[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 3162 Introduced in Senate (IS)]
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116th CONGRESS
2d Session
S. 3162
To amend the Public Health Service Act to establish an Office of Drug
Manufacturing.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
January 8, 2020
Ms. Warren introduced the following bill; which was read twice and
referred to the Committee on Health, Education, Labor, and Pensions
_______________________________________________________________________
A BILL
To amend the Public Health Service Act to establish an Office of Drug
Manufacturing.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Affordable Drug Manufacturing Act of
2020''.
SEC. 2. PUBLIC MANUFACTURING OF PHARMACEUTICALS.
Part A of title III of the Public Health Service Act (42 U.S.C. 241
et seq.) is amended by adding at the end the following:
``SEC. 310B. MANUFACTURING OF DRUGS.
``(a) Establishment of Office of Drug Manufacturing.--
``(1) In general.--There is established within the
Department of Health and Human Services an office to be known
as the Office of Drug Manufacturing (referred to in this
section as the `Office').
``(2) Purpose.--The purpose of the Office is--
``(A) to increase competition, lower prices, and
address shortages in the market for prescription drugs,
including insulin, naloxone, and antibiotics;
``(B) to reduce the cost of prescription drugs to
Federal and State health programs, taxpayers, and
consumers; and
``(C) to increase patient access to affordable
drugs.
``(3) Personnel.--
``(A) Director.--
``(i) In general.--The Office shall be
headed by a Director, who shall be appointed by
the President, by and with the advice and
consent of the Senate.
``(ii) Compensation.--The Director shall be
compensated at the rate prescribed for level
III of the Executive Schedule.
``(B) Employees.--The Director of the Office, in
consultation with the Secretary, may fix the number of,
and appoint and direct, all employees of the Office.
``(C) Banned individuals.--
``(i) Drug company lobbyists.--No former
registered drug manufacturer lobbyist--
``(I) may be appointed to the
position of Director of the Office; or
``(II) may be employed by the
Office during the 6-year period
beginning on the date on which the
registered lobbyist terminates its
registration in accordance with section
4(d) of the Lobbying Disclosure Act of
1995 (2 U.S.C. 1603(d)) or the agent
terminates its status, as applicable.
``(ii) Senior executives of law-breaking
companies.--No former senior executive of a
covered entity (as defined in clause (iii))--
``(I) may be appointed to the
position of Director of the Office; or
``(II) may be employed by the
Office during the 6-year period
beginning on the later of--
``(aa) the date of the
settlement; and
``(bb) the date on which
the enforcement action has
concluded.
``(iii) Covered entity.--The term `covered
entity' means any entity that is--
``(I) a drug manufacturer; and
``(II)(aa) operating under Federal
settlement, including a Federal consent
decree; or
``(bb) the subject of an
enforcement action in a court of the
United States or by an agency.
``(4) Duties.--
``(A) In general.--The Office shall--
``(i) prepare and submit applications for
approval to the Food and Drug Administration,
or enter into contracts for such submission,
for the manufacture of applicable drugs when
authorized under this section;
``(ii) acquire rights to manufacture
applicable drugs as authorized under this
section;
``(iii) manufacture, or enter into
contracts with entities to manufacture,
applicable drugs as authorized under this
section;
``(iv) determine a fair price for each
applicable drugs, in accordance with
subparagraph (B);
``(v) sell manufactured applicable drugs at
a fair price as authorized under this section;
and
``(vi) manufacture, or enter into contracts
with entities to manufacture, active
pharmaceutical ingredients for use by the
Office or for sale to other entities.
``(B) Fair price.--In determining a fair price for
an applicable drug under subparagraph (A)(iv) the
Office shall consider--
``(i) the impact of price on patient access
to the applicable drug;
``(ii) the cost of the applicable drug to
Federal or State health care programs;
``(iii) the cost to the Federal Government
of manufacturing the applicable drug;
``(iv) the administrative costs of
operating the Office;
``(v) the cost to acquire or manufacture
applicable drugs under this section; and
``(vi) the impact of price on market
competition for the applicable drug.
``(C) Acquiring right to manufacture and market.--
The Office may acquire the rights to manufacture and
market applicable drugs as authorized under this
section.
``(D) Active pharmaceutical ingredients.--
``(i) In general.--The Office shall
manufacture, or enter into contracts with
entities to manufacture, an active
pharmaceutical ingredient if--
``(I) the Office determines that
such ingredient is not readily
available from existing suppliers;
``(II) the manufacture of such
ingredient would improve the ability of
other entities to enter the market for
the manufacture of generic drugs or
otherwise expand the manufacture of
generic drugs; or
``(III) the manufacture of such
ingredient is necessary for the Office
to carry out its duties under this
section.
``(ii) Price determinations.--In
determining what price at which to sell an
active pharmaceutical ingredient under clause
(i), the Office shall consider the cost to
manufacture the ingredient, the administrative
costs of the Office with respect to the
ingredient, and the impact of such price on
market competition for the ingredient.
``(5) Reports to congress.--The Director shall prepare and
submit to the President, the Committee on Health, Education,
Labor, and Pensions of the Senate, and the Committee on Energy
and Commerce of the House of Representatives, an annual report
that includes--
``(A) an assessment of the major problems faced by
patients in accessing affordable generic medications;
``(B) a description of the status of all
medications for which manufacturing has been authorized
under this section, including medications being
manufactured, medications for which the Office has
submitted an application to the Food and Drug
Administration but has not yet received approval, and
medications for which the Office has received approval
from the Food and Drug Administration but are not being
manufactured;
``(C) in the case of antibiotics manufactured under
this section, an assessment from the Centers for
Disease Control and Prevention and the Food and Drug
Administration on the impact of the manufacturing of
antibiotics on antimicrobial resistance; and
``(D) an analysis of how the public manufacture of
drugs meeting the conditions described in paragraph (6)
would impact, or has already impacted, competition,
access to such drugs, the costs of such drugs, the
costs of prescription drugs to Federal and State health
programs, and public health.
``(6) Priority manufacturing.--The Office shall prioritize
the manufacturing of those applicable drugs that would have the
greatest impact on--
``(A) lowering drug costs to patients;
``(B) increasing competition and addressing
shortages in the prescription drug market;
``(C) improving public health; or
``(D) reducing the cost of prescription drugs to
Federal and State health programs.
``(7) Manufacturing levels.--Not later than 1 year after
the date of enactment of this section, the Office shall
manufacture, or enter into contracts with entities for the
manufacture of, not less than 15 applicable drugs. Not later
than 3 years after such date of enactment, the Office shall
manufacture, or enter into contracts with entities for the
manufacture of, not less than 25 applicable drugs.
``(b) Submission of Applications.--For each applicable drug that
the Office determines should be manufactured, as provided for under
this section, the Secretary shall--
``(1) submit an application under section 505(j) or 515 of
the Federal Food, Drug, and Cosmetic Act or section 351(k) of
the Public Health Service Act or submit a notification under
section 510(k) of the Federal Food, Drug, and Cosmetic Act (or
enter into a contract with another entity to submit such an
application or notification); or
``(2) acquire from the holder of an application approved
under subsection (c) or (j) of section 505 or section 515 of
the Federal Food, Drug, and Cosmetic Act or section 351 of the
Public Health Service Act, or cleared under section 510(k) of
the Federal Food, Drug, and Cosmetic Act, rights to manufacture
such applicable drug.
``(c) Use.--
``(1) In general.--The Secretary shall sell a drug produced
under this section at a fair price to other entities. Amounts
received from the sale of such drugs shall be used for the
activities of the Office.
``(2) Sale of approved application.--
``(A) In general.--For any applicable drug that the
Office is manufacturing, the Secretary shall, beginning
3 years after the date on which the Office first
undertakes manufacturing of such drug and annually
thereafter, make available for sale, to any person who
commits to manufacturing and marketing the applicable
drug, the approved application for the drug.
``(B) Failure to use.--If a person purchasing an
approved application under subparagraph (A)--
``(i) fails to market the applicable drug
within 6 months of the date of such purchase;
or
``(ii) increases the average manufacturer
price for the applicable drug above the fair
price (increased by the consumer price index
for all urban consumers (as published by the
Bureau of Labor Statistics) for that year),
the Secretary shall revoke the purchaser's approved
application and resume production of the applicable
drug.
``(d) Insulin.--Not later than 1 year after the date of enactment
of this section, the Secretary shall begin the public manufacturing of
insulin within a delivery device that does not violate active patents,
meeting the definition of applicable drug and in accordance with this
section.
``(e) Naloxone.--Not later than 1 year after the date of enactment
of this section, the Secretary shall begin the public manufacturing of
naloxone, including naloxone indicated for community use, meeting the
definition of applicable drug and in accordance with this section.
``(f) Antibiotics.--Not later than 1 year after the date of
enactment of this section, and in consultation with the Centers for
Disease Control and Prevention and the Food and Drug Administration to
ensure the appropriate use of manufactured antibiotics, the Secretary
shall begin the public manufacturing of no fewer than three discrete
antibiotics meeting the definition of applicable drug in accordance
with this section.
``(g) Applicable Drug.--In this section, the term `applicable drug'
means a drug (as defined in section 201 of the Federal Food, Drug, and
Cosmetic Act), biological product (as defined in section 351 of the
Public Health Service Act), or combination product (as described in
section 503(g) of the Federal Food, Drug, and Cosmetic Act) for which
an approved application under section 505 or 515 of the Federal Food,
Drug, and Cosmetic Act or section 351 of the Public Health Service Act,
or clearance under section 510(k) of the Federal Food, Drug, and
Cosmetic Act, is in effect, and--
``(1)(A) for which, with respect to a drug included in the
list described in section 505(j)(7) of the Federal Food, Drug,
and Cosmetic Act, each patent included with respect to such
drug in such list has expired, or each patent that claims a
biological product has expired;
``(B) any period of regulatory exclusivity granted under--
``(i) clause (ii), (iii), or (iv) of section
505(c)(3)(E) of the Federal Food, Drug, and Cosmetic
Act, section 505(j)(5)(B)(iv) of such Act, clause (ii),
(iii), or (iv) of section 505(j)(5)(F) of such Act,
section 527 of such Act, and any extension of such a
period granted under section 505A or 505E of such Act,
has expired; or
``(ii) paragraph (6) or (7) of section 351(k) of
the Public Health Service Act, and any extension of
such a period granted under paragraph (2) or (3) of
section 351(m) of such Act, has expired; and
``(C)(i) that is not being marketed in the United States;
or
``(ii) that is being marketed in the United States by fewer
than 3 manufacturers, and that--
``(I) in the previous 5-year period, has
experienced an increase in the wholesale acquisition
cost by at least one of its manufacturers that is
greater than the consumer price index for all urban
consumers (as published by the Bureau of Labor
Statistics) for one of the years in that same period;
``(II) is included in the drug shortage list under
section 506E of the Federal Food, Drug, and Cosmetic
Act; or
``(III)(aa) has an average wholesale acquisition
cost that the Secretary determines to be a barrier to
patient access; and
``(bb) is listed by the World Health Organization
as an essential medicine; or
``(2) for which there is in effect a license, or patent use
is authorized, under--
``(A) section 1498 of title 28, United States Code;
``(B) section 202 of title 35, United States Code;
``(C) section 203 of title 35, United States Code
(march-in rights);
``(D) section 209 of title 35, United States Code;
or
``(E) any other licensing authority of the Federal
Government.
``(h) Authorization of Appropriations.--There are authorized to be
appropriated such sums as may be necessary to carry out this
section.''.
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