[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 405 Introduced in House (IH)]
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118th CONGRESS
1st Session
H. R. 405
To amend the Public Health Service Act to provide for stockpiles to
ensure that all Americans have access to generic drugs at risk of
shortage, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 20, 2023
Mr. Carter of Georgia (for himself and Ms. Blunt Rochester) introduced
the following bill; which was referred to the Committee on Energy and
Commerce
_______________________________________________________________________
A BILL
To amend the Public Health Service Act to provide for stockpiles to
ensure that all Americans have access to generic drugs at risk of
shortage, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Essential Medicines Strategic
Stockpile Act of 2023''.
SEC. 2. PILOT PROGRAM ON ENSURING MEDICATION SUPPLY STABILITY.
Part D of title III of the Public Health Service Act (42 U.S.C.
254b et seq.) is amended by adding at the end the following new
subpart:
``Subpart XIII--Ensuring Medication Supply Stability
``SEC. 340J. ENSURING MEDICATION SUPPLY STABILITY.
``(a) Award of Contracts.--Beginning not later than January 1,
2024, the Secretary shall award contracts to eligible entities to each
implement and test the effectiveness of acquiring, maintaining,
managing, and distributing a stockpile that--
``(1) consists of generic drugs at risk of shortage; and
``(2) is of sufficient quantity to ensure that customers in
the United States have access to such drugs for at least 6
months (as specified by the Secretary based on the historic
demand for those drugs).
``(b) Selection of Drugs.--
``(1) In general.--The Secretary shall--
``(A) select not more than 50 drugs that may be
included by eligible entities in a stockpile pursuant
to a contract under this section;
``(B) maintain an up-to-date list of such drugs;
and
``(C) make such list publicly available.
``(2) Choice of eligible entities.--A contract awarded to
an eligible entity under this section need not require the
stockpile of the eligible entity to include all 50 drugs listed
pursuant to paragraph (1).
``(c) Sufficient Quantity.--For each generic drug listed pursuant
to subsection (b)(1), the Secretary shall specify the quantity of such
drug that is sufficient to ensure that consumers in the United States
have access to such drug for at least 6 months.
``(d) Duration; Liquidation of Inventory.--
``(1) Duration.--A contract awarded under this section
shall be for a term of no more than 3 years.
``(2) Liquidation of inventory.--A drug held in a stockpile
pursuant to a contract under this section may be liquidated by
the eligible entity at the end of the period of the contract.
``(e) Stockpile Requirements.--
``(1) Ensuring availability of unexpired products.--Each
eligible entity with a contract under this section for a
stockpile of generic drugs at risk of shortage shall--
``(A) ensure that each drug maintained in the
stockpile has an expiration date at least 1 year beyond
the current date; and
``(B) to comply with subparagraph (A)--
``(i) sell drugs in the stockpile through
normal commercial channels and replace those
drugs; or
``(ii) if there is no commercial market for
a drug in the stockpile, dispose of the drug
and report such disposal to the Secretary.
``(2) Management of stockpile.--
``(A) In general.--The Secretary shall ensure
that--
``(i) collectively, the eligible entities
with contracts under this section for a
stockpile of generic drugs at risk of shortage
acquire, not later than 6 months following the
date set in such contracts, and maintain
thereafter, a 6-month supply of such drugs; and
``(ii) the 6-month supply required by
clause (i) is in addition to the average levels
of inventory held by eligible entities over the
previous year for the respective drugs.
``(B) Inventory management.--Each eligible entity
with a contract under this section for a stockpile of
generic drugs at risk of shortage shall manage
inventory to ensure that drugs in the stockpile are
efficiently cycled to the commercial market.
``(C) Annual audits.--Not more than annually, the
Secretary may request a physical audit count of the
inventories of all eligible entities with a contract
under this section to validate that each such entity is
maintaining the appropriate amount of stockpiled
inventory.
``(3) Reporting.--Each eligible entity with a contract
under this section shall submit reports at such time and in
such manner as the Secretary may require regarding--
``(A) current inventory levels of stockpiled drugs
at a drug level;
``(B) indicators of current inventory levels of
stockpiled drugs relative to acceptable minimums; and
``(C) such other matters as the Secretary
determines appropriate.
``(f) Contract Terms.--
``(1) Payment of monthly fees for management.--Subject to
paragraph (2), the Secretary shall pay to each eligible entity
with a contract under this section for a stockpile of generic
drugs at risk of shortage appropriate monthly fees for the
management of the stockpile.
``(2) Payment conditioned on stockpile adequacy.--
``(A) In general.--Except as provided in
subparagraph (B), each contract with an eligible entity
under this section shall provide that no payment under
the contract may be made until the entity demonstrates
to the Secretary that the entity has stockpiled such
portion of the total quantity of drugs to be stockpiled
under the contract as the Secretary determines to be
acceptable for payment.
``(B) Exceptions for advance payments.--
``(i) In general.--A contract under this
section may provide that, if the Secretary
determines (in the Secretary's discretion) that
an advance payment, partial payment for
significant milestones, or payment to increase
capacity is necessary to ensure success of the
terms of the contract, the Secretary shall pay,
in advance of delivery, an amount not to exceed
10 percent of the total contract amount to be
paid to the eligible entity by the Secretary
pursuant to the contract over the full period
of the contract.
``(ii) Cost of capital.--A contract under
this section may provide for payments to
compensate the contracting eligible entity for
additional capital requirements related to the
additional inventory to be maintained.
``(iii) Timing.--The Secretary shall, to
the extent practicable, make any determination
under clause (i) to make an advance payment at
the same time as the issuance of a
solicitation.
``(iv) Repayment.--If the Secretary makes
an advance payment pursuant to clause (i), the
Secretary shall require the eligible entity
receiving such advance payment to repay it if
there is a failure to perform by the eligible
entity.
``(3) Termination.--Nothing in this section shall be
construed as affecting the rights of eligible entities under
provisions of statute or regulation (including the Federal
Acquisition Regulation) relating to the termination of
contracts for the convenience of the Government.
``(g) Congressional Oversight.--
``(1) Independent evaluation and report.--Not later than 1
year after the date of enactment of this section and annually
thereafter, the Comptroller General of the United States shall
conduct an independent evaluation, and submit to the
appropriate congressional committees a report, concerning the
program under this section.
``(2) Contents of report.--The report under paragraph (1)
shall review, assess, and provide recommendations, as
appropriate, on the following:
``(A) Details on likely costs and resultant savings
as compared to a stockpiling method that does not
incorporate perpetual inventory cycling.
``(B) Identification of drawdowns from the
stockpile, as evidence of market shortage avoidance.
``(C) The allocation of drugs included in the
stockpiles funded pursuant to this section to the
customers of the eligible entities with contracts under
this section.
``(D) The degree to which eligible entities with
contracts under this section fulfilled their
obligations under such contracts.
``(h) Definitions.--In this section:
``(1) The term `eligible entity' means an entity that meets
each of the following criteria:
``(A) The entity is licensed or registered in
accordance with applicable Federal and State law and in
good standing with respect to such licensure or
registration.
``(B) If the entity is not a manufacturer, the
entity agrees--
``(i) to purchase all drugs to be
maintained in its stockpile funded under this
section directly from the manufacturers of the
drugs or the exclusive distributors of such
manufacturers; or
``(ii) in the case of an entity that is a
co-op or chain pharmacy warehouse--
``(I) to purchase drugs to be
maintained in its stockpile funded
under this section from an authorized
distributor; and
``(II) distribute those drugs only
to its member pharmacies.
``(C) The entity sells more than 90 percent of its
drugs to dispensers.
``(D) The entity agrees to distribute inventory
from its stockpile funded under this section only to
wholesale distributors or dispensers that are customers
of the entity.
``(2) The term `generic drug at risk of shortage' means a
drug (as defined in section 201 of the Federal Food, Drug, and
Cosmetic Act) that--
``(A) is approved pursuant to section 505(j) of
such Act;
``(B) is included in the list of essential
medicines published by the Food and Drug
Administration;
``(C) is included, at any point during the
preceding 36 months, on the drug shortage list in
effect under section 506E of the Federal Food, Drug,
and Cosmetic Act; and
``(D) is manufactured by 3 or fewer persons that
are registered under section 510 of the Federal Food,
Drug, and Cosmetic Act for purposes of such
manufacture.
``(i) Authorization of Appropriations.--To carry out this section,
there is authorized to be appropriated $120,000,000 for fiscal years
2024 through 2026, to remain available until expended.''.
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