[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 5029 Introduced in Senate (IS)]

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118th CONGRESS
  2d Session
                                S. 5029

 To amend title XI of the Social Security Act to establish a research 
and development-intensive small biotech manufacturer exception from the 
                Medicare drug price negotiation program.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 12, 2024

  Mr. Cassidy introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To amend title XI of the Social Security Act to establish a research 
and development-intensive small biotech manufacturer exception from the 
                Medicare drug price negotiation program.

    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 ``Small Biotech Innovation Act''.

SEC. 2. RESEARCH AND DEVELOPMENT-INTENSIVE SMALL BIOTECH MANUFACTURER 
              EXCEPTION FROM MEDICARE DRUG PRICE NEGOTIATION PROGRAM.

    Section 1192(d)(2) of the Social Security Act (42 U.S.C. 1320f-
1(d)(2)) is amended by adding at the end the following new 
subparagraph:
                    ``(D) Research and development-intensive small 
                biotech manufacturer exception for 2029 and subsequent 
                years.--
                            ``(i) In general.--With respect to initial 
                        price applicability years (beginning with 
                        initial price applicability year 2029), subject 
                        to the succeeding provisions of this 
                        subparagraph, the term `negotiation eligible 
                        drug' shall not include a qualifying single 
                        source drug (as defined in subsection (e)) of a 
                        research and development-intensive small 
                        biotech manufacturer (as defined in clause 
                        (ii)).
                            ``(ii) Definitions.--In this subparagraph:
                                    ``(I) Applicable percent.--The term 
                                `applicable percent' means--
                                            ``(aa) in the case of a 
                                        small biotech manufacturer that 
                                        has 1 qualifying single source 
                                        drug, 30 percent;
                                            ``(bb) in the case of a 
                                        small biotech manufacturer that 
                                        has 2 qualifying single source 
                                        drugs, 40 percent;
                                            ``(cc) in the case of a 
                                        small biotech manufacturer that 
                                        has 3 qualifying single source 
                                        drugs, 50 percent;
                                            ``(dd) in the case of a 
                                        small biotech manufacturer that 
                                        has 4 qualifying single source 
                                        drugs, 60 percent; and
                                            ``(ee) in the case of a 
                                        small biotech manufacturer that 
                                        has 5 qualifying single source 
                                        drugs, 70 percent.
                                    ``(II) Small biotech manufacturer 
                                defined.--The term `small biotech 
                                manufacturer' means a manufacturer that 
                                has 5 or less qualifying single source 
                                drugs.
                                    ``(III) Research and development-
                                intensive small biotech manufacturer 
                                defined.--The term `research and 
                                development-intensive small biotech 
                                manufacturer' means a small biotech 
                                manufacturer that invests at least the 
                                applicable percent of their net revenue 
                                from the average of the previous three 
                                years in research and development 
                                (determined based on generally accepted 
                                accounting principles).
                            ``(iii) Treatment in case of acquisition.--
                        A drug shall not be considered to be a 
                        qualifying single source drug of a research and 
                        development-intensive small biotech 
                        manufacturer if the manufacturer of such drug 
                        is acquired after 2029 by another manufacturer 
                        that does not meet the definition of a research 
                        and development-intensive small biotech 
                        manufacturer, effective at the beginning of the 
                        plan year immediately following such 
                        acquisition.
                            ``(iv) Annual application.--In order for a 
                        qualifying single source drug of a research and 
                        development-intensive small biotech 
                        manufacturer to be eligible for the exception 
                        under this subparagraph with respect to an 
                        initial price applicability year (beginning 
                        with initial price applicability year 2029), 
                        the manufacturer shall submit an application to 
                        the Secretary (at a time specified by the 
                        Secretary) containing--
                                    ``(I) information on the net 
                                product revenue and research and 
                                development expenditures of the 
                                manufacturer during the relevant time 
                                period;
                                    ``(II) a certification that the 
                                information submitted by the 
                                manufacturer under subclause (I) is 
                                accurate and complete to the best of 
                                the manufacturer's knowledge; and
                                    ``(III) such other information as 
                                the Secretary may specify.
                            ``(v) Dispute resolution.--The Secretary 
                        shall develop a process under which a 
                        manufacturer may appeal a determination by the 
                        Secretary that the manufacturer is not a 
                        research and development-intensive small 
                        biotech manufacturer. Such process shall 
                        conclude, with respect to a manufacturer, not 
                        later than the selected drug publication date 
                        with respect to the initial price applicability 
                        year for which the manufacturer submitted an 
                        application under clause (iv).''.
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