We agree with the American Academy of Pediatrics, the Food and Drug Administration (FDA), and the sponsors of H.R. 2887 that proper testing and labeling of drugs for children is an important health matter. For example, we believe that pediatric testing should simply be required in appropriate cases. The Federal Food, Drug, and Cosmetic Act (the Act) requires that drugs be safe and effective for their intended use. The Act does not say safe and effective, except for children.

But, we oppose H.R. 2887 because it imposes unnecessary costs on the consuming and taxpaying public. Even the American Academy of Pediatrics recognizes that the exclusivity incentive "may be providing a monetary windfall for a limited number of drugs," and "believes it is important to determine whether some monetary limits are needed for certain drugs... ."

All programs should be evaluated for their cost effectiveness, including this one. In comments submitted with respect to the Department of Health and Human Services’ (HHS) January 2001 report, "The Pediatric Exclusivity Provision"(the Report), the American Academy of Pediatrics "urged the development of different incentive levels depending on the need for information on specific drugs, to mitigate the tendency to conduct studies on those drugs with the greatest profits rather than those with the greatest need." It should be noted that many well known consumer advocacy organizations oppose H.R. 2887 because of the unnecessary costs of the exclusivity incentive.

In the four years of this program’s existence, it has already cost consumers and taxpayers billions of dollars while producing only 19 new drug labels. One drug netted its owner, Astra Zeneca, a windfall of $1.4 billion, or approximately 350 times the cost of an average pediatric study. Eli Lilly gained a $900 million windfall during the extra six-months monopoly pricing on Prozac. In neither case has the American public, who has paid these higher prices, received any additional information of the pediatric uses of the drugs. If H.R. 2887 becomes law, these and virtually all other brand name drug companies with "blockbuster drugs" will continue to extract billions of excess profits in return for studies that cost, on average, less than $4 million to conduct.

The Committee rejected cost-effective alternative incentives such as the Waxman/Brown Substitute, that would have replaced the six-month exclusivity incentive with direct reimbursement of the costs of the studies, plus a 100 percent profit.

According to the Report, "the impact of the lack of lower cost generic drugs on some patients, especially those without health insurance and the elderly, may be significant." The Report also concluded that "[t]he greatest burden will fall on consumers with no private or public insurance support, which may disproportionately affect lower income purchasers" and that "the pediatric exclusivity provision...imposes substantial costs on consumers and taxpayers."

A survey of twenty-five drugs that may be eligible for pediatric exclusivity during the five-year authorization period of H.R. 2887 indicates that the sponsors of these products will receive additional sales revenues of more than $11 billion. The profit margins on these revenues are quite high since the drugs have already been in existence for many years having already recovered development costs many fold. Without the pediatric exclusivity, these drugs would face price competition and all would benefit.

Moreover, the exclusivity program does not always yield the labeling for which consumers have paid. The FDA has identified approximately 400 drugs for which pediatric testing and labeling is needed. Five years later, 38 drugs have received exclusivity and only half of these products have labeling that reflects the results of those tests.

When the systematic exclusion and underrepresentation of women in drug testing was brought to light years ago, none suggested that the situation could only be addressed with an economic incentive to industry. Nor are we aware of anyone ever suggesting that the only way to address racial and ethnic disparities in drug product research was through an economic incentive for product sponsors. The same should be the case for our children. In fact, FDA’s new drug approval regulations, 21 CFR Part 314, specifically require that both effectiveness and safety data be presented by gender, age, and racial subgroups and effectiveness data shall identify any modifications of dose or dose interval needed for specific subgroups.

It was a mistake to ever allow drug product sponsors to systematically exclude children from the protection of the Act’s safety and efficacy standard. This mistake was compounded in 1997 by the creation of pediatric exclusivity, a program that says that proper testing and labeling of drugs used by children will depend upon a product sponsor’s evaluation of the adequacy of a financial incentive. The Report stated that the incentive "has naturally tended to produce pediatric studies on those products where the exclusivity has the greatest value. This has left some drugs of importance to children, but for which the incentive has little or no value, unstudied."

According to the FDA, "the absence of pediatric labeling information poses significant risks for children." For example, the FDA has noted that inadequate dosing information exposes pediatric patients to the risk of adverse reactions that could be avoided. FDA has noted reports of injuries and deaths in children resulting from use of drugs that were not adequately tested in the pediatric population. Furthermore, as FDA has noted, lack of pediatric testing can expose patients to ineffective treatment or deny them the benefits of therapeutic advances.

Aside from H.R. 2887's reliance on the six-month exclusivity incentive, the bill fails to condition that incentive on actual labeling that reflects the results of studies. Prescribing physicians, parents, and older children do not read studies, they read product labels. There should be no exclusivity unless and until the product is labeled. Our colleague, Representative Bart Stupak, offered an amendment that would have closed this dangerous loophole in the law. Unfortunately, this amendment was rejected.

Giving credit where credit is due, it should be noted that some improvements have been made in the bill. These include suggestions and amendments offered by our colleagues Representatives Stupak, Pallone, and DeGette. These views reflect our concern with the bill’s core provision, namely the provision that conditions proper testing and labeling of products for children on a product sponsor’s evaluation of the adequacy of a financial incentive. Public health decisions should not depend on such hit-or-miss inducements whose cost is often borne by those least able to pay.

JOHN D. DINGELL
SHERROD BROWN
HENRY A. WAXMAN
PETER DEUTSCH
FRANK PALLONE, JR.
TOM BARRETT
BART STUPAK