Legislative Report

FEBRUARY 1998

The second session of the 105th Congress began on January 27, 1998. On the same evening President Clinton delivered his State of the Union address outlying several key health-related issues for the coming year. These included: increasing biomedical research; introducing a new multi-billion child care initiative; calling for a Health Care Consumer Bill of Rights and genetic screening protections among other things. Because 1998 is a mid-term Congressional election year (all 435 members of the House of Representatives and one-third of the Senate are up for election) the agenda appears to be full although it is unclear what in reality will be accomplished. Some of the major issues that may be debated in the coming session of Congress are: campaign finance reform, a potential tax cut, increased funding for the National Institutes of Health (NIH) and other public health service programs, cloning ban legislation, consumer protections for managed care plans, affirmative action and a possible tobacco settlement.

BUDGET/APPROPRIATIONS:

FY 1998: For the first time in three years, Congress approved a free-standing Labor/HHS/Education Appropriations bill. President Clinton signed the FY 1998 Labor-HHS-Education appropriations bill on November 13, 1997 (P.L. 105-78). The bill provides an additional 7 percent ($32.8b illion) in discretionary spending above FY 1997 to HHS. Among the highlights of the bill are: $13.648 billion for the NIH (an increase of 7.1 percent); $293.8 million for health professions education and training programs, including $17.678 million for general internal medicine and general pediatrics; $35 million for pediatric research at the NIH; $146.4 million for the Agency for Health Care Policy and Research (AHCPR), a 2.1 percent increase above FY 1997; and $683 million, a modest $2 million increase for the Maternal and Child Health Block Grant program. The pediatric community was very active throughout the FY 1998 appropriations process seeking adequate funding for programs that impact the well-being of children and adolescents.

FY 1999: The FY 1999 budget and appropriations process is underway. Several questions loom on the horizon for the coming fiscal year -- to keep as is or to alter in some way the five-year budget deal reached in 1997? If there is a federal budget surplus in this year, as it now appears from the Congressional Budget Office, how should the surplus be spent or should it be spent at all? Possible surplus spending options include: a further tax cut or reducing the national debt or increasing funds for discretionary programs (this is the least likely option but you never know) or as the President suggested during the State of the Union, preserving Social Security. Of course, Congress will have much to say about these options with issues such as the doubling of NIH and/or what to do with the tobacco settlement dollars (if there's a settlement) high on its agenda. The President has already provided a hint of his intentions. On January 5, 1998, the President announced his plan to produce and submit to Congress a balanced budget in FY 1999, three years sooner then initially projected in the 1997 Balanced Budget Act. He reiterated this point during the State of the Union Address.

On January 28, 1998, SPR member, Ora Pescovitz, MD, presented testimony on behalf of the Public Policy Council (PPC), before the House Labor/HHS/Education Appropriations Subcommittee. This subcommittee is chaired by Rep. John Porter (R-IL) a long time supporter of the NIH and other Public Health Service programs. Dr. Pescovitz's testimony focused on why pediatric research and pediatric investigators should be funded and how to promote pediatric research and preserve the training of pediatric investigators.[Note: Dr. Pescovitz's testimony can be found on the APS-SPR web site.]

The President's FY 1999 budget was submitted to Congress on February 2. Congressional staff have indicated their desire to quickly resolve the FY 1999 budget resolution.

PEDIATRIC WORKFORCE:

Graduate Medical Education (GME) Provisions: The Balanced Budget Act of 1997 (PL 105-33) includes several changes to Medicare provisions relating to GME. Direct graduate medical education (DGME) and indirect medical education (IME) payments will be carved out over five-years from the managed care rates that Medicare pays to health plans. Disproportionate share (DSH) payments will not be carved out, but will remain in the managed care rates. The carved out GME-related payments will be paid directly to teaching hospitals when they serve Medicare beneficiaries who are enrolled in managed care plans.

Beginning in FY 1998, the number of residents will be capped at the number reported on the hospital's most recent cost reporting period ending on or before December 31, 1996, for the purposes of DGME payments. There is also an incremental reduction in IME payments to hospitals -- from 7.7 percent for every 10 percent increment in a hospital's resident-to-bed ratio to 7.0 percent in FY 1998; 6.5 percent in FY 1999; 6.0 percent in FY 2000; and 5.5 percent in FY 2001 and subsequent years. There are also provisions in the legislation that allow the Secretary to make several other changes including: establishing rules to make DGME payments to certain non-hospital providers(federally qualified health centers, rural health centers and Medicare+Choice organizations); making incentive payments to hospitals that make voluntary reductions in the number of residents; and establishing a consortia demonstration project.

Two commissions have been created: the Medicare Payment Advisory Commission(MedPAC) and the National Bipartisan Commission on the Future of Medicare. The 15 member MedPAC, appointed on September 30, 1997, will make recommendations on long-term policies regarding teaching hospitals and GME. MedPAC is chaired by Gail Wilensky, Ph.D., a HCFA administrator in the 1980's. MedPAC will make its recommendations to Congress by August 5, 1999. The predominately political, 17-member, National Bipartisan Commission on the Future of Medicare will address issues related to the program's long term solvency, resulting from the retirement of the baby boom generation. This commission is chaired by Sen. John Breaux (D-LA). It's report on financing GME and other issues will be submitted to Congress before March 1, 1999, at that time this commission will sunset. Both commissions will consider the implication of children's hospitals and GME.

Combined Residency Programs: The Balanced Budget Act of 1997, also included a provision to continue full graduate medical education funding for primary care combined residency programs, including the combined residency program of Medicine/Pediatrics. The effective date is July 1, 1997. Original sponsors of the legislation, Sen. Mike DeWine (R-OH) and Rep. Louise Slaughter (D-NY), introduced these measures to correct the August 1996 HCFA ruling that ended payment for residencies after three years. The PPC, the Federation of Pediatric Organizations, the National Association of Children's Hospitals (NACH), and the internal medicine community endorsed this legislation and were very active in advocating for its passage in Congress.

Title VII: Legislation to reauthorize the Title VII health professions education and training program was drafted in the first session of the 105th Congress. Negotiations and further drafting is continuing. Staff have been working very closely with key Senate staff on a variety of options to ensure the continuation of this program. In consultation with members of the pediatric academic community, as well as the internal medicine community, staff has explored with Senate staff the possible option of providing funding for interdisciplinary/collaborative activities in community based/ambulatory settings using existing Title VII dollars. The draft Senate reauthorization proposal would combine the disciplines of family medicine, internal medicine, pediatrics, dentistry, and physicians assistants in a manner that would preserve support for departments of family medicine while continuing to provide funding for each of the programs. The final outcome at this time is uncertain. The House has not begun its deliberations onthe reauthorization of Title VII.

COGME: The Council on Graduate Medical Education (COGME) met in the fall and reviewed several pending reports. It reviewed preliminary findings from the HHS Task Force on Academic Health Centers. This task force, chaired by the former administrator of HRSA, Ciro Sumaya, MD, FAAP, was an internal HHS group that reviewed federal policies affecting academic health centers. The Task Force held two public hearings in the late summer. Drs. Herbert Abelson and Ralph Feigin testified at the hearings in the late summer. The final recommendations of the task force are expected to include health professions workforce, financial, research, and service infrastructure issues that are currently confronting academic health centers. One of the recommendations in the report is the establishment of an Office of Academic Health Centers within HHS. The task force report is scheduled to be available for comment early in this year.

COGME also reviewed and discussed its work group report on minorities in medicine. The final report of this workgroup will be delayed as changes are made that accurately reflect new data on declining minority enrollments in medical school and recent court cases affecting affirmative action.

RESEARCH:

NIH Reauthorization: Last summer Russell Chesney, MD, chairman, Department of Pediatrics, University of Tennessee, Memphis, testified before the Subcommittee on Public Health and Safety of the Senate Labor Committee on the reauthorization of the NIH. Dr. Chesney's testimony was endorsed by the Public Policy Council, the Ambulatory Pediatric Association, the American Academy of Pediatrics and the National Association of Children's Hospitals. The hearing, chaired by the Senate's only physician member, Bill Frist (R-TN), was the second of four hearings on the reauthorization. The hearing focused on technology related research; population related research, specifically pediatric research; and disease related research, targeting Parkinson's disease. Other witnesses were: Philip Pizzo, MD, chair of the Department of Medicine at Boston Children's Hospital, NICHD director Duane Alexander, MD and NIMH director Steven Hyman, M.D. Dr. Chesney's testimony focused on the importance of performing research along the life cycle; the importance of including children as subjects in clinical research, the need for a pediatric research initiative at NIH and child health services research.

The Senate held it's third hearing on NIH reauthorization focusing on clinical research on October 9, 1997. In his testimony, NIH Director Harold Varmus, MD estimated that approximately 38% of NIH's research budget can be classified as supporting clinical research. Following Dr. Varmus' testimony, a panel of physicians acknowledged the demands placed on clinicians in the managed care arena. Each of the panelists stressed the importance of an increased commitment to training, infrastructure, and mentoring to encourage physicians to pursue research.

Sen. Frist's staff has indicated that the NIH reauthorization bill could possibly be ready for Senate floor action in the spring. To date, the House has not considered NIH reauthorization.

NIH Pediatric Research Initiative/Funding: Last summer Rep. Jim Greenwood (R-PA) introduced H.R. 1883, a companion bill to the S. 484, the Pediatric Research Initiative introduced by Senators DeWine (R-OH), Edward Kennedy (D-MA) and Kit Bond (R-MO) in March 1997. These bills are identical and authorize $75 million over three years to the Office of the Director at NIH to increase pediatric biomedical research.

For the past two years, the pediatric academic community has worked closely with Senators DeWine and Bond's offices to obtain funding for the pediatric research initiative in the Labor/HHS/Education appropriations bill. Working with the Children's hospitals and other child health research advocates (the March of Dimes and the Juvenile Diabetes Foundation), the pediatric academic community was successful in obtaining an appropriation of $5 million in FY 1997 and $38.5 million in FY 1998. We will work closely with the NIH and Senate staff to insure that these dollars are well spent on new pediatric research initiatives. The Public Policy Council and its pediatric research colleagues will recommend funding of $50 million in FY 1999 for the Pediatric Research Initiative.

Clinical Research Enhancement Act of 1997: On November 7, 1997, Senators Kennedy (D-MA), Thad Cochran (R-MS) and Reps. Nita Lowey (D-NY), Nancy Johnson (R-CT) among others introduced the Clinical Research Enhancement Act of 1997 (S. 1421/H.R. 3001).

Briefly summarized the legislation will:

• implement the recommendations of the Division of Research Grants Clinical Research Study Group and other recommendations for enhancing clinical research;

• “support and expand the resources available for the diverse needs of the clinical research community, including inpatient, outpatient, and critical care clinical research;”

• provide greater support and statutory authority for the general clinical research centers (GCRCs);

• establish peer review mechanisms for clinical research career enhancement awards, innovative medical science awards, graduate training in clinical investigative awards, and intramural clinical research fellowships;

• provide support for individuals seeking advanced degrees in clinical investigation and expand the current NIH Loan Repayment Program for clinical researchers from disadvantaged backgrounds to include individuals in the extramural community.

The bill is endorsed by over 140 organizations including the members of the Public Policy Council, the Ambulatory Pediatric Association, and the American Academy of Pediatrics to name just a few.

Research Funding: During debate on the Senate floor last spring on the 1998 federal budget resolution, Senator Connie Mack (R-FL) introduced an amendment (S.Amend.No. 315) that expressed the sense of the Senate that the Federal commitment to biomedical research should be doubled over the next five years. The non-binding amendment was agreed to by a 98-0 vote.

This concept of doubling the NIH budget has had significant visibility during the first session of the 105th Congress. It is anticipated to be a very popular and “hot” issue in the second session of this Congress. Several bills have already been introduced and several organizations, including Research!America, are championing this cause.

The President's State of the Union address, delivered on January 27, 1998, included an approximate 8.4 percent ($1.15 billion) increase above FY 1998. He further proposed an increase in NIH funding of more than 50 percent over the next five years.

On January 29, Senator Arlen Specter (R-PA) introduced a non-binding“Sense of the Senate” resolution (S.Res. 170) urging that FY 1999 funding for NIH be increased by $2 billion (or 14.65 percent) over the FY 1998 level. The resolution also calls for the budget resolution to“appropriately reflect sufficient funds to achieve this objective.” Original cosponsors include Senators Tom Harkin (D-Iowa), Bill Frist (R-Tenn.), Olympia Snowe (R-Maine), Harry Reid (D-Nev.), Mike Dewine (R-Ohio) and Alphonse D'Amato (R-NY)

The Public Policy Council joined the Ad Hoc Group for Medical Research Funding in recommending a 15 percent increase above current year funding in FY 1999 for the NIH. This recommendation includes support for increased funding for the general clinical research centers (GCRCs). The PPC also endorsed the Friends of NICHD Coalition's recommendation for the National Institute of Child Health and Human Development (NICHD) of $776 million. In its testimony before Congress in January, the PPC stated that it “recognized the difficulty in achieving these goals under the current spending limits... but encouraged Congress to explore all possible options to identify theadditional resources needed to support these recommendations.”

NIH Trust Fund of 1997: A week before the end of the first session of the 105th Congress, Senators Connie Mack (R-FL) and Tom Harkin(D-IA) introduced S.1411, a bill to supplement funding for the NIH by preventing the tobacco companies from claiming a tax deduction for lawsuit settlements. The revenue generated (approximately $100 billion) would be used to create a research fund for medical research to supplement the budget of the NIH.

Senators who cosponsored the Mack/Harkin proposal so far are: Senators Barbara Boxer (D-CA), Susan Collins (R-ME), Mike DeWine (R-OH), Al D'Amato,(R-NY), Chris Dodd (D-CT), Richard Durbin (D-IL), Diane Feinstein (D-CA), Frank Lautenberg (D-NJ), Rick Santorum (R-PA), Gordon Smith (R-OR) and Olympia Snowe (R-ME).

The PPC joined over 175 other organizations in supporting this legislative proposal.

Animal Research: Last February, Reps. Charles Canady (R-FL) and George Brown (D-CA) introduced HR 594 -- the Pet Safety and Protection Act of 1997. The bill has 66 cosponsors. This bill would ban research facilities from obtaining dogs or cats from dealers who do not breed and raise the animals themselves; would disallow private animal shelters from voluntarily choosing to make animals available for research; and would limit individuals donating dogs or cats to research facilities to giving only those animals they bred and raised as well as owned for not less than 1 year. In addition, HR 594 would require municipal pounds to register with the US Department of Agriculture only if they supplied animals to research facilities. There is concern that pounds will choose not to give unwanted animals that would otherwise be killed to research facilities in order to not have to be burdened with USDA regulations and federal law. Fines would be imposed for violation of the provisions. The National Association for Biomedical Research (NABR) has mounted an active opposition campaign to this bill and is encouraging its members, which includes the PPC, to wrte their Representatives urging them to oppose HR 594.

Cloning: In the past weeks there has been a flurry of both media and congressional activity on the issue of cloning. The announcement by the Chicago physicist, that he intends to pursue human cloning clearly has increased the probability that Congress will consider passing a cloning prohibition bill. It appears that the Senate is poised to by-pass any committee action on this issues and take a anti-cloning bill straight to the Senate floor in early February; with a further possibility to add a provision to ban human embryo research as well. According to House Majority Leader, Dick Armey (R-TX) the House which has had some committee activity on this issue during the first session of the 105th Congress will take up legislation sometime in February to permanently ban human cloning in the U.S.

The PPC endorsed a draft legislative proposal developed by the American Society for Reproductive Medicine (ASRM) in an effort to preclude Congress from crafting “poorly drafted legislation” and has signed onto several letters opposing draconian action by Congress. The intent of the draft legislative proposal is to prohibit the making of a human clone while protecting research.. The PPC will continue to monitor this issue throughout the second session of this Congress.

Summary of Current Cloning Legislation pending before Congress:

HR 922 (Ehlers) Would prohibit federal funds for cloning research. Status: Reported out of House Science Committee, referred to House Commerce Committee

H.R. 923 (Ehlers) Would prohibit use of a somatic cell to make a human clone.

Status: Referred to House Commerce Committee

S 368 (Bond) Would prohibit federal funds for cloning research. Status: Referred to Labor Committee, Public Health and Safety Subcommittee has held hearings on cloning, but not on this bill specifically.

Clinton Proposal: Would prohibit human cloning. Status: Not yet officially introduced.

CHILDREN'S HEALTH CARE:

The Balanced Budget Act of 1997 (P.L. 105-33) includes $24b illion for a children's health program. The broadened coverage provided under this program will be financed partially by a 15-cent-per-pack increase in cigarette taxes. The law permits states to use their block grant funds to expand coverage under the Medicaid program, to provide coverage under a separate state child health insurance program, or both.

General -- Funding: Approximately $24 billion is provided between fiscal years 1998-2002, and about $40 billion over 10 years. Under the program, a child health block grant will provide approximately $20.3 billion in new federal funds to states over 5 years, while the rest ($4 billion) will provide: coverage for new children enrolled in Medicaid because of the grant program's outreach and required referral of eligible children to Medicaid. The $4 billion will also provide Medicaid options for 12 month continuous and presumptive eligibility and Medicaid spending for Supplemental Security Income (SSI) children who otherwise lose coverage due to welfare reform.

State Allotment: Each state will receive a proportion of the total grant allotment. The proportion is determined by each participating state's number of uninsured children and the number of children living below 200% of the federal poverty level. A State's allotment remains available to each state for 3 years. After that, any unspent funds are reallocated to states that have used up their allotments.

Matching Payments: Federal matching rates are increased to provide incentives for states to participate. Provider taxes, donations, other Federal spending, premiums and cost sharing do not qualify as contributions eligible for Federal matching funds.

Eligibility: Children whose income is up to 200% of poverty or 50 percentage points above the state's Medicaid eligibility (whichever is higher). Children who are Medicaid-eligible, privately covered, in prisons, or have parents who are state employees are ineligible.

Cost Sharing: is limited depending on the family income:

• Below 150% of poverty: premiums no greater than those in Medicaid and cost sharing consistent with Medicaid but appropriately adjusted by the Secretary.

Above 150% of poverty, premiums and cost sharing that do not exceed 5% of the family's income.

Administrative costs, outreach and direct services: Limited to no more than 10% of the state's expenditures in this program.

Accountability:

• Maintenance of effort: States cannot change their Medicaid eligibility from its level as of June 1, 1997 and must enroll eligible children in Medicaid.

• Protections against substitution: State must develop processes to assure that they are not replacing existing coverage.

• Reporting requirements: States must report annually on their success at covering uninsured children and coordination with other types of coverage.

• Auditing and sanctions: The Secretary has authority to withhold funds and audit programs as necessary to ensure that the funds are used for the intended purpose.

• Fraud and Abuse: Certain Medicaid and Medicare provisions apply.

Medicaid Expansion Option: The Balanced Budget Act of 1997 allows states to use their child health funds to implement an expansion of Medicaid coverage at an “enhanced” matching rate. Under either the Medicaid Expansion Option or the State Child Health Insurance Program option, a state could receive an enhanced federal matching rate 30% higher than its Medicaid matching rate, up to a maximum federal matching rate of 85%. If a state chooses Medicaid expansion and exhausts its federal children's health funds before its costs are covered, it could continue to receive additional federal funds that would drop back to the regular Medicaid matching rate. By contrast, if a state chooses to create its own health insurance program and exhausts its federal matching funds, it cannot receive additional federal funds to cover any leftover costs. Any state that chooses the Medicaid expansion option can use it only for children who would not have qualified for the program under the state Medicaid eligibility rules in effect as of April 15, 1997.

State Children's Health Insurance Program Option:

Benefits: States may choose one of three benefits minimums:

• Plan equivalent to a benchmark plan

• Plan with the same actuarial value as a benchmark plan

• Secretary-approved plan.

Benchmark plans include:

• Federal Employee Health Benefit Standard Blue Cross/Blue Shield PPO option

• State employee health plan that is generally available

• HMO with the highest commercial enrollment in the state

• For New York, Florida and Pennsylvania, their current state only program's benefit plans.

Actuarial equivalence option: States must -

• cover inpatient and outpatient hospital services; physicians' surgical and medical; laboratory and x-ray; and well-baby/well-child care, including immunizations

• have an aggregate actuarial value at least equal to the benchmark plan; and

• assure that the plan's mental health, vision, hearing, and prescription drug benefits have at least 75% of the actuarial value of prescription drug, mental health, vision and/or hearing services in the benchmark plan.

Next Steps: Implementation of this program will occur at both the federal and state levels. It is important that all members of the pediatric community be prepared to work with your states in order to ensure that the best benefit package is available for the children in your state. HCFA has included fact sheets and question-and-answer sheets addressing various questions states have asked about the new law on its Web page --www.hcfa.gov.

PATIENT CONFIDENTIALITY:

HHS Secretary Donna Shalala, testified in September before the Senate Labor and Human Resources Committee on the “Confidentiality of Individually-Identifiable Health Information.” The 1996 Health Insurance Portability and Accountability Act required the secretary to formulate standards for the privacy and protection of individually identifiable health information. The Secretary's legislative recommendations were encompassed in five principles: boundaries, security, consumer control, accountability and public responsibility. The intent of the legislative proposal is to:

• draw clear limits on who has access to health information,

• define the responsibilities of those entities who possess health information to ensure that such information is protected from misuse and disclosure,

• establish patient's rights to be advised as to how payers and providers will use their health information, to limit disclosure of health information in certain cases, to obtain a copy of their records, and to propose corrections in their records,

• invoke strict criminal penalties for the improper disclosure and misuse of health information,

• authorize the disclosure of health information without explicit patient consent for use related to four national priority activities including audits and investigations of the health care system, public health tracking and medical emergencies, health research and law enforcement.

These principles will be included in legislation that the Health Care Quality Commission -- a Subcommittee of the National Committee on Vital Statistics -- will be developing. Updates of the Commission's activities are available at http://www/hcqualitycommission.gov. The Secretary's report is available at http://aspe.os.dhhs.gov/admnsimp/.

CLINICAL LABORATORY IMPROVEMENT AMENDMENTS OF 1988:

During the past summer Rep. Bill Archer (R-TX), chairman of the House Ways and Means Committee, and Sen. Kay Bailey Hutchison (R-TX) reintroduced companion bills (H.R. 2250/S.1068) that will provide much needed relief to physician offices without adversely affecting the quality of care provided to patients. In addition, it will greatly assist in providing patients with access to necessary, basic, simple laboratory services.

The legislative proposal will exempt from CLIA the testing (except some cytology) that is performed in physician office laboratories. This isnot a repeal of CLIA for physician office laboratories, rather it merely “rollsback” the CLIA regulations to where it was before CLIA was enacted in 1988. It would free physicians from the unnecessary government regulations imposed by CLIA, while continuing the oversight of Pap Smear testing whose problems prompted the enactment of CLIA.

[The following two issues -- tobacco and FDA reform -- are included for information purposes. Congress has spent a fair amount of time on both and each has a significant impact on the well-being of children and adolescents.]

TOBACCO:

Tobacco Settlement Agreement: The unprecedented $368.5b illion tobacco settlement reached by 40 attorneys general in June of 1997 has not yet been written into law. Skeptics suggest that the 1998 congressional election make it appear doubtful that legislation will be developed. However, the more optimistic contend that a legislative proposal, perhaps focused on children and youth, may be enacted because it is an election year. Only time will tell.

In the Senate, Assistant Majority Leader, Don Nickles (R-OK) is the tobacco point-person. At least six committees have jurisdiction over some elements of comprehensive tobacco legislation. Senators John McCain (R-AZ), Orrin Hatch(R-UT) and Edward Kennedy (D-MA) have all introduced comprehensive tobacco control legislation (S.1414/S.1415, S.1530 and S.1492). Senator Nickles has asked the chairs of relevant committees to conclude their work by March 16, 1998. Many of the committees have held hearings or are expected to do so in the future.

In the House, Commerce Committee Chairman Tom Bliley (R-VA) will lead tobacco efforts. To date, no definitive timeline has been set in the House although the House Commerce Committee has held preliminary hearings including the release of hundreds of internal tobacco industry documents. Representative Rosa DeLauro (D-CT) has introduced companion legislation to the Kennedy bill. Many other members of Congress have also introduced, or are in the process of developing, tobacco legislation.

In the meantime, there are still several court cases that are pending that depending on their disposition may have implications for the eventual tobacco settlement.

FDA Rule: One year after President Clinton announced efforts to ban the access and marketing of tobacco products to children and adolescents, the Food and Drug Administration's final rule was issued on August 23, 1996.

The first of a three phase implementation process for the new rule began on February 28, 1997, when the photo ID age verification provisions went into effect. The next phase that would have taken effect on August 28, 1997, restricting the advertising and sales, has been delayed pending an appeals court decision on certain provisions of the rule. The final phase, that deals with the sponsorship provisions of the rule, takes effect on August 28, 1998.

FDA REFORM:

On November 9 the Congress passed S.830, the Food and Drug Administration Modernization and Accountability Act of 1997. President Clinton signed the legislation into law on November 21, 1997 (P.L. 105- 115). There are several provisions within the legislation which the pediatric community closely followed that may directly impact children:

Pediatric Studies of Drugs: P.L. 105-115 includes a provision to conduct pediatric studies of drugs (formerly known as the Better Pharmaceuticals for Children Act). The provision would allow for six months of market exclusivity to new and already marketed drugs for which the Secretary makes a written request for pediatric studies. This provision will end January 1, 2002.

An important component of the legislation is the development of a prioritized list of drugs for which additional pediatric information is needed. This list would consist of drugs that were in commercial distribution as of November 21, 1997. The new law contains language that blends the legislation with the proposed FDA regulations for pediatric studies. During the period of time when the legislation and the FDA regulations run simultaneously, the legislation provides that six months of exclusivity would apply to new and already marketed drugs which the Secretary either requests(via the legislation) or requires (via the proposed regulations) that pediatric studies be performed.

Once the legislation ends on January 1, 2002, only already marketed drugs would continue to be eligible for 6 months of exclusivity IF:

• The drug is on the prioritized list of drugs needing additional pediatric information; and

• The Secretary determines there is a continuing need for information related to the use of the drug in the pediatric population and that the drug may provide health benefits in that population.

Dissemination of Information on new uses: (The following is an overview of the provision)

Requirement for dissemination of treatment information on drugs and devices: A manufacturer of a drug or device may disseminate to health care practitioners, pharmacy benefit managers, health insurance issuers, a group health plan or federal/state government agencies, written information concerning safety, effectiveness or benefit of a use not described in the approved label if the following requirements are met:

• In the case of a drug, an application for supplemental use is filed (see details below); 60 days prior to dissemination of information, the manufacturer must submit to the Secretary of HHS: a copy of the information to be disseminated; any clinical trial information related to the safety or effectiveness of the new use; any report of clinical experience pertinent to the safety of the new use and a summary of such information.

• As part of the information, the manufacturer includes a prominently displayed statement that discloses:

• the information has not been approved or cleared by the FDA;

• if applicable, that the information is being disseminated at the expense of the manufacturer;

• if applicable, the name of any authors of information who are employees of, consultants to, or have received compensation from, the manufacturer, or who have a significant financial interest in the manufacturer;

• the official labeling and all updates with respect to the labeling;

• if applicable, a statement that there are products or treatments that have been approved or cleared for the use that is the subject of the information being disseminated; and

• the identification of any person that has provided funding for the conduct of the study relating to the new use

• a bibliography of other articles from a scientific reference publication or scientific or medical journal that have been previously published about the use of the drug or device covered by the information disseminated.

If the Secretary determines (after notice of the determination and an opportunity for manufacturers to meet with HHS) that the information fails to provide objective and balanced information, the Secretary may require the manufacturer to disseminate:

• additional objective and scientifically sound information pertaining to the safety and effectiveness of the use

• an objective statement by the Secretary that bears on the safety and effectiveness of the new use of the drug or device.

Information Authorized to be Disseminated: Manufacturers may only disseminate information if:

• it is an unabridged reprint or copy of an article, peer-reviewed by experts qualified by scientific training or experience to evaluate the safety and effectiveness of the drug or device involved, which was published in a scientific or medical journal, which is about a clinical investigation with respect to the drug or device, and which would be considered to be scientifically sound by such experts; or

• reference publication (meaning one that has not been written, edited, excerpted or published specifically for, at the request of or significantly influenced by a manufacturer.) The publication must be generally available in bookstores or other medical textbook distribution channels. It can not focus on any particular drug and must present materials that are not false or misleading.

Establishment of list of articles and publications disseminated and list of providers that received articles and reference publications: Manufacturers must submit to the Secretary biannually:

• A list of articles and reference publications that were disseminated;

• A list that identifies the categories of providers that received information

Requirement regarding submission of supplemental application for new use; exemption from requirement: A manufacturer may disseminate new use information only if:

• a supplemental application for a new use is or will be (no later than 6 months after date of initial dissemination) submitted to the Secretary or if the manufacturer has an exemption from this re quirement;

• in the case of planned studies, a manufacturer may disseminate information if the Secretary has received a certification that a supplemental application will be submitted not later than 3 years after the initial date of dissemination. This period can be extended.

• within 60 days of a request, the Secretary may, approve or deny an exemption from the requirement for filing a supplemental application. If the Sec. misses the 60 day period, the application is deemed approved.

• The Secretary would make a determination that, for reasons defined by the Sec., it would be economically prohibitive for the manufacturer to incur the costs for submission of a supplemental application.

Corrective Actions; Cessation of Dissemination

• after dissemination has begun, if the Secretary determines the data may not be effective or presents a health risk, the Sec. shall, after consultation with the manufacturer, take action as deemed appropriate, which may include ceasing dissemination.

• manufacturers are required to submit notification of any additional knowledge on clinical research or other data that relate to the safety and effectiveness of the new use involved. Regulations are required to establish the scope of the manufacturers responsibilities.

• the Secretary may order manufacturers to cease dissemination but only after notice has been given to the manufacturer of the intent to issue the order, and there has been an opportunity to meet re: this intent. The Sec. shall delay issuing the order and provide an opportunity to correct the violation if it is deemed a minor violation.

• the Secretary may also order a cease of information if there is not adequate information for approval of the supplemental application; the manufacturer missed the 6 month period to submit a supplemental request; or the Sec., fter an informal hearing, determines the manufacturer is not acting with due diligence to complete studies.

Studies and Reports

• By January 1, 2002, General Accounting Office will conduct a study to determine the impact of this provision on the resources of HHS;

• By September 30, 2005, the Institute of Medicine will conduct a study of the scientific issues raised related to: the effectiveness of this provision on providing useful information to health care practitioners; the quality of information being disseminated; the impact on research in the area of new uses, indications, or dosages, particularly the impact on pediatric indications and rare diseases.

DRUG LABELING FOR CHILDREN:

Both the Congress and the Administration have come up with a means to address the critical need for drug labeling for children. Both branches of government address the issue in a complementary manner. The Administration will require companies to conduct studies, while the Congress will request such studies and provide market incentives to companies who complete the studies to the agreed upon specifications.

Regulations: On August 13, President Clinton announced proposed regulations that would required drug companies to conduct pediatric studies if a drug represents a meaningful therapeutic benefit over existing treatments; or when the product is expected to be widely used in pediatric patients.

The proposed rule attempts to partially address the lack of pediatric use information by requiring that manufacturers of a limited class of new drugs and new biological products provide sufficient data and information to support directions for pediatric use for the claimed indication, before or soon after approval. The AAP and FDA co-sponsored a public hearing on the proposed rule on October 27. The public comment period closed on November 13, 1997. The PPC endorsed the American Academy of Pediatrics' formal comments on the proposed regulation. The FDA will now review all comments and issue a final rule, expected sometime around the beginning of 1998.

* Cited from: FDA Regulations Requiring Manufacturers to Assess the Safety and Effectiveness of New Drugs and Biological Products; Proposed Rule (21 CFR Part 201, 312, 314, and 601)

COALITION FOR AMERICA'S CHILDREN:

As it has done in the past, the Coalition for America's Children is planning to develop child health and other campaign related materials/information for the 1998 Congressional elections. As materials become available they will be widely distributed to the pediatric community. For information about the Coalition for America's Children contact their website: www.kidscampaigns.org or call toll-free, (888) 544-KIDS.

HOW TO CONTACT YOUR MEMBER OF CONGRESS:

The beginning of the second session of the 105th Congress provides an excellent opportunity to contact your members of Congress. The following provides you the necessary information to make these contacts. Also consider using the district work periods (Congressional recess) to invite your member of congress (and/or their staff) to your facility, office or community-based pediatric program. The congressional recess schedule is listed below.

TO WRITE YOUR MEMBER OF CONGRESS:

To a Senator: The Honorable (name); United States Senate; Washington, DC 20510

Dear Senator_____:

To a Representative: The Honorable (name); United States House of Representatives; Washington, DC 20515

Dear Representative_____:

Be courteous, to the point, and include key information, using examples, if possible, to support your position. Address only one issue in each letter and, if possible, keep the length to one page.

TO CALL YOUR MEMBER OF CONGRESS:

You can contact your Senators' and Representative's office by calling the Capitol Hill Switchboard at (202) 224-3121. If you do not know who your Representative is, the switch board operator will be able to direct you to the proper office. Ask to speak to the staff member who works on health care issues. Be prepared to leave a very short message as well as your name and address.

Fax: Most offices have fax machines, so you can call and ask for the fax number if you would like to fax your letter. Some offices do not give out their fax numbers, however.

e-mail: A number of members of Congress have e-mail addresses, but there is no set format for them. We suggest calling the member's office to get an accurate e-mail address. This may not be the quickest or most effective mechanism to contact members offices because of the incredible volume of e-mails Congressional offices receive and each office's response to e-mails varies greatly. However, there are a few members of Congress who appear to prefer e-mails and once you have an established a relationship with the office and staff this may prove to be an expeditious and efficient means of communication.

105TH CONGRESS (SECOND SESSION) RECESS SCHEDULE 1998

Senate

Reconvenes; Jan. 27, 1998

Feb. 14-22; Presidents Day

April 4-19; Spring Recess

May 23-31; Memorial Day

June 27-July 5; Independence Day

Aug. 1-Sept. 7; August Recess

Oct. 9; Target Adjournment

House of Representatives

Reconvenes; Jan. 27, 1998

Feb. 16-23; Presidents Day

April 2-20; Spring Recess

May 25-29; Memorial Day

June 26-July 13; Independence Day

Aug. 10-Sept. 8; August Recess

Oct. 9; Target Adjournment

1998 PUBLIC POLICY PLENARY SESSION Saturday, May 2, 1998 1:30 pm - 3:00 pm

On May 2, 1998, the annual Public Policy Plenary session will be held during the Pediatric Academic Societies Annual Meeting in New Orleans. The title for this session is Developing Future Pediatric Academicians. The session is intended to explore the issues surrounding the education and training of pediatric researchers. It will be moderated by Jimmy Simon, MD, chair of the Task Force on the Future of Pediatric Education II. Our distinguished panelists are: Robert Kelch, MD, Thomas Boat, MD, Christopher Wilson, MD and James Perrin, MD.

EDUCATIONAL SEMINAR -- How to Educate Congress about Research and Child Health Sunday, May 3, 1998 1:00 pm - 3:00 pm

As the second session of the 105th Congress continues and the“mid-term” election year activities heat up, it's important for members of Congress, to continue to be educated about and reminded of the importance of biomedical/behavioral research especially with regard to child and adolescent health. This workshop will provide you with an overview of the major players in the biomedical research advocacy community, including the Public Policy Council, the Ad Hoc Group on Medical Research Funding, Research!America; with basic advocacy skills for communicating with members of Congress either by mail, telephone or a personal meeting; and with an update on issues being debated in Congress that could impact child and adolescent health policy and biomedical/behavioral research funding. Moderator: Myron Genel, MD, Chair, Public Policy Council; Participants: K. Lynn Cates, M.D., Robert Wood Johnson Health Policy Fellow Associate Professor of Pediatrics, Case Western Reserve University School of Medicine Washington, D.C. and Karen M. Hendricks, JD, Washington Coordinator, Public Policy Council.

PUBLIC POLICY FORUM LEGISLATIVE SYMPOSIUM Monday, May 4, 1998 7:00 am - 8:00 am

The Public Policy Forum will convene it's 12th annual 7:00 A.M. breakfast forum. This year's topic is State Child Health Insurance Program(CHIP): Implementation of the new multi-billion dollar program and the role of the academic health center. The invited speakers are: Joan Henneberry, National Governor's Association and John E. Lewy, MD, Professor and Chair, Department of Pediatrics, Tulane Hospital for Children, Tulane University, School of Medicine.

Additional information and resource materials on these or other issues related to child health are available from the Washington Coordinator for the Societies: Karen M. Hendricks, JD, (khendricks@aap.org) or Keri Briel Frisch, Legislative Assistant, (kfrisch@aap.org) at 601 13th Street, NW, Suite 400 North, Washington, DC 20005; phone: 800/336-5475; fax: 202/393-6137.

PUBLIC POLICY COUNCIL

APS: Myron Genel, MD; Jimmy Simon, MD

SPR: Ora Pescovitz, MD; Sam Hawgood, MD

AMSPDC: Russell Chesney, MD; Jon Abramson, MD