[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4525 Introduced in House (IH)]







106th CONGRESS
  2d Session
                                H. R. 4525

  To amend the Public Health Service Act to establish a program under 
 which the Secretary of Health and Human Services makes cash awards to 
  private entities that discover drugs that cure or prevent diseases 
 whose cure or prevention is designated by the Secretary as a national 
                               priority.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 23, 2000

  Mr. Stark introduced the following bill; which was referred to the 
                         Committee on Commerce

_______________________________________________________________________

                                 A BILL


 
  To amend the Public Health Service Act to establish a program under 
 which the Secretary of Health and Human Services makes cash awards to 
  private entities that discover drugs that cure or prevent diseases 
 whose cure or prevention is designated by the Secretary as a national 
                               priority.

    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 Breakthrough Drug 
Incentive Act of 2000''.

SEC. 2. ESTABLISHMENT OF PROGRAM OF CASH AWARDS FOR DISCOVERY OF DRUGS 
              PROVIDING DISEASE CURES OR PREVENTION.

    Part G of title IV of the Public Health Service Act (42 U.S.C. 288 
et seq.) is amended by adding at the end the following section:

   ``award for discovery of drug providing disease cure or prevention

    ``Sec. 489A. (a) In General.--From amounts appropriated under 
subsection (f), the Secretary may make a cash award to any private 
entity (whether nonprofit or for profit) that, under section 505(b) of 
the Federal Food, Drug, and Cosmetic Act, submits to the Secretary an 
application for a drug that is approved by the Secretary as a cure for 
a disease on the list under subsection (b) or as a means of preventing 
the occurrence of a disease on the list.
    ``(b) National Priorities for Cure or Prevention; List of 
Diseases.--
            ``(1) In general.--Not later than 90 days after the date on 
        which amounts are first made available under subsection (f), 
        the Secretary shall publish in the Federal Register a list of 
        the diseases selected by the Secretary under paragraph (2), 
        together with a statement explaining the availability of cash 
        awards under subsection (a) and identifying the factors used by 
        the Secretary in selecting diseases for inclusion on the list. 
        The Secretary shall periodically review the list and make any 
        revisions determined by the Secretary to be appropriate.
            ``(2) Selection of diseases.--For purposes of awards under 
        subsection (a), the Secretary shall--
                    ``(A) identify serious diseases for which there are 
                no cures and serious diseases for which there are no 
                means of prevention; and
                    ``(B) from among such diseases, select diseases 
                whose cure or prevention should be national priorities 
                in the opinion of the Secretary, taking into account 
                factors regarding mortality, morbidity, and economic 
                effects, and such other factors as the Secretary 
                determines to be appropriate.
    ``(c) Amount of Award.--
            ``(1) In general.--An award under subsection (a) may not be 
        made in an amount exceeding $10,000,000,000, subject to 
        paragraph (2).
            ``(2) Offset of tax liability.--After determining the 
        amount of an award under subsection (a) (referred to in this 
        paragraph as the `selected amount'), the Secretary shall 
        increase the selected amount for the purpose of providing to 
        the recipient such reimbursement for the tax liability 
        resulting from the award and the reimbursement as will provide 
        the recipient with an after-tax award that is substantially 
        equivalent to the selected amount.
    ``(d) Certain Conditions.--
            ``(1) In general.--An award may be made under subsection 
        (a) only if the private entity involved has entered into an 
        agreement described in paragraph (2) or an agreement described 
        in paragraph (3). The Secretary shall determine which of such 
        paragraphs will be applied to the entity.
            ``(2) Reasonable profit.--For purposes of paragraph (1), an 
        agreement described in this paragraph is an agreement between 
        the private entity involved and the Secretary governing the 
        price at which the drug involved will be sold by the entity 
        (and any successors of the entity regarding the right to market 
        the drug commercially). In negotiating the price, the Secretary 
        shall take into account a reasonable profit for the entity, 
        (after allowing for a reasonable cost of production and 
        overhead and administrative costs), and shall consider the 
        likely price at which the drug will be sold at retail.
            ``(3) Transfer of patent rights.--
                    ``(A) Transfer to federal government.--For purposes 
                of paragraph (1), an agreement described in this 
                paragraph is an agreement between the private entity 
                involved and the Secretary under which the entity 
                transfers to the Secretary all rights of the entity 
                with respect to patents for the drug involved. The 
                agreement may provide that the Secretary will not with 
                respect to the drug approve any application under 
                section 505(j) of the Federal Food, Drug, and Cosmetic 
                Act during the *[180]-day period beginning on the date 
                on which the rights are transferred to the Secretary, 
                or during such shorter period as the Secretary and the 
                entity designate in the agreement.
                    ``(B) Federal exercise of rights; facilitation of 
                generic drug applications.--The Secretary shall assert 
                patent rights transferred under subparagraph (A) 
                against any private entity that seeks to claim the drug 
                by patent. The Secretary may not assert such rights 
                against any entity that with respect to the drug 
                submits to the Secretary an application under section 
                505(j) of the Federal Food, Drug, and Cosmetic Act, 
                except that the Secretary may impose a reasonable fee 
                for forbearance regarding such rights. Such fees are 
                available to the Secretary for awards under subsection 
                (a).
            ``(4) Advance notice to award candidate.--Upon the request 
        of a private entity that expresses an interest in developing a 
        drug that may be a candidate for an award under subsection (a), 
        the Secretary may enter into an agreement with the entity 
        specifying which of paragraphs (2) and (3) will be applied by 
        the Secretary to the entity in the event that the entity 
        otherwise qualifies for an award for the drug.
    ``(e) Discretion of Secretary.--Determinations of the Secretary 
regarding the selection of recipients for awards under subsection (a), 
the amount of such awards, and the inclusion of diseases on the list 
under subsection (b) are committed to the discretion of the Secretary, 
and are not subject to judicial review.
    ``(f) Authorization of Appropriations.--For the purpose of carrying 
out this section, there are authorized to be appropriated such sums as 
may be necessary for each of the fiscal years 2001 through 2010.''.
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