CLIN. RESEARCH & REG. AFFAIRS, 14(2), 139-154 (1997)
AN UPDATE ON THE GENERIC DRUG APPROVAL PROCESS
Michael R. Hamrell, Ph.D., President MORIAH Consultants
Yorba Linda, California 92886
ABSTRACT
In 1984 the Drug Price Competition and Patent Term Restoration Act changed the regulatory climate for generic drugs. This law allowed for the approval of generic 'me-too' Copies of many approved drug after the patent had expired. Although the road has not been smooth, the generic drug approval process has had a significant impact on the availability of generic versions of approved drug. This article discusses the evolution and changes that have occurred in generic drug approvals since the 1984 Act.
INTRODUCTION
A generic drug is a drug product that is an identical copy in composition,
formulation, strength, packaging, and labeling that is marketed by a company other
than the company that did the original research on the drug product (the innovator
firm)(l). These drugs are also often called 'me-too' drugs. The innovator firm
will have completed many years of chemical development, preclinical animal
testing and clinical testing in humans before gaining approval from the Food and
Drug Administration for the product. Generic drugs on the other hand, do not
139
Copyright 0 1997 by Marcel Dekker, Inc.
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undergo such extensive testing and are currently approved by FDA through an
abbreviated application process.
The drug approval process for generic drugs has evolved over the last 60 years as
the Food Drug and Cosmetic Act has changed. In 1938, Congress amended the
Food Drug & Cosmetic (FD&C) Act to impose a premarket approval requirement
for new drugs. It also charged FDA with setting up rules and regulations for the
interpretation of the new law. However, this premarket approval was only based
on the safety of the drug. The FD&C Act was amended again in 1962, this time
adding the burden of effectiveness to the drug approval process as well as safety.
During the period of 1938 - 1962, a number of new drug products were placed on
the market along with a number of Copies of these products. As a result of the new
requkments for efficacy, the FDA determined it needed to evaluate the drugs on
the market Pre-1962 that had never been evaluated for efficacy. It set up an administrative procedure to retrospectively review the drugs approved before 1962
for efficacy. The Drug Efficacy Safety Implementation (DESI) Review was
conducted to review the efficacy claims for all Pre-1962 drugs on the market. As
a result of this review, a number of ineffective drugs were taken off the market,
reformulated, or modified to meet the findings of the DESI Review (2).
Since the DESI review had evaluated many copies or generic versions of pioneer
drugs, the FDA established a policy in 1968 at the end of the DESI review that
would allow for a shortened form of the New Drug Application or an
'Abbreviated' NDA (ANDA) for the generic drug. For drugs found to be effective
by the DESI Review, the FDA published the conditions under which an ANDA
could be submitted to market an identical version of the product. Under the
statues, the ANDA policy only applied to Pre-1962 drugs that had been reviewed
by the DESI panel and found to be effective.
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GENERIC DRUG APPROVAL PROCESS 141
During the 1960s and 1970s, many drug products were introduced onto the market
and subsequently had their patents expire. The FDA policy however, did not allow
for ANDAs for these drugs. In 1978, the FDA expanded the scope of its ANDA
policy somewhat to include post-1962 drugs. The FDA concluded that if adequate
published studies exist to support the safety and efficacy claims of a particular drug
entity, another manufacturer of that post-1962 drug should not be required to
conduct new studies to support the same claims. This would unnecessarily expose
additional humans to risk, consume clinical resources and cause FDA to review
duplicative studies. The FDA therefore adopted a policy for requirements for an NDA for a duplicative drug product for a post-1962 drug. This policy allowed for
the submission of copies of published studies (scientific) concerning the safety and
efficacy of the original drug product. This became known as the "Paper-NDA".
The paper NDA was not widely used due to the lack of published literature on most
post- 1962 drugs
and was not considered a substitute for a full ANDA program that addressed all
post-1962 drugs (3).
The Drug Price Competition and Patent Term Restoration Act of 1984
The need for a full ANDA program for post-1962 drugs led to the passage by
Congress in 1984 of the Drug Price Competition and Patent Term Restoration Act.
Also know as the 'Waxman-Hatch' Bill after its Congressional sponsors, the 1984
Law amended section 505 of the FD&C Act to allow for an ANDA for any generic
version of an approved new drug (4). This was subject only to patent or
exclusivity provisions that may exist for the product. In order to determine what
new drugs were approved and their status, the FDA was required to publish a list
of all approved drugs, their patent status and information regarding bioequivalence
requirements. This information is available in the Approved Drug Products and
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lhempeutc Quivalence Rating Book (Orange Book), published by the FDA on a
monthly basis. In 1989 the FDA published regulations for implementation of the
1984 Law, and the regulations were finalized in 1992. The regulations permit an
ANDA only for a product that is the same as the listed drug with respect to active
ingredients, route of administration, dosage form, strength, and conditions of use.
Any modifications or deviations from the exact product must be submitted and
approved in advance by the FDA through a suitability petition.
Post 1984 Generic Approvals
As a result of the passage of the Waxman-Hatch bill in September 1984, the FDA found itself dealing with a large backlog of demand for generic versions of post-
1962 drugs that had long since been off-patent. In the first full year after the
Waxman-Hatch took effect, the FDA's Office of Generic Drugs received over lo00
original ANDAs, compared to only 400 in 1983. This increased number of
submissions continued for the next few years with 900-1200 applications received
each year. In addition, there were a significant number of supplements to
approved ANDAs covering changes that inevitably follow a large number of
approvals.
In order to meet this demand, the Office of Generic Drugs was given new
expanded facilities
within the FDA and additional reviewers were added to the staff. The
Bioequivalence Branch in the Division of Biopharmaceutics was transferred to the
Office of Drug Standards and made into the new Division of Bioequivalence to
support the generic drug approval process. Overall, almost 50 new reviewers and support staff were added to meet the generic drug approval demand.
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GENERIC DRUG APPROVAL PROCESS 143
Industry Challenges and Opposition to Generics
The passage of the 1984 Law was a landmark in compromise legislation to satisfy
the m n m s of two sides of the industry. The generic drug industry and consumer
groups wanted generic versions of post-1962 drugs to be readily available. The
innovator or pioneer drug firms were very much against the expansion of FDA's
ability to approve ANDAs for generic versions of post-1962 drugs. Additionally,
they wanted some regulatory relief from the valuable patent life 'lost' during the
FDA review process. As a result, the 1984 amendment includes Title I1 that
covers patent term restoration for the administrative and review time lost to the
patent life of a product. In return for patent term restoration, the innovator firms
conceded generic versions of post-1962 drugs.
Although, the law changed the rules, many innovator firms found new ways to try
to moderate the approval of generic versions for their drug products. These firms
mounted legal challenges to FDA's approval criteria, submitted petitions charging
bioinequivalence of generic versions of their products, poor manufacturing
compliance by generic firms, and arbitrary, inconsistent suitability decisions by
FDA. They also started an advertising campaign to 'alert' the public to the
dangers of non-equivalent versions of their medicines (5). When a company was
unsuccessful in stopping the FDA approval for a generic version of its product,
they took their challenges to state and hospital formulary boards with some degree
of success.
In an effort to gather information on claimed problems with FDA's Bioequivalence
program, and with generic drugs in general, the Agency sponsored a three day
informal public hearing in September 1986 in Washington, D.C. The Hearing
consisted of five sessions on topics related to the issue of bioequivalence of
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immediate release solid oral dosage forms drug products. Despite a noted lack of
scientific data to back many of the concerns expressed regarding bioequivalence
testing, the meeting was attended by more than 800 representatives of academia,
industry, the medical profession and government. Following the Hearing,
Commissioner Young appointed a Task Force to analyze the issues raised at the
Hearing and the comments submitted to the Public Docket. The purpose was to
make recommendations to the Agency for action it should take in response to the
comments conceming the Bioequivalence Program. The Task Force Report, issued
in February 1988, concluded that the underlying fundamental principle, that drug
products delivering comparable blood levels of a therapeutic substance yield
comparable therapeutic results, was scientifically sound and that it saw no need to
recommend major changes in the way FDA approves generic drug products. The
report supported the long-standing policy that if a drug product is declared by the
Agency to be therapeutically equivalent, a physician, in managing a patient, can feel secure that authorizing a substitution of that product for any other generic,
therapeutically equivalent, product will provide the same intended effect (6).
The passage of the Waxman-Hatch Bill had opened the market for the approval of
generic versions of many top selling drugs developed post-1962 whose patent had
expired. The potential generic market was estimated at over $900 million dollars
and growing, as insurance companies, managed care providers, and the
government tried to control the costs of health care. This broad new market stirred
the development of many new generic drug manufacturers, as well as leading to the
expansion of many older, established ones. The competition to be the fust generic
version of a product on the market was seen as key to penetration into the market
and quick cost recovery for the generic manufacturer,
The FDA was receiving well over lo00 ANDA applications each year for generic
versions of drug products. Along with supplements, amendments, suitability
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GENERIC DRUG APPROVAL PROCESS 145
petitions and citizen petitions challenging FDA's policy, the Generic Drug group
was overworked and understaffed. In an effort to speed up the generic drug
approvals, an em of openness between FDA and industry existed that saw industry
regulatory representatives fresuently visit the FDA reviewers in an effort to rapidly
deal with any issues that came up during the review of an ANDA. As a result, a
few companies tried to seek an edge in this highly competitive marketplace.
The Generic Drug Scandal
In late 1987, one company became increasingly concerned that their applications,
which were apparently submitted earlier than other companies, were delayed and
acted upon after the applications submitted later. Company representatives took
their concerns to the Director of the Division of Generic Drugs at FDA who
dismissed them as unfounded. Still convinced of a problem at FDA, the company
hired its own private investigator to look into the allegations. What the
investigator uncovered would subsequently shake the generic drug industry, and the
FDA, with a major scandal of significant proportions.
The investigator discovered initially that one FDA Chemist in Generic Drugs was
receiving large gifts of money and furniture at his home. The items seemed to be
coming from persons associated with a small generic company that had recently received some first generic approvals. The company this time took their evidence
this time to Congressman Dingell, a longtime critic of FDA, and Chairman of the
House Oversight and Investigations Subcommittee on FDA. As a result of this
evidence, the Secretary of HHS took the unusual step of alerting the Inspector
General's Office, and an immediate investigation of the FDA Generic Drug
approval process and personnel associated with the process was begun. Offices
were sealed, records and notes gathered as evidence, and key staff members were
interviewed. The Inspector General and US Attorney's office began looking into
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the allegations for the fist time. Much to their dismay, the allegations appeared
true. It appeared that some companies had tried to subvert the integrity of the
review process by paying bribes and kickbacks to a few FDA reviewers for either
favorable or more timely reviews.
At the same time, in response to growing allegations of problems and
inconsistencies with the generic approval process, the FDA changed policy on
industry meetings, increased training in the area of conflict-of-interest and ethics
for government employees, and increased management review of all pending
ANDAs. Additional FDA reviewers and support staff were now under
investigation and were transferred from Generic Drugs. In April 1989, the US Attorney announced criminal indictments against two FDA reviewers and a number
of generic drug industry representatives. This was the first of many indictments
to follow. The Commissioner immediately called for a complete audit of the
generic drug program by the Inspector General. The FDA also began an inspection
of all generic drug firms for possible compliance problems, focusing on certain
companies accused of illegal activities.
As the extent of the illegal activity began to unfold, the participants involved began
to fall. One company official pleaded guilty to giving an unlawful gratuity to an
FDA official. Two FDA reviewers pleaded guilty to accepting bribes and
racketeering. Three other FDA persons were removed from their positions, two
subsequently plead guilty to accepting bribes. The other, the Director of Division
of Generic Drugs, would later be convicted of accepting illegal gratuities from
company officials and perjury (7).
The problems did not occur with a only few dishonest FDA reviewers and
company officials. As a result of the audit of generic drug manufacturers, it was
uncovered that there was major problems in the manufacturing compliance part of
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GENERIC DRUG APPROVAL PROCESS 147
the generic drug approval process. Apart from overt instances of fraud and
misrepresentation, a number of companies were found to be out of compliance in
their manufacturing operations. This included unapproved changes to
manufacturing processes, lack of quality control procedures, use of unapproved
raw material suppliers, as well as many other manufacturing problems. Following
extensive inspection and investigations, over 50 products were withdrawn from the
market due to questions about the integrity of the application. Another 75 products
were voluntarily recalled to correct deficiencies in GMP procedures.
To deal with the issues raised by the generic drug scandal, the FDA announced in
late 1989 an action plan to ensure the safety and effectiveness of generic drugs.
This included intensified inspection programs for generic manufacturers,
reorganization of the generic drug review process, a strengthening of the
relationship between the FDA and Inspector General's office, and new resources
for intensified surveillance activities. The FDA also issued a set of revised Policy
& Procedures guides to the review staff for the handling of ANDAs. Additional
staff were hired in Generic Drugs to help with the workload as well. Finally, in
early 1990, as a result of mounting pressure from the industry to obtain outside
input into the generic drug process, the FDA announced the establishment of a
Generics Drug Advisory Committee. In addition, the Agency transferred the
authority for generic drug approvals from the Office of Drug Standards to the new
Office of Generic Drugs.
The inspection of generic drug manufacturers prior to approval of an ANDA
revealed that not only did generic manufacturers have GMP compliance problems,
but many innovator firms did as well. Many firms did not have complete
validation procedures in place, lacked adequate QC and sampling routines, and
many other examples of manufacturing controls that would ensure the quality and
integrity of drug products produced. The inspectional experience also revealed that
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there were many discrepancies between what some generic firms submitted to the
FDA and their actual manufacturing operations. The FDA's observations,
although based largely on the generic industry, also included some innovator firms.
The Agency felt that additional inspections were warranted to audit application
commitments and statements against actual manufacturing practices used by
applications before final marketing approval was granted. As a result, the FDA
expanded the policy on inspections for new drug applications, and made a Pre-
Approval Inspection (PAI) of the manufactwing plant a requirement for final NDA
or ANDA approval (8). This policy was proposed and implemented provisionally
in 1991, and finalized in 1993. As a result of this program, many NDA and
ANDA approvals were delayed while firms completed validation and testing
procedures to document their manufacturing operations. A number of firms had
much difficulty meeting FDA's criteria for GMP compliance prior to granting
approval for a product. The need for better written Chemistry and Manufacturing
sections of applications, full quality assurance procedures and good documentation
practices was clear from FDA's inspectional observations. Companies that could
demonstrate a clear understanding of GMP regulations and a fully implemented
compliance program were able to pass a PA1 while those f m s that did not have
procedures and processes in place often had much difficult with FDA inspections.
Another area of concern during the generic scandal was the admission by one
company that it had substituted the innovator's product for its own in
bioequivalence testing. In attempting to audit the bioequivalence study and data,
no samples had been retained by the company or the testing lab to validate what
drug product had in fact been used in the testing. The FDA realized that there was
no specific requirement in the regulations to require retention of bioequivalence
samples for such purposes. As a result, the FDA issued an interim rule in
November 1990 (later finalized in 1993), immediately requiring firms to retain
samples of all drug products used in bioavailability and bioequivalence testing for
new drug applications (including abbreviated NDAs) (9).
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GENERIC DRUG APPROVAL PROCESS 149
In January 1992, Congress passed a bill to establish procedures to restore and
ensure integrity of the ANDA approval process and to bar individuals convicted of
crimes pertaining to the regulation of drug products from working for companies
that manufacture and distribute such products. Known as the Generic Drug
Enforcement Act of 1992, the law adds a new section to the Food Drug and
Cosmetic Act. The law authorizes FDA to debar any individual or firm, convicted
of certain crimes or found to have engaged in certain types of conduct, from
providing services to any drug product applicant (10). The new laws applies not
only to ANDAs, but also to NDAs, AADAs, NADAs, ANADAs, PLAs, and
export applications for certain unapproved products. All applications submitted
after the effective date of the law must now contain a statement that no individual
debarred from the drug approval process has participated in the preparation of the
application. The FDA can also under this law, deny temporarily approvals of
ANDAS for any lirm if the sponsor is under criminal investigation. The FDA can
also suspend the approval of a generic company's products if it can demonstrate to
a judge that the approvals were tainted by repeated misconduct. This misconduct
may include a "pattern of practice" of making false statements to the FDA, or
having committed "flagrant and repeated" GMP or GLP violations during a short
time period. Finally, the law also includes civil penalties of up to $250,000 for
individuals and $1 million for corporations for fraudulent activities (1 1).
The final toll for the generic scandal included five FDA officials were either
convicted or pleaded guilty to various crimes, more than 28 company officials from
various generic companies were convicted of bribery, fraud, obstruction of justice,
racketeering and other crimes. A number of generic companies were put out of
business as a result of these activities. Companies and guilty officials paid a record
over $18 million in fines and penalties as a result of the government's
investigation. It was clear that the FDA approval process and the generic industry
would never be the same again.
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ANDA Review Process
The review process for an Abbreviated New Drug Application (ANDA) is similar
in many respects to the review for an full New Drug Application. After receipt, the
ANDA is reviewed for acceptability and completeness. Under FDA's 'Refusal to
File" Policy, incomplete or unacceptable applications can be refused for
consideration by FDA. In addition the FDA confirms that the application
references the proper 'listed drug' for that product or contains information that a
suitability petition for a variation has been approved by the FDA. Each ANDA
must also contain a patent certification, a statement that either no patent is in effect
for the product (or will expire on a certain date), or that the application uses a
product or process that does not conflict with the patent (12,13).
The format of the ANDA must follow the general requirements for NDA
submissions as a result of the 1985 NDA rewrite, with a blue archival copy and a
technical review copy. In addition, as a result of the PA1 program, an additional
copy of the manufacturing and controls section must be submitted in a separate
binder for distribution to the regional FDA Office for use by the investigators
during the Pre Approval Inspection.
Once an application is approved, certain types of changes to the approved
application must also be sent to the FDA for review and approval. This may
include a change in manufacturing information, supplier, or formulation changes.
These changes must be formally submitted to the FDA as a supplement to the
approved application. The types of changes that require prior approval by FDA
are clearly defined in the regulations and the recent guideline on Scale Up and Post
Approval Changes (SUPAC) (14).
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GENERIC DRUG APPROVAL PROCESS 151
Generic Drugs Workload
Prior to the generic scandal, from 1984 to mid-1988, the Division of Generic
Drugs received an average of 80 - 100 original applications per month for generic
drugs. Actions on applications was averaging around 200 letters per month during
this same time period, with 30-40 original approvals granted each month. This
high workload and the pressures of keeping up may have contributed to the
problems associated with the generic scandal.
Immediately following the revelations of the generic scandal, the FDA severely
restricted approval of new applications and supplements until they were sure of the
integrity of applications and the companies involved. Likewise, companies stopped
submitting ANDAs knowing that FDA was not acting on applications in the wake
of the scandal. By early 1989, the number of applications received had dropped to
30-40 per month while approvals had dropped to less than 10 per month, with
some months having no applications approved. As the FDA tried to sort out the
problems, action letters also dropped significantly with only a handful being issued
per month on average. This trend continued through 1990 and into 1991 as the
FDA slowly sorted out the process, instituted changes, and instituted new
procedures and programs to ensure the integrity of the application process (15).
One of the biggest impacts on the generic drug approval process was the
implementation of the Pre-Approval Inspection program (described earlier). As
a result of this program, the FDA found that a significant number of firms were
not in compliance with GMP requirements, had numerous undocumented and
unapproved changes for approved applications, and an overall lack of
understanding of GMP practices. This lead to a very high level of review and
scrutiny of the chemistry, manufacturing and controls sections of applications.
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Additionally, due to the evidence of fraud found in the application process, both
innovator and generic companies are required to provide certification that they did
not use any debarred individual in any capacity in the application.
The heightened emphasis on GMPs and compliance by FDA led to a distinction
between the quality of submissions from various generic manufacturers. Most of
the generic firms had high quality operations, and good documentation and GMP
practices. For these firms, the new emphasis on GMPs was just another item to deal with in order to gain approval of their products. A few other firms had been
operating with the best of intentions, but their operations were deficient in many
areas. For these firms, the emphasis on GMPs caused them to spend a great deal
of time, effort, and often money to get their manufacturing operations and
documentation up to the new standards expected by FDA. As a result, approvals
were held up or delayed for a significant time period while the firms complied with
the FDA standards for GMPs and pre approval inspections. Finally ,there was a
very small number of firms who, despite all of the problems in the recent years in
the generic industry and FDA's expectations, tried to do business they way they
had before. These few firms repeatedly failed pre approval inspections, did little
or nothing to address the issues raised by the FDA, refused to comply with FDA
requests for additional information, testing or documentation, and often argued that
FDA's demands were unfair and should not apply to them. These pleas of
unfairness fell on deaf ears, and did not gain much sympathy from the public,
FDA, or Congress. Given the level of scrutiny being placed on FDA, the generic
drug industry, and the individuals involved, there was little hope of any leniency being granted. These few firms found out very quickly to either comply with
FDA's new expectations and demands regarding GMP compliance or they would
go out of business.
Since the changes in the Office of Generic Drugs have been implemented and
incorporated, the workload has returned to a level that approximates the pre-
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GENERIC DRUG APPROVAL PROCESS 153
scandal level. Although the rate of review and action letters has returned towards
earlier levels, the level of scrutiny of applications has remained higher.
summary
The approval of Generic Drugs by the Food and Drug Administration has made a
significant impact on the availability of generic versions of many leading drugs.
Although the regulatory approval system for these drugs has suffered through a
major scandal and a lack of confidence, it still continues to approve generic drug
products. These products are required to meet the FDA standard for a new drug
product, and generic drugs are subjected to the same rigorous standard for approval
as innovator products. Despite much discussion and attempt to prove otherwise,
generic drugs are approved based on bioequivalence requirements that support
interchangeability and substitution.
REFERENCES
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Food and Drug Law. ed. Richard M. Cooper, 1991. pp. 249-252,
Food and Drug Law; Case Materials. eds. Memll & Hutt, 1980. pp.370- 378.
NDAs for Duplicative Drug Products of Post-1962 Drugs. FR 46:27396, 1981.
Pub. L. NO. 98-417, 1984.
The Big Lie about Generic Drugs. Consumer Reports, 52(8):480-487, 1987.
Report of the Bioequivalence Task Force on Recommendations from the Bioequivalence Hearing Conducted by the Food and Drug Administration, FDA, January 1988.
Ander, G, Rumore, MM, Torre, GM, and Hyman, L. Major Consequences of the Generic Drug Scandal of 1988., Regulatory Afuirs 6: 137-159. 1994.
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8. New Drug and Abbreviated New Drug Applications; Preapproval InSpection Requirements; Final Rule. FR 58:47340-47352, 1993.
9. Retention of Bioavailability & Bioequivalence Testing Samples; Final Rule. FR 58:25918-25928, 1993.
10. Generic Drug Enforcement Act of 1992. Pub. L. 102-282, 1992.
11. Civil Money Penalties: Biologics, Drugs, and Medical Devices; Proposed Rule, FR 58:30680-30689, 1993.
12. Abbreviated New Drug Applications, Final Rule. FR 57: 17950-18001, 1992.
13. Understanding and Preparing ANDAs. Speech given by David Rosen at RAPS Seminar, July 1987.
14. Immediate Release Solid Oral Dosage Forms; Scale-Up and Postapproval Changes (SUPAC) Notice. FR 60:61638, 1995.
15. Generic Drugs: A New m. Speech Given by Roger Williams at RAPS Annual Meeting, September 1991.
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