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Withdrawal/Redaction Sheet
Clinton Library
DOCUMENT NO.
SUBJECT/TITLE
DATE
RESTRICTION
AND TYPE
001. note
re: FDA Reform [partial] (1 page)
07/12/1996
b(6)
COLLECTION:
Clinton Presidential Records
Domestic Policy Council
Elizabeth Drye
OA/Box Number: 10452
FOLDER TITLE:
FDA Reform 1996 [2]
2014-0046-S
rc1402
RESTRICTION CODES
Presidential Records Act - - |44 U.S.C. 2204(a)|
Freedom of Information Act - 15 U.S.C. 552(b)]
P1 National Security Classified Information [(a)(1) of the PRA]
b(1) National security classified information |(b)(1) of the FOIA]
P2 Relating to the appointment to Federal office |(a)(2) of the PRA]
b(2) Release would disclose internal personnel rules and practices of
P3 Release would violate a Federal statute [(a)(3) of the PRAJ
an agency [(b)(2) of the FOIA]
P4 Release would disclose trade secrets or confidential commercial or
b(3) Release would violate a Federal statute [(b)(3) of the FOIA]
financial information [(a)(4) of the PRA]
b(4) Release would disclose trade secrets or confidential or financial
P5 Release would disclose confidential advice between the President
information [(b)(4) of the FOIA]
and his advisors, or between such advisors [a)(5) of the PRA|
b(6) Release would constitute a clearly unwarranted invasion of
P6 Release would constitute a clearly unwarranted invasion of
personal privacy |(b)(6) of the FOIA]
personal privacy [(a)(6) of the PRA]
b(7) Release would disclose information compiled for law enforcement
purposes |(b)(7) of the FOIA]
C. Closed in accordance with restrictions contained in donor's deed
b(8) Release would disclose information concerning the regulation of
of gift.
financial institutions [(b)(8) of the FOIA]
PRM. Personal record misfile defined in accordance with 44 U.S.C.
b(9) Release would disclose geological or geophysical information
2201(3).
concerning wells |(b)(9) of the FOIA]
RR. Document will be reviewed upon request.
Creation of Food Safety Panel Criticized
http://www.nytimes.com/yr/mo/day/politics/farm-bill-meat-exclusive.html
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April 1, 1996
Creation of Food Safety Panel Criticized
Related Articles
Political Points: A Guide to Web Resources
Politics Index
By MARIAN BURROS
A
little-noted amendment to the farm bill approved by the Congress last week is causing an uproar among
consumer groups and even some producers of meat and poultry. But the framers of the amendment,
Republican staff members of the House Agriculture Committee, say they cannot understand what all the
furor is about.
The amendment creates a Safe Meat and Poultry Inspection Panel, with broad powers to review the decisions by the
Department of Agriculture's Food Safety and Inspection Service on such matters as inspection procedures, food
safety standards and practices in meat and poultry plants as well as work rules and labor relations.
Backers say the review panel would improve food safety by requiring more scientists to be involved in the
decisions. Opponents say the panel's mandate will be too comprehensive. "We would grind to a halt," said Mike
Taylor, acting under secretary for food safety and inspection services. "An incredible array of almost all the
decisions we make would be put through this committee."
The creation of the panel comes at a time when the Agriculture Department is about to replace the current system
of visual inspections of meat and poultry with a more scientific approach that includes microbial testing and
performance standards.
While the industry does not agree with all provisions of the new system, called Hazard Analysis Critical Control
Point, most in the industry are eager for it to begin.
Faced with an avalanche of reports of tainted meat and poultry that have caused thousands of cases of illness and
hundreds of deaths each year, the industry sees the new system as a way to improve the public's perception of its
products. The reports of the spread of what is known as mad cow disease in Britain have heightened their interest.
Carol Tucker Foreman, assistant secretary of agriculture for food and consumer services in the Carter
administration who now works as a consultant on food issues, said the amendment was being treated as though it
were an honest contribution to the safety process, but "it is not."
"It's intention," Mrs. Foreman said, "is to stop the implementation of performance standards and microbial testing."
The department's scientific methods seem to be under attack, she said, adding, "Some members of Congress didn't
like USDA's science about harmful bacteria, so they are going to set up a panel to try to get the science they do
like."
William O'Conner, the policy director of the House Agriculture Committee, which added the amendment, said the
panel was "not designed to slow down the process" and was only advisory.
Besides, O'Conner said, "the HACCP rule is purported to be science-based, but it seemed clear that some of the
regulatory decisions have no scientific validity. The regulations should never have gotten to this stage."
Creation of Food Safety Panel Criticized
http://www.nytimes.com/yr/mo/day/politics/farm-bill-meat-exclusive.html
Page 2
O'Conner said the review panel was necessary because the inspection service devised its new system without
consulting its existing advisory panel, the National Advisory Committee for Microbiological Criteria for Meat and
Poultry.
Taylor said, however, that was not true and provided documentation of the committee's meetings. "HACCP is based
on the recommendations of that committee," he said.
At the largest producer of beef and pork in the world, IBP of Dakota City, Neb., officials say they have serious
concerns about the review panel.
"It adds another layer of bureaucracy and potentially would delay innovations aimed at enhancing food safety
regulations," said Gary Mickelson, an IBP spokesman.
The amendment would require the secretary of agriculture to submit formal regulations and informal directives to
the review panel and respond in writing in the Federal Register to any panel report. The secretary would then have
to allow an additional 90 days for public comment. If the secretary ignored a panel report, Mrs. Foreman said, the
Agriculture Department could face a reduction in appropriations.
This system would make speedy decisions impossible, Taylor said. It would also hamper actions like the agency's
recent directive to the beef industry for increased surveillance of cattle before slaughter because of an increase in
what is known as mad cow disease in Britain and concern about a possible human form of the disease.
"We're dealing with an emergency situation," Taylor said. "With the panel in place, instead of being able to issue
directions we'd be subject to the panel review process."
Unlike outside advisory panels at other agencies that are convened at the discretion of the agency head, the
Agriculture review panel would decide which Food Safety and Inspection Service decisions it wanted to examine.
In addition, it could meet in secret.
"Outside scientists can be quite useful," Taylor said, "but I don't know of any other advisory panel that decides how
a department does business."
The amendment would also require the Agriculture Department to pay the travel and per diem costs for the
seven-member panel out of the existing budget at a time when the inspection service is seeking additional money to
run its food safety program. At least five of the panel members would have to be food, meat and poultry scientists.
"Why would you create a panel for a human health program and require that a majority of them be experts on
animal health?" Mrs. Foreman asked.
Taylor said: "The provisions of the amendment are so poorly thought through that it has given food, meat and
poultry scientists a charge that is so broad it is beyond their expertise. It is severe overkill."
Among the decisions the panel could examine under the amendment are work rules and labor relations, but
O'Conner said the panel would not be involved in such work rules as whether plant workers could have "two or
three bathroom visits."
The amendment was added to the farm bill at the House-Senate conference, an occasional way of passing
controversial legislation without attracting attention or opposition.
"An ordinary bill becomes law by holding hearings," Mrs. Foreman said, "but there were no hearings. Now it is a
typical congressional mess because they decided they wanted to slip something in under the cover of night. We're
going to end up in court for years."
O'Conner disagreed. "I don't consider that much of a criticism," he said.
President Clinton is expected to sign the bill, but a senior administrative official said: "The administration has
serious concerns about the effect the amendment would have in delaying modernization of food safety inspection."
Critic Calls Anti-Smoking Drive Off Course
http://www.nytimes.com/yr/mo/dav/news/national/teen-smokers.html
Page 1
The New York Times
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April 1, 1996
Critic Calls Anti-Smoking Drive Off Course
By BARNABY J. FEDER
c
HICAGO -- Everyone from President Clinton to tobacco companies is preaching these days that teen-agers
should be kept from smoking, and that has some anti-tobacco advocates worried.
"The anti-tobacco movement has careened off on this narrow path because they know it's noncontroversial,"
said Stanton Glantz, a cardiology professor at the University of California in San Francisco. "But it's probably
counterproductive. A kid-centered program is doomed to fail."
Glantz fears the focus on trying to stop the 3 million teen-agers under the age of 18 who become smokers each year is
diverting too much attention from the nation's 40 million adult smokers. He argues that any letup in the pressure on
adult smokers to quit or at least cut back will end up reinforcing the industry's message that smoking is a pleasure to
be enjoyed by adults.
The result: naturally rebellious teen-agers will be seduced into becoming the tobacco companies' next generation of
customers at the same time the industry is claiming public relations credit for saying "kids shouldn't smoke."
Glantz's views, which were spelled out in a recent editorial published by the American Journal of Public Health,
angered some anti-tobacco advocates.
Many were even more upset when he attacked plans announced last month by the Robert Wood Johnson Foundation
and other groups to finance a new clearinghouse called the National Center for Tobacco-Free Kids, calling it "a total
waste of money."
The bigger danger as they see it is that Glantz is sowing doubt and sapping momentum among groups that need all
the unity they can get to battle the $45 billion tobacco industry.
"You don't need to have someone saying you should focus on something else just when you are about to achieve some
of your goals," said Bill Godshall, who is head of SmokeFree Pennsylvania, in Pittsburgh, and a firm believer that a
direct attack on teen-age access to cigarettes could have a big impact.
The squabbling among the anti-smoking forces has been largely confined to private conversations and E-mail on
Scarcnet, an electronic bulletin board used by anti-tobacco groups.
But it underscores the diversity among anti-tobacco groups and experts that often undercuts their efforts to counter the
money and lobbying skills of the tobacco companies.
The divisiveness showed up this year in Kentucky when the state passed a law aimed at reducing teen-age smoking,
with the support of the tobacco industry, retailers and tobacco growers. The law included penalties for teen-age
smokers and money for inspections of retail establishments.
The bill was endorsed by the Kentucky Medical Association on the grounds, as an association spokesman put it, "It
was the best you could expect from a tobacco state."
Other members of the state's coalition of anti-tobacco groups were furious at the Kentucky Medical Association. They
thought group's endorsement undercut their chances, however remote, of forcing the Legislature to turn out a stronger
law, such as one that would ban cigarette vending machines.
Critic Calls Anti-Smoking Drive Off Course
http://www.nytimes.com/yr/mo/dav/news/national/teen-smokers.html
Page 2
"The argument over the focus on kids is fairly new but there is always a split of one kind or another," said Phillip
Wilbur, a spokesman for the Advocacy Institute, a Washington lobbying group.
The most common disputes, like those in Kentucky, are over tactics and which changes to emphasize. But tobacco
critics are also at odds over fundamental goals.
Although many health experts see cigarettes as socially tolerable for adults if smoking is more strictly regulated, like
alcohol, others active in the anti-tobacco effort want total prohibition.
"There are some real zealots," said Dr. Kenneth Warner of the Michigan School of Public Health, who favors
toleration. "They're a minority but they are vocal and visible."
The tobacco companies, which typically refer to critics as the "anti-tobacco industry," maintain that prohibition is the
goal of all of their important critics, whether stated openly or not.
Walker Merryman, the chief spokesman for the Tobacco Institute, the Washington-based trade group, said, "If
someone in the industry came to me and said we have to open a dialogue with these people, I don't know who I'd
speak with."
The toughest question for tobacco critics may be one that is rarely openly discussed: Should they encourage tobacco
companies to produce and market safer cigarettes? Some health experts argue that such products would be beneficial
to society because 46 million Americans are addicted smokers. Others say that such products would make it harder to
combat smoking.
So far, the tobacco critics have been spared an all-out civil war because no company has successfully introduced an
obviously safer product. The closest test came in 1988 when R.J. Reynolds Tobacco Co. tried to market a smokeless
cigarette called Premier.
The company and most tobacco critics presumed it was healthier because of low-tar levels and virtually no secondhand
exposure to smoke, although Reynolds refrained from making any explicit health claims.
A few industry critics expressed interest in the potential benefits, but they were drowned out by attacks on the
company. As it turned out, though, there was little chance for debate because Premier was quickly pulled from the
market after being rejected by smokers.
"There was only one politically correct side in the tobacco-control movement when Premier came out," Warner said.
"I don't think that would be true now."
For now, there is plenty to disagree over concerning teen-age smoking, an issue ushered onto center stage by
Congress' passage in 1992 of the Synar Amendment. That measure, named after former Rep. Mike Synar, D-Okla.,
required states to clamp down on teen-age access to cigarettes or lose federal grants for programs to fight drugs.
Final regulations spelling out how states should prove they were complying were published in February. By then,
however, the spotlight had shifted to the Food and Drug Administration's proposal to attack teen-age smoking with
nationwide restrictions on the sale, distribution and marketing of cigarettes.
Glantz and some supporters argue that preoccupation with the FDA rule and other so-called youth-access measures
has made it easier for the industry to divert broad, aggressive anti-tobacco advertising campaigns in states like
California and Massachusetts toward less effective youth-oriented advertising.
Glantz says the switch is at least partly to blame for a slowing in the decline of adult smoking and a rise in teen-age
smoking in California.
The same preoccupation, he said, diverted the attention of most tobacco control groups from the Occupational Safety
and Health Administration's proposal for a nationwide ban on smoking in public workplaces. Restrictions exist in
many municipalities, including New York City. They are cited by Glantz as a means of reducing the number of
smoking workers by 25 percent (others say evidence of the impact of these measures is mixed) and cutting
second-hand exposure.
The outlook is now bleak for the OSHA proposal. While most tobacco-control groups kept their attention on the Food
Critic Calls Anti-Smoking Drive Off Course
http://www.nytimes.com/yr/mo/day/news/national/teen-smokers.html
Page 3
and Drug Administration, the tobacco industry managed to get the ban proposed by OSHA merged into a far broader
group of proposed regulations, which are now stalled by widespread criticism.
"When you reframe the goal from a smoke-free society to not wanting kids to smoke, it really narrows what you can
do about issues like second-hand smoke," said Robin Hobart, associate director of Americans for Non-Smoker Rights
in Berkeley, Calif.
But others say the focus on youth can help draw attention to the whole range of tobacco control issues.
"One of the ways you get adults concerned is by focusing on kids," said Dr. David Burns of the University of
California at San Diego. "There's a lot more people involved in smoking control in 1996 than in 1993 because we
have a theme that a lot of people can identify with."
Home I Sections I Contents I Search I Forums I Help
Copyright 1996 The New York Times Company
FDA Reform 3/22/96- -
FOA D
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better understanding w/staff,
Put in what FDA's proposed fix would be.
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- Gave them marhed upbill. -
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agreed to meet with
- to have fursher discussors about Siparmsan
fix to her bill
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Devices - # of was - comparies can mahe
changes w/out coming to us
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Device area- change defn. of stel
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Deadlines w/out resources - how That currerfends
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Induary will 50g more if Devoccements are
unified
Members are may. Mondey
EXECUTIVE OFFICE OF THE PRESIDENT
19-Mar-1996 06:38pm
TO:
Elizabeth E. Drye
FROM:
Jeremy D. Benami
Domestic Policy Council
SUBJECT: Schall letter
Thoughts on the Schall response:
Dear Ellen:
Thank you SO much for your letter and for your offer to pull
together some leaders of non-profits to meet with the President. I
am sorry it has taken me a little while to get back to you.
I am very interested in continuing the dialogue on how best to
involve the President and the Administration in the consideration
of the role of non-profits in these turbulent times. There are
some discussions going on among White House staff on this very
topic, and I will certainly keep your offer in mind as these
proceed. Also, if we decide to sponsor a meeting here in
Washington, I may be back in touch with you for ideas regarding
possible attendees and the agenda.
Once again, I enjoyed my visit in New York immensely and I
appreciate your offer of assistance.
Sincerely,
File I=1dpc\data\ Schall. Itr
In early January, the local Million
Denver Is Proving Fertile Ground
Man March organizing committee
decided to hold the black men's con-
ference at the Macedonia Baptist
For Theme of Million Man March
Church. Four firebombings in the
previous two weeks served to sweil
the crowd when the conference was
Haynor may ideas be some for
AI
held on Jan. 27.
By JAMES BROOKE
"We expected only. 400 people,"
DENVER, March 24 - After a 3.
"Our youths are killing each oth-
recalled Mr. Simmons, executive di-
year-old boy was killed in a drive-by
er," Mr. Muhammad told a rapt au-
rector of the organizing committee.
shooting in December, 100 black
dience at a predominantly black high
"We had 1,100 people Inside - and
men fanned out through a black
school here last month. "You can't
200 people trying to get in."
neighborhood here. They knocked on
blame that on the white man. You
Mr. Simmons, a former mayoral
doors until leads resulted in three
better take responsibility, black
aide for gang liaison, recalled the
arrests several days later.
man."
angry words Inside the packed
After rival gangs firebombed four
Mr. Rogers sounded a similar
church. "We gave them an edict," he
houses in the same northeast Denver
theme in a recent interview. "We
said, referring to the gangs. "We will
here
neighborhood in January, more than
have to go forward to a basic set of
help you get a job, but our babies'
1,000 men turned out for a five-hour
values: hard work, family responsi-
lives are not negotiable."
protest rally, the All Black Men Con-
bility, social responsibility,' he said.
Everyone agrees on what hap-
ference. The firebombings stopped.
"There is a movement taking place
pened afterward. Gang-related fire-
It has been nearly six months
in northeast Denver that says, 'It's
bombings stopped in Denver's black
since the Million Man March, the
time to wake up.
neighborhoods.
gathering of hundreds of thousands
In Denver, there is no white politi-
of black men in October in Washing-
cal power structure to blame. In-
Not everyone agrees on why.
"We had a task force out - the
ton organized by the Nation of Islam
stead, there is a nascent black busi-
gangs felt the pressure on the
and its leader, Louis Farrakhan. Far
ness class to emulate.
street," Police Chief David Michaud
from fading away, the march's mes-
Although blacks account for only 5
said in an interview. The anti-arson
sages of moral renewal and personal
percent of the two million people who
task force conducted hundreds of in-
responsibility have found particular-
live in the Denver metropolitan area,
terviews and arrested two teen-
ly fertile ground among the 100,000
the city's Mayor, Wellington E.
agers. They were charged with the
blacks in the Denver area, the larg-
Webb, is black, as is the president of
Jan. 25 bombing, a fire that caused
est such community in the Rocky
Mountain West. Denver's black
the school board, Aaron Gray.
Hardly ghettos, Denver's black
$25,000 in damage, leaving a family
neighborhoods seem changed by the
neighborhoods include low-rise hous-
with five children homeless.
event, in ways tangible and intangi-
ble.
ing projects, working-class bunga-
Community leaders argued that
lows and suburban ranch homes.
public pressure had curbed the
"Men are getting more involved
on their blocks; traditionally, it was
Bolstering a black middle class,
gangs.
there are about 4,000 black-owned
Mr. Simmons, who received tele-
only the women," said Alvertis Sim-
businesses in greater Denver.
phoned death threats from the gangs
mons, who is organizing a local fol-
"Denver has so many good things
before the conference, said, "I want
low-up rally to the Million Man
going for it - we've elected a black
them to have in the back of their
March to be held here next month.
Mayor and re-elected a black May-
minds, 'If I firebomb that house the
Recalling his efforts to set up anti-
crime groups three years ago, he
or," said the Rev. James Peters,
neighbors will see me and put me
said: "Before, there were hardly
pastor of the New Hope Baptist
away for 30 years.'
any men in the neighborhood watch
Church. "The gangs are not repre-
groups. Last week, I heard of a black
sentative of black people in Denver.
Next month, Denver's rally for
You've had retired people from the
"people of color" will keep pressure
man setting up one on his block."
The march has inspired a similar
military, working two jobs and buy-
on the gangs, predicted Chet Whye
ing nice homes here."
Jr., the local director of the National
level of activity in other black neigh-
But, as the 63-year-old pastor
Rainbow Coalition, which is helping
borhoods around the nation. From
spoke one recent Saturday, police
oragnize the rally.
New York to Los Angeles, black men
officers stationed in his vestibule
"There is a different attitude now
are becoming more involved.
handed out basketball tickets to men
that people are coming out," said Mr.
At Northeast High School in Kan-
who turned in handguns, no questions
Whye, who moved here from Balti-
sas City, Mo., for example, several
asked.
more 10 years ago. "The atmosphere
dozen are volunteering as tutors,
"Denver's like a comfort zone,"
has sparked some people to make
counselors and cafeteria monitors in
warned Mr. Muhammad, who was
real changes in their lives."
a program to provide a positive male
sent here last year from Los Angeles
by Mr. Farrakhan. "A lot of black
image for teen-agers. In Chicago, a
similar mentor program has attract-
people, and a lot of white people,
come here to get away from urban
ed about 100 black men, many of
problems."
whom took part in the Washington
But he noted that the Crips and the
march in October. And in Detroit
Bloods, two national street gangs,
and Los Angeles, agencies that help
had recruited here and warned that
THE NEW YORK TIMES
"Denver could end up like L.A."
Continued on Page A12. Column 1
Two-thirds of the area's homicides
MONDAY, MARCH 25, 1996
have occurred in Denver's urban
Continued from Page Al
core even though it has only a fifth of
the greater metropolitan area's pop-
in the adoption of black children are
ulation. But the surge in youth vio-
reporting a surge of interest.
lence was driven home this winter
About 350 communities now have
when the Denver Fire Department
Million Man March organizing com-
announced that there were 51 fire-
mittees, said Benjamin F. Chavis Jr.,
bombings in the city in 1995, up from
national director of the Million Man
39 the previous year.
March Organizing Committee, which
Of the firebombings, 13 are be-
is based in Washington.
lieved to be gang-related. Arrests
In Atlanta, he said, march organ-
were made in only one of the 13
izers have registered 28,000 people to
cases. More than two-thirds of the
vote and have directed a campaign
firebombings occurred in the last six
that increased deposits in black-
months of 1995.
owned banks by $2 million, Mr. Cha-
"Getting leads from the communi-
vis said in a telephone interview
ty is like pulling teeth," Lieut. Joe
He said Denver was "typical of
Sarconi, chief of the department's
what is happening in numerous
Arson Bureau, said in an interview.
areas around the country."
"The community is terribly intimi-
In political discourse here, there
dated by these gang members."
has been an overwhelming shift to
Although no one has been killed in
the march's themes. Prominent
the firebombings, Lieutenant Sar-
blacks as diverse as Jamal Muham-
coni said that was only a matter of
mad, a local Nation of Islam minis-
luck. "These are more indiscrimi-
ter, and Joe Rogers, a Republican
nate than drive-by shootings," he
lawyer who became the first black to
said. "The potential to kill groups of
run for Congress in Colorado, both
people is greater."
emphasize responsibility.
"The bodies were often slashed
From One Serbian Militia Chief,
But in a move that probably meant
with knife marks and were black and
death for Mr. Obradovic, he was re-
blue," he said. "The young women
leased in a prisoner exchange. He
A Trail of Plunder and Slaughter
were wrapped in blankets that were
has since disappeared.
tied at each end. These female
Mr. Lukic, witnesses said, began to
drive his captives to the center of the
corpses were always naked. We bur-
By CHRIS HEDGES
AI
bridge. Women and men said they
led several children, including two
had turned their heads as Mr. Lukic
boys 18 months old. We found one
VISEGRAD, Bosnia and Herzego-
of the 14,500 Muslims who lived in
and his men taunted their victims,
man crucified to the back of a door.
vina, March 21 - For the thousands
Visegrad before the war, 3,000 are
who were made to stand on the walls
Once we picked up a garbage bag
of Muslims who fled from this town
now missing or dead. The others are
of the bridge, before pushing them
filled with 12 human heads."
in eastern Bosnia, and for the Serbs
scattered around Bosnia, many liv-
into the water and opening fire with
By the autumn, with Visegrad
who remained, the war has bound
ing in poverty in overcrowded
nearly emptied of Muslims, the kill-
automatic weapons.
this generation and the next to a
rooms. Most shudder when they
Muslims in Visegrad were desper-
ings subsided but did not end.
Serbian militia leader named Milan
speak of this bridge. And even the
ate to leave. But the city officials
Those who survived the Serbian
Lukic.
Serbs in the town speak of what
refused to give them papers to leave
capture In July 1995 of the United
Witnesses and survivors say Mr.
until they had stripped them of their
Nations "safe areas" of Srebrenica
Lukic, 29, killed scores of Muslims in
happened in hushed and enigmatic
this region from 1992 to 1995. He has
sentences.
property and wealth.
and Zepa say they saw Mr. Lukic
not been indicted by the United Na-
"I read again Ivo Andric's novel
On June 7. 1992, Hasan Ajanovic
with the Bosnian Serb troops. Mr.
was picked up with five friends and
Lukic, they said, took away 65 Vise-
tions' war crimes tribunal in The
during the war," said Boshko Polic,
driven to the river by Mr. Lukic and
grad natives who had moved to the
Hague, and the Serbs in Visegrad
68, the retired principle of the Ivo
Andric High School, now taken over
two other men, including Mr. Vasilje-
United Nations "protected" en-
say they do not know his where-
abouts.
by Serbian families displaced from
vic, the former waiter. One of the
claves.
Sarajevo. "I would look up from the
victims, Meho Djafic, had worked for
Beyond Visegrad, his name and
pages and see what he was describ-
20 years in the Panos restaurant with
story are largely unknown. But de-
ing around me."
Mr. Vasiljevic.
Capture, Killing,
tailed accounts collected over the
last two weeks from witnesses,
In April 1992, when the conflict
"Lukic told us to wade out into the
between the Bosnian Serbs and Mus-
water," he said, Interviewed by tele-
Then a Coca-Cola
many of them now dispersed around
Bosnia, provide a picture of slaugh-
lims began, Mr. Lukic returned from
phone from a Western European
Serbia to his hometown. He gathered
country that he asked not be Identi-
Jasmin Kulovac, a young Muslim
ter, pillage and abuse condoned by
together a group of men, including
fied. "I did not hear the first shot, 1
fighter from Zepa who now lives in
the local authorities and Serbian
suspect because Lukic's gun had a
Sarajevo, tried to escape from Zepa
commanders from Belgrade.
his brother Milos, his cousin Sredoje
silencer. But I heard the screams
through the woods toward Montene-
Mr. Lukic (pronounced LOO-kich)
and a waiter, Mitar Vasiljevic. Mr.
is emblematic of dozens of Serbian
Lukic, who often went barefoot,
and then the other shots. Meho's
gro after the enclave was captured
militia leaders who rose to promi-
named the group the Wolves. He set
body fell on top of me. I lay with my
in July. But he was arrested with
nence in the war in Bosnia, who used
about pillaging and looting Muslim
face in the sand until night. I swam
eight companions on Aug. 4 by the
homes, witnesses said.
across the river and escaped. The
Serbian police along the border near
the call for an ethnically pure Serbi-
The Uzice Corps, the Yugoslav
water stank of death."
Zemlica.
an state to drive tens of thousands of
Army unit that moved into Visegrad
Killings were occurring each day.
The Serbs drove the men to Vise-
Muslim families from their homes
grad and turned them over to Mr.
and eventually turned their weapons
On the afternoon of July 19, 1992,
Lukic. Mr. Kulovac said he had seen
and kill thousands of others.
over to the Bosnian Serbs, did noth-
Milos Lukic kicked down the door
one companion gunned down along
The legacy he and others left of
ing to intervene, survivors said.
where Hasena Muharemovic lived
the banks of the Drina and heard
hatred, loss and pain - is something
The plunder quickly turned to kill-
with her sister, mother, invalid fa-
shots that he suspects indicated the
no peace agreement seems likely to
ing. On May 18 Mr. Lukic burst into
ther and two small girls, Mrs. Mu-
Dzemo Zukic's home and shot his
killing of the others.
erase. It helps explain why Muslims,
haremovic said. Her husband had
"Lukic took me to the middle of
Croats and Serbs refuse to return to
wife, Bakha, in the back, according to
been abducted and had disappeared
Visegrad to have a Coke afterward,"
homes controlled by other ethnic
neighbors who saw the shooting. He
drove the terrified husband away in
two weeks earlier. She swept up Ner-
he said. "As we sat in the cafe, the
groups, as called for in the peace
mina, 6, and her older girl and hid.
agreement reached last year in Day-
the family car, a red Volkswagen
other Serbs spat at me. He walked
Passat. Mr. Zukic was never seen
around the town like a god."
ton, Ohio. And It fuels the yearning
for vengeance that could in time
again. But the car became a harbin-
Mrs. Muharemovic, who lives in a
unleash another conflict.
ger of death.
Mother and Sister
tiny Sarajevo apartment with her
"The sight of the Passat sent ter-
daughters, is gaunt and nervous.
"Every child from Visegrad, even
ror into our hearts," said Hajdra
Are Shot on Bridge
"I do not sleep much," she said. "I
those too young to remember, knows
the name Milan Lukic," said Meh-
Karahodsic, whose husband was tak-
But her mother, Ramiza, and her
am plagued by the same dream. My
met Prtkovic, the leader of the dis-
en away by Mr. Lukic and who now
sister, Asima, were driven to the
room is filled with water. 1 am fight-
placed Muslims from Visegrad who
lives in Gorazde. "We all prayed that
center of the bridge. Mrs. Muhare-
ing to get to the surface. I see the
now lives in the isolated Muslim
It would not stop in front of our
movic crept from her hiding place
bodies of my mother and my sister
enclave of Gorazde. "Our communi-
homes."
and saw her mother and sister sit-
swirling past me in the current. I
ty will never forget. We will never
Survivors said the killings quickly
ting astride the wall.
burst to the surface."
allow our children to forget."
became frenzied and common. On
"Milan Lukic and his brother shot
Her voice went low and hoarse.
In Visegrad there is a graceful
one occasion, witnesses said, Mr. Lu-
them in the stomach," she said.
"I can always see It above me,"
400-year-old bridge, hewn of large
"When they fell in the water, the men
she said. "The bridge. The bridge.
kic tied a man with a rope to his car
off-white stones, that spans the em-
and dragged him through the streets
leaned over and laughed."
The bridge."
erald-green waters of the Drina Riv-
until he died.
That night she huddled in an aban-
er The Nobel laureate Ivo Andric
They said that on at least two
doned house with her daughters. At
centered his novel 'The Bridge on
occasions, Mr. Lukic herded large
dawn she went to see her father.
groups of Muslims into houses and
"My father told me to take the
Continued on Page A8, Column 1
set the buildings on fire. Zahra Tur-
girls and run away, that if we stayed
jacanin, her face and arms badly
we would all be killed," she said. "I
Continued from Page Al
marred by the flames, escaped from
cannot go, he said. I will stay until
one burning house on June 27 and
they come for me. "Nermina," he said
THE NEW YORK TIMES
the Drina" around the purnice struc-
raced screaming through the streets.
to my daughter, 'come kiss your
ture, which he could see from his
Townspeople said she was the only
grandfather goodbye for the last
MONDAY, MARCH 25, 1996
window as a boy.
survivor of 71 people inside. She now
time.' Then we fled."
The book chronicles, over 350
lives in France.
The mother and two girls were
years, the surbulent and often violent
"We watched all these things,"
picked up by Serbs and taken for two
history of Visegrad and Bosnia. And
said Fadila Mujakic, 46, who now
months to a house with six other
as the novel points out, the bridge has
lives in Gorazde. "But when we saw
served as a kind of public theater in
poor Zahra yelling in terror and pain,
women, Mrs. Muharemovic said. But
times of war and upheaval. Brigands
we knew Visegrad had descended
she would not talk about the experi-
into some kind of hell. I gathered my
ence.
and criminals were once impaled
family, and we snuck out that same
In September the mother and her
and executed on its stone flanks. Mr.
night."
daughters where sent to work on a
Andric wrote in the book, "In all
farm with dozens of other captives.
tales about personal, family or public
"Lukic would come to stuff pieces
events, the words 'on the bridge'
could always be heard."
Captured Serb
of pork in our mouths," she said.
(Pork is forbidden under Islamic di-
Testifies on Lukic
etary rules.) "He beat people with
A Long History
metal rods and took many away."
On Aug. 5, 1994, a United Nations
In October 1995 Mrs. Muharemo-
policeman, Sgt. T. Cameron, inter-
Of Major Killers
vic and her daughters were freed in a
viewed a captured Serbian soldier
prisoner exchange.
The steep wooded hillsides that
from Visegrad, and gathered the
The killings here, witnesses said,
plunge to the river have for centuries
only known Serbian testimony of Mr.
filled the waters of the river with
Lukic's actions.
also produced killers of appalling
magnitude. Mr. Lukic, along with his
The soldier, Milomir Obradovic,
bloated and mangled bodies.
Mesud Cocalic lived about 12 miles
group of some 15 well-armed com-
told how fleeing Muslims were
hauled off buses, lined up and shot by
down river from Visegrad in the vil-
panions, was the latest, according to
Mr. Lukic and his companions. He
lage of Slap, which did not fall to the
more than two dozen survivors and
identified the sites of two mass
Serbs until last summer. He said he
witnesses. According to their ac-
graves, but neither have yet been
and a group of neighbors had buried
counts, he too used the bridge as a
investigated He said Mr. Lukic and
180 bodies they had retrieved from
prop to extinguish a Muslim commu-
his followers raped young girls held
the water. The men identified 82 of
nity that had been here for centuries.
captive at the Vilina Vlas spa outside
the bodies and wrote out detailed
Visegrad. And he said Jasna Ahmed-
descriptions of the others.
spahic, a young woman, jumped to
her death from a window of the spa
after being raped for four days.
AMENDMENT NO
Calendar No
Purpose: To reduce overly burdensome, bureaucratic, and unnecessary
requirements.
IN THE SENATE OF THE UNITED STATES-- 104th Cong., 2d Sess.
An Amendment to the amendment offered by Mrs. Kassebaum
to S. 1477
To amend the Federal Food, Drug, and Cosmetic Act and Public Health
Service Act to improve the regulation of food, drugs, devices, and
biological products, and for other purposes.
Referred to the Committee on
and ordered to be printed
Ordered to lie on the table and to be printed
AMENDMENTS intended to be proposed by Mr. Kennedy
1
On page XX, strike lines XX-XX and replace with:
2
"(ii) requests for meetings and the scheduling of meetings relating to
3 reviews of protocols and relating to review of applications or submissions
4 (including petitions or notifications) for product approval or clearance;
5 and";
5
line
22
through
P.
22
6
On page XX, strike lines XX through ** and replace with:
7
"(2)(A) A clinical investigation of a new drug (including a biological
8 product) may begin thirty days after the date the Secretary receives from
9 the sponsor a notification containing information about the drug and the
10 clinical investigation unless, prior to the thirtieth day, the Secretary
1 informs the sponsor that the investigation may not begin and specifies the
2 basis for the decision. Within an additional twenty days, the Secretary
3 shall specify in writing the deficiencies and the information needed in
4 order for the clinical investigation to commence.
24
line
\
through
24
24
25
strike
page
linez
5
On page **, strike lines ** through XX and replace with:
6
"(3)(A) The Secretary may place a clinical hold on any ongoing
7 clinical investigation if the Secretary determines that such action is
8 necessary for the protection of human subjects or for other reasons set
9 forth by the Secretary in regulations.
10
"(B) If the Secretary places a clinical hold on an ongoing
11 investigation, the Secretary shall immediately advise the sponsor of such
12 investigation in writing of such action, and provide such sponsor an
13 opportunity to confer within ten working days of receipt of such
14 communication to discuss the basis for the clinical hold. Within ten
15 working days of such conference, the Secretary shall provide to the
16 sponsor a written list of conditions for the withdrawal of the clinical hold.
17 Any written request from the sponsor requesting that a clinical hold be
18 withdrawn shall receive a decision in writing and specifying the reasons
19 therefor, within twenty working days of the receipt of the request."
16
/
10
20
On page **, strike lines ** through line ** and replace with:
21 "(b) REVIEW BY SCIENTIFIC REVIEW GROUP
1
"(1) In General The product sponsor or applicant shall have a right
2
to request an evaluation by an appropriate scientific review group
3
established under section 904 of any significant scientific decisions made
4 by the Secretary under this Act. In addition, a product sponsor or
5
applicant shall have a right to request an evaluation by an appropriate
6
scientific review group established under section 904 of any significant
7
scientific issue under this Act appealed by such person under subsection
8
(a) that has been pending before the Secretary, without final resolution, for
9
more than 180 days."
Administration Marries Policy Initiatives to Political Message
CLINTON, From A1
wanted to expand benefits to people
exposed to Agent, Orange in Vietnam,
the White House quickly approved the
proposal and Clinton scheduled a
speech to announce the move. The
real-world impact of these initia-
tives-a sample of more than a dozen
examples so far this year-varies
widely.
Six weeks after Clinton unveiled the
education tax-credit proposal, for in-
stance, the administration has yet to
send a bill to Capitol Hill to implement
the idea, and aides say they have yet to
make some basic decisions about how
the tax credit would work. Even so,
Clinton weaves mentions of the plan in-
to almost every campaign speech.
The Agent Orange decision, by con-
trast, quickly disappeared from view
BY RUTH
after a round of headlines the day it
President Clinton, with daughter Chelsea, left, and wife Hillary, leaves for
was announced. The administration of-
Camp David. Clinton uses agenda-setting power to "define himself."
fered no precise cost estimates. But
medical experts say the decision to
new rules requiring women to provide
by juveniles was largely a presidential
compensate every Vietnam veteran
more information about who fathered
restatment of something the Bureau of
who gets prostate cancer could eventu-
their children before receiving welfare
Alcohol, Tobacco and Firearms an-
ally cost the federal government far
benefits. The move, White House offi-
nounced more than two years ago.
more than $1 billion, although the big
cials said, would help show Clinton as a
But sometimes Clinton's pronounce-
bills won't come due until many years
tough-minded innovator, and help blunt
ments involve important policy. The
from now as veterans grow older.
the GOP charge that by vetoing two
Agriculture Department had been
The VA made its decision despite a
Republican bills Clinton had reneged
working for years on a compromise
lack of scientific evidence showing any-
on his 1992 promise to "end welfare as
plan for more rigorous meat inspec-
thing more than a possible link be-
we know it."
tions. The final announcement was has-
tween Agent Orange exposure and
In March, Clinton announced that
tened by several days last week, ad-
prostate cancer, which more than 10
Housing and Urban Development De-
ministration officials said, in time for
percent of all males will get regardless
partment aid to local housing authori-
Clinton's weekly radio address, domi-
of whether they served in Vietnam.
ties would be weighted in favor of pro-
nating the Sunday papers a week ago.
The presidential campaign of former
jects that evict tenants accused of a
The relationship between the execu-
Senate majority leader Robert J. Dole
single crime, even if the tenants have
tive branch and Clinton's political ad-
accuses Clinton of politicizing the gov-
yet to be convicted. HUD and Justice
visers works in both directions. Some-
ernment and campaigning at taxpayer
Department officials helped draft the
times the campaign takes advantage of
expense. But White House aides are
initiative, which a spokesman for the
an idea the bureaucracy had been
unapologetic about their determination
American Civil Liberties Union called
working on. Other times, the political
to merge government policy and cam-
"political grandstanding at the expense
team orders the bureaucracy to work
paign message, and claim they are
of the poor."
on a proposal that Clinton campaign
practicing sensible incumbency politics.
The next day, Clinton announced
consultant Dick Morris or some other
Poor coordination between the
that the Food and Drug Administration
adviser believes will prove popular.
White House and the reelection cam-
was streamlining rules to bring anti-
In the Agent Orange decision last
paign contributed significantly to Presi-
cancer drugs to market. Clinton said it
May, Clinton seized upon a policy deci-
dent George Bush's defeat in 1992 by
was an example of how the administra-
sion that as a practical matter had al-
making him vulnerable to the charge
tion's "reinventing government" cam-
ready been made. Congress in 1991
that he had no message or philosophy,
paign was helping individuals. But it al-
passed legislation requiring the gov-
Clinton aides contend. They are eager
SO responded to Republican complaints
ernment to give the benefit of the
not to let Dole benefit the same way
that the FDA is too slow and bureau-
doubt to veterans in cases where the
they did.
cratic.
scientific evidence is murky about
"We are determined to speak with
In April, Clinton answered consumer
whether Agent Orange causes a partic-
one voice and not have a disconnect,"
fears that gasoline prices were rising
ular health problem. A scientific panel
said White House senior adviser
too high by ordering the Energy De-
found there was "suggestive" but in-
George Stephanopoulos.
partment to sell some of the strategic
conclusive evidence of a link between
New examples keep springing forth,
petroleum reserve. The next day, he
prostate cancer and exposure to the
answered ranchers' fears that beef
sometimes two or three a week.
herbicide and recommended the dis-
This spring, with campaign polling
prices were falling too low by enlisting
ease be added to a list of others for
showing that people want to get tough
the Agriculture Department to speed
which Vietnam veterans receive bene-
on wayward youths, the White House
up school lunch program purchases.
fits.
ordered the Justice Department to de-
Sometimes, the effort to put Clinton
Once the panel made its decision,
velop guidelines to be mailed to locali-
forward with a campaign message of
according to interviews with officials at
ties to encourage them to impose night
the day involves initiatives that amount
the White House and Department of
to little. Last week's announcement of
curfews. The Education Department
Veterans Affairs, there was no serious
put together a similar manual on how
a program to track guns used in crimes
discussion of the considerable costs in
schools can stop truancy.
Last month, the Heath and Human
Services Department came up with
THE WASHINGTON POST
`A16
SUNDAY, JULY 14, 1996
PHOTOCOPY
PRESERVATION
future years or any possibility that
Clinton might not approve.
Instead, according to officials there
was considerable discussion of how
Clinton should announce the decision.
Some thought a Memorial Day address
would be appropriate, but others
THE WASHINGTON POST
thought that would look too political.
A16 SUNDAY, JULY 14 1996
Clinton made his announcement the
day after the holiday surroundeduby
veterans.
The education tax credit by con-
trast, was conceived at the White
House Clinton, according to an alde
was eager for "a big idea on education
that would help "define what the sec-
ond term would be about,' and had
long been intrigued by a Georgia pro-
gramito subsidize the first two:years of
college.
The problem was meshing it with
the realities of budgeting. Economic
adviser Laura D' Andrea Tyson and one
other deputies, Clinton campaign vet
eran Gene Sperling, supervised a pro-
cess of extended wrangling among the
White House and Departments of Edu-
cation and Treasury over how big to
make the credit, and how to pay for it.
Aides said the scope and cost of Clin-
ton's was scaled back as it went
through the policy process. And some
questions, such as whether the tax
credit should be paid to the college or
to the individual student, ar unan
swered
White House press secretary Mi-
chael McCurry said Clinton agrees that
the tax credit proposal is in part politi-
cal, but that it is appropriate for a pres-
ident to offer new policies in ancelec
tion year to highlight what he would do
in a second term.
But Christina Martin, a spokes vom
an for Dole, said Clinton is the
powers of incumbency on several
fronts to unfair advantage. "Whether
it's travel, events staging, war rooms
in the White House, or taxpayer fund
ed policy experts being used for Bill
Clinton's political gain, it is abusive and
wrong, Martin said.
Mary Matalin, a veteran of Bush's
campaign, said if Clinton thought the
tax credit or other proposals were
good ideas, he should have pushed
them when Democrats had control of
Congressitwo years ago.
But Martha Joynt Kumar, a Towson
State University political scientist said
Clinton is shrewdly using the agenda-
setting powers of the presidency. By
announcing even a modest propo sale
"He can immediately get on the news;
and that public exposure gives him a
chance "to define himself
PHOTOCOPY
PRESERVATION
Staff writers Bill McAllister and
Rick Weiss contributed to this
report.
THE WASHINGTON POST
SUNDAY, 4. 1996 A 11
Congress May End Funding for Agriculture's Pesticide Testing Program
Associated Press
thresholds set by the Environmental Pro
budget," said Jay J. Vroom, the group's
The Environmental Protection Agency
residues were found, although only two ap-
tection Agency.
president.
advises the Agriculture Department on
ples had that many pesticides.
The Agriculture Department's Pesticide
About 39 percent of the nearly 7,600
Conversely, the House decided that if
which pesticides to examine. Because of a
Activist organizations such as the Envi-
Data Program, created in 1991 to test pro-
samples tested in 1994 had no detectable
pesticide were so low, the program
1993 report by the National Academy of
ronmental Working Group also say the pro-
duce in the wake of theiscare over the pesti-
residues, even though scientists can meas
wasn needed. After all, the Food and
Scientists, the government has been look
gram should be kept, especially because of
cide Alar in apples, faces possible extinction.
ure down to the tiniest part Just under 2
Drug Administration already enforces pes,
The House passed a spending bill for the
ing more closely at the special impact of
growing concern over exposure to multiple
percent of imported produce and just over
ticide laws testing 10,000 food samples a
Agriculture Department in June that cut
pesticides in the diets of infants and chil-
residues.
1 percent of U.S. grown produce had resi-
year.
out the $11.5 million needed to the
dren.
Although the allowed pesticide levels
dues that would violate standards
The EPA says the data help it do a bet
The agency is also beginning the difficult
may be too high by their reckoning, the
program in l 997. The Senate bill, awaiting
The data hasibeen our friend," said Den-
of calculating the health risk from
nis Stolte, pesticide specialist with the
task of looking at total exposure from all
group says, at least there would be knowl-
final,passage, restores the money. Negotia-
pesticides
edge of the situation.
tors will have to decide the program's fu-
American Farm Bureau Federation. The
The fruits and vegetables are taken from
pesticides rather than regulating each pes-
With a little bit more refinement, and a
ture.
American Crop Protection Association,
warehouses and tested after they been
ticide as though it were the only one being
little bit harder looking by this program,
The arguments for ending the program
which represents pesticide makers agreed.
peeled; scrubbed and otherwise prepared
used. About 36 percent of the samples had
you could really get a pretty good picture
look like those for keeping it.
To the extent this information is valu-
for consumption: Without the data the
traces of more than one pesticide
of what pesticides are on these fruits and
Farm groups and pesticide makers want
able in reassuring public confidence in the
EPA has to assume that the maximum al-
Compared with previous years samples,
vegetables when people eat them," said
it because it shows the food supply/has very
safety of the food supply ACPA would be
lowable levels set for crops ready to har
there were more multiple residues, and
Richard Wiles, the group's pesticide spe-
low levels of pesticides well below
sad to see this program removed from the
vest rather than are in the food.
1994 was the time that as many as 10
cialist
PHOTOCOPY
PRESERVATION
07-29-96 10:24AM FROM 00 HF-1 FB-8
TO 94567028
P002/004
House
19 SEC. 23. ENVIRONMENTAL IMPACT REVIEW.
20
Chapter VII is amended by adding at the end the
21 following:
22
"SUBCHAPTER D-ENVIRONMENTAL IMPACT REVIEW
23 "SEC. 741. ENVIRONMENTAL IMPACT REVIEW.
24
"No action by the Secretary proposed to be taken
25 pursuant to this Act shall require the preparation of an
1 environmental assessment or environmental impact state-
2 ment under the National Environmental Policy Act of
3 1969 unless the Secretary finds that because of extraor-
4 dinary circumstances the proposed action may have a sig-
5 nificant effect, either directly or cumulatively, on the
6 human environment."
07-29-96 10:24AM FROM 0C/HF-1/FB-8
TO 94567028
P003/004
Senate
4 SEC. 406. ENVIRONMENTAL IMPACT REVIEW.
5
Chapter VII (21 U.S.C. 371 et seq.), as amended by
6 section 405, is further amended by adding at the end thereof
7. the following new section:
8 "SEC. 745. ENVIRONMENTAL IMPACT REVIEW.
9
"Notwithstanding any other provision of law, no ac-
10 tion by the Secretary pursuant to this Act shall be subject
11 to an environmental assessment, an environmental impact
12 statement, or other environmental consideration unless the
13 director of the office responsible for the action demonstrates,
14 in writing-
15
"(1) that there is a reasonable probability that
16
the environmental impact of the action is sufficiently
17
substantial and within the factors that the Secretary
18
is authorized to consider under this Act; and
19
"(2) that consideration of the environmental im-
20
pact will directly affect the decision on the action.".
By regulation - proposed nub they we
visals reduced # of env. analysis
NERA
07-29-96 10:24AM FROM 00/HR-1/FB-8
TO 94567028
P004/004
4 SEC. 406. ENVIRONMENTAL IMPACT REVIEW.
5
Chapter VII (21 U.S.C. 371 et seq.), as amended by
6 section 405, is further amended by adding at the end thereof
7 the following new section:
8 "SEC. 745. ENVIRONMENTAL IMPACT REVIEW.
9
"Notwithstanding any other provision of law, no ac-
10 tion by the Secretary pursuant to this Act shall be subject
11 to an environmental assessment, an environmental impact
12 statement, or other environmental consideration unless the
13 director of the office responsible for the action demonstrates,
Aufos burden
14 in writing
shows
"(1) there is U. reasonable probability that
the environmental impact of the action is sufficiently
was burden why. as 18 17
tojustify such an assessment,
substantial and within the factors that the Secretary
is authorized to consider under this Act; and
19
"(2) that consideration of the environmental im-
20
pact will directly affect the decision on the action.".
Possible
EXECUTIVE OFFICE OF THE PRESIDENT
02-Aug-1996 10:38am
TO:
Jonathan Winer
TO:
Sally Katzen
TO:
Elizabeth E. Drye
TO:
John F. Morrall, III
TO:
Michael A. Fitzpatrick
FROM:
Daniel J. Chenok
Office of Mgmt and Budget, OIRA
SUBJECT: DELAY OF MARKUP ON FDA REFORM BILLS SEEN AS IMPROVING PROSPE
DELAY OF MARKUP ON FDA REFORM BILLS SEEN AS IMPROVING PROSPECTS FOR
The House Commerce Committee's decision to delay its scheduled markup of
Food and Drug Administration reform legislation in favor of continued
negotiations with the Clinton administration actually improves the prospects
for congressional action, a drug industry source told BNA Aug. 1.
The House Commerce Health and Environment Subcommittee had been expected to
consider three FDA reform bills (HR 3199, 3200, 3201) beginning Aug. 1, but
announced July 30 that markup would be postponed to allow discussions to
proceed through August.
According to the source, both Republican and Democratic staffers have
represented the postponement as a positive step, not a reason for
disappointment. If the negotiations had broken off for subcommittee markup
there would have been more confrontation, rather than less, brought about by
amendments being offered on controversial issues, the source said.
It appears that reform bills will be brought to the House floor in
September under suspension of the rules, the source added, which means the
leadership considers them to be non-controversial and few amendments will be
allowed.
Roles Of Bliley, Greenwood
Moreover, the bills currently have approximately 208 cosponsors from
both parties, SO passage by the House seems assured. The source credited Rep.
Jim Greenwood (R-Pa), head of the Republican task force appointed by Commerce
Committee Chairman Thomas Bliley Jr. (R-Va), with garnering ``90 percent' of
the cosponsors for the bills.
Greenwood initially took the lead on meeting with FDA Commissioner David
Kessler and his staff as well as industry, patient, and medical groups to
reach agreement on controversial issues before proceeding to mark up.
Bliley and his staff have moved to the forefront now, however, since Health
and Human Services Secretary Donna E. Shalala asked that meetings be held
prior to mark up to work out differences between Congress and the
administration.
The drug industry source said Bliley wanted one more ``legislative
success' before the end of this congressional session. Bliley's involvement
again underscores the probability of the bills will pass in September because
THE WHITE HOUSE
WASHINGTON
Elizabeth,
This was givento
Chris by Genentech
He is inlerested in your
Views -- they believe it's
a sign of movement & hope
we can help to push
through an acceptable
agreement.
-Sandy
SENT BY:GENENTECH, INC.
; 8- 8-96 ; 9:49AM ; GENENTECH-WASH: DC-
2024566487;; # 2/ 2
DISSEMINATION OF INFORMATION
CURRENT LAW
1) Only when fundamentally consistent with approved label
MACK/FRIST/DODD
1) Only independent journals and texts
2) Only information that is scientifically reliable
3) All information reviewed by FDA for balance
4) Disclaimers
5) Obligation to update by companies
6) Secretary has no authority with respect to cost and cost effectiveness of drug claims
FDA POSITION
1) Dissemination only after a company has filed a supplement
2) Unclear position on other issues
"A THIRD WAY"
1) Limit journals to those approved by the Secretary
2) Create three categories of FDA reviewable documents. Those which relate to:
a) filed supplemental applications;
b) those consistent with recommendations of federal health agencies; and
c) those consistent with medical practice guidelines. These determinations to be made by
the Secretary.
3) Limit application of a pending "Guidance document", negotiated rule making, and authority for the
FDA to regulate false and misleading claims pending a final rule.
THE WHITE HOUSE
WASHINGTON
August 6, 1996
MEMORANDUM FOR THE PRESIDENT
FROM:
Elizabeth Drye, 848 DPC
SUBJECT: Update on FDA Reform Legislation
Many biotechnology, pharmaceutical, and medical device
companies would like to see FDA reform legislation pass this
year. California biotechnology leaders may raise the issue with
you. Senator Kassebaum has moved a bill out of the Labor
Committee with some Democratic support. The House Commerce
Committee has held hearings on three separate bills addressing
FDA's regulation of food, drugs, and medical devices.
As you know, FDA has already made substantial changes under
Vice President Gore's National Performance Review to speed drug
and device approval times, provide patients earlier access to new
drugs for cancer and other life-threatening diseases, and ease
regulatory burdens for manufactures. In November of 1995 FDA
announced and biotechnology leaders applauded a package of six
reforms that help the biotechnology industry. FDA has also
proposed a third-party review pilot to test private review of
low-risk medical devices.
Democrats have been divided on pending legislation.
Senators Dodd, Harkin and Mikulski voted to report Senator
Kassebaum's bill out of Committee while noting the need for
improvements. Senator Kennedy, however, wrote a scathing op-ed
calling the Senate bill a "prescription for disaster." FDA has
testified that numerous provisions in both the House and Senate
bills undermine safety and efficacy standards.
HHS and FDA staff, in consultation with White House staff,
have been working with both House and Senate Committee members
and staff toward developing legislation the Administration can
support. We have sought to be responsive to industry's concerns
while preserving safety and efficacy standards. Key remaining
issues include provisions establishing expansive private review
of medical devices, unrealistic review deadlines with "hammers"
that kick products into private review, and rules governing the
distribution of promotional material for "off-label" drug uses
(uses for which a drug is not explicitly approved).
We are working to reach agreement on an FDA reform bill that
does not undermine safety and efficacy. Given the limited number
of legislative days remaining, this Congress is not likely to
pass legislation unless Democrats, Republicans, and the
Administration achieve consensus soon on outstanding issues.
THE NEW YORK TIMES
FRIDAY, MAY 24, 1996
Senators Offer Bipartisan Plan
To Cut Taxes in Washington
By MICHAEL JANOFSKY
would cost $700 million to $800 mil-
WASHINGTON, May 23 - In an
lion a year for up to six years.
effort to reverse years of population
The proposed tax cuts have be-
and economic decline in the District
come the latest in a series of efforts
of Columbia, two Senators said today
to restore the District's economy.
that they would introduce a bill on
Congress last year created a finan-
Friday that would substantially cut
cial control board to help the city
the Federal taxes paid by District
curb spending. The White House has
residents.
appointed a task force to work with
The measure, co-sponsored by
city agencies to solve problems. And
Connie Mack, a Florida Republican,
Mayor Marion S. Barry Jr. has be-
and Joseph 1. Lieberman, a Connecti-
gun work on a four-year plan to
cut, Democrat, is almost identical to
reduce the size of city government
a House bill introduced last month by
by 25 percent.
the District's representative, Elea-
But the tax cuts would appear to be
nor Holmes Norton, a Democrat,
the most dramatic of the initiatives.
which she said was the only viable
Stressing the bipartisan nature of
way of saving the city from ruin.
their efforts, Mr. Kemp nodded to-
The House and Senate bills would
ward Ms. Norton and said: "We've
both create a flat Federal income tax
joined together in a bleeding heart
rate for District residents of 15 per-
issue to save the nation's capital.
cent, down from as high as 39.6 per-
This is an urgent plea to the White
cent. Standard deductions would rise
House and leaders of the House and
to $15,000 for single filers, $25,000 for
Senate. Do it now. People in this city
head of household filers and $30,000
desperately need urgent action."
for married couples. Those figures
were $3,900, $5,750 and $6,550, respec-
tively, last year.
The Senate bill would eliminate
capital gains taxes for any business
investment in the city, while the
House bill would do so only for in-
vestments by District residents. The
Senate bill would also provide a
$5,000 tax credit for first-time home
buyers in the District. Ms. Norton's
Corrections
bill has no such incentive.
Describing the tax cuts as "the
An article on April 16 about at-
who died in March, was a graduate
best way to help" the nation's capi-
tempts to improve the safety record
of Bates College, not Colby College,
tal, Mr. Mack said today that he
of the taxi fleet in Nairobi, Kenya,
which was Mr. Gurney's alma ma-
expected both bills to pass this year.
misstated the etymology of the Ki-
ter.
And if that happened, Mr. Lieberman
swahili colloquialism for the mini-
said, "I bet you a lot of money Presi-
vans that make up the bulk of the
An article on Saturday about a
dent Clinton signs it."
fleet. Matatu, literally meaning
resolution by the Association of Jus-
"High taxes are driving people out
threes, derives from the fare of 30
tices of the Supreme Court of the
of the District of Columbia," Mr.
cents (mateni matatu, or three 10-
State of New York, criticizing Gov.
Mack said at a news conference,
cent pieces) originally charged by
George E. Pataki's proposal to elim-
where the Senators were joined by
Ms. Norton and Jack Kemp, the Sec-
drivers, not from the practice of
inate parole for violent felons, mis-
retary of Housing and Urban Devel-
people banding together to operate
stated the authorship of the resolu-
the taxis. This correction was de-
tion. It was drawn up-by the associa-
opment in the Bush Administration.
layed for consultation with authori-
tion's executive committee, not by
Mr. Kemp has been a strong support-
Justice Burton B. Roberts of the
er of using tax breaks to attract
ties on Kiswahili.
Bronx.
residents and businesses to citles.
The lawmakers and Mr. Kemp
A headline on Wednesday with the
An obituary on Saturday about
said that if the cuts helped Washing-
continuation of a front-page article
Sam Lopata, who designed a number
ton's economy, Federal and state tax
about the erosion of consensus
of New York restaurants, gave an
breaks could be used to resuscitate
among the nation's governors on re-
incorrect date for the opening of one
other urban areas losing population
shaping the Federal-state health
of them. The restaurant, Joanna,
for the same reasons - crime, poor
program for the poor referred incor-
was opened in 1980, not 1978.
schools and inefficient city services.
rectly to that program. It is Medic-
It is not clear, however, whether
aid, not Medicare.
A Critic's Notebook yesterday
the Clinton Administration supports
about television news reports tied to
the idea of Federal tax cuts for Dis-
An obituary yesterday about Ed-
prime-time shows misidentified the
trict residents or of having the cuts
ward J. Gurney, the former Senator
weatherman on WNYW, the Fox-
be a model for use across the coun-
from Florida, misstated Edmund S.
owned station in New York. He is
try. In an interview after Ms. Norton
Muskie's alma mater. Mr. Muskie,
Nick Gregory, not Nick Gomez.
proposed her bill, Alice M. Rivlin, the
director of the Office of Management
and Budget, said the measure was
"more a dramatization of the prob-
lem than a real solution."
Also, at a time when Congress and
the White House are straining to
balance the budget in seven years;
the lawmakers said that neither the
House nor Senate had analyzed how
much the tax cuts would cost the
Federal Government.
Mr. Kemp estimated the cuts
Senator D'Amato, a Republican,
Continued From Page B1
Senator Christopher Dodd, Demo-
Pataki Outlaws
crat of Connecticut, and Representa-
allergies, bronchial disorders and
tive Bill Frist, Republican of Tennes-
asthma that contain ephedra - in-
see, have introduced legislation that
Herbal Stimulant
cluding Primatene and Sudafed -
would reclassify as a drug any herb
will not be affected.
or dietary supplement like ephedra
Besides Herbal Ecstacy, the prod-
that advertises itself as a euphoria-
Used by Youths
ucts bear such names as Euphoria,
producing or awareness-heightening
Brain Wash and Buzz Tablets.
product. Such products would then
In a related action, the Commis-
come under stricter regulation by
By CLIFFORD KRAUSS
sioner of Agriculture and Markets,
the Federal Drug Administration.
Donald R. Davidsen, issued a recall
Concern over ephedra intensified
Gov. George E. Pataki has announced an
of six carbonated beverages that
last month when a Florida coroner
immediate statewide ban on the sale of so-
contain ephedra.
called Herbal Ecstacy and other herbal
The ban will be enforced by local
ruled that Peter Schlendorf, a 20-
products containing the stimulant ephedra,
and state public health officials, who
year-old college student from North-
which has been blamed for 15 deaths nation-
will do spot checks of stores that
port, L.I., had died from taking dou-
wide.
have sold the products and will inves-
ble the recommended dose of Ulti-
Typically sold in health food and novelty
tigate complaints. Merchants violat-
mate Xphoria, one of the 20 products
shops in the form of pills, powders and
ing the ban will face fines of $2,000
banned yesterday by Mr. Pataki.
sodas, the stimulants have become increas-
and prison terms of up to one year.
Since 1993, according to the F.D.A.,
ingly popular among middle-class youths
The state's action does not target
about 400 people have reported ad-
seeking alternatives to the kick received
possession of ephedra, meaning that
verse reactions to ephedra-based
from illegal drugs. But while the stimulants
there would be little to stop New
products, ranging from dizziness to
have been promoted as safe natural-food
York residents from buying such
strokes, and 15 people have died.
supplements by about 100 companies, the
herbal products in New Jersey or
In an interview, New York State's
Food and Drug Administration issued a
Connecticut.
Health Commissioner, Barbara A.
warning to consumers last month that the
But Richard Curtis, an expert on
DeBuono, predicted that many
stimulants can be dangerous when taken in
narcotics at John Jay College of
states, including Connecticut and
excess, especially to people with high blood
Criminal Justice, said he thought
New Jersey, would follow New
pressure, heart disease and diabetes.
Governor Pataki's action would be
York's lead. But she said there was
"We're not going to let our kids be exploit-
largely effective in stemming the
no need for a complete ban on ephe-
ed for a cheap profit," Governor Pataki said
market. "I can't imagine there will
dra-based products that serve medi-
at a news conference in Manhattan yester-
cal functions.
be much of a big black market," he
day to announce the ban, which state health
said, "because if you want to go that
Speaking of several prescription
laws allow him to impose without legislative
and over-the-counter medications
far, you might as well buy real Ec-
action. "Obviously the best solution would
that include ephedra, she said,
stasy, the illegal narcotic kind."
be a Federal role, but we can't sit back and
Companies can appeal the banning
"There is nothing about the way
wait and let our young people die."
of their products at a hearing in
those products are marketed, adver-
tised or sold that has indicated to us
The Governor's action came two days
Albany on June 4.
after his ally, Senator Alfonse M. D'Amato,
Konstantine Theoharis, the execu-
a threat to the public's health, since
introduced legislation to increase Federal
tive media coordinator of Global
they are properly labeled and there
are appropriate warnings for ad-
controls on ephedra-based products.
World Media Corporation, the pro-
verse health affects."
Under the Governor's order, the State
ducer of Herbal Ecstacy, said he
Health Department has issued a ban on the
thought there was a good chance that
sale of 20 specific ephedra-based products
the ban on his product could be re-
that are explicitly marketed for people look-
versed.
ing for a drug high or that do not include
"Politicians and bureaucracies
directions on appropriate dosage. Prescrip-
usually overreact," Mr. Theoharis
tion and over-the-counter medications for
said. "We feel there is tons of misin-
THE NEW YORK TIMES
formation out there and once we
Continued on Page B6
have a fair chance to represent our-
FRIDAY, MAY 24, 1996
selves our products will be shown to
be harmless and beneficial."
He added, "Our products are an
alternative to chemically toxic legal
and illegal drugs available to any-
body."
Few people in the East Village, a
center of ephedra sales in the city,
had heard of the ban yesterday, and
most sellers and buyers reacted with
little emotion.
Armida Barth, owner of Lady in
the Moon shop at 111 St. Mark's
Place, said that she had stopped sell-
ing ephedra products three months
ago when she learned of the dangers.
"The only reason why I sold it is
because I'm against kids using
drugs," she said.
Larry Carter, a manager at Love
Saves the Day, at 119 Second Avenue,
where a sign in the window pro-
claims "Herbal Ecstacy Sold Here,"
said, "We're not going to cry if we
have to take it off the shelves." But
he noted that sales had increased in
recent months. In the last nine
months, the store's biweekly orders
of 10-packs of Herbal Ecstacy pills
increased more than three-fold to 860
packages from 150.
While other restrictions have been
imposed in Ohio and Florida, the
Federal and state governments have
for the most part been slow to regu-
late ephedra because it is considered
a safe food supplement when taken
according to directions. While techni-
cally classified as a natural herb and
not a drug, ephedra can induce a
euphoric feeling or heart palpitations
when taken in-excessive doses.
JUL-29-1996 13:53 TO:DEBBIE FINE
FROM: DADE, J.
P. 1/6
EXECUTIVE OFFICE OF THE PRESIDENT
LRM NO: 5218
OFFICE OF MANAGEMENT AND BUDGET
Washington, D.C. 20503-0001
FILE NO: 1746
SPECIAL
7/29/96
LEGISLATIVE REFERRAL MEMORANDUM
Total Page(s): 6
TO: Legislative Liaison Officer - See Distribution below:
FROM: Janet FORSGREN (for) Assistant Director for Legislative Reference
OMB CONTACT: Robert PELLICCI 395-4871 Logislative Assistant's Line: 395-7362
C=US, A=TELEMAIL, P=GOV+EOP, O=OMB, OU1=LRD, S=PELLICCI, G=ROBERT. I=J
[email protected]
SUBJECT: HHS Drafting Service RE: HR3199, Drug and Biological Products Reform Act of
1996
DEADLINE: 10:00 a.m. Wednesday, July 31,1996
In accordance with OMB Circular A-19, OMB requests the views of your agency on the above subject before
advising on its relationship to the program of the President.
Please advise us if this item will affect direct spending or receipts for purposes of the
"Pay-As-You-Go" provisions of Title XIII of the Omnibus Budget Reconciliation Act of 1990.
COMMENTS: The attached language may be added to pending legislation that would reform the operations
of the FDA. House Committee markup could occur this week. Please expedite your views on
the attached language affecting the regulation of human tissue.
DISTRIBUTION LIST:
AGENCIES: 61-JUSTICE - Andrew Fois - 2025142141
76-National Economic Council - Sonyia Matthews - 2024562174
EOP: Nancy-Ann Min
Chris Jennings
Greg Simon
Jennifer Klein
Elizabeth Drye
Michael Fitzpatrick
Barry Clendenin
Richard Turman
Jim Esquea
Jonathan Winer
Allison Eydt
Elena Kagan
Bob Damus
Janet Forsgren
JUL-29-1996 13:53 TO:DEBBIE FINE
FROM:DADE, J.
P. 2/6
RESPONSE TO
LRM NO:
5218
LEGISLATIVE REFERRAL
FILE NO:
1746
MEMORANDUM
If your response to this request for views is short (e.g., concur/no comment). we prefer that you respond by e-mail or
by faxing us this response sheet.
If the response is short and you prefer to call, please call the branch-wide line shown below (NOT the analyst's line)
10 leave a message with a legislative assistant.
You may also respond by:
(1) calling the analyst/attorney's direct line (you will be connected to voice mail if the analyst does not answer); or
(2) sending US 8 memo or letter
Please include the LRM number shown above, and the subject shown below.
TO: Robert PELLICCI 395-4871
Office of Management and Budget
Fax Number: 395-6148
Branch-Wide Line (to reach legislative assistant): 395-7362
FROM:
(Date)
(Name)
(Agency)
(Telephone)
SUBJECT: HHS Drafting Service RE: HR3199, Drug and Biological Products Reform Act of
1996
The following is the response of our agency 10 your request for views on the above-captioned subject:
Concur
No Objection
No Comment
See proposed edits on pages
Other:
FAX RETURN of
pages, attached to this response sheet
P.3/6
JUL-29-1996 13:53 TO:DEBBIE FINE
FROM: DADE, J.
VA
002
301 443 0739
FDA GEN COUNSEL
07/24/88 18:57
002
07/24/88 WED 14:53 FAX
REGULATION OF HUMAN TISSUE-
(1)
REQUIREMENT OF Part F of Title III of the Public Health Service ACT (42 U.S.C.
262 et seq.) is amended by inserting after section 352 the following new section:
"Section 352A REQUIREMENTS FOR HUMAN TISSUE
(a) IN GENERAL Facilities and persons that engage in the recovery, processing,
storage, or distribution of human tissue:
(1) shall annually register with the Secretary and provide the Secretary 2 list
of all human tissues that are recovered, processed, stored, or distributed
to/from such facility, except that the Secretary may exempt facilities or
persons from such requirements on the grounds that they are not necessary to
protect the public health;
(2) shall at the time of registration provide a list of all contractors or agents
of the tissue establishment who engage in the recovery, processing, storage,
or distribution of human tissue; and
(3) shall comply with good tissue practices including, but not limited to,
practices that address:
(A) quarantine; recordkeeping the recovery, processing, storage, and
distribution of tissue; validation of manufacturing facilities and
equipment; quality control; packaging and labeling; adverse
experience reports, complaint files and failure investigations;
personnel qualification and training: and tissue tracking procedures
to identify tissue from donor to recipient and from recipient to donor;
and
(B) donor screening and infectious disease testing
(4) are subject to inspection by individuals authorized by the Secretary;
(5) shall comply with regulations regarding labeling, advertising and
promotion, which may be promulgated by the Secretary.
(b) REGULATIONS
The Secretary may promulgate regulations for implementation of this section. Such
regulations may include provisions for certification of facilities that engage in the
recovery, processing, storage, or distribution of human rissue.
1
JUL-29-1996 13:53 TO:DEBBIE FINE
FROM: DADE, J.
P. 4/6
003
301 413 0738
FDA GEN COUNSEL
07/24/98
16:58
003
07/24/96 WED 14:38 FAI
(c) FINDING OF INTERSTATE COMMERCE
Congress finds that human tissue that is recovered, processed, distributed, or stored
in the United States for medical use is in, or otherwise directly affects, interstate
commerce.
(d) DEFINITION -
(1) HUMAN TISSUE - The term "human tissue" means any tissue (an
aggregate of similar cells together with their intercellular substance, or
acellular integuments that have a particular structure and function) derived
from a human body which:
(A) is intended for administration to another human for the diagnosis.
cure. mitigation, treatment, or prevention of any condition or disease;
(B) is intended only to replace or repair comparable bodily tissue and
does not act through a systemic mechanism;
(C) is recovered, processed, stored, or distributed by methods which
do not change tissue function or characteristics or propagate the
tissue's cells;
(D) may include the addition of substances that are safe under
conditions of intended use and not intended to contribute to or
provide a therapeutic effect to the recipient; and
(E) includes demineralized bone, heart valves, and dura mater.
(2) Such term does not include:
(A) human material regulated or classified as a drug, medical device
or biological product except as specified in (d)(1)(8) :
(B) vascularized human organs, such as heart, liver, kidneys, lungs,
Intestines, or panoreas;
(C) blood, blood products, bone marrow, stem cells, somatic cell
therapy, gene therapy, or human milk;
(D) tissue that is combined with a drug, device, biologic, or another
tissue; and
(e) TISSUE SPECIFIC REVIEW
For specific human dssue as the Secretary deems appropriate and for which she has
2
JUL-29-1996 13:53 TO:DEBBIE FINE
FROM:DADE, J.
P. 5/6
1
07/24/98
16:58
FDA GEN COUNSEL
F.L
004
201 443 0738
07/24/98 WED 14:38 FAX
004
identified 8 public health concern related to clinical safety or effectiveness, the
Secretary may conduct a review of existing data on clinical use, indications,
outcomes, sufety, and effectiveness of such tissue and may, as part of, or following,
such review:
(1) promulgate regulations controlling such tissue including, but not limited
to, requirements for special labeling or reclassification (under reclassification
subsection) of such tissue; and
(2) set such other limitations as the Secretary may require to protect the
public health.
(f) CLASSIFICATION AND RECLASSIFICATION
(1) the Secretary may classify or reclassify 1 human tissue as a drug, biological
product or medical device, if the Secretary determines that such classification
or reclassification is needed to protect the public health or, during the tissue
specific review of subsection (e), the Secretary determines that premarket
study of effectiveness is warranted; and
(2) the Secretary may reclassify a human drug, biological product or medical
device as a human tissue, if the Secretary determines that such previous
classification is unnecessary to protect the public health
(g) RECALL, RETENTION, AND DESTRUCTION AUTHORITY-
If the Secretary finds that a facility or human tissue violates any provision in this
section or any regulations promulgated thereunder, the Secretary may issue an order
that such facility coase distribution of human tissue or that such human tissue be
retained, recalled. of destroyed. After receipt of such an order, the person in
possession of the human tissue shall not distribute or dispose of the human tissue in
any manner except consistent with the provisions of the order. Persons subject to the
order who wish to challenge the order, shall, within 5 days of receipt of such order,
request an opportunity for an informal hearing to be held within 30 days.
(2) INTERIM REGULATIONS - The requirements set forth in the interim regulations
promulgated by the Secretary in December, 1993 shall remain in effect until new regulations
that supersede these regulations are in effect.
(3) ADULTERATION PROVISION Section 501 (21 U.S.C. 351) is amended as follows:
(A) in the first sentence by changing "drug or device" io "drug device, or human
tissue."
3
JUL-29-1996 13:53 TO:DEBBIE FINE
FROM: DADE, J.
P. 6/6
07/24/96
16:59
301 443 0738
FDA GEN COUNSEL
005
07/24/96 WED 15:38 FAX
002
(B) by inserting at the end thereof the following new subsection:
"0) If it is human tissue and it is recovered, processed, stored, or distributed
by a facility that does not comply with good tissue practices consistent with
section 352(a) of the Public Health Service Act."
(4) MISBRANDING PROVISIONS - section SOZ (21 U.S.C. 352) is amended as follows:
(A) by renaming the section "Misbranded Drugs, Devices, and Human Tissue"
(B) in the first sentence by adding "(a)" before "A drug or device."
(C) by redesignating subsections (a) through (t) as paragraphs (1) through (20).
(D) by adding at the end thereof the following new subsection:
"(b) Human tissue shall be deemed to be misbranded if its labeling is false or
misleading in any particular or if its labeling, advertising, or promotion does
not comply with regulations promulgated under section 352A(a) (5).
(5) PROHIBITED ACTS. Section 301 (21 U.S.C. 331) is amended by inserting the
following new subsection:
"(v) The adulteration or misbranding of any human tissue.
(6) SEIZURE. --
(A) Section 304 (a)(2)(D) (21 U.S.C. 334 (a) ) is amended by inserting "or human
tissue" after "device."
(B) Section 304(d)(1) is amended by deleting the "or" before "cosmetic" and
inserting", or human tissue" after "cosmetic" in the first sentence.
4
JUL-29-1996 13:53 TO:204 - C. JENNINGS
FROM:DADE J.
P. 1/6
EXECUTIVE OFFICE OF THE PRESIDENT
LRM NO: 5218
OFFICE OF MANAGEMENT AND BUDGET
Washington, D.C. 20503-0001
FILE NO: 1746
SPECIAL
7/29/96
LEGISLATIVE REFERRAL MEMORANDUM
Total Page(s): 6
TO: Legislative Liaison Officer Sce Distribution below:
FROM: Janet FORSGREN (for) Assistant Director for Legislative Reference
OMB CONTACT: Robert PELLICCI 395-4871 Logislative Assistant's Line: 395-7362
C=US, A=TELEMAIL, P=GOV+EOP, O=OMB, OU1=LRD, S=PELLICCI, G=ROBERT, I=J
[email protected]
SUBJECT: HHS Drafting Service RE: HR3199, Drug and Biological Products Reform Act of
1996
DEADLINE: 10:00 a.m. Wednesday, July 31, 1996
In accordance with OMB Circular A-19, OMB requests the views of your agency on the above subject before
advising on its relationship to the program of the President.
Please advise us if this item will affect direct spending or receipts for purposes of the
"Pay-As-You-Go" provisions of Title XIII of the Omnibus Budget Reconciliation Act of 1990.
COMMENTS: The attached language may be added 10 pending legislation that would reform the operations
of the FDA. House Committee markup could occur this week. Please expedite your views on
the attached language affecting the regulation of human tissue.
DISTRIBUTION LIST:
AGENCIES: 61-JUSTICE- Andrew Fois - 2025142141
76-National Economic Council - Sonyia Matthews - 2024562174
EOP: Nancy-Ann Min
Chris Jennings
Greg Simon
Jennifer Klein
Elizabeth Drye
Michael Fitzpatrick
Barry Clendenin
Richard Turman
Jim Esquea
Jonathan Winer
Allison Eydt
Elena Kagan
Bob Damus
Janet Forsgren
JUL-29-1996 13:53 TO:204 - C. JENNINGS
FROM:DADE. J.
P. 2/6
RESPONSE TO
LRM NO:
5218
LEGISLATIVE REFERRAL
FILE NO:
1746
MEMORANDUM
If your response to this request for views is short (e.g., concur/no comment). we prefer that you respond by e-mail or
by faxing us this response sheet.
If the response is short and you prefer to call, please call the branch-wide line shown below (NOT the analyst's line)
to leave 8 message with a legislative assistant.
You may also respond by:
(1) calling the analyst/attorney's direct line (you will be connected to voice mail if the analyst does not answer); or
(2) sending us a memo or letter
Please include the LRM number shown above, and the subject shown below.
TO: Robert PELLICCI 395-4871
Office of Management and Budget
Fax Number: 395-6148
Branch-Wide Line (to reach legislative assistant): 395-7362
FROM:
(Date)
(Name)
(Agency)
(Telephone)
SUBJECT: HHS Drafting Service RE: HR3199, Drug and Biological Products Reform Act of
1996
The following is the response of our agency to your request for views on the above-captioned subject:
Concur
No Objection
No Comment
See proposed edits on pages
Other:
FAX RETURN of
pages, attached to this response sheet
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REGULATION OF HUMAN TISSUE
(1)
REQUIREMENT of Part F of Title III of the Public Health Service Act (42 U.S.C.
262 et seq.) is amended by inserting after section 352 the following new section:
"Section 352A REQUIREMENTS FOR HUMAN TISSUE
(a) IN GENERAL - Facilities and persons that engage in the recovery. processing,
storage, or distribution of human tissue:
(1) shall annually register with the Secretary and provide the Secretary a list
of all human tissues that are recovered, processed, stored, or distributed
to/from such facility, except that the Secretary may exempt facilities or
persons from such requirements on the grounds that they are not necessary to
protect the public health:
(2) shall at the time of registration provide s list of all contractors or agents
of the tissue establishment who engage: in the recovery, processing, storage,
or distribution of human tissue; and
(3) shall comply with good tissue practices including, but not limited to,
practices that address:
(A) quarantine; recordkeeping the recovery, processing, storage, and
distribution of tissue; validation of manufacturing facilities and
equipment; quality control; packaging and labeling; adverse
experience reports; complaint files and failure investigations;
personnel qualification and training and tissue tracking procedures
to identify tissue from donor to recipient and from recipient to donor;
and
(B) donor screening and infectious disease testing.
(4) are subject to inspection by individuals authorized by the Secretary;
(5) shall comply with regulations regarding labeling, advertising and
promotion, which may be promulgated by the Secretary.
(b) REGULATIONS
The Secretary may promulgate regulations for implementation of this section. Such
regulations may include provisions for certification of facilities that engage in the
recovery, processing, storage, or distribution of human tissue.
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(c) FINDING OF INTERSTATE COMMERCE
Congress finds that human tissue that is recovered, processed, distributed, or stored
in the United States for medical use is in, or otherwise directly affects, interstate
commerce.
(d) DEFINITION -
(1) HUMAN TISSUE The term "human tissue" means any tissue (an
aggregate of similar cells together with their intercellular substance, or
acellular integuments that have a particular structure and function) derived
from a human body which:
(A) is intended for administration to another human for the diagnosis.
cure, mitígation, treatment, or prevention of any condition or disease;
(B) is intended only to replace or repair comparable bodily tissue and
does not act through a systemic mechanism;
(C) is recovered, processed, stored, or distributed by methods which
do not change tissue function or characteristics or propagate the
tissue's cells;
(D) may include the addition of substances that are safe under
conditions of intended use and not intended to contribute to or
provide a therapeutic effect to the recipient; and
(E) includes demineralized bons, heart valves, and dura mater.
(2) Such term does not include:
(A) human material regulated or classified as a drug, medical device
or biological product except as specified in (d)(1)(8) :
(B) vascularized human organs, such as heart, liver, kidneys, lungs,
Intestines, or pancreas;
(C) blood, blood products, bone marrow, stem cells, somatic cell
therapy, gene therapy, or human milk;
(D) tissue that is combined with a drug, device, biologic, or another
tissue; and
(e) TISSUE SPECIFIC REVIEW
For specific human tissue as the Secretary deems appropriate and for which she has
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identified 1 public health concern related to clinical safety or effectiveness, the
Secretary may conduct a review of existing data on clinical use, indications,
outcomes, safety, and effectiveness of such tissue and may, as part of, or following,
such review:
(1) promulgate regulations controlling such tissue including, but not limited
to, requirements for special labeling or reclassification (under recisssification
subsection) of such tissue; and
(2) set such other limitations as the Secretary may require to protect the
public health.
(f) CLASSIFICATION AND RECLASSIFICATION
(1) the Secretary may classify or reclassify a human tissue as a drug, biological
product or medical device, if the Secretary determines that such classification
or reclassification is needed to protect the public health or, during the tissue
specific review of subsection (e), the Secretary determines that premarket
study of effectiveness is warranted; and
(2) the Secretary may reclassify a human drug, biological product or medical
device as a human tissue, if the Secretary determines that such previous
classification is unnecessary to protect the public health.
(B) RECALL, RETENTION, AND DESTRUCTION AUTHORITY
If the Secretary finds that & facility or human tissue violates any provision in this
section or any regulations promulgated thereunder, the Secretary may issue an order
that such facility cease distribution of human tissue or that such human tissue be
retained, recalled, or destroyed. After receipt of such an order, the person in
possession of the human tissue shall not distribute or dispose of the human tissue in
any manner except consistent with the provisions of the order. Persons subject to the
order who wish to challenge the order, shall, within 5 days of receipt of such order,
request an opportunity for an informal hearing to be held within 30 days.
(2) INTERIM REGULATIONS - The requirements set forth in the interim regulations
promulgated by the Secretary in December, 1993 shall remain in effect until new regulations
that supersede these regulations are in effect.
(3) ADULTERATION PROVISION Section 501 (21 U.S.C. 351) is amended as follows:
(A) in the first sentence by changing "drug or device" to "drug, device, or human
tissue."
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(B) by inserting at the end thereof the following new subsection:
"0) If it is human tissue and it is recovered, processed, stored, or distributed
by a facility that does not comply with good tissue practices consistent with
section 352(a) of the Public Health Service Act."
(4) MISBRANDING PROVISIONS - section 50Z (z1 U.S.C. 352) is amended as follows:
(A) by renaming the section "Misbranded Drugs, Devices, and Human Tissue"
(B) in the first sentence by adding "(a)" before "A drug or device."
(C) by redesignating subsections (a) through (t) as paragraphs (1) through (20).
(D) by adding at the end thereof the following new subsection:
"(b) Human tissue shall be deemed to be misbranded if its labeling is false or
misleading in any particular or If its labeling, advertising, or promotion does
not comply with regulations promulgated under section 352A(a) (5).
(5) PROHIBITED ACTS. - Section 301 (21 U.S.C. 331) is amended by inserting the
following new subsection:
"(v) The adulteration or misbranding of any human tissue.
(6) SEIZURE. --
(A) Section 304 (a)(2)(D) (21 U.S.C. 334 (a) ) is amended by inserting "or human
tissue" after "device."
(B) Section 304(d)(1) is amended by deleting the "or" before "cosmetic" and
inserting", or human tissue" after "cosmetic" in the first sentence.
4
SERVICES.
DEPARTMENT OF HEALTH & HUMAN SERVICES
Public Health Service
Food and Drug Administration
RockVille MD 20857
STATEMENT BY
WILLIAM B. SCHULTZ
DEPUTY COMMISSIONER FOR POLICY
FOOD AND DRUG ADMINISTRATION
PUBLIC HEALTH SERVICE
DEPARTMENT OF HEALTH AND HUMAN SERVICES
BEFORE THE
COMMITTEE ON LABOR AND HUMAN RESOURCES
UNITED STATES SENATE
FEBRUARY 22, 1996
FOR RELEASE ONLY UPON DELIVERY
INTRODUCTION
Madam Chairman and Members of the Committee. I appreciate
the opportunity to testify on the important issue of promotion of
unapproved uses of prescription drugs and medical devices.
My name is William B. Schultz. I am the Deputy Commissioner
for Policy at the Food and Drug Administration.
FDA SUPPORTS THE DISSEMINATION OF INFORMATION TO PHYSICIANS
Madam Chairman, I am here today to talk about uses that do
not appear in a product's FDA-approved labeling and are not
approved by the Agency. Such uses commonly are referred to as
"off label, " "unapproved," "unlabeled," or "extra-label" uses.
The Food and Drug Administration recognizes that, in certain
circumstances, off label uses of approved products are
appropriate, rational, and accepted medical practice. FDA knows
that there are important off label uses of approved drugs. In
this context, it is important that physicians have access to
accurate information about drugs. But we also know that allowing
the promotion of these kinds of uses can have negative public
health consequences -- including exposing patients to unnecessary
risks and destroying the incentive for companies to conduct the
necessary research to demonstrate that products are safe and
effective for these uses. Striking the proper balance between
the need to regulate the promotion of unapproved uses for drugs
and devices and the need for reliable scientific data and
information on unapproved uses of approved products is a
difficult and controversial challenge.
FDA'S REGULATORY AUTHORITY
I would like to start today by explaining how, in passing
and amending the Federal Food, Drug, and Cosmetic Act (FDC Act),
Congress struck that balance and what, as a result of
Congressional decisions, FDA can and cannot do with respect to
off label uses.
The legislative history of the Federal Food, Drug, and
Cosmetic Act indicates that Congress did not intend FDA to
interfere with the practice of medicine. Thus, once a drug is
approved for marketing, FDA does not generally regulate how, and
for what uses, physicians prescribe that drug. A physician may
prescribe a drug for uses or in treatment regimens or patient
populations that are not listed in the FDA-approved labeling.
Generally, FDA does not prohibit the dissemination of
information to health care professionals. Physicians access
information about off label uses through compendia, journal
articles, continuing medical education programs, symposia, and
professional meetings. Physicians also have access to a number
of databases that provide information about off label uses. For
example, the National Cancer Institute's Physician Data Query
(PDQ) system is an excellent source for oncologists to obtain
- 2 -
information about current oncologic therapies. The National
Library of Medicine (NLM) offers a Medical Literature Analysis
and Retrieval System (MEDLARS), which is a computerized system of
databases and databanks pertinent to biomedical research and
patient care. NLM currently offers free access to three
databases relating to AIDS. FDA does not regulate a physician's
access to any of these types of independent off label use
information -- no matter how preliminary it may be. In addition,
FDA does not prohibit a manufacturer from providing a physician
information about off label uses if the physician requests that
information. Recently, the Agency announced a proposed change to
its policy with respect to the dissemination of reference texts
(medical textbooks and compendia). Drug companies may distribute
independent reference texts even if they contain certain
information about off label uses of approved drugs, as long as
the texts do not have a significant focus on an off label use of
the manufacturer supporting dissemination of the text. FDA
recognizes that all of these sources of information can be very
important to good medical practice.
Although the FDC Act does not authorize FDA to regulate the
practice of medicine, it specifically directs FDA to regulate the
promotion of drugs and devices. Promotional materials are
unlawful if they promote an unapproved use for the product;
contain claims relating to the dosing, safety or effectiveness of
the product that are inconsistent with the approved labeling; or
- 3 -
if they lack a fair and balanced presentation of information,
i.e., of benefits and risks. Although submission of an article
for publication in a journal is not promotional, the use of such
an article to sell a drug or device is promotional.
Under current law, if a company wants to promote a use of a
drug or device it can do so by submitting an efficacy supplement
and getting that use onto the label. As I will explain later in
my testimony, getting a use onto the label has benefits beyond
being allowed to promote. For example, it ensures reimbursement
from third party payors, it helps to get that use included in
formularies, and it gives the medical community more complete
information about the product. As I will further explain later
in my testimony, the requirements for efficacy supplements are
often significantly simpler than the requirements for applying
for permission to market a product in the first place. Moreover,
the Agency is considering a number of measures that will make the
supplement process a more effective tool for getting additional
uses on the label of drug and device products.
S. 1447
The Food and Drug Administration Performance and
Accountability Act of 1995, S. 1447, bypasses the current
approach. It would permit drug and device companies to use
journal articles, textbook chapters, continuing medical education
program materials, and compendial information relating to uses
- 4 -
recognized for purposes of third party coverage or reimbursement
that discuss off label uses to promote the sale of their products
for those uses. The bill also would permit drug companies to use
summaries of journal articles, textbook chapters, CME program
materials, or information relating to uses recognized for
purposes of third party coverage or reimbursement to promote the
sale of their products for off label uses. Device companies
could distribute oral and written information about off label
uses that are part of an "exchange" among health care
practitioners, health care reimbursement officials, and the
industry, that is exchanged for "educational or scientific
purposes," or that is presented at CME programs, seminars,
workshops, or demonstrations for devices to promote the sale of
their products for those uses.
We recognize that the purpose of the bill is to enhance
dissemination of information and not to facilitate or encourage
promotion of off label uses. But we strongly believe that if the
bill is enacted, that will be its effect. Drug and device
manufacturers market their products principally by sending sales
representatives, referred to as detail men and women, out to talk
one on one with physicians who might prescribe their products. A
detailer's job is to convince those physicians to use and
prescribe their products. They do this by providing information
that purports to describe the usefulness of their products in the
patient population. Written materials such as journal articles
- 5 -
that discuss favorable studies of these products are powerful
tools in the hands of a detailer. If the bill is enacted, drug
and device companies will be free to use these materials to
promote off label uses.
Pursuant to the bill, after a company receives FDA approval
of a drug or device for one use, it would be permitted to promote
that product, through these other means, for other uses. The
material that companies could distribute often would be very
preliminary, based on poorly designed or wholly uncontrolled
studies. Companies could promote the use of a product even when
the evidence merely suggests or can be interpreted as suggesting
that a product may work for a specific use. Effectiveness would
not have to be demonstrated. Thus, if drug X is approved for
cancer patients, and there is some preliminary data that suggests
it is beneficial for patients with crippling arthritis, the
drug's manufacturer would be permitted to promote the drug and
encourage its use for arthritis on the basis of this preliminary
or unsubstantiated data. This promotion would be permitted even
though the data have not been reviewed by independent scientific
FDA experts.
In addition, the clinical information that appears in the
materials that the bill allows manufacturers to distribute has
not been validated in any way. For example, neither peer
reviewers nor textbook editors review the data underlying a study
- 6 -
described in a journal article or textbook chapter. In fact,
peer reviewers and editors do not even see that data.
FDA has serious concerns regarding the promotion of
indications that have not been reviewed and approved by the
Agency. Because promotional activities of drug companies and
others are substantially motivated by profit and market
expansion, the widespread promotion of prescription drugs and
devices for uses that have not been determined to be safe and
effective could be detrimental to the health and safety of the
public. Permitting companies to promote drugs and devices for
off label uses could have a number of devastating consequences
for the quality of medical care in this country.
PROBLEMS WITH PERMITTING PROMOTION OF OFF LABEL USES
The fundamental problem with permitting the promotion of off
label uses is that not all off label uses are safe and effective.
The only way to know which ones are safe and effective is to
collect and analyze the data supporting a finding of safety and
efficacy. Because the data on off label uses have not been
collected and analyzed, their promotion raises a number of
serious concerns.
Undercutting the Efficacy Standard
Permitting the promotion of off label uses based on studies
reported in journal articles or other texts that clearly are an
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inadequate basis for approval by FDA would undercut the efficacy
standard.
A fundamental precept of drug and device regulation in this
country is that these products must be proven safe and effective
before they can be sold. The requirement that these products
must be proven effective, on the basis of well-controlled
clinical studies, was first adopted by Congress in 1962.
Congress specifically added the concept of effectiveness to the
definition of "new drug" in order to ensure that the efficacy
requirement would apply not only to initial claims made for a
drug, but also to claims made after the initial new drug
application had been approved. 108 Cong. Rec. S22044-46 (daily
ed. October 3, 1962) i S. Rep. No. 1744, 87th Cong., 2d Sess. Part
2 at 267, 271 (1962) ("On what logical basis can one possibly
argue that the initial claim for a drug
should be supported
by "substantial evidence" but that successive claims
should
not be so supported?" 108 Cong. Rec. at S22045.)
The addition of the "efficacy standard" revolutionalized
drug development and approval, not only in the United States, but
worldwide, as well. Essentially, a manufacturer cannot just say
that a product works for a particular disease or condition, it
must prove that the product works for that disease or condition.
The only way manufacturers can prove efficacy is by submitting
data from well-controlled clinical trials for evaluation by
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independent experts at FDA. Anecdotal reports and poorly
controlled observations do not suffice because those kinds of
reports may be wrong or may not be an adequate basis for
conclusion. We know this because we have had experience with
this type of information. Many drugs approved before 1962 turned
out not to work when, after 1962, they had to be (and were)
studied. Even when such reports suggest efficacy, they fail to
provide important guidance in areas critical to the effective use
of a therapy such as dosage and patient selection and management.
The solid foundation that is laid down by the efficacy
standard is one of the main reasons that there is a strong sense
of confidence in the drug products that are on the U.S. market
today. Because the standard requires well-controlled clinical
trials, once FDA has made a determination of effectiveness, there
can be a high degree of confidence that the drug will work.
Thus, when a manufacturer claims that a product is safe and
effective for a particular disease or condition, doctors can be
confident that the product is in fact safe and effective for that
disease or condition. Patients, in turn, can have confidence in
the quality of the products they are receiving.
Eliminating the need for well-controlled studies would be a
major setback for the first-rate medical care that the health
care system in this country provides. Consider some of the
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additional uses that FDA has approved on the basis of such
studies -- for example, timolol, propranolol, metoprolol, and
atenolol to improve the survival of heart attack patients, taxol
for breast cancer, and interferon-alpha 2b for chronic hepatitis
B and C. Without the requirement to submit clinical studies to
prove that drugs are effective for their intended uses, it is far
less likely that we would know that these drugs will work to
decrease mortality in heart attack patients, to delay or prevent
breast cancer recurrence, or to treat chronic hepatitis B and C.
In the absence of the efficacy requirement, the market will be
filled with drugs that manufacturers claim work and that
physicians use because of a belief that they work, but for which
there is relatively little evidence.
Disincentive to Conduct Studies
One of the most serious consequences of allowing companies
to freely promote off label uses is that companies would have no
incentive to conduct or fund the necessary scientific research
and to present data to FDA to verify the safety and efficacy of
those off label uses. In fact, because the Agency might
determine that the new use is not supported by the evidence,
there would be an incentive to avoid FDA review. To use the
example of the cancer drug that may be useful for crippling
arthritis, why would the drug company undergo the expense of
actually studying whether the drug works for arthritis if it
could promote the drug for arthritis based on preliminary
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evidence, particularly since a thorough study might fail to
establish efficacy for arthritis?
In a world where off label uses can be widely promoted,
manufacturers would have an incentive to do the minimal amount of
studies necessary to obtain approval for the first,
narrowest/easiest indication and then heavily promote the product
for other broader (and possibly more speculative) uses. For
example, interferon-alpha 2b was approved for use in hairy cell
leukemia, of which there are approximately 300-400 cases per
year. It subsequently was approved to treat chronic hepatitis B
and C, of which there are tens of thousands of cases per year.
If S. 1477 had been in effect, the manufacturer of interferon-
alpha 2b could have sought approval for hairy cell leukemia and
then just promoted for chronic hepatitis B and C -- the much
broader use -- based on preliminary data. Interferon-alpha 2b is
just one of many examples of a second, very different use being
significantly broader than the original use for which a drug was
approved.
Under the approach taken in the bill, we might never learn
whether interferon alpha actually works to treat hepatitis B --
yet the manufacturer could promote its use. This is precisely
the scenario that Congress sought to prevent when it added the
effectiveness requirement to the definition of a new drug. A
group of Senators, lead by Senator Kefauver, argued that unless
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the effectiveness requirement was added to the definition of
drugs, "the expectation would be that the initial claim would
tend to be quite limited, which of course, would expedite
approval of the new drug application. Thereafter, 'the sky would
be the limit' and extreme claims of any kind could be made,"
subject only to FDA's enforcement authority. 108 Cong. Rec. at
S22046.
Because the incentive to conduct research on uses of drugs
and devices will decrease, the end result will be that the
dissemination of off label information pursuant to this bill will
actually reduce the amount of information that health care
providers receive about drugs and devices.
Safety Issues
Widespread promotion of unapproved uses also raises
significant safety concerns. Even under the current law, which
prohibits the promotion of off label uses, we know of a number of
instances where physicians have used drugs for off label uses
that have resulted in disastrous consequences.
For example, the drugs encainide and flecainide were
approved for life-threatening and symptomatic arrhythmias, which
are abnormal rhythms of the heart. In the late 1980's,
physicians began to prescribe these two drugs for heart attack
victims who were experiencing ventricular premature complexes
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(VPCs), a type of asymptomatic or minimally symptomatic
arrhythmia. (Asymptomatic arrhythmias are arrhythmias that can
be detected by tests, but which the patients do not feel.) This
off label use, which was supported by published peer-reviewed
journal articles, was intended to prevent the well-documented
increased mortality of heart attack victims who have a high level
of VPCs by suppressing those VPCs. The use was logical and
became so widespread that the National Institutes of Health
decided to study the effectiveness of encainide and flecainide in
these patients. To the surprise of almost everybody, that study
demonstrated not only that the drugs were ineffective in reducing
the risk of death but that the drugs were actually harmful in
patients for whom it was being prescribed off label -- that is
the death rate among those receiving the drug was more than twice
the rate of those receiving a placebo. If these unapproved uses
had been heavily promoted by drug companies, it is estimated that
thousands more unnecessary deaths would have occurred.
Another example relates to the widespread off label use of a
class of drugs called calcium channel blockers (CCBs). These
drugs are effective for patients suffering from angina, which is
chest pain caused by insufficient oxygen to the heart muscle.
CCBs have no established role in patients who have had a heart
attack but have no symptoms. These patients do, however, benefit
from another class of drugs, beta-blockers, which are known to
reduce mortality by 25-30% after heart attacks. Nevertheless,
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CCBs are widely used in this patient population and there are
publications that could be interpreted as supporting this use.
Because CCBs and beta-blockers generally should not be used
simultaneously, patients are receiving CCBs in lieu of clearly
life-saving beta blockers. Many, probably thousands, of lives
are lost each year because a drug of no known benefit is being
used for an unapproved use in place of a drug with known value.
Widespread promotion of this use would make the problem even
worse.
Yet another example of a case where the distribution of
published articles on off label use could have resulted in very
serious harm to the public involves the fentanyl transdermal
system (Duragesic). Approved for use in chronic pain in patients
requiring opioids, the fentanyl patch was not approved for acute
post-operative pain because of concern that it would cause
respiratory depression (a serious condition in which less air
reaches the lungs) in those patients not used to the effect of
opioids. A number of publications prior to the time of approval,
however, described the drug as safe and effective for post-
operative pain. After approval, reports to FDA and the
literature documented life-threatening respiratory depression in
post-operative patients given the patches. Extensive promotion
of this off label use could have been disastrous.
There are many other claims that could be promoted through
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peer-reviewed journal articles describing off label uses that
could be detrimental to a large number of patients if they were
heavily promoted. FDA fears that problems illustrated by these
examples would be multiplied if manufacturers were given free
rein to promote unapproved uses.
Unbalanced View
Another significant problem with permitting companies to
promote unapproved uses by distributing the type of information
described in the bill is that physicians may not receive a
balanced view of the available information. It is well
documented that there is publication bias. Studies with
favorable results have a greater likelihood of getting published;
studies with less favorable results less often get published.
More importantly, even if less favorable or contradictory results
have been published, companies have no incentive to distribute
articles, textbook chapters, or other information recommending
against a particular use. Because the bill permits companies to
distribute certain chapters of textbooks or mere summaries of
journal articles, chapters, and CME materials, with no obligation
for balance or comprehensiveness, physicians may see only one
side of an off label use story.
The current law governing promotion requires balance.
Changing the law to allow the distribution of journal articles
and other similar materials that discuss off label uses will
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allow drug detail men and women to provide materials that
describe favorable study results of their product for a
particular use, but without providing copies of materials that go
the other way.
I would like to illustrate with an example. Human growth
hormone currently is indicated for use only in children who are
short because they lack sufficient growth hormone and children
who are short because of kidney problems. Its use in children
who are short, but have no growth hormone deficiency or
underlying kidney problem, is an off label use of uncertain value
and safety. We identified four journal articles that discuss
this off label use -- two more or less supported the off label
use and two did not. If a physician receives information about
this off label use from a detail person, it is possible that he
or she will receive only the two favorable articles. On the
other hand, if the physician were conducting his or her own
research into the subject, he or she would likely locate both the
pro and con articles. Given the approximately $20,000 per year
price tag of human growth hormone, the pain a child must endure
because of multiple drug injections each week, and the potential
adverse effects that growth hormone may cause (such as diabetes
and possibly tumor growth), it is important that physicians see
all pieces of the scientific puzzle until the answer is clear.
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By using this example, I am not targeting a specific drug or
drug company. I am merely trying to illustrate what the bill
would permit and why FDA has serious concerns.
What makes this situation even more troubling is that when
we have evidence that a particular use is unsafe or ineffective,
federal confidentiality laws frequently prohibit FDA from
disseminating that information. Thus, there are off label uses
about which positive studies appear in the literature and
negative data are contained in our files. However, depending on
its source, FDA may be unable to use that information to ensure
that the medical community has all of the available facts on
which to base treatment decisions.
Even under current law, physicians have access to positive
articles about off label uses and FDA may be unable to counter
those positive articles with any negative information that might
be in our files. However, under current law, company detail men
and women cannot use those articles to promote potentially
dangerous off label uses.
The Bill's Requirements Are Not Substitutes for FDA Review
The bill imposes very few requirements on the off label use
information that companies could disseminate. Basically, the
unapproved use must appear in a peer-reviewed journal article, a
chapter from a recognized text, text from an approved CME
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program, information relating to a use recognized under Federal
law for purposes of third party coverage or reimbursement, or a
summary of one of the above. For devices, the information may
also be from oral and written information that is part of an
"exchange" among health care practitioners, health care
reimbursement officials, and the industry, is exchanged for
educational or scientific purposes, or is presented at CME
programs, seminars, workshops, or demonstrations. None of these
sources has procedures that confirm the validity of the data and
information contained therein.
The purpose of the "peer review" process, for example, is to
determine if an article is worthy of publication. At its best,
peer review can ensure that the reader is provided with enough
detail and clarity to make a general judgment about the strengths
and weaknesses of the study. However, there are no generally
accepted standards for what constitutes "peer review. "
Essentially, anyone can establish a "peer review" journal; the
rigor of the review varies considerably.
Regardless of the rigor, there are severe limitations
inherent in the peer review process that make it inappropriate to
rely solely on a peer-reviewed journal article for efficacy
determinations. For example, peer reviewers almost never receive
the study protocol. They cannot tell what the initial hypothesis
was or whether the final analysis represents the planned analysis
- 18 -
or an analysis crafted with the results in hand. Peer reviewers
do not have access to the underlying data. The peer reviewers
must rely on the data and facts as they are presented by the
author. FDA, on the other hand, does have access to the data and
can verify the critical statistical outcomes and the conclusions
of a study. Moreover, peer reviewers do not necessarily have the
time or the expertise in all aspects of the subject matter to
adequately review the information. In fact, a survey reveals
that a peer reviewer spends on average less than three hours
reviewing a prospective article. The peer review process cannot
guarantee the correctness or authenticity of the article, nor can
it detect fraudulent or flawed research.
The data and information supporting off label uses that
appear in reference textbook chapters, which could highlight off
label uses of particular drugs or devices, CME materials, and
materials related to third party coverage and reimbursement are
even less likely to be validated than that in peer-reviewed
journals. In fact, we have no reason to believe that such data
have been reviewed or validated at all. Textbook editors do not
review the data underlying information about off label uses that
appear in those books. The recognition of suggested uses in
texts or treatment guidelines for purposes of third-party
reimbursement serve different societal purposes. The decision to
include such uses is not based on the standards used by FDA to
substantiate safety and efficacy. FDA has serious concerns about
- 19 -
a provision that allows companies to use these types of
unproven/unvalidated information for promotional purposes.
There are many instances when uncontrolled studies have
supported a use and subsequent well-controlled studies have
failed to show effectiveness. Moreover, the literature is laden
with studies that report preliminary findings -- e.g., studies
that involve a small number of patients and case reports or are
not properly controlled. Although the studies or reports may be
scientifically accurate, they are not sufficient to show safety
and efficacy. Thus, companies should not be allowed to use these
less rigorous studies to promote off label uses of approved
products.
GETTING SUPPORTED OFF LABEL USES ON THE LABEL
As you know, a drug is approved for its initial indications
via a new drug application, which includes data on the drug's
safety and efficacy. A subsequent indication is added via a
supplemental new drug application, which usually needs to present
only efficacy information to support that new use. After review
and approval by FDA, the new use is added to the approved
labeling and can be promoted by the drug's manufacturer.
There are several good reasons for drug companies to submit
these "efficacy supplements":
- 20 -
-
Approval usually ensures that third-party payers will
reimburse for the use, as insurance companies virtually always
pay for approved uses of drugs and devices.
-
As health maintenance organizations continue to grow in
size and number, a sponsor's ability to get their drug included
in the HMO's drug formulary will be significantly enhanced.
-
The physician, via the approved labeling, is given more
complete information about the drug's uses, contraindications,
adverse effects, and other important information about the
manufacturer's product.
-
Drug companies can present the FDA findings to drug
approval bodies in other countries, thus enhancing their ability
to gain approval (and reimbursement) for uses in other markets.
-
And, of course, the manufacturer can promote the use,
whether through the use of journal articles or other means.
Unfortunately, in many instances these incentives have been
insufficient to persuade drug sponsors to submit efficacy
supplements. There appear to be two reasons for their
reluctance. First, they fear they will be expected to spend
millions of additional dollars conducting new clinical studies to
convince FDA reviewers that the new use should be approved. And
- 21 -
second, they have often complained that efficacy supplements are
given low priority by FDA, resulting in delays of years in
getting new indications approved. These concerns -- or at least
the perception -- have been valid in the past, and we at FDA must
address them.
We have been working on ideas for encouraging and expediting
efficacy supplements for unapproved uses and for otherwise
addressing industry concerns. We are doing a number of things
and have several ideas for additional progress in this area. Let
me summarize them for you:
Expediting Review of Efficacy Supplements
As you know from yesterday's testimony, the Prescription
Drug User Fee Act of 1992 (PDUFA) is helping resolve the problem
of timely reviews for drugs and biologics. Under PDUFA, by 1997,
the Agency will make approval decisions on all new drug and
biologic applications (NDAs, PLAs, and ELAs) within 12 months and
within 6 months for priority drugs and biologics. These time
frames apply to efficacy supplements as well. The approval times
for NDAs, PLAs, ELAs, and efficacy supplements have decreased
significantly, and the backlog of pending applications has also
decreased markedly. In fact, for NDAS, PLAs, ELAs, and efficacy
supplements, the Agency has exceeded the interim goals
established by Congress. For applications submitted in FY 1994,
the Agency reviewed and acted upon 96% of the NDAs, PLAs and ELAs
- 22 -
and 73% of efficacy supplements on time. [The interim goal for
all of these was 55%.] With adequate resources, we are confident
that we can make the same progress for medical devices.
We should, however, be able to exceed the PDUFA targets. I
believe we should try to reduce the 6-12 month timeframes. To do
so, we will need to give supplements a greater priority than they
have had in the past, and we are committed to that.
Fewer Data Are Needed Than Commonly Believed
In addition to assuring companies that we can and will
expedite their supplemental applications, we also need to address
the industry perception that many efficacy supplements do not
warrant the expense associated with getting them approved.
Companies fear that they must conduct multiple and expensive new
clinical trials and collect and analyze thousands of pages of
medical data, with no assurances of approval. We need to more
clearly explain that in the vast majority of cases this is just
not so. Some off label uses could be approved by FDA if the
sponsor would simply compile the existing literature and submit
it to us. Others may need only limited data or data about the
studies, such as protocols, data tapes, or verification of
endpoints, all of which is already in existence but simply needs
to be found and copied. In any event, because FDA has already
learned much about the drug's actions and effects in humans from
the original application and has considerable experience relevant
- 23 -
to safety, the data required for second and subsequent
indications is often far less than for the original indication.
It is, in sum, Madam Chairman, a much simpler process than
generally believed and we must convince sponsors of that. To
that end, we intend to draft a new policy statement articulating
the data needs of the Agency for efficacy supplements for new
indications.
Pediatric Labeling
We are already demonstrating how limited data can get more
uses on the label in the pediatric area. We have recently
promulgated new regulations that provide, in certain cases, for
pediatric uses to be included on the approved labeling without
new clinical studies. Pursuant to these regulations, when there
is sufficient basis to conclude that the course of the disease
and the effects of the drug are sufficiently similar in children
and adults, drug firms can rely on existing studies in adults,
extrapolate the data to children, and get those uses on the label
with relative ease. The only new data that will ordinarily be
needed are information about the drug's course throughout the
body (e.g., blood and tissue levels) that will allow the proper
dosage to be established for the use of that drug in children.
Seek Out the Most Appropriate Off Label Uses
As I said earlier, many off label uses are quite
appropriate, and some may even be the treatment of choice.
- 24 -
Although off label use is seen in all medical specialties, it
seems to be most widespread in certain areas, such as oncology
and pediatrics. Beginning with those specialties, we will work
with practitioners and their specialty associations to identify
the off label uses that are most appropriate. We will then
present those findings to the sponsors of those drugs and urge
them to work with us to get the indications in the labeling. In
many, if not most, cases that will entail only the compilation of
existing information, not the design and conduct of new clinical
studies. We have not done enough to reach out to the medical
profession and to drug sponsors on this issue, but we believe we
can get the majority of the most appropriate current off label
uses in the labeling through this process.
The best way to get information to physicians about the best
uses of the drug and device armamentarium, Madam Chairman, is to
have it in the product's labeling. Our collective goal ought to
be to get this done.
CONCLUSION
Public confidence in drug and device therapy has been built
on the recognized rigor of FDA's approval process. It is
important that we not change a system that has the respect and
confidence of the health care community and the public. FDA
recognizes that there are important lifesaving off label uses.
FDA believes, however, that the best way to address any concerns
- 25 -
that the information about those uses is not reaching medical
practitioners is to get those uses in the labeling. We believe
that the risks of allowing drug companies to distribute journal
articles and other information about off label uses far outweigh
any benefits.
I would be happy to answer any questions.
- 26 -
ORGANIZATIONS & INDIVIDUALS ENDORSING
THE ACCESS TO MEDICAL TREATMENT ACT
HR 2019/S 1035
American Academy of Anti-Aging Medicine
American Academy of Environmental Medicine
American Academy of Pain Management
American College for Advancement in Medicine
American Herbalist Guild
American Holistic Centers
American Holistic Medical Association
American Holistic Health Association
American Massage Therapists Association
American Preventive Medical Association
American Academy of Metabolic Medicine
American Association of Naturopathic Physicians
American Association of Acupuncture & Oriental Medicine
Association of Applied Psychophysiology & Biofeedback
Calello Martinez P.C.
Cancer Control Society
Cancer Awareness Coalition
Center for Mind-Body Medicine
Center for Natural and Traditional Medicine
Citizens for Health
Citizens for Nutrition Choice
Council for Responsible Nutrition
Direct Access for A.I.D.S. Research
Direct Action for Treatment Access
Dr. Mohammed Ranavaya, of Academy of Disability Evaluating Physicians *
Ed Hudgins of Cato Institute *
Great Lakes Association of Clinical Medicine
Healing Alternatives Foundation
H.I.V. Complimentary Therapy Center
Institute for Naturopathic Medicine
Institute of Pain Management
International Academy of Compounding Pharmacists
International Association of Cancer Victors & Friends
International Oxidative Medical Association
Lyme Disease Foundation
National Center for Homeopathy
National Council for Improved Health
National Nutritional Foods Association
Mr. Duke Pearson and Ms. Sandy Shaw
People Against Cancer
Physician's Committee for Responsible Nutrition
Physician's Association for Anthroposophical Medicine
Pure Food Campaign
Southwest College of Naturopathic Medicine & Health Sciences
Traditional Acupuncture Associates
Traditional Acupuncture Institute
Utah Natural Products Association
Vegetarian Awareness Network
* - Signifies a personal endorsement and is not intended to convey endorsement by the
Association
July 29, 1996
Prepared by the American Preventive Medical Association
459 Walker Road Great Falls, Virginia 22066
703-759-0662 Fax 703-759-6711
CEI
COMPETITIVE ENTERPRISE INSTITUTE
CARDIAC AND CANCER SPECIALISTS ON
THE NEED FOR FDA REFORM
Polls Show Need for Access to Unapproved Therapies
Cardiology and oncology are two medical specialties whose members understand the need for new,
life-saving drugs and devices. They know, on a first-hand basis, that such technologies can frequently
mean the difference between life and death for many patients.
What do cardiologists and oncologists think of FDA and of access to new therapies? In the past year,
CEI commissioned two polls to examine the views of these specialists. The first, a poll of oncologists,
was released in August, 1995. It involved a total of 160 telephone interviews with randomly selected
hospital-based oncologists. Its margin of error was ±5.1% at the 95th percentile confidence level--that
is, similar results would have been obtained in 19 out of 20 cases.
The second poll, of 216 randomly selected cardiologists and cardiac surgeons, was released last week
on July 24, 1996. Its margin of error is ±4.8 percent at the same high confidence level.
Both polls demonstrate highly negative views of FDA on such issues as whether the agency is too slow
in approving new drugs and devices, whether the public understands the human cost of FDA delays,
and whether FDA delays impair the ability of these specialists to give the best possible care to patients.
Both polls also demonstrate overwhelming opposition to FDA's policy of restricting information about
off-label use.
Majorities of both specialties support allowing physicians to use unapproved drugs and devices,
provided those products carried a warning about their unapproved status (Question 8). Both specialties
believed they could rely on published research, on foreign governments' approvals, and on their
colleagues' opinions to determine whether such therapies were suitable for their patients (Question 9).
Cardiologists and oncologists agree that FDA regulation has prevented them from giving their patients
the best possible care. Something is wrong when an agency charged with protecting public health is
viewed this negatively by physicians fighting for their patients' lives. The Access to Medical Treatment
Act (S. 1035), on which the Senate Labor and Human Resources Committee is holding hearings today,
is an important step toward giving doctors the freedom to treat their patients to the best of their
abilities.
Sam Kazman
July 30, 1996
1001 Connecticut Avenue, N.W.
Suite 1250
Washington, D.C. 20036
Phone: (202) 331-1010
Fax: (202) 331-0640
E-mail: [email protected]
Web site: http://www.cei.org
Summary of Poll Results
1. On balance, do FDA regulations help or prevent you from using promising new drugs or medical
devices in the treatment of your patients? Would that be strongly or just somewhat?
Cardiologists
Oncologists
TOTAL HELP
42%
44%
Strongly help
20%
8%
Somewhat help
22%
36%
TOTAL PREVENT
46%
43%
Somewhat prevent
33%
35%
Strongly prevent
13%
8%
Neither
7%
14%
Don't know/Refused
5%
-
2. The FDA is too slow in approving new drugs and medical devices.
Cardiologists
Oncologists
TOTAL AGREE
65%
77%
Strongly agree
30%
31%
Somewhat agree
35%
46%
TOTAL DISAGREE
30%
20%
Somewhat disagree
18%
14%
Strongly disagree
12%
6%
Neither
3%
2%
Don't know/Refused
2%
1%
2
3. The additional time it takes for the FDA to approve drugs and medical devices costs lives by forcing
people to go without potentially beneficial therapies.
Cardiologists
Oncologists
TOTAL AGREE
57%
47%
Strongly agree
17%
11%
Somewhat agree
40%
36%
TOTAL DISAGREE
37%
48%
Somewhat disagree
21%
34%
Strongly disagree
16%
14%
Neither
5%
4%
Don't know/Refused
2%
1%
4. In your opinion, to what extent does the general public understand the "human cost" of the FDA
approval process, that is, that some people may suffer or die waiting for the FDA to act? Do they
Cardiologists
Oncologists
TOTAL UNDERSTAND HUMAN COST
24%
19%
Completely understand
4%
1%
Somewhat understand
20%
18%
TOTAL DON'T UNDERSTAND HUMAN COST
63%
74%
Understand only a little
33%
51%
Don't understand at all
30%
23%
Refused/Disagreed with statement/Don't know
12%
9%
5. If a drug or medical device has already been approved for one use by the FDA, should the FDA
restrict information about off-label uses, that is, other unapproved uses of that drug or device?
Cardiologists
Oncologists
YES
21%
16%
NO
67%
76%
Sometimes
5%
4%
Don't know
5%
1%
Refused
2%
3%
3
6. To what extent does this FDA policy of limiting information make it more difficult for you to learn
about new uses for drugs or devices?
Cardiologists
Oncologists
TOTAL MORE DIFFICULT
60%
60%
Much more difficult
13%
17%
Somewhat more difficult
47%
43%
TOTAL LESS DIFFICULT
28%
28%
Somewhat less difficult
14%
22%
Much less difficult
14%
6%
No impact
7%
-
Don't know
4%
8%
Refused
1%
5%
7. Would you say the FDA's approval process has hurt your ability to treat your patients with the best
possible care frequently, some of the time, at least once, or never?
Cardiologists
Oncologists
TOTAL HURT ABILITY
71%
63%
TO TREAT
Frequently
7%
11%
Some of the time
45%
37%
At least once
19%
15%
NEVER
28%
36%
Refused
1%
1%
8. What would your position be on a proposal to change FDA law so that unapproved drugs or devices
could be made available to physicians as long as they carried a warning about their unapproved status?
Would you strongly favor, somewhat favor, somewhat oppose, or strongly oppose such a proposal?
Cardiologists
Oncologists
TOTAL FAVOR
53%
61%
Strongly favor
21%
24%
Somewhat favor
31%
37%
TOTAL OPPOSE
44%
37%
Somewhat oppose
24%
24%
Strongly oppose
20%
13%
Don't know/refused
3%
2%
4
9. Assume for a moment that a system was in place where unapproved drugs or devices were available to
you for treating patients. Which of the following would be the most important factor in your decision to
use such an unapproved drug or device?
Cardiologists
Oncologists
Whether persuasive published research exists
47%
59%
about the drug or device
Whether the drug or device has received approval
25%
29%
in other medically advanced countries
Whether the drug or device was well-regarded by
19%
10%
physician colleagues
Don't know/Refused
10%
2%
10. And finally, how many years have you been in practice?
Cardiologists
Oncologists
5 years or less
7%
14%
5-8 years
7%
14%
8-12 years
14%
14%
12-15 years
17%
11%
More than 15 years
56%
47%
11. Gender
Cardiologists
Oncologists
Male
94%
89%
Female
6%
11%
5
CEI
COMPETITIVE ENTERPRISE INSTITUTE
For Immediate Release:
Contact: Greg Smith (202) 331-1010
PHYSICIAN ACCESS TO UNAPPROVED THERAPIES SUPPORTED BY
NEW LEGAL STUDY AND BY TWO NATIONAL POLLS OF
MEDICAL SPECIALISTS
WASHINGTON, DC July 30, 1996-A public interest group today announced the release of a new legal
study on giving physicians access to drugs and devices that have not been approved by FDA. On
Tuesday, July 30, the Senate Labor & Human Resources Committee holds hearings on the Access to
Medical Treatment Act (S. 1035), a bill which increases physician access to such therapies.
The CEI study, Breaking the FDA's Drug Approval Monopoly--Implications for Tort Law and Consumer
Welfare, is written by George Mason Law Professor Michael I. Krauss. It concludes that FDA's current
command-and-control approach to therapeutic approval cannot be justified by the "market failure"
arguments that are usually offered to support it. Physician access to unapproved therapies would serve the
interests of patients who frequently suffer under FDA delays, and would ultimately force FDA itself to
earn its credibility.
A CEI poll of cardiologists, released on July 24, demonstrates that support for this approach is far wider
than commonly assumed. A majority of the over 200 cardiologists polled (53%) supported physician
access to properly labeled unapproved therapies, while 44% opposed it. Similarly, a 1995 CEI poll of
cancer specialists found 61% favoring this approach. Both groups stated that "persuasive published
research" would be the single most important factor in their deciding whether to use such therapies.
CEI General Counsel Sam Kazman stated: "Physician access to unapproved therapies is often derided as
opening the door to snake oil. The fact that such an approach is favored not only by the public, but by
majorities of these two life-saving specialties indicates that FDA is far more of a health problem than its
supporters will admit."
Under CEI's proposal, FDA would continue to evaluate new therapies, but it would not have the power to
veto unapproved therapies, which would be available under medical supervision and with clear warning of
their unapproved status.
CEI is a non-profit, non-partisan public policy group dedicated to free markets and limited government.
For more information, or a copy of the study or the polls, call Greg Smith at (202) 331-1010.
1001 Connecticut Avenue, N.W.
Suite 1250
Washington, D.C. 20036
Phone: (202) 331-1010
Fax: (202) 331-0640
E-mail: [email protected]
Web site: http://www.cei.org
THE FEDERATION OF
STATE MEDICAL BOARDS
OF THE UNITED STATES, INC.
400 FULLER WISER ROAD. SUITE 300
EULESS. TEXAS
76039-3855
817 868-4000
FAX 817 868-4099
PRESIDENT
ROBERT E. PORTER. MD
ONE MEDICAL CENTER DR.
STATEMENT OF THE
LEBANON. NH 03756
FEDERATION OF STATE MEDICAL BOARDS
PRESIDENT ELECT
JAMES E. WEST. MD
901 EAST LEIGHTON AVENUE. SUITE 702
OF THE UNITED STATES, INC.
ANNISTON. AL 36207
VICE PRESIDENT
ON
SUSAN M. SPAULDING
P.O. BOX 222
MONTPELIER. VT 05601
TREASURER
S.1035, ACCESS TO MEDICAL TREATMENT ACT
BRUCE H. HASENKAMP JD
900 HYDE ST.. SUITE 1208
SAN FRANCISCO. CA 94109
TO THE
IMMEDIATE PAST PRESIDENT
GERALD J BECHAMPS. MD
P.O. BOX 2698
WINCHESTER. VA 22601
COMMITTEE ON LABOR AND HUMAN RESOURCES
DIRECTORS
UNITED STATES SENATE
LEROY B BUCKLER. MD
640 SOUTH STATE ST
DOVER. DE 19901
WILLIAM H. FLEMING. III. MD
JULY 30, 1996
7777 SW FREEWAY. SUITE 1004
HOUSTON TX 77074
JOHN T. HINTON. DO. MPH
655 EDEN PARK DR.
CINCINNATI OH 45202
PHILIP M. MARGOLIS. MD
900 WALL ST.
ANN ARBOR. MI 48105
DINESH PATEL. MD
15 PARKMAN ST. SUITE 510
BOSTON, MA 02114
ALAN E. SCHUMACHER. MD
3020 CHILDREN'S WAY / MC 5008
SAN DIEGO. CA 92123
GEORGE J VAN KOMEN. MD
745 EAST 300 SOUTH
SALT LAKE CITY. UT 84102
RAY Q BUMGARNER JD
77 SOUTH HIGH ST. 17th FLOOR
COLUMBUS. OH 43266
JAMES R. WINN. MD
EXECUTIVE VICE PRESIDENT
DALE L. AUSTIN. BSN. MA
DEPUTY EXECUTIVE
VICE PRESIDENT
CAROL CLOTHIER. BA
ASSISTANT VICE PRESIDENT
P/R. PUBLICATIONS. EDUCATION
[. KATHRYN HILL. MEd
ASSISTANT VICE PRESIDENT
EXAM/BADB SVCS. DIV.
The Federation of State Medical Boards is pleased to provide comments about S.1035, The
Access to Medical Treatment Act. The Federation is a national organization, the members of
which are the state medical boards empowered to license and discipline physicians in the United
States. The mission of the state medical boards is to protect the public from unqualified
practitioners of medical services, through enforcement of standards established by state laws.
The Federation assists boards with this mission, acting as a clearinghouse for the latest
information on licensure and discipline, and assists in the credentialling process through
maintenance of a comprehensive database of board actions involving physician disciplinary
matters, that is available for query by state boards and other credentialling agencies.
The evaluation of a medical practitioner is best performed at a level of government that allows
regulators to take advantage of professional and personal relationships with individuals whose
judgment they trust. Since being established in the late nineteenth century in response to a
number of incidents in which patients were harmed, state medical licensure boards have evolved
into sophisticated regulatory agencies dedicated to ensuring that the public is protected from unfit
and/or unqualified practitioners.
During the last century each state has enacted and amended its own version of a medical practice
act. While the specifics of each medical practice act differ, each prescribes through statute and
implementing regulation the process by which the initial granting of a license and the monitoring
of the privilege to practice medicine shall be accomplished.
Today, there are 54 allopathic and 16 osteopathic state medical boards which have the authority
to license physicians, to regulate the practice of medicine within the state, and to discipline those
who violate the relevant medical practice act. In particular, state medical boards:
Establish academic and clinical skill standards for all license applicants;
Establish rules and regulations promoting the safe and effective practice of medicine;
Require periodic re-registration of medical licensees in order to review the qualifications
of licensees on a regular basis; (the frequency of re-registration required varies from state
to state);
Investigate and adjudicate allegations of physician misconduct;
Take appropriate disciplinary actions against any physician who is found to have violated
the state medical practice act. The action taken may involve sanctions that range from
license revocation to reprimands and fines.
These central functions of state medical boards serve to accomplish the primary purpose of
medical licensure; protecting the public from sub-standard medical care.
The member Federation boards recognize that patients have a right to participate with their
physicians and other health care practitioners in the decisions to pursue a particular therapy as
long as risks, benefits, costs, and alternatives are discussed between practitioners and patients
before a particular course of treatment is begun. A number of our boards have had to discipline
practitioners for providing treatment without adequate disclosure to the patient. For that reason
the Federation is supportive of several provisions in S.1035 that recognize the need for full
disclosure prior to treatment. Unfortunately, other provisions in the bill seriously undermine the
ability of state licensing boards to take actions against physicians who may jeopardize public
health.
S.1035 grants every patient a right to be treated by a health care practitioner with any medical
treatment that such individual desires (including one not approved, certified, or licensed by the
Secretary of Health and Human Services), provided: a) that such practitioner has personally
examined the individual and agrees to treat such individual, and b) the administration of such
treatment does not violate licensing laws. The Federation has grave concerns about this central
provision and does not believe that the limitations (e.g. requiring a personal examination and
prohibiting treatment that violates licensing laws) provide adequate safeguards for patients.
First, although the bill requires a personal examination of a patient by a practitioner, it does not
specify the nature of the examination; whether it may be perfunctory, or must be exhaustive, nor
whether it shall include particular attention to the patient's mental and emotional state if a
treatment involving products that have not been approved by FDA is being recommended.
Second, The bill prohibits the administration of any treatment that violates licensing laws. For
the most part, licensing laws do not contain prescriptive lists of dos and don'ts for practitioners
to follow. State licensing laws are designed to give boards wide latitude in making
determinations whether a particular practitioner is practicing competently. A practitioner
contemplating the use of an unapproved therapy will not be able to find in statute a definitive
answer to the question of whether its use violates his or her state licensure law. In fact, a
practitioner is not likely to find out if use of an unapproved product violates state licensure law
until a board makes a determination after the treatment has been provided. For this reason, the
Federation does not believe that the limitation in the bill indicating that a procedure must not
violate licensing laws will be effective in preventing a practitioner from engaging in activities
specifically authorized by this new legislation but not explicitly prohibited under a state licensure
statute.
Further, the protocol that must be followed by a practitioner who provides an unapproved therapy
is inadequate and provides only illusory protection for the patient. The first element of this
protocol is that the practitioner must determine that there is no reasonable basis to conclude that
the treatment poses an unreasonable and significant risk of danger to a patient. This stands the
Hippocratic Oath on its head. "First, do no harm" has been transformed to, "Do no harm that
is unreasonable and poses a significant risk of danger." It will be very difficult for state licensure
boards to accept this standard. Many boards will find it contradictory with standards they have
developed over years of experience in dealing with both responsible and irresponsible
practitioners.
2
The legislation also require that a practitioner who provides a treatment that involves a product
not approved by FDA provide the patient with written notice of the product's lack of approval,
the treatment's anticipated benefits, foreseeable side effects, and the results of past treatments.
While this appears to be a fairly complete list of information that will allow a patient to make
an informed decision, in most cases, the information will not be very useful and could be
misleading. Information about the risks, benefits, contraindications, and side effects of treatments
that have not been subjected to clinical studies is anecdotal possibly misleading and not reliable.
As suggested at the outset, the concept of providing extensive information to a patient so that he
or she can make an informed decision about therapy is laudable. Application of that concept to
therapies for which there is little or no verifiable clinical data is useless in most cases and
fraudulent in others.
The Federation also believes that other provisions in the bill need significant revision. Many of
the definitions are imprecise. For instance, the definition of a health care practitioner is someone
"who is legally authorized to provide health services in the State in which the services are
provided." In order to make it clear that an individual may only provide those health services
for which he or she is licensed, the definition should reference licensure for a specific type of
practitioner. Similarly, Section 8 of the bill requires that a health care practitioner who discovers
that a treatment was a danger to the individual receiving such treatment must immediately report
to the Secretary of HHS. Unfortunately, this section does not go on to require the practitioner
to immediately cease using the treatment until further investigation or study about the treatment
has been conducted. It appears that the practitioner's obligation is met by filing a report, despite
the apparent danger of the treatment.
In summary, the Federation of State Medical Boards is very concerned that S.1035 if enacted
would interfere with state medical boards' ability to make appropriate decisions about the
competency of physicians. Our member boards are constantly balancing the right of individuals
to make informed choices about their health care and the boards' obligation to protect vulnerable
people who may not be fully informed about the benefits and risks of different therapies from
being exploited or harmed by licensees of the state. If S.1035 is enacted, the public will no
longer be confident that licensure is an indication that the safety of the individual being treated
by the licensees is of paramount importance.
3
CEL
HEALTH CARE
REFORM PROJECT
COMPETITIVE ENTERPRISE INSTITUTE
BREAKING THE FDA'S
DRUG APPROVAL MONOPOLY
IMPLICATIONS FOR TORT LAW
AND CONSUMER WELFARE
MICHAEL I. KRAUSS
July 1996
ISSN#1085-9055
BREAKING THE FDA'S
DRUG APPROVAL MONOPOLY
IMPLICATIONS FOR TORT LAW
AND CONSUMER WELFARE
Michael I. Krauss
EXECUTIVE SUMMARY
The Food and Drug Administration's monopoly over approving new medical therapies is pre-
mised on the idea that information markets fail. In fact, competitive forces produce information much
more readily than is commonly believed through advertising, testing publications, and companies'
reputations for quality. This holds important implications for FDA reform.
The common law inspires confidence in information produced without the need for heavy-
handed regulations. Tort and product-liability law can and do result in increased informational output
from manufacturer to physician and consumer precisely in those instances where such output might
otherwise be insufficient.
The market failure argument supposes that private corporations have insufficient incentives to
produce information, but that government incentives to inform consumers are somehow not distorted.
But FDA is subject to its own set of perverse incentives. For the agency, the political consequences of
mistakenly approving a bad drug or device are far worse than those of mistakenly delaying or disap-
proving a needed therapy. As a result, FDA is inherently overcautious - an approach which serves its
interests but not those of the public.
The path to reform can be found in a gap in FDA's current monopoly. Under existing law,
manufacturers may not market drugs or devices that have not received FDA approval. But if a drug or
device is approved by the agency as safe and effective for one purpose, then doctors are free to pre-
scribe it for other purposes as well.
Despite its efforts to suppress these "off-label" uses, FDA has not stemmed the tide. Off-label
prescriptions have proliferated despite tort law's implicit bias in favor of FDA-approved uses.
A proposal by the Competitive Enterprise Institute suggests a way to preserve FDA's evaluative
functions while expanding therapeutic choice. Under this proposal, FDA would function not as a veto
agency, but as an evaluation agency. Rather than being banned across the board, unapproved therapies
would be available under medical supervision and with clear warning of their unapproved status. That
is, "off-label manufacturing" would be permitted, much as "off-label prescribing" is presently allowed.
FDA would lose its veto power over new therapies, but it would continue to act as a state-funded
evaluator of therapies.
Manufacturers might still choose to seek FDA approval if that approval was sufficiently valued
by the public and by physicians. Moreover, under this proposal FDA approval would confer a shield
against design defect liability. But patients and their doctors would be free to go beyond the circle of
government approved therapies. The arena of initial therapeutic evaluation would itself expand to
encompass such private entities as testing laboratories and medical journals, so that FDA itself would
be subject to competition in producing credible, and timely, evaluations of new drugs and devices.
FDA's legal control over medicine has never been all-encompassing, but its exercise of that
power has had deadly consequences. The "off-label" use gap in FDA's power has mitigated its poten-
tially disastrous effects, and contains the kernel of a regulatory approach that would be far safer and
more effective than our current system.
BREAKING THE FDA'S
DRUG APPROVAL MONOPOLY
IMPLICATIONS FOR TORT LAW
AND CONSUMER WELFARE
by Michael I. Krauss¹
INTRODUCTION
Origins and Characteristics of the FDA's "Certification Monopoly"
In the 1970s, a configuration of geo-political factors resulted in a
serious but temporary tightening of oil supplies. Several sets of sweeping
federal fuel economy regulations were enacted. The institutionalization of
this expanded federal mandate led to the production and sale of relatively
dangerous and unattractive automobiles.² In a similar way, federal drug
regulation has been driven by reactions to sensational occurrences. For
ethical drugs as for cars, the belief that markets (tempered by common law)
Federal drug
can provide safe and effective products has been a notable casualty of federal
regulation has
regulation.
been driven by
The first statute regulating pharmaceutical products in the United
reactions to
States was the Pure Food and Drug Act of 1906,³ which established federal
sensational
offenses for adulteration and mislabeling of ingredients in food and drugs.⁴
The statute was apparently Congress' response to the "literary emergency"
occurrences.
generated by Upton Sinclair's The Jungle, a turn-of-the-century Soylent
Green portraying a world in which all medicines were deleterious, all milk
tainted and all sausages once human. Both before and after the 1906 bill's
passage, non-narcotic drugs were as freely available as newspapers (as they
remain in many countries today⁵). No government approval was required
before drugs were manufactured or marketed, nor was a physician's prescrip-
tion legally required (though doctors' advice was relied on by many, with
prescriptions accounting for almost one third of all drugs consumed).⁶
Patent medicines of dubious effectiveness were available on the
market in 1906. Amendments to the 1906 law in 1912 criminalized false and
misleading claims of a medication's efficacy. It is worthwhile noting that,
federal criminal law aside, even at this early stage of its development⁷ the
common law already provided recourse to those injured by negligently
mislabeled or poorly manufactured drugs.⁸ Economic analysis suggests that
Krauss: Loosening the FDA's Drug Certification Monopoly
Page 1
market forces will tend to provide correct incentives for manufacturers to
design and produce safe drugs if tort remedies are available in such cases.⁹
Of course, tort law has little effect on insolvent tortfeasors, and in any case
the national ruckus generated by The Jungle provided an impetus for federal
officials anxious to be seen "doing something" about drug problems.
Perhaps not surprisingly, criminal enforcement also presented difficulties
(insolvent producers are often "fly-by-night" and hard to locate; criminal
intent is more difficult to prove than tortious negligence; etc.). All of these
factors curtailed enforcement of the 1906 Act 10
Federal drug regulation was of little consequence until a tragedy in
1937. In attempting to formulate a liquid form of sulfanilamide (a sulfa drug)
one Samuel E. Massengill, a Tennessean doing business as the Massengill
Company, marketed a syrup that employed diethylene glycol as its solvent.
One hundred seven children died after ingesting this poisonous concoction.¹¹
Though Massengill was of course found liable in tort for his gross negli-
gence, 12 the political temptation to provide additional "protection" to voters
proved irresistible for the Roosevelt administration, which was enjoying the
huge expansion of federal jurisdiction produced by the "switch in time that
Federal drug
saved nine. "13 The President signed the Food, Drug and Cosmetic Act of
1938, which for the first time required firms to submit New Drug Applica-
regulation was of
tions (NDA's) to the FDA before introducing pharmaceuticals into interstate
little conse-
commerce. Each NDA enumerated the proposed uses of a drug and
demonstrated that tests "proved" it safe¹⁴ at recommended dosages. NDA's
quence until a
were approved after 60 days unless the FDA determined before that period
tragedy in 1937.
that they did not reveal sufficient safety testing. [The 1938 act contained
another, seemingly innocuous, provision allowing discretionary exemptions
from labelling requirements. This provision was subsequently interpreted by
the FDA to greatly expand its authority (and physicians' income) by creating
a category of "ethical drugs," that could henceforth be sold only by prescrip-
tion.
FDA safety evaluations obviously caused delays in the marketing of
new drugs. But lag times were relatively short: by the end of the 1950's
record levels of new drugs were being marketed with mean regulatory delays
of seven months. The 1938 act is most renowned, however, for the delay it
occasioned in the introduction of the German sedative Thalidomide in 1960.
While an FDA reviewer investigated reports (published in Europe for
years¹⁶) that Thalidomide caused peripheral nerve damage, news of a
different side effect, deformities in the fetuses of pregnant users of the
sedative, led to its withdrawal from markets worldwide in 1961. 17
The 1938 act had indirectly prevented any Thalidomide tragedies in
the United States. Congress nonetheless sprang to action to dramatically
expand federal powers. In 1962 a hastily drafted Food and Drug Act required
that drugs henceforth be found safe and effective by the FDA before they
could be marketed. 18 Whereas under the 1938 act NDAs were approved
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Krauss: Loosening the FDA's Drug Certification Monopoly
unless the FDA denied them, after 1962 disapproval was the default position:
for an NDA to be approved the FDA must affirmatively conclude that a new
drug is safe and effective. 19 While the 1938 bill allowed firms to test the
safety of their own products (subject to documenting their tests for FDA
review), after 1962 all human testing of new drugs had to be pre-cleared by
the agency. The FDA acquired, additionally, the power to pre-approve all
drug advertising and all labels, and set out "good manufacturing practices"
regulations.
As others have noted,²⁰ the combined effect of the 1938 and 1962
legislation was to fundamentally alter the nature of American pharmaceuti-
cal production and distribution. Whereas the 1906 act had essentially sought
to make markets work better through the prohibition of false claims and
information,²¹ after 1962 the judgment about what was desirable or undesir-
able was to be made by a central regulatory authority rather than by the
choices of suppliers, physicians, and patients.
As might be expected, one effect of the FDA's post-1962 "certifica-
FDA safety
tion monopoly" is a much more lengthy "drug lag." By 1967, average post-
test review times for an NDA had increased from seven to thirty months. 22
evaluations
Largely because of agency involvement in testing, total pre-authorization
obviously caused
development time for a new drug (which had averaged from 4 to 6 years
before 1962) increased to over 16 years by 1990. 23 Only one out of 5,000 new
delays in the
drugs now completes this process successfully, at an average manufacturer's
marketing of new
cost of $200 million.²⁴ Economic theory leads to the prediction that these
substantial increases in the cost of developing a drug for the US market affect
drugs.
both the number of new drugs developed (at the margin, otherwise market-
able drugs will now be unprofitable ex ante to a manufacturer)²⁵ and the
market price of developed drugs during what remains of their patent
monopoly.²⁶ Both these forecasts have been amply documented in practice.²
Also increasingly chronicled is the net cost in lost lives of not approving
effective drugs quickly, as the following section relates.
THE RATIONALE FOR THE FDA
CERTIFICATION MONOPOLY:
ANALYSIS AND CRITIQUE
The 1938 and 1962 amendments came during "New Deal" and
"Great Society" administrations, when confidence in government as an
efficient provider and allocator of goods and services was high. General
preference for government over markets is typically accounted for in "wel-
fare economics" by the existence of "market failures." In the case of drugs,
the lay version of the "market failure" argument is that the profit motive leads
manufacturers to produce too many drugs too quickly, that these drugs would
consequently either be poorly manufactured, 28 designed²⁹ or marketed,³⁰ and
that consumers would suffer losses that could be avoided if manufacturers
Krauss: Loosening the FDA's Drug Certification Monopoly
Page 3
were forced through regulatory hoops. Several "consumer watchdog"
groups embrace this market failure theory wholeheartedly. Dr. Sidney Wolfe
of Public Citizen, for example, recently warned Congress not to privatize
any FDA functions because drug manufacturers "mak[e] decisions based
more on who fills their pocketbook than what is best for the public health."3¹
In economic theory, the "market failure" popularly attributed to
pharmaceutical manufactures' profit motive is ascribed to "imperfect infor-
mation." The theoretical argument goes roughly as follows:
Private choice of goods and services maximizes global satisfaction only
if consumers perfectly know what they want and flawlessly calculate
whether products offered for sale will give them what they want. These
conditions imply an elimination of all risk;
A risk-free universe exists nowhere, of course, and is especially absent
where disease is concerned. Consumers of drugs in fact have doubts both
about what ails them and about the effects of proposed remedies for that
ailment;
By 1967, average
Producers of a remedy can of course provide useful information on the
latter subject to consumers, but (as statements like Dr. Wolfe's above
post-test review
indicate) informational asymmetry is held to encourage false or biased
reports;
times for an NDA
Furthermore, information is a "public good:" once originated, it can be
had increased
reproduced or broadcast. Since others can copy costly-to-produce infor-
mation, the argument goes, insufficient quantities of data about pharma-
from seven to
ceuticals are likely to be produced by the private market. Notably, it is
thirty months.
held to be unlikely that disinterested third parties would spring up to
provide correct evaluations of a drug's safety and effectiveness;
Thus, concludes the argument, government must fill the gap created by
informational market failure. This government can do by testing and
certifying drugs, and by requiring exceptional quality before authorizing
drug marketing.
There are many difficulties with the market failure rationale for a
government drug certification monopoly. Some can be usefully sketched
here:
The market failure argument explains little because it explains too much.
Virtually all consumer goods and services are purchased by buyers with
incomplete information. How long will that pair of panty hose last, and
will its chemical formulation provoke allergic reactions? Will this
champagne bottle explode in my face, scarring me for life? Is the doctor
operating on me this morning recovering from last night's party? Will the
university I just applied to have an excellent reputation when I graduate
four years from now? On all these issues, should I trust the information
I receive from the not disinterested department store, bottler, surgeon or
law school? Consumer information is never perfect, and ignorance (i.e.,
risk) therefore inevitably influences all choices relevant to our well-being.
But few are confident enough in government's ability to discover and
process information to argue for the replacement of market allocation and
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Krauss: Loosening the FDA's Drug Certification Monopoly
consumer choice by regulatory agencies merely because information is
imperfect.³²
The major premise of the market failure argument, that information is
a "public good" underproduced by markets and therefore efficiently
provided only by government, is flawed. Competitive forces privatize
information much more readily than is commonly believed by welfare
economists.33 Competitors with better products profit by pointing out
imperfections in their rivals' merchandise. Testing publications from
Consumer Reports to Car and Driver find markets for information,
ranging from open evaluation to formal certification of products. 34 The
value of these publications (and for that matter, the value of pharmaceu-
tical manufacturers' products) derives from the reputation for quality they
acquire. In fact the "good will" value of brand names, trademarks, and
other intellectual property, which both product manufacturers and con-
sumer publications ferociously protect,35 is largely a function of this
reputational effect. Commercial activity (whether by automobile manu-
facturers or drug producers) consists not of one-shot events but rather of
a series of repeat dealings; only myopic producers generate false product
The market
information if it is likely that the misinformation will become known.
Admittedly, fly-by-night operators by definition don't feel reputational
risk: but that is precisely why the market values their products less than it
failure argument
does those of a Proctor & Gamble or a Merck. That is why the used car
explains little
sold through classified ads costs less than the same car sold by a reputable
dealer. In the absence of any federal regulation, market prices for
because it
products already compensate ex ante for informational imperfections.
explains too
Of course, reputational markets are not perfect. Most notably, "agency
problems" incite misbehavior. Managers may, for example, deceive drug
much. Virtually
(or car, or pantyhose, or surgery, or law school) "purchasers" because by
all consumer
the time the misinformation is discovered the manager will have comfort-
ably retired, personally reaping the short term gain while the corporation
goods and
is left with the long-term pain. While agency problems do exist (in
government³⁶ as well as in private industry), it is important to note that tort
services are pur-
and contract law create powerful incentives for private firms³ to monitor
managerial behavior. The common law inspires confidence in informa-
chased by buyers
tion produced without the need for heavy-handed regulations.
with incomplete
For example, incorrect information dispensed by manufacturers typi-
information.
cally constitutes a "breach of express warrant," giving rise to strict
liability suits by consumers injured as a consequence. Poor manufac-
turing techniques, shoddy design work, inadequate warnings or careless
preparation (whether by a too-hasty marketer of a drug with side-effects
or by a partying surgeon) result in tort or products liability. This liability
is designed to fully compensate wrongfully harmed victims, thereby
forcing wrongdoers to internalize the cost of their misbehavior. Some
believe that tort law undercompensates plaintiffs, while others feel that
tort recovery is too generous. Depending on who is right, tort should be
made more plaintiff- or defendant-friendly. But that is a question of tort
law, not of government regulation.³⁹ If the amount manufacturers (or
service providers) must pay injured parties in tort suits is greater than the
long term gain they derive from deceiving their clientele (and such gain
should not be easily assumed: reputational costs make it problematic, as
seen above), information will be improved. This will occur precisely in
cases where we want to modify the manufacturer's (or service provider's)
behavior. 40 Tort and product liability law can and do result in increased
Krauss: Loosening the FDA's Drug Certification Monopoly
Page 5
informational output from manufacturer to consumer precisely in those
instances where such output might otherwise be insufficient.⁴¹
The market failure argument supposes (incorrectly, as seen immediately
above) that private corporations' incentives to produce information are
insufficient. It also believes that government incentives to inform
consumers arenot distorted. But this benign view of government has been
challenged by political theorists ever since the Federalist Papers. Schol-
ars who monitor civil servants know that "agency problems" are notori-
ously likely to reduce bureaucrats' efficiency. 42 "Public Choice" analysis
teaches that we should expect government agencies to be overcautious in
approving new drugs. The loved ones of those who have died because a
non-approved (or non-developed) drug they have never heard of might
have saved them had it been developed and marketed are unlikely to
protest to their elected representative. On the other hand, every crippled
victim of a defective drug is visible to journalists and to politicians,
lawyers and judges. Every new drug is therefore potentially another
Thalidomide to bureaucrats. As Sam Kazman has written,
"From the FDA commissioner to the bureau heads to the individual
NDA reviewers, the message is clear: if you approve a drug with
Drug lag's
unanticipated side effects, both you and the agency will face the heat
of newspaper headlines, television coverage and congressional hear-
victims and their
ings. On the other hand, if the FDA insists on more and more data
from a manufacturer, and finally approves a drug which should have
families will
been on the market months or years before, there is no such price to
pay. Drug lag's victims and their families will hardly be complain-
hardly be
ing, because they won't know what hit them They only know that
there is nothing their doctors can do for them. From the standpoint
complaining,
of
politics, they are invisible."44
because they
As between what might be called "Type 1" certification error (a drug
won't know what
is approved that turns out to cause more harm than good) and "Type 2"
hit them.
certification error (a drug is not approved, but that drug would have caused
more good than harm), the above analysis indicates that market forces
(tempered by contract and tort remedies) tend to minimize the sum of these
two errors: anything less would reduce profits. Government regulation, in
contrast, is acutely sensitive to Type 1 error but relatively unfeeling to Type
2 error. In sum, Public Choice theory leads us to predict that government
monopoly over drug certification would exacerbate, not solve, informational
failure.
Theory has been borne out by practice, as is revealed by recent
illustrations of the informational failure resulting from the FDA's certifica-
tion monopoly:
The cardiopump is standard equipment in ambulances in many coun-
tries. But it is not available in the United States. Initial tests in the US in
1992 showed that, though not universally effective, use of a cardiopump
led to a survival rate 35% greater among unconscious heart attack victims.
However the FDA ordered in 1993 that tests on the pump cease because
unconscious patients could not give "informed consent" before the device
was "tested" on them The cardiopump may help many people: one
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Krauss: Loosening the FDA's Drug Certification Monopoly
estimate is that up to 7,000 Americans could be saved each year through
its use.45 We will never know who these "missing dead" are, of course.
A 42-month delay in making Interleukin-2 available to patients with
kidney cancer cost nearly one hundred unidentified deaths per month.⁴⁶
Delays in the approval of the emergency blood-clotting drug TPA are
estimated to have resulted in more than 100,000 preventable heart-attack
deaths.⁴⁷
The FDA took seven years before approving tacrine (or THA), which
would have greatly improved (and in some cases saved⁴⁸) the lives of
thousands of Alzheimers patients.4
Wyoming physician Michael Werner had the knowledge and wealth
needed to visit Japan in 1993 for experimental treatment for his rare form
of brain cancer. The treatment has not been approved by the FDA for use
in the US. According to Dr. Werner, 120 patients with brain tumors like
his had been treated in Japan with a 52% five-year survival ratio. In the
US 90% of patients with Dr. Werner's disease die within twelve months;
only 1% survive five years.5
FDA regulations require that the clinical studies needed to obtain
Government
approval of a new drug or medical device be "randomized" and "concur-
rent;" i.e., new devices or drugs must be blind-tested against placebos or
monopoly over
FDA-approved products. This poses ethical problems if the new device
or drug is so superior to existing technology that the "placebo" half of the
drug certification
"double-blind" cohort is virtually condemned to death. However, the
would exacer-
FDA tolerates this state of affairs and tends to intervene only when real
victims are publicly identified. For example, the agency ordered hospitals
bate, not solve,
to stop using specialized baby ventilators (irreplaceable in saving very
sick infants because they provide uniquely tiny breaths of air) because
informational
hospitals refused to "blind-test" them (and thereby condemn 50% of air-
deprived "neonates"). Dr. Martin Kessler of Georgetown University
failure.
Medical Center estimates that scores of babies died as a result. Subse-
quent to the FDA decision, protests from doctors who pointed to specific
infant deaths were aired on the television show "20/20." Only then did
the agency allow use of the ventilators.⁵¹
The pre-market approval process for new medical devices, required
since 1976,52 averaged 840 days during the first six months of fiscal 1994
compared to 420 days in 1990. If manufacturers wish to improve devices
already on the market before 1976, they must file a notification (or
"510(k)") application with the agency.53 Although the FDA is legally
obliged to rule on 510(k) applications within 90 days, in fact the average
review time has increased from 98 days in 1990 to 213 days in 1994. 54
These expensive delays, obviously a product of the agency's zealous
desire to control for Type 1 error, result at the margin in decisions not to
introduce new or improved devices.
These and other illustrations of FDA behavior⁵⁵ are not mere techni-
cal failings that could be addressed through more careful oversight. 56 Rather,
they are the inevitable result of the institutional incentives of public regula-
tors. The more complete the government's monopoly, the more pernicious
Krauss: Loosening the FDA's Drug Certification Monopoly
Page 7
these results are. Fortunately, however, the FDA's monopoly has never been
complete.
THE GAP IN THE FDA'S CERTIFICATION
MONOPOLY: OFF-LABEL PRESCRIPTIONS
The FDA's certification monopoly for drugs and new devices has
hastened the death of thousands of Americans. But, as seen in Section 1
above, the use of ethical drugs and devices in America pre-dates mandatory
pre-certification rules. This chronology has left "gaps" in the FDA's
certification monopoly: pockets of market-oriented behavior that have not
yet been stifled by the agency.
One important breach of the monopoly results from "off-label
prescriptions." Physicians may not prescribe, nor may manufacturers
market, drugs or devices that have not received FDA approval.57 Both
doctors and pharmaceutical companies have been found "per se negligent"
in tort if they defy the FDA's power in this area.⁵⁸ But if a drug or device is
approved by the agency as safe and effective for a one purpose, no FDA
regulations prevent doctors from prescribing the approved drug or device
Fortunately, the
for any other purpose. Thus, doctors, hospitals and researchers may discover
FDA's monopoly
that a drug approved, labeled and marketed for treatment of one kind of
cancer is effective at treating other diseases. They write up these discoveries
has never been
in refereed medical journals and other publications. Physicians read or hear
complete.
about these other uses and then prescribe the drug for an "off-label" use.
Under common law, an "off-label prescription" is not "per se" negligent.
Tort law will, of course, sanction independently negligent prescriptions (if a
doctor has misread the journal literature, if he has neglected to prescribe the
correct dose, etc.).
The FDA has had mixed success in its sporadic efforts to suppress
off-label prescriptions. 60 In 1979 the agency attempted to prevent a physician
from prescribing a drug that had been approved as a medication for lead
poisoning for a patient with arteriosclerosis. The Fifth Circuit Court of
Appeals rejected the FDA's claim that the physician had "misbranded"
(falsely claimed that the agency had approved the proposed use of) the drug
by prescribing it or by advertising the new therapy.61 FDA power has been
more successfully invoked against manufacturers, however. Pharmaceutical
companies routinely publicized (to doctors and to the general public) the
results of new research on their already-approved drugs, thereby alerting
physicians (the vast majority of whom do not subscribe to, say, the New
England Journal of Medicine) to new ways to help their patients. In 1991
FDA Commissioner Kessler successfully cracked down on this "misbrand-
ing."⁶²
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Krauss: Loosening the FDA's Drug Certification Monopoly
These efforts to extend the FDA's certification monopoly to off-label
prescriptions have cost lives and money, in several ways. For example, many
insurers, following Medicare's lead, 63 deny or limit drug cost reimbursement
for off-label use. Nearly 25% of oncologists surveyed by the Government
Accounting Office in 1991 reported varying from their preferred treatment
because of anticipated denial of Medicare reimbursement.64 But because
Medicare reimbursement for costly hospital stays is fixed, hospitalization is
used to work around the out-patient system. Five of every eight surveyed
oncologists admitted patients to hospitals solely to ensure reimbursement for
drug therapy that would be denied to an out-patient. 65 However, case law has
limited state governments' (and, to a much lesser degree, private) health
insurers' discretion to rely exclusively on FDA approved use in determining
coverage, however.66
More direct illustrations of health risks created by the FDA's crack-
down on manufacturers' "misbranding" include one case involving an "over-
the-counter" drug. Influential studies suggest that the risk of heart attacks
for males over 50 is cut in half by taking one aspirin every other day.
According to a 1988 article in the New England Journal of Medicine,
Widespread
widespread publicity of the aspirin treatment could save from 10,000 to
100,000 American lives each year.⁶⁷ Yet the FDA has prohibited aspirin
publicity of the
manufacturers from distributing such notices, and since aspirin is no longer
aspirin treatment
patented no company has the incentive to spend the millions of dollars for
clinical trials and other tests necessary to lead the agency to authorize
could save from
publicity for this "new use."68 Even when drug patents are effective, unless
10,000 to
a manufacturer is willing to submit an NDA supplement for an unapproved
use it has little incentive to generate information on its safety and effective-
100,000 Ameri-
ness. Nor may manufacturers even distribute reprints of peer-reviewed
can lives each
journals or textbooks in which off-label uses are documented, even though
drug producers are an efficient clearing house for such material.⁶⁹
year. Yet the FDA
has prohibited
Despite its efforts, the FDA has not stemmed the tide of off-label
prescriptions. According to one officer of the American Medical Associa-
this.
tion, off-label uses may presently account for 60 percent of all prescription
drug use today.⁷⁰ A recent study by the Government Accounting Office
found off-label prescribing to be the rule for many types of therapy.⁷¹
Common law suits recognize this common practice, and there is no require-
ment that physicians inform patients that they are prescribing a medication
for a non-FDA-approved use.⁷²
It is interesting to note that off-label prescriptions have proliferated
despite tort law's implicit bias in favor of FDA-approved uses. A physician
has a qualified tort immunity in that he is never negligent merely for
prescribing a drug for a purpose approved by the FDA (though he still must
transmit appropriate warnings, check for possible drug allergies, etc.). 73 If,
on the other hand, a doctor prescribes an drug "off-label," there is no such
immunity.74 Common-law negligence principles apply; i.e., a doctor will be
Krauss: Loosening the FDA's Drug Certification Monopoly
Page 9
liable to an injured patient if the current state of research or customary
medical practice impugn the off-label use.⁷⁵
Obviously, many more would die (and the clamor about FDA-
induced "drug lag" would be more intense) if off-label prescriptions were
suppressed. In an important sense, the medical profession has reduced public
pressure on the FDA by privately performing research and issuing recom-
mendations that manufacturers find too costly due to agency regulations.
Just as obviously, private research and recommendations only deal with
already-approved drugs and devices, for despite the gap in the agency's
certification monopoly the FDA retains legal control over the approval of a
drug or device for its "first" approved use. The proliferation of beneficial off-
label prescriptions demonstrates the illogical character of this monopoly,
though: why should FDA approval be a sine qua non to "first use" when, once
approved, the drug can be put to any number of other non-approved uses,
A recommenda-
subject only to the general rules of tort liability?
tion initially
The intolerable features of the status quo make it worthwhile to
formulated by the
elaborate on a recommendation initially formulated by the Competitive
Competitive
Enterprise Institute. 76 This proposal, properly developed, could preserve all
FDA evaluative functions while saving hundreds of thousands of lives. It
Enterprise
consists of terminating the FDA's unsound "first use" monopoly by permit-
Institute could
ting "off-label manufacturing," much as "off-label prescribing" is presently
allowed. This proposal would resolve asymmetries of incentives and result
preserve all FDA
in consideration of both "Type 1" and "Type 2" certification errors. The
evaluative
proposal is clarified and defended in the remainder of this paper.
functions while
LOOSENING THE CERTIFICATION MONOPOLY:
saving hundreds
FROM OFF-LABEL PRESCRIPTION
of thousands of
TO "OFF-LABEL MANUFACTURING"
lives.
To recap this paper's findings:
FDA authority has expanded piecemeal in reaction to scattered occur-
rences. The result of this expansion is that the agency has metamorphosed
from a guardian against consumer fraud to a prime determinant of the
production of ethical drugs and medical devices;
The FDA's present role cannot be justified by economic or political
theory. The agency's skewed informational incentives, which contrast
with those of manufacturers and physicians, have had the effect of
aggravating illnesses and accelerating deaths;
The FDA has attempted to suppress what remains of the private selection
of ethical drug use. Despite all its efforts, a significant proportion of
medications are used in non-FDA-approved ways. If private defiance of
FDA hegemony had not been allowed, the perverse effects of the agency's
disincentives would have been far more severe.
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Krauss: Loosening the FDA's Drug Certification Monopoly
What measures can be taken to reconcile economic and political
theory with FDA practice? The outright abolition of the agency, or even its
reinstatement as a "consumer protection" department devoted to policing
and prosecuting fraudulent claims about drugs, are likely nonviable solu-
tions. A significant segment of the public is probably convinced that the
agency should retain a role in the ex ante evaluation of drug safety and
efficacy. On the other hand, the phenomenon of off-label prescriptions
demonstrates that the FDA has never exercised hegemony over the therapeu-
tic use of medication; practitioners (controlled by common-law tort, not by
federal regulation) do "end-runs" around the FDA with quite desirable
effects.
Once this is grasped, it becomes apparent that the FDA's social
function would not change if practitioners could recommend non-approved
drugs as easily as they can now recommend non-approved uses of drugs.
Just as any doctor may today legally write "off-label" prescriptions of drugs
In at least two
or devices, it could be lawful to manufacture drugs and devices "off-label."
areas this plan
The FDA would, under this proposal, remain accessible as a state-funded
monitor of safety and efficacy.
enhances the
value of FDA
Note that this proposal does not create a windfall gain for manufac-
turers of dangerous drugs. By analogy to physicians writing "off-label
certification.
prescriptions," manufacturers producing "off-label drugs" would not benefit
from tort immunity. 77 They would be liable for design defects in these drugs,
while (as is the case for "on-label" prescriptions today) producers of FDA-
approved drugs would be immune to design defect liability.⁷⁸ All producers
of drugs would of course still be liable for manufacturing defects and failures
to warn⁷⁹ (e.g., if a batch of the drug is contaminated, or if a label incorrectly
indicates the appropriate dosage, etc.) just as physicians are liable for
negligently mis/prescribing approved drugs under current law. But liability
for design defect⁸⁰ (marketing a drug that should never have been put on the
market) would be precluded only if the FDA has approved a drug.
This is not, therefore, a revolutionary proposal to sterilize the FDA.
In fact, in at least two areas this plan enhances the value of FDA certification.
As just stated, it provides "on-label" manufacturers with a "design defect
shield" they presently lack, courtesy of agency approval.81 Second, while
physicians are presently not compelled by statute or common law to inform
patients that they are writing "off-label" prescriptions,⁸² this proposal would
assuage nervous consumers and increase FDA visibility by requiring doctors
to obtain "informed consent" from patients if an ethical drug they recom-
mend is not approved by the agency.
What effect would this modification of the FDA's authority have on
the allocation and distribution of ethical drugs? The remainder of this paper
will explore this question Socratically, by answering a series of hypothetical
Krauss: Loosening the FDA's Drug Certification Monopoly
Page 11
criticisms dealing with the interface between tort liability and drug produc-
tion and use decisions.
Critique #1: "Without an FDA right to reject market decisions to commence
production of a drug, manufacturers would massively produce "snake-oil"
cures harming millions."
Readers who have followed the analysis in this paper will hopefully
recognize that this critique is unfounded. Manufacturers interested in
maintaining a presence in the market and in enhancing their brand image
will not market "snake oil." Excellent quality automobiles, croissants and
knives are produced despite the absence of mandatory pre-market govern-
ment approval, even though defective versions of any these products are
extremely detrimental to our health.
In rebuttal, it might be contended that government pre-approval of drugs
The label "FDA
is more prized by the public than pre-certification of the neighborhood
baker or cutler. This argument fails to recognize that all certifications tend
inspected and
to become valuable over time. It may well be the FDA's structural
obsession with avoiding Type 1 headlines that instills misplaced public
approved," if
confidence.⁸³ If the public retains this confidence, manufacturers will
make the investment needed to obtain FDA approval, which they could
truly esteemed by
then recoup by exacting a premium in the marketplace. Over time, market
the public, would
valuation of FDA approval would stabilize (formally stated, a demand
function for the agency's services would emerge). The label "FDA
add more than
inspected and approved," if truly esteemed by the public, would add more
than enough value to a drug or device to ensure the agency's survival even
enough value to a
in the absence of a statutory monopoly. The government could then
engage in informed cost-benefit analysis of the FDA's policies, including
drug or device to
its fixation with Type 1 errors.
ensure the
Critique #2: "Without mandatory FDA approval, manufacturers would
agency's survival
refuse to produce most drugs or devices because of their fear of product
even in the
liability."
absence of a
Both economic theory and present-day practice tell us that this is not so.
Manufacturers produce motorcycles and ladders despite the absence of
statutory
pre-market government approval. They are held liable when their product
monopoly.
is defectively designed.⁸⁴ Conversely, FDA approval does not presently
immunize manufacturers of pharmaceuticals (as distinguished from Class
III medical devices from product liability.86 This proposal's proposed
immunization of manufacturers (against design defect liability only) for
FDA-approved drugs might therefore increase the availability of ethical
drugs.⁸⁷ At the very least, it is clear that the elimination of the agency's
certification monopoly would not remove ethical drugs from the market.
It was observed above that manufacturers now decline to develop certain
drugs because pre-approval expenses render such development unprofit-
able. If Critique #2 is to be accepted, this would imply that manufacturers
will refuse to produce drugs with or without agency oversight. This is a
non sequitur. It is clear that the elimination of the agency's certification
monopoly would not remove ethical drugs from the market.
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Krauss: Loosening the FDA's Drug Certification Monopoly
Critique #3: "Doctors would never prescribe non-FDA approved drugs or
devices, for fear of malpractice liability."
The prevailing "gap" in the FDA's certification monopoly dulls this
criticism. Fear of malpractice liability has not precluded off-label
prescriptions, despite the loss of tort protection that derives from FDA use
approval. Doctors are clearly willing to be held to common law negli-
gence standards⁸⁸ when prescribing drugs for off-label uses. They would
arguably agree to be held to the same standards when prescribing off-label
drugs. Indeed, common law tort has evolved to the point that a physician's
decision not to prescribe a drug for a widely accredited "off-label" use
could well constitute malpractice. In this way again has the private sector
mitigated the effects of the FDA's disdain for "Type 2" error. Legislation
permitting prescription of off-label drugs would further palliate this
problem.
One might wonder how doctors would learn of "off-label manufactured
drugs." After all, off-label uses of FDA-approved drugs are presently
Doctors are
described in medical journals, which can be admitted into evidence at a
malpractice trial; how would "off-label drugs" be introduced? The
clearly willing to
procedure would likely be very similar. Journals and other producers of
knowledge about the safety (and efficacy) of drugs would find it in their
be held to
interest to produce information on manufacturers' products. The same
common law
reputational pressures that encourage the New England Journal of Medi-
cine to refrain from publishing unscientific drivel on new uses will
negligence
promote accuracy on the part of private reviewers of new drugs.⁸⁹ Note
that these new drugs would likely fill very urgent medical needs; the
standards when
relative tort protection of FDA certification means that physicians would
likely need good reasons⁹⁰ for utilizing non-FDA approved drugs or
prescribing drugs
devices if there exist FDA-certified alternative treatments.
for off-label uses.
It is important to see that agencies already provide informational
services in fields where government has not snatched a legal monopoly.
They would
Private firms regularly evaluate and certify design and production param-
arguably agree to
eters (or "standards"⁹") for goods and services as diverse as bricks and law
schools. Reliance on these evaluations and certifications, even when they
be held to the
lack mandatory legal authority,⁹² is an important element of malpractice
defense for (in the above examples) architects and guidance counsellors.
same standards
Unlike government agencies like the FDA, private firms cannot be
politically constrained to accredit (or to refuse to accredit) new products
when prescribing
or designs.93 But (also unlike government agencies) if a sufficient number
of knowledgeable parties belittle a certifying agency's inefficiency or
off-label drugs.
corruption the creation of a rival agency is permissible.94 Competing
agencies exist in many fields,95 some of them well known to physicians.⁹⁶
Critique #4: "Private firms will not be willing to certify drugs and devices,
because (unlike the FDA)⁹⁷ they will be liable for the unexpected side effects
of drugs they have 'approved'."
This is another baseless critique. It begs two important questions:
- As regards reasonably foreseeableside effects (for example, Thalido-
mide-type side effects that were clearly discernable through testing), the
critique impliedly assumes that such calamities will occur frequently as a
result of private drug certification; i.e., that market incentives will not lead
Krauss: Loosening the FDA's Drug Certification Monopoly
Page 13
private certifying agencies to discover and prevent drug tragedies. The
burden of much of this paper has been to challenge that assumption.
Markets (supplemented by tort law) do provide strong incentives for
certifying agencies to do their jobs well;
- As regards unknowable future side effects, it is not clear why a non-
negligent certifier should be liable for results it could not have reasonably
prevented. Manufacturers of ethical drugs are most certainly not liable for
such side effects today,⁹⁸ and there is no reason why a certifying agency
would assume presently non-existent liability in their place.99
More fundamentally, this paper's critique of the "informational market
failure" argument emphasizes that profits can be earned from certification
even if there is a risk of liability. Some firms (like Underwriters'
Laboratories) charge manufacturers directly for their services. Others
(like Consumers Union, publisher of Consumer Reports) earn money
solely from the public sale of evaluative information. Both types of
companies devote considerable resources to protecting their intellectual
property, which of course enables them to privatize the information they
produce. 100 Still other companies (like Hearst, publisher of Good House-
keeping, whose "Seal of Approval" is affixed to products) earn money
from subscribers (purchasers of their evaluative information) and from
manufacturers. Although payment of fees might blur the distinction
The UL model
between publicity and certification, both protection of trademark value
has particular
and tort liability¹⁰¹ furnish incentives to accurately assess products.
relevance for the
It seems likely that insurance companies would have a comparative
advantage in competing as quality certifiers. Liability insurance compa-
ethical drug
nies already have a vital incentive to accurately evaluate products whose
quality is likely to affect their exposure. One of America's most venerable
industry under
private certifiers, Underwriters' Laboratories, is in fact a cooperative
venture of insurance companies that presumably lower total risk (thereby
this proposal.
increasing their profit)¹⁰ by assuring that only certified products are
produced or used by their clients. Since UL certification incurs the
venture's liability to consumers injured by a defectively designed product
that never should have been certified,¹⁰³ and since insurance companies
are typically vent, UL accreditation can be seen as a kind of surety bond
paid for by manufacturers, assuring purchasers¹⁰⁴ that a product design is
effective. 105
The UL model has particular relevance for the ethical drug industry
under this proposal. Drug manufacturers could offer to "hold harmless"
(i.e., to indemnify, as if they had issued a surety bond to) any physician
found liable for prescribing a (non-government-approved) drug they
produced, just as, analogously, Ford Motor Company contractually holds
harmless independent dealers for liability they incur as a result of selling
a defective new (non-government-approved) Ford. In both cases, of
course, manufacturers either self-insure or purchase their own insurance
against concomitant risks. 106 Drug manufacturers deciding to forego FDA
certification could, by risking their capital ("self-insurance") or by pur-
chasing liability insurance, produce quality guarantees for products in
which they already have an interest and an expertise. Poor certification
practices for ethical drugs would obviously directly cut into the profits of
these "insurers," who in fact are serving as a bond for the quality of their
pharmaceuticals. Good certification practices, accomplished through the
establishment of reputable independent agencies (such as Underwriters'
Laboratories), maximize insurers' and manufacturers' profits. Both tort
Page 14
Krauss: Loosening the FDA's Drug Certification Monopoly
liability and self-interested monitoring by insurers will hold cooperative
certifying agencies in check.
CONCLUSION
The FDA's legal control over medicine has never been all-encom-
passing. What monopoly the agency does possess was acquired episodically
and accidentally. The agency's power over drug certification is not justified
by economic or political realities, and its exercise has had deadly conse-
quences. However, a gap in the FDA's power, resulting from the ad hoc
process through which its jurisdiction was granted, has mitigated its poten-
tially disastrous effects. This current process itself contains the kernel of a
safer and more effective drug regulation policy.
This paper argues that the FDA's authority should be modified by
allowing doctors to prescribe non-approved drugs and devices just as they
Since this
today promote non-approved uses. Indeed, the FDA itself has recently
proposal in no
presented a (very diluted) version of this proposal¹⁰ in an effort to calm
hostile critics on both sides of the aisle¹⁰⁸ in Congress.
way eliminates
the FDA,
Although the relaxation of the agency's monopoly that this paper
proposes would not substantially alter the FDA's everyday work, it would
consumers who
have far-reaching and beneficial effects. It might well lead to the establish-
remain troubled
ment of a drug certification industry likely be composed of different types of
competitive firms, as is the case in other fields. Non-profits (like Consumers
by non-FDA-
Union), for-profits (like Hearst Publications) and insurers' cooperatives (like
approved
Underwriters' Laboratories) could be expected to enter the drug certification
industry. To compete successfully, these firms would have to convince
products will be
producers, consumers and doctors that their evaluation process is of high
able to insist on
quality. Physicians and manufacturers would not decline to make and use
privately certified products under these new ground rules, while risks of
FDA certifica-
liability will be transferred (via insurance and bonding mechanisms) to
tion.
efficient risk bearers.
Of course, no private evaluation industry will be viable if consumers
balk at non-FDA certified drugs. Since this proposal in no way eliminates the
agency, consumers who remain troubled by non-FDA-approved products
will be able to insist on FDA certification. If consumers remain unconvinced
that the market has provided efficient substitutes for the agency, drug
manufacturers will continue to submit their products to the FDA for pre-
market approval. On the other hand, if the FDA becomes perceived as an
inefficient agency focused exclusively on the elimination of Type 1 testing
errors (at the cost of an inefficiently high number of Type 2 errors), the
agency's "market share" of certifications will decline. Sick people will
increasingly opt to consume privately certified ethical drugs. If this happens,
an FDA that wishes to prosper sans certification monopoly can be expected
to put patients' best interests at heart by balancing Type 1 and Type 2 errors
Krauss: Loosening the FDA's Drug Certification Monopoly
Page 15
instead of responding to bureaucratic pressures at the cost of thousands of
lives. At that point consumers will finally benefit from an FDA which will
put their interests first.
ABOUT THE AUTHOR
Michael I. Krauss is a professor of law at George Mason University School
of Law in Arlington, Virginia. He is a graduate of Carleton University, and
received his degrees in law from the Université de Sherbrooke and Yale
University. He has published numerous law review articles on issues of tort
law, market processes and comparative law. His writings have also appeared
in publications ranging from the Wall Street Journal to Reason magazine and
Policy Review. In 1994 he received George Mason University's first
"Teacher of the Year" award for excellence in teaching.
A slightly different version of this monograph will shortly be published in the
George Mason University Law Review.
Page 16
Krauss: Loosening the FDA's Drug Certification Monopoly
END NOTES
1 Professor of Law, George Mason University, 3401 North Fairfax Drive, Arlington, Virginia USA 22201.
Internet: [email protected]. Assistance from the Law and Economics Center of George Mason
University and from the Competitive Enterprise Institute is gratefully acknowledged. Thanks to Richard
Jacobus and to Sam Kazman for their useful comments, and to Kenneth Rossman for valuable research
assistance. Any remaining errors are, of course, solely the author's responsibility.
²See Competitive Enterprise Institute V. NHTSA, 956 F.2d 321 (D.C. Cir. 1992) (holding NHTSA must
consider reduced safety effects when determining fuel efficiency standards). See also Crandall &
J.D. Graham, "The Effect of Fuel Economy Standards on Automobile Safety," 32J. L. & Econ. 97 (1989).
³Federal Food and Drugs Act of 1906, ch. 3915, 34 Stat. 768.
4See Peter Temin, Taking Your Medicine: Drug Regulation in the United States, Harvard U. Press, 1980,
for a good history of drug regulation.
⁵See S. Peltzman, The Health Effects of Mandatory Prescriptions, 30 J.L. & Econ. 207 (1987).
⁶Federal regulations did not determine which drugs would be controlled by the prescription process until
1951. Humphrey-Durham Act, ch. 578, 65 Stat. 648 (1951). In fact, until that time drug manufacturers
decided on their own how to label and sell their drugs, subject to state laws. See DeFreese V. United
States, 270 F.2d 730 (5th Cir. 1959), cert. denied, 362 U.S. 944 (1960).
7 Notably, the requirement of privity for successful products liability lawsuits was in the process of being
relaxed at this time. See, e.g., Macpherson v. Buick, 111 N.E. 1050 (1916).
⁸See, e.g., Thomas V. Winchester, 6N.Y. 397 (1906) (liability for manufacturer of incorrectly labelled drug,
even if no privity is involved); Osborne v. McMasters (1906) (liability of druggist for mislabeling a
poisonous drug); Macpherson V. Buick, 111 N.E., 1050 (1916) (liability for manufacturer of misrepre-
sented vehicle). Contrary to popular belief, even early products liability law didn't preclude recovery
from a defendant manufacturer whose misrepresented product caused injury.
⁹See M. Polinsky, An Introduction to Law and Economics, 1983, ch. 4. Assume, for example, that one
million "units" (of an ethical drug) currently sell for $5 each, but that for $1 per unit more the
manufacturer could add a safety device that would reduce total consumer injuries by two million dollars
(for instance, manufacturers could substitute a hypo-allergenic substance for an ingredient that randomly
affects a very tiny number of users). Assume that if the drug is not improved consumers cannot cheaply
avoid these injuries at any cost less than five million dollars (because, say, no consumer knows whether
they are allergic to the substance). The drug manufacturer should realize that it can maximize profits by
choosing this new ingredient and selling the improved drug at a price above $6. If the manufacturer fails
to realize this, tort law will "help" it figure this out. When sued by a consumer who suffers an allergic
reaction to the non-improved drug, the manufacturer will be found to have marketed a negligently
designed drug (under comment k, §402A, Restatement on Torts (2nd)), since it could have improved the
drug for less ($1 million) than the damages the unimproved drug caused ($2 million). Internalizing these
damages, the firm will realize that it is cheaper for it to add the safety device to the drug.
¹⁰Drug regulation was originally the responsibility of the Bureau of Chemistry in the Department of
Agriculture. See Federal Food and Drugs Act of 1906, ch. 3915, 34 Stat. 768. The Bureau became the
Food, Drug and Insecticide Administration in 1927. That name was shortened to the Food and Drug
Administration in 1930. McNary-Mapes Amendment, ch. 874, 46 Stat. 1019 (1930).
"The syrup had already been marketed in pill form, and Mr. Massengill decided to produce it as a syrup by
liquefying it with diethylene glycol. For further discussion of the relationship between the Elixir
Sulfanilamide tragedy and the 1938 Act, see David F. Cavers, Food, Drug and Cosmetic Act of 1938:
Its Legislative History and Its Substantive Provisions, 6 Law & Contemp. Probs. 2.
Krauss: Loosening the FDA's Drug Certification Monopoly
Page 17
¹²Tort liability was rendered difficult by the fact that Mr. Massengill apparently owned assets only in
Tennessee, which had a very short statute of limitations for wrongful death suits. Ultimately, Massengill
was found liable under Tennessee law by applying the statutes of limitations of the states where the injury
occurred. See, e.g., Wilson V. Massengill, 124 F.2d 666 (C.C.A.6 (Tenn.), Jan. 9, 1942, cert. denied,
Massengill v. Wilson, 316 U.S. 686. In addition, Massengill was fined $26,100 under the 1906 Act for
misbranding violations under the 1906 Act.
¹³The phrase refers to Justice Roberts' vote in West Coast Hotel v. Parrish, 300 U.S. 379 (1937), reversing
a series of cases which held unconstitutional various components of "New Deal" legislation. These cases
displeased President Roosevelt, prompting his threat to increase the number of Supreme Court Justices
until he obtained a majority which would validate to his platform. See The Oxford Dictionary of
American Legal Quotations 393 (Fred R. Shapiro ed., 1993); Gerald Gunther, Constitutional Law 457
(12th ed., 1991). No one is certain who authored the phrase. See Michael Ariens, A Thrice-Told Tale,
or Felix the Cat, 107 Harv. L. Rev. 620, 623 n.11 (1994).
¹⁴It is important to note that the safety of a new drug had to be established. The effectiveness of the drug was
not the FDA's concern, however. Presumably, market forces were still relied on to distinguish effective
from ineffective medications.
¹⁵See Temin, supra note 4, pp. 46-51; Peltzman, supra note 5.
¹⁶Chemie Grünenthal, the producer of Thalidomide, had been alerted to the drug's neurological hazards by
many European physicians. But the firm, in a move that did not serve its long-term commercial interests,
constantly dissimulated the problem. W. S. Ross, The Life/Death Ratio 22 (1977)
¹⁷It should be noted that there is no reason to believe that the FDA ever suspected that Thalidomide had any
teratogenic effect. The delay in US approval for the drug was entirely due to the above-mentioned adverse
neurological reactions, whose theoretical link to birth deformities is still unclear. See Ross, supra note
16, at 39.
¹⁸For a summary of the modifications to Food and Drug law in 1962, see H. Grabowski and J. Vernon, The
Regulation of Pharmaceuticals, American Enterprise Institute, 1983, p. 2-4.
¹⁹The agency was required to render decisions within 180 days, but no sanctions were provided for longer
deliberation time. See Pub. L. 87-781, Title I, Part A, 76 Stat. 781-83, 784, 785 (codified in relevant part
at 21 U.S.C. § 355(c)).
20Grabowski and Vernon, supra note 18, p. 5.
²¹In other words, the 1906 bill recognized the primacy of the market in the production and distribution of
medicines, and saw a purely informational role for government. Of course, it is not clear that government
is even efficient in evaluating information accurately. See on this point M. Krauss, "Regulation V.
Markets in the Development of Standards," 3 S. Cal. Interdisciplinary L. J. 781 (1994)
²²S. Peltzman, Regulation of Pharmaceutical Innovation, American Enterprise Institute, 1974, p. 18.
²³Grabowski, supra note 18, p. 30; K. Kaitin, Written Testimony Before House Subcommittee on oversight
and Investigations, Tufts Center for the Study of Drug Development, May 25, 1995. The process for new
drug approval begins with preclinical testing of a compound in a laboratory and on animals. This stage
takes on average 3.5 years to satisfy the FDA. If successful, researchers then file an IDA (Investigational
New Drug Application) with the agency. This requires a three-stage clinical testing procedure on human
subjects, monitored constantly by the agency: Phase 1 determines safety and dosage on a small group
of volunteers, over about one year. Phase 2 measures the effectiveness of the drug on hundreds of
volunteers, over about two years. Phase 3 confirms the efficacy of the drug in double-blind tests
involving hundreds if not thousands of volunteers and control groups, lasting on average three years. See
21 C.F.R. $312.21
²⁴San Francisco Chronicle, Oct.26, 1992, p. A1.
25The pharmaceutical industry introduced an average of more than three times as many drugs (54 to 16) before
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Krauss: Loosening the FDA's Drug Certification Monopoly
1962 as after. See H. Grabowski, "The Prescription for High Drug Prices: Factors Contributing to Rising
Prescription Drug Prices," (December 1992) Consumers' Research 10.
26If fewer drugs are available, lessened competition will increase prices.
²⁷See K. Kaitin et al., "The drug lag: An update of new drug introductions in the United States and in the
United Kingdom, 1977-87," 46-2 Clinical Pharmacology & Therapeutics 121 (1989).
²⁸For example, using poor sterilization processes.
²⁹For example, with insufficient care given to allergic or other abreactions, or to drug interaction effects.
³⁰For example, firms might exaggerate a drug's therapeutic effects, or not draft labels that would alert users
to abreactions or optimal dosage.
31 FDA to leave firms to devices," Washington Times, 4-7-95, p. A6.
³²Some readers might have the following reaction to the above examples: "Yes, we almost always have
incomplete information, but in the case of ethical drugs imperfect information is especially severe, and
its consequences can be especially bad." Later in this paper I try to show that government monopoly over
drug certification is, neither in theory nor in practice, the best way to combat this informational problem.
At this point my modest claim is that informational problems are endemic to daily life in a free society.
³³See M. Krauss, "Property, Monopoly, and Intellectual Rights," 12 Hamline L. Rev. 305 (1989) for an in-
depth discussion of this point. See also Krauss, supra note 21. The privatization of information will not
be possible, of course, if legislation prevents it (say, by denying copyright or patent protection to
information producers).
34 The burgeoning growth of private on-line information systems (e.g., America Online, LEXIS-NEXIS, etc.)
and the anticipated streamlining of Internet services will likely make the diffusion of such information
much less costly. Once dangerous side effects emerge in users of a particular product, the "Net" may
allow extremely rapid dissemination of this information. Arguably, news of Thalidomide's neurological
side-effects would become much more difficult to hide today.
³⁵See infra, note 100.
36 Janet Novack has repeatedly detailed FDA corruption scandals in articles written for Forbes magazine. See,
e.g., Oct. 16, 19989, p. 10; April 29, 1991, p. 34.
³⁷Unfortunately, tort law provides less incentive to monitor negligent government workers, since their
managers (unlike corporate owners) have no direct ownership claims which allow them to directly profit
from good monitoring. Tort law's inability to adequately motivate government officials is a contempo-
rary justification for sovereign immunity (excluding tort liability to limit drains on tax dollars).
³⁸See, e.g., Seely V. White Motor Co. 63 Cal.2d 9 (1965) (Privity between consumer and manufacturer is not
required for manufacturer to be sued for breach of express warranty.)
39 See M. Krauss, "Tort Law and Private Ordering", 53 St. Louis U. L. J. 423 (1992).
40If it would have cost moree ante to modify the manufacturer's behavior than would be saved through such
a change, then of course the modification is not socially beneficial. See R. Coase, "The Problem of Social
Cost," 3 J. of L. & Econ. 1 (1960), and supra note 9.
41 Again, a strong argument can be made that the consumer is presently paying for more information than she
wants because tort law is skewed to over-compensating victims. Any reader who has seen the labels on
new ladders will understand this point.
42 "Public Choice" vision of government and bureaucracy largely based on these agency problems garnered
a Nobel prize for one of my George Mason colleagues. See J. Buchanan, with G. Tullock, The Calculus
of Consent, 1961.
⁴³During the Thalidomide episode the regulatory authority and one of its employees was praised by both the
President and Congress for the purely negative action of delaying (not disapproving) endorsement of
Thalidomide. The employee and the FDA had never been praised forapproving a drug, or for expediting
approval or, in fact, for any positive decision.
Krauss: Loosening the FDA's Drug Certification Monopoly
Page 19
⁴⁴See S. Kazman, "Deadly Overcaution: FDA's Drug Approval Process," 1J. of Regulation & Social Costs
35 (1990), 41.
⁴⁵See, "Feel a Heart Attack Coming? Go to France," Wall Street Journal, August 2, 1994, p. A14. In April,
1995 the Journal of the American Medical Association published a study questioning the claimed
superior efficacy of the cardiopump: see Schwab et al., "A Randomized Clinical Trial of Active
Compression-Decompression CPR V. Standard CPR in Out-of-Hospital Cardiac Arrests in Two Cities,"
JAMA 1995: 273:1261-1268. However neither this nor any other study has found any added risk from
cardiopumps, and the article underlined the need for further research, which hospitals would presumably
be free to conduct were it not for the FDA prohibition. An editorial in the same issue of the AMAJournal
expressed "astonish and dismay at the FDA's policy on research of emergency devices. A 1993
Congressional report, "Less than the Sum of its Parts," found that 26 US-made life-sustaining
cardiovascular products were not available in this country, but have been approved and are in widespread
use overseas. Less Than the Sum of its Parts: Reforms Needed in the Organization, management, and
Resources of the Food and Drug Administrations Center for Devices and Radiological Health (Comm.
Print 103-N) 103d Cong., 1st Sess. (1993).
Competitive Enterprise Institute, "Consumer Advocacy Group Attacks FDA For Slow Approval of Cancer
Treatment" (press release, May 14, 1992).
47 Investor's Business Daily, May 3, 1994, p.1.
48 An Alzheimers patient whose symptoms are controlled is less likely to wander off from home, etc.
49 Baltimore Sun, May 10, 1994, p. 1.
Dr. Went to Japan for Treatment He Couldn't Receive in America," Minneapolis Star Tribune, June 26,
1994, p. 12A.
⁵¹See 20/20, August 12, 1994, transcript, p. 7.
⁵²See Medical Device Amendments to the Food and Drug Act, 21 USC § 360 et seq. (90 U.S. Stat. 539).
⁵³Referring to section 510(k) of the Act.
⁵⁴Testimony of Mr. Robert O'Holla, Vice-President for Regulatory Affairs, Johnson & Johnson. Medical
Device User Fee Act of 1994: Hearings on H.R. 4728 Before the Subcomm. on Health and the
Environment of the House of Representatives Committee on Energy and Commerce, 103d Congress, 2d
Session (1994).
⁵⁵See, for other examples, J. DiMasiet al., "New Drug Development in the United States from 1963 to 1992,"
Clin. Pharm. Therap., pp. 609-622.
⁵⁶uch is the recurrent claim of FDA Chairman David Kessler. See, e.g., "Statement Before the Subcom-
mittee on Human Resources and Intergovernmental Relations, Committee on Government Operations."
Council on Competitiveness and FDA Plans to Alter the Drug Approval Process at FDA: Hearings
Before the Subcomm. on Human Resources and Intergovernmental Relations of the House of Represen-
tatives Comm. on Government Operations, 102d Congress, 2d Session 47-145, 226-357 (March 19,
1992).
⁵⁷Except for those drugs and devices which are "grandfathered" by the 1976 amendments.
⁵⁸See Stanton by Brooks V. Astra Pharmaceutical Products Inc., 718 F.2d 553 (3d Cir. 1983); Orthopedic
Equipment Co. V. Eutsler, 276 F.2d 455, 460-61 (4th Cir. 1960).
59 See Richard M. Cooper, Unapproved Uses of Drugs: An Analysis and Some Proposals, 49 Food & Drug
L.J. 533 (1994); William L. Christopher, Drug Prescription: Filling the Regulatory Vacuum, 48 Food
& Drug L.J. 247 (1993), for examples of this process involving journals, textbooks, and even the Internet.
⁶⁰In a position paper over twenty years ago, the FDA admitted that "Once the new drug is in a local
pharmacy the physician may, as part of the practice of medicine, lawfully vary the conditions of use
from those approved on the package insert without informing or obtaining the approval of the Food and
Drug Administration." 37 Federal Register 16,503 (1972). This acknowledgment by the FDA was in fact
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Krauss: Loosening the FDA's Drug Certification Monopoly
part of a proposal to curb off-label uses, if necessary by revoking approval of any drug used "too often"
in an off-label fashion. The 1972 proposal was abandoned, however, and in 1982 the FDA issued a
bulletin formally emphasizing that it condoned off-label use as "accepted medical practice." 12 FDA
DRUG BULLETIN, April 1982, at 4. The 1982 bulletin was seen by some as an abdication by the FDA
of its desire to control off-label use. See, e.g., American Medical Association, 1991 Drug Evaluations
Manual 13. But see infra, note 62 where more recent efforts to discourage off-label prescriptions are
detailed.
United States V. Evers, 643 F.2d 1043 (5th Cir. 1981).
⁶²See T. Randall, "FDA Scrutinizes 'Off-Label' Promotions," 266 JAMA 11 (1991). See also 21 C.F.R.
§§310.3(h)(4), 312.7(a), 314.70(b)(3) (1994).
⁶See 54 Fed. Reg. 4302, 4306, 4316 (1989) (providing reimbursement only for "safe and effective" drug
use, and defining FDA approved uses as "safe and effective."
⁶⁴United States Government Accounting Office, Off-Label Drugs: Reimbursement Policies Constrain
Physicians in their Choice of Cancer Therapies, GAO/PEMD-91-14, (1991) at 35.
65 See supra note 64, at 37.
⁶⁶In Weaver v. Reagan, 886 F.2d 194 (8th Cir. 1989), Missouri defended its refusal to provide Medicaid
coverage to certain AIDS patients on the grounds that their preferred therapy, AZT, had only been
approved by the FDA for patients with a different HIV profile than the plaintiffs'. The Eighth Circuit
reasoned that Medicaid was required to provide "medically necessary" care, and that the distinction
between "medically necessary" and "experimental" care should be established by the medical commu-
nity, not by the FDA approvals. In Pirozzi v. Blue Cross-Blue Shield, 741 F.Supp. 586 (E.D. 1990),
a district court enjoined an insurer from denying reimbursement for a new cancer therapy known as high
dose chemotherapy-autologous bone marrow transplant (HDCT-ABMT), a therapy in which standard
cancer drugs are used at levels far higher than approved by the FDA. The grounds for the injunction were
narrow: the court held that the insurer's contract with the plaintiff did not disclose that the insurers could
refuse to reimburse a non-FDA-approved use.
⁶⁷See D. Thompson, "Aspirin: the Cardiologist's Dream?" 131 Time 56 (Feb. 8, 1988).
68 This is one area where, because of legislation, there is indeed an informational "market failure." See supra
note 33 and accompanying text.
69 According to one critic, this new FDA interpretation has actually intimidated textbook publishers, who now
fear that including the latest information on drug use may result in restrictions on the sale of their
textbooks. See J. Bovard, "FDA's pharmaceutical hide-and-seek," Washington Times, April 9, 1995,
p. B4.
⁷⁰See J. Calfee, "The Leverage Principle in FDA's Regulation of Information" in R. Helms, ed., Competitive
Strategies in the Pharmaceutical Industry, American Enterprise Institute, 1995. S. Lane, "Medical
Precautions," Washington Times, April 9, 1995, p. B4.
⁷United States Government Accounting Office, Off-Label Drugs: Reimbursement Policies Constrain
Physicians in their Choice of Cancer Therapies, GAO/PEMD-91-14, at 3. The report notes that off-label
use of three drugs, ifosamide, interferon and mitoxantrone, constituted 85% of total prescriptions. Id. at
22.
⁷²No appellate cases have been found holding that a doctor's failure to disclose that a frequently prescribed
drug therapy was "off-label" violated the rigorous "informed consent" requirements of tort law.
"The Food and Drug act has generally been seen as preempting state tort law liability holdings in such cases.
See, e.g., Slater V. Optical Radiation Corp., 961 F.2d 1330 (7th Cir., 1992); Evraets V. Intermedics
Intraocular, 34 Cal.Rptr. 2d 852 (1995). The Supreme Court recently granted a certiorari petition in a
case in which the Eleventh Circuit had ruled that the "grandfathering" of a medical device (under the
Medical Device Amendments to the Food, Drug and Cosmetic Act) precluded any state-based products
Krauss: Loosening the FDA's Drug Certification Monopoly
Page 21
liability suit. See Medtronic, Inc. V. Lohr, cert. granted, Jan. 19, 1996. The issues posed in Lohr to the
Supreme Court are not relevant to the qualified tort immunity discussed in this paragraph.
74 Mulder V. Parke Davis, 181 N.W.2d 882 (Minn., 1970) is occasionally cited as contrary authority. In
Mulder, the Minnesota court held (at 887) that when the drug manufacturers' warnings and contraindications
have been clearly communicated to the physician, who then deviates from them, prima facie evidence
of negligence has been established, requiring the physician to explain his deviation. Mulder clearly
rejects any "per se" rule for off-label prescriptions, as it does not preclude a demonstration by the
defendant physician of the reasonableness of his use of the drug, given current medical practice. See,
e.g., Lhotka V. Larson, 238 N.W.2D 870 (Minn. 1976).
⁷⁵See, e.g., Salgo v. Leland Stanford Jr. Univ. Board of Trustees, 317 P.2d 170 (CA, 1957) (finding, at 180,
that drug manufacturers' recommendations are always conservative and are quickly outdated, and after
a drug has been available for a period of time physicians rely on their own experience concerning its use
in actual practice); Craft V. Peebles, 893 P.2d 138 (HI, 1995) (holding that manufacturers' instructions
about use and dosage, which are presumably those approved by the FDA, do not establish the standard
of medical care as a matter of law).
⁷⁶See Competitive Enterprise Institute, "The Food and Drug Administration: A Modest Proposal" (press
release, January 6, 1995); see also Kazman, supra note 44, at 51-52.
⁷⁷See supra note 74 and accompanying text.
⁷⁸The situation is analogous in that, under present law, a doctor prescribing a drug for an "on-label" (i.e. FDA
approved) use could not successfully be sued on the grounds that the drug was inappropriate for that use.
However an "off-label" prescriber is vulnerable to this type of lawsuit.
79I.e., when the drug as sold is not identical to the drug as advertised.
⁸⁰See comment k, §402A Restatement (Second) of Torts: k. Unavoidably unsafe products. There are some
products which, in the present state of human knowledge, are quite incapable of being made safe for their
intended and ordinary use. These are especially common in the field of drugs. An outstanding example
is the vaccine for the Pasteur treatment of rabies, which not uncommonly leads to very serious and
damaging consequences when it is injected. Since the disease itself invariably leads to a dreadful death,
both the marketing and use of the vaccine are fully justified, notwithstanding the unavoidable high degree
of risk which they involve. Such a product, properly prepared, and accompanied by proper directions
and warning, is not defective, nor is it unreasonably dangerous. The same is true of many other drugs,
vaccines, and the like, many of which for this very reason cannot legally be sold except to physicians,
or under the prescription of a physician. It is also true in particular of many new or experimental drugs
as to which, because of lack of time and opportunity for sufficient medical experience, there can be no
assurance of safety, or perhaps even of purity of ingredients, but such experience as there is justifies the
marketing and use of the drug notwithstanding a medically recognizable risk. The seller of such products,
again with the qualification that they are properly prepared and marketed, and proper warning is given,
where the situation calls for it, is not to be held to strict liability for unfortunate consequences attending
their use, merely because he has undertaken to supply the public with an apparently useful and desirable
product, attended with a known but apparently reasonable risk. Restatement (Second) of Torts § 402A,
comment k.
81 Absolute design defect immunity for FDA approved drugs is not presently enjoyed by manufacturers:
indeed, in only five states (Arizona, New Jersey, Ohio, Oregon and Utah) does FDA approval currently
preclude punitive damages for faulty design. See Viscusi, Rowland, Dorman & Walsh, "Deterring
Inefficient Pharmaceutical Litigation: an Economic Rationale for the FDA Regulatory Compliance
Defense," 24 Seton Hall L. Rev. 1437 (1994). It follows that in an important way this proposal would
increase the present value of FDA approval. It is thus incorrect to think that implementation of the
proposal contained in this paper would "emasculate" the agency. However, just as some doctors currently
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Krauss: Loosening the FDA's Drug Certification Monopoly
prescribe "off-label" despite the lack of tort immunity, some manufacturers would, for reasons explicated
below, produce non-approved drugs despite the risk of liability for design defect. This would eliminate
the noxious drug lag described above.
⁸²See supra note 75.
⁸³Reputable certifications are relied on in many areas unrelated to drugs. Well-heeled consumers (of products
as diverse as shotguns, wallets and four-wheel-drive vehicles) prize the knowledge that a product has
achieved "appointment to Her Majesty the Queen," who therefore acts as a certifier of exceptional quality
control throughout the British Commonwealth. In the food industry, registration with the Pennsylvania
Department of Agriculture was likely a sign of high quality a generation ago. Perhaps the governmental
nature of the certifier led to insufficient cultivation, and thus a slow deterioration, of its "brand name."
But private food certifiers continue to thrive. For example, consumers of Kosher food products are often
fussy about the identity of the agency which has certified that a product complies with Jewish dietary
rules. "Star K," "Circle U" and "MK" logos on products are brand marks of three of many competing
rabbinical inspection boards, which contract with manufacturers to inspect and certify their manufactur-
ing and packaging facilities. These marks add value to food for consumers of Kosher goods who trust
the agency owning the relevant trademark. If (as has occasionally happened in the past) it is revealed that
a certification board has erroneously (or even intentionally, as a result of corruption) certified a non-
Kosher product, the commercial effect on the board is devastating.
Many experts in Tort law, including this author, feel that manufacturers are presently being held liable even
if their motorcycle or ladder was properly designed and manufactured. See Krauss, supra note 39. Again,
this is a problem that substantive tort reform can handle. Mandatory government certification is not
needed.
See Michael V. Shiley, Inc., 46 F.3d 1316 (3d Cir. 1995) (ruling that the 1976 amendments to the Food and
Drug act preempt state actions for negligence, strict liability and implied warranty for Class III medical
devices, the only devices subject to formal pre-market FDA approval).
⁸Numerous cases have held that FDA approval does not preempt state products liability. See, e.g.,
MacDonald v. Ortho Pharm. Corp., 475 N.E.2d 65, cert. denied, 474 U.S. 920 (1985) (holding state not
preempted from imposing higher duty of warning); Allen v. G.D. Searle & Co., 708 F. Supp. 1142 (D.
Or. 1989) (holding state law claim of defective labelling for IUD was not preempted because the device
was classified as a prescription drug).
⁸⁷For example, Bendectin, the most effective anti-nausea drug for pregnant women, was withdrawn from the
market after many successful (but expensive) product liability defenses against claims that it induced
birth defects. Had these suits been "demurrable" (i.e., seen as ill-founded on the basis of a preliminary
motion) on the grounds that Bendectin had been tested and found safe by the FDA, the drug would most
certainly still be marketed.
⁸E.g., allowing doctors to defend themselves by citing medical studies showing the utility of the drug, etc.
⁸⁹In a recent survey, the Competitive Enterprise Institute asked oncologists how they would obtain reliable
information about drugs that had not obtained FDA approval: 59% of respondents stated that they would
rely on studies published by refereed journals. CEI, "A National Survey of Oncologists Regarding the
Food and Drug Administration," p. 5 (Aug. 1995).
⁹⁰E.g., superior effectiveness, enhanced safety, much lower price (due to the high costs of FDA certification)
for low-income patients, etc.
⁹See Krauss, supra note 21.
⁹²See, e.g., In the Matter of Analysis of Wash Trucking, 521 A.2d 883 (N.J.Super., 1987) (confirming the
voluntary nature of Underwriters' Laboratories).
⁹See, e.g., Roofire Alarm Co. V. Underwriters' Laboratories, 188 F. Supp. 753 (E.D. Tenn., 1959) [UL
cannot be forced to change its standards as to fire warning devices, as it is a private entity. Consolidated
Krauss: Loosening the FDA's Drug Certification Monopoly
Page 23
Metal Products V. American Petroleum Institute, 846 F. 2D 284 (5th Cir., 1988) [Trade association that
evaluates products and issues private "licenses" does not violate § 1 of Sherman Act when it fails to
favorably evaluate a product.]
94Of course, it is conceivable that private certification firms may be bribed or otherwise corrupted; but this
is a risk that has also afflicted the FDA. See, e.g., Novack, supra note 36. If a private firm is corrupted
it loses most or all of its goodwill, while a government monopolist does not have this fear. The likelihood
of corruption is thus lower for private certifiers than for the FDA.
95 For example, for metal gasoline containers standards have been privately proclaimed by Underwriters'
Laboratories (Standard #30 for Metal Safety Cans), by the National Fire Prevention Association (NFPA
Flammable and Combustible Liquids Code #30-77), and by Factory Mutual Insurance (Standard for
Safety Containers and Filling Supply and Disposal Containers #FM 6051).
⁹⁶Medical malpractice trials are replete with expert testimony from various hospital and physicians'
associations, which have adopted competing standards for surgical techniques.
⁹⁷See Sun Up Foods, Inc. v. Florida Dept. of Citrus, (M.D. Fla., Dec. 31, 1991) (holding FDA's sovereign
immunity bars suits for damaging business through manner of enforcement); Giles v. Villanileea, No.
C 93-2461 BAC (N.D. Cal. Dec. 14, 1993); Daley v. Weinburger, 400 F. Supp. 1288 (E.D.N.Y. 1975)
(denying injunction request because of the FDA's sovereign immunity).
98 Comment k, § 402A, Restatement (second) of Torts. This comment applies to prescription drugs, so in fact
a negligence rule applies to manufacturers of FDA approved drugs. See, e.g., Carmichael V. Reitz, 95
Cal. Rptr. 381 (Cal. App., 1971). Strict liability is also held inapplicable to medical devices, whether
approved by the FDA or grandfathered. See, e.g., Phillips v. Baxter Healthcare, 1993 WL 524688 (Cal.
App. 2 Dist.) (1993).
⁹⁹See, e.g., Yassin V. Certified Grocers of Illinois, 502 N.E.2d 315 (III. App., 1986) at 331 (refusing to hold
Underwriters' Laboratories to a "strict liability" standard under § 402A of the Restatement (Second) of
Torts, as UL is a testing facility and not a manufacturer).
100 Their efforts are not always successful. In Consumers Union of the United States V. General Signal Corp.,
730 F.2d 47 (2nd Cir., 1984), the Union (publisher of Consumer Reports) sued to prevent a manufacturer
from using that magazine's research findings about Regina vacuum cleaners in its advertising. A
majority of the court opined that quoting Consumer Reports' ratings of a product constituted "fair use"
under 17 U.S.C. § 107. Oakes, J., in dissent (ibid, at 47), correctly observed that the majority's opinion
prevented Consumers Union from maximizing profits by deciding what mix of endorsement revenues
and newsstand sales is optimal. Buyers informed about Regina's high CR rating directly from the
manufacturer have less of a need to purchase the CR "vacuum cleaner" issue to see "who won." In
practice, of course, the Union can refuse to evaluate products manufactured by corporations which
violate its prohibition of citations. Even in Second Circuit states there is a strong economic incentive
to refrain from using CR's name. See also Toman v. Underwriters' Laboratories, 707 F.2d 620 (5th Cir.,
1983) (Underwriters' Laboratories may sue manufacturer and distributor of hair dryer if they place
laboratory approval marks on their product without authorization).
101 See, e.g. Hanberry v. Hearst Corp., 81 Cal. Rptr. 519 (Cal. App., 1969) (recognizing the possible liability
for negligent issuance of "Good Housekeeping Seal of Approval" for a dangerous product). Acceptance
of an advertisement by a magazine does not constitute an endorsement (see, e.g., Walters V. Seventeen
Magazine, 241 Cal. Rptr. 101 (Cal. App. 1987)), but Good Housekeeping purports to evaluate, not just
advertise, products which gain its seal of approval.
102 Insurance companies derive profits in two ways: by investing the premiums they receive, and by accurately
gauging their risk exposure. High absolute risks are more variable; it follows that if insurance companies
can lower their risk they can (by definition) more accurately gauge their exposure. Risk is lowered in
three ways: intrinsically through the aggregation of identical risks into pools (via the "law of large
Page 24
Krauss: Loosening the FDA's Drug Certification Monopoly
numbers"); through production of more accurate information about the extent of risk; and through
reinsurance (by which insurance companies "contract out" the aggregation of some risks). Certification
agencies test products and thereby produce new information about their risk potential. Insurance
companies are "natural" certifiers of risk, and therefore of quality. Note that managed care providers are
typically insurers in this sense.
¹⁰³See Restatement of Torts, § 324A. See: United States Lighting Service V. Llerrad Corp., 800 F.Supp. 1513
(N.D.Ohio, E.D., 1992) (UL can be considered a "product endorser," and is liable when it fails to exercise
reasonable care when performing its testing procedures, or if inaccurately communicating its testing
results). See also Toman v. Underwriters' Laboratories, 532 F. Supp. 1017 (D. Mass. 1982) (reversed
on other grounds, 707 F.2d 620).
104 The reputational effect of UL certification is significant. See, e.g., Brazos Graphics v. Arvin Industries,
574 S.W.2d 240 (Tex App., 1978) (evidence of UL approval of an electric heater admissible in defense
against claim that the heater was defectively designed).
¹⁰⁵Robert Cooter has produced analogous and interesting work on insurers' purchase and sale of tort claims.
Robert Cooter, Towards a Market in Unmatured Tort Claims, 75 Va. L. Rev. 383 (1989).
106 See Frank H. Easterbrook, Limited Liability and the Corporation, 52 Chi. L. Rev. 89 (1985) (discussing
reasons why corporations insure, despite the portfolio diversification of their owners and their presumed
resulting risk neutrality).
107 On April 6, 1995 the agency, in a package of reforms announced at the White House, announced that for
a two-year trial period it would contract out testing of low-risk devices (like laboratory cholesterol tests
and electronic stethoscopes) to private certification firms, but only if those firms are accredited by the
agency. The agency reserved the right to nullify private certifications in any case. See Washington Times,
April 7, 1995, p. A6. Note that no drugs (and no devices affected by long time lags, such as pacemakers)
are affected by the FDA's offer. Note also that the FDA accreditation requirement would have the effect
of exporting many of the bureaucratic pressures afflicting the agency, and would preclude free
competitive entry into a nascent "certification industry."
108 Senator Barbara Mikulski (D-MD) insisted that the FDA have a "passion for change" if it did not wish to
be "rolled right over" by Congress. Ibid.
Krauss: Loosening the FDA's Drug Certification Monopoly
Page 25
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Jim Ardala is
202-2019 202 -2 60 1847 184 7
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DOCUMENT NO.
SUBJECT/TITLE
DATE
RESTRICTION
AND TYPE
001. note
re: FDA Reform [partial] (1 page)
07/12/1996
b(6)
COLLECTION:
Clinton Presidential Records
Domestic Policy Council
Elizabeth Drye
OA/Box Number: 10452
FOLDER TITLE:
FDA Reform 1996 [2]
2014-0046-S
rc1402
RESTRICTION CODES
Presidential Records Act - 144 U.S.C. 2204(a)]
Freedom of Information Act [5 U.S.C. 552(b)]
P1 National Security Classified Information |(a)(1) of the PRA]
b(1) National security classified information [(b)(1) of the FOIA|
P2 Relating to the appointment to Federal office [(a)(2) of the PRAJ
b(2) Release would disclose internal personnel rules and practices of
P3 Release would violate a Federal statute [(a)(3) of the PRA]
an agency [(b)(2) of the FOIAJ
P4 Release would disclose trade secrets or confidential commercial or
b(3) Release would violate a Federal statute [(b)(3) of the FOIA]
financial information [(a)(4) of the PRA|
b(4) Release would disclose trade secrets or confidential or financial
P5 Release would disclose confidential advice between the President
information [(b)(4) of the FOIA]
and his advisors, or between such advisors [a)(5) of the PRA]
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personal privacy [(a)(6) of the PRA]
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it to The FDA
before you
dissemenate journal article that would
be basis for supplared
-3 months before sudmit data to FDA -
Patient Croups -
Dris in boonies - want get This info. -
Need database
have it for Cancer, (NCI)
AIDS,
2
- in-House bill
3
- fixing supplement process - Rego type this
i
suplefying largely
Dodd- see same circumstances where supplements wouldren
be necessary.
- has smiluesearch warms is U.
- Mach's intense interest. -
Z weeks -Dugell
name indication for approval /monde of
Tues. 5:30
FDA Conf-call
7626
Devices
pitor resolved (3rd)
touse
-
Open - efficacs std; off-lasel
Howard Kohni idealogical nun- -
Monder expects cument draft. -
R's will mahe a judgment eanly in the week -
LOH is telling basebarn - 1/2 day.
agreement and no more than
Senate
New issues Jane Williams is raising - -
tissue issue
pharmacy compounding 15sues
- -off-label
Agreed to:
health claims
excepts
1
third party review - Coats
1
efficacy srds. -
manifacturing changes -
-
health claims -
A
med gudes off the table - (resolved in approps.)
12 issues
4 Done
5 close
initial classification of deres
3
humantarian devices; efficacy (we offened language),
(we gave guage
FDA Refan - Letters
July 3, 1996
Ms. Susan Panico
Executive Director
National Depressive and
Manic-Depressive Association
Suite 501
730 North Franklin Street
Chicago, Illinois 60610
Dear Susan:
Thank you for writing to me. I'm glad to
have the perspective of the National DMDA.
Since taking office, I have worked hard
to reform the Food and Drug Administration
so that it can function more efficiently and
rapidly to benefit the American people. As you
know, we have successfully reduced the length
of the approval process for many new drugs and
therapies, and recently, my Administration put
forward a series of regulatory reforms designed
to make the FDA even more responsive to those in
need of new treatments.
I appreciate your suggestions, and as we
work to build on our progress, I will certainly
keep your views in mind.
Sincerely,
BILL CLINTON
BC/SEM/JFB/JFB/emu-jfo
(Corres. #3005417)
(6.panico.s)
CC: Barbara Woolley, OPL
Elizabeth Drye, ODP
222
07/18/96 14:32
FDA/OFFICE OF THE COMMISSIONER -> 92024567028
NO.273 P003/006
CONCERNS RE: DEVICE BILL (H.R. 3201)
A.
Major Concerns
1.
Privatization of Review/GMP Inspections (Sections 9, 11, 12, and 17)
2.
Off Label Promotion (Section 18)
B.
Serious Concerns
1.
Effectiveness Standards (Section 8 -- no well controlled clinical trials and no
clinical outcome results for devices)
2.
Devices: Modifications Without FDA Review and Specific/General Use
(Section 9)
C.
Other Significant Concerns
1.
Dispute Resolution (Section 3)
2.
Investigational Device Exemptions (Section 4)
3.
Humanitarian Use of Devices (Section 6)
4.
Performance Standards (Section 7)
5.
Initial Classification of Devices (Section 9)
6.
Scientific Advisory/Classification Panels (Section 10)
7.
Device Tracking (Section 14)
8.
Postmarket Surveillance (Section 15)
9.
GMP and Device Reports (Section 20)
10.
Information Systems (Section 22)
11.
Environmental Impact Review (Section 23)
07/18/96 14:32
FDA/OFFICE OF THE COMMISSIONER
->
92024567028
NO.273 P004/006
D.
Other Concerns
1.
Annual Report (Section 2)
2.
Harmonization (Section 16)
3.
Informal Agency Statements (Section 24)
4.
Research and Education (Section 25)
5.
Public Notice of Deviation (Section 26)
6.
Civil Penalties (Section 21)
2
07/18/96 14:32
FDA/OFFICE OF THE COMMISSIONER -> 92024567028
NO.273 P005/006
CONCERNS RE: DRUG DEVICE BILL (H.R. 3199)
A.
Major Concerns
1.
Privatization of Review/GMP Inspections (Sections 7 and 8)
2.
Off Label Promotion (Section 19)
B.
Serious Concerns
1.
Effectiveness Standards (Section 5 - one versus two clinical trials and new
uses of drugs)
2.
Medication Guides (Section 29)
3.
Human Tissue (Section 25)
C.
Other Significant Concerns
1.
Annual Report (Section 2)
2.
Streamlining Clinical Research in Drugs and Biological Products (Section 3)
3.
Content and Review of New Drug Application (Section 4)
4.
Scientific Advisory Panels (Section 6)
5.
Dispute Resolution (Section 9)
6.
GMPs (Section 10)
7.
Nonprescription Drugs (Section 14)
8.
Pharmacy Compounding (Section 17)
9.
Access to Unapproved Therapies (Section 26)
10.
Protection of Confidential Information (Section 28)
07/18/96 14:32
FDA/OFFICE OF THE COMMISSIONER + 92024567028
NO.273 P006/006
D.
Other Concerns
1.
Information Systems (Section 15)
2.
Environmental Impact Review (Section 16)
3.
Harmonization (Section 18)
4.
Informal Agency Statements (Section 20)
5.
Research and Education (Section 21)
6.
Public Notice of Deviation (Section 23)
7.
Radiopharmaceuticals (Section 27)
-2-