Businessweek Archives

Congress Wants A Tougher Fda But It's Not Sure How Tough


Top of the News

CONGRESS WANTS A TOUGHER FDA--BUT IT'S NOT SURE HOW TOUGH

Back in 1989, as federal investigators uncovered a morass of bribery and falsified records in the generic-drug industry, Representative John D. Dingell (D-Mich.) asked Food & Drug Administration officials a simple question: If companies such as Bolar Pharmaceutical Co. had hoodwinked the FDA into approving some of their generic versions of brand-name drugs, why was the agency allowing these companies to continue selling other generics? The beleaguered FDA responded that it didn't have the authority to ban the drugs. So Dingell vowed to give the agency a sharp new set of enforcement teeth.

He's doing his best to keep his promise. Under a measure Dingell is pushing, if a generic-drug company cheated on a drug application, the FDA would have to hold up all of the company's pending drug approvals--and even bar it from selling existing products (table). "Right now, we're not putting any misery on the scoundrels who are doing these things," says Dingell. "How about shutting them down for a couple of years so they can contemplate better practices?"

IN-HOUSE BATTLE. Crafting new enforcement weapons for the FDA has already turned into a contentious process, however. In the waning days of the last Congress, Dingell was set to ram his bill through the House after just one hearing. But he dropped it at the last minute, after Senator Howard M. Metzenbaum made it clear that the bill wouldn't go far in the Senate. The Ohio Democrat complained that the "debarment" measure suffered from too hasty drafting and should cover more than the generic-drug industry. "The question is not whether we should have a debarment bill but rather what we should put in it," says a staffer for Metzenbaum, who plans to introduce legislation this month that would apply to food, brand-name drugs, and medical devices, as well as generic drugs.

The episode has left Dingell fuming. The combative chairman of the House Energy & Commerce Committee maintains that a narrow bill is all that's needed to clean up what he calls "the most pervasively corrupt industry we have ever uncovered." Indeed, generic drugmakers have much more opportunity to cheat than closely scrutinized brand-name drug companies. In 1990, three generic-drug companies were convicted of fraud, and indictments of up to a dozen more are expected.

Dingell's strategy has the advantage of muting industry opposition. The powerful brand-name companies don't object to anything that might take lower-priced generic rivals off the market. "We're willing to accept Dingell's bill because debarment doesn't cover our companies," says a spokesman for the Pharmaceutical Manufacturers Assn. The generic companies, for their part, are in no position to complain. "One of the threats from Dingell's staff was that if we opposed the bill, they would bring in dozens of people and companies and force them to take the Fifth Amendment," says one generic-drug executive who refused to be quoted by name. "The companies would be so stigmatized that they would have wished they had supported the bill."

Yet Dingell's chances of passing generics-only legislation in the next session of Congress seem slim. For one thing, concern among physicians and patients over the generic-drug scandal appears to have abated (chart). More important, congressional sentiment is turning toward a far broader bill, which has the backing not only of Metzenbaum but also of Henry A. Waxman (D-Calif.), chairman of the House health and environment subcommittee.

RAISING HACKLES. But the prospect of a broader bill that also would cover brand-name drugs, medical devices, and other products regulated by the FDA is mobilizing Washington lobbyists. What especially worries companies are the strong debarment provisions. At their most punitive, they would give the FDA the power to punish an entire company for the criminal behavior of a single employee.

Industry lawyers charge that penalties such as holding up all new-product applications and banning sales of already-approved treatments are dangerous as well as draconian. "Broad debarment proposals would harm the public by leading to the removal of safe and effective therapies from the market," explains Bruce N. Kuhlik of Washington law firm Covington & Burling. Nor does the punishment fit the crime, critics charge. "We don't shut down the Senate if a senator takes a bribe," notes Washington lawyer Richard M. Cooper, a former FDA chief counsel.

Lawmakers are already talking about compromises. One idea is to include waivers allowing the sale of lifesaving drugs despite a company's malfeasance on another product. Another is to limit penalties to drugs worked on by the errant employee. But Congress will resist watering down the legislation. "This area is so important that we have to err on the side of being harsh," says a Waxman staffer. The trick for lawmakers is to hammer out a measure that is broad enough to enlist congressional support and narrow enough to get around industry objections.

A BITTER PILL FROM CONGRESS

Main points of a bill backed by Representative John Dingell (D-Mich.):

--Any generic drug company convicted of fraud in making a product or gaining FDA approval would be barred from the FDA approval process for at least 18 months. All applications under review would be put on hold

--The FDA could bar a convicted company from marketing all of its

already approved products, even drugs that had been in use for years

--The agency could impose fines of up to $5 million on companies that cheat in the approval process

DATA: BWJohn Carey in Washington


We Almost Lost the Nasdaq
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus