[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 3398 Introduced in Senate (IS)]

<DOC>






118th CONGRESS
  1st Session
                                S. 3398

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


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            December 5, 2023

Ms. Warren (for herself and Mr. Merkley) 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 
2023''.

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. 310C. 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, asthma and chronic obstructive 
                pulmonary disease (COPD) inhalers, naloxone, 
                epinephrine auto-injectors, and antibiotics;
                    ``(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 and associated devices.
            ``(3) Personnel.--
                    ``(A) Director.--
                            ``(i) In general.--The Office shall be 
                        headed by a Director, who shall be appointed by 
                        the President.
                            ``(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 industry 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)) who 
                        was employed by such entity on any date on 
                        which wrongful conduct is the subject of a 
                        settlement, decree or enforcement action 
                        described in clause (iii)(III) occurred--
                                    ``(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 currently--
                                    ``(I) a drug manufacturer;
                                    ``(II) a wholesaler; and
                                    ``(III)(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, and in 
                        accordance with subparagraph (G);
                            ``(ii) acquire rights to manufacture 
                        applicable drugs as authorized under this 
                        section;
                            ``(iii) manufacture, or enter into 
                        contracts with entities, with preference for 
                        nonprofit entities and public partners, to 
                        manufacture, applicable drugs as authorized 
                        under this section;
                            ``(iv) determine a fair price for each 
                        applicable drug, 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, with preference for nonprofit 
                        entities and public partners, to manufacture 
                        active pharmaceutical ingredients for use by 
                        the Office or for sale to other entities.
                    ``(B) Transparency.--All prices paid and charged 
                for applicable drugs and their inputs shall be made 
                publicly available by the Office.
                    ``(C) Fair price.--In determining a fair price (the 
                price at which the Office sells an applicable drug to a 
                wholesaler or direct purchaser) 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;
                            ``(vi) the impact of price on market 
                        competition for the applicable drug;
                            ``(vii) the impact of formulary design on 
                        patient access to the applicable drug; and
                            ``(viii) the cost to acquire the applicable 
                        drug at the National Average Drug Acquisition 
                        Cost.
                    ``(D) Acquiring right to manufacture and market.--
                The Office may acquire the rights to manufacture and 
                market applicable drugs as authorized under this 
                section.
                    ``(E) 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) such ingredient is supplied 
                                by a single manufacturing facility;
                                    ``(III) such ingredient is 
                                necessary for the manufacture of 
                                medical countermeasures or medicines 
                                deemed essential from a public health 
                                perspective;
                                    ``(IV) the manufacture of such 
                                ingredient would improve the ability of 
                                other entities to enter the market for 
                                the manufacture of applicable drugs or 
                                otherwise expand the manufacture of 
                                applicable drugs; or
                                    ``(V) the manufacture of such 
                                ingredient is necessary for, or would 
                                improve the ability of, 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.
                    ``(F) Purchase requirements.--Notwithstanding 
                applicable laws relating to the procurement of 
                prescription drugs, the Office shall establish minimum 
                purchase requirements for the Department of Veterans 
                Affairs, the Department of Defense, the Public Health 
                Service, and the Coast Guard to purchase drugs 
                manufactured by or as a result of the Office.
                    ``(G) Limitation on undue influence.--The Food and 
                Drug Administration shall consider an application 
                submitted by the Office under subparagraph (A)(i) in 
                the same manner in which the Administration considers 
                applications submitted by other manufacturers. Nothing 
                in this paragraph shall be construed to require the 
                Food and Drug Administration to give special deference 
                to any determination made, or application submitted, by 
                the Office.
            ``(5) 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 drug 
                shortages in the pharmaceutical market;
                    ``(C) improving public health;
                    ``(D) addressing health disparities;
                    ``(E) reducing the cost of prescription drugs to 
                Federal and State health programs; or
                    ``(F) addressing public health emergencies as 
                defined in this Act, the National Emergencies Act, and 
                the Robert T. Stafford Disaster Relief and Emergency 
                Assistance Act, in coordination with the Biomedical 
                Advanced Research and Development Authority, the 
                Administration for Strategic Preparedness and Response, 
                the Centers for Disease Control and Prevention, and any 
                other Federal agency that the Office determines 
                necessary, to enable efficient procurement, including 
                contracting, for the Federal emergency response.
            ``(6) 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.
            ``(7) 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 applicable drugs;
                    ``(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;
                    ``(C) in the case of antibiotics manufactured under 
                this section, an assessment from the Centers for 
                Disease Control and Prevention and the Food and Drug 
                Administration on the impact of the manufacturing of 
                antibiotics on antimicrobial resistance;
                    ``(D) an accounting of funds received from the sale 
                of all medications for which manufacturing has been 
                authorized under this section and the use of such 
                funds;
                    ``(E) an analysis of how the public manufacture of 
                drugs meeting the conditions described in paragraph (5) 
                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; and
                    ``(F) a description of the challenges faced by the 
                Office in carrying out its duties under paragraph (4).
    ``(b) Submission of Applications.--For each applicable drug that 
the Office determines should be manufactured, as provided for under 
this section, the Office shall--
            ``(1) submit an application under section 505(b)(2), 
        505(j), or 515 of the Federal Food, Drug, and Cosmetic Act or 
        section 351(a) or 351(k) of this 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);
            ``(2) request an emergency use authorization of the 
        product, as appropriate, under section 564 of the Federal Food, 
        Drug, and Cosmetic Act (or enter into a contract with another 
        entity to submit an application for such use); or
            ``(3) 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 this 
        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 Office shall sell a drug produced 
        under this section at a fair price to other entities. Amounts 
        received by the Office from the sale of such drugs shall be 
        used for the activities of the Office.
            ``(2) Sale of approved application.--
                    ``(A) Availability.--
                            ``(i) In general.--For any applicable drug 
                        that the Office is manufacturing, the Office 
                        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.
                            ``(ii) Continued compliance with fda 
                        requirements.--The Office shall ensure that any 
                        application purchased under clause (i) is 
                        consistent with existing standards applied by 
                        the Food and Drug Administration related to the 
                        transfer of ownership rights for an approved 
                        application, including any additional filing 
                        requirements that the purchaser would need to 
                        be in compliance with due to material changes 
                        in information provided in the approved 
                        application.
                    ``(B) Failure to use.--If the Office makes a 
                determination that 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 Office shall revoke the purchaser's approved 
                application and resume production of the applicable 
                drug. The Office may waive the application of this 
                subparagraph in the case of a National Emergency or in 
                any other case determined appropriate by the Office.
    ``(d) Ensuring Patient Access.--
            ``(1) In general.--The Office shall carry out appropriate 
        activities to ensure the distribution and coverage of all 
        applicable drugs that the Office is manufacturing or has 
        entered into a contract to manufacture under this section.
            ``(2) Advisory council.--The Office shall establish an 
        advisory council to inform the Office on the identification of 
        applicable drugs, market landscape, and supply chain 
        considerations to ensure delivery of applicable drugs to 
        consumers. The advisory committee shall include representatives 
        from community and retail pharmacies, pharmacy benefit 
        managers, drug wholesalers, hospitals, health plans, 
        independent patient groups, clinicians, and consumer advocacy 
        organizations.
    ``(e) Insulin.--Not later than 1 year after the date of enactment 
of this section, the Office shall begin the public manufacturing of at 
least 1 insulin product of each dosage form (such as vial, pump, or pen 
dosage forms) and of each different type of insulin (such as rapid-
acting, short-acting, intermediate-acting, long-acting, ultra-long 
acting, and premixed), meeting the definition of applicable drug and in 
accordance with this section.
    ``(f) Asthma and COPD Inhalers.--Not later than 1 year after the 
date of enactment of this section, the Office shall begin the public 
manufacturing of at least 1 inhaler, meeting the definition of 
applicable drug and in accordance with this section.
    ``(g) Epinephrine Auto-Injector.--Not later than 1 year after the 
date of enactment of this section, the Office shall begin the public 
manufacturing of an epinephrine auto-injector, meeting the definition 
of applicable drug and in accordance with this section.
    ``(h) Naloxone.--Not later than 1 year after the date of enactment 
of this section, the Office shall begin the public manufacturing of 
naloxone, including naloxone indicated for community use, meeting the 
definition of applicable drug and in accordance with this section.
    ``(i) Antibiotics.--Not later than 1 year after the date of 
enactment of this section, and in consultation with the Centers for 
Disease Control and Prevention and the Food and Drug Administration to 
ensure the appropriate use of manufactured antibiotics, the Office 
shall begin the public manufacturing of no fewer than three discrete 
antibiotics meeting the definition of applicable drug in accordance 
with this section.
    ``(j) 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 3 or 
        fewer manufacturers with an approved abbreviated new drug 
        application or biosimilar (not including manufacturers of 
        authorized generics under a new drug application or 
        biosimilar), and that--
                    ``(I) in the previous 5-year period, has 
                experienced an increase in the wholesale acquisition 
                cost by at least 1 of its manufacturers that is greater 
                than the consumer price index for all urban consumers 
                (as published by the Bureau of Labor Statistics) for 1 
                of the years in that 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 wholesale acquisition 
                cost that the Office 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.
    ``(k) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary to carry out this 
section.''.
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