[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2599 Introduced in House (IH)]






109th CONGRESS
  1st Session
                                H. R. 2599

To improve the quality, availability, diversity, personal privacy, and 
            innovation of health care in the United States.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 24, 2005

 Mr. Rohrabacher introduced the following bill; which was referred to 
 the Committee on Ways and Means, and in addition to the Committees on 
  Energy and Commerce and Judiciary, for a period to be subsequently 
   determined by the Speaker, in each case for consideration of such 
 provisions as fall within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
To improve the quality, availability, diversity, personal privacy, and 
            innovation of health care in the United States.

    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 ``Medical 
Independence, Privacy, and Innovation Act of 2005''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
                    TITLE I--TAX-RELATED PROVISIONS

Sec. 101. Findings.
Sec. 102. Deduction of medical expenses for individuals.
Sec. 103. Medical checking accounts.
Sec. 104. Decrease in minimum annual deductibles under a high 
                            deductible health plan for purposes of 
                            health savings accounts and Archer MSAs.
                       TITLE II--MEDICAL PRIVACY

Sec. 201. Findings.
Sec. 202. Modification of regulations on privacy of individually 
                            identifiable health information.
 TITLE III--MODIFICATIONS REGARDING REGULATION OF DRUGS UNDER FEDERAL 
                      FOOD, DRUG, AND COSMETIC ACT

Sec. 301. Definition of drug.
Sec. 302. Striking of effectiveness requirement; modifications 
                            regarding patent listings, patent 
                            certifications, and thirty-month rule.
Sec. 303. Granting of exclusive or partially exclusive licenses 
                            regarding inventions made with Federal 
                            assistance.
Sec. 304. Importation of certain drugs.

                    TITLE I--TAX-RELATED PROVISIONS

SEC. 101. FINDINGS.

    The Congress finds the following:
            (1) Current law confers tax benefits for health insurance 
        provided as an employee fringe benefit, but no similar tax 
        benefit for health insurance purchased by individuals thus 
        creating an unfair bias toward employer provided medical 
        insurance plans and an unfair discrimination against 
        individuals who seek marketplace alternatives to health 
        insurance.
            (2) Current law confers a tax benefits for third party 
        payment of medical expenses but no similar tax benefits for 
        direct individual payment of medical expenses. This has 
        promoted employer-provided third party payment systems and 
        discouraged direct doctor-patient relationships.
            (3) The current tax treatment of medical expenses has 
        resulted in a greatly distorted marketplace in medical 
        insurance where decreased opportunities for private personal 
        health insurance has reduced competition both for medical 
        insurance and health care services. This has resulted in an 
        increased costs of both health insurance and health care 
        services and fostered over use of low high premium health 
        insurance plans.
            (4) The current tax treatment of medical expenses has 
        restricted the freedom of individuals to exercise direct 
        control over their health care dollars. The exclusion from 
        gross income for employer-provided health care with no 
        corresponding tax benefit for health insurance and health care 
        costs bourn by individuals represents a strong incentive toward 
        employers group plans.
            (5) The tax code's preferment of employer-provided group 
        plans has triggered a marketplace response reflected in the 
        significant increases in large health care delivery, and the 
        creation of a relative few health care conglomerates in lieu of 
        thousands of competitive providers of medical insurance and 
        services. This has increasingly placed medical decisions in the 
        hands of health care bureaucracies and has eroded doctor-
        patient relationships.
            (6) The role of the marketplace in both medical insurance 
        and medical services should be strengthened. The discriminatory 
        tax policies in the area of health insurance and health care 
        should be ended. Private individuals should be able to contract 
        for their health insurance and health care delivery in 
        atmosphere free of discriminatory tax pressures. High 
        deductible low premium as well as catastrophic alternatives in 
        health insurance should be viable options for all Americans.

SEC. 102. DEDUCTION OF MEDICAL EXPENSES FOR INDIVIDUALS.

    (a) In General.--Subsection (a) of section 213 of the Internal 
Revenue Code of 1986 (relating to treatment of medical, dental, etc., 
expenses) is amended to read as follows:
    ``(a) Allowance of Deduction.--There shall be allowed as a 
deduction the expenses paid during the taxable year, not compensated 
for by insurance or otherwise, for medical care of the taxpayer, his 
spouse, or a dependent (as defined by section 152, determined without 
regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof).''.
    (b) Deduction Allowed in Computing Adjusted Gross Income.--
Subsection (a) of section 62 of such Code is amended by redesignating 
paragraph (19) (relating to costs involving discrimination suits, etc.) 
as paragraph (20) and by inserting after paragraph (20) the following 
new paragraph:
            ``(21) Medical care.--The deduction allowed by section 
        213.''.
    (c) Conforming Amendments.--
            (1) Section 56(b)(1) of such Code is amended by striking 
        subparagraph (B).
            (2) Section 67(b) of such Code is amended by striking 
        paragraph (5).
            (3) Section 72(t)(2)(B) of such Code is amended by striking 
        ``to the extent such distributions do not exceed the amount'' 
        and inserting ``which are''.
            (4) Sections 104(a) and 105(b) of such Code are both 
        amended by striking ``(and not in excess of)''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2005.

SEC. 103. MEDICAL CHECKING ACCOUNTS.

    (a) In General.--Subchapter F of chapter 1 of the Internal Revenue 
Code of 1986 (relating to exempt organizations) is amended by adding at 
the end the following:

                  ``PART IX--MEDICAL CHECKING ACCOUNTS

``Sec. 530A. Medical checking accounts.

``SEC. 530A. MEDICAL CHECKING ACCOUNTS.

    ``(a) General Rule.--A medical checking account shall be exempt 
from taxation under this subtitle. Notwithstanding the preceding 
sentence, any medical checking account shall be subject to the taxes 
imposed by section 511 (relating to imposition of tax on unrelated 
business income of charitable, etc., organizations). Rules similar to 
the rules of paragraphs (2) and (4) of section 408(e) shall apply to 
medical checking accounts, and any amount treated as distributed under 
such rules shall be treated as not used to pay qualified medical 
expenses.
    ``(b) Deduction for Contributions.--
            ``(1) In general.--In the case of an individual, there 
        shall be allowed as a deduction an amount equal to the 
        aggregate amount paid in cash during the taxable year to a 
        medical checking account of the taxpayer.
            ``(2) Limitations.--
                    ``(A) Maximum annual contribution.--The deduction 
                under paragraph (1) for a taxable year shall not exceed 
                $1,000 ($2,000 in the case of a joint return).
                    ``(B) Maximum allowable deduction based on balance 
                in account.--No deduction shall be allowed for a 
                taxable year for any amount contributed to a medical 
                checking account if the sum of such amount plus the 
                balance in the account determined as of the end of the 
                taxable year would exceed $2,000 ($4,000 in the case of 
                married individuals filing a joint return, a surviving 
                spouse, and a head of household).
    ``(c) Credit for Contributions.--
            ``(1) In general.--In the case of an individual, there 
        shall be allowed as a credit against the tax imposed by this 
        chapter for the taxable year an amount equal to the credit 
        amount with respect to contributions made during the taxable 
        year to the medical checking account of the taxpayer.
            ``(2) Credit amount.--For purposes of paragraph (1), the 
        credit amount is the lesser of--
                    ``(A) the total amount of contributions to the 
                medical checking account for the taxable year reduced 
                by the amount of contributions allowed as a deduction 
                under subsection (b), and
                    ``(B) $1,000.
    ``(d) Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Medical checking account.--The term `medical checking 
        account' means a trust created or organized in the United 
        States for the exclusive benefit of a qualified individual or 
        his beneficiaries, but only if the written governing instrument 
        creating the trust meets the following requirements:
                    ``(A) Except in the case of a rollover contribution 
                described in paragraph (4)(D), no contribution will be 
                accepted unless it is in cash, or it exceeds $1,000 
                ($2,000 in the case of married individuals filing a 
                joint return, a surviving spouse, and a head of 
                household).
                    ``(B) The trustee is a bank (as defined in section 
                408(n), an insurance company (as defined in section 
                816), or another person who demonstrates to the 
                satisfaction of the Secretary that the manner in which 
                such person will administer the trust will be 
                consistent with the requirements of this section.
                    ``(C) No part of the trust assets will be invested 
                in life insurance contracts.
                    ``(D) The assets of the trust will not be 
                commingled with other property except in a common trust 
                fund or common investment fund.
                    ``(E) The interest of an individual in the balance 
                in his account is nonforfeitable.
            ``(2) Qualified medical expenses.--The term `qualified 
        medical expenses' means, with respect to an account holder, 
        amounts paid by such holder for medical care (as defined in 
        section 213(d)) for such individual, the spouse of such 
        individual, and any dependent (as defined in section 152, 
        determined without regard to subsections (b)(1), (b)(2), and 
        (d)(1)(B) thereof) of such individual, but only to the extent 
        such amounts are not compensated for by insurance or otherwise 
        (including distributions from an Archer MSA which are not 
        includible in gross income by reason of section 220(f)(1) or 
        from a health savings account which are not includible in gross 
        income by reason of section 223(f)(1)).
            ``(3) Change in filing status.--In the case of a taxpayer 
        whose filing status changes during the taxable year, the 
        limitation under paragraph (1)(A) shall be apportioned among 
        the filing statuses of the taxpayer in accordance with 
        regulations prescribed by the Secretary.
            ``(4) Certain rules to apply.--Rules similar to the 
        following rules shall apply for purposes of this section:
                    ``(A) Section 219(d)(2) (relating to no deduction 
                for rollovers).
                    ``(B) Section 219(f)(3) (relating to time when 
                contributions deemed made).
                    ``(C) Section 219(f)(5) (relating to employer 
                payments).
                    ``(D) Section 220(f)(5) (relating to rollover 
                contributions).
                    ``(E) Section 220(f)(7) (relating to transfer of 
                account incident to divorce).
                    ``(F) Section 220(f)(8) (relating to treatment 
                after death of account holder).
                    ``(G) Section 408(g) (relating to community 
                property laws).
                    ``(H) Section 408(h) (relating to custodial 
                accounts).
    ``(e) Tax Treatment of Distributions.--
            ``(1) Amounts used for qualified medical expenses.--Any 
        amount paid or distributed out of a medical checking account 
        which is used exclusively to pay qualified medical expenses of 
        any account holder shall not be includible in gross income.
            ``(2) Inclusion of amounts not used for qualified medical 
        expenses.--Any amount paid or distributed out of a medical 
        checking account which is not used exclusively to pay the 
        qualified medical expenses of the account holder shall be 
        included in the gross income of such holder.
            ``(3) Additional tax on distributions not used for 
        qualified medical expenses.--For purposes of this section, 
        rules similar to the rules of section 220(f)(4) shall apply.
            ``(4) Coordination with medical expense deduction.--For 
        purposes of determining the amount of the deduction under 
        section 213, any payment or distribution out of a medical 
        checking account for qualified medical expenses shall not be 
        treated as an expense paid for medical care.
    ``(f) Reports.--The Secretary may require the trustee of a medical 
checking account to make such reports regarding such account to the 
Secretary and to the account holder with respect to contributions, 
distributions, and such other matters as the Secretary determines 
appropriate. The reports required by this subsection shall be filed at 
such time and in such manner and furnished to such individuals at such 
time and in such manner as may be required by the Secretary.''.
    (b) Tax on Excess Contributions.--Section 4973 of such Code 
(relating to tax on excess contributions to individual retirement 
accounts, certain section 403(b) contracts, and certain individual 
retirement annuities) is amended--
            (1) in subsection (a) by striking ``or'' at the end of 
        paragraph (4), by inserting ``or'' at the end of paragraph (5), 
        and by inserting after paragraph (5) the following:
            ``(6) a medical checking account (within the meaning of 
        section 530A(d)),'', and
            (2) by adding at the end the following new subsection:
    ``(h) Excess Contributions to Medical Checking Accounts.--For 
purposes of this section, in the case of medical checking accounts 
(within the meaning of section 530A(d)), the term `excess 
contributions' means the sum of--
            ``(1) the aggregate amount contributed for the taxable year 
        to such accounts (other than rollover contributions referred to 
        in section 530A(d)(4)(D)) which is not allowable as a deduction 
        or credit under section 530A for such year, and
            ``(2) the amount determined under this subsection for the 
        preceding taxable year, reduced by the sum of--
                    ``(A) the distributions out of the accounts which 
                were included in gross income under section 530A(e)(2), 
                and
                    ``(B) the excess (if any) of--
                            ``(i) the sum of the maximum amount 
                        allowable as a deduction or credit under 
                        section 530A for the taxable year, over
                            ``(ii) the amount contributed to such 
                        accounts for the taxable year.
For purposes of this subsection, any contribution which is distributed 
out of the medical checking account in a distribution to which section 
530A(d)(4)(B) applies shall be treated as an amount not contributed.''.
    (c) Tax on Prohibited Transactions.--
            (1) Subsection (c) of section 4975 of such Code (relating 
        to tax on prohibited transactions) is amended by adding at the 
        end the following new paragraph:
            ``(6) Special rule for medical checking accounts.--An 
        individual for whose benefit a medical checking account (within 
        the meaning of section 530A(d)) is established shall be exempt 
        from the tax imposed by this section with respect to any 
        transaction concerning such account (which would otherwise be 
        taxable under this section) if, with respect to such 
        transaction, the account ceases to be a medical checking 
        account by reason of the application of section 530A(e)(2) to 
        such account.''.
            (2) Paragraph (1) of section 4975(e) of such Code is 
        amended by striking ``or'' at the end of subparagraph (F), by 
        redesignating subparagraph (G) as subparagraph (H), and by 
        inserting after subparagraph (F) the following new 
        subparagraph:
                    ``(G) a medical checking account described in 
                section 530A(d), or''.
    (d) Failure to Provide Reports on Medical Checking Accounts.--
Paragraph (2) of section 6693(a) of such Code (relating to general rule 
on reports) is amended by striking ``and'' at the end of subparagraph 
(D), by striking the period at the end of subparagraph (E) and 
inserting ``, and'', and by inserting after subparagraph (E) the 
following new subparagraph:
                    ``(F) section 530A(g) (relating to medical savings 
                accounts).''.
    (e) Clerical Amendment.--The table of parts for subchapter F of 
chapter 1 of such Code is amended by adding at the end the following 
new item:

                ``Part IX. Medical checking accounts''.

    (f) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2005.

SEC. 104. DECREASE IN MINIMUM ANNUAL DEDUCTIBLES UNDER A HIGH 
              DEDUCTIBLE HEALTH PLAN FOR PURPOSES OF HEALTH SAVINGS 
              ACCOUNTS AND ARCHER MSAS.

    (a) Annual Deductible and Out-of-Pocket Expenses With Respect to 
Health Savings Accounts.--
            (1) In general.--Subclause (I) of section 223(c)(2)(A) (ii) 
        of the Internal Revenue Code of 1986 (defining high deductible 
        health plan) is amended by striking ``$5,000'' and inserting 
        ``$4,000''.
            (2) Minimum deductible decreased; amounts not increased by 
        inflation.--Paragraph (1) of section 223(g) of such Code is 
        amended--
                    (A) in the matter preceding subparagraph (A) by 
                striking ``subsections (b)(2) and (c)(2)(A)'' and 
                inserting ``subsection (b)(2)'', and
                    (B) in subparagraph (B) by striking 
                ``substituting'' and all that follows and inserting 
                ``substituting calendar year 1997 for `calendar year 
                1992' in subparagraph (B) thereof.''.
    (b) Archer MSAs.--
            (1) Decrease in minimum deductible.--Subparagraph (A) of 
        section 220(c)(2) of the Internal Revenue Code of 1986 
        (defining high deductible health plan) is amended--
                    (A) in clause (i) by striking ``$1,500'' and 
                inserting ``$1,000'', and
                    (B) in clause (ii) by striking ``$3,000'' and 
                inserting ``$2,000''.
            (2) Minimum not increased by inflation.--Section 220(g) of 
        such Code is amended by inserting ``(other than the $1,000 
        amount in subparagraph (A)(i) and the $2,000 amount in 
        subparagraph (A)(ii) thereof)'' after ``subsection (c)(2)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2005.

                       TITLE II--MEDICAL PRIVACY

SEC. 201. FINDINGS.

    The Congress finds the following:
            (1) Medical privacy is an issue that concerns a growing 
        number of people in the United States. The culture of the 
        United States has always strongly favored a close physician-
        patient relationship. One of the key elements of this 
        relationship is the trust that a patient has that their 
        personal information will be treated as confidential by medical 
        personnel and will not be made public or accessible to other 
        persons without their permission.
            (2) In our increasingly complex times, two trends are 
        combining to exert pressure on maintaining the confidentiality 
        of health care information. First, public policy favors an 
        increased ability to provide protection against harmful 
        prescription interactions and for the reporting of medications' 
        serious side effects. Second, health care insurers desire to 
        take advantage of economies of scale in controlling health care 
        costs. These trends have greatly reduced expectations for the 
        privacy of health care information.
            (3) For the first time in our Nation's history, serious 
        loopholes have been written into privacy protections that were 
        created to protect the right of individuals. Positive changes 
        in privacy law have been made in recent years to guarantee that 
        patients are notified regarding the use of their health 
        information, have access to their own medical records, and are 
        able to request corrections of such records. These protections 
        must be maintained and strengthened.
            (4) One of the greatest needs in the area of health privacy 
        is to protect individuals against the use of their confidential 
        health information for profit-generating consumer marketing. 
        Patients justifiably have objections to this use of their 
        information without their consent.
            (5) There recently have been implemented a series of 
        alarming modifications to the standards previously finalized to 
        protect the privacy of individually identifiable health 
        information. These include changes in important definitions, 
        additions to the category of health care operations for which 
        patient consent for the use of their information is not 
        required, and changes in permitted use of patient information 
        without consent for public health purposes.
            (6) Recent rollbacks in health privacy need to be reversed, 
        and the individuals' confidence that their private 
        conversations with medical personnel will remain private needs 
        to be strengthened.
            (7) There is also a need to protect the integrity and 
        confidentiality of social security account numbers and to 
        prohibit Federal agencies from imposing national standards for 
        identification of individuals.

SEC. 202. MODIFICATION OF REGULATIONS ON PRIVACY OF INDIVIDUALLY 
              IDENTIFIABLE HEALTH INFORMATION.

    (a) Marketing.--
            (1) In general.--The modifications made by the August 2002 
        medical privacy rule to the definition of the term 
        ``marketing'' in section 164.501 of title 45, Code of Federal 
        Regulations, shall have no force or effect.
            (2) Authorizations for marketing.--Section 164.508 of title 
        45, Code of Federal Regulations, shall be construed and applied 
        so as to require that, if an authorization is required for a 
        use or disclosure of protected health information for 
        marketing, the authorization shall be considered invalid unless 
        it--
                    (A) uses the term ``marketing'';
                    (B) states that the purpose of the use or 
                disclosure involved is marketing; and
                    (C) describes the specific marketing uses and 
                disclosures authorized.
    (b) Consent for Uses or Disclosures to Carry Out Treatment, 
Payment, or Health Care Operations.--
            (1) In general.--The modifications made to section 164.506 
        of title 45, Code of Federal Regulations, by the August 2002 
        medical privacy rule shall have no force or effect.
            (2) Use or disclosure without consent.--
                    (A) In general.--Section 164.506 of title 45, Code 
                of Federal Regulations, insofar as it permits any use 
                or disclosure of protected health information without 
                consent, shall have no force or effect.
                    (B) Circumstances where consent not required.--A 
                health care provider may use or disclose an 
                individual's protected health information without 
                obtaining the prior consent of the individual only in 
                the following circumstances:
                            (i) To fill or dispense a prescription, and 
                        to search for drug interactions related to that 
                        prescription, if the health care provider 
                        obtains written consent from the individual as 
                        soon as practicable.
                            (ii) To carry out treatment of that 
                        individual if--
                                    (I) the individual has not executed 
                                a Universal Health Privacy Declaration 
                                promulgated under subparagraph (C);
                                    (II) the individual and the health 
                                care provider have not had in-person 
                                communication regarding such treatment; 
                                and
                                    (III) obtaining consent would be 
                                impracticable.
                    (C) Universal health privacy declaration.--
                            (i) In general.--The Secretary of Health 
                        and Human Services shall promulgate a document 
                        which shall be known as the ``Universal Health 
                        Privacy Declaration''.
                            (ii) Eligibility.--A Universal Health 
                        Privacy Declaration may be executed by any 
                        individual who is a citizen of the United 
                        States or an alien lawfully admitted to the 
                        United States for permanent residence.
                            (iii) Purpose.--A Universal Health Privacy 
                        Declaration, once executed by an individual 
                        described in clause (ii) and not revoked, shall 
                        be considered to prohibit, as provided under 
                        subparagraph (B), a health care provider from 
                        using or disclosing the individual's protected 
                        health information for treatment without 
                        obtaining the prior consent of the individual.
                            (iv) Enforcement.--There is established in 
                        the Department of Health and Human Services an 
                        Office of the Health Privacy Ombudsman, which 
                        shall be headed by an individual known as the 
                        ``Health Privacy Ombudsman''. The Health 
                        Privacy Ombudsman shall be charged with 
                        investigating complaints submitted by 
                        individuals described in clause (ii) regarding 
                        a use or disclosure of protected health 
                        information in violation of their Universal 
                        Health Privacy Declaration.
    (c) Disclosures for Law Enforcement Purposes.--Subparagraph (C) of 
section 164.506(f)(1)(ii) of title 45, Code of Federal Regulations 
shall have no force or effect.
    (d) Definitions.--
            (1) In general.--For purposes of this section:
                    (A) December 2000 medical privacy rule.--The term 
                ``December 2000 medical privacy rule'' means the final 
                rule on standards for privacy of individually 
                identifiable health information published on December 
                28, 2000, in the Federal Register (65 Fed. Reg. 82462), 
                including the provisions of title 45, Code of Federal 
                Regulations, revised or added by such rule.
                    (B) August 2002 medical privacy rule.--The term 
                ``August 2002 medical privacy rule'' means the final 
                rule, published on August 14, 2002, in the Federal 
                Register (67 Fed. Reg. 53182), that modified the 
                December 2000 medical privacy rule.
            (2) Other terms defined.--For purposes of this section:
                    (A) Health care provider.--The term ``health care 
                provider'' shall have the meaning given such term in 
                section 160.103 of title 45, Code of Federal 
                Regulations, as contained in the December 2000 medical 
                privacy rule.
                    (B) Disclosure; individual; protected health 
                information; treatment; use.--The terms ``disclosure'', 
                ``individual'', ``protected health information'', 
                ``treatment'', and ``use'' shall have the meaning given 
                such terms in section 164.501 of title 45, Code of 
                Federal Regulations, as contained in the December 2000 
                medical privacy rule.

 TITLE III--MODIFICATIONS REGARDING REGULATION OF DRUGS UNDER FEDERAL 
                      FOOD, DRUG, AND COSMETIC ACT

SEC. 301. DEFINITION OF DRUG.

    Section 201(g)(1) of the Federal Food, Drug, and Cosmetic Act (21 
U.S.C. 321(g)(1)) is amended in the first sentence by striking ``and 
(B) articles intended'' and all that follows and inserting the 
following: ``and (B) articles intended for use in the diagnosis, cure, 
or treatment (but not mitigation or prevention) of disease in man or 
other animals.''.

SEC. 302. STRIKING OF EFFECTIVENESS REQUIREMENT; MODIFICATIONS 
              REGARDING PATENT LISTINGS, PATENT CERTIFICATIONS, AND 
              THIRTY-MONTH RULE.

    (a) Striking of Effectiveness Requirement; Prohibition Against 
Listing of Certain Patents.--
            (1) In general.--Section 505(b) of the Federal Food, Drug, 
        and Cosmetic Act (21 U.S.C. 355(b)) is amended by striking 
        ``(b)(1)'' and all that follows through ``clinical trials 
        required by clause (A).'' and inserting the following:
    ``(b) Application.--
            ``(1) Contents.--
                    ``(A) In general.--Any person may file with the 
                Secretary an application with respect to any drug 
                subject to the provisions of subsection (a). Such 
                persons shall submit to the Secretary as a part of the 
                application--
                            ``(i) full reports of investigations which 
                        have been made to show whether or not such drug 
                        is safe for use;
                            ``(ii) a full list of the articles used as 
                        components of such drug;
                            ``(iii) a full statement of the composition 
                        of such drug;
                            ``(iv) a full description of the methods 
                        used in, and the facilities and controls used 
                        for, the manufacture, processing, and packing 
                        of such drug;
                            ``(v) such samples of such drug and of the 
                        articles used as components thereof as the 
                        Secretary may require; and
                            ``(vi) specimens of the labeling proposed 
                        to be used for such drug.
                    ``(B) Patent information.--
                            ``(i) Requirement.--The applicant shall 
                        file with the application the patent number and 
                        the expiration date of any patent which claims 
                        the drug for which the applicant submitted the 
                        application or which claims a method of using 
                        such drug and with respect to which a claim of 
                        patent infringement could reasonably be 
                        asserted if a person not licensed by the owner 
                        engaged in the manufacture use, or sale of the 
                        drug.
                            ``(ii) Types of patents.--
                                    ``(I) Patents subject to 
                                requirement.--The patents for which 
                                information under clause (i) is 
                                required to be filed with the Secretary 
                                are drug substance (ingredient) 
                                patents, drug product (formulation and 
                                composition) patents, product by 
                                process patents, and method of use 
                                patents.
                                    ``(II) Prohibition regarding 
                                certain patents.--Process patents, 
                                patents claiming packaging, patents 
                                claiming metabolites, and patents 
                                claiming intermediates are not patents 
                                described in subclause (I), and 
                                information on such patents may not be 
                                filed with the Secretary.
                                    ``(III) Patent regarding drug 
                                substance.--For patents that claim the 
                                drug substance, the applicant shall 
                                submit information only on patents that 
                                claim the drug substance that is the 
                                subject of the pending or approved 
                                application or that claim a drug 
                                substance that is the same as the 
                                active ingredient that is the subject 
                                of an approved or pending application 
                                within the meaning of subsection 
                                (j)(2)(A)(ii).
                                    ``(IV) Patent regarding drug 
                                product.--For patents that claim a drug 
                                product, the applicant shall submit 
                                information only on those patents that 
                                claim a drug product that is the 
                                subject of a pending or approved 
                                application.
                                    ``(V) Patent regarding method of 
                                use.--For patents that claim a method 
                                of use, the applicant shall submit 
                                information only on those patents that 
                                claim indications or other conditions 
                                of use that are the subject of a 
                                pending or approved application. For 
                                approved applications, the applicant 
                                shall identify the indication or other 
                                condition of use in the approved 
                                labeling that corresponds to the listed 
                                patent and claim identified.
                            ``(iii) Filing of patent after submission 
                        of application.--If an application is filed 
                        under this subsection for a drug and a patent 
                        which claims such drug or a method of using 
                        such drug is issued after the filing date but 
                        before approval of the application, the 
                        applicant shall amend the application to 
                        include the information required by clauses (i) 
                        and (ii).
                            ``(iv) Publication of patent information.--
                        Upon approval of the application, the Secretary 
                        shall publish information submitted under 
                        clauses (i) through (iii).
                    ``(C) Guidance regarding inclusion of women and 
                minorities in clinical trials.--The Secretary shall, in 
                consultation with the Director of the National 
                Institutes of Health and with representatives of the 
                drug manufacturing industry, review and develop 
                guidance, as appropriate, on the inclusion of women and 
                minorities in clinical trials required by subparagraph 
                (A)(i).''.
            (2) Conforming amendments.--The Federal Food, Drug, and 
        Cosmetic Act (21 U.S.C. 301 et seq.) is amended--
                    (A) in section 201(p)--
                            (i) by striking ``safety and effectiveness 
                        of'' and inserting ``safety of''; and
                            (ii) by striking ``safe and effective for 
                        use'' and inserting ``safe for use''; and
                    (B) in section 505--
                            (i) by striking ``safety and 
                        effectiveness'' each place such term appears 
                        and inserting ``safety'';
                            (ii) by striking ``safety or 
                        effectiveness'' each place such term appears 
                        and inserting ``safety''; and
                            (iii) in subsection (i)(1)(D), by striking 
                        ``pediatric safety and efficacy'' and inserting 
                        ``pediatric safety''.
    (b) Abbreviated Applications; Amendments Regarding Thirty-Month 
Delay in Approval.--Section 505 of the Federal Food, Drug, and Cosmetic 
Act (21 U.S.C. 355(j)) is amended--
            (1) in subsection (c)(3)--
                    (A) in subparagraph (C), in the matter preceding 
                clause (i), by striking ``thirty-month period'' and 
                inserting ``twenty-month period''; and
                    (B) in subparagraph (E)(ii), by striking ``thirty-
                month period'' and inserting ``twenty-month period''; 
                and
            (2) in subsection (j)(5)--
                    (A) in subparagraph (B)(iii), in the matter 
                preceding subclause (I), by striking ``thirty-month 
                period'' and inserting ``twenty-month period''; and
                    (B) in subparagraph (F)(ii), by striking ``thirty-
                month period'' and inserting ``twenty-month period''.

SEC. 303. GRANTING OF EXCLUSIVE OR PARTIALLY EXCLUSIVE LICENSES 
              REGARDING INVENTIONS MADE WITH FEDERAL ASSISTANCE.

    No grant of an exclusive or partially exclusive license pursuant to 
chapter 18 of title 35, United States Code, may be made, except in 
accordance with section 209 of such title (relating to the availability 
to the public of an invention and its benefits on reasonable terms).

SEC. 304. IMPORTATION OF CERTAIN DRUGS.

    Chapter VIII of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
381 et seq.) is amended by striking section 804 and inserting the 
following:

                     ``importation of certain drugs

    ``Sec. 804. (a) Regulations.--The Secretary, after consultation 
with the United States Trade Representative and the Commissioner of 
Customs, shall promulgate regulations permitting pharmacists and 
wholesalers to import prescription drugs from foreign nations.
    ``(b) Limitation.--The regulations under subsection (a) shall 
require that safeguards be in place to ensure that each prescription 
drug imported under the regulations complies with section 505 
(including being safe for the intended use of the prescription drug) 
with sections 501 and 502 and with other applicable requirements of 
this Act.''.
                                 <all>