Adopting the Therapeutic Orphan: An Examination of FDA and Congress’ Efforts to Promote the Inclusion of Children in Clinical Drug Studies

Staci E. Patterson

Food and Drug Law/Third-Year Graduation Requirement

Submitted to:	Mr. Hutt
Date:  			May 24, 2001

Adopting the Therapeutic Orphan: An Examination of FDA and Congress’ Efforts to Promote the Inclusion of Children in Clinical Drug Studies 

INTRODUCTION
Physicians regularly prescribe drugs to children, by necessity, without the guidance of clinical trials that test drugs to determine their safety and efficacy in this population.  Often times, such therapies have harmful effects, creating grave dangers and risks, including death, for some pediatric patients.    Physicians’ extensive off-label use of drugs to treat children may lead one to conclude that children are already being used as research subjects everyday.  Yet, prior to the passage of the FDA’s Final Rule mandating drug sponsors to test drugs on children and the pediatric exclusivity provision of the Food and Drug Modernization Act, there was little incentive for the pharmaceutical industry to include children in their clinical studies and, thus, they did not.   However, as a result of both initiatives, the number of children in clinical trials has risen.  There is an estimated 45,000 children participating in industry-sponsored testing of new drugs, up from about 16,000 in 1997.  
This paper examines both the Food and Drug Administration’s Final Rule, which mandates drug sponsors to conduct pediatric research on their products prior to FDA approval and Section 111 of the Food and Drug  Modernization Act, which provides economic incentives for drug sponsors to include children in research studies on their products.  This paper concludes that Congress should renew the pediatric exclusivity provision of the Food and Drug Modernization Act, but with modifications as to provide incentives to drug sponsors for testing products on children that are not as burdensome to the elderly and the poor.  After a historical review of the ills of pediatric testing, the paper discusses the need for more studies to be conducted regarding the effects of drugs commonly prescribed in children. The paper then discusses the need for regulation in clinical trials involving children.  Next, the paper discusses past efforts of Congress and the FDA to encourage drug sponsors to include the pediatric population in research trials before marketing their products and then examines the latest efforts of both to encourage such studies.  In the final section, the paper proposes modifications to FDAMA Section 111 to ensure that the legislation is meeting its goal of including children in more clinical trials in efforts to provide more labeling information in therapies used on children. 

I.	THE NEED FOR REGULATION IN PEDIATRIC RESEARCH

The history of experimental research on human beings is plagued with horrific instances of abuse such as World War II Nazi experiments on people that resulted in the Nuremberg trials, the Tuskegee experiments in which African-American men were denied treatment for syphilis, and the Willowbrook experiments in which institutionalized children were intentionally infected with hepatitis and observed to determine the effects of a vaccine for the disease. Recent examples, such as the death of a three-year-old in a cancer study treatment and the death of a nine-month-old given an experimental drug for reflux, serve as reminders that using humans as research subjects continue to pose significant risks.  As such, modern scientists have approached the continued use of humans as research subjects with caution, especially where children are involved.   

A.  Historical Abuses of Children in Clinical Trials

Children were historically excluded from clinical studies, with the exception of vaccine development.    There was hesitation concern on the part of many over drug therapy in the pediatric population. Indeed, the dogma of the day was simple:  it was considered unethical to enroll children in experiments.  Children were a population to be protected from the unpredictability of therapeutic trials.  
Nonetheless, numerous clinical studies conducted in the development of vaccines continued to have large pediatric populations.  During the nineteenth century, the amount of pediatric research conducted increased substantially in an earnest effort to improve children’s health through advanced vaccinations and inoculations.  Although the researchers conducting these trials made significant oncological contributions by curing serious childhood diseases, they often placed pediatric research subjects at considerable risk.
High-risk experiments involving medical research on children continued throughout the late nineteenth century.  Researchers primarily focused their experiments upon institutionalized children in asylums and orphanages as control groups for research on measles and other diseases, theories, and medical treatments.  The inherent dangers in these trials were manifested through many cases.  For instance, in a North Carolina orphanage in 1912, children were administered an experimental tuberculosis vaccine and were later found to have a greater tendency to contract the disease than the children who had not received the experimental treatment.
Newer, more sophisticated drugs and medical tools, such as the x-ray, prompted continued medical research on children in the twentieth century, with a particular interest in metabolism and digestion.  Many of these experiments required pediatric subjects to undergo medically unnecessary procedures and discomfort.  The negative publicity surrounding these trials, however, led to increased scrutiny of these abusive experiments by members of the medical community and society-at-large.
Pediatric subjects continued to endure mistreatment well into the second half of the twentieth century despite this increased scrutiny.   The hepatitis testing conducted at the Willowbrook State School beginning in 1955 and continuing through the early 1970s is one of the most infamous examples of pediatric clinical testing abuse.  Although researchers conducting this clinical trial obtained parental permission, the parents were not fully apprised of the risks involved in the experiment. The head of the research team defended the Willowbrook experiment,  explaining that research subjects were not placed at an increased risk of serious illness than the school’s other students.  In fact, he predicted that research subjects were at a lower risk of serious illness than the school’s other students due to the poor conditions that existed at the school.   Despite the head researcher’s defenses of the study, critics continued to question its merits  While this study and others similar to it shed light on the ills of pediatric research, abuses continue in this country and throughout the world even today.
In the early 1990s in New York City, thirty-six healthy children between the ages of six and ten years old participated in a research study where they were given doses of the diet drug fenflouramine.  Prior to this study, the FDA had removed this drug from the market for causing death in adult patients, however, exposure to fenflouramine was found by researchers to measure a hormone in the subjects’ brains that was supposedly linked to antisocial behavior.  In the course of this three-year study, researchers forced children to fast for eighteen-hour periods and then drew multiple blood samples from catheters inserted in their veins.  The result of this process left some of the children feeling nauseous and complaining of headaches.
While these horrific examples illustrate the extreme need for regulation in the area of medical testing of human beings, especially children, the importance of safe clinical studies cannot be overstated.  Regulation in this area helps to achieve the necessary balance between conducting safe research trials and the need for the valuable information about the effects of drugs in children which is derived from such experiments.  

B. Pharmaceutical Companies’ Exclusion of Children from Clinical Studies

Many pharmaceutical companies resist conducting research on children because of the ethical and legal concerns involved in conducting pediatric trials, and the difficulty recruiting subjects for testing.  A study on the effects of the drug Enbrel on children with rheumatoid arthritis demonstrates the difficulties pharmaceutical companies face when conducting pediatric research. First, the market for pediatric medicines is small.  Of the estimated two million Americans with rheumatoid arthritis, less than 100,000 are children, and only half of those children would be eligible.  Thus, drug companies can expect little in return for conducting such costly studies on children without some external financial incentive. In the case of the Enbrel study, researchers tested adults and children simultaneously to get the drug approved as an “orphan drug,” a lucrative designation given to treatments for rare diseases.  Orphan drug status entitles a drug company to tax credits and seven years of “market exclusivity,” whereby generic companies are precluded from competing with the name brand drug until the exclusive license expires. 
Not only is the demand of drugs for pediatric patients relatively small, few therapeutic indications are unique to the pediatric patient population.  Furthermore, from an actuarial perspective, humans spend about 60 to 80 years as adults, whereas they spend only approximately 16 years as children.  Finally, since off-label prescribing is considered perfectly acceptable medical practice, physicians are still able to administer drugs to children without costly clinical trials.  As a result,  there are few incentives for pharmaceutical companies to develop drugs and drug dosing guidelines for infants and children.  Thus, a large number of medications commonly prescribed for children are not tested on pediatric subjects, creating a grave dangers and risks for young patients.  

II.	THE NEED FOR INFORMATION ABOUT THE EFFECTS OF DRUG THERAPIES IN CHILDREN 

A.	Physiological Differences Between Adults and Children

Because children are subject to many of the same diseases as adults, physicians often treat children, by necessity, with the same drugs and biological products used by adults, even if these products have not been tested on children.  Physicians’ extensive off-label use of drugs to treat children has leads one to the conclusion that children are already being used as research subjects everyday.  Because physicians prescribe drugs to children without the controlled supervision of a clinical trial, such prescriptions often result in disastrous consequences for the children and their families. 
The physiological differences between children and adults require scientists to conduct pediatric research.  The most distinguishing feature differentiating children from adults are the significant physical and maturation changes that occur.  The course of an individual’s development with regard to drug absorption, metabolism, and excretion substantially restricts the extrapolation of data from adults to children.  One horrific example of children metabolizing drugs differently than adults was the wide-spread use of the antibiotic chloramphenical in premature infants to treat infections.   A study in 1959 revealed that babies were unable to metabolize the drug properly.  Chloramphenical, which had only been approved for use in adults for infections resistant to penicillin, resulted in “gray baby syndrome” and death for some infants who accumulated toxic levels of the drug in their system.  Furthermore, not only is a child’s physiology  significantly different from that of an adult, but a child’s physiology is different from that of another child in a different age group.  
As a result, the differences between adults and children, and even the differences among children themselves, significantly impact whether and how a drug can be used on a pediatric patient.  Drug studies conducted on adults or on children of only one age group may not adequately predict whether a drug will be toxic if prescribed to a child of another age group.  Thus, pharmaceutical companies’ failure to test medicines in children of all age groups may result in serious illness or even death.  
B.  Off-Label Prescriptions
Without adequate pediatric testing, physicians confront a serious ethical dilemma: prescribe medication or perform a procedure that potentially benefit the child, or refrain from this treatment due to inadequate information about its effects on children.  By prescribing the drug or performing the procedure, the physician may run the risk of creating an unexpected adverse effect on the child that could subject the physician to liability.  Conversely, by failing to prescribe the drug off-label, the doctor may be preventing the child from receiving the most effective intervention available.  
The FDA has implemented some initiatives to improve both the quality and quantity of pediatric prescribing guidelines available to health care professionals.  First, the Pediatric Studies Page for a New Drug Application was modified.  Prior to the modification, the manufacturer had to justify the necessity of conducting a pediatric study.  Under the modification, the manufacturer must justify why a pediatric study is not going to be conducted.  
Secondly, standards were developed for clinicians to follow for the extrapolation of data from adult clinical trials, when appropriate, or for the use of selective pediatric data (pharmacokinetics) in formulating pediatric use guidelines to help physicians prescribe drugs off-label more safely. For example, one method to make the adjustment from an adult dosage to a child dosage is an extrapolation based on weight.  The arbitrariness of this method, and its failure to take into account any specific differences in drug absorption between children and adults makes this an inadequate method for determining proper dosages for children without placing them at a substantial risk for injury or even death.  Moreover, adjusting doses solely based on weight often underdose infants and children, while overdosing neonates. 
Another suggested method for determining dosages of medication for children is to extrapolate dosage information from available medical literature.  In this instance, the clinician’s decision for treatment is based on studies published in medical journals.  Yet, this method is equally inadequate. Research shows that the reporting of clinical research in medical literature is burdened with paucities, including ill-prepared study designs, inaccurate documentation, questionable data collection methods, flawed statistical analyses, and indefensible conclusions.  Moreover, unlike the FDA’s review of data from a clinical trial, journal editors and reviewers usually do not have access to all the data when reviewing the results of a clinical trial.  Therefore, drug therapy decisions that rely solely upon medical literature may also lead to ineffective therapy or toxic results.
Unfortunately, this practice of off-label prescribing using weight charts and medical literature by physicians often constitutes the standard of care for many children. Startling statistics show that only one-fifth of all drugs on the market have been labeled for use by infants and children.  Moreover, 60 to 70 percent of drugs have no indication for their use in children under age 12, and 95 percent of drugs used in neonatology are administered off-label.  As a result, children remain “therapeutic orphans,” a term coined to describe children who are experimented on outside formal clinical trials.  The problem of therapeutic orphaning hinders the development and application of potentially life-saving therapies for pediatric patients, sometimes causing children to suffer grave and dangerous harm.  More than 70% of all Physicians’ Desk Reference (PDR) entries have either no existing dosing information for pediatric patients or explicit statements that the safety and efficacy in children have not been determined.  This quandary is particularly evident in medications used to treat serious illnesses, such as cancer and AIDS.  Additionally, certain age groups are commonly excluded from drug trials, resulting in incomplete and unreliable outcomes concerning the safety and effectiveness of drugs for these patients. Therefore, despite the controversies surrounding medical studies that are conducted on children the scientific need for such experimentation is apparent.  

IV.	CONGRESS’ AND FDA’S PAST ATTEMPTS TO IMPROVE DRUG LABELING FOR CHILDREN

Prior to initiatives to encourage drug sponsors to include the pediatric population in clinical studies on drug therapies, children were likely to remain therapeutic orphans.  During the past two decades, however, the medical community has expressed increased concern that the majority of drugs widely used on children lack testing regarding the safety and effectiveness of such usage.  In response to this concern, Congress and the Food and Drug Administration have undertaken numerous initiatives to address the problem of inadequate pediatric testing and unsubstantial pediatric use information available in drug and biological product labeling.
The first earnest efforts to improve pediatric labeling of drugs began in 1974.  At that time, the FDA and the American Academy of Pediatrics (AAP) agreed to develop and implement a solution for the lack of drugs in the market labeled for pediatric use.  The AAP’s Committee on Drugs then issued general guidelines outlining procedures for the evaluation of drugs to be used in pediatric patients.  Subsequently, the FDA adopted AAP’s guidelines and incorporated them into clinical guidelines in 1977.  A couple of years later, in 1979, the FDA announced a “Pediatric Use” regulation. This regulation stipulated requirements to which drug sponsors had to comply in order to include pediatric uses on product labels.  The regulation’s requirements included a mandate that drug sponsors include information collected from clinical studies performed during a product’s safety and effectiveness evaluation on the product’s labeling.   The 1979 regulation was amended in 1994, thereby requiring drug sponsors to modify drug labels.  Modification of a drug label was to be done based on an assessment of current pediatric data to seek either a labeling change for pediatric use or to include a statement, such as:  “Safety and effectiveness in pediatric patients have not been established.”  The amended regulation essentially gave the pharmaceutical industry the option as to whether it would conduct pediatric research and include the data on labels, or include a statement on the product indicating that such studies had not been conducted.
	By failing to mandate the pharmaceutical industry to include pediatric data on labels in both the 1979 “Pediatric Use” regulations and in the amended 1994 rule, the FDA  essentially removed any incentive for drug sponsors to conduct clinical studies.  While the purpose of the 1994 amendment to the regulation was to counteract such a result, it neglected to provide an incentive to generate the inclusion of substantive pediatric information on product labels.  When the FDA compared the number of new molecular entities approved in 1991 with those of 1996 with the potential usefulness in pediatric patients, fifty-six percent of the products approved in 1991 had some pediatric labeling at the time of approval.  Yet, by 1996, this number had plummeted and only thirty-seven percent of the products approved had some pediatric labeling.  Further, of the seven new molecular entities approved in 1991 for which post-approval pediatric studies were promised, only one attained pediatric labeling by 1997.  Evidently, the pharmaceutical industry chose not to study its products for use in pediatric patients. While there was not an incentive to conduct such research, neither was there a disincentive for choosing not to conduct such a study.  
Both the Clinton Administration, through the FDA, and Congress took action to remedy this problem of excluding  children from drug therapy trials.  The FDA made clinical testing as well as the subsequent labeling of drugs mandatory for pediatric patients under the Pediatric Final Rule.  Conversely, instead of setting forth a mandate to conduct studies, Congress created incentives for drug sponsors to conduct such pediatric trials, resulting in FDAMA Section III. 

V.	FDA FINAL RULE ON PEDIATRIC LABELING
Past attempts to protect pediatric health and provide safe and effective products for children are the hallmarks of change and innovation to the Food Drug and Cosmetics Act (“FDCA”).  Strides in clinical pharmacology have identified how an array of factors affects the safety and efficacy of drugs in various host patients.  Both the FDA’s Rule on Pediatric Labeling (“Final Rule”) and Section 111 of the Food and Modernization Act (“Modernization Act” or “pediatric exclusivity provision”) represent a culmination of the most recent efforts to include children in clinical drug trials and, thus, adopt the “therapeutic orphan.”
FDA regulations, with regard to the specific content and format of prescription drug labeling, stipulate that pediatric labeling must be based on adequate, well-controlled studies involving children.  Because the FDA’s customary rule has required labeling that specifies that such studies have not been conducted in children, many heavily used drugs in pediatric populations gained recognition of their utility and risks through clinical trial and error.  Perhaps the failure of the 1994 voluntary labeling rule to increase the number of products on the market with pediatric labeling contributed to the FDA’s proposal of a regulation requiring drug sponsors to conduct pediatric studies and to include the results of those studies on product labels in efforts to guarantee the safety and effectiveness of drugs for pediatric patients. The FDA introduced the proposed rule on August 15, 1997.  The promulgation of the Final Rule occurred on December 2, 1998 and took effect on April 1, 1999.
Although the drug manufacturers thought that the pediatric exclusivity provision of FDAMA, discussed infra, would provide enough incentive to develop drugs for children, the FDA did not agree.  Apparently, the FDA thought that the provisions of the Modernization Act, which is presently scheduled to sunset in 2002, would be well complemented by a set of regulations requiring that all new drugs potentially helpful to children  be tested in the pediatric population, with penalties for drug manufacturers who fail to comply.  The ultimate goal of the Final Rule is to have more drugs labeled for children, which is not a requirement for the benefits offered in the Modernization Act.  
	The Final Rule distinguishes new drugs from currently marketed drugs.  Under the Final Rule, the FDA presumes that sponsors will study all new drugs in pediatric patients unless a waiver of this requirement is justified.  The FDA concluded that sponsors with currently-marketed products must conduct pediatric studies if:  (1) the use of the product among pediatric patients is great and the absence of labeling would pose significant risks to those patients, and (2) the product’s claimed indications would “represent a meaningful therapeutic benefit over existing treatments if studied in pediatric patients.”  If the FDA determines that either a new or currently marketed drug provides a “meaningful therapeutic benefit” for pediatric patients, then the sponsor must develop and test a pediatric formulation.  Drug sponsors can waive this requirement when reasonable attempts to develop a pediatric formulation have failed. 
	The regulation’s final notice provides that where children are not tested without securing the appropriate waivers, penalties must be imposed, the effectiveness of the regulation’s penalties for non-compliance is questionable.   According to the FDA’s commentary, penalties include issuing injunctions, making findings of contempt, issuing fines, and requiring the manufacturer to assess the product’s safety and effectiveness.  Nevertheless, even if the regulation is violated, the drug will not be kept off or taken off the market “except possibly in rare circumstances” that are not designated.  Without the availability of these remedies, it is not clear whether manufacturers would choose to withstand the imposition of existing penalties rather than develop drugs for children.  In addition to the other requirements of the rule, the regulations also provide that children should be tested before the new drug is approved for adults, unless a deferral is warranted.
	It must be noted that the FDA’s legal authority to mandate pediatric studies has been questioned on grounds that the Final Rule expands the FDA’s regulatory authority beyond the powers granted to it by Congress.   The FDA relies on section 701(a) of the FDCA, which authorizes the FDA to issue regulations for the “efficient enforcement of the [FDCA],” to buttress its argument for mandated pediatric studies.  However, drug manufacturers have argued that even the most expansive interpretation of the FDA’s cited statutory authority to mandate pediatric studies cannot encompass the FDA’s propositions for new or currently marketed drugs.  If this authority is left unchallenged, it is anticipated that the FDA will expand its authority further if the Modernization Act expires on January, 2002 without renewal of the pediatric exclusivity provision. 
 
VI.	FDAMA SECTION 111:  THE 1997 PEDIATRIC EXCLUSIVITY PROVISION

In November 1997, Congress passed a sweeping reform of Food, Drug and Cosmetics Act with its enactment of the Federal Food and Drug Administration Modernization Act (FDAMA). This Act is considered to be the first comprehensive drug reform legislation in 35 years.  Unlike past legislation aimed at the FDA, the FDAMA affects the majority of products under the agency’s regulation: foods, drugs, and medical devices.  At the time it was passed in 1997, the FDA predicted that the enforcement of this new  legislation would be “one of the most demanding challenges faced by the agency in its 92-year history.”  
Two provisions of the FDAMA aim for performance of more clinical trials that are inclusive of likely patients.  The first provision pertains to the inclusion of women and minorities in clinical studies.  Taking a cautious approach, the FDAMA only directs the FDA to consult with the National Institutes of Health and pharmaceutical industry representatives to administer guidance on the inclusion of women and minorities in clinical trials.  Beyond this, the law fails to impose any further obligations on the FDA or drug sponsors to insure the inclusion of women and minorities in clinical studies.
	In the second provision, the FDAMA encompasses a more proactive approach to ensuring that the pediatric population is included in clinical trials.  Prior to the passing of the FDAMA, the FDA rarely mandated that a drug be studied in children.  In fact, as discussed supra, the vast majority of drugs approved under FDCA amendments do not have approved indications for children.  Ironically, both the 1938 and 1962 amendments to the FDCA, however, were the result of therapeutic catastrophes in the use of untested drugs on children.  The first amendments to the statute were made after the death of 107 children from sulfanilamide elixir that used diethylene glycol as a solvent.  Prior to marketing of the elixir, no toxicity testing had been done.  Similarly, another pediatric tragedy led to the passing of the 1962 amendments.  The thalidomide tragedy, where children whose mothers took thalidomide during pregnancy to prevent morning sickness and their children were born with phcomelia and other debilitating birth defects, led to the requirement that not only did drugs have to be safe, but they also had to be effective in the population in which they are to be marketed.  As a result of these amendments to the FDCA, the safety and efficacy in one population could not be transferred to another population, such as the adult population to the pediatric population.  While these changes to the FDCA were significant, the problem of medication use in children without proper testing has not been solved. In effort an effort to solve this problem, Congress included a provision in the FDAMA offering economic incentives to pharmaceutical companies to conduct testing on children in Section 111 of the Act. 
The birth of the pediatric exclusivity provision occurred in 1990, when attendees of a workshop held at the Institute of Medicine (“IOM”) recommended market-based incentives as a proposal to increase pediatric studies and labeling.   They named the proposal the “Better Pharmaceuticals for Children Act (“BPCA”).”  Following the IOM workshop, pharmaceutical industry representatives urged Senator Nancy Kassebaum (R-Kan.) to introduce the BPCA to Congress.  Congress passed and signed the BPCA into law as part of the FDAMA in 1997.
Although the Modernization Act does not mandate the inclusion of children in clinical trials, it does provide substantial financial incentives for manufacturers to undertake such studies.  The primary incentive provided in the law is extending market exclusivity by six months to any existing period of marketing exclusivity or continuing patent protection if a drug sponsor agrees to conduct clinical trials in children.  The pediatric studies do not have to result in new labeling for the tested drugs, nor do the studies have to show safety and efficacy in pediatric patients.   Not only is the six months of additional patent protection for the specific drug tested, but it also applies to the drug’s active moiety, the part of the drug’s make-up that causes its physiological or pharmacological action.  In certain limited circumstances, sponsors of such studies can earn an additional six-month exclusivity period.
At the time this provision was in enacted, it was predicted that the economic impact of the law would be substantial.  Estimates ranged up to $4 billion of additional sales revenue for brand manufacturers for the first 26 drugs tested subsequent to the new law.  Merck, for instance, is estimated to have gained nearly $300 million in sales for having tested Pepcid on infants, in accordance with FDAMA Section 111.
There are, however, exceptions as to which drugs qualify for market exclusivity under the Modernization Act.  For example, time must still remain on the patent, or the drug must not yet be approved.  Furthermore, drug sponsors can earn market exclusivity only for products listed in the “Orange Book” which are eligible for market exclusivity or protected under either the Drug Price Competition and Patent Term Restoration Act or the Orphan Drug Act.  
The initiative to conduct pediatric studies does not lie solely with drug companies under the Modernization Act.  The Act outlines a multi-step procedure by which the FDA must first determine which drugs should be studied in children.  Moreover, the FDA must then initiate agreements with drug manufacturers to conduct such studies.  After determining that information about a drug may produce health benefits among a pediatric population, the Secretary of the Department of Health and Human Services (“DHHS”) must request in writing for the drug sponsor to conduct pediatric studies.  The written request addresses, among other things, the type of studies to be performed, study design, appropriate age study groups, and clinically endpoints to ensure that studies eligible for pediatric exclusivity provide meaningful safety and efficacy information on the use of the drug in relevant pediatric age groups. Even after receipt of a written request, the drug sponsor is not obligated in any way to conduct pediatric studies and is allowed at its discretion to conduct such studies only to reap the benefits of the market exclusivity incentive.  Finally, the Act directs the FDA to annually update the listing of drugs for which additional pediatric information may improve children’s health. Since the FDAMA came into effect, the FDA has requested studies to be performed on a significant number of drugs, covering a variety health ailments prevalent in children  
Because Congress passed the Modernization Act after the FDA’s proposed rule mandating pediatric study(but before the rule was finalized), the necessity of both incentives has been questioned since their passing.  Yet, both the Final Rule and the pediatric exclusivity provision, as efforts to increase the number of children in clinical trials that test the effects of drugs on them, are necessary when examined closely.  First, the Final Rule is intended to be product-specific.  As such, the Final Rule is limited only to a specific indication for a specific drug product, whereas the Modernization Act applies to the entire active moiety of a drug product.  The Final Rule shifts the inquiry from whether children should be tested to when children should be tested.  
The pediatric exclusivity provision, on the other hand, provides an economic incentive for drug sponsors to comply with the FDA’s Final Rule.   In achieving the goals of both initiatives, which is to have more clinical trials that are inclusive of children conducted, the Modernization Act is still an incentive to do such, even if the FDA’s authority to mandate pediatric research is  challenged.   Insofar as the Modernization Act and the Final Rule may overlap, it is the FDA’s responsibility to notify drug sponsors about the possibility of gaining FDAMA market exclusivity.  
In compliance with the FDAMA’s requirement for the FDA report to Congress on the effectiveness and adequacy of pediatric exclusivity provision, the FDA released a report on the status of the section (“status report”), including suggestions for modification, on January 1, 2001.  Although initial reports showed that the FDA was slow to grant the market exclusivity incentives promised in the Modernization Act, the status report concludes that the pediatric exclusivity provision has been highly effective in achieving its goal of generating pediatric studies on many drugs and in providing useful new information in labeling drugs and biological products.  More specifically, at the time the report was written, the FDA had issued more than 157 written requests asking for 332 studies.  These studies would potentially involve more than 20,000 pediatric patients.   Additionally, the FDA reported that it had received more than 191 proposals from sponsors to conduct pediatric studies.  In fewer than three years, more than 58 pediatric studies had already been conducted.  Reports from these studies had been submitted, and exclusivity granted to 25 drugs.  The status report indicated that drugs that have or soon will have pediatric use information in their labeling include those drugs used to treat conditions in children such as HIV, asthma, diabetes, acid reflux disease, hypertension, juvenile rheumatoid arthritis, obsessive-compulsive disorder, and pain.  
In addition to reporting on the effectiveness of provision, the status report also addresses the adequacy and the economic impact of the provision, while also making recommendations for modifications of the provision when it expires January 1, 2002.  With regard to the provision’s adequacy, the status report said that the current exclusivity provision is inadequate as an incentive for drug sponsors to conduct testing on older antibiotics and other drugs lacking market exclusivity or patent protection.  Moreover, the incentive is not adequate to encourage research trials for certain younger age groups, especially the neonatal age group for whom an appropriate trial cannot be designed until studies of older pediatric age groups have been submitted and analyzed.  
The status report also found that the provision’s market exclusivity incentive is also inadequate failure to encourage studies in drugs with low sales because the value of the exclusivity does not offset the costs of the studies.  As a result,  a number of drugs that have been identified as important to children, but for which the incentive has little or no value, remain unstudied.  For example, of the ten most frequently prescribed drugs for children that lacked adequate labeling as set forth by the FDA in 1994, six have no remaining exclusivity or patent life.  As such, their sponsors were unable to take advantage of incentives under the pediatric exclusivity program.  Thus, even after the passage of the Modernization Act, the six drugs remain inadequately studied and labeled for the pediatric population. 
Finally, the status report showed that although a second period of exclusivity is available in the law, it, too, is inadequate because its limited scope precludes sponsors from being able to utilize this option.  
While the pediatric exclusivity provision should reduce certain types of health care expenditures, it also increases others.  The status report estimates that the cost of pediatric exclusivity will add less than one-half of 1 percent to the nation’s pharmaceutical bill.  Yet, while it is predicted that better drug treatment information will permit quicker recoveries from childhood illnesses, with fewer attendant hospital stays, physician visits and parental workdays lost, the extended exclusivity will also delay the introduction of lower-priced generic drugs into the market.  Delaying the introduction of generic drugs from entering the markets   temporarily raises the average price of prescription drugs, thus, particularly affecting the elderly and the uninsured population.
Although the report recommends renewal of the pediatric exclusivity provision after its sunset in 2002, it also recommends modifications to increase the program’s effectiveness.  The primary modification is for Congress to develop alternative incentives to address gaps in the current law regarding specific groups of children and classes of drugs for which current exclusivity provisions are inadequate or do not apply.  Moreover, the status report acknowledges the great burden the provision places on the elderly and the uninsured because of the delay in generic drugs on the market as a result of the extension of brand name patents under the provision.  As such, it encourages Congress to weigh costs of the provision and, if Congress determines that the costs of the provision outweighs its benefits, then the size of the incentive should be reduced. When viewed in its totality, however, the report concludes that the pediatric exclusivity provision has been effective in achieving its goal of providing dosing and safety information to physicians and to consumers by having information regarding safety on product labels.  

VII.	RECOMMENDATIONS FOR MODIFICATION TO THE PEDIATRIC EXCLUSIVITY PROVISION

The purported successes of the Modernization Act in  encouraging drug sponsors to conduct more clinical trials including children with the opportunity for patent extension on the tested drug make it difficult to question whether Congress should renew the provision beyond its scheduled sunset date of January 1, 2002.  There is more information regarding the effects of drugs on children available to clinicians for administering drugs to children and more information for product labeling than ever before.  
	In considering whether to renew the pediatric exclusivity provision, as suggested by the status report, Congress must seriously evaluate the costs of granting such an incentive and, more importantly, evaluate who is actually bearing the burden of these costs.  It is estimated that over the next 20 years, the pediatric exclusivity provision will cost consumers an additional 13.9 billion dollars.  Over that time, according to the FDA’s projections, brand-name drug-makers will gain 29.6 billion dollars, the generic industry will lose 10.7 billion dollars, and drug distributors, including pharmacies will lose 4.9 billion dollars. Assuming this is an accurate estimate, an evaluation of these numbers reveals that the overwhelming financial burden of the pediatric market exclusivity provision lies with the consumer.  The extension of market exclusivity to name brand drugs keeps the prices of prescription drugs higher due to the unavailability of generic drugs.  More than likely, the most affected sector of the population is the elderly and the poor.  To counter the effects of the provision’s incentive on these populations, Congress should revise the Modernization Act and implement a two-tiered incentive plan for drug sponsors that conduct clinical trials inclusive of the pediatric population.  
A two-tiered incentive plan would not only lessen the burden on consumers, particularly the elderly and the poor populations, but it would also combat the shortcomings of the Modernization Act including (1) its failure to encourage testing about the effects of drug therapy on all sectors of the pediatric populations, including neonates and infants; and (2) the absence of an incentive to conduct testing on drugs that do not qualify for patent exclusivity extensions due to expired patents.  Moreover, a two-tiered incentive plan will further increase the amount of information available regarding the effects of commonly prescribed drugs on the pediatric population, which is the ultimate goal of the provision.
	Tier-one of the incentive plan would allow the pediatric exclusivity provision to remain similar to its present state, with some modifications.  As the provision stands today, a drug that has been tested on children for safety and efficacy may qualify for a six-month extension on its patent, provided that the patent has not already expired.  Congress should modify this and allow drugs to qualify for a nine-month extension under the pediatric exclusivity provision if (1) the tested drug leads to a change in labeling for the pediatric population; (2) the drug is the first in its particular therapeutic class to be tested on children; or (3) the drug has been tested on all cross-sections of the pediatric population, including neonates and infants.
	Limiting the drugs that qualify for patent exclusivity achieves many of the goals the pediatric exclusivity provision fails to meet in its present state.  Most significantly, such limitations will reduce the number of drugs that receive the market exclusivity incentive, thus, lessening the burden on consumers. While these requirements set the incentive qualifying bar for drug sponsors higher, the financial gain drug sponsors receive as a result of the new nine-month patent exclusivity would make it worth the extra effort.  These limitations essentially shift the financial burden from consumers to drug sponsors, while simultaneously providing them a highly valuable and attainable incentive.	
In addition to shifting the burden of the incentive plan from consumers to drug sponsors, these limitations will encourage  faster and better  pediatric studies, especially with the granting of market exclusivity to only the first drug of a particular therapeutic class.  This provision is similar to the standard used in the orphan drug context, where a subsequent sponsor seeking orphan status must show clinical superiority in order to defeat a previous sponsor’s orphan exclusivity for a particular drug and qualify for its own exclusivity.  As a result of this modification, there will be fewer unnecessary duplicative studies on drugs of the same class.  Furthermore, drug companies would not be able to maintain market exclusivity on an entire class of drugs that essentially provide the same treatments, thus, rarely providing any new information on the effects of these treatments on children. 
	The final provision under which a drug sponsor can get an extension on market exclusivity of a drug is by testing the drug on all cross-sections of the pediatric population.  While there has been a substantial increase in the information available about the effects of certain drug therapies on certain pediatric populations as a result of the incentives provided in the Modernization Act, information regarding the effects of drug therapies on infants and neonates is still insufficient.  As such, this provision for patent exclusivity extension will encourage drug sponsors to conduct clinical trials in this sector of the pediatric population as well.
	Although limiting grants of patent exclusivity to those drugs that meet the previously outlined criteria, Congress should also create a second-tier incentive to ensure that drug companies do not dismiss the Modernization Act incentive provision as unattainable, and forego all pediatric clinical trials.  There should be an alternative,  second-tier incentive for drug sponsors to test drugs in pediatric populations that will not qualify for the market exclusivity extension, such as those drugs with expired patents, drugs of a class that have already received the extension under the first-tier, and drugs for which it is too costly or unfeasible to design a plan for testing on neonates and infants.  This second-tier incentive would be to provide drug companies with a one time tax benefit to conduct such studies. This benefit rewards drug companies without burdening consumers and drug distributors through excessive grants of market exclusivity, which delay the entrance of generic drugs and other lower price competitors into the market.   Although this provision may not be as appealing as the extension on market exclusivity as provided in the first-tier, it will encourage drug sponsors to conduct testing of their drugs on children, especially if the tax incentive is substantial.  
	Under this proposed scheme, the Modernization Act will continue to increase the amount of information available to clinicians and for labels regarding the effects of drug therapies on children by offering drug sponsors incentives to conduct such testing.  Placing further limitations on drugs that qualify for patent exclusivity will alleviate the economic burden consumers, especially the most vulnerable of our population, experience as a result of the delay of the introduction of lower drug competitors into the market.  While extension of market exclusivity from six- months to nine-months for qualifying drugs may have a counter effect and further delay the entry of some generic drugs into the market, the strict limitations of this provision will keep such to a minimum.  Finally, the second-tier incentive, which will provide a one time tax benefit for drugs that have been tested on children but do not qualify under the first-tier, will encourage drug sponsors to conduct clinical trials in the pediatric population, especially testing drugs on children that already have expired patents, without causing economic harm to consumers and drug distributors.

CONCLUSION
More than 60 to 70 percent of all drugs have no indication for their use in children under age 12.  The Final Rule and the pediatric exclusivity provision are the latest efforts to solve this problem of children as “therapeutic orphans.”  Although the FDA Final Rule mandates drug sponsors to conduct clinical trials that include children, the statutory authority of the FDA to enforce such a rule is questionable, and may be challenged by the pharmaceutical industry in the future.  As such, it is imperative that Congress renew the pediatric exclusivity provision in the FDAMA so as to continue increasing the amount of information available about the effects of drugs in children. In renewing this provision, Congress should adopt an incentive plan that rewards drug manufacturers for conducting such clinical trials but not one that simultaneously harms consumers.  Thus, a two-tiered incentive plan which extends patent life to drug studies  providing the most comprehensive information about their effects in children and tax benefits to other drug studies that include children, is an alternative, and perhaps better plan, for the pediatric exclusivity provision of the Modernization Act.