[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 3148 Introduced in Senate (IS)]







107th CONGRESS
  2d Session
                                S. 3148

 To provide incentives to increase research by private sector entities 
     to develop antivirals, antibiotics and other drugs, vaccines, 
    microbicides, and diagnostic technologies to prevent and treat 
   illnesses associated with a biological, chemical, or radiological 
                            weapons attack.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            October 17, 2002

  Mr. Lieberman (for himself and Mr. Hatch) introduced the following 
  bill; which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To provide incentives to increase research by private sector entities 
     to develop antivirals, antibiotics and other drugs, vaccines, 
    microbicides, and diagnostic technologies to prevent and treat 
   illnesses associated with a biological, chemical, or radiological 
                            weapons attack.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Biological, 
Chemical, and Radiological Weapons Countermeasures Research Act of 
2002''.
    (b) In Honor.--This Act is enacted in honor of Robert Stevens, 
Thomas Morris Jr., Joseph Curseen, Kathy Nguyen, Ottilie Lundgren, and 
Lisa J. Raines, victims of terrorist attacks in the United States in 
2001.
    (c) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Definitions.
        TITLE I--STRATEGY FOR THE DEVELOPMENT OF COUNTERMEASURES

Sec. 101. Biological, chemical and radiological agent, toxin, and 
                            material countermeasure research priority 
                            list.
Sec. 102. Research registration requirements.
Sec. 103. Diagnostics incentives.
Sec. 104. Research tools incentives.
      TITLE II--INCENTIVES FOR THE DEVELOPMENT OF COUNTERMEASURES

                     Subtitle A--Primary Incentives

Sec. 201. Federal tax incentives.
Sec. 202. Terror Weapon Countermeasure Purchase Fund.
Sec. 203. Patent term protection and exclusive marketing.
Sec. 204. Liability and indemnification.
                      Subtitle B--Other Incentives

Sec. 211. Accelerated approval of countermeasures.
Sec. 212. Approvals of certain drugs based on animal trials.
Sec. 213. Limited antitrust exemption.
Sec. 214. Biologics manufacturing capacity incentives.
Sec. 215. Biologics manufacturing efficiency incentives.
Sec. 216. Construction of biosafety level 3-4 research facilities.
Sec. 217. National Institutes of Health countermeasures partnership 
                            challenge grants.
Sec. 218. Human clinical trials and drugs for rare diseases and 
                            conditions.
Sec. 219. Use of adjuvants in vaccine production.
Sec. 220. Annual report.
Sec. 221. International conference on research to develop 
                            countermeasures.

SEC. 2. FINDINGS.

    Congress makes the following findings:
            (1) The United States must be prepared with diagnostic and 
        medical countermeasures in the event of the use of biological, 
        chemical, and radiological weapons by terrorists and others 
        against military and intelligence personnel, government 
        officials, or civilians.
            (2) The threat of biological and chemical weapons is real.
                    (A) Members of the cult Aum Shinrikyo were 
                responsible for chemical weapons attacks in Japan that 
                killed 12 people and injured over 5,000 on March 20, 
                1995. In this attack, terrorists placed plastic bags of 
                diluted sarin, a lethal nerve agent, on crowded subway 
                trains during the morning rush-hour. It was found that 
                sect members had legally stockpiled sodium cyanide and 
                hundreds of tons of chemicals used to make sarin, 
                including sodium fluoride, phosphorous trichloride, 
                isopropyl alcohol, and acetonitrile. Aum Shinrikyo 
                concealed its sarin manufacturing plant in a shrine to 
                a sect goddess. Investigators also found a biological 
                weapons research lab on the cult's compound. The 
                facility contained an incubator, an electron 
                microscope, a growth medium for fermenting or growing 
                cultures, and cultures of the deadly botulinum toxin. 
                Aum Shinrikyo members were apparently planning a more 
                devastating offensive. The cult also released anthrax 
                spores and botulinum in Tokyo nine times before it 
                carried out its nerve gas attack. Aum's attempted germ 
                attacks failed because the group's biologists cultured 
                the strain of anthrax used to make vaccine, which is 
                harmless. Had they used a potent culture, the outcome 
                might have been very different. No one knows why the 
                botulism attack failed. The horror is only magnified by 
                the thought that individuals and nations would consider 
                attacking others with such viruses. In October 1993, 
                Shoko Asahara, head of the Aum Shinrikyo cult, and 40 
                followers traveled to Zaire, ostensibly to help treat 
                Ebola victims. But the group's real intention, 
                according to an October 31, 1995, report by the 
                Permanent Subcommittee on Investigations of the Senate, 
                was probably to obtain virus samples, culture them and 
                use them in biological attacks.
                    (B) Before the 2001 anthrax attacks, the most 
                recent successful biological attack in the United 
                States, which was not recognized as such at the time, 
                was with salmonella. Followers of Bhagwan Shree 
                Rajneesh put the bacteria in salad bars in restaurants 
                in Dalles, Oregon, in 1984, sickening 750 people.
                    (C) There is a long and sordid history of chemical 
                and biological weapons, including use during the First 
                and Second World Wars, an accidental release of anthrax 
                spores in 1979 from a Soviet military microbiological 
                facility, use of mustard gas, tabun, and hydrogen 
                cyanide by Iraq in the Iran-Iraq War and against the 
                Kurds, and development by Iraq of an offensive 
                biological weapons capability including anthrax and 
                botulinum toxin.
                    (D) The United States bioterror weapons program 
                focused on anthrax, botulinum toxin, brucellosis, 
                tularemia, psittacosis, plagua, Venezuelan equine 
                encephalitis, Q fever, cholera, dengue, shigellosis 
                dysentery, glanders, and Rocky Mountain spotted fever. 
                The United States Army concocted a botulinum toxin that 
                was so toxic that a pound, if expertly dispersed, could 
                kill 1,000,000,000 people. Botulinum toxin is 15,000 
                times more toxic than VX and 10,000 times more toxic 
                than Sarin. The Soviet bioterror program involved 47 
                laboratories and 65,000 people. It focused on 52 
                different pathogens, including smallpox, anthrax, 
                plague, Ebola and Marburg hemorrhagic fevers, yellow 
                fever, tularemia, brucellosis, Q fever, botulinum 
                toxin, and Venezuelan equine encephalitis. It created 
                2,000 strains of anthrax with 7,000 employees working 
                on nothing but anthrax. It produced 20 tons of smallpox 
                virus each year, created antibiotic resistant strains, 
                strains with odd systems to confuse diagnosis, plague 
                bacteria that secreted diphtheria toxin and resisted 
                antibiotics, and some Venezuelan equine encephalitis. 
                The Iraqi bioterror program focused on anthrax, 
                botulinum toxin, cholera, plague, gas gangrene, 
                Salmonella, ricin, staphylococcal enterotoxin, 
                camelpox, cancer-causing molds called aflatoxins, 
                rotavirus, and hemorrhagic conjunctivitis.
                    (E) A Central Intelligence Agency report concluded 
                that ``clandestine production of chemical and 
                biological weapons for multiple casualty attacks raises 
                no greater technical obstacles than does the 
                clandestine production of chemical narcotics or 
                heroin''. One of the aspects which makes chemical and 
                biological agents such an attractive weapon for a 
terrorist is the high shock value of these weapons.
                    (F) The Office of Technology Assessment estimated 
                than 100 kilograms of anthrax released upwind in an 
                American city could cause between 130,000 and 3,000,000 
                deaths, depending on the weather and other variables. 
                This degree of carnage is in the same range as that 
                forecast for a hydrogen bomb.
            (3) The threat of terrorism using radiological weapons is 
        real.
                    (A) In April 2000, customs officers from Uzbekistan 
                discovered 10 lead-lined containers at a remote border 
                crossing with Kazakhstan. These containers were filled 
                with enough radioactive material to make dozens of 
                crude weapons, each capable of contaminating a large 
                area for many years. The consignment was addressed to a 
                company in Quetta, Pakistan, called Ahmadjan Haji 
                Mohammed. Quetta, where border controls are virtually 
                non-existent, is the main Pakistani crossing into 
                southern Afghanistan and only a 6 hour drive from 
                Kandahar.
                    (B) In 1994 Czech police seized 3 kilograms of 
                highly enriched uranium During the same year German 
                police seized 360 grams of plutonium. In 2001 Turkish 
                police seized two men with 1.16 kilograms of weapons 
                grade uranium. Russian general Alexander Ledbed claimed 
                that 40 suitcase nuclear weapons were unaccounted for.
                    (C) In 1995 Islamic Chechen rebels announced, and 
                Russians confirmed, that they had planted a 30 pound 
                shielded container holding the Cesium-137 core of a 
                cancer treatment device in a Moscow park.
                    (D) The International Atomic Energy Agency, a 
                Vienna-based division of the United Nations, has 
                documented almost 400 cases of trafficking in nuclear 
                or radiological materials since 1993. Many such 
                supplies are subject to few controls or are poorly 
                guarded, particularly in the former Soviet Union. 
                Reports also have cited weak protection of spent fuel 
                at nuclear facilities in the United States. Other 
                experts worry about the security of the nuclear 
                facilities in Pakistan, India, and other developing 
                countries. An estimated 1300 kilograms of highly 
                enriched uranium and 180,000 kilograms of plutonium, 
                the main fuels for a nuclear device, exists in civilian 
                nuclear facilities around the world. There are nearly 
                450 nuclear power plants, nearly 300 nuclear research 
                reactors, and 250 nuclear fuel cycle plants around the 
                world.
                    (E) In September 1987, scavengers broke into an 
                abandoned cancer clinic in Goiania, Brazil and stole a 
                medical device containing large amounts of radioactive 
                cesium-137. An estimated 250 people were exposed to the 
                source, eight developed radiation sickness, and four 
                died.
                    (F) A crude but deadly radiation dispersal device 
                (RDD) fashioned from stolen nuclear material (from a 
                nuclear waster processor, a nuclear power plant, a 
                university research facility, a medical radiotherapy 
                clinic, or an industrial complex) and a few sticks of 
                dynamite could spread radioactive material across an 
                area without a nuclear detonation. Such a weapon could 
                kill many, contaminate a square mile for 10 years or 
                more, and cause widespread panic. The Chernobyl nuclear 
                reactor meltdown in 1986 resulted in the 
                uninhabitability of a 6 mile belt around the reactor. 
                That area is still uninhabitable today. It released 
                about 400 times as much radioactivity at the Hiroshima 
                bomb. Half of the atoms in a sample of cobalt-60 will 
                disintegrate over a 5 year period, but it takes 430 
                years for half of the atoms in a sample of Americium-
                241 to decay.
                    (G) Even more threatening, during the Cold War the 
                United States and the Soviet Union fashioned a few 
                hundred portable nuclear weapons and some of the Soviet 
                weapons might fall into the hands of terrorists.
                    (H) The panic at dispersal or detonation of such a 
                device might well be much more damaging than the 
                morbidity and mortality. Radiation is invisible and 
                there is widespread fear of it. Few would understand 
                the difference between a dirty and a nuclear bomb.
                    (I) Such a device or bomb can cause exposure to a 
                variety of radioactive materials, including Plutonium, 
                enriched or depleted Uranium, Radium, Cesium, 
                Strontium, Cobalt, Iodine, Americium, etc.
                    (J) Such exposure can a cause immediate death, as 
                well as adverse effects on radiosensitive tissues, 
                including suppression of white and red blood stem and 
                platelet cells production. Acute Radiation Syndrome 
                (ARS), Central Nervous System syndrome (CNS), 
                gastrointestinal syndrome, and bone marrow radiation 
                syndrome are early effects of substantial acute 
                exposure to ionizing radiation. Leukemia and other 
                forms of cancer can arise many years after exposure 
                even to lower doses. Other symptoms include nausea, 
                vomiting, hair loss, diarrhea, hemorrhages, and 
                internal bleeding. The United States has only one 
                hospital emergency room dedicated to treating patients 
                exposed to radiation hazards, at Oak Ridge, Tennessee.
                    (K) Medical responses currently available with 
                respect to exposure to radioactive materials are rather 
                limited and can include use of chelation agents to 
                speed secretion of radioactive metals from the body if 
                radioactive material was swallowed or inhaled, 
                preventive blocking of thyroid uptake of radioactive 
                iodine by use of potassium iodine tablets, and use of 
                Investigational New Drugs like Prussian Blue.
                    (L) The United States needs to develop additional 
                medical responses, including antiemetics, hematological 
                colony-stimulating factors, and chelating agents. The 
                United States also needs to develop better means of 
                assessing radiation exposure using new molecular, 
                biological, physical and other technologies.
                    (M) The ill-defined and uncontrolled nature of 
                radiation exposure and nuclear accidents usually causes 
                a non-uniform exposure with the variable dose 
                distribution complicating dosimetry, which is important 
                for medical management of exposed patient with a need 
                to determine the degree to which bone marrow or 
                gastrointestinal stem cells have survived.
            (4) The United States must take steps to prevent access to 
        the biological and chemical agents and toxins and radiological 
        materials by terrorists and others, but attacks may nonetheless 
        occur. The United States needs to respond to attacks with well-
        coordinated public health measures. We also need a broad array 
        of effective diagnostics and medicines to rapidly identify and 
        treat those who are exposed to, or infected by, the agents, 
        toxins, or materials.
            (5) The United States faces a public health crisis with the 
        spread of antibiotic resistant bacteria. This alone should lead 
        us to take urgent action to develop new vaccines and medicines. 
        The antibiotic vancomycin, our last line of defense against the 
        often deadly bacterium, Staphylococcus aureus, is losing its 
        effectiveness. Worldwide, many strains of S. aureus are already 
        resistant to all antibiotics except vancomycin. Emergence of 
        strains lacking sensitivity to vancomycin signifies that 
        variants untreatable by every known antibiotic are on their 
        way. S. aureus, a major cause of hospital-acquired infections, 
        has thus moved one step closer to becoming an unstoppable 
        killer. What is more, strains of at least three bacterial 
        species capable of causing life-threatening illnesses 
        (Enterococcus faecalis, Mycobacleriumn tuberculosis and 
        Pseudomonas aeruginosa) already evade every antibiotic in the 
        clinician's armamentarium, a stockpile of more than 100 drugs. 
        In part because of the rise in resistance to antibiotics, the 
        death rates for some communicable diseases (such as 
        tuberculosis) have started to rise again, after having declined 
        in the industrial nations.
            (6) The possibility exists that terrorists or others will 
        use biotechnology techniques to enhance the lethality of a 
        biological agent. According to the Defense Science Board, 
        ``Motivated researchers using advanced genetics techniques can 
        engineer pathogens with unnatural characteristics that enhance 
        their offensive properties by altering such characteristics as 
        stability, dissemination properties, host range, 
        contagiousness, resistance to drugs and vaccines, and 
        persistence in the environment, among others''.
            (7) Vaccines exist for some of the biological agents that 
        might be used by terrorists and others, but these vaccines need 
        substantial additional development. The current United States 
        vaccine against anthrax was formulated in the 1960s and 
        licensed in 1970. Before and subsequent to the licensing of 
        this vaccine in the United States, additional preclinical and 
        clinical studies have been conducted to confirm its safety and 
        efficacy. The current Food and Drug Administration-licensed 
        immunization schedule for the anthrax vaccine involves 6 doses 
        over 18 months followed by yearly boosters. Since this is a 
        cumbersome schedule for immunizing both military personnel and 
        civilian laboratory workers and first responders at 
        occupational risk of exposure to the biothreat from an anthrax 
        attack, the Centers for Disease Control and Prevention has 
        initiated multi-center studies to develop the next generation 
        of the anthrax vaccine by reducing the number of doses and 
        changing its route of administration. Additional early 
        development phase studies of experimental recombinant and live 
        attenuated anthrax vaccines are underway to determine their 
        suitability, safety and efficacy.
            (8) Treatments for those who are not protected by vaccines 
        are often not effective. Inhalation anthrax (woolsorters' 
        disease) results from inhaling anthrax spores disseminated from 
        either a natural source or a biological attack and, if 
        untreated, it is considered to be 99 percent fatal. Antibiotics 
        and standard interventions provided after symptoms have 
        developed rarely prevent a fatal outcome.
            (9) The United States does not currently have available the 
        diagnostics, drugs, and vaccines needed in the event of a 
        bioterror attack. It has been estimated by the Defense Science 
        Board that the United States is adequately protected with 
        respect to only 13 of the top 50 pathogens that might be 
        weaponized. For example, while the United States has a vaccine 
        for smallpox, that vaccine has side effects and is one that 
        cannot be well tolerated by many, and for those who are 
        infected, the United States has no effective treatment. The 
        United States has a treatment for early stage inhalation 
        anthrax, but those treatments are ineffective when there are 
        delays in diagnosis. The United States has very few products 
        that are effective against viruses. The United States is not 
        well protected with broad-spectrum antibiotics that are needed 
        to deal with pathogens that have been modified or selected for 
        antibiotic resistance. It takes more than 24 hours to diagnose 
        many of the most dangerous pathogens.
            (10) A ring vaccination strategy may well be impossible to 
        implement given the mobility of Americans. Twenty-three million 
        international airline passengers embarked or disembarked at 
        United States airports in the fourth quarter of 2001. Nearly 
        500,000,000 people crossed the United States-Canada and United 
        States-Mexico boarders by land in 2000. Tens of millions of 
        people each day cross from one metropolitan area to another. 
        For the same reasons, it may not be possible to enforce a 
        quarantine. If, however, the United States has safe and 
        effective treatments to deploy, there will be less need to 
        attempt to implement a ring vaccination strategy or quarantine.
            (11) Vaccines and treatments for exposure to nerve toxins 
        and radiological materials do not exist or are ineffective.
            (12) The United States Government is directly funding 
        biomedical research on vaccines and treatments for biological 
        and chemical agents and radiological materials. These funding 
        efforts could be matched many-fold if the 1,500 biotechnology 
        companies, 100 pharmaceutical companies, medical device and 
        research tool companies, and research institutions were able to 
        secure the funding from private investors, or justify the 
        investment of retained earnings, to conduct this research.
            (13) The enactment of tax, procurement, patent, liability, 
        and other incentives will enable the biotechnology, 
        pharmaceutical, device, and research tool industries to raise 
        equity and other capital from investors to fund research on 
        countermeasures for biological, chemical, and radiological 
        attacks. This will supplement direct Federal funding for this 
        research and speed development of life saving technologies. The 
        existence of these technologies will reassure the public that 
        if attacks occur, effective medical treatments are available 
        and there is no reason for panic.
            (14) Past efforts by agencies of the Federal Government to 
        contract for the development and manufacture of countermeasures 
        have been, and likely will continue to be, ineffective. These 
        efforts have been under-funded, too complex, financially 
        restrictive, and unreliable and therefore have failed to 
        attract the commitment of capital and research-intensive 
        biotechnology, pharmaceutical, medical device, and research 
        tool companies. These shortcomings are likely to be even more 
        apparent and severe with respect to proposals to use Federal 
        taxpayer dollars for Federal Government construction, 
        ownership, and operation of research and development and 
        manufacturing facilities for the production of vaccines for 
        military and civilian use (GOGOs and GOCOs) or for the 
        establishment of a National Vaccine Authority for the research 
        and development and production of vaccines for the protection 
        of civilians against bioterrorist attacks. These federalized 
        proposals will result in significantly higher costs for 
        taxpayers, add significant additional layers of Federal 
        bureaucracy, and delay the availability of needed 
        countermeasures.
            (15) Efforts by the Department of Defense to acquire drugs 
        and vaccines for bioterror agents have been ineffective. The 
        Defense Science Board has found that ``DOD has failed to 
        implement a proactive strategy for engagement of the private 
        sector in gaining access to new technologies relevant to 
        biodefense . . . (There are) significant obstacles to 
        engagement of the private sector. Neither the DOD nor the 
        nation can achieve a robust biodefense without engagement of 
        private sector R&D and leading scientists in academia and 
        closer ties to industry . . . A program of longer-term 
        investment in new R&D initiatives to address major gaps in drug 
        and vaccine coverage is crucial but it will take 10 to 15 years 
        to bring such investments to fruition.''
            (16) The Defense Science Board has noted the ``private 
        sector's declared lack of interest in seeking Government R&DE 
        contracts.'' It has found that the ``medical-related industry 
        differs from traditional defense industries. The financial 
        disincentives inherent in producing products for limited 
        markets (i.e. DOD only) with no commitment to longterm supply 
        in the face of massive capitalization needs and the long, 
        multi-year lead times to build new manufacturing facilities for 
        drugs and vaccines are considerable. Nonetheless, it is 
        difficult to see how DOD or the nation can pursue a successful 
        biodefense strategy if they do not engage leading companies and 
        top scientists from outside the physics/engineering circles of 
        traditional defense contractors.''
            (17) This Act is premised on the belief that the most 
        effective strategy is to capitalize on the experience and 
        entrepreneurship of America's world preeminent biotechnology, 
        pharmaceutical, medical device, research tool companies, and 
        research institutions engaged in this research, development, 
        and manufacturing at their own risk, their own expense, for 
        their own good business reasons.

SEC. 3. DEFINITIONS.

    In this Act:
            (1) Biological or chemical agent; toxin; nuclear or 
        radiological material; terror weapon.--The term--
                    (A) ``biological agent'', ``biological toxin'', 
                ``chemical agent'', or ``chemical toxin'', or any 
                variation of any such term, means any microorganism, 
                virus, infectious substance, biological product, toxic 
                or poisonous chemical, or precursor of a toxic or 
                poisonous chemical, that may be used in a manner that 
                is intended to cause widespread death or serious bodily 
                injury, including biological agents and toxins 
                described in paragraphs (1) and (2) of section 178 of 
                title 18, United States Code;
                    (B) ``nuclear or radiological material'' means any 
                radioactive material that may be used in a manner that 
                is intended to cause widespread death or serious bodily 
                injury; and
                    (C) ``terror weapon'' and ``weapon of mass 
                destruction'' mean any matter described in subparagraph 
                (A) or (B) that may be used in a manner that is 
                intended to cause widespread death or serious bodily 
                injury.
            (2) Countermeasures.--The term ``countermeasures'' means--
                    (A) a vaccine and related delivery system, 
                antiviral, microbicide, diagnostic technology, drug, or 
                other technology that can be used to diagnose, treat, 
                or prevent infection with or bodily harm from, or the 
                spread of, a biological agent or toxin on the list 
                described in section 101, and that is subject to 
                applicable provisions of the Federal Food, Drug, and 
                Cosmetic Act (21 U.S.C. 301 et seq.), the Public Health 
                Service Act (42 U.S.C. 201 et seq.), and the Virus-
                Serum-Toxin Act (21 U.S.C. 151 et seq.); and
                    (B) a therapy or diagnostic that may be used to 
                detect, treat, or prevent bodily harm that may be 
                caused by the use of nuclear or radiological material 
                as a terror weapon.
            (3) Department.--The term ``Department'' means the 
        Department of Homeland Security.
            (4) Development.--The term ``development'' or ``to 
        develop'' includes the identification of suitable compounds or 
        biological materials, the conduct of preclinical and clinical 
        studies, the preparation of an application for marketing 
        approval, and other actions related to preparation of a 
        countermeasure.
            (5) Diagnostics.--The term ``diagnostics'' includes 
        products, devices, and technologies to detect, identify, or 
        analyze, the potential presence or absence of 1 or more 
        biological agents or toxins in patient samples, environmental 
        samples, or field samples.
            (6) Research tool.--The term ``research tool'' includes the 
        full range of tools that scientists may use in the laboratory, 
        including cell lines, monoclonal antibodies, reagants, animal 
        models, growth factors, combinatorial chemistry and DNA 
        libraries, clones and cloning tools (such as PCR), methods, 
        laboratory equipment and machines, databases, and other 
        technologies that enable the rapid and effective development of 
        countermeasures, including diagnostics, vaccines, and drugs.
            (7) Secretary.--The term ``Secretary'' means the Secretary 
        of the Department of Homeland Security.

        TITLE I--STRATEGY FOR THE DEVELOPMENT OF COUNTERMEASURES

SEC. 101. BIOLOGICAL, CHEMICAL AND RADIOLOGICAL AGENT, TOXIN, AND 
              MATERIAL COUNTERMEASURE RESEARCH PRIORITY LIST.

    (a) Development.--
            (1) In general.--Not later than 180 days after the date of 
        enactment of this Act, the Secretary, in consultation with the 
        Secretary of Defense and the Secretary of Health and Human 
        Services, shall develop and make available to potential 
        manufacturers of terror weapons countermeasures and, except as 
        provided in paragraph (5) publish, a list of biological and 
        chemical agents and toxins and nuclear and radiological 
        materials that may be used as weapons of mass destruction with 
        respect to which the Secretary finds that research to develop 
        countermeasures is in the national security interest of the 
        United States.
            (2) Requirements.--
                    (A) In general.--The Secretary shall only include 
                on the list developed under paragraph (1) agents, 
                toxins, and materials--
                            (i) that pose a significant security or 
                        medical threat to the United States military 
                        and intelligence personnel, government 
                        officials, or civilians;
                            (ii) that are more likely to be subject to 
                        a countermeasure that is developed as a result 
                        of the availability of the tax, procurement, 
                        intellectual property, liability, and other 
                        provisions of this Act (and the amendment made 
                        by this Act); and
                            (iii) with respect to which safe and 
                        effective countermeasures are not available or 
                        with respect to which the development of safer 
                        and more effective countermeasures, or 
                        countermeasures that may be deployed more 
                        safely or effectively, is in the public 
                        interest.
                    (B) Certain determinations.--For purposes of 
                subparagraph (A)(ii), in determining whether the 
                agents, toxins, and materials are more likely to be 
                subject to a countermeasure, the Secretary shall 
                consider--
                            (i) the status of existing public and 
                        private sector research to develop such 
                        countermeasure;
                            (ii) the status of public and private 
                        sector research that could be adapted or 
                        redirected to develop such countermeasure;
                            (iii) the availability of products that 
                        could be utilized as countermeasures;
                            (iv) the extent to which such 
                        countermeasures may be utilized for purposes 
                        other than as a countermeasure for a biological 
                        agent or toxin or radiological material on the 
                        list developed under this section;
                            (v) the extent to which market-based 
                        reimbursement is available for uses of the 
                        countermeasure other than as a countermeasure 
                        for a biological agent or toxin or radiological 
                        material on the list developed under this 
                        section; and
                            (vi) the most effective strategy for 
                        expediting development of such countermeasure, 
                        including reliance on Government contracts, 
                        grants and cooperative research agreements and 
                        utilization of the incentives provided for in 
                        this Act (and the amendments made by this Act).
            (3) Use of existing lists and data.--The list developed 
        under paragraph (1) may, at the discretion of the Secretary, 
        make reference to or incorporate elements of the list of 
        biological agents and toxins established and maintained by the 
        Secretary of Health and Human Services under section 351A of 
        the Public Health Service Act (as added by section 201 of the 
        Public Health Security and Bioterrorism Preparedness and 
        Response Act of 2002) and under section 178 of title 18, United 
        States Code.
            (4) Information and determinations relating to potential 
        manufacturers.--With respect to the list developed under 
        paragraph (1), the Secretary shall--
                    (A) provide such information regarding such weapons 
                of mass destruction as the Secretary determines to be 
                necessary to enable such potential manufacturers to 
                structure and manage their research and development 
                programs for the development of terror weapons 
                countermeasures; and
                    (B) determine when such a manufacturer has 
                successfully developed a countermeasure and therefore 
                becomes entitled to the procurement, intellectual 
                property, and liability provisions of this Act (or an 
                amendment made by this Act).
            (5) Exemption.--
                    (A) In general.--The Secretary may exempt certain 
                information concerning weapons of mass destruction from 
                publication if the Secretary determines that such 
                publication would (or could) be detrimental to the 
                security of the United States. In providing an 
                exemption under the preceding sentence, the Secretary 
                shall develop procedures for making such list or 
                information available on a confidential basis to 
                potential manufacturers of countermeasures.
                    (B) Sufficiency of information.--In developing the 
                procedures described in subparagraph (A), the Secretary 
                shall ensure that the information provided to potential 
                manufacturers of countermeasures is sufficient to 
                enable the Federal Government and the manufacturer to 
                determine when such a manufacturer has successfully 
                developed a countermeasure and therefore becomes 
                entitled to the procurement, intellectual property, and 
                liability provisions of this Act (or an amendment made 
                by this Act).
    (b) Initial List.--The initial list developed under subsection (a) 
may, at the discretion of the Secretary, contain the following 
biological agents and diseases caused by biological agents, chemical 
toxins, and nuclear and radiological materials:
            (1) Variola major (confluent, flat, and hemorrhagic 
        smallpox).
            (2) Bacillus anthracis (anthrax).
            (3) Clostridium botulinum (botulism).
            (4) Francisella tularensis (tularemia).
            (5) Yersina pestis (Black Death/bubonic plague).
            (6) Ebola hemorrhagic fever.
            (7) Marbug hemorrhagic fever.
            (8) Lassa fever.
            (9) Junin (Argentine hemmorrhagic fever).
            (10) Crimean-Congo Hemmorrhagic Fever.
            (11) Coxiella burnetti (Q fever).
            (12) Coccidioidomycosis (San Joaquin Valley or desert 
        fever).
            (13) Clostridium perfringens.
            (14) Chalydia psittaci (parrot fever).
            (15) Rift Valley Fever.
            (16) Rocky Mountain Spotted Fever.
            (17) Brucella species (brucellosis).
            (18) Burkholderia mallei (glanders).
            (19) Venezuelan encephalomyelitis.
            (20) Eastern and Western equine encephalomyelitis.
            (21) Ricin toxin from ricinus communis (castor beans).
            (22) Trichothcene Mycotoxins (Yellow Rain).
            (23) Paralytic Shellfish Toxin.
            (24) Aflatoxins.
            (25) Epsilon toxin of clostridium perfringens.
            (26) Staphylococcus enterotoxin B.
            (27) Salmonella species.
            (28) Salmonella Typhi (typhoid fever).
            (29) Shigella dysenteriae.
            (30) Escherichia coli 0157:H7.
            (31) Vibrio cholerae (colera).
            (32) Cryptosporidium parvum.
            (33) Nipah virus.
            (34) Hantaviruses.
            (35) Tickborne homorrhagic fever viruses.
            (36) Tickborne encephalitis virus.
            (37) Yellow fever.
            (38) Malaria.
            (39) Typhus.
            (40) Antibiotic resistant tuberculosis.
            (41) Entamoeba histolytica.
            (42) Bacillary dysentery.
            (43) Giardiasis.
            (44) Trichomoniasis.
            (45) Trypanosomiasis.
            (46) Visceral leishmaniasis (black fever).
            (47) Nerve agents (including tabun, sarin, soman, GF, and 
        VX).
            (48) Blood agents (including hydrogen cyanide and cyanogen 
        chloride).
            (49) Blister agents (including lewisite, nitrogen and 
        sulfur mustards).
            (50) Heavy metals (including arsenic, lead, and mercury).
            (51) Colatile toxins (including benzene, chloroform, and 
        trihalomethanes).
            (52) Pulmonary agents (including phosgene and chlorine 
        vinyl chloride).
            (53) Incapacitating agents (including BZ).
            (54) Nuclear and radiological materials.
    (c) Revisions.--The Secretary shall revise the list developed under 
subsection (a) on at least an annual basis, and make such list 
available, under the terms and limitations described in this section, 
to potential manufacturers of terror weapons countermeasures or to 
holders of approved certifications. Such terms and conditions shall be 
consistent with the security interests of the United States.
    (d) No Judicial Review.--Notwithstanding any other provision of 
law, there shall be no judicial review of the Secretary's 
determinations regarding which agents, toxins, or materials to include 
on the list, or revised list, developed under this section or of a 
determination to exempt information from public distribution under this 
section.
    (e) Procurement.--
            (1) Purpose.--It is the purpose of this subsection to 
        provide potential manufacturers of countermeasures that are 
        registered with the Department under section 102 with 
        sufficient information to enable that manufacturer to structure 
        and manage its research and development of a terror weapons 
        countermeasure and to determine when the manufacturer has 
        successfully developed such a countermeasure and therefore 
        becomes entitled to the procurement, intellectual property, and 
        liability incentives provided for under this Act (or an 
        amendment made by this Act).
            (2) Federal government success and market determination.--
        Not later than 180 days after the development of the list, or 
        revised list, under subsection (a), the Secretary shall, with 
        respect to each agent, toxin, or material on the list, 
        determine--
                    (A) the type of countermeasure to be developed, 
                including whether such countermeasure is a diagnostic, 
                vaccine, biological, drug, or other countermeasure;
                    (B) the testing and clinical trial standards that 
                will be required with respect to the countermeasure, in 
                order for the manufacturer to become entitled to 
                procurement, intellectual property, and liability 
                provisions of this Act (or an amendment made by this 
                Act), including the terms of review of the 
                countermeasure by the Food and Drug Administration and 
                whether the approval of such Administration is 
                required;
                    (C) the safety and efficacy profile of the 
                countermeasure;
                    (D) the projected utilization of such 
                countermeasure in combination;
                    (E) the Federal procurement market that will be 
                available to the manufacturer of such countermeasure, 
                including the minimum number of dosages or units that 
                will be purchased, the minimum price per dose or unit, 
                and the timing and minimum number of years projected 
                for such purchases;
                    (F) with respect to a developer of a countermeasure 
                that contracts with another entity for the manufacturer 
                of such countermeasure, or with respect to a developer 
                that is one of several manufacturers of such 
                countermeasure, the Federal Government market that will 
                be available to the developer of such countermeasure;
                    (G) the advance, partial, progress, milestone or 
                other payments that may be available to the 
                manufacturer under section 202, and the terms and 
                conditions for the adjustment of any such payments for 
                uncontrollable factors; and
                    (H) such other information as the manufacturer may 
                reasonably request to enable the manufacturer to 
                structure and manage research and development 
                activities and determine when a countermeasure has been 
                successfully developed therefore entitling the 
                manufacturer to the procurement, intellectual property, 
                and liability provisions of this Act (or an amendment 
                made by this Act).
            (3) Determinations.--
                    (A) In general.--The Secretary shall make 
                determinations under this subsection with respect to 
                the successful development of countermeasures in 
                accordance with section 102(e)(3).
                    (B) Testing and clinical trials.--The determination 
                by the Secretary under paragraph (2)(B) with respect to 
                the testing and clinical trial standards that will be 
                required shall apply only to the entitlement of the 
                manufacturer to the procurement, intellectual property, 
                and liability provisions of this Act (or an amendment 
                made by this Act). Nothing in this Act shall be 
                construed to alter or affect the authority of the Food 
                and Drug Administration with respect to the testing, 
                clinical trial, or other regulatory standards 
                applicable to the countermeasure involved.
                    (C) No judicial review.--Notwithstanding any other 
                provision of law, there shall be no judicial review of 
                determinations made by the Secretary under this 
                subsection.
            (4) Revisions.--The Secretary is authorized to revise 
        upward determinations under subparagraphs (E) and (G) of 
        paragraph (2) with respect to minimum number of dosages that 
        will be purchased and minimum price per dose and the advance, 
        partial, progress, milestone or other payments that may be 
        available to the manufacturer upon a determination that such 
        revision is necessary to protect the national security 
        interests of the United States and provide an effective 
        incentive to entities developing countermeasures.

SEC. 102. RESEARCH REGISTRATION REQUIREMENTS.

    (a) In General.--On or before December 31 of each year each entity 
that operates any private sector establishment in any State that seeks 
to be eligible for the tax, procurement, intellectual property, and 
liability provisions in title II (and the amendments made by such 
title), and that is engaged in the conduct of research to develop 
countermeasures, diagnostics (as provided for in section 103), or 
research tools (as provided for in section 104) shall register with the 
Department. Such registration shall contain--
            (1) the name and address of the entity;
            (2) the name and address of the establishment at which the 
        research is being conducted;
            (3) the name of the agent, toxin, or material with respect 
        to which the entity seeks to develop countermeasures, 
        diagnostics or research tools;
            (4) a description of the research that is being, or that 
        will be, conducted to develop countermeasures to, or diagnostic 
        or research tools with respect to, such agent, toxin, or 
        material;
            (5) a description of the capability of the entity, 
        including its technology and personnel, to develop 
        countermeasures to such agents, toxins, or material that meet 
        the safety and efficacy profiles specified by the Secretary;
            (6) the name of each individual who is conducting the 
        research involved;
            (7) the procedures that the entity will follow to ensure 
        that the security interests of the United States are met; and
            (8) any other information required under regulations 
        promulgated by the Secretary, including additions and 
        corrections to the information required under this subsection 
as may be required by the Secretary through regulation.
    (b) Availability of Information.--
            (1) In general.--Not later than 90 days after the date of 
        enactment of this Act, the Secretary shall promulgate 
        regulations with respect to the availability of information 
        under this subsection.
            (2) Inspections.--Subject to regulations promulgated under 
        paragraph (1), the Department shall make available for 
        inspection, to any person so requesting, any registration filed 
        pursuant to subsection (a), except as provided in paragraph 
        (3).
            (3) Certain information not available.--The Secretary shall 
        promulgate regulations to exempt certain information from 
        disclosure under paragraph (2). Such regulations shall exempt 
        from publication and disclosure trade secret and commercial or 
        financial information which is exempt from disclosure to the 
        public under section 552(b)(4) of title 5, United States Code, 
        national security information, and information affecting the 
        security of research and other facilities.
            (4) No judicial review.--Notwithstanding any other 
        provision of law, there shall be no judicial review of 
        determinations made by the Secretary to exempt information 
        under paragraph (3), except that this paragraph shall not apply 
        to judicial review of the failure to exempt from publication 
        and disclosure trade secret and commercial or financial 
        information, national security information, and information 
        affecting the security of research and other facilities.
    (c) Inspections.--Every establishment in any State registered with 
the Department pursuant to this section shall be subject to inspection, 
limited to such information as may be necessary relating to the 
development of countermeasures, diagnostics, or research tools and 
facility security, pursuant to regulations promulgated by the 
Secretary.
    (d) Reports.--The Secretary shall promulgate regulations that 
prescribe the reports that each establishment that is registered with 
the Department under this section shall be required to file with the 
Secretary. Such regulations shall limit such reports to those necessary 
to enable the Secretary to--
            (1) ensure that the capital derived by the utilization of 
        the tax incentives provided for in title II (and the amendments 
        made by such title) is used to fund the research that is the 
        subject of the registration and certification under this 
        section;
            (2) determine the status of the research involved; and
            (3) determine the outlook for United States preparedness 
        for a biological, chemical, or radiological attack.
    (e) Certification.--
            (1) In general.--With respect to each entity that registers 
        with the Department under this section, the Secretary, in 
        consultation with the Secretary of Health and Human Services, 
        shall determine--
                    (A) whether the research to be conducted under such 
                registration is directed to lead to the development of 
                a--
                            (i) countermeasure with respect to a 
                        biological or chemical agency or radiological 
                        material on the list under section 101;
                            (ii) diagnostic with respect to the list 
                        developed under section 103; or
                            (iii) research tool with respect to the 
                        list developed under section 104;
                    (B) whether the entity is qualified to conduct 
                research to develop the countermeasure with respect to 
                which the entity seeks certification, and, with respect 
                to such determination, the Secretary shall not presume 
                that the entity is unqualified because the entity has 
                not previously secured approval of the Food and Drug 
                Administration of a device, drug, or biologic; and
                    (C) whether the procedures of the entity will 
                ensure compliance with section 351A of the Public 
                Health Service Act (as added by section 201 of the 
                Public Health Security and Bioterrorism Preparedness 
                and Response Act of 2002.
            (2) Determination.--If the Secretary makes an affirmative 
        determination under paragraph (1) with respect to an entity, 
        the Secretary shall certify the entity as being entitled to 
        utilize the tax incentive provisions described in section 201 
        (and the amendments made by such section).
            (3) Successful development.--Not later than 90 days after 
        the date on which a certified entity submits to the Secretary 
        an application for a determination that the entity has 
        successfully developed a terror weapons countermeasure in 
        accordance with section 101(e)(2), diagnostic in accordance 
        with section 103, or research tool in accordance with section 
        104, the Secretary shall notify the entity--
                    (A) of such determination; and
                    (B) in the case of an affirmative determination by 
                the Secretary with respect to the countermeasure, 
                diagnostic, or research tool involved, that the entity 
                shall be entitled to--
                            (i) procurement of the countermeasure, 
                        diagnostic, or research tool under the terms 
                        and conditions described under such section 
                        101(e)(2) (including the minimum number of 
                        doses to be purchased, the timing and minimum 
                        number of years projected for such purchases, 
                        and the minimum per dose price), in accordance 
                        with section 202, and upon the execution of a 
                        contract with the Secretary with respect to 
                        such procurement; and
                            (ii) the patent restoration and extension 
                        protection under section 156a or 158 of title 
                        35, United States Code, as added by section 
                        203; and
                            (iii) upon a determination by the Secretary 
                        that it is the national security interest of 
                        the United States, the liability protections 
                        provided for under the amendment made by 
                        section 204.
            (4) Required affirmative determination.--The Secretary 
        shall make an affirmative determination that an entity has 
        successfully developed a terror weapons countermeasure, 
        diagnostic, or research tool under this subsection if such 
        countermeasure, diagnostic, or research tool--
                    (A) has been authorized under the Federal Food, 
                Drug, and Cosmetic Act (21 U.S.C. 301 et seq.) and the 
                Public Health Service Act (42 U.S.C. 201 et seq.) for 
                introduction or distribution into commerce;
                    (B) has not been authorized for such introduction 
                or distribution into commerce under subparagraph (A) 
                but has been authorized for investigation or 
                compassionate use as a terror weapons countermeasure, 
                diagnostic, or research tool under such Acts and the 
                Secretary determines that significant quantities of the 
                countermeasure, diagnostic, or research tool have been 
                manufactured by the entity and are available for such 
                investigational or compassionate use; or
                    (C) is not required to be authorized for 
                introduction or distribution in commerce or 
                investigational use under such Acts under subparagraphs 
                (A) or (B) but the Secretary determines that 
                significant quantities of it have been manufactured by 
                an entity for use as a terror weapons countermeasure, 
                diagnostic, or research tool and are available for such 
                use.
            (5) Judicial review.--An adverse determination by the 
        Secretary with respect to the development by a manufacturer of 
        a terror weapons countermeasure in accordance with section 
        101(e)(2), diagnostic in accordance with section 103, or 
        research tool in accordance with section 104, shall be subject 
        to appropriate judicial review.
    (f) Eligibility of Entities With More Than $750,000,000 in 
Aggregate Gross Assets, etc.--
            (1) Authority of secretary to waive aggregate gross assets 
        limitation.--Within 60 days of the request of an entity for a 
        certification under subsection (e)(1) or a determination under 
        subsection (e)(3), and upon a finding by the Secretary that it 
        is in the public interest, the Secretary may extend the 
        entitlement to utilize the tax incentives described in the 
        amendments made by section 201 and the patent restoration and 
        extension protection described in the amendments made by 
        section 203, to such an entity with aggregate gross assets 
        exceeding $750,000,000 (as defined in section 1202(d)(2) of the 
        Internal Revenue Code of 1986).
            (2) Waiver with regard to entities with net operating 
        losses.--Any entity obtaining a certification or determination 
        described in paragraph (1) shall be entitled to utilize the tax 
        incentives described in paragraphs (1), (2), and (3) of section 
        201 and the patent restoration and extension protection 
        described in section 158 of title 35, United States Code, as 
        added by section 203(b), if such entity's tax status in no 
        fewer than 3 of the 5 taxable years preceding such 
        certification or determination is that of an entity with net 
        operating losses (as defined in section 172(c) of the Internal 
        Revenue Code of 1986).
            (3) Implementing rules.--The Secretary shall publish 
        appropriate rules to implement this subsection taking into 
        account the need to encourage participation by entities which 
        have not yet become profitable on a sustainable basis.
            (4) No judicial review.--Notwithstanding any other 
        provision of law, there shall be no judicial review of 
        determinations made by the Secretary with respect to waivers 
        under this subsection.
    (g) Rule of Construction.--Nothing in this section shall be 
construed to prohibit--
            (1) a private sector establishment from filing more than 1 
        registration concerning research and from obtaining more than 1 
        certification of eligibility under this section;
            (2) a consortium, partnership, or joint venture of more 
        than one private sector establishment from filing one or more 
        registrations concerning research and obtaining one or more 
        certification of eligibility under this section; and
            (3) a private sector establishment from receiving Federal 
        grants, contracts, or cooperative agreements for research, 
        investigations, experiments, demonstrations, and studies in 
        addition to the incentives provided for under this Act (and the 
        amendments made by this Act).
    (h) Priority Access to Certain Research Results.--An entity that is 
certified under this section shall be given priority access to the 
results of research related to the epidemiology and pathogenesis of 
agents, the genomes and other DNA analysis, or other comparative 
analysis of agents, and other relevant research conducted under 
subparagraphs (A), (b), and (C) of section 391F(h)(1) of the Public 
Health Service Act (as added by section 125 of the Public Health 
Security and Bioterrorism Preparedness and Response Act of 2002.
    (i) Accelerated Approval.--An entity that is certified under this 
section shall be eligible for accelerated approval of a countermeasure 
as described in section 211 and as provided for in section 122 of the 
Public Health Security and Bioterrorism Preparedness and Response Act 
of 2002.
    (j) Priority for Technical and Other Assistance.--An entity that is 
certified under this section shall be given priority for receiving 
technical and other assistance to provide security for their personnel 
and facilities that conduct development, production, distribution, or 
storage of countermeasures under section 319K of the Public Health 
Service Act (as added by section 124 of the Public Health Security and 
Bioterrorism Preparedness and Response Act of 2002).

SEC. 103. DIAGNOSTICS INCENTIVES.

    (a) Findings.--Congress finds that--
            (1) in the case of a bioterrorist attack, the United States 
        public health authorities need the capacity to quickly and 
        accurately diagnose the agent, toxin, or material involved so 
        that appropriate medical intervention can be implemented;
            (2) public health authorities need information on which 
        vaccines and drugs will be effective in preventing infection, 
        or in treating those who are infected, as a result of a 
        terrorist attack, and whether there are any existing vaccines 
        or drugs that are effective;
            (3) there is a lack of information on the complications 
        involved in administering vaccines and drugs via the use of 
        diagnostic devices to portions of society that are known or 
        unknown to carry contraindication diseases or conditions;
            (4) few diagnostics for agents, toxins, or materials that 
        could be used in a terror attack are currently available;
            (5) the current structure and management of patients in 
        both the emergency room and outpatient clinical settings is not 
        conducive to rapid recognition of infectious disease agents, 
        which may in fact be biothreat agents;
            (6) financial inducements to conduct screening tests for 
        infectious diseases are nonexistent or require substantial 
        justification before a health care provider will order a 
        specific test to diagnose an infectious disease;
            (7) cultures, the gold standard currently, can require 48 
        hours to many days or weeks to provide a definitive diagnosis 
        while new molecular level tests can reduce that time to hours;
            (8) the clinical presentation of many conditions, including 
        biothreat agents, is a very common and nonspecific pattern of 
        symptoms and doctors, in general, will not order a test unless 
        they happen to think of a particular disease in their 
        presumptive differential diagnosis;
            (9) it is often easier to prescribe an antibiotic rather 
        than to determine the underlying causative organism;
            (10) both screening and more specific tests to diagnose 
        infectious diseases need to be available to physicians; and
            (11) screening particularly needs to be part of the routine 
        way physicians practice medicine, and this means the ready 
        availability of tests in emergency room settings, the ability 
        to rapidly provide a definitive diagnosis, and the ability to 
        report out electronically to local public health agencies and 
        hospital infection control monitors results of these tests.
    (b) Identification.--Not later than 180 days after the date of 
enactment of this Act, the Secretary shall develop and make available 
to potential manufacturers, a list of the diagnostics and diagnostics 
for contraindicators to vaccines or drugs that need to be developed to 
prepare the United States for a terrorist attack with a biological or 
chemical agent or toxin or nuclear or radiological materials. The 
Secretary shall provide such information as the Secretary determines to 
be necessary to enable such potential manufacturers to structure and 
focus their research and development programs for the development of 
such diagnostics.
    (c) Revisions.--The Secretary shall revise the list developed under 
subsection (b) on at least an annual basis, and make such list 
available to potential manufacturers of diagnostics under terms and 
conditions consistent with the security interests of the United States.
    (d) Development of Certain Diagnostics.--
            (1) In general.--The Secretary shall develop and implement 
        a strategy for the creation of infectious disease multiplexed 
        molecular level technologies and the building of a system 
        linking the local, State, and Federal public health systems 
        through automated laboratory results reporting for all 
        infectious diseases.
            (2) Strategy.--The strategy developed and implemented 
        pursuant to paragraph (1) shall--
                    (A) include the development of confirmatory 
                laboratory tests to back up presumptive results 
                available from initial screening;
                    (B) recognize the need for advancement in the field 
                of bioinformatics to accelerate the discovery of 
                countermeasures using advanced mathematical techniques 
                for pattern recognition, lossless digital data 
                compression for storage and transmission of biomedical 
                images, and the ability to analyze massive amounts of 
                data; and
                    (C) promote the advancement of bioinformatics 
                through the use of incentives, the procurement and 
                rapid development of new devices, and the linkage of 
                information systems into a medical surveillance 
                infrastructure.
            (3) Technology.--The specific screening and diagnostics 
        technology used to implement the strategy described in 
        paragraph (1) may consist of multiplexed devices that screen 
        for routinely encountered common infectious diseases and have 
        biothreat agent detection embedded in the devices capable of 
        autoreporting results electronically, so results can be put 
        into the public health system quickly.
    (e) Utilization of Diagnostics by Health Care Providers.--
            (1) In general.--The Secretary shall develop and implement 
        a strategy that recognizes the need to provide the right 
incentives to the health care industry to allow them to utilize the new 
diagnostic tools that will be made available through research and allow 
for routine screening for infectious diseases.
            (2) Reimbursement.--The strategy shall include appropriate 
        incentives to allow for reimbursement to hospitals, clinics, 
        and other providers who perform routine laboratory screening 
        utilizing newer molecular level tests that rapidly detect 
        infectious diseases.
            (3) Guidelines.--The Secretary shall establish similar 
        guidelines for States to utilize to promote infectious disease 
        screening, including testing for the rapid identification of 
        potential biothreat agents.
    (f) No Judicial Review.--Notwithstanding any other provision of 
law, there shall be no judicial review of the list, or revised list, 
developed by the Secretary under this section.
    (g) Incentives.--Not later than 90 days after the date on which a 
certified entity submits to the Secretary an application for a 
determination that the entity has successfully developed a terror 
weapons diagnostic in accordance with this section and section 102, the 
Secretary shall notify the entity--
            (1) of such determination; and
            (2) in the case of an affirmative determination by the 
        Secretary with respect to the diagnostic involved, that the 
        entity shall be entitled to--
                    (A) the tax incentives described in section 201; 
                and
                    (B) after the successful development of the 
                diagnostic involved--
                            (i) procurement of the diagnostic;
                            (ii) the patent restoration and extension 
                        protection under section 156a or 158 of title 
                        35, United States Code, as added by section 
                        203; and
                            (iii) the liability protections provided 
                        for under the amendment made by section 204.
    (g) Judicial Review.--An adverse determination by the Secretary 
with respect to the development by a manufacturer of a terror weapons 
diagnostic in accordance with this section, shall be subject to 
appropriate judicial review.

SEC. 104. RESEARCH TOOLS INCENTIVES.

    (a) Findings.--Congress finds that--
            (1) it may not be possible for the United States to 
        anticipate the biological or chemical agent or toxin or nuclear 
        or radiological material that might be utilized in a terrorist 
        attack against the United States;
            (2) terrorists may develop a biological or chemical agent 
        or toxin or nuclear or radiological material that the United 
        States has not anticipated would be weaponized;
            (3) terrorists may be able to genetically modify an 
        organism or manufacture a novel biological or chemical agent or 
        toxin or nuclear or radiological material so that available 
        diagnostics, vaccines, and drugs are not effective;
            (4) in such cases, the United States needs the capacity to 
        develop and deploy, in the middle of an epidemic or attack, 
        effective diagnostics, vaccines, drugs, and research tools;
            (5) the ability of terrorists to deploy novel weapons of 
        mass destruction far exceeds the power of existing research 
        tools;
            (6) to be prepared, the United States needs to provide 
        incentives for the development of new and more powerful 
        research tools; and
            (7) the Defense Science Board has found ``Effective 
        biodefense measures for treatment or proactive vaccination 
        against engineered agents introduces an additional element of 
        technical complexity that would demand just-in-time R&D 
        initiatives on a case-by-case basis to address the specific 
        technical manipulation used in producing the engineered 
        agent''.
    (b) Identification.--Not later than 180 days after the date of 
enactment of this Act, the Secretary shall develop and make available 
to potential manufacturers, a list of the research tools that need to 
be developed to prepare the United States for a terrorist attack with a 
biological or chemical agent or toxin or nuclear or radiological 
materials. The list developed by the Secretary shall include research 
tools for which there is a need for development in order to understand 
why certain countermeasures may cause adverse events, how to minimize 
such adverse events, and how to treat such adverse events. The 
Secretary shall provide such information as the Secretary determines to 
be necessary to enable such potential manufacturers to structure and 
focus their research and development programs for the development of 
such diagnostics.
    (c) Revisions.--The Secretary shall revise the list developed under 
subsection (b) on at least an annual basis, and make such list 
available to potential manufacturers of research tools under terms and 
conditions consistent with the security interests of the United States.
    (d) No Judicial Review.--Notwithstanding any other provision of 
law, there shall be no judicial review of the list, or revised list, 
developed by the Secretary under this section.
    (e) Incentives.--Not later than 90 days after the date on which a 
certified entity submits to the Secretary an application for a 
determination that the entity has successfully developed a terror 
weapons research tool in accordance with this section and section 102, 
the Secretary shall notify the entity--
            (1) of such determination; and
            (2) in the case of an affirmative determination by the 
        Secretary with respect to the research tool involved, that the 
        entity shall be entitled to--
                    (A) the tax incentives described in section 201; 
                and
                    (B) after the successful development of the 
                research tool involved--
                            (i) procurement of the research tool;
                            (ii) the patent restoration and extension 
                        protection under section 156a or 158 of title 
                        35, United States Code, as added by section 
                        203; and
                            (iii) the liability protections provided 
                        for under the amendment made by section 204.
    (f) Judicial Review.--An adverse determination by the Secretary 
with respect to the development by a manufacturer of a terror weapons 
research tool in accordance with this section, shall be subject to 
appropriate judicial review.
    (g) Utilization and Availability.--
            (1) In general.--Entities with respect to which an 
        affirmative determination is made under subsection (e) shall 
        maximize the utilization of the research tools involved for the 
        development of countermeasures, including making such tools 
        available on commercially reasonable terms to other entities 
        certified under section 102 to develop countermeasures.
            (2) Rule of construction.--Nothing in this Act or chapter 
        18 of title 35, United States Code, shall be construed to 
        restrict the right of an entity described in paragraph (1) to--
                    (A) secure and enforce patents with regard to 
                research tools;
                    (B) enter into exclusive, revocable, and 
                nontransferable licenses of such research tools; or
                    (C) impose limits on royalty-reach-through 
                agreements, option rights, or product reach-through 
                rights concerning such research tools.

      TITLE II--INCENTIVES FOR THE DEVELOPMENT OF COUNTERMEASURES

                     Subtitle A--Primary Incentives

SEC. 201. FEDERAL TAX INCENTIVES.

    (a) Findings and Purpose.--
            (1) Findings.--Congress makes the following findings:
                    (A) Most biotechnology companies, and many device 
                and research tool companies, are early stage research 
                ventures with no revenue from product sales to finance 
                their medical research. Most biotechnology companies 
                must rely on repeated and large infusions of investor 
                capital to fund this research. To conduct research on 
                countermeasures to biological agents and other toxins 
                or any other type of research, these companies must 
                persuade venture capitalists and other investors that 
                funding this research may lead to a rate of return 
                commensurate with the risk and comparable to the rate 
                of return available to other, comparable investment 
                opportunities.
                    (B) Biotechnology companies are justifiably 
                reluctant to modify their ongoing research priorities 
                and devote scare management and scientific talent to 
                new and risky projects. Their first priority and 
                obligation is and must be to secure approval to market 
                a product that will generate revenue sufficient to 
                reduce the dependence of the company on continued 
                infusions of investor capital and to provide a long-
                awaited return to patient investors.
                    (C) Biotechnology companies tend to focus on 
                breakthrough research to develop medical treatments for 
                diseases where no effective treatments are currently 
                available. They often specialize in research and 
                development on rare diseases and they are parties in 
                the vast majority of the collaborations in the United 
                States between private industry and academic medical 
                centers and the National Institutes of Health. Many 
                biotechnology companies do not have approval to market 
                products with respect to which they might develop minor 
                improvements to maintain a market advantage.
                    (D) No type of industrial research is as costly as 
                biotechnology research. Successful research and 
                development of countermeasures will necessitate 
                breakthroughs in virology, immunology, antibiotics, 
                genetic analysis, and many other disciplines in 
                biology.
                    (E) Many biotechnology companies have no tax 
                liability with respect to which to claim a tax credit. 
                Many of the tax incentives in the income tax system of 
                the United States have no value to a company with no 
                current revenue or tax liability. Large pharmaceutical 
                companies can utilize tax credits as an incentive for 
                research.
                    (F) The provision of tax incentives will help in 
                enabling biotechnology companies to form the capital 
                needed to conduct research to develop countermeasures. 
                Such incentives lower the cost of capital, induce 
                investors to fund research, and enable biotechnology 
                companies to justify the investment of retained 
                earnings. Without such capital, research on 
                countermeasures is not likely to go forward. Tax 
                incentives are less costly than direct Federal 
                Government funding of the research and tend to shift 
                some of the risk of failure to the companies.
            (2) Purpose.--It is the purpose of this section to provide 
        tax incentives to enable biotechnology, pharmaceutical, 
        diagnostics, and research tool companies to form capital to 
        conduct research to develop countermeasures.
    (b) In General.--Any entity certified as entitled to the provisions 
described in this section for any taxable year under section 102(e) may 
irrevocably elect 1 of the following Federal tax incentives to fund 
research with respect to each certification to develop countermeasures, 
diagnostics, or medical research tools:
            (1) Research and development limited partnerships to fund 
        countermeasure research.--The entity may establish a limited 
        partnership for the certified countermeasures, diagnostics, or 
        research tools research, but only if such entity is a qualified 
        small business as determined under section 1202(d) of the 
        Internal Revenue Code of 1986, by substituting ``$750,000,000'' 
        for ``$50,000,000'' each place it appears. For purposes of the 
        Internal Revenue Code of 1986, section 469 of such Code shall 
        not apply with respect to a limited partnership established 
        under this paragraph.
            (2) Capital gains exclusion for investors to fund 
        countermeasure research.--The entity may issue a class of stock 
        for the certified countermeasures, diagnostics, or research 
        tools research under section 1202 of the Internal Revenue Code 
        of 1986 with the following modifications:
                    (A) Increased exclusion for noncorporate 
                taxpayers.--Subsection (a) of section 1202 of such Code 
                shall be applied by substituting ``100 percent'' for 
                ``50 percent''.
                    (B) Application to corporate taxpayers.--Subsection 
                (a) of section 1202 of such Code shall be applied 
                without regard to the phrase ``other than a 
                corporation''.
                    (C) Stock of larger businesses eligible for 
                exclusion.--Paragraph (1) of section 1202(d) of such 
                Code (defining qualified small business) shall be 
                applied by substituting ``$750,000,000'' for 
                ``$50,000,000'' each place it appears.
                    (D) Reduction in holding period.--Subsection (a) of 
                section 1202 of such Code shall be applied by 
                substituting ``3 years'' for ``5 years''.
                    (E) Nonapplication of per-issuer limitation.--
                Section 1202 of such Code shall be applied without 
                regard to subsection (b) (relating to per-issuer 
                limitations on taxpayer's eligible gain).
                    (F) Modification of working capital limitation.--
                Section 1202(e)(6) of such Code shall be applied--
                            (i) in subparagraph (B), by substituting 
                        ``5 years'' for ``2 years'', and
                            (ii) without regard to the last sentence.
                    (G) Nonapplication of minimum tax preference.--
                Section 57(a) of such Code shall be applied without 
                regard to paragraph (7).
            (3) Tax credit to fund countermeasure research.--
                    (A) In general.--Subpart D of part IV of subchapter 
                A of chapter 1 of the Internal Revenue Code of 1986 
                (relating to business related credits) is amended by 
                adding at the end the following new section:

``SEC. 45G. CREDIT FOR MEDICAL RESEARCH RELATED TO DEVELOPING 
              COUNTERMEASURES.

    ``(a) General Rule.--For purposes of section 38, in the case of any 
certified entity under section 102(e) of the Biological, Chemical, and 
Radiological Weapons Countermeasures Research Act of 2002 which makes 
an election under section 201(b) of such Act to apply this section, the 
countermeasures research credit determined under this section for the 
taxable year is an amount equal to 35 percent of the qualified 
countermeasures research expenses for the taxable year.
    ``(b) Qualified Countermeasures Research Expenses.--For purposes of 
this section--
            ``(1) Qualified countermeasures research expenses.--
                    ``(A) In general.--Except as otherwise provided in 
                this paragraph, the term `qualified countermeasures 
                research expenses' means the amounts which are paid or 
                incurred by the taxpayer during the taxable year which 
                would be described in subsection (b) of section 41 if 
                such subsection were applied with the modifications set 
                forth in subparagraph (B).
                    ``(B) Modifications; increased incentive for 
                contract research payments.--For purposes of 
                subparagraph (A), subsection (b) of section 41 shall be 
                applied--
                            ``(i) by substituting `qualified 
                        countermeasures research' for `qualified 
                        research' each place it appears in paragraphs 
                        (2) and (3) of such subsection, and
                            ``(ii) by substituting `100 percent' for 
                        `65 percent' in paragraph (3)(A) of such 
                        subsection.
                    ``(C) Exclusion for amounts funded by grants, 
                etc.--The term `qualified countermeasures research 
                expenses' shall not include any amount to the extent 
                such amount is funded by any grant, contract, or 
                otherwise by another person (or any governmental 
                entity).
            ``(2) Countermeasures research.--The term `countermeasures 
        research' means certified countermeasures research for any 
        biological agent or toxin on the list described in section 101 
        of the Biological, Chemical, and Radiological Weapons 
        Countermeasures Research Act of 2002.
    ``(c) Coordination With Credit for Increasing Research 
Expenditures.--
            ``(1) In general.--Except as provided in paragraph (2), any 
        qualified countermeasures research expenses for a taxable year 
        to which an election under this section applies shall not be 
        taken into account for purposes of determining the credit 
        allowable under section 41 for such taxable year.
            ``(2) Expenses included in determining base period research 
        expenses.--Any qualified countermeasures research expenses for 
        any taxable year which are qualified research expenses (within 
        the meaning of section 41(b)) shall be taken into account in 
        determining base period research expenses for purposes of 
        applying section 41 to subsequent taxable years.
    ``(d) Special Rules.--
            ``(1) Limitations on foreign testing.--No credit shall be 
        allowed under this section with respect to any countermeasures 
        research (other than human clinical testing) conducted outside 
        the United States.
            ``(2) Pre-clinical research.--No credit shall be allowed 
        under this section for pre-clinical research unless such 
        research is pursuant to a research plan an abstract of which 
        has been filed with the Director of the Office of Homeland 
        Security before the beginning of such year. The Director of the 
        Office of Homeland Security, in consultation with the Secretary 
        of Health and Human Services, shall prescribe regulations 
        specifying the requirements for such plans and procedures for 
        filing under this paragraph.
            ``(3) Certain rules made applicable.--Rules similar to the 
        rules of paragraphs (1) and (2) of section 41(f) shall apply 
        for purposes of this section.
            ``(4) Coordination with credit for clinical testing 
        expenses for certain drugs for rare diseases.--Any qualified 
        countermeasures research expense for a taxable year shall not 
        be taken into account for purposes of determining the credit 
        allowable under section 45C for such taxable year.''.
                    (B) Inclusion in general business credit.--
                            (i) In general.--Section 38(b) of such Code 
                        is amended by striking ``plus'' at the end of 
                        paragraph (14), by striking the period at the 
                        end of paragraph (15) and inserting ``, plus'', 
                        and by adding at the end the following new 
                        paragraph:
            ``(16) the countermeasures research credit determined under 
        section 45G.''.
                            (ii) Transition rule.--Section 39(d) of 
                        such Code is amended by adding at the end the 
                        following new paragraph:
            ``(11) No carryback of section 45g credit before 
        enactment.--No portion of the unused business credit for any 
        taxable year which is attributable to the countermeasures 
        research credit determined under section 45G may be carried 
        back to a taxable year beginning before January 1, 2003.''.
                    (C) Denial of double benefit.--Section 280C of such 
                Code is amended by adding at the end the following new 
                subsection:
    ``(d) Credit for Qualified Countermeasures Research Expenses.--
            ``(1) In general.--No deduction shall be allowed for that 
        portion of the qualified countermeasures research expenses (as 
        defined in section 45G(b)) otherwise allowable as a deduction 
        for the taxable year which is equal to the amount of the credit 
        determined for such taxable year under section 45G(a).
            ``(2) Certain rules to apply.--Rules similar to the rules 
        of paragraphs (2), (3), and (4) of subsection (c) shall apply 
        for purposes of this subsection.''.
                    (D) Deduction for unused portion of credit.--
                Section 196(c) of such Code (defining qualified 
                business credits) is amended by striking ``and'' at the 
                end of paragraph (9), by striking the period at the end 
                of paragraph (10) and inserting ``, and'', and by 
                adding at the end the following new paragraph:
            ``(11) the countermeasures research credit determined under 
        section 45G(a) (other than such credit determined under the 
        rules of section 280C(d)(2)).''.
                    (E) Technical amendment.--The table of sections for 
                subpart D of part IV of subchapter A of chapter 1 of 
                such Code is amended by adding at the end the following 
                new item:

                              ``Sec. 45G. Credit for medical research 
                                        related to developing 
                                        countermeasures.''.
            (4) Tax credit to fund countermeasure research at certain 
        qualified non-profit and academic institutions including 
        teaching hospitals.--
                    (A) In general.--Subpart D of part IV of subchapter 
                A of chapter 1 of the Internal Revenue Code of 1986 
                (relating to business related credits) is amended by 
                inserting after section 41 the following:

``SEC. 41A. CREDIT FOR COUNTERMEASURES RESEARCH EXPENSES.

    ``(a) General Rule.--For purposes of section 38, in the case of any 
certified entity under section 102(e) of the Biological, Chemical, and 
Radiological Weapons Countermeasures Research Act of 2002 which makes 
an election under section 201(b) of such Act to apply this section, the 
countermeasures research credit determined under this section for the 
taxable year shall be an amount equal to 35 percent of the excess (if 
any) of--
            ``(1) the qualified countermeasures research expenses for 
        the taxable year, over
            ``(2) the countermeasures base period amount.
    ``(b) Qualified Countermeasures Research Expenses.--For purposes of 
this section--
            ``(1) In general.--The term `qualified countermeasures 
        research expenses' means the amounts which are paid or incurred 
        by the taxpayer during the taxable year directly or indirectly 
        to any qualified non-profit or academic institution for 
        countermeasures research activities certified under section 
        102(e) of such Act.
            ``(2) Countermeasures research activities.--
                    ``(A) In general.--The term `countermeasures 
                research activities' means research to develop 
                countermeasures or research tools conducted at any 
                qualified non-profit or academic institution in the 
                development of any product, which occurs before--
                            ``(i) the date on which an application with 
                        respect to such product is approved under 
                        section 505(b), 506, or 507 of the Federal 
                        Food, Drug, and Cosmetic Act,
                            ``(ii) the date on which a license for such 
                        product is issued under section 351 of the 
                        Public Health Service Act, or
                            ``(iii) the date classification or approval 
                        of such product which is a device intended for 
                        human use is given under section 513, 514, or 
                        515 of the Federal Food, Drug, and Cosmetic 
                        Act.
                    ``(B) Definitions.--
                            ``(i) Countermeasures; research tools.--The 
                        terms `countermeasures' and `research tools' 
                        have the meanings given such terms by section 3 
                        of the Biological, Chemical, and Radiological 
                        Weapons Countermeasures Research Act of 2002.
                            ``(ii) Product.--The term `product' means 
                        any drug, biologic, medical device, or research 
                        tool.
            ``(3) Qualified non-profit or academic institution.--The 
        term `qualified non-profit or academic institution' means any 
        of the following institutions:
                    ``(A) Educational institution.--A qualified 
                organization described in section 170(b)(1)(A)(iii) 
                which is owned or affiliated with an institution of 
                higher education as described in section 3304(f).
                    ``(B) Teaching hospital.--A teaching hospital 
                which--
                            ``(i) is publicly supported or owned by an 
                        organization described in section 501(c)(3), 
                        and
                            ``(ii) is affiliated with an organization 
                        meeting the requirements of subparagraph (A).
                    ``(C) Foundation.--A medical research organization 
                described in section 501(c)(3) (other than a private 
                foundation) which is affiliated with, or owned by--
                            ``(i) an organization meeting the 
                        requirements of subparagraph (A), or
                            ``(ii) a teaching hospital meeting the 
                        requirements of subparagraph (B).
                    ``(D) Charitable research hospital.--A hospital 
                that is designated as a cancer center by the National 
                Cancer Institute.
                    ``(E) Other institutions.--A qualified organization 
                (as defined in section 41(e)(6)).
            ``(4) Exclusion for amounts funded by grants, etc.--The 
        term `qualified countermeasures research expenses' shall not 
        include any amount to the extent such amount is funded by any 
        grant, contract, or otherwise by another person (or any 
        governmental entity).
    ``(c) Countermeasures Research Base Period Amount.--For purposes of 
this section, the term `countermeasures research base period amount' 
means the average annual qualified countermeasures research expenses 
paid by the taxpayer during the 3-taxable year period ending with the 
taxable year immediately preceding the first taxable year of the 
taxpayer beginning after December 31, 2002.
    ``(d) Special Rules.--
            ``(1) Limitation on foreign testing.--No credit shall be 
        allowed under this section with respect to any clinical testing 
        research activities conducted outside the United States.
            ``(2) Certain rules made applicable.--Rules similar to the 
        rules of subsections (f) and (g) of section 41 shall apply for 
        purposes of this section.
            ``(3) Coordination with credit for increasing research 
        expenditures and with credit for clinical testing expenses for 
        certain drugs for rare diseases.--Any qualified countermeasures 
        research expense for a taxable year shall not be taken into 
        account for purposes of determining the credit allowable under 
        section 41 or 45C for such taxable year.
            ``(4) Qualified countermeasures research expenses not 
        treated as unrelated business taxable income.--For purposes of 
        section 511, qualified countermeasures research expenses paid 
        or incurred by the taxpayer directly or indirectly to any 
        qualified non-profit or academic institution shall not be 
        considered unrelated business taxable income of such 
        institution.''.
                    (B) Credit to be part of general business credit.--
                            (i) In general.--Section 38(b) of such Code 
                        (relating to current year business credits), as 
                        amended by this section, is amended by striking 
                        ``plus'' at the end of paragraph (15), by 
                        striking the period at the end of paragraph 
                        (16) and inserting ``, plus'', and by adding at 
                        the end the following:
            ``(17) the countermeasures research credit determined under 
        section 41A(a).''.
                            (ii) Transition rule.--Section 39(d) of 
                        such Code, as amended by this section, is 
                        amended by adding at the end the following new 
                        paragraph:
            ``(12) No carryback of section 41a credit before 
        enactment.--No portion of the unused business credit for any 
        taxable year which is attributable to the countermeasures 
        research credit determined under section 41A may be carried 
        back to a taxable year beginning before January 1, 2003.''.
                    (C) Denial of double benefit.--Section 280C of such 
                Code, as amended by this section, is amended by adding 
                at the end the following new subsection:
    ``(e) Credit for Countermeasures Research Expenses.--
            ``(1) In general.--No deduction shall be allowed for that 
        portion of the qualified countermeasures research expenses (as 
        defined in section 41A(b)) otherwise allowable as a deduction 
        for the taxable year which is equal to the amount of the credit 
        determined for such taxable year under section 41A(a).
            ``(2) Certain rules to apply.--Rules similar to the rules 
        of paragraphs (2), (3), and (4) of subsection (c) shall apply 
        for purposes of this subsection.''.
                    (D) Deduction for unused portion of credit.--
                Section 196(c) of such Code (defining qualified 
                business credits), as amended by this section, is 
                amended by striking ``and'' at the end of paragraph 
                (10), by striking the period at the end of paragraph 
                (11) and inserting ``, and'', and by adding at the end 
                the following new paragraph:
            ``(5) the countermeasures research expenses credit 
        determined under section 41A(a) (other than such credit 
        determined under the rules of section 280C(e)(2)),''.
                    (E) Clerical amendment.--The table of sections for 
                subpart D of part IV of subchapter A of chapter 1 of 
                such Code is amended by adding after the item relating 
                to section 41 the following:

                              ``Sec. 41A. Credit for countermeasures 
                                        research expenses.''.
    (c) Reporting; Recapture.--
            (1) Reporting.--Each certified entity under subsection (b) 
        shall submit to the Director and the Secretary of the Treasury 
        such information regarding its election of any tax incentive 
        under this section for the purpose certified under section 
        102(e) as the Director and the Secretary determine necessary to 
        carry out the enforcement provisions prescribed under paragraph 
        (2).
            (2) Recapture.--The Secretary of the Treasury, in 
        consultation with the Director, shall provide for the recapture 
        of any tax benefits resulting from any elected tax incentive 
        under this section if the resulting research is for a purpose 
        other than that certified under section 101(e).
    (d) Effective Date.--The provisions of and amendments made by this 
section shall apply to taxable years beginning after December 31, 2002.

SEC. 202. TERROR WEAPON COUNTERMEASURE PURCHASE FUND.

    (a) Findings and Purpose.--
            (1) Findings.--Congress finds that--
                    (A) the market for countermeasures is uncertain at 
                best and it is not possible for private, for-profit 
                entities to determine the prospects for a reasonable 
                rate of return on their research and development 
                investments relating to such countermeasures;
                    (B) such entities and their investors have 
                reasonable concerns that they will not realize a 
                reasonable rate of return in a market where the Federal 
                Government has monopoly or oligopoly purchasing power;
                    (C) such entities need to know in advance, prior to 
                undertaking the research necessary to develop a 
                countermeasure, the nature, size, duration, and terms 
                of the market that is available if it is successful in 
                such development; and
                    (D) the market and rate of return that the Federal 
                Government guarantees for a countermeasure must be 
                comparable to a market and rate of return that would be 
                available to the entity and investors for non-
                countermeasure research.
            (2) Purpose.--It is the purpose of this section to--
                    (A) establish the guaranteed market and a long-term 
                commitment for private sector research that leads to 
                the successful development of countermeasures to 
                respond to an attack with biological and chemical 
                agents or toxins or nuclear and radiological materials, 
                or diagnostics or research tools with respect to such 
                agents, toxins or materials; and
                    (B) provide advance, partial, progress or other 
                payments to manufacturers of countermeasures, 
                diagnostics, or research tools described in 
                subparagraph (A).
            (3) Limitation.--Private sector entities are entitled to 
        the procurement incentives provided for in this Act (and the 
        amendments made by this Act) only when such entities 
        successfully develop a countermeasure that meets the 
        specifications prescribed by the Secretary.
    (b) Definitions.--In this section:
            (1) Eligible countermeasure, diagnostic, or research 
        tool.--The term ``eligible countermeasure, diagnostic, or 
        research tool'' means a countermeasure (as defined in section 
        3(1)), diagnostic (developed under section 103), or research 
        tool (developed under section 104)--
                    (A) that is developed by an entity that has been 
                certified under section 102(d);
                    (B) in the case of a countermeasure, that the 
                Secretary has determined is successful as provided for 
                in section 101; and
                    (C) with respect to which an affirmative notice has 
                been provided under section 102(e)(3)(B), 103(e)(2), or 
                104(e)(2).
            (2) Fund.--The term ``Fund'' means the Terror Weapon 
        Countermeasure Purchase Fund established under subsection (c).
    (c) Establishment of Fund.--There is established in the Treasury of 
the United States a fund to be known as the ``Terror Weapon 
Countermeasure Purchase Fund'' consisting of amounts appropriated under 
subsection (f).
    (d) Investment of Fund.--Amounts in the Fund shall be invested in 
accordance with section 9702 of title 31, United States Code, and any 
interest on, and proceeds from any such investment shall be credited to 
and become part of the Fund.
    (e) Use of Fund.--
            (1) In general.--The Secretary of the Treasury shall expend 
        amounts in the Fund--
                    (A) for the purchase of eligible countermeasures, 
                diagnostics, or research tools with respect to which 
                the Secretary has made an affirmative determination as 
                provided for in section 102(e)(3)(B), 103(e)(2), or 
                104(e)(2) which shall be made available to the 
                Secretary and distributed as the Secretary, in 
                consultation with the Secretary of Health and Human 
                Services and the Secretary of Defense, determines 
                appropriate; and
                    (B) to provide advance, partial, progress or other 
                payments, in accordance with paragraph (4), to 
                manufacturers of eligible countermeasures, diagnostics, 
                or research tools with respect to which the Secretary 
                has made an affirmative determination as provided for 
                in section 102(e)(3)(B), 103(e)(2), or 104(e)(2).
            (2) Purchase.--Countermeasures, diagnostics, or research 
        tools shall be--
                    (A) purchased by the Fund--
                            (i) in the case of a countermeasure, in the 
                        amount and at the per dosage price as described 
                        in the notice received by the entity under 
                        section 102(e)(3) and in accordance with the 
                        contract entered into under subparagraph (B)(i) 
                        of such section; or
                            (ii) in the case of a diagnostic or 
                        research tool, at the price and under the terms 
                        negotiated by the Secretary and the 
                        manufacturer; and
                    (B) and subject to the approval of the Food and 
                Drug Administration if provided for in the notice under 
                section 102(e)(3).
            (3) Conditions for purchase.--Payments made for purchases 
        under paragraph (1)(A) shall be made under such terms and 
        conditions as the Secretary, in consultation with the Secretary 
        of the Treasury, determines (in accordance with section 102) 
        are appropriate or customary in the commercial marketplace and 
        are in the best interests of the United States, including the 
        provision by the manufacturer of adequate security for such 
        payments. If such security is in the form of a lien on property 
        or equipment in favor of the United States, such lien shall be 
        paramount to all other liens on such property or equipment and 
        shall be effective immediately upon the first payment, without 
        filing, notice, or other action by the United States.
            (4) Advance, partial, progress or other payments.--
                    (A) In general.--The Secretary of the Treasury may 
                make payments under paragraph (1)(B) to manufacturers 
                of eligible countermeasures, diagnostics, or research 
                tools prior to the final purchase of such 
                countermeasure, diagnostic, or research tool.
                    (B) Basis for payments.--Payments under this 
                paragraph shall be based on--
                            (i) the performance of the manufacturer 
                        involved as measured by the Secretary of the 
                        Treasury using objective, quantifiable methods 
                        (such as delivery of acceptable items, work 
                        measurement, or statistical process controls) 
                        established by the Secretary of the Treasury in 
                        consultation with the Secretary;
                            (ii) the accomplishment of events as 
                        defined in a program management plan that is 
                        developed by the manufacturer and submitted to 
                        the Secretary of the Treasury; or
                            (iii) other quantifiable measures of 
                        results determined appropriate by the Secretary 
                        of the Treasury, in consultation with the 
                        Secretary.
                    (C) Number, time, and amount of payments.--
                            (i) In general.--The Secretary of the 
                        Treasury, in consultation with the Secretary, 
                        shall, with respect to a manufacturer of an 
                        eligible countermeasure, diagnostic, or 
                        research tool, determine the number payments to 
                        be made, the timing of such payments, and 
                        subject to clause (ii), the amount of each such 
                        payment.
                            (ii) Limitation.--The amount of any payment 
                        made to a manufacturer under this paragraph 
                        shall not exceed the amount of the final 
                        purchase price (described in paragraph (2)(A)) 
                        for the countermeasure, diagnostic, or research 
                        tool involved that remains unpaid as of the 
                        date of the payment involved.
                    (D) Conditions for payment.--The Secretary of the 
                Treasury, in consultation with the Secretary, shall 
                ensure that any payment to which this paragraph applies 
                is commensurate with the actions taken by the 
                manufacturer and  the progress made in achieving the 
performance measures under subparagraph (B)(i) through the time of such 
payment. The manufacturer shall provide such information and evidence 
as the Secretary of the Treasury and the Secretary determine is 
necessary to determine compliance with the preceding sentence.
                    (E) Security.--The provisions of paragraph (3) 
                relating to security shall apply to payments made under 
                this paragraph.
            (5) Third party manufacturer.--In the case of an entity 
        that is certified under section 102 and that contracts with 
        another entity for the manufacture of a countermeasure (as 
        provided for in section 101(e)(2)(F)), the Secretary of the 
        Treasury shall, after receipt of notice of such contract, 
        ensure that payments are made to the entity at a pre-determined 
        amount to reimburse the entity for research and other 
        administrative costs that do not include the actual 
        manufacturing cost. Amounts for manufacturing costs shall be 
        passed through to the actual manufacturer.
            (6) Distribution.--Eligible countermeasures, diagnostics, 
        or research tools purchased by the Fund shall be distributed as 
        provided for by the Secretary, in consultation with the 
        Secretary of Health and Human Services, determines appropriate 
        after--
                    (A) consideration of--
                            (i) in the case of countermeasures, the 
                        prevalence of the infection or exposure to a 
                        toxin or material to be treated by the eligible 
                        countermeasure; or
                            (ii) in the case of diagnostics or research 
                        tools, the predicted demand for the use of such 
                        diagnostics or research tools; and
                    (B) consideration of the ability of the recipient 
                to effectively and safely deliver the countermeasures, 
                diagnostics, or research tools.
            (7) PUSH packs.--The Secretary of the Treasury may use 
        amounts in the Fund for the purchase of countermeasures to be 
        included in Federal or State government maintained PUSH Packs 
        to be used in the case of a terror attack using chemical, 
        biological, or radiologic toxins, agents or materials.
            (8) Rule of construction.--Nothing in this subsection shall 
        be construed to require that the Fund purchase more than one 
        eligible countermeasure, diagnostic, or research tool for each 
        agent, toxin, or material contained on the Biological and 
        Chemical Agent Priority List developed under section 101 unless 
        the Secretary certifies entities to produce more than one such 
        countermeasure or additional diagnostics or research tools 
        under section 102(e).
            (9) Regulations.--The Secretary shall promulgate such 
        regulations as are necessary to carry out the provisions of 
        this subsection.
    (f) Appropriations.--
            (1) In general.--Subject to paragraph (2), there are 
        appropriated out of any funds in the Treasury not otherwise 
        appropriated such sums as may be necessary to carry out the 
        purposes of the Fund for each of 10 fiscal years beginning with 
        the first fiscal year after the date that the Secretary of the 
        Treasury determines that any eligible countermeasure, 
        diagnostic, or research tool is available for purchase by the 
        Fund.
            (2) Transfer to fund.--The Secretary of the Treasury shall 
        transfer the amount appropriated under paragraph (1) for a 
        fiscal year to the Fund.
            (3) Availability.--Amounts appropriated under this section 
        shall remain available until expended.
    (g) Terms of Contracts.--Notwithstanding any other provision of 
law, a multi-year contract may be entered into by the Secretary under 
this section, except that any such contract shall be for a period of 
not to exceed 10 years.
    (h) Rule of Construction.--Nothing in this section shall be 
construed to limit in any manner, the sale or terms of sale of an 
eligible countermeasure, diagnostic, or research tool to any other 
entity or individual in any public or private sector market.

SEC. 203. PATENT TERM PROTECTION AND EXCLUSIVE MARKETING.

    (a) Findings and Purpose.--
            (1) Findings.--Congress makes the following findings:
                    (A) Patents are necessary to protect the inventions 
                of entrepreneurial firms. Without patents, the 
                inventions of these companies can be expropriated by 
                competitors and investors' expectations of a reasonable 
                rate of return on their investment are frustrated. In 
                return for a limited term of protection from 
                competitors, inventors are required to publish a 
                detailed description of the invention for which the 
                patent has been granted.
                    (B) The 20 year term of a patent is measured from 
                the date of the patent application. The effective term 
                of a patent, however, is the term remaining after an 
                invention has been approved for sale by Government 
                regulators. Erosion of the term of patents for 
                biotechnology and pharmaceutical firms, which cannot 
                market a product until it has been approved, is common 
                and increasing. Protection against such erosion, due to 
                delays caused by Government regulatory review, will 
                ensure that the full term of the patent granted by the 
                Patent and Trademark Office is available to the 
                inventor to recoup their investment. Such protections 
                maintain the full term of the patent.
                    (C) As an incentive for capital formation to fund 
                research to develop countermeasures, companies and 
                investors will respond to the prospect of being able to 
                extend other patents in their portfolio.
                    (D) Biotechnology and pharmaceutical companies and 
                their investors are sensitive to any possibility that 
                successful completion of breakthrough research leading 
                to the approval for the sale of a product, including a 
                countermeasure, will lead to challenges to their 
                patents.
            (2) Purpose.--The purpose of this section is to provide 
        patent incentives to protect inventions from expropriation by 
        competitors and to provide an incentive for capital formation 
        to fund countermeasures research.
            (3) Limitation.--Private sector entities are entitled to 
        the intellectual property and marketing exclusivity incentives 
        provided for in this Act (and the amendments made by this Act) 
        only when such entities successfully develop a countermeasure 
        that meets the specifications of the Director and upon 
        execution of a contract with the Secretary with respect to 
        procurement of the countermeasure in accordance with section 
        202.
    (b) Restoration of Patent Terms Relating to Countermeasures for 
Certain Biological or Chemical Agents or Toxins or Radiological 
Materials.--
            (1) In general.--Chapter 14 of title 35, United States 
        Code, is amended by inserting after section 156 the following:
``Sec. 156a. Restoration of patent terms relating to countermeasures 
              for certain biological or chemical agents or toxins
    ``(a) Definitions.--In this section, the term--
            ``(1) `product' means a new drug, antibiotic drug, or human 
        biological product (as those terms are used in the Federal 
        Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.) and the 
        Public Health Service Act (42 U.S.C. 201 et seq.));
            ``(2) `regulatory review period' means--
                    ``(A) the period beginning on the date a patent is 
                issued through the date of the first filing of an 
                application relating to human clinical trials for the 
                subject of that patent with the Food and Drug 
                Administration under the Federal Food, Drug, and 
                Cosmetic Act (21 U.S.C. 301 et seq.) or the Public 
                Health Service Act (42 U.S.C. 201 et seq.), and 
                includes any period prior to such issuance during which 
                the Food and Drug Administration is reviewing such 
                application;
                    ``(B) the period beginning on the date an exemption 
                under section 505(i) of the Federal Food, Drug, and 
                Cosmetic Act (21 U.S.C. 355(i)) became effective for 
                the approved product and ending on the date an 
                application was initially submitted for such product 
                under section 351 of the Public Health Service Act (42 
                U.S.C. 262) or section 505 of the Federal Food, Drug, 
                and Cosmetic Act (21 U.S.C. 355); and
                    ``(C) the period beginning on the date the 
                application was initially submitted for the approved 
                product under section 351 of the Public Health Service 
                Act (42 U.S.C. 262) or section 505 of the Federal Food, 
                Drug, and Cosmetic Act (21 U.S.C. 355) and ending on 
                the date such application was approved under the 
                applicable section; and
            ``(3) `Research Act' means the Biological, Chemical, and 
        Radiological Weapons Countermeasures Research Act of 2002.
    ``(b) Patent.--A patent referred to under subsection (c) or (d) is 
any patent that--
            ``(1) encompasses within its scope a composition of matter, 
        a method of using such composition, a method of manufacturing 
        such composition, or a process for using such composition 
        relating to a product;
            ``(2) is for an eligible countermeasure as defined under 
        section 202(b)(1) of the Research Act; and
            ``(3) is held by an entity (or is exclusively licensed to 
        an entity by a not-for-profit organization or is exclusively 
        licensed to an entity under section 209(e) of this title or 
        section 12(b)(7) of the Stevenson-Wydler Technology Innovation 
        Act of 1980 (15 U.S.C. 3710a(b)(1)(7)) that has entered into a 
        contract for sale of that countermeasure under section 
        102(e)(3)(B)(i) of the Research Act.
    ``(c) Certain Action Not Necessary.--With respect to the owner of 
record of a patent described under subsection (b), it shall be presumed 
that no action under this section is necessary to effect the policies 
and objectives of title 18.
    ``(d) Patent Extension.--Notwithstanding any specific limitations 
on the terms of patent extensions under section 156, the term of a 
patent described under subsection (b) shall be extended under this 
section from the original expiration date of the patent by the period 
of time that is equal to the full regulatory review period for the 
product, and which shall include any patent term adjustment under 
section 154(b).
    ``(e) Administrative Provisions.--
            ``(1) In general.--To obtain an extension of the term of a 
        patent under this section, the owner of record of the patent or 
        the agent of the owner shall submit an application to the 
        Patent and Trademark Office.
            ``(2) Content.--The application shall contain--
                    ``(A) the identity of the approved product and the 
                Federal statute under which regulatory review occurred;
                    ``(B) the identity of the patent for which an 
                extension applies;
                    ``(C) documentation that the product is an eligible 
                countermeasure as defined under section 202(b)(1) of 
                the Research Act; and
                    ``(D) such patent or other information as the 
                Office may require.
            ``(3) Submission of application.--An application may only 
        be submitted within the 60-day period beginning on the date the 
        product became eligible for purchase under section 202 of the 
        Research Act. The submission of an application under this 
        section is an irrevocable election of the application of this 
        section to a patent consistent with paragraph (4).
            ``(4) Exclusive application.--Sections 156 and 158 shall 
        not apply to any patent for which an application is filed under 
        this section. This section shall not apply to any patent the 
        term of which has been extended under section 156.
            ``(5) Rule of construction.--Nothing in this section shall 
        be construed to prohibit an extension of the term of patent 
        relating to a product that, before the effective date of this 
        section--
                    ``(A) was approved for commercial marketing for 
                non-countermeasure uses; or
                    ``(B) was approved for commercial marketing.''.
            (2) Technical and conforming amendment.--The table of 
        sections for chapter 14 of title 35, United States Code, is 
        amended by inserting after the item relating to section 156 the 
        following:

``156a. Restoration of patent terms relating to countermeasures for 
                            certain biological or chemical agents or 
                            toxins.''.
    (c) General Extension of Certain Patent Terms for Patents Held by 
Entities That Have Successfully Developed Countermeasures.--
            (1) In general.--Chapter 14 of title 35, United States 
        Code, is amended by adding at the end the following:
``Sec. 158. Patent term for patents held by entities with certain 
              research certifications
    ``(a) Definitions.--In this section, the term--
            ``(1) `product' means a new drug, antibiotic drug, or human 
        biological product (as those terms are used in the Federal 
        Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.) and the 
        Public Health Service Act (42 U.S.C. 201 et seq.)); and
            ``(2) `Research Act' means the Biological, Chemical, and 
        Radiological Weapons Countermeasures Research Act of 2002.
    ``(b) Patent Term.--The term of a patent described under subsection 
(c) shall be for a period of 2 years in addition to the term which 
would otherwise apply except for this section.
    ``(c) Patent.--
            ``(1) In general.--A patent referred to under subsection 
        (b) or (d) is any patent that--
                    ``(A) is held by an entity (or is exclusively 
                licensed to an entity by a not-for-profit organization 
                or is exclusively licensed to an entity under section 
                209(e) of this title or section 12(b)(7) of the 
                Stevenson-Wydler Technology Innovation Act of 1980 (15 
                U.S.C. 3710a(b)(1)(7)) that--
                            ``(i) holds a certification under section 
                        102(e) of the Research Act with respect to a 
                        product, a method of manufacturing such 
                        product, or a method of using such product;
                            ``(ii) has entered into a contract for the 
                        sale of that product or method under section 
                        102(e)(3)(B)(i) of the Research Act; and
                            ``(iii) is a qualified small business as 
                        determined under section 1202(d) of the 
                        Internal Revenue Code of 1986, by substituting 
                        `$750,000,000' for `$50,000,000' each place it 
                        appears;
                    ``(B) subject to subsections (d) and (e), is 
                designated by that entity as the patent to which this 
                section applies.
            ``(2) Waiver.--The Assistant to the President for Homeland 
        Security may waive the requirement of paragraph (1)(A)(iii).
    ``(d) Certain Action Not Necessary.--With respect to the owner of 
record of a patent described under subsection (c)(1), it shall be 
presumed that no action under this section is necessary to effect the 
policies and objectives of title 18.
    ``(e) Limitations and Conditions.--In the administration of this 
section--
            ``(1) only 1 patent may be designated with respect to each 
        certification held by an entity;
            ``(2) no redesignation of another patent may be made; and
            ``(3) the patent designated by the entity--
                    ``(A) shall be issued before the date of a filing 
                of an application under subsection (e);
                    ``(B) shall be held by that entity for at least 1 
                year before the date of the filing under subsection 
                (e);
                    ``(C) may not have been acquired by that entity 
                from another entity for the purpose of the treatment of 
                that patent under subsection (b); and
                    ``(D) is not required to be related to the subject 
                of the certification held by the entity.
    ``(f) Application.--
            ``(1) In general.--An entity that holds a certification 
        under section 102(e) of the Research Act, may file an 
        application with the Patent and Trademark Office under this 
        section.
            ``(2) Content.--The application shall contain--
                    ``(A) a copy of the certification under section 
                102(e) of the Research Act;
                    ``(B) a copy of any waiver granted under subsection 
                (c)(2); and
                    ``(C) a designation of the patent to which this 
                section applies.
            ``(3) Submission of application.--An application may only 
        be submitted within the 60-day period beginning on the date 
        that the applicable product is eligible for purchase under 
        section 202 of the Research Act.
            ``(4) Irrevocable and exclusive.--
                    ``(A) Irrevocable election.--A filing of an 
                application under this section is an irrevocable 
                election of the application of this section to a patent 
                consistent with subparagraph (B).
                    ``(B) Exclusive.--Sections 156 and 156a shall not 
                apply to any patent for which there is a filing under 
                this section. This section shall not apply to any 
                patent the term of which has been extended under 
                section 156.''.
            (2) Technical and conforming amendment.--The table of 
        sections for chapter 14 of title 35, United States Code, is 
        amended by adding at the end the following:

``158. Patent term for patents held by entities with certain research 
                            certifications.''.
    (d) Exclusive Licensing.--
            (1) In general.--Notwithstanding sections 200, 203, and 209 
        of title 35, United States Code, an entity that holds a 
        certification under section 102(e) with respect to a product 
        that is an eligible countermeasure as defined under section 
        202(b)(1) may exclusively license such patented product.
            (2) Federally owned inventions.--Section 209 of title 35, 
        United States Code, is amended--
                    (A) by redesignating subsections (e) and (f) as 
                subsections (f) and (g), respectively; and
                    (B) by inserting after subsection (d) the 
                following:
    ``(e) Terms and Conditions of Exclusive License.--Each exclusive 
license granted under section 207(a)(2) shall include a provision that, 
at the discretion of the licensee, the licensee may act as the agent 
for the licensor with respect to any patent for the licensed invention 
for purposes of extending a patent under section 156a or 158.''.
            (3) Cooperative research and development agreements.--
        Section 12(b) of the Stevenson-Wydler Technology Innovation Act 
        of 1980 (15  U.S.C. 3710a(b)) is amended by adding at the end 
the following:
            ``(7) Each exclusive license for a patent granted under an 
        agreement entered into under subsection (a)(1) shall include a 
        provision that, at the discretion of the licensee, the licensee 
        may act as the agent for the licensor with respect to that 
        patent for purposes of extending a patent under section 156a or 
        158 of title 35, United States Code.''.
            (4) Applicable licenses.--The amendments made by paragraphs 
        (2) and (3) shall apply only to exclusive licenses granted on 
        or after 60 days after the date of enactment of this Act.
    (e) Exclusive Marketing.--Subchapter A of chapter V of the Federal 
Food, Drug, and Cosmetic Act (21 U.S.C. 351 et seq.) is amended by 
inserting after section 505A, the following:

``SEC. 505B. MARKET EXCLUSIVITY FOR TERROR WEAPONS COUNTERMEASURES.

    ``(a) In General.--If, prior to approval of an application that is 
submitted under section 505(b)(1), the Secretary determines that the 
new drug involved is a countermeasure (as defined in section 3(1) of 
the Biological, Chemical, and Radiological Weapons Countermeasures 
Research Act of 2002) that meets the requirements of subparagraphs (A) 
through (C) of section 202(b)(1) of such Act, the provisions of 
subsection (b) shall apply.
    ``(b) Exclusivity.--With respect to a new drug described in 
subsection (a)--
            ``(1)(A)(i) the period referred to in subsection 
        (c)(3)(D)(ii) of section 505, and in subsection (j)(5)(D)(ii) 
        of such section, is deemed to be 10 years rather than five 
        years, and the references in subsections (c)(3)(D)(ii) and 
        (j)(5)(D)(ii) of such section to four years, to forty-eight 
        months, and to seven and one-half years are deemed to be nine 
        years, 108 months, and nine years, respectively; or
            ``(ii) the period referred to in clauses (iii) and (iv) of 
        subsection (c)(3)(D) of such section, and in clauses (iii) and 
        (iv) of subsection (j)(5)(D) of such section, is deemed to be 
        10 years rather than three years; and
            ``(B) if the drug is designated under section 526 for a 
        rare disease or condition, the period referred to in section 
        527(a) is deemed to be 10 years rather than seven years; and
            ``(2)(A) if the drug is the subject of--
                    ``(i) a listed patent for which a certification has 
                been submitted under subsection (b)(2)(A)(ii) or 
                (j)(2)(A)(vii)(II) of section 505; or
                    ``(ii) a listed patent for which a certification 
                has been submitted under subsections (b)(2)(A)(iii) or 
                (j)(2)(A)(vii)(III) of section 505,
        the period during which an application may not be approved 
        under section 505(c)(3) or section 505(j)(4)(B) shall be 
        extended by a period of 5 years after the date the patent 
        expires (including any patent extensions); or
            ``(B) if the drug is the subject of a listed patent for 
        which a certification has been submitted under subsection 
        (b)(2)(A)(iv) or (j)(2)(A)(vii)(IV) of section 505, and in the 
        patent infringement litigation resulting from the certification 
        the court determines that the patent is valid and would be 
        infringed, the period during which an application may not be 
        approved under section 505(c)(3) or section 505(j)(4)(B) shall 
        be extended by a period of 5 years after the date the patent 
        expires (including any patent extensions).''.

SEC. 204. LIABILITY AND INDEMNIFICATION.

    (a) Findings and Purpose.--
            (1) Findings.--Congress makes the following findings:
                    (A) Many countermeasures to terror agents, toxins, 
                and materials will be deployed with a minimum of human 
                clinical trials, which are either impractical or 
                unethical. In other cases, when countermeasures are 
                deployed in an emergency, no human clinical trials may 
                have been conducted.
                    (B) Companies are justifiably reluctant to permit 
                deployment of a countermeasure where so little clinical 
                testing is possible. They need reassurance that they 
                will not be held liable for claims that may arise 
                related to the safety and efficacy of countermeasures, 
                especially from vaccines, that they develop.
                    (C) The United States faces dire public health 
                consequences if agents, toxins, and materials are used 
                in an attack for which no countermeasures are 
                available. The United States has enemies who will not 
                hesitate to use these agents in an attack. Our national 
                security requires that we ensure that these 
                countermeasures are developed and the most effective 
                available research and development expertise lies with 
                biotechnology and pharmaceutical companies.
            (2) Purpose.--It is the purpose of this section to provide 
        liability protections to encourage companies to conduct 
        research to develop and produce countermeasures.
            (3) Limitation.--Upon a determination by the Secretary that 
        it is in the national security interest of the United States 
        under section 101(e) of this act, private sector entities are 
        entitled to the liability protections provided for in this 
        section (and the amendments made by this section) only when 
        such entities successfully develop a countermeasure that meets 
        the specifications of the Secretary and upon the execution of a 
        contract with the Secretary with respect to procurement of the 
        countermeasure in accordance with section 202.
    (b) Indemnification and Defense Agreements.--Notwithstanding 
sections 1341, 1342, 1349, 1350, and 1351 and subchapter II of chapter 
15, of title 31, United States Code, or any other provision of law, the 
Secretary--
            (1) shall enter into agreements to indemnify and defend 
        persons or entities engaged in the research, development, and 
        production of countermeasures, diagnostics, or research tools 
        purchased under section 202;
            (2) shall enter into agreements to indemnify and defend 
        persons or entities from claims or civil actions arising from 
        human clinical trials and research, development, and production 
        of countermeasures developed under a certification under 
        section 102; and
            (3) may enter into such agreements with other persons and 
        entities relating to such countermeasures, diagnostics, or 
        research tools (including individuals and entities engaged in 
        the administration or use of such countermeasures, diagnostics, 
        or research tools), whether or not listed as a countermeasure 
        by the Secretary under section 101, if the Secretary determines 
        that the national interest in combating terrorism, or the 
        protection of the public health, or both, reasonably requires 
        such an agreement.
    (c) Protections.--An indemnification and defense agreement shall 
protect against claims or civil actions (including reasonable expenses 
of litigation or settlement) by third persons, for damages (including 
death, bodily injury, economic losses, non-economic losses, or loss of 
or damage to property or punitive damages), allegedly caused by the 
research, development, production, or use of a countermeasure, 
diagnostic, or research tool purchased under section 202 or for claims 
or civil actions or research relating to countermeasures developed 
under a certification under section 102. Such contracts and protection 
against claims or civil actions shall apply only when the manufacturer 
of the countermeasure has entered into a contract with the Secretary, 
for procurement of the countermeasure in accordance with section 202. 
Such contracts and protection against claims or civil actions shall 
apply only to the administration or use of a countermeasure, 
diagnostic, or research tool by the Federal Government or another 
entity with respect to a biological agent or toxin or a nuclear or 
radiological material used as a terror weapon.
    (d) Exclusive Remedy.--This section shall constitute the exclusive 
remedy with respect to a civil action filed against persons or entities 
within the scope of an indemnification and defense agreement entered 
into under subsection (b), for damages (including bodily injury, death, 
economic losses, non-economic losses or damage to property or punitive 
damages), to the extent that the civil action arises from the research, 
development, production, or use of a countermeasure, diagnostic, or 
research tool described in such subsection.
    (e) Requirements.--An indemnification and defense agreement under 
this section shall--
            (1) require notice to be provided to the United States of 
        any claim or civil action (including an exclusive civil action) 
        that is filed against persons or entities who are parties to 
        such agreement for any alleged damages (including bodily 
        injury, death, economic losses, non-economic losses, and loss 
        of or damage to property or punitive damages) allegedly caused 
        by the research, development, production, distribution, 
        administration or use of a countermeasure, diagnostic, or 
        research tool described in subsection (b); and
            (2) require control of, or assistance in, the defense by 
        the United States of such claim or civil action.
    (f) Venue; Application of Law; and Damages.--
            (1) Venue.--An exclusive civil action under this section 
        shall be filed in any United States district court of otherwise 
        appropriate jurisdiction. Appeals from appealable actions of 
        such courts in such actions shall be taken to the Court of 
        Appeals for the Federal Circuit and, as appropriate, to the 
        United States Supreme Court.
            (2) Application of law.--An exclusive civil action filed 
        under this section shall be governed by Federal law. No State 
        or political subdivision of a State shall have any authority to 
        enforce any other law or common law standard governing a civil 
        action for damages (including damages for bodily injury, death, 
        economic damages, noneconomic damages, or loss or damage to 
        property or punitive damages) arising out of the conduct or 
        actions covered by an indemnification and defense agreement. 
        Any civil action in State or Federal Court that is barred from 
        consideration by this section shall be removed or transferred 
        to the appropriate Federal district court or dismissed, as 
        appropriate.
            (3) Limitations on damages.--In an exclusive civil action 
        filed under this section an award for non-economic damages 
        shall not exceed 3 times the award for economic damages or 
        $250,000 per plaintiff, whichever is greater. In no such cases 
        shall punitive or exemplary damages be awarded.
            (4) Reduction in amounts.--In an exclusive civil action 
        under this section, an award to a plaintiff shall be reduced, 
        by the presiding judge, to the extent that the plaintiff has 
        otherwise received reimbursement for the damages at issue from 
        the Federal Government or health care insurance provider for 
        medical expenses.
    (g) Limitations.--The protections provided for in this section 
shall not apply in the case of an entity described in subsection (b)(1) 
if--
            (1) such entity fails to enter into a contract with the 
        Secretary for the purchase of a countermeasure, diagnostic, or 
        research tool developed or produced under title I; or
            (2) such entity fails to comply with the terms of a 
        contract described in paragraph (1).
    (h) Definitions.--In this section:
            (1) Exclusive civil action.--The term ``exclusive civil 
        action'' means a civil action described in subsection (c)(1).
            (2) Indemnification and defense agreements.--The term 
        ``indemnification and defense agreements'' means the agreements 
        described in subsection (b).

                      Subtitle B--Other Incentives

SEC. 211. ACCELERATED APPROVAL OF COUNTERMEASURES.

    (a) In General.--The Secretary of Health and Human Services may 
designate a countermeasure as a fast-track product pursuant to section 
506 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 356) or as a 
device granted priority review pursuant to section  515(d)(5) of such 
Act (21 U.S.C. 366e(d)(5)). Such a designation may be made prior to the 
submission of--
            (1) a request for designation by the sponsor or applicant; 
        or
            (2) an application for the investigation of the drug under 
        section 505(i) of such Act or section 351(a)(3) of the Public 
        Health Service Act.
Nothing in this subsection shall be construed to prohibit a sponsor or 
applicant from declining such a designation.
    (b) Use of Animal Trials.--A drug for which approval is sought 
under section 505(d) of the Federal Food, Drug, and Cosmetic Act or 
section 351 of the Public Health Service Act on the basis of evidence 
of effectiveness that is derived from animal studies under section 212 
may be designated as a fast track product for purposes of this section.
    (c) Priority Review.--
            (1) In general.--A countermeasure that is a drug or 
        biological product shall be subject to the performance goals 
        established by the Commissioner of Food and Drugs for priority 
        drugs or biological products.
            (2) Definition.--In this subsection the term ``priority 
        drugs or biological products'' means a drug or biological 
        product that is the subject of a drug application referred to 
        in section 101(4) of the Food and Drug Administration 
        Modernization Act of 1997.

SEC. 212. APPROVALS OF CERTAIN DRUGS BASED ON ANIMAL TRIALS.

    (a) Federal Food, Drug, and Cosmetic Act.--Section 505(d) of the 
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355(d)) is amended by 
adding at the end the following: ``In the case of drugs and diagnostic 
devices for use against lethal or permanently disabling toxic chemical, 
biological, radiological, nuclear, or other substances, when adequate 
and well-controlled studies of effectiveness in humans cannot ethically 
be conducted because the studies would involve administering a 
potentially lethal or permanently disabling toxic substance or organism 
to healthy human volunteers, and when adequate field trials assessing 
use of the drug or diagnostic device (in situations such as after 
accidental or hostile exposure to the substance) have not been feasible 
or where adequate volumes of human samples for diagnosis from previous 
exposures is not available, the Secretary may grant approval based on 
evidence of effectiveness derived from appropriate studies in 
animals.The Secretary may promulgate regulations establishing 
standards, criteria, and procedures for use of the authority contained 
in the preceding sentence.''.
    (b) Public Health Service Act.--Section 351 of the Public Health 
Service Act (42 U.S.C. 262) is amended by adding at the end the 
following:
    ``(k) Approval of Certain Products and Diagnostic Devices Based on 
Animal Trials.--In the case of biological products and diagnostic 
devices for use against lethal or permanently disabling toxic chemical, 
biological, radiological, nuclear, or other substances, when definitive 
human effectiveness studies in humans cannot ethically be conducted 
because the studies would involve administering a potentially lethal or 
permanently disabling toxic substance or organism to healthy human 
volunteers, and when adequate field trials assessing use of the drug 
(in situations such as after accidental or hostile exposure to the 
substance) have not been feasible, the Secretary may grant approval 
based on evidence of effectiveness derived from appropriate studies in 
animals. The Secretary may promulgate regulations establishing 
standards, criteria, and procedures for use of the authority provided 
under this subsection.''.

SEC. 213. LIMITED ANTITRUST EXEMPTION.

    Section 2 of the Clayton Act (15 U.S.C. 13) is amended by adding at 
the end the following:
    ``(g) Limited Antitrust Exemption.--
            ``(1) Countermeasures development meetings.--
                    ``(A) Countermeasures development meetings and 
                consultations.--The Secretary may conduct meetings and 
                consultations with parties involved in the development 
                of countermeasures for the purpose of the development, 
                manufacture, distribution, purchase, or sale of 
                countermeasures consistent with the purposes of this 
                title. The Secretary shall give notice of such meetings 
                and consultations to the Attorney General and the 
                Chairperson of the Federal Trade Commission (referred 
                to in this subsection as the `Chairperson').
                    ``(B) Meeting and consultation conditions.--A 
                meeting or consultation conducted under subparagraph 
                (A) shall--
                            ``(i) be chaired or, in the case of a 
                        consultation, facilitated by the Secretary;
                            ``(ii) be open to parties involved in the 
                        development, manufacture, distribution, 
                        purchase, or sale of countermeasures, as 
                        determined by the Secretary;
                            ``(iii) be open to the Attorney General and 
                        the Chairperson;
                            ``(iv) be limited to discussions involving 
                        the development, manufacture, distribution, or 
                        sale of countermeasures, consistent with the 
                        purposes of this title; and
                            ``(v) be conducted in such manner as to 
                        ensure that national security, confidential, 
                        and proprietary information is not disclosed 
                        outside the meeting or consultation.
                    ``(C) Minutes.--The Secretary shall maintain 
                minutes of meetings and consultations under this 
                subsection, which shall not be disclosed under section 
                552 of title 5, United States Code.
                    ``(D) Exemption.--The antitrust laws shall not 
                apply to meetings and consultations under this 
                paragraph, except that any agreement or conduct that 
                results from a meeting or consultation and that does 
                not receive an exemption pursuant to this subsection 
                shall be subject to the antitrust laws.
            ``(2) Written agreements.--The Secretary shall file a 
        written agreement regarding covered activities, made pursuant 
        to meetings or consultations conducted under paragraph (1) and 
        that is consistent with this paragraph, with the Attorney 
        General and the Chairperson for a determination of the 
        compliance of such agreement with antitrust laws. In addition 
        to the proposed agreement itself, any such filing shall 
        include--
                    ``(A) an explanation of the intended purpose of the 
                agreement;
                    ``(B) a specific statement of the substance of the 
                agreement;
                    ``(C) a description of the methods that will be 
                utilized to achieve the objectives of the agreement;
                    ``(D) an explanation of the necessity of a 
                cooperative effort among the particular participating 
                parties to achieve the objectives of the agreement; and
                    ``(E) any other relevant information determined 
                necessary by the Secretary in consultation with the 
                Attorney General and the Chairperson.
            ``(3) Determination.--The Attorney General, in consultation 
        with the Chairperson, shall determine whether an agreement 
        regarding covered activities referred to in paragraph (2) would 
        likely--
                    ``(A) be in compliance with the antitrust laws, and 
                so inform the Secretary and the participating parties; 
                or
                    ``(B) violate the antitrust laws, in which case, 
                the filing shall be deemed to be a request for an 
                exemption from the antitrust laws, limited to the 
                performance of the agreement consistent with the 
                purposes of this title.
            ``(4) Action on request for exemption.--
                    ``(A) In general.--The Attorney General, in 
                consultation with the Chairperson, shall grant, deny, 
                grant in part and deny in part, or propose 
                modifications to a request for exemption from the 
                antitrust laws under paragraph (3) within 15 days of 
                the receipt of such request.
                    ``(B) Extension.--The Attorney General may extend 
                the 15-day period referred to in subparagraph (A) for 
                an additional period of not to exceed 10 days. Such 
                additional period may be further extended only by the 
                United States district court, upon an application by 
                the Attorney General after notice to the Secretary and 
                the parties involved.
                    ``(C) Determination.--In granting an exemption 
                under this paragraph, the Attorney General, in 
                consultation with the Chairperson and the Secretary--
                            ``(i) must find--
                                    ``(I) that the agreement involved 
                                is necessary to ensure the availability 
                                of countermeasures;
                                    ``(II) that the exemption from the 
                                antitrust laws would promote the public 
                                interest; and
                                    ``(III) that there is no 
                                substantial competitive impact to areas 
                                not directly related to the purposes of 
                                the agreement; and
                            ``(ii) may consider any other factors 
                        determined relevant by the Attorney General and 
                        the Chairperson.
            ``(5) Limitation on and renewal of exemptions.--An 
        exemption granted under paragraph (4) shall be limited to 
        covered activities, and shall expire on the date that is 3 
        years after the date on which the exemption becomes effective 
        (and at 3 year intervals thereafter, if renewed) unless the 
        Attorney General in consultation with the Chairperson 
        determines that the exemption should be renewed (with 
        modifications, as appropriate) considering the factors 
        described in paragraph (4).
            ``(6) Limitation on parties.--The use of any information 
        acquired under an exempted agreement by the parties to such an 
        agreement for any purposes other than those specified in the 
        antitrust exemption granted by the Attorney General shall be 
        subject to the antitrust laws and any other applicable laws.
            ``(7) Guidelines.--The Attorney General and the Chairperson 
        may develop and issue guidelines to implement this subsection.
            ``(8) Report.--Not later than 1 year after the date of 
        enactment of the Biological, Chemical, and Radiological Weapons 
        Countermeasures Research Act of 2002, and annually thereafter, 
        the Attorney General and the Chairperson shall report to 
        Congress on the use and continuing need for the exemption from 
        the antitrust laws provided by this subsection.
            ``(9) Sunset.--The authority of the Attorney General to 
        grant or renew a limited antitrust exemption under this 
        subsection shall expire at the end of the 10-year period that 
        begins on the date of enactment of the Biological, Chemical, 
        and Radiological Weapons Countermeasures Research Act of 2002.
    ``(h) Definitions.--In this section:
            ``(1) Antitrust laws.--The term `antitrust laws'--
                    ``(A) has the meaning given such term in subsection 
                (a) of the first section of the Clayton Act (15 U.S.C. 
                12(a)), except that such term includes the Act of June 
                19, 1936 (15 U.S.C. 13 et seq.) commonly known as the 
                Robinson-Patman Act), and section 5 of the Federal 
                Trade Commission Act (15 U.S.C. 45) to the extent such 
                section 5 applies to unfair methods of competition; and
                    ``(B) includes any State law similar to the laws 
                referred to in subparagraph (A).
            ``(2) Countermeasure.--The term `countermeasure' has the 
        meaning given such term in section 3(2) of the Biological, 
        Chemical, and Radiological Weapons Countermeasures Research Act 
        of 2002.
            ``(3) Covered activities.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the term `covered activities' means 
                any group of activities or conduct, including 
                attempting to make, making, or performing a contract or 
                agreement or engaging in other conduct, for the purpose 
                of--
                            ``(i) theoretical analysis, 
                        experimentation, or the systematic study of 
                        phenomena or observable facts necessary to the 
                        development of countermeasures;
                            ``(ii) the development or testing of basic 
                        engineering techniques necessary to the 
                        development of countermeasures;
                            ``(iii) the extension of investigative 
                        findings or theory of a scientific or technical 
                        nature into practical application for 
                        experimental and demonstration purposes, 
                        including the experimental production and 
                        testing of models, prototypes, equipment, 
                        materials, and processes necessary to the 
                        development of countermeasures;
                            ``(iv) the production, distribution, or 
                        marketing of a product, process, or service 
                        that is a countermeasures;
                            ``(v) the testing in connection with the 
                        production of a product, process, or services 
                        necessary to the development of 
                        countermeasures;
                            ``(vi) the collection, exchange, and 
                        analysis of research or production information 
                        necessary to the development of 
                        countermeasures; or
                            ``(vii) any combination of the purposes 
                        described in clauses (i) through (vi);
                and such term may include the establishment and 
                operation of facilities for the conduct of covered 
                activities described in clauses (i) through (vi), the 
                conduct of such covered activities on a protracted and 
                proprietary basis, and the processing of applications 
                for patents and the granting of licenses for the 
                results of such covered activities.
                    ``(B) Exception.--The term `covered activities' 
                shall not include the following activities involving 2 
                or more persons:
                            ``(i) Exchanging information among 
                        competitors relating to costs, sales, 
                        profitability, prices, marketing, or 
                        distribution of any product, process, or 
                        service if such information is not reasonably 
                        necessary to carry out the purposes of covered 
                        activities.
                            ``(ii) Entering into any agreement or 
                        engaging in any other conduct--
                                    ``(I) to restrict or require the 
                                sale, licensing, or sharing of 
                                inventions, developments, products, 
                                processes, or services not developed 
                                through, produced by, or distributed or 
                                sold through such covered activities; 
                                or
                                    ``(II) to restrict or require 
                                participation by any person who is a 
                                party to such covered activities in 
                                other research and development 
                                activities, that is not reasonably 
                                necessary to prevent the 
                                misappropriation of proprietary 
                                information contributed by any person 
                                who is a party to such covered 
                                activities or of the results of such 
                                covered activities.
                            ``(iii) Entering into any agreement or 
                        engaging in any other conduct allocating a 
                        market with a competitor that is not expressly 
                        exempted from the antitrust laws by a 
                        determination under subsection (i)(4).
                            ``(iv) Exchanging information among 
                        competitors relating to production (other than 
                        production by such covered activities) of a 
                        product, process, or service if such 
                        information is not reasonably necessary to 
                        carry out the purpose of such covered 
                        activities.
                            ``(v) Entering into any agreement or 
                        engaging in any other conduct restricting, 
                        requiring, or otherwise involving the 
                        production of a product, process, or service 
                        that is not so expressly exempted from the 
                        antitrust laws by a determination under 
                        subsection (i)(4).
                            ``(vi) Except as otherwise provided in this 
                        subsection, entering into any agreement or 
                        engaging in any other conduct to restrict or 
                        require participation by any person who is a 
                        party to such activities, in any unilateral or 
                        joint activity that is not reasonably necessary 
                        to carry out the purpose of such covered 
                        activities.
            ``(4) Development.--The term `development' includes the 
        identification of suitable compounds or biological materials, 
        the conduct of preclinical and clinical studies, the 
        preparation of an application for marketing approval, and any 
        other actions related to preparation of a countermeasure.
            ``(5) Person.--The term `person' has the meaning given such 
        term in subsection (a) of the first section of this Act.
            ``(6) Secretary.--The term `Secretary' means the Secretary 
        of Health and Human Services.''.

SEC. 214. BIOLOGICS MANUFACTURING CAPACITY INCENTIVES.

    (a) Findings.--Congress makes the following findings:
            (1) When the United States develops new biologically 
        derived materials, including vaccines, monoclonal antibodies, 
        and recombinant proteins, to prevent infection by bioterrorist 
        agents or toxins or to treat those infected in bioterrorist 
        attacks, a shortage of manufacturing facilities for biologics 
        may delay or prevent the production and stockpiling of such 
        materials.
            (2) There is a serve shortage of manufacturing capacity to 
        produce such materials. There are nearly 100 biologics in 
        clinical trials, and current manufacturing capacity is 475,000 
        liters, virtually all of which is utilized. An additional 
        1,100,000 liters of  capacity will come online by the end of 
2006, but civilian demand will continue to outstrip capacity. There is 
little or no available capacity to produce such biologically derived 
materials to treat those who might be infected by bioterror agents.
            (3) The Defense Science Board has found ``Any bioterrorism 
        attack that created the need to treat more than 50,000 people 
        with an extended course of antibiotic therapy...or to immunize 
        more than 1 to 3 million people with a vaccine would completely 
        overwhelm the total production capacity of the industry.'' The 
        Federal Government ``must establish a proactive long-term plan 
        to address these inventory and production shortfalls''.
            (4) A typical manufacturing facility costs between 
        $200,000,000 and $400,000,000 to build, and there is no 
        incentive for companies to build these facilities until a 
        product has been developed and approved. On average, a plant 
        takes 4 years to build, considering the intricacies of the 
        process and the necessary Food and Drug Administration 
        procedures.
            (5) Biotechnology and pharmaceutical companies have no 
        reason to fund the construction of biologics manufacturing 
        facilities unless and until there is a market demand for the 
        facilities.
            (6) The incentives provided under this Act, and the 
        amendments made by this Act, should lead to the development of 
        new biologically derived materials to prevent and treat 
        bioterrorist attacks and decisions to purchase, stockpile and 
        perhaps deploy such materials.
            (7) It is in the national interest for the United States to 
        provide incentives for the construction of sufficient biologics 
        manufacturing facilities so that there will be no delay in the 
        production of biologically active materials once such materials 
        are developed.
    (b) Survey and Plan.--Not later than 90 days after the date of 
enactment of this Act, the Secretary shall--
            (1) conduct a survey of the biologics manufacturing 
        facilities operating in the United States and determine whether 
        additional manufacturing facilities that will be needed (and if 
        so the number of such facilities) to manufacture and stockpile 
        biologically active materials for bioterrorist attacks; and
            (2) develop a plan to ensure that sufficient biologics 
        manufacturing facilities are available in the United States 
        when they are needed, including an analysis of the feasibility 
        of the Federal Government contracting for the construction of 
        such facilities or of providing tax and other incentives for 
        the construction of such facilities by private sector entities.
    (c) Submission to Congress.--The Secretary shall submit the plan 
developed under subsection (b)(2) to Congress together with 
recommendations concerning the manner in which to ensure that the 
needed biologics manufacturing facilities available for the production 
of countermeasures under this Act are constructed and available, 
including the siting, design and certification costs, costs of training 
and recruitment of expert staff, and other costs associated with such 
facilities.
    (d) Incentives for the Construction of Biologics Manufacturing 
Facilities Available for the Production of Countermeasures.--
            (1) In general.--The Secretary shall issue regulations 
        regarding the selection of an entity that agrees to operate as 
        a biologics manufacturing facility available for the production 
        of countermeasures under this Act in accordance with the plan 
        developed under subsection (b)(2) for the investment tax credit 
        provided under paragraph (2). Such regulations shall state when 
        such an entity shall be available and the terms for the use for 
        the production of such countermeasures. If an entity is 
        constructed to produce such countermeasures, such entity shall 
        provide notice that such entity is available to produce such 
        countermeasures.
            (2) Biologics manufacturing facilities investment tax 
        credit.--
                    (A) Allowance of credit.--Section 46(a) of the 
                Internal Revenue Code of 1986 (relating to amount of 
                investment credit) is amended by striking ``and'' at 
                the end of paragraph (2), by striking the period at the 
                end of paragraph (3) and inserting ``, and'', and by 
                adding at the end the following new paragraph:
            ``(4) the biologics manufacturing facilities investment 
        credit.''.
                    (B) Amount of credit.--Section 48 of such Code is 
                amended by adding at the end the following new 
                subsection:
    ``(c) Biologics Manufacturing Facilities Investment Credit.--
            ``(1) In general.--For purposes of section 46, in the case 
        of any entity selected under section 214(d)(1) of the 
        Biological, Chemical, and Radiological Weapons Countermeasures 
        Research Act of 2002, the biologics manufacturing facilities 
        investment credit for any taxable year is an amount equal to 20 
        percent of the qualified investment for such taxable year.
            ``(2) Qualified investment.--For purposes of paragraph (1), 
        the qualified investment for any taxable year is the basis of 
        each biologics manufacturing facilities property placed in 
        service by the taxpayer during such taxable year.
            ``(3) Biologics manufacturing facilities property.--For 
        purposes of this subsection, the term `biologics manufacturing 
        facilities property' means real and tangible personal 
        property--
                    ``(A)(i) the original use of which commences with 
                the taxpayer, or
                    ``(ii) which is acquired through purchase (as 
                defined by section 179(d)(2)),
                    ``(B) which is depreciable under section 167, and
                    ``(C) which is used for the manufacture, 
                distribution, or research and development of vaccines 
                and other biologics.
            ``(4) Certain progress expenditure rules made applicable.--
        Rules similar to rules of subsection (c)(4) and (d) of section 
        46 (as in effect on the day before  the date of the enactment 
of the Revenue Reconciliation Act of 1990) shall apply for purposes of 
this subsection.''.
                    (C) Technical amendments.--
                            (i) Subparagraph (C) of section 49(a)(1) of 
                        such Code is amended by striking ``and'' at the 
                        end of clause (ii), by striking the period at 
                        the end of clause (iii) and inserting ``, 
                        and'', and by adding at the end the following 
                        new clause:
                            ``(iv) the basis of any biologics 
                        manufacturing facilities property.''.
                            (ii) Subparagraph (E) of section 50(a)(2) 
                        of such Code is amended by striking ``section 
                        48(a)(5)(A)'' and inserting ``section 48(a)(5) 
                        or 48(c)(4)''.
                            (iii)(I) The section heading for section 48 
                        of such Code is amended to read as follows:

``SEC. 48. OTHER CREDITS.''.

                            (II) The table of sections for subpart E of 
                        part IV of subchapter A of chapter 1 of such 
                        Code is amended by striking the item relating 
                        to section 48 and inserting the following:

``Sec. 48. Other Credits.''.
    (e) Preemption of Zoning Laws for Siting of Biologics Manufacturing 
Facilities.--The provisions of this section relating to the operation 
and location of biologics manufacturing facilities, in accordance with 
the plan developed under subsection (b)(2), shall preempt State and 
local laws relating to zoning. State and local laws relating to the 
construction and maintenance of such facilities shall be preempted to 
the extent that such laws conflict with such plan and the purposes of 
this section.

SEC. 215. BIOLOGICS MANUFACTURING EFFICIENCY INCENTIVES.

    (a) Findings.--Congress finds that--
            (1) the manufacturing of biologics, which are living 
        organisms, is an art as well as a science;
            (2) the efficiency of the biologics manufacturing process 
        determines the output capacity, purity, and manufacturing cost 
        of vaccines;
            (3) technical advances in manufacturing sciences for 
        biologics can increase the capacity of the Federal Government 
        to ensure that vaccines are available as part of a bioterror 
        plan and to reduce the cost of manufacturing and stockpiling 
        these vaccines; and
            (4) the subjects of research relating to the manufacturing 
        of biologics may include the development of--
                    (A) additional well characterized cell lines for 
                vaccine and monoclonal antibody production;
                    (B) new biologic and chemical standards for use in 
                product testing, including testing of potency and 
                purity;
                    (C) improved preservatives for vaccines or other 
                biologics to prolong shelf-life;
                    (D) adjuvants that enhance the immune response to a 
                vaccine or antigen;
                    (E) tests to determine contamination with human or 
                animal viruses or prions;
                    (F) improved tests of potency and purity during the 
                manufacturing process, not just for the final product;
                    (G) improved characterization of biologics at the 
                macro-molecular level;
                    (H) processes that enhance the yield and quality of 
                biologics;
                    (I) improved methods that enhance disinfection and 
                sterilization of material and facilities;
                    (J) new methods to improve output, manufacturing 
                costs, and product quality with a particular emphasis 
                on downstream processing (separation and purification) 
                where particular bottlenecks occur with much lost 
                product, complexity and very high costs; and
                    (K) improved methods for decontamination of 
                production of facilities to enable switching from one 
                product to another.
    (b) Survey and Plan.--Not later than 90 days after the date of 
enactment of this Act, the Secretary shall--
            (1) conduct a survey of existing biologics manufacturing 
        sciences and determine whether technical advances in such 
        sciences might increase the biologics output capacity and 
        purity, and lower the manufacturing cost of vaccines; and
            (2) develop a plan to provide incentives to enhance 
        scientific research to develop new technologies identified 
        under the survey conducted under paragraph (1), including a 
        list of the possible technologies that may be developed and the 
        possible incentives that may lead to their development.
    (c) Submission to Congress.--The Secretary shall submit the plan 
developed under subsection (b)(2) to Congress together with 
recommendations concerning the provision of funding or incentives for 
the conduct of scientific research to develop new technologies relating 
to biologics manufacturing sciences.
    (d) Incentives.--The Secretary shall establish a program under 
which entities that agree to develop new technologies in accordance 
with the plan developed under subsection (b)(2) are eligible for the 
tax incentives provided for under the amendments made by section 201.

SEC. 216. CONSTRUCTION OF BIOSAFETY LEVEL 3-4 RESEARCH FACILITIES.

    (a) Findings.--Congress finds that--
            (1) research to develop countermeasures requires the use of 
        special facilities where biological agents can be handled 
        safely;
            (2) very few companies can capitalize the construction of 
        these special facilities; and
            (3) the Federal Government can facilitate research and 
        development of countermeasures by financing the construction of 
        these special facilities.
    (b) Grants Authorized.--
            (1) In general.--The Secretary is authorized to award 
        grants and contracts to grantees to construct, maintain, and 
        manage (including funding for staff and staff training) 
        biosafety level 3-4 facilities.
            (2) Requirements.--To be eligible for a grant under 
        paragraph (1) an entity shall--
                    (A) allow use of the facility involved by only 
                those researchers who meet qualifications set by the 
                Secretary;
                    (B) give priority for the use of the facility 
                involved to those entities that have been registered 
                and certified by the Secretary to develop 
                countermeasures; and
                    (C) allow the National Institutes of Health to 
                inspect the facility involved at any time.
            (3) Number of grants.--The Secretary of the Department of 
        Homeland Defense shall determine the number of facilities that 
        need to be constructed under this section, not to exceed 10 
        such facilities nationwide, and the Secretary shall award 
        grants based on such determination.
    (c) Application.--
            (1) In general.--To be eligible to receive a grant under 
        this section an entity shall submit to the Secretary an 
        application at such time, in such form and containing such 
        information, as the Secretary may require.
            (2) Contents.--Each application submitted pursuant to 
        paragraph (1) shall--
                    (A) provide detailed information on the technical 
                specifications of proposed facilities;
                    (B) propose a design that includes offices for 
                personnel, visiting researchers, and facilities for 
                research and laboratory materials;
                    (C) provide assurances that the facilities shall be 
                available on a fee-for-service or other basis to 
                companies and academic researchers; and
                    (D) provide assurances that the facilities will be 
                constructed as secure facilities.
    (d) Definitions.--For the purposes of this section--
            (1) unless otherwise specifically identified, the term 
        ``Director'' means the Director of the National Institutes of 
        Health; and
            (2) a ``biosafety level 3-4 facility'' means a facility for 
        research on indigenous, exotic, or dangerous agents with the 
        potential for aerosol transmission of disease that may have 
        serious or lethal consequences or that pose a high risk of 
        life-threatening disease, aerosol-transmitted laboratory 
        infections, or related agents with unknown risk of 
        transmission.
    (e) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary to carry out this section.

SEC. 217. NATIONAL INSTITUTES OF HEALTH COUNTERMEASURES PARTNERSHIP 
              CHALLENGE GRANTS.

    (a) Grants Authorized.--The Director of the National Institutes of 
Health (in this section referred to as the ``Director'') is authorized 
to award partnership challenge grants to promote joint ventures between 
the National Institutes of Health, its grantees, and for-profit 
biotechnology, pharmaceutical, and medical device industries for the 
development of countermeasures and research tools.
    (b) Regulations.--The Director shall issue regulations within 90 
days of the date of enactment of this section to implement the awarding 
of grants under subsection (a).
    (c) Rule of Construction.--Nothing in this section shall be 
construed to preclude an entity that receives a partnership challenge 
grant under this section from also being certified as being eligible 
for incentives under this Act (and the amendments made by this Act).
    (d) Authorization of Appropriations.--There are authorized to be 
appropriated $200,000,000 for each of fiscal years 2002, 2003, 2004, 
2005, and 2006 for the purpose of carrying out this section.

SEC. 218. HUMAN CLINICAL TRIALS AND DRUGS FOR RARE DISEASES AND 
              CONDITIONS.

    (a) Expanded Human Clinical Trials Qualifying for Orphan Drug 
Credit.--
            (1) In general.--Subclause (I) of section 45C(b)(2)(A)(ii) 
        of the Internal Revenue Code of 1986 is amended to read as 
        follows:
                                    ``(I) after the date that the 
                                application is filed for designation 
                                under such section 526, and''.
            (2) Conforming amendment.--Clause (i) of section 
        45C(b)(2)(A) of the Internal Revenue Code of 1986 is amended by 
        inserting ``which is'' before ``being'' and by inserting before 
        the comma at the end ``and which is designated under section 
        526 of such Act''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to amounts paid or incurred after December 31, 
        2002.
    (b) Publication of Filing and Approval of Requests for Designation 
of Drugs for Rare Diseases or Conditions.--Subsection (c) of section 
526 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360bb) is 
amended to read as follows:
    ``(c) Not less than monthly, the Secretary shall publish in the 
Federal Register, and otherwise make available to the public, notice of 
requests for designation of a drug under subsection (a) and approvals 
of such requests. Such notice shall include--
            ``(1) the name and address of the manufacturer and the 
        sponsor;
            ``(2) the date of the request for designation or of the 
        approval of such request;
            ``(3) the nonproprietary name of the drug and the name of 
        the drug under which an application is filed under section 
        505(b) or section 351 of the Public Health Service Act;
            ``(4) the rare disease or condition for which the 
        designation is requested or approved; and
            ``(5) the proposed indication for use of the product.''.

SEC. 219. USE OF ADJUVANTS IN VACCINE PRODUCTION.

    (a) Purpose.--The purpose of this section is to create incentives 
for the conduct of research by private for-profit entities relating to 
the development and use of adjuvants to enhance the potency of, and 
increase the period of protection and the number of useful doses from, 
a limited supply of antigen in response to an attack with a biological 
agent or toxin or nuclear or radiological material.
    (b) Definition of Adjuvant.--In this section, the term ``adjuvant'' 
means a substance included in a vaccine formulation to enhance or 
prolong the immune response of the vaccine.
    (c) Eligibility for Classification.--
            (1) Criteria.--
                    (A) In general.--For purposes of this section, in 
                determining whether a proposed use of an adjuvant is 
                safe, the Secretary of Health and Human Services (in 
                this section referred to as the ``Secretary'') shall--
                            (i) consider--
                                    (I) the views of experts qualified 
                                by scientific training and experience 
                                to evaluate the safety of vaccines (the 
                                basis of such views being scientific 
                                procedures or experience based on 
                                common use in vaccines);
                                    (II) common knowledge concerning 
                                the adjuvant throughout that portion of 
                                the scientific community that is 
                                knowledgeable about the safety of such 
                                adjuvant substances that are  directly 
or indirectly added to vaccines;
                                    (III) scientific procedures that 
                                are ordinarily based on published peer-
                                reviewed studies which may be 
                                corroborated by unpublished studies and 
                                other data and information; and
                                    (IV) other factors that the 
                                Secretary determines appropriate;
                            (ii) require--
                                    (I) the conduct of human trials 
                                using at least two different antigens 
                                relating to the adjuvant;
                                    (II) the consideration of the 
                                cumulative experience of at least 2,000 
                                human subjects of the human trials; and
                                    (III) the conduct of at least one 
                                safety assessment, using the parameters 
                                described in subparagraph (B), of the 
                                toxicity profile of the adjuvant in 
                                which the dose per injection should 
                                equal to, or exceed, the intended human 
                                dose, if feasible.
                    (B) Parameters.--The parameters to be evaluated in 
                a safety assessment conducted under subparagraph 
                (A)(ii)(III) include--
                            (i) laboratory analyses (for example serum 
                        chemistry, hematology and immunogenicity);
                            (ii) injection site observations;
                            (iii) histopathology;
                            (iv) necropsy; and
                            (v) pyrogenicity.
    (2) Deeming safe.--An adjuvant determined by the Secretary to be 
safe under paragraph (1) shall, with respect to any particular use or 
intended use of such adjuvant, be deemed to be safe for the purposes of 
the application of section 351 of the Public Health Service Act (42 
U.S.C. 262) or section 505 of the Federal Food, Drug, and Cosmetic Act 
(21 U.S.C. 355).
    (d) Establishment of a Preferred List of Adjuvants.--
            (1) In general.--The Secretary shall establish a list of 
        preferred adjuvants that are generally recognized as safe for 
        use in vaccine formulation and production.
            (2) Regulations.--The Secretary shall promulgate such 
        regulations as are necessary to carry out the provisions of 
        this subsection.
            (3) Publication.--The Secretary shall publish the preferred 
        list of adjuvants not less than quarterly in the Federal 
        Register.
    (e) Petition for Eligibility.--
            (1) In general.--Any person may, with respect to any 
        intended use of an adjuvant, file with the Secretary a petition 
        proposing to list the adjuvant on the list of preferred 
        adjuvants described in subsection (d).
            (2) Contents.--The petition described in paragraph (1) 
        shall, in addition to any explanatory or supporting data, 
        contain--
                    (A) the name and all pertinent information 
                concerning such adjuvant, including, where available, 
                its chemical identity and composition;
                    (B) a statement of the conditions of the proposed 
                use of such adjuvant, including any proposed use of 
                such adjuvant;
                    (C) all relevant data bearing on the physical or 
                other technical effect that such adjuvant is intended 
                to produce, and the quantity of such adjuvant required 
                to produce such effect; and
                    (D) full reports of investigations made with 
                respect to the safety of such adjuvant, including the 
                full disclosure of information as to the methods and 
                controls used in conducting such investigations.
            (3) Additional information.--Upon the request of the 
        Secretary, a petitioner under this subsection shall provide the 
        Secretary, as part of the petition process under this 
        subsection, a full description of the methods used in, and the 
        facilities and controls used for, the production of the 
        adjuvant that is the subject of the petition and samples of the 
        adjuvant involved, or articles used as components thereof, and 
        samples of the vaccine in or on which the adjuvant is proposed 
        to be used.
            (4) Notification.--
                    (A) In general.--Except as provided in subparagraph 
                (B), not later than 90 days after the date on which a 
                petition is filed under paragraph (1), the Secretary 
                shall provide the petitioner with notice of the 
                approval or disapproval of such petition.
                    (B) Exception.--If the Secretary determines that 
                study of a petition beyond the 90-day period described 
                in subparagraph (A) is required, the Secretary shall 
                notify the petitioner in writing during such period of 
                the additional period required prior to approval or 
                disapproval.
    (f) Conditional Approval.--
            (1) Establishing conditions.--The Secretary may provide for 
        the conditional approval of a petition submitted under 
        subsection (e). Such conditional approval shall limit the use 
        of an adjuvant unless conditions prescribed by the Secretary 
        are complied with by the petitioner with respect to the use of 
        the adjuvant. Such conditions may include--
                    (A) specifications as to the particular vaccine or 
                classes of vaccines in which such adjuvant may be used;
                    (B) the manner in which such adjuvant may be added 
                to or used in or on such vaccine;
                    (C) the maximum quantity of the adjuvant which may 
                be used; and
                    (D) any labeling requirements for such adjuvant 
                that are determined necessary to ensure the safety of 
                the use of the adjuvant.
            (2) Notification.--If an adjuvant is conditionally approved 
        by the Secretary for inclusion on the list described in 
        subsection (d), the Secretary shall notify (as part of the 
notice provided under subsection (e)(4)) the petitioner of the 
conditions applicable to the adjuvant under paragraph (1) with respect 
to such approval and the reasons for requiring such conditions.
    (g) Study.--The Secretary, acting through the Director of the 
National Institute of Allergy and Infectious Diseases, shall conduct a 
study on the effectiveness of the use of adjuvants, in response to an 
attack with biological or chemical agents or toxins or nuclear or 
radiological materials, to--
            (1) enhance the potency of a given supply of antigen;
            (2) increase the period of protection of a given supply of 
        antigen; and
            (3) increase the number of useful doses from a given supply 
        of antigen.

SEC. 220. ANNUAL REPORT.

    (a) In General.--Not later than January 1, 2004, and each January 1 
thereafter, the Secretary shall prepare and submit to the appropriate 
committees of Congress and make available to the public, a report 
concerning the implementation of the Act (and the amendment made by 
this Act). Such reports shall include--
            (1) an assessment of whether the incentives provided for in 
        this title are sufficient, as determined by the Secretary, to 
        induce the biotechnology, pharmaceutical, device, and research 
        tools industries to modify their ongoing research priorities 
        and devote scarce management and scientific talent to research 
        to develop terror weapons countermeasures;
            (2) an assessment of whether such incentives are 
        sufficient, as determined by the Secretary, to address the 
        sensitivity of such industries to the possibility of challenges 
        to their prices and patents and the terms of sales that may 
        arise when the Federal Government is an oligopoly or monopoly 
        purchaser;
            (3) an assessment of whether such incentives are likely to 
        lead to the development of countermeasures to prepare the 
        United States in the event of the use of biological, chemical, 
        and radiological weapons by terrorists and others against both 
        military or intelligence, government, and civilian personnel;
            (4) an assessment of whether such incentives will lead to 
        the development of research tools;
            (5) an assessment of whether sections 211, 212, 213, 214, 
        215, 216, 217, 218, and 219 are being carried out and having 
        the intended effect on industry activity;
            (6) a description of how such incentives for private sector 
        research relate to the provision of public funding for the 
        development of countermeasures; and
            (7) recommendations for the modification of such incentives 
        to increase their effectiveness.
    (b) Limitation on Publication.--In making the report under 
subsection (a) available to the public, the Secretary may exempt 
certain information from disclosure if the Secretary determines that 
such publication would (or could) be detrimental to the security of the 
United States. Such determinations by the Secretary shall not be 
subject to judicial review.

SEC. 221. INTERNATIONAL CONFERENCE ON RESEARCH TO DEVELOP 
              COUNTERMEASURES.

    (a) In General.--The Director of the Centers for Disease Control 
and Prevention shall annually convene an International Conference on 
Research to Develop Countermeasures to biological, chemical and nuclear 
terror attacks.
    (b) Focus of Conference.--Each conference convened under subsection 
(a) shall focus on one ore more of the following:
            (1) An assessment of the biological, chemical, or 
        radiological threats that may arise and the countermeasures 
        that may be needed.
            (2) The status of research to develop countermeasures, 
        including research tools.
            (3) The need for and effectiveness of incentives for such 
        research by private sector entities, including tax, 
        procurement, intellectual property, and liability incentives.
            (4) Mechanisms that will improve coordination among public 
        and private sector entities conducting such research and 
        development.
            (5) The potential benefits and applications of such 
        research for the prevention and treatment of tropical and other 
        diseases.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated, such sums as be necessary in each fiscal year to carry 
out this section.
                                 <all>