Bill 4780

MUMS HR 4780 Congressional Bill

The following is the complete text of the Minor Animal Species Health and Welfare Act of 2000 legislation that was introduced in the House of Representatives as Bill 4780 on June 28, 2000. This bill is the result of the efforts by many over numerous years. It provides a unique opportunity

for new options and incentives that can streamline the drug approval process for minor species and minor uses. Aquaculture leaders have provided important leadership and guidance via a coalition of minor use species industries and others to develop this legislation. Much work lies ahead for passage of this bill by Congress before it can be considered for signature into law by the President. This legislation provides a real opportunity for a united front of diverse stakeholders to collaborate on a common cause that can make a difference.

Gary Jensen

USDA-CSREES

HR 4780
106th CONGRESS
2d Session

H. R. 4780

To amend the Federal Food, Drug, and Cosmetic Act and the Internal Revenue Code of 1986 with respect to drugs for minor animal species, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

June 28, 2000

Mr. PICKERING (for himself, Mr. HALL of Texas, Mr. COMBEST, Mr. STENHOLM, and Mr. POMBO) introduced the following bill; which was referred to the Committee on Commerce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the

committee concerned

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A BILL

To amend the Federal Food, Drug, and Cosmetic Act and the Internal Revenue Code of 1986 with respect to drugs for minor animal species, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Minor Animal Species Health and Welfare Act of 2000'.

SEC. 2. FINDINGS.

The Congress finds as follows:

(1) There is a severe shortage of approved animal drugs for use in minor species.

(2) There is a severe shortage of approved drugs for treating animal diseases and conditions that occur infrequently or in limited geographic areas.

(3) Because of the small market shares, low-profit margins involved, and capital investment required, it is generally not economically feasible for animal drug manufacturers to pursue approvals for these species, diseases, and conditions.

(4) Because the populations for which such drugs are intended are small and conditions of animal management may vary widely, it is often difficult or impossible to design and conduct studies to establish drug safety and effectiveness under traditional animal drug approval processes.

(5) It is in the public interest and in the interest of animal welfare to provide for special procedures to sanction the lawful use and marketing of animal drugs for minor species and minor uses that take into account these special circumstances and that ensure that such drugs do not endanger the public health.

(6) Exclusive marketing rights and tax credits for clinical testing expenses have helped encourage the development of orphan drugs for human use, and comparable incentives will help encourage the development and sanctioning for lawful marketing of animal drugs for minor species and minor uses.

SEC. 3. AMENDMENTS AFFECTING THE FOOD AND DRUG ADMINISTRATION.

(a) DEFINITIONS- Section 201 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321) is amended by adding the following new subsections at the end:

`(kk) The term `minor species' means animals other than cattle, horses, swine, chickens, turkeys, dogs, and cats, except that the Secretary may amend this definition by regulation.

`(ll) The term `minor use' means the use of a drug--

`(1) in a minor species, or

`(2) in an animal species other than a minor species for a disease or condition that occurs infrequently or in limited geographic areas, except that the Secretary may amend this definition by regulation.

`(mm) The term `species with no human food safety concern' means an animal species, or life stage of an animal species, that is not customarily used for food for man and does not endanger the public health.'.

(b) MINOR USE ANIMAL DRUGS- Chapter V of the Federal Food, Drug, and Cosmetic Act is amended by adding at the end the following new subchapter:

`SUBCHAPTER F--ANIMAL DRUGS FOR MINOR USES

`DESIGNATION OF DRUGS FOR MINOR USES

`SEC. 571. (a) The manufacturer or the sponsor of a drug may request the Secretary to designate the drug as a drug for a minor use. A request for designation of a drug shall be made before the submission of an application under section 512(b) for the drug. If the Secretary finds that a drug for which a request is submitted under this subsection is being or will be investigated for a minor use and if an application for such drug is approved under section 512, the approval would be for such minor use, the Secretary shall designate the drug as a drug for such minor use. A request for a designation of a drug under this subsection shall contain the consent of the applicant to notice being given by the Secretary under subsection (c) respecting the designation of the drug.

`(b) A designation of a drug under subsection (a) shall be subject to the condition that--

`(1) if an application was approved for the drug under section 512(c), the manufacturer of the drug will notify the Secretary of any discontinuance of the production of the drug at least one year before discontinuance; and

`(2) if an application has not been approved for the drug under section 512(c) and if preclinical investigations or investigations under section 512(j) are being conducted with the drug, the manufacturer or sponsor of the drug will notify the Secretary of any decision to discontinue active pursuit of approval of an application under section 512(b).

`(c) Notice respecting the designation of a drug under subsection (a) shall be made available to the public.

`PROTECTION FOR DRUGS FOR MINOR USES

`SEC. 572. (a) Except as provided in subsection (b):

`(1) If the Secretary approves an application filed pursuant to section 512 for a drug designated under section 571 for minor uses, no active ingredient (including any salt or ester of the active ingredient) of which has been approved in any other application under section 512, the Secretary may not approve or conditionally approve another application submitted under section 512 or section 573 for such drug for such minor use for a person who is not the holder of such approved

application until the expiration of ten years from the date of the approval of the application.

`(2) If the Secretary approves an application filed pursuant to section 512 for a drug designated under section 571 for minor uses, which includes an active ingredient (including an ester or salt of the active ingredient) that has been approved in any other application under section 512, the Secretary may not approve or conditionally approve another application submitted under section 512 or section 573 for such drug for such minor use for a person who is not the holder of such approved application until the expiration of seven years from the date of approval of the application.

`(b) If an application filed pursuant to section 512 is approved for a drug designated under section 571, the Secretary may, during the ten-year or seven-year period beginning on the date of the application approval, approve or conditionally approve another application under section 512 or section 573 for such drug for such minor use for a person who is not the holder of such approved application if--

`(1) the Secretary finds, after providing the holder notice and opportunity for the submission of views, that in such period the holder of the approved application cannot assure the availability of sufficient quantities of the drug to meet the needs for which the drug was designated; or

`(2) such holder provides the Secretary in writing the consent of such holder for the approval or conditional approval of other applications before the expiration of such ten-year or seven-year period.

`CONDITIONAL APPROVAL FOR MINOR USE NEW ANIMAL DRUGS

`SEC. 573. (a)(1) Except as provided in paragraph (2), any person may file with the Secretary an application for conditional approval of a new animal drug for minor use. Such person shall submit to the Secretary as part of an application--

`(A) reports of investigations which have been made to show whether or not such drug is safe for use;

`(B) information to show that there is a reasonable expectation that the drug is effective for its intended use, such as data from a pilot investigation, data from an investigation in a related species; data from a single investigation, data from an investigation using surrogate endpoints,

data based on pharmacokinetic extrapolations, data from a short-term investigation, or data from the investigation of closely-related diseases;

`(C) the quantity of drug expected to be manufactured and distributed on an annual basis;

`(D) a commitment that the applicant will conduct additional investigations to support approval of an application under section 512 within the time frame set forth in subsection (d)(1)(A);

`(E) reasonable data for establishing a conditional dose; and

`(F) the information required by section 512(b)(1)(B)-(H).

`(2) A person may not file an application under paragraph (1) if the person has filed a previous application under paragraph (1) for the same drug and conditions for use that was conditionally approved by the Secretary under subsection (b).

`(b)(1) Within 180 days after the filing of an application pursuant to subsection (a), or such additional period as may be agreed upon by the Secretary and the applicant, the Secretary shall either (A) issue an order conditionally approving the application if the Secretary then finds that

none of the grounds for denying conditional approval specified in subsection (c) applies, or (B) give the applicant notice of an opportunity for an expedited informal hearing on the question whether such application is conditionally approvable.

`(2) A drug manufactured in a pilot or other small facility may be used to demonstrate the safety and effectiveness of the drug and to obtain conditional approval for the drug prior to manufacture of the drug in a larger facility, unless the Secretary makes a determination that a full scale production facility is necessary to ensure the safety or effectiveness of the drug.

`(c)(1) If the Secretary finds, after due notice to the applicant and giving the applicant an opportunity for an expedited informal hearing, that--

`(A) the investigations, reports of which are required to be submitted to the Secretary pursuant to subsection (a), do not include adequate tests by all methods reasonably applicable to show whether or not such drug is safe for use under the conditions prescribed, recommended, or suggested in the proposed labeling thereof;

`(B) the results of such tests show that such drug is unsafe for use under such conditions or do not show that such drug is safe for use under such conditions;

`(C) the methods used in, and the facilities and controls used for, the manufacture, processing, and packing of such drug are inadequate to preserve its identity, strength, quality, and purity;

`(D) upon the basis of the information submitted to the Secretary as part of the application, or upon the basis of any other information before the Secretary with respect to such drug, the Secretary has insufficient information to determine whether such drug is safe for use under such

conditions;

`(E) evaluated on the basis of the information submitted to the Secretary as part of the application and any other information before the Secretary with respect to such drug, there is insufficient information to show that there is a reasonable expectation that the drug will have the effect it purports or is represented to have under the conditions of use prescribed, recommended, or suggested in the proposed labeling thereof;

`(F) upon the basis of information submitted to the Secretary as part of the application or any other information before the Secretary with respect to such drug, any use prescribed, recommended, or suggested in labeling proposed for such drug will result in a residue of such drug in excess of a tolerance found by the Secretary to be safe for such drug;

`(G) based on a fair evaluation of all material facts, such labeling is false or misleading in any particular; or

`(H) such drug induces cancer when ingested by man or animal or, after tests which are appropriate for the evaluation of the safety of such drug, induces cancer in man or animal, except that the foregoing provisions of this subparagraph shall not apply with respect to such drug if the Secretary finds that, under the conditions for use specified in proposed labeling and reasonably certain to be followed in practice (i) such drug will not adversely affect the animals for which it is intended, and (ii) no residue of such drug will be found (by methods of examination prescribed or approved by the Secretary by regulations, which regulations shall not be subject to subsections (c)), in any edible portion of such animals after slaughter or in any food yielded by or derived from the living animals; or

`(I) another person has received approval under section 512 for a drug with the same active ingredient or ingredients and the same conditions of use, and that person is able to assure the availability of sufficient quantities of the drug to meet the needs for which the drug is intended;

the Secretary shall issue an order refusing to conditionally approve the application. If, after such notice and opportunity for hearing, the Secretary finds that subparagraphs (A) through (I) do not apply, the Secretary shall issue an order conditionally approving the application.

`(2) In determining whether such drug is safe for use under the conditions prescribed, recommended, or suggested in the proposed labeling thereof, the Secretary shall consider, among other relevant factors, (A) the probable consumption of such drug and of any substance formed in or on food because of the use of such drug, (B) the cumulative effect on man or animal of such drug, taking into account any chemically or pharmacologically related substance, (C) safety factors which in the opinion of experts, qualified by scientific training and experience to evaluate the safety of such drugs, are appropriate for the use of animal experimentation data, and (D) whether the conditions of use prescribed, recommended, or suggested in the proposed labeling are reasonably certain to be followed in practice. Any order issued under this subsection refusing to approve an application shall state the findings upon which it is based.

`(d)(1) A conditional approval granted by the Secretary under this section shall be effective for a one-year period. The Secretary shall, upon request, renew a conditional approval for up to four additional one-year terms, unless the Secretary by order makes a finding that--

`(A) the applicant is not making appropriate progress toward meeting approval requirements under section 512, and is unlikely to be able to fulfill those requirements and obtain an approval under section 512 before the expiration of the five year maximum term of the conditional approval;

`(B) excessive quantities of the drug have been produced, without adequate explanation; or

`(C) another drug with the same active ingredient or ingredients for the same conditions of use has received approval under section 512, and the holder of the approved application is able to assure the availability of sufficient quantities of the drug to meet the needs for which the drug is

intended.

`(2) If the Secretary does not renew a conditional approval, the Secretary shall provide due notice and an opportunity for an expedited informal hearing to the applicant.

`(e)(1) The Secretary shall, after due notice and opportunity for an expedited informal hearing to the applicant, issue an order withdrawing conditional approval of an application filed pursuant to subsection (a) if the Secretary finds--

`(A) that experience or scientific data show that such drug is unsafe for use under the conditions of use upon the basis of which the application was conditionally approved;

`(B) that new evidence not contained in such application or not available to the Secretary until after such application was conditionally approved, or tests by new methods, or tests by methods not deemed reasonably applicable when such application was conditionally approved, evaluated together with the evidence available to the Secretary when the application was conditionally approved, shows that such drug is not shown to be safe for use under the conditions of use upon the basis of which the application was conditionally approved;

`(C) on the basis of new information before the Secretary with respect to such drug, evaluated together with the evidence available to the Secretary when the application was conditionally approved, that there is not a reasonable expectation that such drug will have the effect it purports or is represented to have under the conditions of use prescribed, recommended, or suggested in the labeling thereof;

`(D) that the application contains any untrue statement of a material fact; or

`(E) that the applicant has made any changes from the standpoint of safety or effectiveness beyond the variations provided for in the application unless the applicant has supplemented the application by filing with the Secretary adequate information respecting all such changes and unless there is in effect a conditional approval of the supplemental application, which supplemental application shall be treated in the same manner as the original application.

If the Secretary finds that there is an imminent hazard to the health of man or of the animals for which such drug is intended, the Secretary may suspend the conditional approval of such application immediately, and give the applicant prompt notice of the Secretary's action and afford the applicant the opportunity for an expedited informal hearing, but the authority conferred by this sentence to suspend the conditional approval of an application shall not be delegated below the Commissioner of Food and Drugs.

`(2) The Secretary may also, after due notice and opportunity for an expedited informal hearing to the applicant, issue an order withdrawing the conditional approval of an application with respect to any new animal drug under this section if the Secretary finds--

`(A) that the applicant has failed to establish a system for maintaining required records, or has repeatedly or deliberately failed to maintain such records or to make required reports in accordance with a regulation or order under subsection (h), or the applicant has refused to permit access to, or copying or verification of, such records as required by paragraph (2) of such subsection;

`(B) that on the basis of new information before the Secretary, evaluated together with the evidence before the Secretary when the application was conditionally approved, the methods used in, or the facilities and controls used for, the manufacture, processing, and packing of such drug are inadequate to assure and preserve its identity, strength, quality, and purity and were not made adequate within a reasonable time after receipt of written notice from the Secretary specifying the matter complained of; or

`(C) that on the basis of new information before the Secretary, evaluated together with the evidence before the Secretary when the application was conditionally approved, the labeling of such drug, based on a fair evaluation of all material facts, is false or misleading in any particular

and was not corrected within a reasonable time after receipt of written notice from the Secretary specifying the matter complained of.

`(3) Any order under this subsection shall state the findings upon which itis based.

`(f) The decision of the Secretary under subsections (c), (d), or (e) shall constitute a final agency decision for purposes of judicial review.

`(g) When an application filed pursuant to subsection (a) is conditionally approved, the Secretary shall by notice publish in the Federal Register the name and address of the applicant and the conditions and indications of use of the new animal drug covered by such application, including any tolerance and withdrawal period or other use restriction and, if such new animal drug is intended for use in animal feed, appropriate purposes and conditions of use (including special labeling requirements and any requirement that an animal feed bearing or containing the new animal drug be limited to use under the professional supervision of a licensed veterinarian) applicable to any animal feed for use in which such drug is conditionally approved, the expiration date of the conditional approval, and such other information, upon the basis of which such application was conditionally approved, as the Secretary deems necessary to assure the safe and effective use of such drug. Upon withdrawal of conditional approval of such new animal drug application or upon its suspension, the Secretary shall publish a notice in the Federal Register.

`(h)(1) In the case of any new animal drug for which a conditional approval of an application filed pursuant to subsection (a) is in effect, the applicant shall establish and maintain such records, and make such reports to the Secretary, of data relating to experience, and other data or information, received or otherwise obtained by such applicant with respect to such drug, or with respect to animal feeds bearing or containing such drug, as the Secretary may by general regulation, or by order with respect to such application, prescribe on the basis of a finding that such records and reports are necessary in order to enable the Secretary to determine, or

facilitate a determination, whether there is or may be ground for refusing to renew the conditional approval under subsection (d) or for invoking subsection (e). Such regulation or order shall provide, where the Secretary deems it to be appropriate, for the examination, upon request, by the persons to whom such regulation or order is applicable, of similar information received or otherwise obtained by the Secretary.

`(2) Every person required under this subsection to maintain records, and every person in charge or custody thereof, shall, upon request of an officer or employee designated by the Secretary, permit such officer or employee at all reasonable times to have access to and copy and verify such records.

`(i)(1) The label and labeling of a drug with a conditional approval under this section shall state that fact prominently and conspicuously.

`(2) Conditions of use that are the subject of an conditional approval under this section shall not be combined in product labeling with any conditions of use approved under section 512.

`(j)(1) Safety and effectiveness data and information which has been submitted in an application filed under subsection (a) for a drug and which has not previously been disclosed to the public shall be made available to the public, upon request, unless extraordinary circumstances are shown--

`(A) if no work is being or will be undertaken to have the application conditionally approved,

`(B) if the Secretary has determined that the application is not conditionally approvable and all legal appeals have been exhausted,

`(C) if conditional approval of the application under subsection (c) is withdrawn and all legal appeals have been exhausted, or

`(D) if the Secretary has determined that such drug is not a new animal drug.

`(2) Any request for data and information pursuant to paragraph (1) shall include a verified statement by the person making the request that any data or information received under such paragraph shall not be disclosed by such person to any other person--

`(A) for the purpose of, or as part of a plan, scheme, or device for, obtaining the right to make, use, or market, or making, using, or marketing, outside the United States, the drug identified in the application filed under subsection (a), and

`(B) without obtaining from any person to whom the data and information are disclosed an identical verified statement, a copy of which is to be provided by such person to the Secretary, which meets the requirements of this paragraph.

`(k) To the extent consistent with the public health, the Secretary shall promulgate regulations for exempting from the operation of this section new animal drugs, and animal feeds bearing or containing new animal drugs, intended solely for investigational use by experts qualified by scientific training and experience to investigate the safety and effectiveness of animal drugs. Such regulations may, in the discretion of the Secretary, among other conditions relating to the protection of the public health, provide for conditioning such exemption upon the establishment and maintenance of such records, and the making of such reports to the Secretary, by the manufacturer or the sponsor of the investigation of such article, of data (including but not limited to analytical reports by investigators) obtained as a result of such investigational use of such

article, as the Secretary finds will enable the Secretary to evaluate the safety and effectiveness of such article in the event of the filing of an application pursuant to this section. Such regulations, among other things, shall set forth the conditions (if any) upon which animals treated with such

articles, and any products of such animals (before or after slaughter), may be marketed for food use.

`INDEX OF LEGALLY MARKETED UNAPPROVED MINOR USE ANIMAL DRUGS FOR MINOR

SPECIES WITH NO HUMAN FOOD SAFETY CONCERN

`SEC. 574. (a) The Secretary shall establish an index of unapproved minor use new animal drugs that may be lawfully marketed for use in minor species with no human food safety concern. The index is intended to benefit primarily zoo and wildlife species, aquarium and bait fish, reptiles and amphibians, caged birds, and small pet mammals as well as some commercially produced species such as cricket, earthworms and possibly nonfood life stages of some minor species used for human food such as oysters and shellfish. The index shall conform to the requirements in subsection (d).

`(b)(1) Any person may submit a request to the Secretary for a preliminary determination that a drug may be eligible for inclusion in the index. Such a request shall include--

`(A) information regarding the proposed species, conditions of use, and anticipated annual production;

`(B) information regarding product formulation and manufacturing; and

`(C) information sufficient for the Secretary to determine that there does not appear to be human food safety, environmental safety, occupational safety, or bioavailability concerns with the proposed use of the drug.

`(2) Within 90 days after the submission of a request for a preliminary determination under paragraph (1), the Secretary shall grant or deny the request, and notify the submitter of the Secretary's conclusion. The Secretary shall grant the request if it appears that--

`(A) the request addresses the need for a minor use animal drug for which there is no approved or conditionally approved drug, and

`(B) the proposed drug use does not appear to raise human food safety, environmental safety, occupational safety, or bioavailability concerns.

If the Secretary denies the request, the Secretary shall provide due notice and an opportunity for an expedited informal hearing. If the Secretary does not grant or deny the request within 90 days, the Secretary shall provide the Committee on Commerce of the House of Representatives and the Committee on Health, Education, Labor, and Pensions of the Senate with the reasons action on the request did not occur within such 90 days. The decision of the Secretary under this paragraph shall constitute a final agency decision for purposes of judicial review.

`(c)(1) With respect to a drug for which the Secretary has made a preliminary determination of eligibility under subsection (b), the submitter of that request may request that the Secretary add the drug to the index established by subsection (a). Such a request shall include--

`(A) a copy of the Secretary's preliminary determination of eligibility issued under subsection (b);

`(B) a qualified expert panel report that meets the requirements in paragraph (2);

`(C) a proposed index entry;

`(D) proposed labeling;

`(E) anticipated annual production of the drug; and

`(F) a commitment to manufacture, label, and distribute the drug in accordance with the index entry and any additional requirements that the Secretary may prescribe by general regulation or specific order.

`(2) For purposes of paragraph (1), a `qualified expert panel report' is a written report that--

`(A) is authored by a panel of individuals qualified by scientific training and experience to evaluate the safety and effectiveness of animal drugs for the intended uses and species in question and operating external to the Food and Drug Administration;

`(B) addresses all available target animal safety and effectiveness information, including anecdotal information where necessary;

`(C) addresses proposed labeling;

`(D) addresses whether the drug should be limited to use under the professional supervision of a licensed veterinarian; and

`(E) addresses whether, in the expert panel's opinion, the benefits of using the drug outweigh its risks, taking into account the harm being caused by the absence of an approved or conditionally approved new animal drug for the minor use in question.

`(3) Within 180 days after the receipt of a request for listing a drug in the index, the Secretary shall grant or deny the request. The Secretary shall grant the request if the Secretary finds, on the basis of the expert panel report and other information available to the Secretary, that the

benefits of using the drug outweigh its risks, taking into account the harm caused by the absence of an approved or conditionally approved new animal drug for the minor use in question. If the Secretary denies the request, the Secretary shall provide due notice and the opportunity for an expedited informal hearing. If the Secretary does not grant or deny the request within 180 days, the Secretary shall provide the Committee on Commerce of the House of Representatives and the Committee on Health, Education, Labor, and Pensions of the Senate with the reasons action on the request did not occur within such 180 days. The decision of the Secretary under this paragraph shall constitute a final agency decision for purposes of judicial review.

`(d)(1) The index established by subsection (a) shall include the following information for each listed drug:

`(A) The name and address of the sponsor of the index listing.

`(B) The name of the drug, its dosage form, and its strength.

`(C) Labeling.

`(D) Production limits or other conditions the Secretary deems necessary to prevent misuse of the drug.

`(E) Requirements that the Secretary deems necessary for the safe and effective use of the drug.

`(2) The Secretary shall publish the index, and revise it monthly.

`(e)(1) If the Secretary finds, after due notice to the sponsor and an opportunity for an expedited informal hearing, that--

`(A) on the basis of new information before the Secretary, evaluated together with the evidence available to the Secretary when the drug was listed in the index, the benefits of using the drug do not outweigh its risks; or

`(B) the conditions and limitations of use in the index listing have not been followed, the Secretary shall remove the drug from the index. The decision of the Secretary shall constitute final agency decision for purposes of judicial review.

`(2) If the Secretary finds that there is an imminent hazard to the health of man or of the animals for which such drug is intended, the Secretary may suspend the listing of such drug immediately, and give the sponsor prompt notice of the Secretary's action and afford the sponsor the opportunity for an expedited informal hearing, but the authority conferred by this sentence to suspend the listing of a drug shall not be delegated below the Commissioner of Food and Drugs.

`(f)(1) In the case of any new animal drug for which an index listing pursuant to subsection (a) is in effect, the sponsor shall establish and maintain such records, and make such reports to the Secretary, of data relating to experience, and other data or information, received or otherwise

obtained by such sponsor with respect to such drug, or with respect to animal feeds bearing or containing such drug, as the Secretary may by general regulation, or by order with respect to such listing, prescribe on the basis of a finding that such records and reports are necessary in order to enable the Secretary to determine, or facilitate a determination, whether there is or may be ground for invoking subsection (e). Such regulation or order shall provide, where the Secretary deems it to be appropriate, for the examination, upon request, by the persons to whom such regulation or order is applicable, of similar information received or otherwise obtained by the

Secretary.

`(g) The labeling of a drug that is the subject of an index listing shall state, prominently and conspicuously, that the drug is legally marketed but not approved.

`(h) The Secretary shall promulgate regulations to implement this section. Such regulations shall address, among other subjects, the composition of the expert panel, sponsorship of the expert panel under the auspices of a recognized professional organization, conflict of interest criteria for

panel members, and the use of advisory committees convened by the Food and Drug Administration.

`(i) To the extent consistent with the public health, the Secretary shall promulgate regulations for exempting from the operation of this section new animal drugs intended solely for investigational use by experts qualified by scientific training and experience to investigate the safety and effectiveness of animal drugs. Such regulations may, in the discretion of the Secretary, among other conditions relating to the protection of the public health, provide for conditioning such exemption upon the establishment and maintenance of such records, and the making of such

reports to the Secretary, by the manufacturer or the sponsor of the investigation of such article, of data (including but not limited to analytical reports by investigators) obtained as a result of such

investigational use of such article, as the Secretary finds will enable the Secretary to evaluate the safety and effectiveness of such article in the event of the filing of a request for an index listing pursuant to this section. Such regulations, among other things, shall set forth the conditions (if any) upon which animals treated with such articles, and any products of such animals (before or after slaughter), may be marketed for food use.

`GRANTS AND CONTRACTS FOR DEVELOPMENT OF ANIMAL DRUGS FOR MINOR USES

`SEC. 575. (a) The Secretary may make grants to and enter into contracts with public and private entities and individuals to assist in defraying the costs of qualified testing expenses and manufacturing expenses incurred in connection with the development of drugs for minor uses.

`(b) For purposes of subsection (a) of this section:

`(1) The term `qualified testing' means--

`(A) clinical testing--

`(i) which is carried out under an exemption for a drug for minor uses under section 512(j), 573(k), or 574(i); and

`(ii) which occurs after the date such drug is designated under section 571 and before the date on which an application with respect to such drug is submitted under section 512; and

`(B) preclinical testing involving a drug for minor use which occurs after the date such drug is designated under section 571 and before the date on which an application with respect to such drug is submitted under section 512.

`(2) The term `manufacturing expenses' means expenses incurred in developing processes and procedures intended to meet current good manufacturing practice requirements which occur after such drug is designated under section 571 and before the date on which an application with respect to such drug is submitted under section 512.

`(c) For grants and contracts under subsection (a), there are authorized to be appropriated $1,000,000 for fiscal year 2001, $1,500,000 for fiscal year 2002, and $2,000,000 for fiscal year 2003.'.

(c) THREE-YEAR EXCLUSIVITY FOR MINOR USE APPROVALS- Section 512(c)(2)(F)(ii), (iii), and (v) of the Federal Food, Drug, and Cosmetic Act is amended by striking `(other than bioequivalence or residue studies)' and inserting the following: `(other than bioequivalence studies or, except in the case of a new animal drug for minor uses, residue studies)'.

(d) SCOPE OF REVIEW FOR MINOR USE APPLICATIONS- Section 512(d) of the Federal Food, Drug, and Cosmetic Act is amended by adding the following new paragraph at the end:

`(5) In reviewing a supplement to an approved application that seeks a minor use approval, the Secretary shall not reconsider information in the approved application to determine whether it meets current standards for approval.'.

(e) PRESUMPTION OF NEW ANIMAL DRUG STATUS- Section 709 of the Federal Food, Drug, and Cosmetic Act is amended by designating the existing text as subsection (a), and by adding the following new subsection (b):

`(b) In any action to enforce the requirements of this Act respecting a drug for minor use that is not the subject of an approval under section 512, a conditional approval under section 573, or an index listing under section 574, it shall be presumed that the drug is a new animal drug.'.

(f) CONFORMING AMENDMENTS-

(1) Section 512(a)(1) of the Federal Food, Drug, and Cosmetic Act is amended by striking subparagraphs (A) and (B) and inserting the following:

`(A) there is in effect an approval of an application filed pursuant to subsection (b) with respect to such use or intended use of such drug, and such drug, its labeling, and such use conform to such approved application;

`(B) there is in effect a conditional approval of an application filed pursuant to section 573 with respect to such use or intended use of such drug, and such drug, its labeling, and such use conform to such conditionally approved application; or

`(C) there is in effect an index listing pursuant to section 574 with respect to such use or intended use of such drug, and such drug, its labeling, and such use conform to such index listing.'.

(2) Section 512(a)(4) of the Federal Food, Drug, and Cosmetic Act is amended by adding after `if an approval of an application filed under subsection (b)' the following: `or a conditional approval of an application filed under section 573'.

(3) Section 503(f) of the Federal Food, Drug, and Cosmetic Act is amended as follows:

(A) In paragraph (1)(A)(ii) by striking `512' and inserting the following:
`512, a conditionally approved application under subsection (b) of section 573, or an index listing under subsection (a) of section 574.'.

(B) In paragraph (3) by striking `section 512' and inserting the following:
`sections 512, 573, or 574.'.

(4) Section 504(a)(1) of the Federal Food, Drug, and Cosmetic Act is amended by striking `512(b)' and inserting the following:
`512(b), a conditionally approved application filed pursuant to section 573, or an index listing pursuant to section 574.'.

(5) Section 504(a)(2)(B) and (b) of the Federal Food, Drug, and Cosmetic Act are amended by striking `512(i)' and inserting the following:
`512(i) or section 573(g), or the index listing pursuant to section 574.'.

(6) Section 403(a) of the Food and Drug Administration Modernization Act (Public Law 105-115) is amended by adding the following sentence at the end:
`For purposes of this section, an approved article includes a new animal drug that is the subject of a conditional approval or an index listing under sections 573 and 574 of the Federal Food, Drug, and Cosmetic Act, respectively.'.

(g) REGULATIONS- The Secretary of Health and Human Services shall publish proposed regulations to implement amendments to the Federal Food, Drug, and Cosmetic Act made by this Act within 6 months of the date of enactment, and final regulations within 24 months of the date of enactment.

(h) OFFICE OF MINOR USE ANIMAL DRUG DEVELOPMENT-

(1) The Secretary shall establish within the Food and Drug Administration, Center of Veterinary Medicine, an Office of Minor Use Animal Drug Development that reports directly to the Director of the Center for Veterinary Medicine. This office shall be responsible for designating minor use animal drugs under section 571 of the Federal Food, Drug, and Cosmetic Act, for administering grants and contracts for the development of animal drugs for minor uses under section 575 of the Federal Food, Drug, and Cosmetic Act, and for serving as liaison with any party interested in minor use animal drug development.

(2) For this office, there are authorized to be appropriated $1,200,000 for each of the fiscal years 2001 through 2003.

SEC. 4. CREDIT FOR CLINICAL TESTING EXPENSES FOR CERTAIN ANIMAL DRUGS FOR

MINOR USES.

(a) IN GENERAL- Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 45C the following new section:

`SEC. 45D. CLINICAL TESTING EXPENSES FOR CERTAIN ANIMAL DRUGS FOR MINOR

USES.

`(a) GENERAL RULE- For purposes of section 38, the minor use animal drug credit determined under this section for the taxable year is an amount equal to 50 percent of the qualified animal clinical testing expenses for the taxable year.

`(b) QUALIFIED ANIMAL CLINICAL TESTING EXPENSES- For purposes of this section--

`(1) QUALIFIED ANIMAL CLINICAL TESTING EXPENSES-

`(A) IN GENERAL- Except as otherwise provided in this paragraph, the term `qualified animal clinical testing expenses' means the amounts which are paid or incurred by the taxpayer during the taxable year which would be described in subsection (b) of section 41 if such subsection were applied with the modifications set forth in subparagraph (B).

`(B) MODIFICATIONS- For purposes of subparagraph (A), subsection (b) of section 41 shall be applied--

`(i) by substituting `animal clinical testing' for `qualified research' each place it appears in paragraphs (2) and (3) of such subsection, and

`(ii) by substituting `100 percent' for `65 percent' in paragraph (3)(A) of such subsection.

`(C) EXCLUSION FOR AMOUNTS FUNDED BY GRANTS, ETC- The term `qualified animal clinical testing expenses' shall not include any amount to the extent such amount is funded by any grant, contract, or otherwise by another person (or any governmental entity).

`(D) SPECIAL RULE- For purposes of this paragraph:

`(i) section 41 shall be deemed to remain in effect for periods after June 30, 2000; and

`(ii) the trade or business requirement of section 41(b)(1) shall be deemed to be satisfied in the case of a taxpayer that owns animals and that conducts clinical testing on such animals.

`(2) ANIMAL CLINICAL TESTING-

`(A) IN GENERAL- The term `animal clinical testing' means any clinical testing--

`(i) which is carried out under an exemption for a drug being tested for minor use under section 512(j), 573(k), or 574(i) of the Federal Food, Drug, and Cosmetic Act (or regulations issued under such sections),

`(ii) which occurs--

`(I) after the date such drug is designated under section 571 of such Act, and

`(II) before the date on which an application with respect to such drug is approved under section 512(c) of such Act, and

`(iii) which is conducted by or on behalf of--

`(I) the taxpayer to whom the designation under such section 571 applies, or

`(II) the owner of the animals that are the subject of clinical testing.

`(B) TESTING MUST BE FOR MINOR USE- Animal clinical testing shall be taken into account under subparagraph (A) only to the extent such testing is related to the use of a drug for the minor use for which it was designated under section 571 of the Federal Food, Drug, and Cosmetic Act.

`(c) COORDINATION WITH CREDIT FOR INCREASING RESEARCH EXPENDITURES-

`(1) IN GENERAL- Except as provided in paragraph (2), any qualified animal clinical testing expenses for a taxable year to which an election under this section applies shall not be taken into account for purposes of determining the credit allowable under section 41 for such taxable year.

`(2) EXPENSES INCLUDED IN DETERMINING BASE PERIOD RESEARCH EXPENSES- Any

qualified animal clinical testing expenses for any taxable year which are qualified research expenses (within the meaning of section 41(b)) shall be taken into account in determining base period research expenses for purposes of applying section 41 to subsequent taxable years.

`(d) DEFINITION AND SPECIAL RULES-

`(1) MINOR USE- For purposes of this section, the term `minor use' has the meaning given such term by section 201(ll) of the Federal Food, Drug, and Cosmetic Act. Determinations under the preceding sentence with respect to any drug shall be made on the basis of the facts and circumstances as of the date such drug is designated under section 571 of the Federal Food, Drug, and Cosmetic Act.

`(2) DENIAL OF CREDIT FOR TESTING CONDUCTED BY CORPORATIONS TO WHICH SECTION 936 APPLIES- No credit shall be allowed under this section with respect to any animal clinical testing conducted by a corporation to which an election under section 936 applies.

`(3) CERTAIN RULES MADE APPLICABLE- Rules similar to the rules of paragraphs (1) and (2) of section 41(f) shall apply for purposes of this section.

`(4) ELECTION- This section shall apply to any taxpayer for any taxable year only if such taxpayer elects (at such time and in such manner as the Secretary may by regulations prescribe) to have this section apply for such taxable year.'.

(b) CONFORMING AMENDMENTS-

(1) Section 38(b) of such Code is amended--

(A) by striking `plus' at end of paragraph (11),

(B) by striking the period at the end of paragraph (12) and inserting `,plus', and

`(13) the minor use animal drug credit determined under section 45D(a).'.

(2) Section 280C(b) of such Code is amended--

(A) in paragraph (1), by striking `section 45C(b)' and inserting `section 45C(b) or 45D(b)', and

(B) in paragraphs (1) and (2), by striking `section 45C' each place it appears and inserting `section 45C or 45D'.

(c) CLERICAL AMENDMENT- The table of sections for subpart D of part IV of subchapter A of chapter 1 of such Code is amended by inserting after the item relating to section 45C the following new item: `Sec. 45D. Clinical testing expenses for certain animal drugs for minor uses.'.

(d) EFFECTIVE DATE- The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.

(e) REGULATIONS- The Secretary of the Treasury shall publish proposed regulations to implement amendments to the Internal Revenue Code of 1986 made by this Act within 6 months after the date of the enactment of this Act, and final regulations within 24 months after such date.

END