[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 10238 Introduced in House (IH)]
<DOC>
118th CONGRESS
2d Session
H. R. 10238
To authorize the collection of supplemental payments to increase
congressional investments in medical research, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
November 21, 2024
Ms. Schakowsky (for herself, Ms. Castor of Florida, and Ms. Omar)
introduced the following bill; which was referred to the Committee on
Energy and Commerce
_______________________________________________________________________
A BILL
To authorize the collection of supplemental payments to increase
congressional investments in medical research, and for other purposes.
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 ``Medical Innovation Act of 2024''.
SEC. 2. AUTHORITY TO ASSESS AND USE SUPPLEMENTAL PAYMENTS TO INCREASE
CONGRESSIONAL INVESTMENTS IN MEDICAL RESEARCH.
(a) In General.--Section 301 of the Public Health Service Act (42
U.S.C. 241) is amended by adding at the end the following:
``(i) Authority To Assess and Use Supplemental Payments To Increase
Congressional Investments in Medical Research.--
``(1) Definitions.--For purposes of this subsection:
``(A) Covered blockbuster drug.--
``(i) In general.--The term `covered
blockbuster drug' means any product--
``(I) for which the covered
manufacturer reported to the Securities
and Exchange Commission on a form,
including form 10-K or form 20-F, or is
otherwise determined by the Secretary
to have received, at least
$1,000,000,000 in net sales in the
previous calendar year; and
``(II) that was developed, in whole
or in part, through Federal Government
investments in medical research, as the
Secretary determines in accordance with
clause (ii).
``(ii) Determination of federal government
investment.--In determining under clause
(i)(II) whether a product was developed, in
whole or in part, through Federal Government
investments in medical research, the Secretary
shall consider whether information included in
any patent that claims the covered blockbuster
drug or that claims a method of using such
covered blockbuster drug and with respect to
which a claim of patent infringement could
reasonably be asserted if a person not licensed
by the owner engaged in the manufacture, use,
or sale of the covered blockbuster drug, or any
element of the covered blockbuster drug--
``(I) relates to, or is based upon,
prior science conducted, in whole or in
part, by a person that is or was funded
by the Federal Government;
``(II) relates to, acts upon, or is
based upon knowledge of a signaling
pathway, cellular receptor, ion
channel, protein, DNA or RNA sequence
or mutation, virus, or any other
scientific information discovered, in
whole or in part, through research
funded by the Federal Government; or
``(III) relates to, or is based
upon, through the manufacturing process
or testing process of the covered
blockbuster drug, technology derived,
in whole or in part, through research
funded by the Federal Government.
``(B) Covered manufacturer.--The term `covered
manufacturer' means a person--
``(i) that holds an application approved
under section 505 of the Federal Food, Drug,
and Cosmetic Act or a license under section 351
of this Act for a covered blockbuster drug; or
``(ii) who is a co-licensed partner of the
person described in clause (i) that obtains the
covered blockbuster drug directly from a person
described in this clause or clause (i).
``(C) Covered settlement agreement.--
``(i) In general.--The term `covered
settlement agreement' means a settlement
agreement (including a consent decree), and
except as provided under clause (ii)--
``(I) that is between an agency and
a covered manufacturer;
``(II) that relates to--
``(aa) an alleged violation
of, or a penalty under, section
1128A of the Social Security
Act or section 1128B of the
Social Security Act;
``(bb) an alleged violation
under subchapter III of chapter
37 of title 31, United States
Code (commonly known as the
`False Claims Act');
``(cc) an alleged violation
under the Federal Food, Drug,
and Cosmetic Act; or
``(dd) an alleged violation
of any other Federal civil or
criminal law; and
``(III) under the terms of which a
covered manufacturer is obligated in an
amount not less than a total of
$1,000,000, including civil or criminal
penalties with respect to any parties,
including governmental and private
entities.
``(ii) Exception for settlements not
affecting taxpayers or public health.--The term
`covered settlement agreement' does not include
any settlement agreement that the Secretary
determines--
``(I) does not involve an alleged
criminal violation; and
``(II) does not relate to--
``(aa) allegations of fraud
resulting, or potentially
resulting, in a loss of
taxpayer dollars; or
``(bb) allegations of
conduct having an adverse
impact, or a potentially
adverse impact, on the health
of the public.
``(D) Person.--The term `person' has the meaning
given such term in section 201(e) of the Federal Food,
Drug, and Cosmetic Act.
``(E) Product.--The term `product' means a drug
approved under section 505 of the Federal Food, Drug,
and Cosmetic Act or licensed under section 351, and
subject to section 503(b)(1) of the Federal Food, Drug,
and Cosmetic Act.
``(2) Supplemental payments to increase congressional
investments in medical research.--
``(A) Supplemental payment assessment and
collection.--Beginning with the first fiscal year that
begins at least 60 days after the date of enactment of
the Medical Innovation Act of 2024, and each subsequent
fiscal year, the Secretary shall, in accordance with
this paragraph, assess and collect supplemental
payments to increase congressional investments in
medical research from each covered manufacturer
described in subparagraph (B).
``(B) Criteria for assessing payments.--A covered
manufacturer that meets both of the following criteria
for a calendar year (referred to in this subparagraph
and subparagraph (D) as the `applicable calendar year')
shall be assessed a supplemental payment under
subparagraph (A) for the fiscal year beginning in the
proceeding calendar year:
``(i) A covered manufacturer that, during
the 5-year period immediately preceding the
date on which the payment is assessed, but not
before the date of enactment of the Medical
Innovation Act of 2024, entered into a covered
settlement agreement.
``(ii) A covered manufacturer that reported
net income of at least $1,000,000,000 to the
Securities and Exchange Commission on a form,
including form 10-K or form 20-F, or that the
Secretary otherwise determines to have had net
income of at least $1,000,000,000--
``(I) during the applicable
calendar year; or
``(II) during the calendar year in
which the covered manufacturer entered
into a covered settlement agreement, as
described in clause (i).
``(C) Payment amount.--
``(i) In general.--A covered manufacturer
described in subparagraph (B) shall be assessed
a supplemental payment to increase
congressional investments in medical research
for a fiscal year equal to the applicable
percentage of the net income of the covered
manufacturer, as reported or determined as
described in subparagraph (B)(ii), for the
previous calendar year, multiplied by the
number of covered blockbuster drugs of the
covered manufacturer for that year.
``(ii) Applicable percentage.--For purposes
of determining the amount of a supplemental
payment under clause (i), the applicable
percentage of the net income of a covered
manufacturer is--
``(I) 0.75 percent, in the case of
a covered settlement agreement under
the terms of which the total obligation
of a covered manufacturer is in an
amount that is less than $500,000,000;
``(II) 1 percent, in the case of a
covered settlement agreement under the
terms of which the total obligation of
a covered manufacturer is in an amount
that is at least $500,000,000 but less
than $1,000,000,000; or
``(III) 1.5 percent, in the case of
a covered settlement agreement under
the terms of which the total obligation
of a covered manufacturer is in an
amount that is at least $1,000,000,000.
``(D) Annual limitation.--In the case of a covered
manufacturer that entered into more than 1 covered
settlement agreement during an applicable calendar
year, such covered manufacturer shall be assessed a
supplemental payment under subparagraph (C) only with
respect to the covered settlement agreement under which
the total amount obligated of the covered manufacturer,
as described in paragraph (1)(C)(i)(III), is the
highest.
``(E) Publication of payments.--Beginning with the
first fiscal year that begins at least 60 days after
the date of enactment of the Medical Innovation Act of
2024, and not later than 60 days before the start of
each fiscal year, the Secretary shall publish in the
Federal Register, with respect to the next fiscal
year--
``(i) a list of covered manufacturers
subject to the payment under this paragraph;
``(ii) a list of the covered blockbuster
drugs of each such covered manufacturer;
``(iii) the total payment amount assessed
to each such covered manufacturer; and
``(iv) the manner in which payments
assessed under this paragraph will be
collected.
``(F) Crediting and availability of supplemental
payments.--
``(i) In general.--Subject to clause (ii),
payments authorized under this paragraph shall
be collected and available for obligation only
to the extent and in the amount provided in
advance in appropriations Acts. Such payments
are authorized to remain available until
expended.
``(ii) Collections and appropriations
acts.--
``(I) In general.--The payments
authorized by this paragraph--
``(aa) subject to subclause
(II), shall be collected and
available in each fiscal year
in an amount not to exceed the
amount specified in
appropriation Acts, or
otherwise made available for
obligation, for such fiscal
year; and
``(bb) shall be available
to the Secretary to distribute,
as described in paragraph (3).
``(II) Provision for early
payments.--Payments authorized under
clause (iii) for a fiscal year, prior
to the due date for such payments, may
be accepted by the Secretary.
``(iii) Authorization of appropriations.--
For the first fiscal year that begins at least
60 days after the date of enactment of the
Medical Innovation Act of 2024 and for each
subsequent fiscal year, there is authorized to
be appropriated for the purpose of making
distributions under paragraph (3) to meet the
priorities described in paragraph (4), an
amount equal to the total amount of
supplemental payments assessed for such fiscal
year under this paragraph.
``(G) Remitting payments.--A covered manufacturer
assessed a supplemental payment under subparagraph (A)
shall remit the payment no later than the first
business day on or after October 1 of each fiscal year,
or the first business day after the date of enactment
of an appropriations Act providing for the collection
and obligation of supplemental payments for such fiscal
year.
``(H) Collection of assessed payments that are not
remitted.--In any case where the Secretary does not
receive a supplemental payment assessed under
subparagraph (A) within 30 days after it is due, such
supplemental payment shall be treated as a claim of the
United States Government subject to subchapter II of
chapter 37 of title 31, United States Code.
``(I) Supplement not supplant.--Payments collected
under this paragraph shall be used to supplement and
not supplant other Federal funds made available to
carry out the priorities described in paragraph (4).
``(3) Distribution of payments to agencies to increase
congressional investments in medical research.--
``(A) Distribution to agencies.--Subject to
subparagraph (C), for the purposes described in
paragraph (4), the Secretary shall distribute the
amounts appropriated under paragraph (2)(F)(iii) during
a fiscal year to--
``(i) the Food and Drug Administration, to
be used in accordance with paragraph (4)(A);
and
``(ii) the National Institutes of Health
organized under title IV, to be used in
accordance with paragraph (4)(B).
``(B) Distribution ratio between agencies.--The
amount that the Secretary distributes to an agency
under subparagraph (A) during a fiscal year shall bear
the same relation to the total amount appropriated
under paragraph (2)(F)(iii) for such fiscal year as the
amount of discretionary funds appropriated to such
agency for such fiscal year bears to the total amount
of discretionary funding appropriated to both agencies
listed in subparagraph (A) for such fiscal year.
``(C) Ensuring stable congressional investments in
medical research.--
``(i) In general.--Supplemental payments
collected in accordance with paragraph (2)
shall not be distributed under subparagraph (A)
for a fiscal year unless appropriations to both
of the agencies listed in such subparagraph for
the fiscal year are equal to or greater than
appropriations to such agencies for the prior
fiscal year.
``(ii) Delayed distribution.--If, in
accordance with clause (i), the Secretary does
not distribute payments collected in accordance
with paragraph (2) during any portion of a
fiscal year, and, at a later date in such
fiscal year, the appropriations to the agencies
listed in subparagraph (A) become equal to or
greater than the amount of appropriations for
the prior fiscal year, the Secretary may
distribute such payment at any time in such
fiscal year.
``(D) Considerations.--In determining amounts
appropriated for purposes of subparagraphs (B) and
(C)--
``(i) the Secretary shall not consider any
amounts appropriated in accordance with
paragraph (2)(F)(iii); and
``(ii) with respect to the Food and Drug
Administration, the Secretary shall not
consider amounts appropriated in accordance
with subchapter C of chapter VII of the Federal
Food, Drug, and Cosmetic Act (relating to user
fees collected by the Secretary).
``(4) Prioritizing urgent needs in medical research.--The
Secretary shall ensure that the payments distributed under
paragraph (3) are used to meet urgent needs in medical
research, including priorities as follows:
``(A) FDA.--With respect to the Food and Drug
Administration, the priority use of the distributions
shall include carrying out the goals of the strategy
and implementation plan for advancing regulatory
science for medical products under section 1124 of the
Food and Drug Administration Safety and Innovation Act
(21 U.S.C. 393 note), and other such research
activities in order to promote the public health and
advance innovation in regulatory decisionmaking, as
determined by the Secretary.
``(B) NIH.--With respect to the National Institutes
of Health, the priority use of the distributions shall
include supporting--
``(i) research that fosters radical
innovation, including--
``(I) research on diseases or
conditions for which treatments exist
but are inadequate;
``(II) research on diseases or
conditions for which there are unmet
medical needs;
``(III) research on diseases for
which treatments exist but the side
effect profiles of such treatments
limit the therapeutic potential of such
treatments;
``(IV) research on new approaches
to treatment or diagnosis of a disease
using a drug, device, or therapy that,
at the time of distribution, is not
used or is underused; or
``(V) research to identify new
biomarkers;
``(ii) research that advances fundamental
knowledge and technology even if it does not
provide immediate or near-term clinical or
therapeutic benefits, including research and
technology that advances the understanding of
biochemistry, biology, protein science,
immunology, genetics, virology, microbiology,
or neurology;
``(iii) research related to diseases that
disproportionally account for Federal health
care spending, including spending under the
Medicare program under title XVIII of the
Social Security Act, the Medicaid program under
title XIX of the Social Security Act, the State
Children's Health Insurance Program under title
XXI of the Social Security Act, the TRICARE
program under chapter 55 of title 10, United
States Code, and the hospital services and
medical care provided through the Veterans'
Administration under chapters 17 and 18 of
title 38, United States Code, and tax credits
made available through the amendments to the
Internal Revenue Code of 1986 made by the
Patient Protection and Affordable Care Act
(Public Law 111-148), such as research relating
to--
``(I) diseases that
disproportionally impact older
individuals;
``(II) degenerative diseases; and
``(III) chronic conditions; and
``(iv) early career scientists by--
``(I) awarding research project
grants that support discrete,
specified, circumscribed projects to be
performed by the investigator in an
area representing the specific
interests and competencies of such
investigator, to investigators--
``(aa) who are within 10
years of completing a terminal
research degree; or
``(bb) who are within 10
years of completing a medical
residency;
``(II) awarding grants that support
career development experiences that
lead to earlier research independence;
and
``(III) awarding grants that
support innovative training programs
that, in addition to scientific
training, provide additional training
to enhance employment opportunities,
including training in management and
business, to--
``(aa) graduate students;
``(bb) post-doctoral
fellows;
``(cc) individuals within
10 years of completing a
terminal research degree; or
``(dd) individuals within
10 years of completing a
medical residency.
``(5) Annual reports.--
``(A) Secretary of health and human services.--Not
later than 180 calendar days before the end of a fiscal
year in which the Secretary has assessed supplemental
payments under paragraph (2), the Secretary shall
submit a report to the Committee on Health, Education,
Labor, and Pensions of the Senate and the Committee on
Energy and Commerce of the House of Representatives,
which shall include a description of supplemental
payments assessed, collected, and distributed under
this subsection for such fiscal year, and a list of the
covered manufacturers that were assessed supplemental
payments and the amount of such assessments.
``(B) FDA and nih.--For each fiscal year in which
amounts are distributed under paragraph (3), the Food
and Drug Administration and the National Institutes of
Health shall report on the use and impact of such
amounts in the annual budget submission of such
entity.''.
(b) Effect of Failure To Remit Payment.--Section 502 of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 352) is amended by adding at
the end the following:
``(ee) If it is a drug that is a covered blockbuster drug (as
defined in section 301(i)(1) of the Public Health Service Act) for
which any payment assessed under section 301(i)(2) of such Act has not
been paid in accordance with such section, until such payment is
made.''.
(c) Severability.--If any provision of this section, any amendment
made by this section, or the application of such provision or amendment
to any person or circumstance is held to be unconstitutional, the
remainder of the provisions of this section, the amendments made by
this section, and the application of such provisions or amendments to
any person or circumstance shall not be affected.
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