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113th Congress                                            Rept. 113-565
                        HOUSE OF REPRESENTATIVES
 2d Session                                                      Part 1

======================================================================



 
    IMPROVING REGULATORY TRANSPARENCY FOR NEW MEDICAL THERAPIES ACT

                                _______
                                

                 July 29, 2014.--Ordered to be printed

                                _______
                                

         Mr. Upton, from the Committee on Energy and Commerce, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 4299]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Energy and Commerce, to whom was referred 
the bill (H.R. 4299) to amend the Controlled Substances Act 
with respect to drug scheduling recommendations by the 
Secretary of Health and Human Services, and with respect to 
registration of manufacturers and distributors seeking to 
conduct clinical testing, having considered the same, report 
favorably thereon without amendment and recommend that the bill 
do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     2
Background and Need for Legislation..............................     2
Hearings.........................................................     3
Committee Consideration..........................................     3
Committee Votes..................................................     3
Committee Oversight Findings.....................................     3
Statement of General Performance Goals and Objectives............     3
New Budget Authority, Entitlement Authority, and Tax Expenditures     3
Earmark, Limited Tax Benefits, and Limited Tariff Benefits.......     4
Committee Cost Estimate..........................................     4
Congressional Budget Office Estimate.............................     4
Federal Mandates Statement.......................................     4
Duplication of Federal Programs..................................     5
Disclosure of Directed Rule Makings..............................     5
Advisory Committee 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

    The bill would amend the Controlled Substances Act (CSA) to 
require the Attorney General to issue an interim final rule 
placing a drug or substance that has not been marketed 
previously in the United States and that has abuse potential in 
the CSA schedule recommended by the Secretary of Health and 
Human Services (HHS) within 45 days of receiving such 
recommendation. If the drug or substance has been approved by 
the Food and Drug Administration (FDA), upon issuance of the 
interim final rule, marketing of the product is permitted, 
subject to the controls included in the schedule.
    Under current law, if the Secretary of HHS recommends that 
a drug or substance be decontrolled, the Attorney General shall 
not control the drug or substance. The bill does not alter the 
Attorney General's ministerial obligation to carry out the 
Secretary's recommendation.
    The bill also would amend the CSA to require the Attorney 
General, within 180 days of receiving an application for 
registration to manufacture or distribute a controlled 
substance that indicates the substance will be used only in 
connection with clinical trials, to make a final decision on 
whether to approve the application or provide notice to the 
applicant of the outstanding issues that must be resolved and 
an estimated date on which a final decision will be made. The 
bill does not force the Attorney General to make a decision, 
but brings transparency to the process.

                  Background and Need for Legislation

    In addition to requiring approval by the FDA, drugs and 
substances that have not been been marketed previously in the 
United States and that have abuse potential also must be 
scheduled under the CSA by the DEA before a company can begin 
marketing its product. In recent years, an increasing number of 
companies have had their product launches delayed because of 
lengthy and unpredictable review times associated with DEA 
scheduling decisions.
    During FDA's approval process, the agency examines the 
abuse potential of the new drug and makes a scheduling 
recommendation through the Secretary of HHS to the DEA. In 
formulating its recommendations, the FDA uses an eight part 
test outlined in Section 201(c) of the CSA. Currently, the DEA 
also utilizes the eight part test, but FDA's decisions related 
to scientific and medical matters are binding on the DEA. 
Because of the binding nature of FDA's decisionmaking in these 
areas and due to the fact that DEA's primary examination 
typically involves post-market experience with the drug, over 
the past fifteen years, DEA has not made any scheduling 
decision for a new drug that was contrary to the FDA 
recommendation. H.R. 4299 would remove this duplicative DEA 
review process for new drugs and require DEA to take the 
ministerial step of issuing an interim final rule within 45 
days of receiving FDA's scheduling recommendation so companies 
can begin marketing their product if it has been approved by 
FDA, and patients can have access to the new therapy. The DEA 
would retain its authority to transfer the drug between 
schedules under Section 201 of the CSA.
    Inconsistency and lengthy review times at DEA are not 
limited to scheduling decisions for new drugs, but also apply 
to the review of registration applications submitted by 
companies in advance of conducting clinical trials. The DEA 
registration does not distinguish between the manufacturing of 
a controlled substance for marketing and the manufacturing of a 
controlled substance for the use in clinical trials. There is 
no timetable for the DEA to grant approval of registration 
applications, and there is no process for the applicant to 
determine the reasons for a delay in the application. H.R. 4299 
would bring transparency and predictability to the registration 
process so companies can properly plan clinical trial schedules 
for new therapies.

                                Hearings

    The Committee on Energy and Commerce held a hearing on 
April 7, 2014.

                        Committee Consideration

    On May 28, 2014, the Subcommittee on Health met in open 
markup session and approved H.R. 4299, Improving Regulatory 
Transparency for New Medical Therapies Act, for full Committee 
consideration by a voice vote. On June 10, 2014, the full 
Committee met in open markup session and approved H.R. 4299 by 
a voice vote.

                            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. 4299. A motion by Mr. Upton to order H.R. 4299 reported to 
the House, without amendment, was agreed to by a voice vote.

                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee held a hearing and made 
findings that are reflected in this report.

         Statement of General Performance Goals and Objectives

    The objective of this legislation is to facilitate patient 
access to new therapies in an efficient and transparent manner, 
while ensuring appropriate controls are in place under the CSA.

   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. 
4299 would result in no new or increased budget authority, 
entitlement authority, or tax expenditures or revenues.

       Earmark, Limited Tax Benefits, and Limited Tariff Benefits

    In compliance with clause 9(e), 9(f), and 9(g) of rule XXI 
of the Rules of the House of Representatives, the Committee 
finds that H.R. 4299 contains no earmarks, limited tax 
benefits, or limited tariff benefits.

                        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:

                                                     June 26, 2014.
Hon. Fred Upton,
Chairman, Committee on Energy and Commerce,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 4299, the 
Improving Regulatory Transparency for New Medical Therapies 
Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Mark 
Grabowicz.
            Sincerely,
                                              Douglas W. Elmendorf.
    Enclosure.

H.R. 4299--Improving Regulatory Transparency for New Medical Therapies 
        Act

    H.R. 4299 would modify the administrative procedures 
followed by the Department of Justice in regulating new drugs 
that are already approved by the Food and Drug Administration 
and in authorizing drugs to be used in clinical trials. The 
legislation would aim to streamline the current review and 
approval process. CBO estimates that implementing the bill 
would have no significant costs to the federal government. 
Enacting the legislation would not affect direct spending or 
revenues; therefore, pay-as-you-go procedures do not apply.
    H.R. 4299 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would impose no costs on state, local, or tribal governments.
    The CBO staff contact for this estimate is Mark Grabowicz. 
The estimate was approved by Theresa Gullo, 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.

                    Duplication of Federal Programs

    No provision of H.R. 4299 establishes or reauthorizes a 
program of the Federal Government known to be duplicative of 
another Federal program, a program that was included in any 
report from the Government Accountability Office to Congress 
pursuant to section 21 of Public Law 111-139, or a program 
related to a program identified in the most recent Catalog of 
Federal Domestic Assistance.

                  Disclosure of Directed Rule Makings

    The Committee estimates that enacting H.R. 4299 
specifically directs to be completed zero specific rule makings 
within the meaning of 5 U.S.C. 551.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                  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 provides the short title of ``Improving 
Regulatory Transparency for New Medical Therapies Act.''

Section 2: Scheduling of substances included in new FDA-approved drugs

    Section 2 amends Section 201 of the CSA (21 U.S.C. 811) by 
requiring DEA to issue an interim final rule within 45 days of 
receiving FDA's recommendation and place the drug or substance 
on the recommended schedule.

Section 3: Enhancing new drug development

    Section 3 amends Section 302 of the CSA by requiring DEA, 
within 180 days of receiving such an application, to make a 
determination on a registration application that includes an 
indication that the controlled substance will be used only in 
connection with clinical trials, or to provide notice to the 
applicant of the outstanding issues that must be resolved along 
with an estimated date on which a final decision on the 
application will be made.

         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 (new matter is 
printed in italic and existing law in which no change is 
proposed is shown in roman):

                       CONTROLLED SUBSTANCES ACT


TITLE II--CONTROL AND ENFORCEMENT

           *       *       *       *       *       *       *



         Part B--Authority To Control; Standards and Schedules


        authority and criteria for classification of substances

  Sec. 201. (a) * * *

           *       *       *       *       *       *       *

  (i) Within 45 days of receiving a recommendation from the 
Secretary to add a drug or substance that has never been 
marketed in the United States to a schedule under this title, 
the Attorney General shall, without regard to the findings 
required by subsection (a) of this section or section 202(b), 
issue an interim final rule, under the exception for good cause 
described in subparagraph (B) of section 553(b) of title 5, 
United States Code, placing the drug or substance into the 
schedule recommended by the Secretary. The interim final rule 
shall be made immediately effective under section 553(d)(3) of 
title 5, United States Code.

           *       *       *       *       *       *       *


Part C--Registration of Manufacturers, Distributors, and Dispensers of 
Controlled Substances; Piperidine Reporting

           *       *       *       *       *       *       *


                      persons required to register

  Sec. 302. (a) * * *

           *       *       *       *       *       *       *

  (h)(1) A person who submits an application for registration 
to manufacture or distribute a controlled substance in 
accordance with this section may indicate on the registration 
application that the substance will be used only in connection 
with clinical trials of a drug in accordance with section 
505(i) of the Federal Food, Drug, and Cosmetic Act.
  (2) When an application for registration to manufacture or 
distribute a controlled substance includes an indication that 
the controlled substance will be used only in connection with 
clinical trials of a drug in accordance with section 505(i) of 
the Federal Food, Drug, and Cosmetic Act, the Attorney General 
shall--
          (A) make a final decision on the application for 
        registration within 180 days; or
          (B) provide notice to the applicant in writing of--
                  (i) the outstanding issues that must be 
                resolved in order to reach a final decision on 
                the application; and
                  (ii) the estimated date on which a final 
                decision on the application will be made.

           *       *       *       *       *       *       *