\nHouse and leaders of the House and\nto $15,000 for single filers, $25,000 for\nSenate. Do it now. People in this city\nhead of household filers and $30,000\ndesperately need urgent action.\"\nfor married couples. Those figures\nwere $3,900, $5,750 and $6,550, respec-\ntively, last year.\nThe Senate bill would eliminate\ncapital gains taxes for any business\ninvestment in the city, while the\nHouse bill would do so only for in-\nvestments by District residents. The\nSenate bill would also provide a\n$5,000 tax credit for first-time home\nbuyers in the District. Ms. Norton's\nCorrections\nbill has no such incentive.\nDescribing the tax cuts as \"the\nAn article on April 16 about at-\nwho died in March, was a graduate\nbest way to help\" the nation's capi-\ntempts to improve the safety record\nof Bates College, not Colby College,\ntal, Mr. Mack said today that he\nof the taxi fleet in Nairobi, Kenya,\nwhich was Mr. Gurney's alma ma-\nexpected both bills to pass this year.\nmisstated the etymology of the Ki-\nter.\nAnd if that happened, Mr. Lieberman\nswahili colloquialism for the mini-\nsaid, \"I bet you a lot of money Presi-\nvans that make up the bulk of the\nAn article on Saturday about a\ndent Clinton signs it.\"\nfleet. Matatu, literally meaning\nresolution by the Association of Jus-\n\"High taxes are driving people out\nthrees, derives from the fare of 30\ntices of the Supreme Court of the\nof the District of Columbia,\" Mr.\ncents (mateni matatu, or three 10-\nState of New York, criticizing Gov.\nMack said at a news conference,\ncent pieces) originally charged by\nGeorge E. Pataki's proposal to elim-\nwhere the Senators were joined by\nMs. Norton and Jack Kemp, the Sec-\ndrivers, not from the practice of\ninate parole for violent felons, mis-\nretary of Housing and Urban Devel-\npeople banding together to operate\nstated the authorship of the resolu-\nthe taxis. This correction was de-\ntion. It was drawn up-by the associa-\nopment in the Bush Administration.\nlayed for consultation with authori-\ntion's executive committee, not by\nMr. Kemp has been a strong support-\nJustice Burton B. Roberts of the\ner of using tax breaks to attract\nties on Kiswahili.\nBronx.\nresidents and businesses to citles.\nThe lawmakers and Mr. Kemp\nA headline on Wednesday with the\nAn obituary on Saturday about\nsaid that if the cuts helped Washing-\ncontinuation of a front-page article\nSam Lopata, who designed a number\nton's economy, Federal and state tax\nabout the erosion of consensus\nof New York restaurants, gave an\nbreaks could be used to resuscitate\namong the nation's governors on re-\nincorrect date for the opening of one\nother urban areas losing population\nshaping the Federal-state health\nof them. The restaurant, Joanna,\nfor the same reasons - crime, poor\nprogram for the poor referred incor-\nwas opened in 1980, not 1978.\nschools and inefficient city services.\nrectly to that program. It is Medic-\nIt is not clear, however, whether\naid, not Medicare.\nA Critic's Notebook yesterday\nthe Clinton Administration supports\nabout television news reports tied to\nthe idea of Federal tax cuts for Dis-\nAn obituary yesterday about Ed-\nprime-time shows misidentified the\ntrict residents or of having the cuts\nward J. Gurney, the former Senator\nweatherman on WNYW, the Fox-\nbe a model for use across the coun-\nfrom Florida, misstated Edmund S.\nowned station in New York. He is\ntry. In an interview after Ms. Norton\nMuskie's alma mater. Mr. Muskie,\nNick Gregory, not Nick Gomez.\nproposed her bill, Alice M. Rivlin, the\ndirector of the Office of Management\nand Budget, said the measure was\n\"more a dramatization of the prob-\nlem than a real solution.\"\nAlso, at a time when Congress and\nthe White House are straining to\nbalance the budget in seven years;\nthe lawmakers said that neither the\nHouse nor Senate had analyzed how\nmuch the tax cuts would cost the\nFederal Government.\nMr. Kemp estimated the cuts\nSenator D'Amato, a Republican,\nContinued From Page B1\nSenator Christopher Dodd, Demo-\nPataki Outlaws\ncrat of Connecticut, and Representa-\nallergies, bronchial disorders and\ntive Bill Frist, Republican of Tennes-\nasthma that contain ephedra - in-\nsee, have introduced legislation that\nHerbal Stimulant\ncluding Primatene and Sudafed -\nwould reclassify as a drug any herb\nwill not be affected.\nor dietary supplement like ephedra\nBesides Herbal Ecstacy, the prod-\nthat advertises itself as a euphoria-\nUsed by Youths\nucts bear such names as Euphoria,\nproducing or awareness-heightening\nBrain Wash and Buzz Tablets.\nproduct. Such products would then\nIn a related action, the Commis-\ncome under stricter regulation by\nBy CLIFFORD KRAUSS\nsioner of Agriculture and Markets,\nthe Federal Drug Administration.\nDonald R. Davidsen, issued a recall\nConcern over ephedra intensified\nGov. George E. Pataki has announced an\nof six carbonated beverages that\nlast month when a Florida coroner\nimmediate statewide ban on the sale of so-\ncontain ephedra.\ncalled Herbal Ecstacy and other herbal\nThe ban will be enforced by local\nruled that Peter Schlendorf, a 20-\nproducts containing the stimulant ephedra,\nand state public health officials, who\nyear-old college student from North-\nwhich has been blamed for 15 deaths nation-\nwill do spot checks of stores that\nport, L.I., had died from taking dou-\nwide.\nhave sold the products and will inves-\nble the recommended dose of Ulti-\nTypically sold in health food and novelty\ntigate complaints. Merchants violat-\nmate Xphoria, one of the 20 products\nshops in the form of pills, powders and\ning the ban will face fines of $2,000\nbanned yesterday by Mr. Pataki.\nsodas, the stimulants have become increas-\nand prison terms of up to one year.\nSince 1993, according to the F.D.A.,\ningly popular among middle-class youths\nThe state's action does not target\nabout 400 people have reported ad-\nseeking alternatives to the kick received\npossession of ephedra, meaning that\nverse reactions to ephedra-based\nfrom illegal drugs. But while the stimulants\nthere would be little to stop New\nproducts, ranging from dizziness to\nhave been promoted as safe natural-food\nYork residents from buying such\nstrokes, and 15 people have died.\nsupplements by about 100 companies, the\nherbal products in New Jersey or\nIn an interview, New York State's\nFood and Drug Administration issued a\nConnecticut.\nHealth Commissioner, Barbara A.\nwarning to consumers last month that the\nBut Richard Curtis, an expert on\nDeBuono, predicted that many\nstimulants can be dangerous when taken in\nnarcotics at John Jay College of\nstates, including Connecticut and\nexcess, especially to people with high blood\nCriminal Justice, said he thought\nNew Jersey, would follow New\npressure, heart disease and diabetes.\nGovernor Pataki's action would be\nYork's lead. But she said there was\n\"We're not going to let our kids be exploit-\nlargely effective in stemming the\nno need for a complete ban on ephe-\ned for a cheap profit,\" Governor Pataki said\nmarket. \"I can't imagine there will\ndra-based products that serve medi-\nat a news conference in Manhattan yester-\ncal functions.\nbe much of a big black market,\" he\nday to announce the ban, which state health\nsaid, \"because if you want to go that\nSpeaking of several prescription\nlaws allow him to impose without legislative\nand over-the-counter medications\nfar, you might as well buy real Ec-\naction. \"Obviously the best solution would\nthat include ephedra, she said,\nstasy, the illegal narcotic kind.\"\nbe a Federal role, but we can't sit back and\nCompanies can appeal the banning\n\"There is nothing about the way\nwait and let our young people die.\"\nof their products at a hearing in\nthose products are marketed, adver-\ntised or sold that has indicated to us\nThe Governor's action came two days\nAlbany on June 4.\nafter his ally, Senator Alfonse M. D'Amato,\nKonstantine Theoharis, the execu-\na threat to the public's health, since\nintroduced legislation to increase Federal\ntive media coordinator of Global\nthey are properly labeled and there\nare appropriate warnings for ad-\ncontrols on ephedra-based products.\nWorld Media Corporation, the pro-\nverse health affects.\"\nUnder the Governor's order, the State\nducer of Herbal Ecstacy, said he\nHealth Department has issued a ban on the\nthought there was a good chance that\nsale of 20 specific ephedra-based products\nthe ban on his product could be re-\nthat are explicitly marketed for people look-\nversed.\ning for a drug high or that do not include\n\"Politicians and bureaucracies\ndirections on appropriate dosage. Prescrip-\nusually overreact,\" Mr. Theoharis\ntion and over-the-counter medications for\nsaid. \"We feel there is tons of misin-\nTHE NEW YORK TIMES\nformation out there and once we\nContinued on Page B6\nhave a fair chance to represent our-\nFRIDAY, MAY 24, 1996\nselves our products will be shown to\nbe harmless and beneficial.\"\nHe added, \"Our products are an\nalternative to chemically toxic legal\nand illegal drugs available to any-\nbody.\"\nFew people in the East Village, a\ncenter of ephedra sales in the city,\nhad heard of the ban yesterday, and\nmost sellers and buyers reacted with\nlittle emotion.\nArmida Barth, owner of Lady in\nthe Moon shop at 111 St. Mark's\nPlace, said that she had stopped sell-\ning ephedra products three months\nago when she learned of the dangers.\n\"The only reason why I sold it is\nbecause I'm against kids using\ndrugs,\" she said.\nLarry Carter, a manager at Love\nSaves the Day, at 119 Second Avenue,\nwhere a sign in the window pro-\nclaims \"Herbal Ecstacy Sold Here,\"\nsaid, \"We're not going to cry if we\nhave to take it off the shelves.\" But\nhe noted that sales had increased in\nrecent months. In the last nine\nmonths, the store's biweekly orders\nof 10-packs of Herbal Ecstacy pills\nincreased more than three-fold to 860\npackages from 150.\nWhile other restrictions have been\nimposed in Ohio and Florida, the\nFederal and state governments have\nfor the most part been slow to regu-\nlate ephedra because it is considered\na safe food supplement when taken\naccording to directions. While techni-\ncally classified as a natural herb and\nnot a drug, ephedra can induce a\neuphoric feeling or heart palpitations\nwhen taken in-excessive doses.\nJUL-29-1996 13:53 TO:DEBBIE FINE\nFROM: DADE, J.\nP. 1/6\nEXECUTIVE OFFICE OF THE PRESIDENT\nLRM NO: 5218\nOFFICE OF MANAGEMENT AND BUDGET\nWashington, D.C. 20503-0001\nFILE NO: 1746\nSPECIAL\n7/29/96\nLEGISLATIVE REFERRAL MEMORANDUM\nTotal Page(s): 6\nTO: Legislative Liaison Officer - See Distribution below:\nFROM: Janet FORSGREN (for) Assistant Director for Legislative Reference\nOMB CONTACT: Robert PELLICCI 395-4871 Logislative Assistant's Line: 395-7362\nC=US, A=TELEMAIL, P=GOV+EOP, O=OMB, OU1=LRD, S=PELLICCI, G=ROBERT. I=J\[email protected]\nSUBJECT: HHS Drafting Service RE: HR3199, Drug and Biological Products Reform Act of\n1996\nDEADLINE: 10:00 a.m. Wednesday, July 31,1996\nIn accordance with OMB Circular A-19, OMB requests the views of your agency on the above subject before\nadvising on its relationship to the program of the President.\nPlease advise us if this item will affect direct spending or receipts for purposes of the\n\"Pay-As-You-Go\" provisions of Title XIII of the Omnibus Budget Reconciliation Act of 1990.\nCOMMENTS: The attached language may be added to pending legislation that would reform the operations\nof the FDA. House Committee markup could occur this week. Please expedite your views on\nthe attached language affecting the regulation of human tissue.\nDISTRIBUTION LIST:\nAGENCIES: 61-JUSTICE - Andrew Fois - 2025142141\n76-National Economic Council - Sonyia Matthews - 2024562174\nEOP: Nancy-Ann Min\nChris Jennings\nGreg Simon\nJennifer Klein\nElizabeth Drye\nMichael Fitzpatrick\nBarry Clendenin\nRichard Turman\nJim Esquea\nJonathan Winer\nAllison Eydt\nElena Kagan\nBob Damus\nJanet Forsgren\nJUL-29-1996 13:53 TO:DEBBIE FINE\nFROM:DADE, J.\nP. 2/6\nRESPONSE TO\nLRM NO:\n5218\nLEGISLATIVE REFERRAL\nFILE NO:\n1746\nMEMORANDUM\nIf your response to this request for views is short (e.g., concur/no comment). we prefer that you respond by e-mail or\nby faxing us this response sheet.\nIf the response is short and you prefer to call, please call the branch-wide line shown below (NOT the analyst's line)\n10 leave a message with a legislative assistant.\nYou may also respond by:\n(1) calling the analyst/attorney's direct line (you will be connected to voice mail if the analyst does not answer); or\n(2) sending US 8 memo or letter\nPlease include the LRM number shown above, and the subject shown below.\nTO: Robert PELLICCI 395-4871\nOffice of Management and Budget\nFax Number: 395-6148\nBranch-Wide Line (to reach legislative assistant): 395-7362\nFROM:\n(Date)\n(Name)\n(Agency)\n(Telephone)\nSUBJECT: HHS Drafting Service RE: HR3199, Drug and Biological Products Reform Act of\n1996\nThe following is the response of our agency 10 your request for views on the above-captioned subject:\nConcur\nNo Objection\nNo Comment\nSee proposed edits on pages\nOther:\nFAX RETURN of\npages, attached to this response sheet\nP.3/6\nJUL-29-1996 13:53 TO:DEBBIE FINE\nFROM: DADE, J.\nVA\n002\n301 443 0739\nFDA GEN COUNSEL\n07/24/88 18:57\n002\n07/24/88 WED 14:53 FAX\nREGULATION OF HUMAN TISSUE-\n(1)\nREQUIREMENT OF Part F of Title III of the Public Health Service ACT (42 U.S.C.\n262 et seq.) is amended by inserting after section 352 the following new section:\n\"Section 352A REQUIREMENTS FOR HUMAN TISSUE\n(a) IN GENERAL Facilities and persons that engage in the recovery, processing,\nstorage, or distribution of human tissue:\n(1) shall annually register with the Secretary and provide the Secretary 2 list\nof all human tissues that are recovered, processed, stored, or distributed\nto/from such facility, except that the Secretary may exempt facilities or\npersons from such requirements on the grounds that they are not necessary to\nprotect the public health;\n(2) shall at the time of registration provide a list of all contractors or agents\nof the tissue establishment who engage in the recovery, processing, storage,\nor distribution of human tissue; and\n(3) shall comply with good tissue practices including, but not limited to,\npractices that address:\n(A) quarantine; recordkeeping the recovery, processing, storage, and\ndistribution of tissue; validation of manufacturing facilities and\nequipment; quality control; packaging and labeling; adverse\nexperience reports, complaint files and failure investigations;\npersonnel qualification and training: and tissue tracking procedures\nto identify tissue from donor to recipient and from recipient to donor;\nand\n(B) donor screening and infectious disease testing\n(4) are subject to inspection by individuals authorized by the Secretary;\n(5) shall comply with regulations regarding labeling, advertising and\npromotion, which may be promulgated by the Secretary.\n(b) REGULATIONS\nThe Secretary may promulgate regulations for implementation of this section. Such\nregulations may include provisions for certification of facilities that engage in the\nrecovery, processing, storage, or distribution of human rissue.\n1\nJUL-29-1996 13:53 TO:DEBBIE FINE\nFROM: DADE, J.\nP. 4/6\n003\n301 413 0738\nFDA GEN COUNSEL\n07/24/98\n16:58\n003\n07/24/96 WED 14:38 FAI\n(c) FINDING OF INTERSTATE COMMERCE\nCongress finds that human tissue that is recovered, processed, distributed, or stored\nin the United States for medical use is in, or otherwise directly affects, interstate\ncommerce.\n(d) DEFINITION -\n(1) HUMAN TISSUE - The term \"human tissue\" means any tissue (an\naggregate of similar cells together with their intercellular substance, or\nacellular integuments that have a particular structure and function) derived\nfrom a human body which:\n(A) is intended for administration to another human for the diagnosis.\ncure. mitigation, treatment, or prevention of any condition or disease;\n(B) is intended only to replace or repair comparable bodily tissue and\ndoes not act through a systemic mechanism;\n(C) is recovered, processed, stored, or distributed by methods which\ndo not change tissue function or characteristics or propagate the\ntissue's cells;\n(D) may include the addition of substances that are safe under\nconditions of intended use and not intended to contribute to or\nprovide a therapeutic effect to the recipient; and\n(E) includes demineralized bone, heart valves, and dura mater.\n(2) Such term does not include:\n(A) human material regulated or classified as a drug, medical device\nor biological product except as specified in (d)(1)(8) :\n(B) vascularized human organs, such as heart, liver, kidneys, lungs,\nIntestines, or panoreas;\n(C) blood, blood products, bone marrow, stem cells, somatic cell\ntherapy, gene therapy, or human milk;\n(D) tissue that is combined with a drug, device, biologic, or another\ntissue; and\n(e) TISSUE SPECIFIC REVIEW\nFor specific human dssue as the Secretary deems appropriate and for which she has\n2\nJUL-29-1996 13:53 TO:DEBBIE FINE\nFROM:DADE, J.\nP. 5/6\n1\n07/24/98\n16:58\nFDA GEN COUNSEL\nF.L\n004\n201 443 0738\n07/24/98 WED 14:38 FAX\n004\nidentified 8 public health concern related to clinical safety or effectiveness, the\nSecretary may conduct a review of existing data on clinical use, indications,\noutcomes, sufety, and effectiveness of such tissue and may, as part of, or following,\nsuch review:\n(1) promulgate regulations controlling such tissue including, but not limited\nto, requirements for special labeling or reclassification (under reclassification\nsubsection) of such tissue; and\n(2) set such other limitations as the Secretary may require to protect the\npublic health.\n(f) CLASSIFICATION AND RECLASSIFICATION\n(1) the Secretary may classify or reclassify 1 human tissue as a drug, biological\nproduct or medical device, if the Secretary determines that such classification\nor reclassification is needed to protect the public health or, during the tissue\nspecific review of subsection (e), the Secretary determines that premarket\nstudy of effectiveness is warranted; and\n(2) the Secretary may reclassify a human drug, biological product or medical\ndevice as a human tissue, if the Secretary determines that such previous\nclassification is unnecessary to protect the public health\n(g) RECALL, RETENTION, AND DESTRUCTION AUTHORITY-\nIf the Secretary finds that a facility or human tissue violates any provision in this\nsection or any regulations promulgated thereunder, the Secretary may issue an order\nthat such facility coase distribution of human tissue or that such human tissue be\nretained, recalled. of destroyed. After receipt of such an order, the person in\npossession of the human tissue shall not distribute or dispose of the human tissue in\nany manner except consistent with the provisions of the order. Persons subject to the\norder who wish to challenge the order, shall, within 5 days of receipt of such order,\nrequest an opportunity for an informal hearing to be held within 30 days.\n(2) INTERIM REGULATIONS - The requirements set forth in the interim regulations\npromulgated by the Secretary in December, 1993 shall remain in effect until new regulations\nthat supersede these regulations are in effect.\n(3) ADULTERATION PROVISION Section 501 (21 U.S.C. 351) is amended as follows:\n(A) in the first sentence by changing \"drug or device\" io \"drug device, or human\ntissue.\"\n3\nJUL-29-1996 13:53 TO:DEBBIE FINE\nFROM: DADE, J.\nP. 6/6\n07/24/96\n16:59\n301 443 0738\nFDA GEN COUNSEL\n005\n07/24/96 WED 15:38 FAX\n002\n(B) by inserting at the end thereof the following new subsection:\n\"0) If it is human tissue and it is recovered, processed, stored, or distributed\nby a facility that does not comply with good tissue practices consistent with\nsection 352(a) of the Public Health Service Act.\"\n(4) MISBRANDING PROVISIONS - section SOZ (21 U.S.C. 352) is amended as follows:\n(A) by renaming the section \"Misbranded Drugs, Devices, and Human Tissue\"\n(B) in the first sentence by adding \"(a)\" before \"A drug or device.\"\n(C) by redesignating subsections (a) through (t) as paragraphs (1) through (20).\n(D) by adding at the end thereof the following new subsection:\n\"(b) Human tissue shall be deemed to be misbranded if its labeling is false or\nmisleading in any particular or if its labeling, advertising, or promotion does\nnot comply with regulations promulgated under section 352A(a) (5).\n(5) PROHIBITED ACTS. Section 301 (21 U.S.C. 331) is amended by inserting the\nfollowing new subsection:\n\"(v) The adulteration or misbranding of any human tissue.\n(6) SEIZURE. --\n(A) Section 304 (a)(2)(D) (21 U.S.C. 334 (a) ) is amended by inserting \"or human\ntissue\" after \"device.\"\n(B) Section 304(d)(1) is amended by deleting the \"or\" before \"cosmetic\" and\ninserting\", or human tissue\" after \"cosmetic\" in the first sentence.\n4\nJUL-29-1996 13:53 TO:204 - C. JENNINGS\nFROM:DADE J.\nP. 1/6\nEXECUTIVE OFFICE OF THE PRESIDENT\nLRM NO: 5218\nOFFICE OF MANAGEMENT AND BUDGET\nWashington, D.C. 20503-0001\nFILE NO: 1746\nSPECIAL\n7/29/96\nLEGISLATIVE REFERRAL MEMORANDUM\nTotal Page(s): 6\nTO: Legislative Liaison Officer Sce Distribution below:\nFROM: Janet FORSGREN (for) Assistant Director for Legislative Reference\nOMB CONTACT: Robert PELLICCI 395-4871 Logislative Assistant's Line: 395-7362\nC=US, A=TELEMAIL, P=GOV+EOP, O=OMB, OU1=LRD, S=PELLICCI, G=ROBERT, I=J\[email protected]\nSUBJECT: HHS Drafting Service RE: HR3199, Drug and Biological Products Reform Act of\n1996\nDEADLINE: 10:00 a.m. Wednesday, July 31, 1996\nIn accordance with OMB Circular A-19, OMB requests the views of your agency on the above subject before\nadvising on its relationship to the program of the President.\nPlease advise us if this item will affect direct spending or receipts for purposes of the\n\"Pay-As-You-Go\" provisions of Title XIII of the Omnibus Budget Reconciliation Act of 1990.\nCOMMENTS: The attached language may be added 10 pending legislation that would reform the operations\nof the FDA. House Committee markup could occur this week. Please expedite your views on\nthe attached language affecting the regulation of human tissue.\nDISTRIBUTION LIST:\nAGENCIES: 61-JUSTICE- Andrew Fois - 2025142141\n76-National Economic Council - Sonyia Matthews - 2024562174\nEOP: Nancy-Ann Min\nChris Jennings\nGreg Simon\nJennifer Klein\nElizabeth Drye\nMichael Fitzpatrick\nBarry Clendenin\nRichard Turman\nJim Esquea\nJonathan Winer\nAllison Eydt\nElena Kagan\nBob Damus\nJanet Forsgren\nJUL-29-1996 13:53 TO:204 - C. JENNINGS\nFROM:DADE. J.\nP. 2/6\nRESPONSE TO\nLRM NO:\n5218\nLEGISLATIVE REFERRAL\nFILE NO:\n1746\nMEMORANDUM\nIf your response to this request for views is short (e.g., concur/no comment). we prefer that you respond by e-mail or\nby faxing us this response sheet.\nIf the response is short and you prefer to call, please call the branch-wide line shown below (NOT the analyst's line)\nto leave 8 message with a legislative assistant.\nYou may also respond by:\n(1) calling the analyst/attorney's direct line (you will be connected to voice mail if the analyst does not answer); or\n(2) sending us a memo or letter\nPlease include the LRM number shown above, and the subject shown below.\nTO: Robert PELLICCI 395-4871\nOffice of Management and Budget\nFax Number: 395-6148\nBranch-Wide Line (to reach legislative assistant): 395-7362\nFROM:\n(Date)\n(Name)\n(Agency)\n(Telephone)\nSUBJECT: HHS Drafting Service RE: HR3199, Drug and Biological Products Reform Act of\n1996\nThe following is the response of our agency to your request for views on the above-captioned subject:\nConcur\nNo Objection\nNo Comment\nSee proposed edits on pages\nOther:\nFAX RETURN of\npages, attached to this response sheet\nP. 3/6\nJUL-29-1996 13:53 TO:204 - C. JENNINGS\nFROM:DADE. J.\n002\n301 443 0739\nFDA GEN COUNSEL\n002\n07/24/96 18:57\n07/24/86 WED 14:53 FAX\nREGULATION OF HUMAN TISSUE\n(1)\nREQUIREMENT of Part F of Title III of the Public Health Service Act (42 U.S.C.\n262 et seq.) is amended by inserting after section 352 the following new section:\n\"Section 352A REQUIREMENTS FOR HUMAN TISSUE\n(a) IN GENERAL - Facilities and persons that engage in the recovery. processing,\nstorage, or distribution of human tissue:\n(1) shall annually register with the Secretary and provide the Secretary a list\nof all human tissues that are recovered, processed, stored, or distributed\nto/from such facility, except that the Secretary may exempt facilities or\npersons from such requirements on the grounds that they are not necessary to\nprotect the public health:\n(2) shall at the time of registration provide s list of all contractors or agents\nof the tissue establishment who engage: in the recovery, processing, storage,\nor distribution of human tissue; and\n(3) shall comply with good tissue practices including, but not limited to,\npractices that address:\n(A) quarantine; recordkeeping the recovery, processing, storage, and\ndistribution of tissue; validation of manufacturing facilities and\nequipment; quality control; packaging and labeling; adverse\nexperience reports; complaint files and failure investigations;\npersonnel qualification and training and tissue tracking procedures\nto identify tissue from donor to recipient and from recipient to donor;\nand\n(B) donor screening and infectious disease testing.\n(4) are subject to inspection by individuals authorized by the Secretary;\n(5) shall comply with regulations regarding labeling, advertising and\npromotion, which may be promulgated by the Secretary.\n(b) REGULATIONS\nThe Secretary may promulgate regulations for implementation of this section. Such\nregulations may include provisions for certification of facilities that engage in the\nrecovery, processing, storage, or distribution of human tissue.\n1\nJUL-29-1996 13:53 TO:204 - C. JENNINGS\nFROM:DADE, J.\nP. 4/6\n2\n003\n07/24/96 15:58 TJ01 4d3 0738\nFDA GEN COUNSEL\n003\n07/24/95 WED 14:58 FAI\n(c) FINDING OF INTERSTATE COMMERCE\nCongress finds that human tissue that is recovered, processed, distributed, or stored\nin the United States for medical use is in, or otherwise directly affects, interstate\ncommerce.\n(d) DEFINITION -\n(1) HUMAN TISSUE The term \"human tissue\" means any tissue (an\naggregate of similar cells together with their intercellular substance, or\nacellular integuments that have a particular structure and function) derived\nfrom a human body which:\n(A) is intended for administration to another human for the diagnosis.\ncure, mitígation, treatment, or prevention of any condition or disease;\n(B) is intended only to replace or repair comparable bodily tissue and\ndoes not act through a systemic mechanism;\n(C) is recovered, processed, stored, or distributed by methods which\ndo not change tissue function or characteristics or propagate the\ntissue's cells;\n(D) may include the addition of substances that are safe under\nconditions of intended use and not intended to contribute to or\nprovide a therapeutic effect to the recipient; and\n(E) includes demineralized bons, heart valves, and dura mater.\n(2) Such term does not include:\n(A) human material regulated or classified as a drug, medical device\nor biological product except as specified in (d)(1)(8) :\n(B) vascularized human organs, such as heart, liver, kidneys, lungs,\nIntestines, or pancreas;\n(C) blood, blood products, bone marrow, stem cells, somatic cell\ntherapy, gene therapy, or human milk;\n(D) tissue that is combined with a drug, device, biologic, or another\ntissue; and\n(e) TISSUE SPECIFIC REVIEW\nFor specific human tissue as the Secretary deems appropriate and for which she has\n2\nJUL-29-1996 13:53 TO:204 - C. JENNINGS\nFROM:DADE J.\nP. 5/6\n07/24/96\n16:38\nFDA GEN COUNSEL\n004\n301 443 0739\n07/24/96 WED 14:38 FAI\n@\n004\nidentified 1 public health concern related to clinical safety or effectiveness, the\nSecretary may conduct a review of existing data on clinical use, indications,\noutcomes, safety, and effectiveness of such tissue and may, as part of, or following,\nsuch review:\n(1) promulgate regulations controlling such tissue including, but not limited\nto, requirements for special labeling or reclassification (under recisssification\nsubsection) of such tissue; and\n(2) set such other limitations as the Secretary may require to protect the\npublic health.\n(f) CLASSIFICATION AND RECLASSIFICATION\n(1) the Secretary may classify or reclassify a human tissue as a drug, biological\nproduct or medical device, if the Secretary determines that such classification\nor reclassification is needed to protect the public health or, during the tissue\nspecific review of subsection (e), the Secretary determines that premarket\nstudy of effectiveness is warranted; and\n(2) the Secretary may reclassify a human drug, biological product or medical\ndevice as a human tissue, if the Secretary determines that such previous\nclassification is unnecessary to protect the public health.\n(B) RECALL, RETENTION, AND DESTRUCTION AUTHORITY\nIf the Secretary finds that & facility or human tissue violates any provision in this\nsection or any regulations promulgated thereunder, the Secretary may issue an order\nthat such facility cease distribution of human tissue or that such human tissue be\nretained, recalled, or destroyed. After receipt of such an order, the person in\npossession of the human tissue shall not distribute or dispose of the human tissue in\nany manner except consistent with the provisions of the order. Persons subject to the\norder who wish to challenge the order, shall, within 5 days of receipt of such order,\nrequest an opportunity for an informal hearing to be held within 30 days.\n(2) INTERIM REGULATIONS - The requirements set forth in the interim regulations\npromulgated by the Secretary in December, 1993 shall remain in effect until new regulations\nthat supersede these regulations are in effect.\n(3) ADULTERATION PROVISION Section 501 (21 U.S.C. 351) is amended as follows:\n(A) in the first sentence by changing \"drug or device\" to \"drug, device, or human\ntissue.\"\n3\nJUL-29-1996 13:53 TO:204 - C. JENNINGS\nFROM:DADE, J.\nP. 6/6\n07/24/96\n16:59\n301 443 0739\nFDA GEN COUNSEL\n005\n07/24/96 WED 15:35 FAX\n002\n(B) by inserting at the end thereof the following new subsection:\n\"0) If it is human tissue and it is recovered, processed, stored, or distributed\nby a facility that does not comply with good tissue practices consistent with\nsection 352(a) of the Public Health Service Act.\"\n(4) MISBRANDING PROVISIONS - section 50Z (z1 U.S.C. 352) is amended as follows:\n(A) by renaming the section \"Misbranded Drugs, Devices, and Human Tissue\"\n(B) in the first sentence by adding \"(a)\" before \"A drug or device.\"\n(C) by redesignating subsections (a) through (t) as paragraphs (1) through (20).\n(D) by adding at the end thereof the following new subsection:\n\"(b) Human tissue shall be deemed to be misbranded if its labeling is false or\nmisleading in any particular or If its labeling, advertising, or promotion does\nnot comply with regulations promulgated under section 352A(a) (5).\n(5) PROHIBITED ACTS. - Section 301 (21 U.S.C. 331) is amended by inserting the\nfollowing new subsection:\n\"(v) The adulteration or misbranding of any human tissue.\n(6) SEIZURE. --\n(A) Section 304 (a)(2)(D) (21 U.S.C. 334 (a) ) is amended by inserting \"or human\ntissue\" after \"device.\"\n(B) Section 304(d)(1) is amended by deleting the \"or\" before \"cosmetic\" and\ninserting\", or human tissue\" after \"cosmetic\" in the first sentence.\n4\nSERVICES.\nDEPARTMENT OF HEALTH & HUMAN SERVICES\nPublic Health Service\nFood and Drug Administration\nRockVille MD 20857\nSTATEMENT BY\nWILLIAM B. SCHULTZ\nDEPUTY COMMISSIONER FOR POLICY\nFOOD AND DRUG ADMINISTRATION\nPUBLIC HEALTH SERVICE\nDEPARTMENT OF HEALTH AND HUMAN SERVICES\nBEFORE THE\nCOMMITTEE ON LABOR AND HUMAN RESOURCES\nUNITED STATES SENATE\nFEBRUARY 22, 1996\nFOR RELEASE ONLY UPON DELIVERY\nINTRODUCTION\nMadam Chairman and Members of the Committee. I appreciate\nthe opportunity to testify on the important issue of promotion of\nunapproved uses of prescription drugs and medical devices.\nMy name is William B. Schultz. I am the Deputy Commissioner\nfor Policy at the Food and Drug Administration.\nFDA SUPPORTS THE DISSEMINATION OF INFORMATION TO PHYSICIANS\nMadam Chairman, I am here today to talk about uses that do\nnot appear in a product's FDA-approved labeling and are not\napproved by the Agency. Such uses commonly are referred to as\n\"off label, \" \"unapproved,\" \"unlabeled,\" or \"extra-label\" uses.\nThe Food and Drug Administration recognizes that, in certain\ncircumstances, off label uses of approved products are\nappropriate, rational, and accepted medical practice. FDA knows\nthat there are important off label uses of approved drugs. In\nthis context, it is important that physicians have access to\naccurate information about drugs. But we also know that allowing\nthe promotion of these kinds of uses can have negative public\nhealth consequences -- including exposing patients to unnecessary\nrisks and destroying the incentive for companies to conduct the\nnecessary research to demonstrate that products are safe and\neffective for these uses. Striking the proper balance between\nthe need to regulate the promotion of unapproved uses for drugs\nand devices and the need for reliable scientific data and\ninformation on unapproved uses of approved products is a\ndifficult and controversial challenge.\nFDA'S REGULATORY AUTHORITY\nI would like to start today by explaining how, in passing\nand amending the Federal Food, Drug, and Cosmetic Act (FDC Act),\nCongress struck that balance and what, as a result of\nCongressional decisions, FDA can and cannot do with respect to\noff label uses.\nThe legislative history of the Federal Food, Drug, and\nCosmetic Act indicates that Congress did not intend FDA to\ninterfere with the practice of medicine. Thus, once a drug is\napproved for marketing, FDA does not generally regulate how, and\nfor what uses, physicians prescribe that drug. A physician may\nprescribe a drug for uses or in treatment regimens or patient\npopulations that are not listed in the FDA-approved labeling.\nGenerally, FDA does not prohibit the dissemination of\ninformation to health care professionals. Physicians access\ninformation about off label uses through compendia, journal\narticles, continuing medical education programs, symposia, and\nprofessional meetings. Physicians also have access to a number\nof databases that provide information about off label uses. For\nexample, the National Cancer Institute's Physician Data Query\n(PDQ) system is an excellent source for oncologists to obtain\n- 2 -\ninformation about current oncologic therapies. The National\nLibrary of Medicine (NLM) offers a Medical Literature Analysis\nand Retrieval System (MEDLARS), which is a computerized system of\ndatabases and databanks pertinent to biomedical research and\npatient care. NLM currently offers free access to three\ndatabases relating to AIDS. FDA does not regulate a physician's\naccess to any of these types of independent off label use\ninformation -- no matter how preliminary it may be. In addition,\nFDA does not prohibit a manufacturer from providing a physician\ninformation about off label uses if the physician requests that\ninformation. Recently, the Agency announced a proposed change to\nits policy with respect to the dissemination of reference texts\n(medical textbooks and compendia). Drug companies may distribute\nindependent reference texts even if they contain certain\ninformation about off label uses of approved drugs, as long as\nthe texts do not have a significant focus on an off label use of\nthe manufacturer supporting dissemination of the text. FDA\nrecognizes that all of these sources of information can be very\nimportant to good medical practice.\nAlthough the FDC Act does not authorize FDA to regulate the\npractice of medicine, it specifically directs FDA to regulate the\npromotion of drugs and devices. Promotional materials are\nunlawful if they promote an unapproved use for the product;\ncontain claims relating to the dosing, safety or effectiveness of\nthe product that are inconsistent with the approved labeling; or\n- 3 -\nif they lack a fair and balanced presentation of information,\ni.e., of benefits and risks. Although submission of an article\nfor publication in a journal is not promotional, the use of such\nan article to sell a drug or device is promotional.\nUnder current law, if a company wants to promote a use of a\ndrug or device it can do so by submitting an efficacy supplement\nand getting that use onto the label. As I will explain later in\nmy testimony, getting a use onto the label has benefits beyond\nbeing allowed to promote. For example, it ensures reimbursement\nfrom third party payors, it helps to get that use included in\nformularies, and it gives the medical community more complete\ninformation about the product. As I will further explain later\nin my testimony, the requirements for efficacy supplements are\noften significantly simpler than the requirements for applying\nfor permission to market a product in the first place. Moreover,\nthe Agency is considering a number of measures that will make the\nsupplement process a more effective tool for getting additional\nuses on the label of drug and device products.\nS. 1447\nThe Food and Drug Administration Performance and\nAccountability Act of 1995, S. 1447, bypasses the current\napproach. It would permit drug and device companies to use\njournal articles, textbook chapters, continuing medical education\nprogram materials, and compendial information relating to uses\n- 4 -\nrecognized for purposes of third party coverage or reimbursement\nthat discuss off label uses to promote the sale of their products\nfor those uses. The bill also would permit drug companies to use\nsummaries of journal articles, textbook chapters, CME program\nmaterials, or information relating to uses recognized for\npurposes of third party coverage or reimbursement to promote the\nsale of their products for off label uses. Device companies\ncould distribute oral and written information about off label\nuses that are part of an \"exchange\" among health care\npractitioners, health care reimbursement officials, and the\nindustry, that is exchanged for \"educational or scientific\npurposes,\" or that is presented at CME programs, seminars,\nworkshops, or demonstrations for devices to promote the sale of\ntheir products for those uses.\nWe recognize that the purpose of the bill is to enhance\ndissemination of information and not to facilitate or encourage\npromotion of off label uses. But we strongly believe that if the\nbill is enacted, that will be its effect. Drug and device\nmanufacturers market their products principally by sending sales\nrepresentatives, referred to as detail men and women, out to talk\none on one with physicians who might prescribe their products. A\ndetailer's job is to convince those physicians to use and\nprescribe their products. They do this by providing information\nthat purports to describe the usefulness of their products in the\npatient population. Written materials such as journal articles\n- 5 -\nthat discuss favorable studies of these products are powerful\ntools in the hands of a detailer. If the bill is enacted, drug\nand device companies will be free to use these materials to\npromote off label uses.\nPursuant to the bill, after a company receives FDA approval\nof a drug or device for one use, it would be permitted to promote\nthat product, through these other means, for other uses. The\nmaterial that companies could distribute often would be very\npreliminary, based on poorly designed or wholly uncontrolled\nstudies. Companies could promote the use of a product even when\nthe evidence merely suggests or can be interpreted as suggesting\nthat a product may work for a specific use. Effectiveness would\nnot have to be demonstrated. Thus, if drug X is approved for\ncancer patients, and there is some preliminary data that suggests\nit is beneficial for patients with crippling arthritis, the\ndrug's manufacturer would be permitted to promote the drug and\nencourage its use for arthritis on the basis of this preliminary\nor unsubstantiated data. This promotion would be permitted even\nthough the data have not been reviewed by independent scientific\nFDA experts.\nIn addition, the clinical information that appears in the\nmaterials that the bill allows manufacturers to distribute has\nnot been validated in any way. For example, neither peer\nreviewers nor textbook editors review the data underlying a study\n- 6 -\ndescribed in a journal article or textbook chapter. In fact,\npeer reviewers and editors do not even see that data.\nFDA has serious concerns regarding the promotion of\nindications that have not been reviewed and approved by the\nAgency. Because promotional activities of drug companies and\nothers are substantially motivated by profit and market\nexpansion, the widespread promotion of prescription drugs and\ndevices for uses that have not been determined to be safe and\neffective could be detrimental to the health and safety of the\npublic. Permitting companies to promote drugs and devices for\noff label uses could have a number of devastating consequences\nfor the quality of medical care in this country.\nPROBLEMS WITH PERMITTING PROMOTION OF OFF LABEL USES\nThe fundamental problem with permitting the promotion of off\nlabel uses is that not all off label uses are safe and effective.\nThe only way to know which ones are safe and effective is to\ncollect and analyze the data supporting a finding of safety and\nefficacy. Because the data on off label uses have not been\ncollected and analyzed, their promotion raises a number of\nserious concerns.\nUndercutting the Efficacy Standard\nPermitting the promotion of off label uses based on studies\nreported in journal articles or other texts that clearly are an\n- 7 -\ninadequate basis for approval by FDA would undercut the efficacy\nstandard.\nA fundamental precept of drug and device regulation in this\ncountry is that these products must be proven safe and effective\nbefore they can be sold. The requirement that these products\nmust be proven effective, on the basis of well-controlled\nclinical studies, was first adopted by Congress in 1962.\nCongress specifically added the concept of effectiveness to the\ndefinition of \"new drug\" in order to ensure that the efficacy\nrequirement would apply not only to initial claims made for a\ndrug, but also to claims made after the initial new drug\napplication had been approved. 108 Cong. Rec. S22044-46 (daily\ned. October 3, 1962) i S. Rep. No. 1744, 87th Cong., 2d Sess. Part\n2 at 267, 271 (1962) (\"On what logical basis can one possibly\nargue that the initial claim for a drug\nshould be supported\nby \"substantial evidence\" but that successive claims\nshould\nnot be so supported?\" 108 Cong. Rec. at S22045.)\nThe addition of the \"efficacy standard\" revolutionalized\ndrug development and approval, not only in the United States, but\nworldwide, as well. Essentially, a manufacturer cannot just say\nthat a product works for a particular disease or condition, it\nmust prove that the product works for that disease or condition.\nThe only way manufacturers can prove efficacy is by submitting\ndata from well-controlled clinical trials for evaluation by\n- 8 -\nindependent experts at FDA. Anecdotal reports and poorly\ncontrolled observations do not suffice because those kinds of\nreports may be wrong or may not be an adequate basis for\nconclusion. We know this because we have had experience with\nthis type of information. Many drugs approved before 1962 turned\nout not to work when, after 1962, they had to be (and were)\nstudied. Even when such reports suggest efficacy, they fail to\nprovide important guidance in areas critical to the effective use\nof a therapy such as dosage and patient selection and management.\nThe solid foundation that is laid down by the efficacy\nstandard is one of the main reasons that there is a strong sense\nof confidence in the drug products that are on the U.S. market\ntoday. Because the standard requires well-controlled clinical\ntrials, once FDA has made a determination of effectiveness, there\ncan be a high degree of confidence that the drug will work.\nThus, when a manufacturer claims that a product is safe and\neffective for a particular disease or condition, doctors can be\nconfident that the product is in fact safe and effective for that\ndisease or condition. Patients, in turn, can have confidence in\nthe quality of the products they are receiving.\nEliminating the need for well-controlled studies would be a\nmajor setback for the first-rate medical care that the health\ncare system in this country provides. Consider some of the\n- 9 -\nadditional uses that FDA has approved on the basis of such\nstudies -- for example, timolol, propranolol, metoprolol, and\natenolol to improve the survival of heart attack patients, taxol\nfor breast cancer, and interferon-alpha 2b for chronic hepatitis\nB and C. Without the requirement to submit clinical studies to\nprove that drugs are effective for their intended uses, it is far\nless likely that we would know that these drugs will work to\ndecrease mortality in heart attack patients, to delay or prevent\nbreast cancer recurrence, or to treat chronic hepatitis B and C.\nIn the absence of the efficacy requirement, the market will be\nfilled with drugs that manufacturers claim work and that\nphysicians use because of a belief that they work, but for which\nthere is relatively little evidence.\nDisincentive to Conduct Studies\nOne of the most serious consequences of allowing companies\nto freely promote off label uses is that companies would have no\nincentive to conduct or fund the necessary scientific research\nand to present data to FDA to verify the safety and efficacy of\nthose off label uses. In fact, because the Agency might\ndetermine that the new use is not supported by the evidence,\nthere would be an incentive to avoid FDA review. To use the\nexample of the cancer drug that may be useful for crippling\narthritis, why would the drug company undergo the expense of\nactually studying whether the drug works for arthritis if it\ncould promote the drug for arthritis based on preliminary\n- 10 -\nevidence, particularly since a thorough study might fail to\nestablish efficacy for arthritis?\nIn a world where off label uses can be widely promoted,\nmanufacturers would have an incentive to do the minimal amount of\nstudies necessary to obtain approval for the first,\nnarrowest/easiest indication and then heavily promote the product\nfor other broader (and possibly more speculative) uses. For\nexample, interferon-alpha 2b was approved for use in hairy cell\nleukemia, of which there are approximately 300-400 cases per\nyear. It subsequently was approved to treat chronic hepatitis B\nand C, of which there are tens of thousands of cases per year.\nIf S. 1477 had been in effect, the manufacturer of interferon-\nalpha 2b could have sought approval for hairy cell leukemia and\nthen just promoted for chronic hepatitis B and C -- the much\nbroader use -- based on preliminary data. Interferon-alpha 2b is\njust one of many examples of a second, very different use being\nsignificantly broader than the original use for which a drug was\napproved.\nUnder the approach taken in the bill, we might never learn\nwhether interferon alpha actually works to treat hepatitis B --\nyet the manufacturer could promote its use. This is precisely\nthe scenario that Congress sought to prevent when it added the\neffectiveness requirement to the definition of a new drug. A\ngroup of Senators, lead by Senator Kefauver, argued that unless\n- 11 -\nthe effectiveness requirement was added to the definition of\ndrugs, \"the expectation would be that the initial claim would\ntend to be quite limited, which of course, would expedite\napproval of the new drug application. Thereafter, 'the sky would\nbe the limit' and extreme claims of any kind could be made,\"\nsubject only to FDA's enforcement authority. 108 Cong. Rec. at\nS22046.\nBecause the incentive to conduct research on uses of drugs\nand devices will decrease, the end result will be that the\ndissemination of off label information pursuant to this bill will\nactually reduce the amount of information that health care\nproviders receive about drugs and devices.\nSafety Issues\nWidespread promotion of unapproved uses also raises\nsignificant safety concerns. Even under the current law, which\nprohibits the promotion of off label uses, we know of a number of\ninstances where physicians have used drugs for off label uses\nthat have resulted in disastrous consequences.\nFor example, the drugs encainide and flecainide were\napproved for life-threatening and symptomatic arrhythmias, which\nare abnormal rhythms of the heart. In the late 1980's,\nphysicians began to prescribe these two drugs for heart attack\nvictims who were experiencing ventricular premature complexes\n- 12 -\n(VPCs), a type of asymptomatic or minimally symptomatic\narrhythmia. (Asymptomatic arrhythmias are arrhythmias that can\nbe detected by tests, but which the patients do not feel.) This\noff label use, which was supported by published peer-reviewed\njournal articles, was intended to prevent the well-documented\nincreased mortality of heart attack victims who have a high level\nof VPCs by suppressing those VPCs. The use was logical and\nbecame so widespread that the National Institutes of Health\ndecided to study the effectiveness of encainide and flecainide in\nthese patients. To the surprise of almost everybody, that study\ndemonstrated not only that the drugs were ineffective in reducing\nthe risk of death but that the drugs were actually harmful in\npatients for whom it was being prescribed off label -- that is\nthe death rate among those receiving the drug was more than twice\nthe rate of those receiving a placebo. If these unapproved uses\nhad been heavily promoted by drug companies, it is estimated that\nthousands more unnecessary deaths would have occurred.\nAnother example relates to the widespread off label use of a\nclass of drugs called calcium channel blockers (CCBs). These\ndrugs are effective for patients suffering from angina, which is\nchest pain caused by insufficient oxygen to the heart muscle.\nCCBs have no established role in patients who have had a heart\nattack but have no symptoms. These patients do, however, benefit\nfrom another class of drugs, beta-blockers, which are known to\nreduce mortality by 25-30% after heart attacks. Nevertheless,\n- 13 -\nCCBs are widely used in this patient population and there are\npublications that could be interpreted as supporting this use.\nBecause CCBs and beta-blockers generally should not be used\nsimultaneously, patients are receiving CCBs in lieu of clearly\nlife-saving beta blockers. Many, probably thousands, of lives\nare lost each year because a drug of no known benefit is being\nused for an unapproved use in place of a drug with known value.\nWidespread promotion of this use would make the problem even\nworse.\nYet another example of a case where the distribution of\npublished articles on off label use could have resulted in very\nserious harm to the public involves the fentanyl transdermal\nsystem (Duragesic). Approved for use in chronic pain in patients\nrequiring opioids, the fentanyl patch was not approved for acute\npost-operative pain because of concern that it would cause\nrespiratory depression (a serious condition in which less air\nreaches the lungs) in those patients not used to the effect of\nopioids. A number of publications prior to the time of approval,\nhowever, described the drug as safe and effective for post-\noperative pain. After approval, reports to FDA and the\nliterature documented life-threatening respiratory depression in\npost-operative patients given the patches. Extensive promotion\nof this off label use could have been disastrous.\nThere are many other claims that could be promoted through\n- 14 -\npeer-reviewed journal articles describing off label uses that\ncould be detrimental to a large number of patients if they were\nheavily promoted. FDA fears that problems illustrated by these\nexamples would be multiplied if manufacturers were given free\nrein to promote unapproved uses.\nUnbalanced View\nAnother significant problem with permitting companies to\npromote unapproved uses by distributing the type of information\ndescribed in the bill is that physicians may not receive a\nbalanced view of the available information. It is well\ndocumented that there is publication bias. Studies with\nfavorable results have a greater likelihood of getting published;\nstudies with less favorable results less often get published.\nMore importantly, even if less favorable or contradictory results\nhave been published, companies have no incentive to distribute\narticles, textbook chapters, or other information recommending\nagainst a particular use. Because the bill permits companies to\ndistribute certain chapters of textbooks or mere summaries of\njournal articles, chapters, and CME materials, with no obligation\nfor balance or comprehensiveness, physicians may see only one\nside of an off label use story.\nThe current law governing promotion requires balance.\nChanging the law to allow the distribution of journal articles\nand other similar materials that discuss off label uses will\n- 15 -\nallow drug detail men and women to provide materials that\ndescribe favorable study results of their product for a\nparticular use, but without providing copies of materials that go\nthe other way.\nI would like to illustrate with an example. Human growth\nhormone currently is indicated for use only in children who are\nshort because they lack sufficient growth hormone and children\nwho are short because of kidney problems. Its use in children\nwho are short, but have no growth hormone deficiency or\nunderlying kidney problem, is an off label use of uncertain value\nand safety. We identified four journal articles that discuss\nthis off label use -- two more or less supported the off label\nuse and two did not. If a physician receives information about\nthis off label use from a detail person, it is possible that he\nor she will receive only the two favorable articles. On the\nother hand, if the physician were conducting his or her own\nresearch into the subject, he or she would likely locate both the\npro and con articles. Given the approximately $20,000 per year\nprice tag of human growth hormone, the pain a child must endure\nbecause of multiple drug injections each week, and the potential\nadverse effects that growth hormone may cause (such as diabetes\nand possibly tumor growth), it is important that physicians see\nall pieces of the scientific puzzle until the answer is clear.\n- 16 -\nBy using this example, I am not targeting a specific drug or\ndrug company. I am merely trying to illustrate what the bill\nwould permit and why FDA has serious concerns.\nWhat makes this situation even more troubling is that when\nwe have evidence that a particular use is unsafe or ineffective,\nfederal confidentiality laws frequently prohibit FDA from\ndisseminating that information. Thus, there are off label uses\nabout which positive studies appear in the literature and\nnegative data are contained in our files. However, depending on\nits source, FDA may be unable to use that information to ensure\nthat the medical community has all of the available facts on\nwhich to base treatment decisions.\nEven under current law, physicians have access to positive\narticles about off label uses and FDA may be unable to counter\nthose positive articles with any negative information that might\nbe in our files. However, under current law, company detail men\nand women cannot use those articles to promote potentially\ndangerous off label uses.\nThe Bill's Requirements Are Not Substitutes for FDA Review\nThe bill imposes very few requirements on the off label use\ninformation that companies could disseminate. Basically, the\nunapproved use must appear in a peer-reviewed journal article, a\nchapter from a recognized text, text from an approved CME\n- 17 -\nprogram, information relating to a use recognized under Federal\nlaw for purposes of third party coverage or reimbursement, or a\nsummary of one of the above. For devices, the information may\nalso be from oral and written information that is part of an\n\"exchange\" among health care practitioners, health care\nreimbursement officials, and the industry, is exchanged for\neducational or scientific purposes, or is presented at CME\nprograms, seminars, workshops, or demonstrations. None of these\nsources has procedures that confirm the validity of the data and\ninformation contained therein.\nThe purpose of the \"peer review\" process, for example, is to\ndetermine if an article is worthy of publication. At its best,\npeer review can ensure that the reader is provided with enough\ndetail and clarity to make a general judgment about the strengths\nand weaknesses of the study. However, there are no generally\naccepted standards for what constitutes \"peer review. \"\nEssentially, anyone can establish a \"peer review\" journal; the\nrigor of the review varies considerably.\nRegardless of the rigor, there are severe limitations\ninherent in the peer review process that make it inappropriate to\nrely solely on a peer-reviewed journal article for efficacy\ndeterminations. For example, peer reviewers almost never receive\nthe study protocol. They cannot tell what the initial hypothesis\nwas or whether the final analysis represents the planned analysis\n- 18 -\nor an analysis crafted with the results in hand. Peer reviewers\ndo not have access to the underlying data. The peer reviewers\nmust rely on the data and facts as they are presented by the\nauthor. FDA, on the other hand, does have access to the data and\ncan verify the critical statistical outcomes and the conclusions\nof a study. Moreover, peer reviewers do not necessarily have the\ntime or the expertise in all aspects of the subject matter to\nadequately review the information. In fact, a survey reveals\nthat a peer reviewer spends on average less than three hours\nreviewing a prospective article. The peer review process cannot\nguarantee the correctness or authenticity of the article, nor can\nit detect fraudulent or flawed research.\nThe data and information supporting off label uses that\nappear in reference textbook chapters, which could highlight off\nlabel uses of particular drugs or devices, CME materials, and\nmaterials related to third party coverage and reimbursement are\neven less likely to be validated than that in peer-reviewed\njournals. In fact, we have no reason to believe that such data\nhave been reviewed or validated at all. Textbook editors do not\nreview the data underlying information about off label uses that\nappear in those books. The recognition of suggested uses in\ntexts or treatment guidelines for purposes of third-party\nreimbursement serve different societal purposes. The decision to\ninclude such uses is not based on the standards used by FDA to\nsubstantiate safety and efficacy. FDA has serious concerns about\n- 19 -\na provision that allows companies to use these types of\nunproven/unvalidated information for promotional purposes.\nThere are many instances when uncontrolled studies have\nsupported a use and subsequent well-controlled studies have\nfailed to show effectiveness. Moreover, the literature is laden\nwith studies that report preliminary findings -- e.g., studies\nthat involve a small number of patients and case reports or are\nnot properly controlled. Although the studies or reports may be\nscientifically accurate, they are not sufficient to show safety\nand efficacy. Thus, companies should not be allowed to use these\nless rigorous studies to promote off label uses of approved\nproducts.\nGETTING SUPPORTED OFF LABEL USES ON THE LABEL\nAs you know, a drug is approved for its initial indications\nvia a new drug application, which includes data on the drug's\nsafety and efficacy. A subsequent indication is added via a\nsupplemental new drug application, which usually needs to present\nonly efficacy information to support that new use. After review\nand approval by FDA, the new use is added to the approved\nlabeling and can be promoted by the drug's manufacturer.\nThere are several good reasons for drug companies to submit\nthese \"efficacy supplements\":\n- 20 -\n-\nApproval usually ensures that third-party payers will\nreimburse for the use, as insurance companies virtually always\npay for approved uses of drugs and devices.\n-\nAs health maintenance organizations continue to grow in\nsize and number, a sponsor's ability to get their drug included\nin the HMO's drug formulary will be significantly enhanced.\n-\nThe physician, via the approved labeling, is given more\ncomplete information about the drug's uses, contraindications,\nadverse effects, and other important information about the\nmanufacturer's product.\n-\nDrug companies can present the FDA findings to drug\napproval bodies in other countries, thus enhancing their ability\nto gain approval (and reimbursement) for uses in other markets.\n-\nAnd, of course, the manufacturer can promote the use,\nwhether through the use of journal articles or other means.\nUnfortunately, in many instances these incentives have been\ninsufficient to persuade drug sponsors to submit efficacy\nsupplements. There appear to be two reasons for their\nreluctance. First, they fear they will be expected to spend\nmillions of additional dollars conducting new clinical studies to\nconvince FDA reviewers that the new use should be approved. And\n- 21 -\nsecond, they have often complained that efficacy supplements are\ngiven low priority by FDA, resulting in delays of years in\ngetting new indications approved. These concerns -- or at least\nthe perception -- have been valid in the past, and we at FDA must\naddress them.\nWe have been working on ideas for encouraging and expediting\nefficacy supplements for unapproved uses and for otherwise\naddressing industry concerns. We are doing a number of things\nand have several ideas for additional progress in this area. Let\nme summarize them for you:\nExpediting Review of Efficacy Supplements\nAs you know from yesterday's testimony, the Prescription\nDrug User Fee Act of 1992 (PDUFA) is helping resolve the problem\nof timely reviews for drugs and biologics. Under PDUFA, by 1997,\nthe Agency will make approval decisions on all new drug and\nbiologic applications (NDAs, PLAs, and ELAs) within 12 months and\nwithin 6 months for priority drugs and biologics. These time\nframes apply to efficacy supplements as well. The approval times\nfor NDAs, PLAs, ELAs, and efficacy supplements have decreased\nsignificantly, and the backlog of pending applications has also\ndecreased markedly. In fact, for NDAS, PLAs, ELAs, and efficacy\nsupplements, the Agency has exceeded the interim goals\nestablished by Congress. For applications submitted in FY 1994,\nthe Agency reviewed and acted upon 96% of the NDAs, PLAs and ELAs\n- 22 -\nand 73% of efficacy supplements on time. [The interim goal for\nall of these was 55%.] With adequate resources, we are confident\nthat we can make the same progress for medical devices.\nWe should, however, be able to exceed the PDUFA targets. I\nbelieve we should try to reduce the 6-12 month timeframes. To do\nso, we will need to give supplements a greater priority than they\nhave had in the past, and we are committed to that.\nFewer Data Are Needed Than Commonly Believed\nIn addition to assuring companies that we can and will\nexpedite their supplemental applications, we also need to address\nthe industry perception that many efficacy supplements do not\nwarrant the expense associated with getting them approved.\nCompanies fear that they must conduct multiple and expensive new\nclinical trials and collect and analyze thousands of pages of\nmedical data, with no assurances of approval. We need to more\nclearly explain that in the vast majority of cases this is just\nnot so. Some off label uses could be approved by FDA if the\nsponsor would simply compile the existing literature and submit\nit to us. Others may need only limited data or data about the\nstudies, such as protocols, data tapes, or verification of\nendpoints, all of which is already in existence but simply needs\nto be found and copied. In any event, because FDA has already\nlearned much about the drug's actions and effects in humans from\nthe original application and has considerable experience relevant\n- 23 -\nto safety, the data required for second and subsequent\nindications is often far less than for the original indication.\nIt is, in sum, Madam Chairman, a much simpler process than\ngenerally believed and we must convince sponsors of that. To\nthat end, we intend to draft a new policy statement articulating\nthe data needs of the Agency for efficacy supplements for new\nindications.\nPediatric Labeling\nWe are already demonstrating how limited data can get more\nuses on the label in the pediatric area. We have recently\npromulgated new regulations that provide, in certain cases, for\npediatric uses to be included on the approved labeling without\nnew clinical studies. Pursuant to these regulations, when there\nis sufficient basis to conclude that the course of the disease\nand the effects of the drug are sufficiently similar in children\nand adults, drug firms can rely on existing studies in adults,\nextrapolate the data to children, and get those uses on the label\nwith relative ease. The only new data that will ordinarily be\nneeded are information about the drug's course throughout the\nbody (e.g., blood and tissue levels) that will allow the proper\ndosage to be established for the use of that drug in children.\nSeek Out the Most Appropriate Off Label Uses\nAs I said earlier, many off label uses are quite\nappropriate, and some may even be the treatment of choice.\n- 24 -\nAlthough off label use is seen in all medical specialties, it\nseems to be most widespread in certain areas, such as oncology\nand pediatrics. Beginning with those specialties, we will work\nwith practitioners and their specialty associations to identify\nthe off label uses that are most appropriate. We will then\npresent those findings to the sponsors of those drugs and urge\nthem to work with us to get the indications in the labeling. In\nmany, if not most, cases that will entail only the compilation of\nexisting information, not the design and conduct of new clinical\nstudies. We have not done enough to reach out to the medical\nprofession and to drug sponsors on this issue, but we believe we\ncan get the majority of the most appropriate current off label\nuses in the labeling through this process.\nThe best way to get information to physicians about the best\nuses of the drug and device armamentarium, Madam Chairman, is to\nhave it in the product's labeling. Our collective goal ought to\nbe to get this done.\nCONCLUSION\nPublic confidence in drug and device therapy has been built\non the recognized rigor of FDA's approval process. It is\nimportant that we not change a system that has the respect and\nconfidence of the health care community and the public. FDA\nrecognizes that there are important lifesaving off label uses.\nFDA believes, however, that the best way to address any concerns\n- 25 -\nthat the information about those uses is not reaching medical\npractitioners is to get those uses in the labeling. We believe\nthat the risks of allowing drug companies to distribute journal\narticles and other information about off label uses far outweigh\nany benefits.\nI would be happy to answer any questions.\n- 26 -\nORGANIZATIONS & INDIVIDUALS ENDORSING\nTHE ACCESS TO MEDICAL TREATMENT ACT\nHR 2019/S 1035\nAmerican Academy of Anti-Aging Medicine\nAmerican Academy of Environmental Medicine\nAmerican Academy of Pain Management\nAmerican College for Advancement in Medicine\nAmerican Herbalist Guild\nAmerican Holistic Centers\nAmerican Holistic Medical Association\nAmerican Holistic Health Association\nAmerican Massage Therapists Association\nAmerican Preventive Medical Association\nAmerican Academy of Metabolic Medicine\nAmerican Association of Naturopathic Physicians\nAmerican Association of Acupuncture & Oriental Medicine\nAssociation of Applied Psychophysiology & Biofeedback\nCalello Martinez P.C.\nCancer Control Society\nCancer Awareness Coalition\nCenter for Mind-Body Medicine\nCenter for Natural and Traditional Medicine\nCitizens for Health\nCitizens for Nutrition Choice\nCouncil for Responsible Nutrition\nDirect Access for A.I.D.S. Research\nDirect Action for Treatment Access\nDr. Mohammed Ranavaya, of Academy of Disability Evaluating Physicians *\nEd Hudgins of Cato Institute *\nGreat Lakes Association of Clinical Medicine\nHealing Alternatives Foundation\nH.I.V. Complimentary Therapy Center\nInstitute for Naturopathic Medicine\nInstitute of Pain Management\nInternational Academy of Compounding Pharmacists\nInternational Association of Cancer Victors & Friends\nInternational Oxidative Medical Association\nLyme Disease Foundation\nNational Center for Homeopathy\nNational Council for Improved Health\nNational Nutritional Foods Association\nMr. Duke Pearson and Ms. Sandy Shaw\nPeople Against Cancer\nPhysician's Committee for Responsible Nutrition\nPhysician's Association for Anthroposophical Medicine\nPure Food Campaign\nSouthwest College of Naturopathic Medicine & Health Sciences\nTraditional Acupuncture Associates\nTraditional Acupuncture Institute\nUtah Natural Products Association\nVegetarian Awareness Network\n* - Signifies a personal endorsement and is not intended to convey endorsement by the\nAssociation\nJuly 29, 1996\nPrepared by the American Preventive Medical Association\n459 Walker Road Great Falls, Virginia 22066\n703-759-0662 Fax 703-759-6711\nCEI\nCOMPETITIVE ENTERPRISE INSTITUTE\nCARDIAC AND CANCER SPECIALISTS ON\nTHE NEED FOR FDA REFORM\nPolls Show Need for Access to Unapproved Therapies\nCardiology and oncology are two medical specialties whose members understand the need for new,\nlife-saving drugs and devices. They know, on a first-hand basis, that such technologies can frequently\nmean the difference between life and death for many patients.\nWhat do cardiologists and oncologists think of FDA and of access to new therapies? In the past year,\nCEI commissioned two polls to examine the views of these specialists. The first, a poll of oncologists,\nwas released in August, 1995. It involved a total of 160 telephone interviews with randomly selected\nhospital-based oncologists. Its margin of error was ±5.1% at the 95th percentile confidence level--that\nis, similar results would have been obtained in 19 out of 20 cases.\nThe second poll, of 216 randomly selected cardiologists and cardiac surgeons, was released last week\non July 24, 1996. Its margin of error is ±4.8 percent at the same high confidence level.\nBoth polls demonstrate highly negative views of FDA on such issues as whether the agency is too slow\nin approving new drugs and devices, whether the public understands the human cost of FDA delays,\nand whether FDA delays impair the ability of these specialists to give the best possible care to patients.\nBoth polls also demonstrate overwhelming opposition to FDA's policy of restricting information about\noff-label use.\nMajorities of both specialties support allowing physicians to use unapproved drugs and devices,\nprovided those products carried a warning about their unapproved status (Question 8). Both specialties\nbelieved they could rely on published research, on foreign governments' approvals, and on their\ncolleagues' opinions to determine whether such therapies were suitable for their patients (Question 9).\nCardiologists and oncologists agree that FDA regulation has prevented them from giving their patients\nthe best possible care. Something is wrong when an agency charged with protecting public health is\nviewed this negatively by physicians fighting for their patients' lives. The Access to Medical Treatment\nAct (S. 1035), on which the Senate Labor and Human Resources Committee is holding hearings today,\nis an important step toward giving doctors the freedom to treat their patients to the best of their\nabilities.\nSam Kazman\nJuly 30, 1996\n1001 Connecticut Avenue, N.W.\nSuite 1250\nWashington, D.C. 20036\nPhone: (202) 331-1010\nFax: (202) 331-0640\nE-mail: [email protected]\nWeb site: http://www.cei.org\nSummary of Poll Results\n1. On balance, do FDA regulations help or prevent you from using promising new drugs or medical\ndevices in the treatment of your patients? Would that be strongly or just somewhat?\nCardiologists\nOncologists\nTOTAL HELP\n42%\n44%\nStrongly help\n20%\n8%\nSomewhat help\n22%\n36%\nTOTAL PREVENT\n46%\n43%\nSomewhat prevent\n33%\n35%\nStrongly prevent\n13%\n8%\nNeither\n7%\n14%\nDon't know/Refused\n5%\n-\n2. The FDA is too slow in approving new drugs and medical devices.\nCardiologists\nOncologists\nTOTAL AGREE\n65%\n77%\nStrongly agree\n30%\n31%\nSomewhat agree\n35%\n46%\nTOTAL DISAGREE\n30%\n20%\nSomewhat disagree\n18%\n14%\nStrongly disagree\n12%\n6%\nNeither\n3%\n2%\nDon't know/Refused\n2%\n1%\n2\n3. The additional time it takes for the FDA to approve drugs and medical devices costs lives by forcing\npeople to go without potentially beneficial therapies.\nCardiologists\nOncologists\nTOTAL AGREE\n57%\n47%\nStrongly agree\n17%\n11%\nSomewhat agree\n40%\n36%\nTOTAL DISAGREE\n37%\n48%\nSomewhat disagree\n21%\n34%\nStrongly disagree\n16%\n14%\nNeither\n5%\n4%\nDon't know/Refused\n2%\n1%\n4. In your opinion, to what extent does the general public understand the \"human cost\" of the FDA\napproval process, that is, that some people may suffer or die waiting for the FDA to act? Do they\nCardiologists\nOncologists\nTOTAL UNDERSTAND HUMAN COST\n24%\n19%\nCompletely understand\n4%\n1%\nSomewhat understand\n20%\n18%\nTOTAL DON'T UNDERSTAND HUMAN COST\n63%\n74%\nUnderstand only a little\n33%\n51%\nDon't understand at all\n30%\n23%\nRefused/Disagreed with statement/Don't know\n12%\n9%\n5. If a drug or medical device has already been approved for one use by the FDA, should the FDA\nrestrict information about off-label uses, that is, other unapproved uses of that drug or device?\nCardiologists\nOncologists\nYES\n21%\n16%\nNO\n67%\n76%\nSometimes\n5%\n4%\nDon't know\n5%\n1%\nRefused\n2%\n3%\n3\n6. To what extent does this FDA policy of limiting information make it more difficult for you to learn\nabout new uses for drugs or devices?\nCardiologists\nOncologists\nTOTAL MORE DIFFICULT\n60%\n60%\nMuch more difficult\n13%\n17%\nSomewhat more difficult\n47%\n43%\nTOTAL LESS DIFFICULT\n28%\n28%\nSomewhat less difficult\n14%\n22%\nMuch less difficult\n14%\n6%\nNo impact\n7%\n-\nDon't know\n4%\n8%\nRefused\n1%\n5%\n7. Would you say the FDA's approval process has hurt your ability to treat your patients with the best\npossible care frequently, some of the time, at least once, or never?\nCardiologists\nOncologists\nTOTAL HURT ABILITY\n71%\n63%\nTO TREAT\nFrequently\n7%\n11%\nSome of the time\n45%\n37%\nAt least once\n19%\n15%\nNEVER\n28%\n36%\nRefused\n1%\n1%\n8. What would your position be on a proposal to change FDA law so that unapproved drugs or devices\ncould be made available to physicians as long as they carried a warning about their unapproved status?\nWould you strongly favor, somewhat favor, somewhat oppose, or strongly oppose such a proposal?\nCardiologists\nOncologists\nTOTAL FAVOR\n53%\n61%\nStrongly favor\n21%\n24%\nSomewhat favor\n31%\n37%\nTOTAL OPPOSE\n44%\n37%\nSomewhat oppose\n24%\n24%\nStrongly oppose\n20%\n13%\nDon't know/refused\n3%\n2%\n4\n9. Assume for a moment that a system was in place where unapproved drugs or devices were available to\nyou for treating patients. Which of the following would be the most important factor in your decision to\nuse such an unapproved drug or device?\nCardiologists\nOncologists\nWhether persuasive published research exists\n47%\n59%\nabout the drug or device\nWhether the drug or device has received approval\n25%\n29%\nin other medically advanced countries\nWhether the drug or device was well-regarded by\n19%\n10%\nphysician colleagues\nDon't know/Refused\n10%\n2%\n10. And finally, how many years have you been in practice?\nCardiologists\nOncologists\n5 years or less\n7%\n14%\n5-8 years\n7%\n14%\n8-12 years\n14%\n14%\n12-15 years\n17%\n11%\nMore than 15 years\n56%\n47%\n11. Gender\nCardiologists\nOncologists\nMale\n94%\n89%\nFemale\n6%\n11%\n5\nCEI\nCOMPETITIVE ENTERPRISE INSTITUTE\nFor Immediate Release:\nContact: Greg Smith (202) 331-1010\nPHYSICIAN ACCESS TO UNAPPROVED THERAPIES SUPPORTED BY\nNEW LEGAL STUDY AND BY TWO NATIONAL POLLS OF\nMEDICAL SPECIALISTS\nWASHINGTON, DC July 30, 1996-A public interest group today announced the release of a new legal\nstudy on giving physicians access to drugs and devices that have not been approved by FDA. On\nTuesday, July 30, the Senate Labor & Human Resources Committee holds hearings on the Access to\nMedical Treatment Act (S. 1035), a bill which increases physician access to such therapies.\nThe CEI study, Breaking the FDA's Drug Approval Monopoly--Implications for Tort Law and Consumer\nWelfare, is written by George Mason Law Professor Michael I. Krauss. It concludes that FDA's current\ncommand-and-control approach to therapeutic approval cannot be justified by the \"market failure\"\narguments that are usually offered to support it. Physician access to unapproved therapies would serve the\ninterests of patients who frequently suffer under FDA delays, and would ultimately force FDA itself to\nearn its credibility.\nA CEI poll of cardiologists, released on July 24, demonstrates that support for this approach is far wider\nthan commonly assumed. A majority of the over 200 cardiologists polled (53%) supported physician\naccess to properly labeled unapproved therapies, while 44% opposed it. Similarly, a 1995 CEI poll of\ncancer specialists found 61% favoring this approach. Both groups stated that \"persuasive published\nresearch\" would be the single most important factor in their deciding whether to use such therapies.\nCEI General Counsel Sam Kazman stated: \"Physician access to unapproved therapies is often derided as\nopening the door to snake oil. The fact that such an approach is favored not only by the public, but by\nmajorities of these two life-saving specialties indicates that FDA is far more of a health problem than its\nsupporters will admit.\"\nUnder CEI's proposal, FDA would continue to evaluate new therapies, but it would not have the power to\nveto unapproved therapies, which would be available under medical supervision and with clear warning of\ntheir unapproved status.\nCEI is a non-profit, non-partisan public policy group dedicated to free markets and limited government.\nFor more information, or a copy of the study or the polls, call Greg Smith at (202) 331-1010.\n1001 Connecticut Avenue, N.W.\nSuite 1250\nWashington, D.C. 20036\nPhone: (202) 331-1010\nFax: (202) 331-0640\nE-mail: [email protected]\nWeb site: http://www.cei.org\nTHE FEDERATION OF\nSTATE MEDICAL BOARDS\nOF THE UNITED STATES, INC.\n400 FULLER WISER ROAD. SUITE 300\nEULESS. TEXAS\n76039-3855\n817 868-4000\nFAX 817 868-4099\nPRESIDENT\nROBERT E. PORTER. MD\nONE MEDICAL CENTER DR.\nSTATEMENT OF THE\nLEBANON. NH 03756\nFEDERATION OF STATE MEDICAL BOARDS\nPRESIDENT ELECT\nJAMES E. WEST. MD\n901 EAST LEIGHTON AVENUE. SUITE 702\nOF THE UNITED STATES, INC.\nANNISTON. AL 36207\nVICE PRESIDENT\nON\nSUSAN M. SPAULDING\nP.O. BOX 222\nMONTPELIER. VT 05601\nTREASURER\nS.1035, ACCESS TO MEDICAL TREATMENT ACT\nBRUCE H. HASENKAMP JD\n900 HYDE ST.. SUITE 1208\nSAN FRANCISCO. CA 94109\nTO THE\nIMMEDIATE PAST PRESIDENT\nGERALD J BECHAMPS. MD\nP.O. BOX 2698\nWINCHESTER. VA 22601\nCOMMITTEE ON LABOR AND HUMAN RESOURCES\nDIRECTORS\nUNITED STATES SENATE\nLEROY B BUCKLER. MD\n640 SOUTH STATE ST\nDOVER. DE 19901\nWILLIAM H. FLEMING. III. MD\nJULY 30, 1996\n7777 SW FREEWAY. SUITE 1004\nHOUSTON TX 77074\nJOHN T. HINTON. DO. MPH\n655 EDEN PARK DR.\nCINCINNATI OH 45202\nPHILIP M. MARGOLIS. MD\n900 WALL ST.\nANN ARBOR. MI 48105\nDINESH PATEL. MD\n15 PARKMAN ST. SUITE 510\nBOSTON, MA 02114\nALAN E. SCHUMACHER. MD\n3020 CHILDREN'S WAY / MC 5008\nSAN DIEGO. CA 92123\nGEORGE J VAN KOMEN. MD\n745 EAST 300 SOUTH\nSALT LAKE CITY. UT 84102\nRAY Q BUMGARNER JD\n77 SOUTH HIGH ST. 17th FLOOR\nCOLUMBUS. OH 43266\nJAMES R. WINN. MD\nEXECUTIVE VICE PRESIDENT\nDALE L. AUSTIN. BSN. MA\nDEPUTY EXECUTIVE\nVICE PRESIDENT\nCAROL CLOTHIER. BA\nASSISTANT VICE PRESIDENT\nP/R. PUBLICATIONS. EDUCATION\n[. KATHRYN HILL. MEd\nASSISTANT VICE PRESIDENT\nEXAM/BADB SVCS. DIV.\nThe Federation of State Medical Boards is pleased to provide comments about S.1035, The\nAccess to Medical Treatment Act. The Federation is a national organization, the members of\nwhich are the state medical boards empowered to license and discipline physicians in the United\nStates. The mission of the state medical boards is to protect the public from unqualified\npractitioners of medical services, through enforcement of standards established by state laws.\nThe Federation assists boards with this mission, acting as a clearinghouse for the latest\ninformation on licensure and discipline, and assists in the credentialling process through\nmaintenance of a comprehensive database of board actions involving physician disciplinary\nmatters, that is available for query by state boards and other credentialling agencies.\nThe evaluation of a medical practitioner is best performed at a level of government that allows\nregulators to take advantage of professional and personal relationships with individuals whose\njudgment they trust. Since being established in the late nineteenth century in response to a\nnumber of incidents in which patients were harmed, state medical licensure boards have evolved\ninto sophisticated regulatory agencies dedicated to ensuring that the public is protected from unfit\nand/or unqualified practitioners.\nDuring the last century each state has enacted and amended its own version of a medical practice\nact. While the specifics of each medical practice act differ, each prescribes through statute and\nimplementing regulation the process by which the initial granting of a license and the monitoring\nof the privilege to practice medicine shall be accomplished.\nToday, there are 54 allopathic and 16 osteopathic state medical boards which have the authority\nto license physicians, to regulate the practice of medicine within the state, and to discipline those\nwho violate the relevant medical practice act. In particular, state medical boards:\nEstablish academic and clinical skill standards for all license applicants;\nEstablish rules and regulations promoting the safe and effective practice of medicine;\nRequire periodic re-registration of medical licensees in order to review the qualifications\nof licensees on a regular basis; (the frequency of re-registration required varies from state\nto state);\nInvestigate and adjudicate allegations of physician misconduct;\nTake appropriate disciplinary actions against any physician who is found to have violated\nthe state medical practice act. The action taken may involve sanctions that range from\nlicense revocation to reprimands and fines.\nThese central functions of state medical boards serve to accomplish the primary purpose of\nmedical licensure; protecting the public from sub-standard medical care.\nThe member Federation boards recognize that patients have a right to participate with their\nphysicians and other health care practitioners in the decisions to pursue a particular therapy as\nlong as risks, benefits, costs, and alternatives are discussed between practitioners and patients\nbefore a particular course of treatment is begun. A number of our boards have had to discipline\npractitioners for providing treatment without adequate disclosure to the patient. For that reason\nthe Federation is supportive of several provisions in S.1035 that recognize the need for full\ndisclosure prior to treatment. Unfortunately, other provisions in the bill seriously undermine the\nability of state licensing boards to take actions against physicians who may jeopardize public\nhealth.\nS.1035 grants every patient a right to be treated by a health care practitioner with any medical\ntreatment that such individual desires (including one not approved, certified, or licensed by the\nSecretary of Health and Human Services), provided: a) that such practitioner has personally\nexamined the individual and agrees to treat such individual, and b) the administration of such\ntreatment does not violate licensing laws. The Federation has grave concerns about this central\nprovision and does not believe that the limitations (e.g. requiring a personal examination and\nprohibiting treatment that violates licensing laws) provide adequate safeguards for patients.\nFirst, although the bill requires a personal examination of a patient by a practitioner, it does not\nspecify the nature of the examination; whether it may be perfunctory, or must be exhaustive, nor\nwhether it shall include particular attention to the patient's mental and emotional state if a\ntreatment involving products that have not been approved by FDA is being recommended.\nSecond, The bill prohibits the administration of any treatment that violates licensing laws. For\nthe most part, licensing laws do not contain prescriptive lists of dos and don'ts for practitioners\nto follow. State licensing laws are designed to give boards wide latitude in making\ndeterminations whether a particular practitioner is practicing competently. A practitioner\ncontemplating the use of an unapproved therapy will not be able to find in statute a definitive\nanswer to the question of whether its use violates his or her state licensure law. In fact, a\npractitioner is not likely to find out if use of an unapproved product violates state licensure law\nuntil a board makes a determination after the treatment has been provided. For this reason, the\nFederation does not believe that the limitation in the bill indicating that a procedure must not\nviolate licensing laws will be effective in preventing a practitioner from engaging in activities\nspecifically authorized by this new legislation but not explicitly prohibited under a state licensure\nstatute.\nFurther, the protocol that must be followed by a practitioner who provides an unapproved therapy\nis inadequate and provides only illusory protection for the patient. The first element of this\nprotocol is that the practitioner must determine that there is no reasonable basis to conclude that\nthe treatment poses an unreasonable and significant risk of danger to a patient. This stands the\nHippocratic Oath on its head. \"First, do no harm\" has been transformed to, \"Do no harm that\nis unreasonable and poses a significant risk of danger.\" It will be very difficult for state licensure\nboards to accept this standard. Many boards will find it contradictory with standards they have\ndeveloped over years of experience in dealing with both responsible and irresponsible\npractitioners.\n2\nThe legislation also require that a practitioner who provides a treatment that involves a product\nnot approved by FDA provide the patient with written notice of the product's lack of approval,\nthe treatment's anticipated benefits, foreseeable side effects, and the results of past treatments.\nWhile this appears to be a fairly complete list of information that will allow a patient to make\nan informed decision, in most cases, the information will not be very useful and could be\nmisleading. Information about the risks, benefits, contraindications, and side effects of treatments\nthat have not been subjected to clinical studies is anecdotal possibly misleading and not reliable.\nAs suggested at the outset, the concept of providing extensive information to a patient so that he\nor she can make an informed decision about therapy is laudable. Application of that concept to\ntherapies for which there is little or no verifiable clinical data is useless in most cases and\nfraudulent in others.\nThe Federation also believes that other provisions in the bill need significant revision. Many of\nthe definitions are imprecise. For instance, the definition of a health care practitioner is someone\n\"who is legally authorized to provide health services in the State in which the services are\nprovided.\" In order to make it clear that an individual may only provide those health services\nfor which he or she is licensed, the definition should reference licensure for a specific type of\npractitioner. Similarly, Section 8 of the bill requires that a health care practitioner who discovers\nthat a treatment was a danger to the individual receiving such treatment must immediately report\nto the Secretary of HHS. Unfortunately, this section does not go on to require the practitioner\nto immediately cease using the treatment until further investigation or study about the treatment\nhas been conducted. It appears that the practitioner's obligation is met by filing a report, despite\nthe apparent danger of the treatment.\nIn summary, the Federation of State Medical Boards is very concerned that S.1035 if enacted\nwould interfere with state medical boards' ability to make appropriate decisions about the\ncompetency of physicians. Our member boards are constantly balancing the right of individuals\nto make informed choices about their health care and the boards' obligation to protect vulnerable\npeople who may not be fully informed about the benefits and risks of different therapies from\nbeing exploited or harmed by licensees of the state. If S.1035 is enacted, the public will no\nlonger be confident that licensure is an indication that the safety of the individual being treated\nby the licensees is of paramount importance.\n3\nCEL\nHEALTH CARE\nREFORM PROJECT\nCOMPETITIVE ENTERPRISE INSTITUTE\nBREAKING THE FDA'S\nDRUG APPROVAL MONOPOLY\nIMPLICATIONS FOR TORT LAW\nAND CONSUMER WELFARE\nMICHAEL I. KRAUSS\nJuly 1996\nISSN#1085-9055\nBREAKING THE FDA'S\nDRUG APPROVAL MONOPOLY\nIMPLICATIONS FOR TORT LAW\nAND CONSUMER WELFARE\nMichael I. Krauss\nEXECUTIVE SUMMARY\nThe Food and Drug Administration's monopoly over approving new medical therapies is pre-\nmised on the idea that information markets fail. In fact, competitive forces produce information much\nmore readily than is commonly believed through advertising, testing publications, and companies'\nreputations for quality. This holds important implications for FDA reform.\nThe common law inspires confidence in information produced without the need for heavy-\nhanded regulations. Tort and product-liability law can and do result in increased informational output\nfrom manufacturer to physician and consumer precisely in those instances where such output might\notherwise be insufficient.\nThe market failure argument supposes that private corporations have insufficient incentives to\nproduce information, but that government incentives to inform consumers are somehow not distorted.\nBut FDA is subject to its own set of perverse incentives. For the agency, the political consequences of\nmistakenly approving a bad drug or device are far worse than those of mistakenly delaying or disap-\nproving a needed therapy. As a result, FDA is inherently overcautious - an approach which serves its\ninterests but not those of the public.\nThe path to reform can be found in a gap in FDA's current monopoly. Under existing law,\nmanufacturers may not market drugs or devices that have not received FDA approval. But if a drug or\ndevice is approved by the agency as safe and effective for one purpose, then doctors are free to pre-\nscribe it for other purposes as well.\nDespite its efforts to suppress these \"off-label\" uses, FDA has not stemmed the tide. Off-label\nprescriptions have proliferated despite tort law's implicit bias in favor of FDA-approved uses.\nA proposal by the Competitive Enterprise Institute suggests a way to preserve FDA's evaluative\nfunctions while expanding therapeutic choice. Under this proposal, FDA would function not as a veto\nagency, but as an evaluation agency. Rather than being banned across the board, unapproved therapies\nwould be available under medical supervision and with clear warning of their unapproved status. That\nis, \"off-label manufacturing\" would be permitted, much as \"off-label prescribing\" is presently allowed.\nFDA would lose its veto power over new therapies, but it would continue to act as a state-funded\nevaluator of therapies.\nManufacturers might still choose to seek FDA approval if that approval was sufficiently valued\nby the public and by physicians. Moreover, under this proposal FDA approval would confer a shield\nagainst design defect liability. But patients and their doctors would be free to go beyond the circle of\ngovernment approved therapies. The arena of initial therapeutic evaluation would itself expand to\nencompass such private entities as testing laboratories and medical journals, so that FDA itself would\nbe subject to competition in producing credible, and timely, evaluations of new drugs and devices.\nFDA's legal control over medicine has never been all-encompassing, but its exercise of that\npower has had deadly consequences. The \"off-label\" use gap in FDA's power has mitigated its poten-\ntially disastrous effects, and contains the kernel of a regulatory approach that would be far safer and\nmore effective than our current system.\nBREAKING THE FDA'S\nDRUG APPROVAL MONOPOLY\nIMPLICATIONS FOR TORT LAW\nAND CONSUMER WELFARE\nby Michael I. Krauss¹\nINTRODUCTION\nOrigins and Characteristics of the FDA's \"Certification Monopoly\"\nIn the 1970s, a configuration of geo-political factors resulted in a\nserious but temporary tightening of oil supplies. Several sets of sweeping\nfederal fuel economy regulations were enacted. The institutionalization of\nthis expanded federal mandate led to the production and sale of relatively\ndangerous and unattractive automobiles.² In a similar way, federal drug\nregulation has been driven by reactions to sensational occurrences. For\nethical drugs as for cars, the belief that markets (tempered by common law)\nFederal drug\ncan provide safe and effective products has been a notable casualty of federal\nregulation has\nregulation.\nbeen driven by\nThe first statute regulating pharmaceutical products in the United\nreactions to\nStates was the Pure Food and Drug Act of 1906,³ which established federal\nsensational\noffenses for adulteration and mislabeling of ingredients in food and drugs.⁴\nThe statute was apparently Congress' response to the \"literary emergency\"\noccurrences.\ngenerated by Upton Sinclair's The Jungle, a turn-of-the-century Soylent\nGreen portraying a world in which all medicines were deleterious, all milk\ntainted and all sausages once human. Both before and after the 1906 bill's\npassage, non-narcotic drugs were as freely available as newspapers (as they\nremain in many countries today⁵). No government approval was required\nbefore drugs were manufactured or marketed, nor was a physician's prescrip-\ntion legally required (though doctors' advice was relied on by many, with\nprescriptions accounting for almost one third of all drugs consumed).⁶\nPatent medicines of dubious effectiveness were available on the\nmarket in 1906. Amendments to the 1906 law in 1912 criminalized false and\nmisleading claims of a medication's efficacy. It is worthwhile noting that,\nfederal criminal law aside, even at this early stage of its development⁷ the\ncommon law already provided recourse to those injured by negligently\nmislabeled or poorly manufactured drugs.⁸ Economic analysis suggests that\nKrauss: Loosening the FDA's Drug Certification Monopoly\nPage 1\nmarket forces will tend to provide correct incentives for manufacturers to\ndesign and produce safe drugs if tort remedies are available in such cases.⁹\nOf course, tort law has little effect on insolvent tortfeasors, and in any case\nthe national ruckus generated by The Jungle provided an impetus for federal\nofficials anxious to be seen \"doing something\" about drug problems.\nPerhaps not surprisingly, criminal enforcement also presented difficulties\n(insolvent producers are often \"fly-by-night\" and hard to locate; criminal\nintent is more difficult to prove than tortious negligence; etc.). All of these\nfactors curtailed enforcement of the 1906 Act 10\nFederal drug regulation was of little consequence until a tragedy in\n1937. In attempting to formulate a liquid form of sulfanilamide (a sulfa drug)\none Samuel E. Massengill, a Tennessean doing business as the Massengill\nCompany, marketed a syrup that employed diethylene glycol as its solvent.\nOne hundred seven children died after ingesting this poisonous concoction.¹¹\nThough Massengill was of course found liable in tort for his gross negli-\ngence, 12 the political temptation to provide additional \"protection\" to voters\nproved irresistible for the Roosevelt administration, which was enjoying the\nhuge expansion of federal jurisdiction produced by the \"switch in time that\nFederal drug\nsaved nine. \"13 The President signed the Food, Drug and Cosmetic Act of\n1938, which for the first time required firms to submit New Drug Applica-\nregulation was of\ntions (NDA's) to the FDA before introducing pharmaceuticals into interstate\nlittle conse-\ncommerce. Each NDA enumerated the proposed uses of a drug and\ndemonstrated that tests \"proved\" it safe¹⁴ at recommended dosages. NDA's\nquence until a\nwere approved after 60 days unless the FDA determined before that period\ntragedy in 1937.\nthat they did not reveal sufficient safety testing. [The 1938 act contained\nanother, seemingly innocuous, provision allowing discretionary exemptions\nfrom labelling requirements. This provision was subsequently interpreted by\nthe FDA to greatly expand its authority (and physicians' income) by creating\na category of \"ethical drugs,\" that could henceforth be sold only by prescrip-\ntion.\nFDA safety evaluations obviously caused delays in the marketing of\nnew drugs. But lag times were relatively short: by the end of the 1950's\nrecord levels of new drugs were being marketed with mean regulatory delays\nof seven months. The 1938 act is most renowned, however, for the delay it\noccasioned in the introduction of the German sedative Thalidomide in 1960.\nWhile an FDA reviewer investigated reports (published in Europe for\nyears¹⁶) that Thalidomide caused peripheral nerve damage, news of a\ndifferent side effect, deformities in the fetuses of pregnant users of the\nsedative, led to its withdrawal from markets worldwide in 1961. 17\nThe 1938 act had indirectly prevented any Thalidomide tragedies in\nthe United States. Congress nonetheless sprang to action to dramatically\nexpand federal powers. In 1962 a hastily drafted Food and Drug Act required\nthat drugs henceforth be found safe and effective by the FDA before they\ncould be marketed. 18 Whereas under the 1938 act NDAs were approved\nPage 2\nKrauss: Loosening the FDA's Drug Certification Monopoly\nunless the FDA denied them, after 1962 disapproval was the default position:\nfor an NDA to be approved the FDA must affirmatively conclude that a new\ndrug is safe and effective. 19 While the 1938 bill allowed firms to test the\nsafety of their own products (subject to documenting their tests for FDA\nreview), after 1962 all human testing of new drugs had to be pre-cleared by\nthe agency. The FDA acquired, additionally, the power to pre-approve all\ndrug advertising and all labels, and set out \"good manufacturing practices\"\nregulations.\nAs others have noted,²⁰ the combined effect of the 1938 and 1962\nlegislation was to fundamentally alter the nature of American pharmaceuti-\ncal production and distribution. Whereas the 1906 act had essentially sought\nto make markets work better through the prohibition of false claims and\ninformation,²¹ after 1962 the judgment about what was desirable or undesir-\nable was to be made by a central regulatory authority rather than by the\nchoices of suppliers, physicians, and patients.\nAs might be expected, one effect of the FDA's post-1962 \"certifica-\nFDA safety\ntion monopoly\" is a much more lengthy \"drug lag.\" By 1967, average post-\ntest review times for an NDA had increased from seven to thirty months. 22\nevaluations\nLargely because of agency involvement in testing, total pre-authorization\nobviously caused\ndevelopment time for a new drug (which had averaged from 4 to 6 years\nbefore 1962) increased to over 16 years by 1990. 23 Only one out of 5,000 new\ndelays in the\ndrugs now completes this process successfully, at an average manufacturer's\nmarketing of new\ncost of $200 million.²⁴ Economic theory leads to the prediction that these\nsubstantial increases in the cost of developing a drug for the US market affect\ndrugs.\nboth the number of new drugs developed (at the margin, otherwise market-\nable drugs will now be unprofitable ex ante to a manufacturer)²⁵ and the\nmarket price of developed drugs during what remains of their patent\nmonopoly.²⁶ Both these forecasts have been amply documented in practice.²\nAlso increasingly chronicled is the net cost in lost lives of not approving\neffective drugs quickly, as the following section relates.\nTHE RATIONALE FOR THE FDA\nCERTIFICATION MONOPOLY:\nANALYSIS AND CRITIQUE\nThe 1938 and 1962 amendments came during \"New Deal\" and\n\"Great Society\" administrations, when confidence in government as an\nefficient provider and allocator of goods and services was high. General\npreference for government over markets is typically accounted for in \"wel-\nfare economics\" by the existence of \"market failures.\" In the case of drugs,\nthe lay version of the \"market failure\" argument is that the profit motive leads\nmanufacturers to produce too many drugs too quickly, that these drugs would\nconsequently either be poorly manufactured, 28 designed²⁹ or marketed,³⁰ and\nthat consumers would suffer losses that could be avoided if manufacturers\nKrauss: Loosening the FDA's Drug Certification Monopoly\nPage 3\nwere forced through regulatory hoops. Several \"consumer watchdog\"\ngroups embrace this market failure theory wholeheartedly. Dr. Sidney Wolfe\nof Public Citizen, for example, recently warned Congress not to privatize\nany FDA functions because drug manufacturers \"mak[e] decisions based\nmore on who fills their pocketbook than what is best for the public health.\"3¹\nIn economic theory, the \"market failure\" popularly attributed to\npharmaceutical manufactures' profit motive is ascribed to \"imperfect infor-\nmation.\" The theoretical argument goes roughly as follows:\nPrivate choice of goods and services maximizes global satisfaction only\nif consumers perfectly know what they want and flawlessly calculate\nwhether products offered for sale will give them what they want. These\nconditions imply an elimination of all risk;\nA risk-free universe exists nowhere, of course, and is especially absent\nwhere disease is concerned. Consumers of drugs in fact have doubts both\nabout what ails them and about the effects of proposed remedies for that\nailment;\nBy 1967, average\nProducers of a remedy can of course provide useful information on the\nlatter subject to consumers, but (as statements like Dr. Wolfe's above\npost-test review\nindicate) informational asymmetry is held to encourage false or biased\nreports;\ntimes for an NDA\nFurthermore, information is a \"public good:\" once originated, it can be\nhad increased\nreproduced or broadcast. Since others can copy costly-to-produce infor-\nmation, the argument goes, insufficient quantities of data about pharma-\nfrom seven to\nceuticals are likely to be produced by the private market. Notably, it is\nthirty months.\nheld to be unlikely that disinterested third parties would spring up to\nprovide correct evaluations of a drug's safety and effectiveness;\nThus, concludes the argument, government must fill the gap created by\ninformational market failure. This government can do by testing and\ncertifying drugs, and by requiring exceptional quality before authorizing\ndrug marketing.\nThere are many difficulties with the market failure rationale for a\ngovernment drug certification monopoly. Some can be usefully sketched\nhere:\nThe market failure argument explains little because it explains too much.\nVirtually all consumer goods and services are purchased by buyers with\nincomplete information. How long will that pair of panty hose last, and\nwill its chemical formulation provoke allergic reactions? Will this\nchampagne bottle explode in my face, scarring me for life? Is the doctor\noperating on me this morning recovering from last night's party? Will the\nuniversity I just applied to have an excellent reputation when I graduate\nfour years from now? On all these issues, should I trust the information\nI receive from the not disinterested department store, bottler, surgeon or\nlaw school? Consumer information is never perfect, and ignorance (i.e.,\nrisk) therefore inevitably influences all choices relevant to our well-being.\nBut few are confident enough in government's ability to discover and\nprocess information to argue for the replacement of market allocation and\nPage 4\nKrauss: Loosening the FDA's Drug Certification Monopoly\nconsumer choice by regulatory agencies merely because information is\nimperfect.³²\nThe major premise of the market failure argument, that information is\na \"public good\" underproduced by markets and therefore efficiently\nprovided only by government, is flawed. Competitive forces privatize\ninformation much more readily than is commonly believed by welfare\neconomists.33 Competitors with better products profit by pointing out\nimperfections in their rivals' merchandise. Testing publications from\nConsumer Reports to Car and Driver find markets for information,\nranging from open evaluation to formal certification of products. 34 The\nvalue of these publications (and for that matter, the value of pharmaceu-\ntical manufacturers' products) derives from the reputation for quality they\nacquire. In fact the \"good will\" value of brand names, trademarks, and\nother intellectual property, which both product manufacturers and con-\nsumer publications ferociously protect,35 is largely a function of this\nreputational effect. Commercial activity (whether by automobile manu-\nfacturers or drug producers) consists not of one-shot events but rather of\na series of repeat dealings; only myopic producers generate false product\nThe market\ninformation if it is likely that the misinformation will become known.\nAdmittedly, fly-by-night operators by definition don't feel reputational\nrisk: but that is precisely why the market values their products less than it\nfailure argument\ndoes those of a Proctor & Gamble or a Merck. That is why the used car\nexplains little\nsold through classified ads costs less than the same car sold by a reputable\ndealer. In the absence of any federal regulation, market prices for\nbecause it\nproducts already compensate ex ante for informational imperfections.\nexplains too\nOf course, reputational markets are not perfect. Most notably, \"agency\nproblems\" incite misbehavior. Managers may, for example, deceive drug\nmuch. Virtually\n(or car, or pantyhose, or surgery, or law school) \"purchasers\" because by\nall consumer\nthe time the misinformation is discovered the manager will have comfort-\nably retired, personally reaping the short term gain while the corporation\ngoods and\nis left with the long-term pain. While agency problems do exist (in\ngovernment³⁶ as well as in private industry), it is important to note that tort\nservices are pur-\nand contract law create powerful incentives for private firms³ to monitor\nmanagerial behavior. The common law inspires confidence in informa-\nchased by buyers\ntion produced without the need for heavy-handed regulations.\nwith incomplete\nFor example, incorrect information dispensed by manufacturers typi-\ninformation.\ncally constitutes a \"breach of express warrant,\" giving rise to strict\nliability suits by consumers injured as a consequence. Poor manufac-\nturing techniques, shoddy design work, inadequate warnings or careless\npreparation (whether by a too-hasty marketer of a drug with side-effects\nor by a partying surgeon) result in tort or products liability. This liability\nis designed to fully compensate wrongfully harmed victims, thereby\nforcing wrongdoers to internalize the cost of their misbehavior. Some\nbelieve that tort law undercompensates plaintiffs, while others feel that\ntort recovery is too generous. Depending on who is right, tort should be\nmade more plaintiff- or defendant-friendly. But that is a question of tort\nlaw, not of government regulation.³⁹ If the amount manufacturers (or\nservice providers) must pay injured parties in tort suits is greater than the\nlong term gain they derive from deceiving their clientele (and such gain\nshould not be easily assumed: reputational costs make it problematic, as\nseen above), information will be improved. This will occur precisely in\ncases where we want to modify the manufacturer's (or service provider's)\nbehavior. 40 Tort and product liability law can and do result in increased\nKrauss: Loosening the FDA's Drug Certification Monopoly\nPage 5\ninformational output from manufacturer to consumer precisely in those\ninstances where such output might otherwise be insufficient.⁴¹\nThe market failure argument supposes (incorrectly, as seen immediately\nabove) that private corporations' incentives to produce information are\ninsufficient. It also believes that government incentives to inform\nconsumers arenot distorted. But this benign view of government has been\nchallenged by political theorists ever since the Federalist Papers. Schol-\nars who monitor civil servants know that \"agency problems\" are notori-\nously likely to reduce bureaucrats' efficiency. 42 \"Public Choice\" analysis\nteaches that we should expect government agencies to be overcautious in\napproving new drugs. The loved ones of those who have died because a\nnon-approved (or non-developed) drug they have never heard of might\nhave saved them had it been developed and marketed are unlikely to\nprotest to their elected representative. On the other hand, every crippled\nvictim of a defective drug is visible to journalists and to politicians,\nlawyers and judges. Every new drug is therefore potentially another\nThalidomide to bureaucrats. As Sam Kazman has written,\n\"From the FDA commissioner to the bureau heads to the individual\nNDA reviewers, the message is clear: if you approve a drug with\nDrug lag's\nunanticipated side effects, both you and the agency will face the heat\nof newspaper headlines, television coverage and congressional hear-\nvictims and their\nings. On the other hand, if the FDA insists on more and more data\nfrom a manufacturer, and finally approves a drug which should have\nfamilies will\nbeen on the market months or years before, there is no such price to\npay. Drug lag's victims and their families will hardly be complain-\nhardly be\ning, because they won't know what hit them They only know that\nthere is nothing their doctors can do for them. From the standpoint\ncomplaining,\nof\npolitics, they are invisible.\"44\nbecause they\nAs between what might be called \"Type 1\" certification error (a drug\nwon't know what\nis approved that turns out to cause more harm than good) and \"Type 2\"\nhit them.\ncertification error (a drug is not approved, but that drug would have caused\nmore good than harm), the above analysis indicates that market forces\n(tempered by contract and tort remedies) tend to minimize the sum of these\ntwo errors: anything less would reduce profits. Government regulation, in\ncontrast, is acutely sensitive to Type 1 error but relatively unfeeling to Type\n2 error. In sum, Public Choice theory leads us to predict that government\nmonopoly over drug certification would exacerbate, not solve, informational\nfailure.\nTheory has been borne out by practice, as is revealed by recent\nillustrations of the informational failure resulting from the FDA's certifica-\ntion monopoly:\nThe cardiopump is standard equipment in ambulances in many coun-\ntries. But it is not available in the United States. Initial tests in the US in\n1992 showed that, though not universally effective, use of a cardiopump\nled to a survival rate 35% greater among unconscious heart attack victims.\nHowever the FDA ordered in 1993 that tests on the pump cease because\nunconscious patients could not give \"informed consent\" before the device\nwas \"tested\" on them The cardiopump may help many people: one\nPage 6\nKrauss: Loosening the FDA's Drug Certification Monopoly\nestimate is that up to 7,000 Americans could be saved each year through\nits use.45 We will never know who these \"missing dead\" are, of course.\nA 42-month delay in making Interleukin-2 available to patients with\nkidney cancer cost nearly one hundred unidentified deaths per month.⁴⁶\nDelays in the approval of the emergency blood-clotting drug TPA are\nestimated to have resulted in more than 100,000 preventable heart-attack\ndeaths.⁴⁷\nThe FDA took seven years before approving tacrine (or THA), which\nwould have greatly improved (and in some cases saved⁴⁸) the lives of\nthousands of Alzheimers patients.4\nWyoming physician Michael Werner had the knowledge and wealth\nneeded to visit Japan in 1993 for experimental treatment for his rare form\nof brain cancer. The treatment has not been approved by the FDA for use\nin the US. According to Dr. Werner, 120 patients with brain tumors like\nhis had been treated in Japan with a 52% five-year survival ratio. In the\nUS 90% of patients with Dr. Werner's disease die within twelve months;\nonly 1% survive five years.5\nFDA regulations require that the clinical studies needed to obtain\nGovernment\napproval of a new drug or medical device be \"randomized\" and \"concur-\nrent;\" i.e., new devices or drugs must be blind-tested against placebos or\nmonopoly over\nFDA-approved products. This poses ethical problems if the new device\nor drug is so superior to existing technology that the \"placebo\" half of the\ndrug certification\n\"double-blind\" cohort is virtually condemned to death. However, the\nwould exacer-\nFDA tolerates this state of affairs and tends to intervene only when real\nvictims are publicly identified. For example, the agency ordered hospitals\nbate, not solve,\nto stop using specialized baby ventilators (irreplaceable in saving very\nsick infants because they provide uniquely tiny breaths of air) because\ninformational\nhospitals refused to \"blind-test\" them (and thereby condemn 50% of air-\ndeprived \"neonates\"). Dr. Martin Kessler of Georgetown University\nfailure.\nMedical Center estimates that scores of babies died as a result. Subse-\nquent to the FDA decision, protests from doctors who pointed to specific\ninfant deaths were aired on the television show \"20/20.\" Only then did\nthe agency allow use of the ventilators.⁵¹\nThe pre-market approval process for new medical devices, required\nsince 1976,52 averaged 840 days during the first six months of fiscal 1994\ncompared to 420 days in 1990. If manufacturers wish to improve devices\nalready on the market before 1976, they must file a notification (or\n\"510(k)\") application with the agency.53 Although the FDA is legally\nobliged to rule on 510(k) applications within 90 days, in fact the average\nreview time has increased from 98 days in 1990 to 213 days in 1994. 54\nThese expensive delays, obviously a product of the agency's zealous\ndesire to control for Type 1 error, result at the margin in decisions not to\nintroduce new or improved devices.\nThese and other illustrations of FDA behavior⁵⁵ are not mere techni-\ncal failings that could be addressed through more careful oversight. 56 Rather,\nthey are the inevitable result of the institutional incentives of public regula-\ntors. The more complete the government's monopoly, the more pernicious\nKrauss: Loosening the FDA's Drug Certification Monopoly\nPage 7\nthese results are. Fortunately, however, the FDA's monopoly has never been\ncomplete.\nTHE GAP IN THE FDA'S CERTIFICATION\nMONOPOLY: OFF-LABEL PRESCRIPTIONS\nThe FDA's certification monopoly for drugs and new devices has\nhastened the death of thousands of Americans. But, as seen in Section 1\nabove, the use of ethical drugs and devices in America pre-dates mandatory\npre-certification rules. This chronology has left \"gaps\" in the FDA's\ncertification monopoly: pockets of market-oriented behavior that have not\nyet been stifled by the agency.\nOne important breach of the monopoly results from \"off-label\nprescriptions.\" Physicians may not prescribe, nor may manufacturers\nmarket, drugs or devices that have not received FDA approval.57 Both\ndoctors and pharmaceutical companies have been found \"per se negligent\"\nin tort if they defy the FDA's power in this area.⁵⁸ But if a drug or device is\napproved by the agency as safe and effective for a one purpose, no FDA\nregulations prevent doctors from prescribing the approved drug or device\nFortunately, the\nfor any other purpose. Thus, doctors, hospitals and researchers may discover\nFDA's monopoly\nthat a drug approved, labeled and marketed for treatment of one kind of\ncancer is effective at treating other diseases. They write up these discoveries\nhas never been\nin refereed medical journals and other publications. Physicians read or hear\ncomplete.\nabout these other uses and then prescribe the drug for an \"off-label\" use.\nUnder common law, an \"off-label prescription\" is not \"per se\" negligent.\nTort law will, of course, sanction independently negligent prescriptions (if a\ndoctor has misread the journal literature, if he has neglected to prescribe the\ncorrect dose, etc.).\nThe FDA has had mixed success in its sporadic efforts to suppress\noff-label prescriptions. 60 In 1979 the agency attempted to prevent a physician\nfrom prescribing a drug that had been approved as a medication for lead\npoisoning for a patient with arteriosclerosis. The Fifth Circuit Court of\nAppeals rejected the FDA's claim that the physician had \"misbranded\"\n(falsely claimed that the agency had approved the proposed use of) the drug\nby prescribing it or by advertising the new therapy.61 FDA power has been\nmore successfully invoked against manufacturers, however. Pharmaceutical\ncompanies routinely publicized (to doctors and to the general public) the\nresults of new research on their already-approved drugs, thereby alerting\nphysicians (the vast majority of whom do not subscribe to, say, the New\nEngland Journal of Medicine) to new ways to help their patients. In 1991\nFDA Commissioner Kessler successfully cracked down on this \"misbrand-\ning.\"⁶²\nPage 8\nKrauss: Loosening the FDA's Drug Certification Monopoly\nThese efforts to extend the FDA's certification monopoly to off-label\nprescriptions have cost lives and money, in several ways. For example, many\ninsurers, following Medicare's lead, 63 deny or limit drug cost reimbursement\nfor off-label use. Nearly 25% of oncologists surveyed by the Government\nAccounting Office in 1991 reported varying from their preferred treatment\nbecause of anticipated denial of Medicare reimbursement.64 But because\nMedicare reimbursement for costly hospital stays is fixed, hospitalization is\nused to work around the out-patient system. Five of every eight surveyed\noncologists admitted patients to hospitals solely to ensure reimbursement for\ndrug therapy that would be denied to an out-patient. 65 However, case law has\nlimited state governments' (and, to a much lesser degree, private) health\ninsurers' discretion to rely exclusively on FDA approved use in determining\ncoverage, however.66\nMore direct illustrations of health risks created by the FDA's crack-\ndown on manufacturers' \"misbranding\" include one case involving an \"over-\nthe-counter\" drug. Influential studies suggest that the risk of heart attacks\nfor males over 50 is cut in half by taking one aspirin every other day.\nAccording to a 1988 article in the New England Journal of Medicine,\nWidespread\nwidespread publicity of the aspirin treatment could save from 10,000 to\n100,000 American lives each year.⁶⁷ Yet the FDA has prohibited aspirin\npublicity of the\nmanufacturers from distributing such notices, and since aspirin is no longer\naspirin treatment\npatented no company has the incentive to spend the millions of dollars for\nclinical trials and other tests necessary to lead the agency to authorize\ncould save from\npublicity for this \"new use.\"68 Even when drug patents are effective, unless\n10,000 to\na manufacturer is willing to submit an NDA supplement for an unapproved\nuse it has little incentive to generate information on its safety and effective-\n100,000 Ameri-\nness. Nor may manufacturers even distribute reprints of peer-reviewed\ncan lives each\njournals or textbooks in which off-label uses are documented, even though\ndrug producers are an efficient clearing house for such material.⁶⁹\nyear. Yet the FDA\nhas prohibited\nDespite its efforts, the FDA has not stemmed the tide of off-label\nprescriptions. According to one officer of the American Medical Associa-\nthis.\ntion, off-label uses may presently account for 60 percent of all prescription\ndrug use today.⁷⁰ A recent study by the Government Accounting Office\nfound off-label prescribing to be the rule for many types of therapy.⁷¹\nCommon law suits recognize this common practice, and there is no require-\nment that physicians inform patients that they are prescribing a medication\nfor a non-FDA-approved use.⁷²\nIt is interesting to note that off-label prescriptions have proliferated\ndespite tort law's implicit bias in favor of FDA-approved uses. A physician\nhas a qualified tort immunity in that he is never negligent merely for\nprescribing a drug for a purpose approved by the FDA (though he still must\ntransmit appropriate warnings, check for possible drug allergies, etc.). 73 If,\non the other hand, a doctor prescribes an drug \"off-label,\" there is no such\nimmunity.74 Common-law negligence principles apply; i.e., a doctor will be\nKrauss: Loosening the FDA's Drug Certification Monopoly\nPage 9\nliable to an injured patient if the current state of research or customary\nmedical practice impugn the off-label use.⁷⁵\nObviously, many more would die (and the clamor about FDA-\ninduced \"drug lag\" would be more intense) if off-label prescriptions were\nsuppressed. In an important sense, the medical profession has reduced public\npressure on the FDA by privately performing research and issuing recom-\nmendations that manufacturers find too costly due to agency regulations.\nJust as obviously, private research and recommendations only deal with\nalready-approved drugs and devices, for despite the gap in the agency's\ncertification monopoly the FDA retains legal control over the approval of a\ndrug or device for its \"first\" approved use. The proliferation of beneficial off-\nlabel prescriptions demonstrates the illogical character of this monopoly,\nthough: why should FDA approval be a sine qua non to \"first use\" when, once\napproved, the drug can be put to any number of other non-approved uses,\nA recommenda-\nsubject only to the general rules of tort liability?\ntion initially\nThe intolerable features of the status quo make it worthwhile to\nformulated by the\nelaborate on a recommendation initially formulated by the Competitive\nCompetitive\nEnterprise Institute. 76 This proposal, properly developed, could preserve all\nFDA evaluative functions while saving hundreds of thousands of lives. It\nEnterprise\nconsists of terminating the FDA's unsound \"first use\" monopoly by permit-\nInstitute could\nting \"off-label manufacturing,\" much as \"off-label prescribing\" is presently\nallowed. This proposal would resolve asymmetries of incentives and result\npreserve all FDA\nin consideration of both \"Type 1\" and \"Type 2\" certification errors. The\nevaluative\nproposal is clarified and defended in the remainder of this paper.\nfunctions while\nLOOSENING THE CERTIFICATION MONOPOLY:\nsaving hundreds\nFROM OFF-LABEL PRESCRIPTION\nof thousands of\nTO \"OFF-LABEL MANUFACTURING\"\nlives.\nTo recap this paper's findings:\nFDA authority has expanded piecemeal in reaction to scattered occur-\nrences. The result of this expansion is that the agency has metamorphosed\nfrom a guardian against consumer fraud to a prime determinant of the\nproduction of ethical drugs and medical devices;\nThe FDA's present role cannot be justified by economic or political\ntheory. The agency's skewed informational incentives, which contrast\nwith those of manufacturers and physicians, have had the effect of\naggravating illnesses and accelerating deaths;\nThe FDA has attempted to suppress what remains of the private selection\nof ethical drug use. Despite all its efforts, a significant proportion of\nmedications are used in non-FDA-approved ways. If private defiance of\nFDA hegemony had not been allowed, the perverse effects of the agency's\ndisincentives would have been far more severe.\nPage 10\nKrauss: Loosening the FDA's Drug Certification Monopoly\nWhat measures can be taken to reconcile economic and political\ntheory with FDA practice? The outright abolition of the agency, or even its\nreinstatement as a \"consumer protection\" department devoted to policing\nand prosecuting fraudulent claims about drugs, are likely nonviable solu-\ntions. A significant segment of the public is probably convinced that the\nagency should retain a role in the ex ante evaluation of drug safety and\nefficacy. On the other hand, the phenomenon of off-label prescriptions\ndemonstrates that the FDA has never exercised hegemony over the therapeu-\ntic use of medication; practitioners (controlled by common-law tort, not by\nfederal regulation) do \"end-runs\" around the FDA with quite desirable\neffects.\nOnce this is grasped, it becomes apparent that the FDA's social\nfunction would not change if practitioners could recommend non-approved\ndrugs as easily as they can now recommend non-approved uses of drugs.\nJust as any doctor may today legally write \"off-label\" prescriptions of drugs\nIn at least two\nor devices, it could be lawful to manufacture drugs and devices \"off-label.\"\nareas this plan\nThe FDA would, under this proposal, remain accessible as a state-funded\nmonitor of safety and efficacy.\nenhances the\nvalue of FDA\nNote that this proposal does not create a windfall gain for manufac-\nturers of dangerous drugs. By analogy to physicians writing \"off-label\ncertification.\nprescriptions,\" manufacturers producing \"off-label drugs\" would not benefit\nfrom tort immunity. 77 They would be liable for design defects in these drugs,\nwhile (as is the case for \"on-label\" prescriptions today) producers of FDA-\napproved drugs would be immune to design defect liability.⁷⁸ All producers\nof drugs would of course still be liable for manufacturing defects and failures\nto warn⁷⁹ (e.g., if a batch of the drug is contaminated, or if a label incorrectly\nindicates the appropriate dosage, etc.) just as physicians are liable for\nnegligently mis/prescribing approved drugs under current law. But liability\nfor design defect⁸⁰ (marketing a drug that should never have been put on the\nmarket) would be precluded only if the FDA has approved a drug.\nThis is not, therefore, a revolutionary proposal to sterilize the FDA.\nIn fact, in at least two areas this plan enhances the value of FDA certification.\nAs just stated, it provides \"on-label\" manufacturers with a \"design defect\nshield\" they presently lack, courtesy of agency approval.81 Second, while\nphysicians are presently not compelled by statute or common law to inform\npatients that they are writing \"off-label\" prescriptions,⁸² this proposal would\nassuage nervous consumers and increase FDA visibility by requiring doctors\nto obtain \"informed consent\" from patients if an ethical drug they recom-\nmend is not approved by the agency.\nWhat effect would this modification of the FDA's authority have on\nthe allocation and distribution of ethical drugs? The remainder of this paper\nwill explore this question Socratically, by answering a series of hypothetical\nKrauss: Loosening the FDA's Drug Certification Monopoly\nPage 11\ncriticisms dealing with the interface between tort liability and drug produc-\ntion and use decisions.\nCritique #1: \"Without an FDA right to reject market decisions to commence\nproduction of a drug, manufacturers would massively produce \"snake-oil\"\ncures harming millions.\"\nReaders who have followed the analysis in this paper will hopefully\nrecognize that this critique is unfounded. Manufacturers interested in\nmaintaining a presence in the market and in enhancing their brand image\nwill not market \"snake oil.\" Excellent quality automobiles, croissants and\nknives are produced despite the absence of mandatory pre-market govern-\nment approval, even though defective versions of any these products are\nextremely detrimental to our health.\nIn rebuttal, it might be contended that government pre-approval of drugs\nThe label \"FDA\nis more prized by the public than pre-certification of the neighborhood\nbaker or cutler. This argument fails to recognize that all certifications tend\ninspected and\nto become valuable over time. It may well be the FDA's structural\nobsession with avoiding Type 1 headlines that instills misplaced public\napproved,\" if\nconfidence.⁸³ If the public retains this confidence, manufacturers will\nmake the investment needed to obtain FDA approval, which they could\ntruly esteemed by\nthen recoup by exacting a premium in the marketplace. Over time, market\nthe public, would\nvaluation of FDA approval would stabilize (formally stated, a demand\nfunction for the agency's services would emerge). The label \"FDA\nadd more than\ninspected and approved,\" if truly esteemed by the public, would add more\nthan enough value to a drug or device to ensure the agency's survival even\nenough value to a\nin the absence of a statutory monopoly. The government could then\nengage in informed cost-benefit analysis of the FDA's policies, including\ndrug or device to\nits fixation with Type 1 errors.\nensure the\nCritique #2: \"Without mandatory FDA approval, manufacturers would\nagency's survival\nrefuse to produce most drugs or devices because of their fear of product\neven in the\nliability.\"\nabsence of a\nBoth economic theory and present-day practice tell us that this is not so.\nManufacturers produce motorcycles and ladders despite the absence of\nstatutory\npre-market government approval. They are held liable when their product\nmonopoly.\nis defectively designed.⁸⁴ Conversely, FDA approval does not presently\nimmunize manufacturers of pharmaceuticals (as distinguished from Class\nIII medical devices from product liability.86 This proposal's proposed\nimmunization of manufacturers (against design defect liability only) for\nFDA-approved drugs might therefore increase the availability of ethical\ndrugs.⁸⁷ At the very least, it is clear that the elimination of the agency's\ncertification monopoly would not remove ethical drugs from the market.\nIt was observed above that manufacturers now decline to develop certain\ndrugs because pre-approval expenses render such development unprofit-\nable. If Critique #2 is to be accepted, this would imply that manufacturers\nwill refuse to produce drugs with or without agency oversight. This is a\nnon sequitur. It is clear that the elimination of the agency's certification\nmonopoly would not remove ethical drugs from the market.\nPage 12\nKrauss: Loosening the FDA's Drug Certification Monopoly\nCritique #3: \"Doctors would never prescribe non-FDA approved drugs or\ndevices, for fear of malpractice liability.\"\nThe prevailing \"gap\" in the FDA's certification monopoly dulls this\ncriticism. Fear of malpractice liability has not precluded off-label\nprescriptions, despite the loss of tort protection that derives from FDA use\napproval. Doctors are clearly willing to be held to common law negli-\ngence standards⁸⁸ when prescribing drugs for off-label uses. They would\narguably agree to be held to the same standards when prescribing off-label\ndrugs. Indeed, common law tort has evolved to the point that a physician's\ndecision not to prescribe a drug for a widely accredited \"off-label\" use\ncould well constitute malpractice. In this way again has the private sector\nmitigated the effects of the FDA's disdain for \"Type 2\" error. Legislation\npermitting prescription of off-label drugs would further palliate this\nproblem.\nOne might wonder how doctors would learn of \"off-label manufactured\ndrugs.\" After all, off-label uses of FDA-approved drugs are presently\nDoctors are\ndescribed in medical journals, which can be admitted into evidence at a\nmalpractice trial; how would \"off-label drugs\" be introduced? The\nclearly willing to\nprocedure would likely be very similar. Journals and other producers of\nknowledge about the safety (and efficacy) of drugs would find it in their\nbe held to\ninterest to produce information on manufacturers' products. The same\ncommon law\nreputational pressures that encourage the New England Journal of Medi-\ncine to refrain from publishing unscientific drivel on new uses will\nnegligence\npromote accuracy on the part of private reviewers of new drugs.⁸⁹ Note\nthat these new drugs would likely fill very urgent medical needs; the\nstandards when\nrelative tort protection of FDA certification means that physicians would\nlikely need good reasons⁹⁰ for utilizing non-FDA approved drugs or\nprescribing drugs\ndevices if there exist FDA-certified alternative treatments.\nfor off-label uses.\nIt is important to see that agencies already provide informational\nservices in fields where government has not snatched a legal monopoly.\nThey would\nPrivate firms regularly evaluate and certify design and production param-\narguably agree to\neters (or \"standards\"⁹\") for goods and services as diverse as bricks and law\nschools. Reliance on these evaluations and certifications, even when they\nbe held to the\nlack mandatory legal authority,⁹² is an important element of malpractice\ndefense for (in the above examples) architects and guidance counsellors.\nsame standards\nUnlike government agencies like the FDA, private firms cannot be\npolitically constrained to accredit (or to refuse to accredit) new products\nwhen prescribing\nor designs.93 But (also unlike government agencies) if a sufficient number\nof knowledgeable parties belittle a certifying agency's inefficiency or\noff-label drugs.\ncorruption the creation of a rival agency is permissible.94 Competing\nagencies exist in many fields,95 some of them well known to physicians.⁹⁶\nCritique #4: \"Private firms will not be willing to certify drugs and devices,\nbecause (unlike the FDA)⁹⁷ they will be liable for the unexpected side effects\nof drugs they have 'approved'.\"\nThis is another baseless critique. It begs two important questions:\n- As regards reasonably foreseeableside effects (for example, Thalido-\nmide-type side effects that were clearly discernable through testing), the\ncritique impliedly assumes that such calamities will occur frequently as a\nresult of private drug certification; i.e., that market incentives will not lead\nKrauss: Loosening the FDA's Drug Certification Monopoly\nPage 13\nprivate certifying agencies to discover and prevent drug tragedies. The\nburden of much of this paper has been to challenge that assumption.\nMarkets (supplemented by tort law) do provide strong incentives for\ncertifying agencies to do their jobs well;\n- As regards unknowable future side effects, it is not clear why a non-\nnegligent certifier should be liable for results it could not have reasonably\nprevented. Manufacturers of ethical drugs are most certainly not liable for\nsuch side effects today,⁹⁸ and there is no reason why a certifying agency\nwould assume presently non-existent liability in their place.99\nMore fundamentally, this paper's critique of the \"informational market\nfailure\" argument emphasizes that profits can be earned from certification\neven if there is a risk of liability. Some firms (like Underwriters'\nLaboratories) charge manufacturers directly for their services. Others\n(like Consumers Union, publisher of Consumer Reports) earn money\nsolely from the public sale of evaluative information. Both types of\ncompanies devote considerable resources to protecting their intellectual\nproperty, which of course enables them to privatize the information they\nproduce. 100 Still other companies (like Hearst, publisher of Good House-\nkeeping, whose \"Seal of Approval\" is affixed to products) earn money\nfrom subscribers (purchasers of their evaluative information) and from\nmanufacturers. Although payment of fees might blur the distinction\nThe UL model\nbetween publicity and certification, both protection of trademark value\nhas particular\nand tort liability¹⁰¹ furnish incentives to accurately assess products.\nrelevance for the\nIt seems likely that insurance companies would have a comparative\nadvantage in competing as quality certifiers. Liability insurance compa-\nethical drug\nnies already have a vital incentive to accurately evaluate products whose\nquality is likely to affect their exposure. One of America's most venerable\nindustry under\nprivate certifiers, Underwriters' Laboratories, is in fact a cooperative\nventure of insurance companies that presumably lower total risk (thereby\nthis proposal.\nincreasing their profit)¹⁰ by assuring that only certified products are\nproduced or used by their clients. Since UL certification incurs the\nventure's liability to consumers injured by a defectively designed product\nthat never should have been certified,¹⁰³ and since insurance companies\nare typically vent, UL accreditation can be seen as a kind of surety bond\npaid for by manufacturers, assuring purchasers¹⁰⁴ that a product design is\neffective. 105\nThe UL model has particular relevance for the ethical drug industry\nunder this proposal. Drug manufacturers could offer to \"hold harmless\"\n(i.e., to indemnify, as if they had issued a surety bond to) any physician\nfound liable for prescribing a (non-government-approved) drug they\nproduced, just as, analogously, Ford Motor Company contractually holds\nharmless independent dealers for liability they incur as a result of selling\na defective new (non-government-approved) Ford. In both cases, of\ncourse, manufacturers either self-insure or purchase their own insurance\nagainst concomitant risks. 106 Drug manufacturers deciding to forego FDA\ncertification could, by risking their capital (\"self-insurance\") or by pur-\nchasing liability insurance, produce quality guarantees for products in\nwhich they already have an interest and an expertise. Poor certification\npractices for ethical drugs would obviously directly cut into the profits of\nthese \"insurers,\" who in fact are serving as a bond for the quality of their\npharmaceuticals. Good certification practices, accomplished through the\nestablishment of reputable independent agencies (such as Underwriters'\nLaboratories), maximize insurers' and manufacturers' profits. Both tort\nPage 14\nKrauss: Loosening the FDA's Drug Certification Monopoly\nliability and self-interested monitoring by insurers will hold cooperative\ncertifying agencies in check.\nCONCLUSION\nThe FDA's legal control over medicine has never been all-encom-\npassing. What monopoly the agency does possess was acquired episodically\nand accidentally. The agency's power over drug certification is not justified\nby economic or political realities, and its exercise has had deadly conse-\nquences. However, a gap in the FDA's power, resulting from the ad hoc\nprocess through which its jurisdiction was granted, has mitigated its poten-\ntially disastrous effects. This current process itself contains the kernel of a\nsafer and more effective drug regulation policy.\nThis paper argues that the FDA's authority should be modified by\nallowing doctors to prescribe non-approved drugs and devices just as they\nSince this\ntoday promote non-approved uses. Indeed, the FDA itself has recently\nproposal in no\npresented a (very diluted) version of this proposal¹⁰ in an effort to calm\nhostile critics on both sides of the aisle¹⁰⁸ in Congress.\nway eliminates\nthe FDA,\nAlthough the relaxation of the agency's monopoly that this paper\nproposes would not substantially alter the FDA's everyday work, it would\nconsumers who\nhave far-reaching and beneficial effects. It might well lead to the establish-\nremain troubled\nment of a drug certification industry likely be composed of different types of\ncompetitive firms, as is the case in other fields. Non-profits (like Consumers\nby non-FDA-\nUnion), for-profits (like Hearst Publications) and insurers' cooperatives (like\napproved\nUnderwriters' Laboratories) could be expected to enter the drug certification\nindustry. To compete successfully, these firms would have to convince\nproducts will be\nproducers, consumers and doctors that their evaluation process is of high\nable to insist on\nquality. Physicians and manufacturers would not decline to make and use\nprivately certified products under these new ground rules, while risks of\nFDA certifica-\nliability will be transferred (via insurance and bonding mechanisms) to\ntion.\nefficient risk bearers.\nOf course, no private evaluation industry will be viable if consumers\nbalk at non-FDA certified drugs. Since this proposal in no way eliminates the\nagency, consumers who remain troubled by non-FDA-approved products\nwill be able to insist on FDA certification. If consumers remain unconvinced\nthat the market has provided efficient substitutes for the agency, drug\nmanufacturers will continue to submit their products to the FDA for pre-\nmarket approval. On the other hand, if the FDA becomes perceived as an\ninefficient agency focused exclusively on the elimination of Type 1 testing\nerrors (at the cost of an inefficiently high number of Type 2 errors), the\nagency's \"market share\" of certifications will decline. Sick people will\nincreasingly opt to consume privately certified ethical drugs. If this happens,\nan FDA that wishes to prosper sans certification monopoly can be expected\nto put patients' best interests at heart by balancing Type 1 and Type 2 errors\nKrauss: Loosening the FDA's Drug Certification Monopoly\nPage 15\ninstead of responding to bureaucratic pressures at the cost of thousands of\nlives. At that point consumers will finally benefit from an FDA which will\nput their interests first.\nABOUT THE AUTHOR\nMichael I. Krauss is a professor of law at George Mason University School\nof Law in Arlington, Virginia. He is a graduate of Carleton University, and\nreceived his degrees in law from the Université de Sherbrooke and Yale\nUniversity. He has published numerous law review articles on issues of tort\nlaw, market processes and comparative law. His writings have also appeared\nin publications ranging from the Wall Street Journal to Reason magazine and\nPolicy Review. In 1994 he received George Mason University's first\n\"Teacher of the Year\" award for excellence in teaching.\nA slightly different version of this monograph will shortly be published in the\nGeorge Mason University Law Review.\nPage 16\nKrauss: Loosening the FDA's Drug Certification Monopoly\nEND NOTES\n1 Professor of Law, George Mason University, 3401 North Fairfax Drive, Arlington, Virginia USA 22201.\nInternet: [email protected]. Assistance from the Law and Economics Center of George Mason\nUniversity and from the Competitive Enterprise Institute is gratefully acknowledged. Thanks to Richard\nJacobus and to Sam Kazman for their useful comments, and to Kenneth Rossman for valuable research\nassistance. Any remaining errors are, of course, solely the author's responsibility.\n²See Competitive Enterprise Institute V. NHTSA, 956 F.2d 321 (D.C. Cir. 1992) (holding NHTSA must\nconsider reduced safety effects when determining fuel efficiency standards). See also Crandall &\nJ.D. Graham, \"The Effect of Fuel Economy Standards on Automobile Safety,\" 32J. L. & Econ. 97 (1989).\n³Federal Food and Drugs Act of 1906, ch. 3915, 34 Stat. 768.\n4See Peter Temin, Taking Your Medicine: Drug Regulation in the United States, Harvard U. Press, 1980,\nfor a good history of drug regulation.\n⁵See S. Peltzman, The Health Effects of Mandatory Prescriptions, 30 J.L. & Econ. 207 (1987).\n⁶Federal regulations did not determine which drugs would be controlled by the prescription process until\n1951. Humphrey-Durham Act, ch. 578, 65 Stat. 648 (1951). In fact, until that time drug manufacturers\ndecided on their own how to label and sell their drugs, subject to state laws. See DeFreese V. United\nStates, 270 F.2d 730 (5th Cir. 1959), cert. denied, 362 U.S. 944 (1960).\n7 Notably, the requirement of privity for successful products liability lawsuits was in the process of being\nrelaxed at this time. See, e.g., Macpherson v. Buick, 111 N.E. 1050 (1916).\n⁸See, e.g., Thomas V. Winchester, 6N.Y. 397 (1906) (liability for manufacturer of incorrectly labelled drug,\neven if no privity is involved); Osborne v. McMasters (1906) (liability of druggist for mislabeling a\npoisonous drug); Macpherson V. Buick, 111 N.E., 1050 (1916) (liability for manufacturer of misrepre-\nsented vehicle). Contrary to popular belief, even early products liability law didn't preclude recovery\nfrom a defendant manufacturer whose misrepresented product caused injury.\n⁹See M. Polinsky, An Introduction to Law and Economics, 1983, ch. 4. Assume, for example, that one\nmillion \"units\" (of an ethical drug) currently sell for $5 each, but that for $1 per unit more the\nmanufacturer could add a safety device that would reduce total consumer injuries by two million dollars\n(for instance, manufacturers could substitute a hypo-allergenic substance for an ingredient that randomly\naffects a very tiny number of users). Assume that if the drug is not improved consumers cannot cheaply\navoid these injuries at any cost less than five million dollars (because, say, no consumer knows whether\nthey are allergic to the substance). The drug manufacturer should realize that it can maximize profits by\nchoosing this new ingredient and selling the improved drug at a price above $6. If the manufacturer fails\nto realize this, tort law will \"help\" it figure this out. When sued by a consumer who suffers an allergic\nreaction to the non-improved drug, the manufacturer will be found to have marketed a negligently\ndesigned drug (under comment k, §402A, Restatement on Torts (2nd)), since it could have improved the\ndrug for less ($1 million) than the damages the unimproved drug caused ($2 million). Internalizing these\ndamages, the firm will realize that it is cheaper for it to add the safety device to the drug.\n¹⁰Drug regulation was originally the responsibility of the Bureau of Chemistry in the Department of\nAgriculture. See Federal Food and Drugs Act of 1906, ch. 3915, 34 Stat. 768. The Bureau became the\nFood, Drug and Insecticide Administration in 1927. That name was shortened to the Food and Drug\nAdministration in 1930. McNary-Mapes Amendment, ch. 874, 46 Stat. 1019 (1930).\n\"The syrup had already been marketed in pill form, and Mr. Massengill decided to produce it as a syrup by\nliquefying it with diethylene glycol. For further discussion of the relationship between the Elixir\nSulfanilamide tragedy and the 1938 Act, see David F. Cavers, Food, Drug and Cosmetic Act of 1938:\nIts Legislative History and Its Substantive Provisions, 6 Law & Contemp. Probs. 2.\nKrauss: Loosening the FDA's Drug Certification Monopoly\nPage 17\n¹²Tort liability was rendered difficult by the fact that Mr. Massengill apparently owned assets only in\nTennessee, which had a very short statute of limitations for wrongful death suits. Ultimately, Massengill\nwas found liable under Tennessee law by applying the statutes of limitations of the states where the injury\noccurred. See, e.g., Wilson V. Massengill, 124 F.2d 666 (C.C.A.6 (Tenn.), Jan. 9, 1942, cert. denied,\nMassengill v. Wilson, 316 U.S. 686. In addition, Massengill was fined $26,100 under the 1906 Act for\nmisbranding violations under the 1906 Act.\n¹³The phrase refers to Justice Roberts' vote in West Coast Hotel v. Parrish, 300 U.S. 379 (1937), reversing\na series of cases which held unconstitutional various components of \"New Deal\" legislation. These cases\ndispleased President Roosevelt, prompting his threat to increase the number of Supreme Court Justices\nuntil he obtained a majority which would validate to his platform. See The Oxford Dictionary of\nAmerican Legal Quotations 393 (Fred R. Shapiro ed., 1993); Gerald Gunther, Constitutional Law 457\n(12th ed., 1991). No one is certain who authored the phrase. See Michael Ariens, A Thrice-Told Tale,\nor Felix the Cat, 107 Harv. L. Rev. 620, 623 n.11 (1994).\n¹⁴It is important to note that the safety of a new drug had to be established. The effectiveness of the drug was\nnot the FDA's concern, however. Presumably, market forces were still relied on to distinguish effective\nfrom ineffective medications.\n¹⁵See Temin, supra note 4, pp. 46-51; Peltzman, supra note 5.\n¹⁶Chemie Grünenthal, the producer of Thalidomide, had been alerted to the drug's neurological hazards by\nmany European physicians. But the firm, in a move that did not serve its long-term commercial interests,\nconstantly dissimulated the problem. W. S. Ross, The Life/Death Ratio 22 (1977)\n¹⁷It should be noted that there is no reason to believe that the FDA ever suspected that Thalidomide had any\nteratogenic effect. The delay in US approval for the drug was entirely due to the above-mentioned adverse\nneurological reactions, whose theoretical link to birth deformities is still unclear. See Ross, supra note\n16, at 39.\n¹⁸For a summary of the modifications to Food and Drug law in 1962, see H. Grabowski and J. Vernon, The\nRegulation of Pharmaceuticals, American Enterprise Institute, 1983, p. 2-4.\n¹⁹The agency was required to render decisions within 180 days, but no sanctions were provided for longer\ndeliberation time. See Pub. L. 87-781, Title I, Part A, 76 Stat. 781-83, 784, 785 (codified in relevant part\nat 21 U.S.C. § 355(c)).\n20Grabowski and Vernon, supra note 18, p. 5.\n²¹In other words, the 1906 bill recognized the primacy of the market in the production and distribution of\nmedicines, and saw a purely informational role for government. Of course, it is not clear that government\nis even efficient in evaluating information accurately. See on this point M. Krauss, \"Regulation V.\nMarkets in the Development of Standards,\" 3 S. Cal. Interdisciplinary L. J. 781 (1994)\n²²S. Peltzman, Regulation of Pharmaceutical Innovation, American Enterprise Institute, 1974, p. 18.\n²³Grabowski, supra note 18, p. 30; K. Kaitin, Written Testimony Before House Subcommittee on oversight\nand Investigations, Tufts Center for the Study of Drug Development, May 25, 1995. The process for new\ndrug approval begins with preclinical testing of a compound in a laboratory and on animals. This stage\ntakes on average 3.5 years to satisfy the FDA. If successful, researchers then file an IDA (Investigational\nNew Drug Application) with the agency. This requires a three-stage clinical testing procedure on human\nsubjects, monitored constantly by the agency: Phase 1 determines safety and dosage on a small group\nof volunteers, over about one year. Phase 2 measures the effectiveness of the drug on hundreds of\nvolunteers, over about two years. Phase 3 confirms the efficacy of the drug in double-blind tests\ninvolving hundreds if not thousands of volunteers and control groups, lasting on average three years. See\n21 C.F.R. $312.21\n²⁴San Francisco Chronicle, Oct.26, 1992, p. A1.\n25The pharmaceutical industry introduced an average of more than three times as many drugs (54 to 16) before\nPage 18\nKrauss: Loosening the FDA's Drug Certification Monopoly\n1962 as after. See H. Grabowski, \"The Prescription for High Drug Prices: Factors Contributing to Rising\nPrescription Drug Prices,\" (December 1992) Consumers' Research 10.\n26If fewer drugs are available, lessened competition will increase prices.\n²⁷See K. Kaitin et al., \"The drug lag: An update of new drug introductions in the United States and in the\nUnited Kingdom, 1977-87,\" 46-2 Clinical Pharmacology & Therapeutics 121 (1989).\n²⁸For example, using poor sterilization processes.\n²⁹For example, with insufficient care given to allergic or other abreactions, or to drug interaction effects.\n³⁰For example, firms might exaggerate a drug's therapeutic effects, or not draft labels that would alert users\nto abreactions or optimal dosage.\n31 FDA to leave firms to devices,\" Washington Times, 4-7-95, p. A6.\n³²Some readers might have the following reaction to the above examples: \"Yes, we almost always have\nincomplete information, but in the case of ethical drugs imperfect information is especially severe, and\nits consequences can be especially bad.\" Later in this paper I try to show that government monopoly over\ndrug certification is, neither in theory nor in practice, the best way to combat this informational problem.\nAt this point my modest claim is that informational problems are endemic to daily life in a free society.\n³³See M. Krauss, \"Property, Monopoly, and Intellectual Rights,\" 12 Hamline L. Rev. 305 (1989) for an in-\ndepth discussion of this point. See also Krauss, supra note 21. The privatization of information will not\nbe possible, of course, if legislation prevents it (say, by denying copyright or patent protection to\ninformation producers).\n34 The burgeoning growth of private on-line information systems (e.g., America Online, LEXIS-NEXIS, etc.)\nand the anticipated streamlining of Internet services will likely make the diffusion of such information\nmuch less costly. Once dangerous side effects emerge in users of a particular product, the \"Net\" may\nallow extremely rapid dissemination of this information. Arguably, news of Thalidomide's neurological\nside-effects would become much more difficult to hide today.\n³⁵See infra, note 100.\n36 Janet Novack has repeatedly detailed FDA corruption scandals in articles written for Forbes magazine. See,\ne.g., Oct. 16, 19989, p. 10; April 29, 1991, p. 34.\n³⁷Unfortunately, tort law provides less incentive to monitor negligent government workers, since their\nmanagers (unlike corporate owners) have no direct ownership claims which allow them to directly profit\nfrom good monitoring. Tort law's inability to adequately motivate government officials is a contempo-\nrary justification for sovereign immunity (excluding tort liability to limit drains on tax dollars).\n³⁸See, e.g., Seely V. White Motor Co. 63 Cal.2d 9 (1965) (Privity between consumer and manufacturer is not\nrequired for manufacturer to be sued for breach of express warranty.)\n39 See M. Krauss, \"Tort Law and Private Ordering\", 53 St. Louis U. L. J. 423 (1992).\n40If it would have cost moree ante to modify the manufacturer's behavior than would be saved through such\na change, then of course the modification is not socially beneficial. See R. Coase, \"The Problem of Social\nCost,\" 3 J. of L. & Econ. 1 (1960), and supra note 9.\n41 Again, a strong argument can be made that the consumer is presently paying for more information than she\nwants because tort law is skewed to over-compensating victims. Any reader who has seen the labels on\nnew ladders will understand this point.\n42 \"Public Choice\" vision of government and bureaucracy largely based on these agency problems garnered\na Nobel prize for one of my George Mason colleagues. See J. Buchanan, with G. Tullock, The Calculus\nof Consent, 1961.\n⁴³During the Thalidomide episode the regulatory authority and one of its employees was praised by both the\nPresident and Congress for the purely negative action of delaying (not disapproving) endorsement of\nThalidomide. The employee and the FDA had never been praised forapproving a drug, or for expediting\napproval or, in fact, for any positive decision.\nKrauss: Loosening the FDA's Drug Certification Monopoly\nPage 19\n⁴⁴See S. Kazman, \"Deadly Overcaution: FDA's Drug Approval Process,\" 1J. of Regulation & Social Costs\n35 (1990), 41.\n⁴⁵See, \"Feel a Heart Attack Coming? Go to France,\" Wall Street Journal, August 2, 1994, p. A14. In April,\n1995 the Journal of the American Medical Association published a study questioning the claimed\nsuperior efficacy of the cardiopump: see Schwab et al., \"A Randomized Clinical Trial of Active\nCompression-Decompression CPR V. Standard CPR in Out-of-Hospital Cardiac Arrests in Two Cities,\"\nJAMA 1995: 273:1261-1268. However neither this nor any other study has found any added risk from\ncardiopumps, and the article underlined the need for further research, which hospitals would presumably\nbe free to conduct were it not for the FDA prohibition. An editorial in the same issue of the AMAJournal\nexpressed \"astonish and dismay at the FDA's policy on research of emergency devices. A 1993\nCongressional report, \"Less than the Sum of its Parts,\" found that 26 US-made life-sustaining\ncardiovascular products were not available in this country, but have been approved and are in widespread\nuse overseas. Less Than the Sum of its Parts: Reforms Needed in the Organization, management, and\nResources of the Food and Drug Administrations Center for Devices and Radiological Health (Comm.\nPrint 103-N) 103d Cong., 1st Sess. (1993).\nCompetitive Enterprise Institute, \"Consumer Advocacy Group Attacks FDA For Slow Approval of Cancer\nTreatment\" (press release, May 14, 1992).\n47 Investor's Business Daily, May 3, 1994, p.1.\n48 An Alzheimers patient whose symptoms are controlled is less likely to wander off from home, etc.\n49 Baltimore Sun, May 10, 1994, p. 1.\nDr. Went to Japan for Treatment He Couldn't Receive in America,\" Minneapolis Star Tribune, June 26,\n1994, p. 12A.\n⁵¹See 20/20, August 12, 1994, transcript, p. 7.\n⁵²See Medical Device Amendments to the Food and Drug Act, 21 USC § 360 et seq. (90 U.S. Stat. 539).\n⁵³Referring to section 510(k) of the Act.\n⁵⁴Testimony of Mr. Robert O'Holla, Vice-President for Regulatory Affairs, Johnson & Johnson. Medical\nDevice User Fee Act of 1994: Hearings on H.R. 4728 Before the Subcomm. on Health and the\nEnvironment of the House of Representatives Committee on Energy and Commerce, 103d Congress, 2d\nSession (1994).\n⁵⁵See, for other examples, J. DiMasiet al., \"New Drug Development in the United States from 1963 to 1992,\"\nClin. Pharm. Therap., pp. 609-622.\n⁵⁶uch is the recurrent claim of FDA Chairman David Kessler. See, e.g., \"Statement Before the Subcom-\nmittee on Human Resources and Intergovernmental Relations, Committee on Government Operations.\"\nCouncil on Competitiveness and FDA Plans to Alter the Drug Approval Process at FDA: Hearings\nBefore the Subcomm. on Human Resources and Intergovernmental Relations of the House of Represen-\ntatives Comm. on Government Operations, 102d Congress, 2d Session 47-145, 226-357 (March 19,\n1992).\n⁵⁷Except for those drugs and devices which are \"grandfathered\" by the 1976 amendments.\n⁵⁸See Stanton by Brooks V. Astra Pharmaceutical Products Inc., 718 F.2d 553 (3d Cir. 1983); Orthopedic\nEquipment Co. V. Eutsler, 276 F.2d 455, 460-61 (4th Cir. 1960).\n59 See Richard M. Cooper, Unapproved Uses of Drugs: An Analysis and Some Proposals, 49 Food & Drug\nL.J. 533 (1994); William L. Christopher, Drug Prescription: Filling the Regulatory Vacuum, 48 Food\n& Drug L.J. 247 (1993), for examples of this process involving journals, textbooks, and even the Internet.\n⁶⁰In a position paper over twenty years ago, the FDA admitted that \"Once the new drug is in a local\npharmacy the physician may, as part of the practice of medicine, lawfully vary the conditions of use\nfrom those approved on the package insert without informing or obtaining the approval of the Food and\nDrug Administration.\" 37 Federal Register 16,503 (1972). This acknowledgment by the FDA was in fact\nPage 20\nKrauss: Loosening the FDA's Drug Certification Monopoly\npart of a proposal to curb off-label uses, if necessary by revoking approval of any drug used \"too often\"\nin an off-label fashion. The 1972 proposal was abandoned, however, and in 1982 the FDA issued a\nbulletin formally emphasizing that it condoned off-label use as \"accepted medical practice.\" 12 FDA\nDRUG BULLETIN, April 1982, at 4. The 1982 bulletin was seen by some as an abdication by the FDA\nof its desire to control off-label use. See, e.g., American Medical Association, 1991 Drug Evaluations\nManual 13. But see infra, note 62 where more recent efforts to discourage off-label prescriptions are\ndetailed.\nUnited States V. Evers, 643 F.2d 1043 (5th Cir. 1981).\n⁶²See T. Randall, \"FDA Scrutinizes 'Off-Label' Promotions,\" 266 JAMA 11 (1991). See also 21 C.F.R.\n§§310.3(h)(4), 312.7(a), 314.70(b)(3) (1994).\n⁶See 54 Fed. Reg. 4302, 4306, 4316 (1989) (providing reimbursement only for \"safe and effective\" drug\nuse, and defining FDA approved uses as \"safe and effective.\"\n⁶⁴United States Government Accounting Office, Off-Label Drugs: Reimbursement Policies Constrain\nPhysicians in their Choice of Cancer Therapies, GAO/PEMD-91-14, (1991) at 35.\n65 See supra note 64, at 37.\n⁶⁶In Weaver v. Reagan, 886 F.2d 194 (8th Cir. 1989), Missouri defended its refusal to provide Medicaid\ncoverage to certain AIDS patients on the grounds that their preferred therapy, AZT, had only been\napproved by the FDA for patients with a different HIV profile than the plaintiffs'. The Eighth Circuit\nreasoned that Medicaid was required to provide \"medically necessary\" care, and that the distinction\nbetween \"medically necessary\" and \"experimental\" care should be established by the medical commu-\nnity, not by the FDA approvals. In Pirozzi v. Blue Cross-Blue Shield, 741 F.Supp. 586 (E.D. 1990),\na district court enjoined an insurer from denying reimbursement for a new cancer therapy known as high\ndose chemotherapy-autologous bone marrow transplant (HDCT-ABMT), a therapy in which standard\ncancer drugs are used at levels far higher than approved by the FDA. The grounds for the injunction were\nnarrow: the court held that the insurer's contract with the plaintiff did not disclose that the insurers could\nrefuse to reimburse a non-FDA-approved use.\n⁶⁷See D. Thompson, \"Aspirin: the Cardiologist's Dream?\" 131 Time 56 (Feb. 8, 1988).\n68 This is one area where, because of legislation, there is indeed an informational \"market failure.\" See supra\nnote 33 and accompanying text.\n69 According to one critic, this new FDA interpretation has actually intimidated textbook publishers, who now\nfear that including the latest information on drug use may result in restrictions on the sale of their\ntextbooks. See J. Bovard, \"FDA's pharmaceutical hide-and-seek,\" Washington Times, April 9, 1995,\np. B4.\n⁷⁰See J. Calfee, \"The Leverage Principle in FDA's Regulation of Information\" in R. Helms, ed., Competitive\nStrategies in the Pharmaceutical Industry, American Enterprise Institute, 1995. S. Lane, \"Medical\nPrecautions,\" Washington Times, April 9, 1995, p. B4.\n⁷United States Government Accounting Office, Off-Label Drugs: Reimbursement Policies Constrain\nPhysicians in their Choice of Cancer Therapies, GAO/PEMD-91-14, at 3. The report notes that off-label\nuse of three drugs, ifosamide, interferon and mitoxantrone, constituted 85% of total prescriptions. Id. at\n22.\n⁷²No appellate cases have been found holding that a doctor's failure to disclose that a frequently prescribed\ndrug therapy was \"off-label\" violated the rigorous \"informed consent\" requirements of tort law.\n\"The Food and Drug act has generally been seen as preempting state tort law liability holdings in such cases.\nSee, e.g., Slater V. Optical Radiation Corp., 961 F.2d 1330 (7th Cir., 1992); Evraets V. Intermedics\nIntraocular, 34 Cal.Rptr. 2d 852 (1995). The Supreme Court recently granted a certiorari petition in a\ncase in which the Eleventh Circuit had ruled that the \"grandfathering\" of a medical device (under the\nMedical Device Amendments to the Food, Drug and Cosmetic Act) precluded any state-based products\nKrauss: Loosening the FDA's Drug Certification Monopoly\nPage 21\nliability suit. See Medtronic, Inc. V. Lohr, cert. granted, Jan. 19, 1996. The issues posed in Lohr to the\nSupreme Court are not relevant to the qualified tort immunity discussed in this paragraph.\n74 Mulder V. Parke Davis, 181 N.W.2d 882 (Minn., 1970) is occasionally cited as contrary authority. In\nMulder, the Minnesota court held (at 887) that when the drug manufacturers' warnings and contraindications\nhave been clearly communicated to the physician, who then deviates from them, prima facie evidence\nof negligence has been established, requiring the physician to explain his deviation. Mulder clearly\nrejects any \"per se\" rule for off-label prescriptions, as it does not preclude a demonstration by the\ndefendant physician of the reasonableness of his use of the drug, given current medical practice. See,\ne.g., Lhotka V. Larson, 238 N.W.2D 870 (Minn. 1976).\n⁷⁵See, e.g., Salgo v. Leland Stanford Jr. Univ. Board of Trustees, 317 P.2d 170 (CA, 1957) (finding, at 180,\nthat drug manufacturers' recommendations are always conservative and are quickly outdated, and after\na drug has been available for a period of time physicians rely on their own experience concerning its use\nin actual practice); Craft V. Peebles, 893 P.2d 138 (HI, 1995) (holding that manufacturers' instructions\nabout use and dosage, which are presumably those approved by the FDA, do not establish the standard\nof medical care as a matter of law).\n⁷⁶See Competitive Enterprise Institute, \"The Food and Drug Administration: A Modest Proposal\" (press\nrelease, January 6, 1995); see also Kazman, supra note 44, at 51-52.\n⁷⁷See supra note 74 and accompanying text.\n⁷⁸The situation is analogous in that, under present law, a doctor prescribing a drug for an \"on-label\" (i.e. FDA\napproved) use could not successfully be sued on the grounds that the drug was inappropriate for that use.\nHowever an \"off-label\" prescriber is vulnerable to this type of lawsuit.\n79I.e., when the drug as sold is not identical to the drug as advertised.\n⁸⁰See comment k, §402A Restatement (Second) of Torts: k. Unavoidably unsafe products. There are some\nproducts which, in the present state of human knowledge, are quite incapable of being made safe for their\nintended and ordinary use. These are especially common in the field of drugs. An outstanding example\nis the vaccine for the Pasteur treatment of rabies, which not uncommonly leads to very serious and\ndamaging consequences when it is injected. Since the disease itself invariably leads to a dreadful death,\nboth the marketing and use of the vaccine are fully justified, notwithstanding the unavoidable high degree\nof risk which they involve. Such a product, properly prepared, and accompanied by proper directions\nand warning, is not defective, nor is it unreasonably dangerous. The same is true of many other drugs,\nvaccines, and the like, many of which for this very reason cannot legally be sold except to physicians,\nor under the prescription of a physician. It is also true in particular of many new or experimental drugs\nas to which, because of lack of time and opportunity for sufficient medical experience, there can be no\nassurance of safety, or perhaps even of purity of ingredients, but such experience as there is justifies the\nmarketing and use of the drug notwithstanding a medically recognizable risk. The seller of such products,\nagain with the qualification that they are properly prepared and marketed, and proper warning is given,\nwhere the situation calls for it, is not to be held to strict liability for unfortunate consequences attending\ntheir use, merely because he has undertaken to supply the public with an apparently useful and desirable\nproduct, attended with a known but apparently reasonable risk. Restatement (Second) of Torts § 402A,\ncomment k.\n81 Absolute design defect immunity for FDA approved drugs is not presently enjoyed by manufacturers:\nindeed, in only five states (Arizona, New Jersey, Ohio, Oregon and Utah) does FDA approval currently\npreclude punitive damages for faulty design. See Viscusi, Rowland, Dorman & Walsh, \"Deterring\nInefficient Pharmaceutical Litigation: an Economic Rationale for the FDA Regulatory Compliance\nDefense,\" 24 Seton Hall L. Rev. 1437 (1994). It follows that in an important way this proposal would\nincrease the present value of FDA approval. It is thus incorrect to think that implementation of the\nproposal contained in this paper would \"emasculate\" the agency. However, just as some doctors currently\nPage 22\nKrauss: Loosening the FDA's Drug Certification Monopoly\nprescribe \"off-label\" despite the lack of tort immunity, some manufacturers would, for reasons explicated\nbelow, produce non-approved drugs despite the risk of liability for design defect. This would eliminate\nthe noxious drug lag described above.\n⁸²See supra note 75.\n⁸³Reputable certifications are relied on in many areas unrelated to drugs. Well-heeled consumers (of products\nas diverse as shotguns, wallets and four-wheel-drive vehicles) prize the knowledge that a product has\nachieved \"appointment to Her Majesty the Queen,\" who therefore acts as a certifier of exceptional quality\ncontrol throughout the British Commonwealth. In the food industry, registration with the Pennsylvania\nDepartment of Agriculture was likely a sign of high quality a generation ago. Perhaps the governmental\nnature of the certifier led to insufficient cultivation, and thus a slow deterioration, of its \"brand name.\"\nBut private food certifiers continue to thrive. For example, consumers of Kosher food products are often\nfussy about the identity of the agency which has certified that a product complies with Jewish dietary\nrules. \"Star K,\" \"Circle U\" and \"MK\" logos on products are brand marks of three of many competing\nrabbinical inspection boards, which contract with manufacturers to inspect and certify their manufactur-\ning and packaging facilities. These marks add value to food for consumers of Kosher goods who trust\nthe agency owning the relevant trademark. If (as has occasionally happened in the past) it is revealed that\na certification board has erroneously (or even intentionally, as a result of corruption) certified a non-\nKosher product, the commercial effect on the board is devastating.\nMany experts in Tort law, including this author, feel that manufacturers are presently being held liable even\nif their motorcycle or ladder was properly designed and manufactured. See Krauss, supra note 39. Again,\nthis is a problem that substantive tort reform can handle. Mandatory government certification is not\nneeded.\nSee Michael V. Shiley, Inc., 46 F.3d 1316 (3d Cir. 1995) (ruling that the 1976 amendments to the Food and\nDrug act preempt state actions for negligence, strict liability and implied warranty for Class III medical\ndevices, the only devices subject to formal pre-market FDA approval).\n⁸Numerous cases have held that FDA approval does not preempt state products liability. See, e.g.,\nMacDonald v. Ortho Pharm. Corp., 475 N.E.2d 65, cert. denied, 474 U.S. 920 (1985) (holding state not\npreempted from imposing higher duty of warning); Allen v. G.D. Searle & Co., 708 F. Supp. 1142 (D.\nOr. 1989) (holding state law claim of defective labelling for IUD was not preempted because the device\nwas classified as a prescription drug).\n⁸⁷For example, Bendectin, the most effective anti-nausea drug for pregnant women, was withdrawn from the\nmarket after many successful (but expensive) product liability defenses against claims that it induced\nbirth defects. Had these suits been \"demurrable\" (i.e., seen as ill-founded on the basis of a preliminary\nmotion) on the grounds that Bendectin had been tested and found safe by the FDA, the drug would most\ncertainly still be marketed.\n⁸E.g., allowing doctors to defend themselves by citing medical studies showing the utility of the drug, etc.\n⁸⁹In a recent survey, the Competitive Enterprise Institute asked oncologists how they would obtain reliable\ninformation about drugs that had not obtained FDA approval: 59% of respondents stated that they would\nrely on studies published by refereed journals. CEI, \"A National Survey of Oncologists Regarding the\nFood and Drug Administration,\" p. 5 (Aug. 1995).\n⁹⁰E.g., superior effectiveness, enhanced safety, much lower price (due to the high costs of FDA certification)\nfor low-income patients, etc.\n⁹See Krauss, supra note 21.\n⁹²See, e.g., In the Matter of Analysis of Wash Trucking, 521 A.2d 883 (N.J.Super., 1987) (confirming the\nvoluntary nature of Underwriters' Laboratories).\n⁹See, e.g., Roofire Alarm Co. V. Underwriters' Laboratories, 188 F. Supp. 753 (E.D. Tenn., 1959) [UL\ncannot be forced to change its standards as to fire warning devices, as it is a private entity. Consolidated\nKrauss: Loosening the FDA's Drug Certification Monopoly\nPage 23\nMetal Products V. American Petroleum Institute, 846 F. 2D 284 (5th Cir., 1988) [Trade association that\nevaluates products and issues private \"licenses\" does not violate § 1 of Sherman Act when it fails to\nfavorably evaluate a product.]\n94Of course, it is conceivable that private certification firms may be bribed or otherwise corrupted; but this\nis a risk that has also afflicted the FDA. See, e.g., Novack, supra note 36. If a private firm is corrupted\nit loses most or all of its goodwill, while a government monopolist does not have this fear. The likelihood\nof corruption is thus lower for private certifiers than for the FDA.\n95 For example, for metal gasoline containers standards have been privately proclaimed by Underwriters'\nLaboratories (Standard #30 for Metal Safety Cans), by the National Fire Prevention Association (NFPA\nFlammable and Combustible Liquids Code #30-77), and by Factory Mutual Insurance (Standard for\nSafety Containers and Filling Supply and Disposal Containers #FM 6051).\n⁹⁶Medical malpractice trials are replete with expert testimony from various hospital and physicians'\nassociations, which have adopted competing standards for surgical techniques.\n⁹⁷See Sun Up Foods, Inc. v. Florida Dept. of Citrus, (M.D. Fla., Dec. 31, 1991) (holding FDA's sovereign\nimmunity bars suits for damaging business through manner of enforcement); Giles v. Villanileea, No.\nC 93-2461 BAC (N.D. Cal. Dec. 14, 1993); Daley v. Weinburger, 400 F. Supp. 1288 (E.D.N.Y. 1975)\n(denying injunction request because of the FDA's sovereign immunity).\n98 Comment k, § 402A, Restatement (second) of Torts. This comment applies to prescription drugs, so in fact\na negligence rule applies to manufacturers of FDA approved drugs. See, e.g., Carmichael V. Reitz, 95\nCal. Rptr. 381 (Cal. App., 1971). Strict liability is also held inapplicable to medical devices, whether\napproved by the FDA or grandfathered. See, e.g., Phillips v. Baxter Healthcare, 1993 WL 524688 (Cal.\nApp. 2 Dist.) (1993).\n⁹⁹See, e.g., Yassin V. Certified Grocers of Illinois, 502 N.E.2d 315 (III. App., 1986) at 331 (refusing to hold\nUnderwriters' Laboratories to a \"strict liability\" standard under § 402A of the Restatement (Second) of\nTorts, as UL is a testing facility and not a manufacturer).\n100 Their efforts are not always successful. In Consumers Union of the United States V. General Signal Corp.,\n730 F.2d 47 (2nd Cir., 1984), the Union (publisher of Consumer Reports) sued to prevent a manufacturer\nfrom using that magazine's research findings about Regina vacuum cleaners in its advertising. A\nmajority of the court opined that quoting Consumer Reports' ratings of a product constituted \"fair use\"\nunder 17 U.S.C. § 107. Oakes, J., in dissent (ibid, at 47), correctly observed that the majority's opinion\nprevented Consumers Union from maximizing profits by deciding what mix of endorsement revenues\nand newsstand sales is optimal. Buyers informed about Regina's high CR rating directly from the\nmanufacturer have less of a need to purchase the CR \"vacuum cleaner\" issue to see \"who won.\" In\npractice, of course, the Union can refuse to evaluate products manufactured by corporations which\nviolate its prohibition of citations. Even in Second Circuit states there is a strong economic incentive\nto refrain from using CR's name. See also Toman v. Underwriters' Laboratories, 707 F.2d 620 (5th Cir.,\n1983) (Underwriters' Laboratories may sue manufacturer and distributor of hair dryer if they place\nlaboratory approval marks on their product without authorization).\n101 See, e.g. Hanberry v. Hearst Corp., 81 Cal. Rptr. 519 (Cal. App., 1969) (recognizing the possible liability\nfor negligent issuance of \"Good Housekeeping Seal of Approval\" for a dangerous product). Acceptance\nof an advertisement by a magazine does not constitute an endorsement (see, e.g., Walters V. Seventeen\nMagazine, 241 Cal. Rptr. 101 (Cal. App. 1987)), but Good Housekeeping purports to evaluate, not just\nadvertise, products which gain its seal of approval.\n102 Insurance companies derive profits in two ways: by investing the premiums they receive, and by accurately\ngauging their risk exposure. High absolute risks are more variable; it follows that if insurance companies\ncan lower their risk they can (by definition) more accurately gauge their exposure. Risk is lowered in\nthree ways: intrinsically through the aggregation of identical risks into pools (via the \"law of large\nPage 24\nKrauss: Loosening the FDA's Drug Certification Monopoly\nnumbers\"); through production of more accurate information about the extent of risk; and through\nreinsurance (by which insurance companies \"contract out\" the aggregation of some risks). Certification\nagencies test products and thereby produce new information about their risk potential. Insurance\ncompanies are \"natural\" certifiers of risk, and therefore of quality. Note that managed care providers are\ntypically insurers in this sense.\n¹⁰³See Restatement of Torts, § 324A. See: United States Lighting Service V. Llerrad Corp., 800 F.Supp. 1513\n(N.D.Ohio, E.D., 1992) (UL can be considered a \"product endorser,\" and is liable when it fails to exercise\nreasonable care when performing its testing procedures, or if inaccurately communicating its testing\nresults). See also Toman v. Underwriters' Laboratories, 532 F. Supp. 1017 (D. Mass. 1982) (reversed\non other grounds, 707 F.2d 620).\n104 The reputational effect of UL certification is significant. See, e.g., Brazos Graphics v. Arvin Industries,\n574 S.W.2d 240 (Tex App., 1978) (evidence of UL approval of an electric heater admissible in defense\nagainst claim that the heater was defectively designed).\n¹⁰⁵Robert Cooter has produced analogous and interesting work on insurers' purchase and sale of tort claims.\nRobert Cooter, Towards a Market in Unmatured Tort Claims, 75 Va. L. Rev. 383 (1989).\n106 See Frank H. Easterbrook, Limited Liability and the Corporation, 52 Chi. L. Rev. 89 (1985) (discussing\nreasons why corporations insure, despite the portfolio diversification of their owners and their presumed\nresulting risk neutrality).\n107 On April 6, 1995 the agency, in a package of reforms announced at the White House, announced that for\na two-year trial period it would contract out testing of low-risk devices (like laboratory cholesterol tests\nand electronic stethoscopes) to private certification firms, but only if those firms are accredited by the\nagency. The agency reserved the right to nullify private certifications in any case. See Washington Times,\nApril 7, 1995, p. A6. Note that no drugs (and no devices affected by long time lags, such as pacemakers)\nare affected by the FDA's offer. Note also that the FDA accreditation requirement would have the effect\nof exporting many of the bureaucratic pressures afflicting the agency, and would preclude free\ncompetitive entry into a nascent \"certification industry.\"\n108 Senator Barbara Mikulski (D-MD) insisted that the FDA have a \"passion for change\" if it did not wish to\nbe \"rolled right over\" by Congress. Ibid.\nKrauss: Loosening the FDA's Drug Certification Monopoly\nPage 25\nThe Competitive Enterprise Institute\nThe Competitive Enterprise Institute is a public policy\norganization committed to advancing the principles of free enterprise\nand limited government. Founded in 1984 by Fred Smith, Jr., CEI\npromotes classical liberal ideals through analysis, education,\ncoalition-building, advocacy, and litigation. A non-profit, tax exempt\norganization under Section 501 (c) (3) of the Internal Revenue Code,\nCEI relies entirely on donations from foundations, corporations, and\nprivate individuals. Contributions are tax deductible to the extent\nallowed by law.\nFor more information, contact:\nCOMPETITIVE ENTERPRISE INSTITUTE\n1001 Connecticut Avenue, N.W.\nSuite 1250\nWashington, D.C. 20036\nPhone: (202) 331-1010\nFax: (202) 331-0640\nE-mail: [email protected]\nWeb site: http://www.cei.org\nJim Ardala is\n202-2019 202 -2 60 1847 184 7\nLindses moose - -\n/\ni\nPaul Shuda\n4 \\\n- my -\n479. 47 9. 66421\n- Michael Langle\ncopies\nWASHINGTON\nTHE WHITE HOUSE\nI\nFDA Reform 7/12/96\nJD /Rich - funalyed ground rules for Donna-Bliley\ndiscussion He called her! She said\nshe couldn't support if they were gous\nto so forward w/ Marking each with next\ntwo weeks He agreed -pendus blowing.\nAlan Nover\nKey Holoms\nKaren Nelson -waman\nThil. it's R good Importation - through 11/2\nissues -\n[Kassebaem Mkulshi, Dodd - -met w/piil Lee. -\nCroml rules - Divezil - Warnan at lable\n- FOA\n- at Table\n- agreement on larguage / not concepts\n- 2 wells w/Butey/Donna -\n- No Food-\nBulees - wants something on derices - Rich - but we he\nfor about - Barm is commutted to his bill\n- recognize they how \"Banan problem\nDrugs and Denies. -\nMeetings STAVING Mon p.m 4:30 -\n- First negoriation sessession Wed.\n- (Tues is pessicide mark-emp) -\n11\nkeep Dan Take involved\"\n- bridge 10 Conservature duocrass-\nPoshicedes -\n120 -\nRich apprised Then of agreement 0/Builey Dorma -\nTues or Wednesday -\nWed, Thurs, Fri - Tracey called about FDA reforme -\nSunate - Hanner\nKassebaun said explicity -never want have\nto he truggered. -\nspreading out trugger\nlowering perception each year\nHHS- made argument wasen't realistic in\nterms 01 nevernes -\nRich - menber level understander ISMI thin -\nFlexibility about lowerng percentage and\nStretching out time frame.\nHas 10 be diff - Dard and Bill -\nNo harmers on dues side an House bill -\nHouse now has a more acceptable\ndus hanner - Senate has heiter approach\non 3rd party review - on devices agreed to\nour parameters - excluding life Threaterus implactal\nand Sone\nTherapeutic /dogustic derces. -\nGuidance - unitom Standards for diff reviewers\nan sane denie.\n- II and chass III - w/notice of intent\nto reclassifes -\n\"supporting 05 Stating hunan life\"\n\"diagnotic 0) which\nDealth Claims - fleus.lites\nMed bindes - flexibility\nDrod Approval\nMon changes\nOH lahol - Dodd work out w/Frist, Macc,\nBill\nand\nJane Lowerson Whaten works hard on off label-\nPess Dwiell\n- Phil also secing Frist Tuesday\n-\nof Lahel - that's where Senators are most dug in 1\nSuly - -that's where the dun't have as\nmuch 10\n- Podd would oppose an immeadiare done\nvote - So at least c/ days on\nFloor. -\nSenate was Selinda\nWithdrawal/Redaction Marker\nClinton Library\nDOCUMENT NO.\nSUBJECT/TITLE\nDATE\nRESTRICTION\nAND TYPE\n001. note\nre: FDA Reform [partial] (1 page)\n07/12/1996\nb(6)\nCOLLECTION:\nClinton Presidential Records\nDomestic Policy Council\nElizabeth Drye\nOA/Box Number: 10452\nFOLDER TITLE:\nFDA Reform 1996 [2]\n2014-0046-S\nrc1402\nRESTRICTION CODES\nPresidential Records Act - 144 U.S.C. 2204(a)]\nFreedom of Information Act [5 U.S.C. 552(b)]\nP1 National Security Classified Information |(a)(1) of the PRA]\nb(1) National security classified information [(b)(1) of the FOIA|\nP2 Relating to the appointment to Federal office [(a)(2) of the PRAJ\nb(2) Release would disclose internal personnel rules and practices of\nP3 Release would violate a Federal statute [(a)(3) of the PRA]\nan agency [(b)(2) of the FOIAJ\nP4 Release would disclose trade secrets or confidential commercial or\nb(3) Release would violate a Federal statute [(b)(3) of the FOIA]\nfinancial information [(a)(4) of the PRA|\nb(4) Release would disclose trade secrets or confidential or financial\nP5 Release would disclose confidential advice between the President\ninformation [(b)(4) of the FOIA]\nand his advisors, or between such advisors [a)(5) of the PRA]\nb(6) Release would constitute a clearly unwarranted invasion of\nP6 Release would constitute a clearly unwarranted invasion of\npersonal privacy |(b)(6) of the FOIA]\npersonal privacy [(a)(6) of the PRA]\nb(7) Release would disclose information compiled for law enforcement\npurposes [(b)(7) of the FOIA]\nC. Closed in accordance with restrictions contained in donor's deed\nb(8) Release would disclose information concerning the regulation of\nof gift.\nfinancial institutions |(b)(8) of the FOIA]\nPRM. Personal record misfile defined in accordance with 44 U.S.C.\nb(9) Release would disclose geological or geophysical information\n2201(3).\nconcerning wells [(b)(9) of the FOIA]\nRR. Document will be reviewed upon request.\nFDA referr\n-\nHave UP or Leen call\nDodd said - he's done everything he\nam to get our supmort -\nPhil has Frust at 4:00 or easy afternoon- -\n-tracy 2:00 or 5:30\nJohn\nPhyllis\n(001]\n- George\n3954852\n(b)(6)\nLine in sand M -Phil Lee.\n- Sally\nE- Taipun 690-7627\n- Gros\nS- Phil-lee's 690-764\n- Nance-Ann\n2- sheets -. 827-3370\nJonathen\n- -Bill corr. 610-7694\n1\nTrally (Dan Take\n(b)(6):\n- who Angell -\n3:00 -\noff lasel Use- -\n26th - Day on Cott's internal Calendar for PDA reform 1\n- Mach/Frist/Dodd\nFocus - undersent incentive to do regard —\nBasic minciple - done research, - represented\nit to The FDA\nbefore you\ndissemenate journal article that would\nbe basis for supplared\n-3 months before sudmit data to FDA -\nPatient Croups -\nDris in boonies - want get This info. -\nNeed database\nhave it for Cancer, (NCI)\nAIDS,\n2\n- in-House bill\n3\n- fixing supplement process - Rego type this\ni\nsuplefying largely\nDodd- see same circumstances where supplements wouldren\nbe necessary.\n- has smiluesearch warms is U.\n- Mach's intense interest. -\nZ weeks -Dugell\nname indication for approval /monde of\nTues. 5:30\nFDA Conf-call\n7626\nDevices\npitor resolved (3rd)\ntouse\n-\nOpen - efficacs std; off-lasel\nHoward Kohni idealogical nun- -\nMonder expects cument draft. -\nR's will mahe a judgment eanly in the week -\nLOH is telling basebarn - 1/2 day.\nagreement and no more than\nSenate\nNew issues Jane Williams is raising - -\ntissue issue\npharmacy compounding 15sues\n- -off-label\nAgreed to:\nhealth claims\nexcepts\n1\nthird party review - Coats\n1\nefficacy srds. -\nmanifacturing changes -\n-\nhealth claims -\nA\nmed gudes off the table - (resolved in approps.)\n12 issues\n4 Done\n5 close\ninitial classification of deres\n3\nhumantarian devices; efficacy (we offened language),\n(we gave guage\nFDA Refan - Letters\nJuly 3, 1996\nMs. Susan Panico\nExecutive Director\nNational Depressive and\nManic-Depressive Association\nSuite 501\n730 North Franklin Street\nChicago, Illinois 60610\nDear Susan:\nThank you for writing to me. I'm glad to\nhave the perspective of the National DMDA.\nSince taking office, I have worked hard\nto reform the Food and Drug Administration\nso that it can function more efficiently and\nrapidly to benefit the American people. As you\nknow, we have successfully reduced the length\nof the approval process for many new drugs and\ntherapies, and recently, my Administration put\nforward a series of regulatory reforms designed\nto make the FDA even more responsive to those in\nneed of new treatments.\nI appreciate your suggestions, and as we\nwork to build on our progress, I will certainly\nkeep your views in mind.\nSincerely,\nBILL CLINTON\nBC/SEM/JFB/JFB/emu-jfo\n(Corres. #3005417)\n(6.panico.s)\nCC: Barbara Woolley, OPL\nElizabeth Drye, ODP\n222\n07/18/96 14:32\nFDA/OFFICE OF THE COMMISSIONER -> 92024567028\nNO.273 P003/006\nCONCERNS RE: DEVICE BILL (H.R. 3201)\nA.\nMajor Concerns\n1.\nPrivatization of Review/GMP Inspections (Sections 9, 11, 12, and 17)\n2.\nOff Label Promotion (Section 18)\nB.\nSerious Concerns\n1.\nEffectiveness Standards (Section 8 -- no well controlled clinical trials and no\nclinical outcome results for devices)\n2.\nDevices: Modifications Without FDA Review and Specific/General Use\n(Section 9)\nC.\nOther Significant Concerns\n1.\nDispute Resolution (Section 3)\n2.\nInvestigational Device Exemptions (Section 4)\n3.\nHumanitarian Use of Devices (Section 6)\n4.\nPerformance Standards (Section 7)\n5.\nInitial Classification of Devices (Section 9)\n6.\nScientific Advisory/Classification Panels (Section 10)\n7.\nDevice Tracking (Section 14)\n8.\nPostmarket Surveillance (Section 15)\n9.\nGMP and Device Reports (Section 20)\n10.\nInformation Systems (Section 22)\n11.\nEnvironmental Impact Review (Section 23)\n07/18/96 14:32\nFDA/OFFICE OF THE COMMISSIONER\n->\n92024567028\nNO.273 P004/006\nD.\nOther Concerns\n1.\nAnnual Report (Section 2)\n2.\nHarmonization (Section 16)\n3.\nInformal Agency Statements (Section 24)\n4.\nResearch and Education (Section 25)\n5.\nPublic Notice of Deviation (Section 26)\n6.\nCivil Penalties (Section 21)\n2\n07/18/96 14:32\nFDA/OFFICE OF THE COMMISSIONER -> 92024567028\nNO.273 P005/006\nCONCERNS RE: DRUG DEVICE BILL (H.R. 3199)\nA.\nMajor Concerns\n1.\nPrivatization of Review/GMP Inspections (Sections 7 and 8)\n2.\nOff Label Promotion (Section 19)\nB.\nSerious Concerns\n1.\nEffectiveness Standards (Section 5 - one versus two clinical trials and new\nuses of drugs)\n2.\nMedication Guides (Section 29)\n3.\nHuman Tissue (Section 25)\nC.\nOther Significant Concerns\n1.\nAnnual Report (Section 2)\n2.\nStreamlining Clinical Research in Drugs and Biological Products (Section 3)\n3.\nContent and Review of New Drug Application (Section 4)\n4.\nScientific Advisory Panels (Section 6)\n5.\nDispute Resolution (Section 9)\n6.\nGMPs (Section 10)\n7.\nNonprescription Drugs (Section 14)\n8.\nPharmacy Compounding (Section 17)\n9.\nAccess to Unapproved Therapies (Section 26)\n10.\nProtection of Confidential Information (Section 28)\n07/18/96 14:32\nFDA/OFFICE OF THE COMMISSIONER + 92024567028\nNO.273 P006/006\nD.\nOther Concerns\n1.\nInformation Systems (Section 15)\n2.\nEnvironmental Impact Review (Section 16)\n3.\nHarmonization (Section 18)\n4.\nInformal Agency Statements (Section 20)\n5.\nResearch and Education (Section 21)\n6.\nPublic Notice of Deviation (Section 23)\n7.\nRadiopharmaceuticals (Section 27)\n-2-"
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