[House Report 107-702]
[From the U.S. Government Publishing Office]
107th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 107-702
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RARE DISEASES ORPHAN PRODUCT DEVELOPMENT ACT OF 2002
_______
October 1, 2002.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Tauzin, from the Committee on Energy and Commerce, submitted the
following
R E P O R T
[To accompany H.R. 4014]
[Including cost estimate of the Congressional Budget Office]
The Committee on Energy and Commerce, to whom was referred
the bill (H.R. 4014) to amend the Federal Food, Drug, and
Cosmetic Act with respect to the development of products for
rare diseases, having considered the same, report favorably
thereon without amendment and recommend that the bill do pass.
CONTENTS
Page
Purpose and Summary.............................................. 1
Background and Need for Legislation.............................. 2
Hearings......................................................... 2
Committee Consideration.......................................... 2
Committee Votes.................................................. 2
Committee Oversight Findings..................................... 2
Statement of General Performance Goals and Objectives............ 3
New Budget Authority, Entitlement Authority, and Tax Expenditures 3
Committee Cost Estimate.......................................... 3
Congressional Budget Office Estimate............................. 3
Federal Mandates Statement....................................... 5
Advisory Committee Statement..................................... 5
Constitutional Authority Statement............................... 5
Applicability to Legislative Branch.............................. 5
Section-by-Section Analysis of the Legislation................... 5
Changes in Existing Law Made by the Bill, as Reported............ 5
Purpose and Summary
H.R. 4014, the Rare Diseases Orphan Product Development
Act, reauthorizes the grant program originally established
under the Orphan Drug Act through FY 2006. Grants awarded
pursuant to this Act are used by researchers to investigate
therapies to treat rare diseases, which are diseases affecting
fewer than 200,000 individuals in the United States.
Background and Need for Legislation
An ``orphan drug'' is a drug intended to treat a rare
disease. Prior to 1983, few manufacturers sought to develop
cures and treatments for these diseases due to the limited
return on investment of such therapies. To respond to the fact
that few drugs were developed to treat rare diseases, Congress
passed the Orphan Drug Act, which created various incentives
for developing orphan drugs. Included in the Act were
provisions which provided a seven year exclusivity period
(instead of the normal five year exclusivity period granted by
the Food and Drug Administration for new chemical entities) for
orphan drugs; a grant program which funds researcher for
developing cures and therapies for orphan diseases; and tax
incentives for such researchers.
There are more than 6,000 rare diseases (diseases which
affect fewer than 200,000 individuals in the United States)
affecting roughly 25 million individuals in the United States.
Prior to 1983, only 38 orphan drugs had been developed to treat
orphan diseases. Since the Orphan Drug Act was passed, more
than 220 orphan drugs have been approved and marketed in the
United States.
H.R. 4014 amends the Orphan Drug Act by reauthorizing the
Orphan Products Research Grant program contained in the Act at
the amounts already-appropriated in this year, and at $25
million per year for the Fiscal Years 2003-2006. The new monies
authorized under this program will result in more clinical
trials for therapies for orphan diseases to be funded.
Hearings
The Committee on Energy and Commerce has not held hearings
on the legislation.
Committee Consideration
On Thursday, September 5, the Full Committee met in open
markup session and without objection, ordered H.R. 4014
favorably reported to the House, without amendment, by
unanimous consent, a quorum being present.
Committee Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the motion to report legislation and amendments thereto.
There were no record votes taken in connection with ordering
H.R. 4014 reported. A motion by Mr. Tauzin to order H.R. 4014
reported to the House, without amendment, was agreed to by
unanimous consent.
Committee Oversight Findings
Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the Committee has not held oversight
or legislative hearings on this legislation.
Statement of General Performance Goals and Objectives
The goals of the legislation are to provide for more
treatments and cures for rare diseases by funding more
researchers who are conducting clinical trials designed to
discover such cures and treatments.
New Budget Authority, Entitlement Authority, and Tax Expenditures
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee finds that H.R.
4014, the Rare Diseases Orphan Product Development Act of 2002,
would result in no new or increased budget authority,
entitlement authority, or tax expenditures or revenues.
Committee Cost Estimate
The Committee adopts as its own the cost estimate prepared
by the Director of the Congressional Budget Office pursuant to
section 402 of the Congressional Budget Act of 1974.
Congressional Budget Office Estimate
Pursuant to clause 3(c)(3) of rule XIII of the Rules of the
House of Representatives, the following is the cost estimate
provided by the Congressional Budget Office pursuant to section
402 of the Congressional Budget Act of 1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, September 27, 2002.
Hon. W.J. ``Billy'' Tauzin,
Chairman, Committee on Energy and Commerce,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed estimate of H.R. 4014, the Rare Diseases
Orphan Product Development Act of 2002.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Julia M.
Christensen.
Sincerely,
Barry B. Anderson
(For Dan L. Crippen, Director).
Enclosure.
H.R. 4014--Rare Diseases Orphan Product Development Act of 2002
Summary: H.R. 4014 would authorize funding for an existing
grant program administered by the Food and Drug Administration
(FDA) that sponsors clinical testing of the safety and
effectiveness of new products to treat or diagnose rare
diseases.
The bill would authorize the appropriation of $25 million a
year for fiscal years 2003 through 2006. CBO estimates that
implementing H.R. 4014 would cost $8 million in 2003 and $93
million over the 2003-2007 period, assuming the appropriation
of the authorized amounts. The legislation would not affect
direct spending or receipts; therefore, pay-as-you-go
procedures would not apply.
H.R. 4014 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
State, local, and tribal governments could enter into contracts
and receive grants authorized by the bill, and any costs they
incur would be voluntary.
Estimated cost to the Federal Government: The estimated
budgetary impact of H.R. 4014 is shown in the following table.
The costs of this legislation fall within budget function 550
(health).
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-----------------------------------------------------
2002 2003 2004 2005 2006 2007
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CHANGES IN SPENDING SUBJECT TO APPROPRIATION
Authorization Level....................................... 0 25 25 25 25 0
Estimated Outlays......................................... 0 8 21 23 24 17
----------------------------------------------------------------------------------------------------------------
Basis of estimate: H.R. 4014 would authorize funding for an
existing grant program administered by the FDA that sponsors
clinical studies on the safety and effectiveness of new
products to treat or diagnose rare diseases. The amount
appropriated for fiscal year 2002 for the current program is
$13 million. The bill would authorize the appropriation of such
sums as already have been appropriated for fiscal year 2002,
and $25 million for each of the fiscal years 2003 through 2006.
Research grants awarded under the program would defray some
of the costs associated with clinical testing of certain orphan
drugs, biologicals, medical devices, and medical foods. An
orphan drug is a drug or biological that is used to treat or
diagnose an illness usually affecting fewer than 200,000 people
in the United States. Eligible medical devices and medical
foods include products for which there is no reasonable
expectation of development without grant assistance because the
condition occurs relatively infrequently in the United States.
CBO estimates that implementing H.R. 4014 would cost $8
million in 2003 and $93 million over the 2003-2007 period,
assuming appropriation of the necessary amounts. This estimate
incorporates general spending patterns for research grant
programs administered within the Public Health Service.
Pay-as-you-go considerations: None.
Estimated impact on state, local, and tribal governments:
H.R. 4014 contains no intergovernmental mandates as defined in
UMRA. State, local, and tribal governments enter into contracts
and receive grants authorized by the bill, and any costs they
incur would be voluntary.
Estimated impact on the private sector: The bill contains
no private-sector mandates as defined in UMRA.
Previous estimate: On December 5, 2001, CBO transmitted a
cost estimate for S. 1379, the Rare Diseases Act of 2001, as
ordered reported by the Senate Committee on Health, Education,
Labor, and Pensions on November 1, 2002. S. 1379 contains a
provision very similar to H.R. 4014 that funds FDA's grant
program for the development of orphan products. The main
difference between the provision in the two bills is that S.
1379 would authorize the appropriation of $25 million in 2002
and such sums as necessary for each subsequent year while H.R.
4014 would authorize such sums as already have been
appropriated for fiscal year 2002, and $25 million in funding
each year from 2003 through 2006.
Estimate prepared by: Federal Costs: Julia Christensen,
Impact on State, Local, and Tribal Governments: Leo Lex; and
Impact on the Private Sector: Jennifer Bowman.
Estimate approved by: Peter H. Fontaine, Deputy Assistant
Director for Budget Analysis.
Federal Mandates Statement
The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act.
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
Constitutional Authority Statement
Pursuant to clause 3(d)(1) of rule XIII of the Rules of the
House of Representatives, the Committee finds that the
Constitutional authority for this legislation is provided in
Article I, section 8, clause 3, which grants Congress the power
to regulate commerce with foreign nations, among the several
States, and with the Indian tribes.
Applicability to Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
Section-by-Section Analysis of the Legislation
Section 1. Short title
Section 1 of the legislation provides the short title for
the bill.
Section 2. Findings and purposes
Section 2 provides the findings and purposes of the bill.
Section 3. Food and Drug Administration; grants and contracts for the
development of orphan drugs
Section 3 reauthorizes the Orphan Products Research Grant
program at such sums which have already been appropriated for
FY 2002, and at $25,000,000 for each of Fiscal Years 2003
through 2006.
Section 4. Technical amendment
Section 4 provides for a technical amendment to the Federal
Food, Drug, and Cosmetic Act.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):
SECTION 5 OF THE ORPHAN DRUG ACT
GRANTS AND CONTRACTS FOR DEVELOPMENT OF DRUGS FOR RARE DISEASES AND
CONDITIONS
Sec. 5. (a) * * *
* * * * * * *
[(c) For grants and contracts under subsection (a) there are
authorized to be appropriated $10,000,000 for fiscal year 1988,
$12,000,000 for fiscal year 1989, $14,000,000 for fiscal year
1990.]
(c) For grants and contracts under subsection (a), there are
authorized to be appropriated such sums as already have been
appropriated for fiscal year 2002, and $25,000,000 for each of
the fiscal years 2003 through 2006.
* * * * * * *
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SECTION 527 OF THE FEDERAL FOOD, DRUG, AND COSMETIC ACT
protection for drugs for rare diseases or conditions
Sec. 527. (a) Except as provided in subsection (b), if the
Secretary--
(1) approves an application filed pursuant to section
505, or
(2) issues a license under section 351 of the Public
Health Service Act
for a drug designated under section 526 for a rare disease or
condition, the Secretary may not approve another application
under section 505 or issue another license under section 351 of
the Public Health Service Act for such drug for such disease or
condition for a person who is not the holder of such approved
application[, of such certification,] or of such license until
the expiration of seven years from the date of the approval of
the approved application[, the issuance of the certification,]
or the issuance of the license. Section 505(c)(2) does not
apply to the refusal to approve an application under the
preceding sentence.
* * * * * * *