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to in this subparagraph as the 'compliance budget), and of such amount, the amount that was obligated for inspections by the Secretary of device establishments (referred to in this subparagraph as the ‘inspection budget').

"(ii) For purposes of determinations under clause (i), the Comptroller General shall not include in the compliance budget or the inspection budget any amounts obligated for inspections of device establishments conducted as part of the process of reviewing applications under section 515.

"iii) Not later than March 31, 2003, the Comptroller General shall complete the determinations required in this subparagraph and submit to the Secretary and the Congress a reporting describing the findings made through such determinations. “(C) For purposes of this paragraph:

"(i) The term base amount means the inspection budget determined under subparagraph (B) for fiscal year 2002.

"(ii) The term 'adjusted base amount', in the case of applicability to fiscal year 2003, means an amount equal to the base amount increased by 5 percent.

“(iii) The term 'adjusted base amount, with respect to applicability to fiscal year 2004 or any subsequent fiscal year, means the adjusted based amount applicable to the preceding year increased by 5 percent.

“(11) The authority provided by this subsection terminates on October 1, 2012.

"(12) No later than four years after the enactment of this subsection the Comptroller General shall report to the Committee on Energy and Commerce of the House of Representatives and the Committee on Health, Education, Labor and Pensions of the Senate

"(A) the number of inspections pursuant to subsections (h) and (i) of section 510 conducted by accredited persons and the number of inspections pursuant to such subsections conducted by Federal employees;

"(B) the number of persons who sought accreditation under this subsection, as well as the number of persons who were accredited under this subsection;

"(C) the reasons why persons who sought accreditation, but were denied accreditation, were denied;

“(D) the number of audits conducted by the Secretary of accredited persons, the quality of inspections conducted by accredited persons, whether accredited persons are meeting their obligations under this Act, and whether the number of audits conducted is sufficient to permit these assessments;

"(E) whether this subsection is achieving the goal of ensuring more information about device establishment compliance is being presented to the Secretary, and whether that information is of a quality consistent with information obtained by the Secretary pursuant to subsection (h) or (i) of section 510;

"(F) whether this subsection is advancing efforts to allow device establishments to rely upon third-party inspections for purposes of compliance with the laws of foreign governments; and

"(G) whether the Congress should continue, modify, or terminate the program under this subsection.

"(13) The Secretary shall include in the annual report required under section 903(g) the names of all accredited persons and the particular activities under this subsection for which each such person is accredited and the name of each accredited person whose accreditation has been withdrawn during the year.

"(14) Notwithstanding any provision of this subsection, this subsection does not have any legal effect on any agreement described in section 803(b) between the Secretary and a foreign country.”.

(b) MAINTENANCE OF RECORDS.-Section 704(f) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 374(f)) is amended

(1) in paragraph (1), in the first sentence, by striking “A person accredited” and all that follows through “shall maintain records” and inserting the following: “An accredited person described in paragraph (3) shall maintain records”;

(2) in paragraph (2), by striking "a person accredited under section 523” and inserting “an accredited person described in paragraph (3)”; and

(3) by adding at the end the following paragraph: “(3) For purposes of paragraphs (1) and (2), an accredited person described in this paragraph is a person who—

“(A) is accredited under subsection (g); or

“(B) is accredited under section 523.". (c) CIVIL MONEY PENALTY.-Section 303(g)(1)(A) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 333(g)(1)(A)) is amended by adding at the end the following: “For purposes of the preceding sentence, a person accredited under paragraph (2) of section 704(g) who is substantially not in compliance with the standards of accreditation under such section, or who poses a threat to public health or fails to act in a manner that is consistent with the purposes of such section, shall be considered to have violated a requirement of this Act that relates to devices.”.

(d) PROHIBITED ACTS.—Section 301 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 331) is amended by adding at the end the following:

"(gg) The knowing failure of a person accredited under paragraph (2) of section 704(g) to comply with paragraph (7)(E) of such section; the knowing inclusion by such a person of false information in an inspection report under paragraph (7)(A) of such section; or the knowing failure of such a person to include material facts in such a report.”.

(e) CONFORMING AMENDMENT.-Section 510(h) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360(h) is amended by inserting after "duly designated by the Secretary” the following:

or by persons accredited to conduct inspections under section 704(g)," SEC. 202. THIRD PARTY REVIEW OF PREMARKET NOTIFICATION.

Section 523 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360m) is amended

(1) in subsection (c), by striking “The authority” and all that follows and inserting the following: "The authority provided by this section terminates October 1, 2007."; and

(2) by adding at the end the following subsection: "(d) REPORT.-Not later than January 10, 2007, the Secretary Deadline. shall conduct a study based on the experience under the program under this section and submit to the Committee on Energy and

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Commerce of the House of Representatives, and the Committee on Health, Education, Labor, and Pensions of the Senate, a report describing the findings of the study. The objectives of the study shall include determining

"(1) the number of devices reviewed under this section;

“(2) the number of devices reviewed under this section that were ultimately cleared by the Secretary;

"(3) the number of devices reviewed under this section that were ultimately not cleared by the Secretary; “(4) the average time period for a review under this section

a (including the time it takes for the Secretary to review a recommendation of an accredited person under subsection (a) and determine the initial device classification);

“(5) the average time period identified in paragraph (4) compared to the average time period for review of devices solely by the Secretary pursuant to section 510(k);

“(6) if there is a difference in the average time period under paragraph (4) and the average time period under paragraph (5), the reasons for such difference;

(7) whether the quality of reviews under this section for devices for which no guidance has been issued is qualitatively inferior to reviews by the Secretary for devices for which no guidance has been issued;

“(8) whether the quality of reviews under this section of devices for which no guidance has been issued is qualitatively inferior to reviews under this section of devices for which guidance has been issued;

"(9) whether this section has in any way jeopardized or improved the public health;

“(10) any impact of this section on resources available to the Secretary to review reports under section 510(k); and

“(11) any suggestions for continuation, modification (including contraction or expansion of device eligibility), or termination of this section that the Secretary determines to

be appropriate.”. SEC. 203. DEBARMENT OF ACCREDITED PERSONS.

Section 306 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 335a) is amended by adding at the end the following subsection:

"m) DEVICES; MANDATORY DEBARMENT REGARDING THIRDPARTY INSPECTIONS AND REVIEWS.

"(1) IN GENERAL.-If the Secretary finds that a person has been convicted of a felony under section 301(gg), the Secretary shall debar such person from being accredited under section 523(b) or 704(g)(2) and from carrying out activities under an agreement described in section 803(b).

(2) DEBARMENT PERIOD.—The Secretary shall debar a person under paragraph (1) for the following periods:

(À) The period of debarment of a person (other than an individual) shall not be less than 1 year or more than 10 years, but if an act leading to a subsequent debarment under such paragraph occurs within 10 years after such person has been debarred under such paragraph, the period of debarment shall be permanent.

"(B) The debarment of an individual shall be permanent.

"(3) TERMINATION OF DEBARMENT; JUDICIAL REVIEW; OTHER MATTERS.–Subsections (c)(3), (d), (e), (i), (j), and (1)(1) apply with respect to a person (other than an individual) or an individual who is debarred under paragraph (1) to the same extent and in the same manner as such subsections apply with respect to a person who is debarred under subsection (a)(1), or an individual who is debarred under subsection (a)(2),

respectively.”. SEC. 204. DESIGNATION AND REGULATION OF COMBINATION PROD

UCTS. Section 503(g) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 353(g)) is amended

(1) in paragraph (1)

(A) in the first sentence, by striking "shall designate
a component of the Food and Drug Administration” and
inserting "shall in accordance with this subsection assign
an agency center"; and

(B) in each of subparagraphs (A) through (C), by
striking "the persons charged” and inserting “the agency
center charged”;
(2) by redesignating paragraph (4) as paragraph (5);

(3) by inserting after paragraph (3) the following paragraph:

“(4)(A) Not later than 60 days after the date of the enactment Deadline. of this paragraph, the Secretary shall establish within the Office of the Commissioner of Food and Drugs an office to ensure the prompt assignment of combination products to agency centers, the timely and effective premarket review of such products, and consistent and appropriate postmarket regulation of like products subject to the same statutory requirements to the extent permitted by law. Additionally, the office shall, in determining whether a product is to be designated a combination product, consult with the component within the Office of the Commissioner of Food and Drugs that is responsible for such determinations. Such office (referred to in this paragraph as the 'Office') shall have appropriate scientific and medical expertise, and shall be headed by a director.

"(B) In carrying out this subsection, the Office shall, for each combination product, promptly assign an agency center with primary jurisdiction in accordance with paragraph (1) for the premarket review of such product.

"(C)(i) In carrying out this subsection, the Office shall ensure timely and effective premarket reviews by overseeing the timeliness of and coordinating reviews involving more than one agency center.

“(ii) In order to ensure the timeliness of the premarket review of a combination product, the agency center with primary jurisdiction for the product, and the consulting agency center, shall be responsible to the Office with respect to the timeliness of the premarket review.

“(D) In carrying out this subsection, the Office shall ensure the consistency and appropriateness of postmarket regulation of like products subject to the same statutory requirements to the extent permitted by law.

“(E)(i) Any dispute regarding the timeliness of the premarket review of a combination product may be presented to the Office for resolution, unless the dispute is clearly premature.

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Reports.

"(ii) During the review process, any dispute regarding the substance of the premarket review may be presented to the Commissioner of Food and Drugs after first being considered by the agency center with primary jurisdiction of the premarket review, under the scientific dispute resolution procedures for such center. The Commissioner of Food and Drugs shall consult with the Director of the Office in resolving the substantive dispute.

“(F) The Secretary, acting through the Office, shall review each agreement, guidance, or practice of the Secretary that is specific to the assignment of combination products to agency centers and shall determine whether the agreement, guidance, or practice is consistent with the requirements of this subsection. In carrying out such review, the Secretary shall consult with stakeholders and the directors of the agency centers. After such consultation, the Secretary shall determine whether to continue in effect, modify, revise, or eliminate such agreement, guidance, or practice, and shall publish in the Federal Register a notice of the availability of such modified or revised agreement, guidance or practice. Nothing in this paragraph shall be construed as preventing the Secretary from following each agreement, guidance, or practice until continued, modified, revised, or eliminated.

"(G) Not later than one year after the date of the enactment of this paragraph and annually thereafter, the Secretary shall report to the appropriate committees of Congress on the activities and impact of the Office. The report shall include provisions

“(i) describing the numbers and types of combination products under review and the timeliness in days of such assignments, reviews, and dispute resolutions;

"(ii) identifying the number of premarket reviews of such products that involved a consulting agency center; and

"(iii) describing improvements in the consistency of postmarket regulation of combination products.

“(H) Nothing in this paragraph shall be construed to limit the regulatory authority of any agency center.”; and

(4) in paragraph (5) (as redesignated by paragraph (2) of this section)

(A) by redesignating subparagraphs (A) and (B) as subparagraphs (B)

and (C), respectively; and (B) by inserting before subparagraph (B) the following subparagraph:

“(A) The term ‘agency center' means a center or alternative organizational component of the Food and Drug Administra

tion.".
SEC. 205. REPORT ON CERTAIN DEVICES.

Not later than one year after the date of enactment of this Act, the Secretary of Health and Human Services shall report to the appropriate committees of Congress on the timeliness and effectiveness of device premarket reviews by centers other than the Center for Devices and Radiological Health. Such report shall include information on the times required to log in and review original submissions and supplements, times required to review manufacturers' replies to submissions, and times to approve or clear such devices. Such report shall contain the Secretary's recommendations on any measures needed to improve performance including, but not limited to, the allocation of additional resources.

21 USC 360e note. Deadline.

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