[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 3775 Introduced in Senate (IS)]

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115th CONGRESS
  2d Session
                                S. 3775

 To amend the Public Health Service Act to establish an Office of Drug 
                             Manufacturing.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           December 18, 2018

  Ms. Warren introduced the following bill; which was read twice and 
  referred to the Committee on Health, Education, Labor, and Pensions

_______________________________________________________________________

                                 A BILL


 
 To amend the Public Health Service Act to establish an Office of Drug 
                             Manufacturing.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Affordable Drug Manufacturing Act of 
2018''.

SEC. 2. PUBLIC MANUFACTURING OF PHARMACEUTICALS.

    Part A of title III of the Public Health Service Act (42 U.S.C. 241 
et seq.) is amended by adding at the end the following:

``SEC. 310B. MANUFACTURING OF DRUGS.

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