[House Report 116-572]
[From the U.S. Government Publishing Office]


116th Congress }                                          { Report
                        HOUSE OF REPRESENTATIVES
  2d Session   }                                          { 116-572

======================================================================
 
                FAIRNESS IN ORPHAN DRUG EXCLUSIVITY ACT

                                _______
                                

 November 16, 2020.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

 Mr. Pallone, from the Committee on Energy and Commerce, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 4712]

    The Committee on Energy and Commerce, to whom was referred 
the bill (H.R. 4712) to amend the Federal Food, Drug, and 
Cosmetic Act with respect to limitations on exclusive approval 
or licensure of orphan drugs, and for other purposes, having 
considered the same, reports favorably thereon with an 
amendment and recommends that the bill as amended do pass.

                                CONTENTS

                                                                   Page
  I. Purpose and Summary............................................. 2
 II.  Background and Need for the Legislation........................ 3
III. Committee Hearings.............................................. 5
 IV. Committee Consideration......................................... 6
  V.  Committee Votes................................................ 6
 VI.  Oversight Findings............................................. 6
VII.  New Budget Authority, Entitlement Authority, and Tax Expenditur 6
VIII. Federal Mandates Statement..................................... 7

 IX.  Statement of General Performance Goals and Objectives.......... 7
  X.  Duplication of Federal Programs................................ 7
 XI.  Committee Cost Estimate........................................ 7
XII.  Earmarks, Limited Tax Benefits, and Limited Tariff Benefits.... 7
XIII. Advisory Committee Statement................................... 7

XIV.  Applicability to Legislative Branch............................ 7
 XV.  Section-by-Section Analysis of the Legislation................. 7
XVI.  Changes in Existing Law Made by the Bill, as Reported.......... 8

    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Fairness in Orphan Drug Exclusivity 
Act''.

SEC. 2. LIMITATIONS ON EXCLUSIVE APPROVAL OR LICENSURE OF ORPHAN DRUGS.

  (a) In General.--Section 527 of the Federal Food, Drug, and Cosmetic 
Act (21 U.S.C. 360cc) is amended--
          (1) in subsection (a), by striking ``Except as provided in 
        subsection (b)'' and inserting ``Except as provided in 
        subsection (b) or (f)''; and
          (2) by adding at the end the following:
  ``(f) Limitations on Exclusive Approval, Certification, or License.--
          ``(1) In general.--For a drug designated under section 526 
        for a rare disease or condition pursuant to the criteria set 
        forth in subsection (a)(2)(B) of such section, the Secretary 
        shall not grant, recognize, or apply exclusive approval or 
        licensure under subsection (a), and, if such exclusive approval 
        or licensure has been granted, recognized, or applied, shall 
        revoke such exclusive approval or licensure, unless the sponsor 
        of the application for such drug demonstrates--
                  ``(A) with respect to an application approved or a 
                license issued after the date of enactment of this 
                subsection, upon such approval or issuance, that there 
                is no reasonable expectation at the time of such 
                approval or issuance that the cost of developing and 
                making available in the United States such drug for 
                such disease or condition will be recovered from sales 
                in the United States of such drug, taking into account 
                all sales made or reasonably expected to be made within 
                12 years of first marketing the drug; or
                  ``(B) with respect to an application approved or a 
                license issued on or prior to the date of enactment of 
                this subsection, not later than 60 days after such date 
                of enactment, that there was no reasonable expectation 
                at the time of such approval or issuance that the cost 
                of developing and making available in the United States 
                such drug for such disease or condition would be 
                recovered from sales in the United States of such drug, 
                taking into account all sales made or reasonably 
                expected to be made within 12 years of first marketing 
                the drug.
          ``(2) Considerations.--For purposes of subparagraphs (A) and 
        (B) of paragraph (1), the Secretary and the sponsor of the 
        application for the drug designated for a rare disease or 
        condition described in such paragraph shall consider sales from 
        all drugs that--
                  ``(A) are developed or marketed by the same sponsor 
                or manufacturer of the drug (or a licensor, predecessor 
                in interest, or other related entity to the sponsor or 
                manufacturer); and
                  ``(B) are covered by the same designation under 
                section 526.
          ``(3) Criteria.--No drug designated under section 526 for a 
        rare disease or condition pursuant to the criteria set forth in 
        subsection (a)(2)(B) of such section shall be eligible for 
        exclusive approval or licensure under this section unless it 
        met such criteria under such subsection on the date on which 
        the drug was approved or licensed.''.
  (b) Rule of Construction.--The amendments made in subsection (a) 
shall apply to any drug that has been or is hereafter designated under 
section 526 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
360bb) for a rare disease or condition pursuant to the criteria under 
subsection (a)(2)(B) of such section regardless of--
          (1) the date on which such drug is designated or becomes the 
        subject of a designation request under such section;
          (2) the date on which such drug is approved under section 505 
        of such Act (21 U.S.C. 355) or licensed under section 351 of 
        the Public Health Service Act (42 U.S.C. 262) or becomes the 
        subject of an application for such approval or licensure; and
          (3) the date on which such drug is granted exclusive approval 
        or licensure under section 527 of the Federal Food, Drug, and 
        Cosmetic Act (21 U.S.C. 360cc) or becomes the subject of a 
        request for such exclusive approval or licensure.

                         I. Purpose and Summary

    H.R. 4712, the ``Fairness in Orphan Drug Exclusivity Act'', 
was introduced by Representatives Madeleine Dean (D-PA), Earl 
L. ``Buddy'' Carter (R-GA), Marc A. Veasey (D-TX), and David B. 
McKinley (R-WV). H.R. 4712 updates the Orphan Drug Act to 
require drug manufacturers seeking exclusive approval or 
licensure for an orphan drug designated as such under section 
526(a)(2)(B) of the Federal Food, Drug, and Cosmetic Act 
(FFDCA) to demonstrate the absence of any reasonable 
expectation at the time of approval that the costs the 
manufacturer incurs in developing the drug will be recovered in 
the United States within twelve years of first marketing the 
drug. The bill also requires drug manufacturers with active 
orphan drug designations under section 526(a)(2)(B) of the 
FFDCA at the time of enactment to make the same demonstration 
no later than 60 days after enactment and would prohibit a drug 
from receiving orphan drug exclusivity unless it met the 
criteria for orphan drug designation on the date that the drug 
was approved or licensed.

                II. Background and Need for Legislation

    The Orphan Drug Act was enacted in 1983 to incentivize the 
development of drugs for rare diseases by providing 
manufacturers with seven years of exclusive marketing rights 
from date of approval, during which time the same drug produced 
by another manufacturer is barred from entering the market.\1\ 
The Orphan Drug Act provides two ways under which the sponsor 
of a drug application can receive an orphan drug designation: 
(1) by being approved to treat a disease or condition that 
affects 200,000 or fewer people, the most commonly used 
``prevalence'' pathway; or (2) if there is no reasonable 
expectation that the cost of developing a drug and making it 
available in the United States will be recovered by U.S. sales, 
the ``cost recovery'' pathway.\2\ A manufacturer may also 
receive additional drug exclusivity periods for subsequently 
approved drugs approved under the same orphan drug designation 
(i.e. drugs made by the same manufacturer using the same active 
moiety), regardless of whether the subsequent drugs meet the 
original requirements of the orphan drug designation. This 
provision in the law has allowed manufacturers to circumvent 
the original intent of the Orphan Drug Act and blocked 
competitors from the market despite evidence that the costs of 
developing the subsequent drug could be recouped.
---------------------------------------------------------------------------
    \1\Pub. L. No. 97-414.
    \2\21 U.S.C. Sec. 360bb.
---------------------------------------------------------------------------
    An illustrative example of this occurred in 2017, when 
Sublocade, a buprenorphine drug manufactured by Indivior to 
treat opioid use disorder, was approved under a 1994 orphan 
drug designation for Subutex, a similar drug manufactured by 
Reckitt Benckiser, the former parent company of Indivior.\3\ 
Subutex received its orphan drug designation using the cost 
recovery pathway because, while opioid use disorder affected 
more than 200,000 people, when the drug was designated as an 
orphan drug in 1994, it was expected that buprenorphine would 
only be prescribed in opioid treatment centers, limiting its 
reach and U.S. sales, ultimately preventing the manufacturer 
from recovering costs associated with developing the drug and 
making it available.\4\ Six years later, however, the Drug 
Addiction Treatment Act of 2000 (DATA 2000) allowed certain 
qualifying physicians to prescribe buprenorphine outside of 
opioid treatment programs, expanding access to the drug.\5\ 
From 2002 to 2011, buprenorphine treatments reached billions of 
dollars in sales, including $285 million for Subutex, clearly 
demonstrating that buprenorphine drugs could generate 
sufficient sales to recover costs.\6\ Subsequent legislation, 
including the Comprehensive Addiction Recovery Act of 2016 
(CARA) again expanded access to buprenorphine, further raising 
the potential for cost recovery and profitability.\7\ 
Nevertheless, in 2017, Sublocade, Indivior's follow-on 
buprenorphine product, was granted orphan drug exclusivity 
under Subutex's orphan drug designation.\8\ Raising concerns 
that Sublocade was not a bona fide orphan drug (i.e., it did 
not independently meet the requirements of either of the 
prevalence or cost recovery pathways, and the drug was intended 
to serve a large patient population of more than 2 million 
individuals for which no additional orphan drug incentive was 
necessary), and an orphan drug exclusivity period would limit 
competition, Braeburn Inc., a generic drug manufacturer and 
competitor to Indivior, filed a citizen petition with the Food 
and Drug Administration (FDA) in 2019, arguing that the agency 
should revoke the Sublocade's orphan drug designation.\9\ FDA 
subsequently agreed with portions of the petition and revoked 
the designation.\10\
---------------------------------------------------------------------------
    \3\Kao-Ping Chua and Rena M. Conti, Orphan Drugs for Opioid Use 
Disorder: An Abuse of the Orphan Drug Act, Health Affairs Blog, https:/
/www.healthaffairs.org/do/10.1377/hblog20190724.795814/full/ (July 26, 
2019).
    \4\Id.
    \5\Enacted as part of the Children's Health Act of 2000, Pub. L. 
No. 106-310.
    \6\Kao-Ping Chua and Rena M. Conti, Orphan Drugs for Opioid Use 
Disorder: An Abuse of the Orphan Drug Act, Health Affairs Blog, https:/
/www.healthaffairs.org/do/10.1377/hblog20190724.795814/full/ (July 26, 
2019).
    \7\Pub. L. No. 114-198; Pub. L. No. 115-271.
    \8\Kao-Ping Chua and Rena M. Conti, Orphan Drugs for Opioid Use 
Disorder: An Abuse of the Orphan Drug Act, Health Affairs Blog, https:/
/www.healthaffairs.org/do/10.1377/hblog20190724.795814/full/ (July 26, 
2019).
    \9\Citizen Petition Requesting FDA to Revoke Orphan Drug 
Designation for Sublocade (Buprenorphine Extended-Release) Injection 
for Treatment of Opiate Addiction in Opiate Users, Docket No. FDA-2019-
P-1697 (April 5, 2019).
    \10\Letter from Lowell Schiller, FDA Principal Deputy Commissioner 
for Policy, to Braeburn Inc. Re: Docket No. FDA-2019-P-1697 (Nov. 7, 
2019).
---------------------------------------------------------------------------
    H.R. 4712 will prevent a similar situation from happening 
again, allowing for greater competition in the pharmaceutical 
market and bringing down drug costs, while still preserving the 
incentives enacted through the Orphan Drug Act to encourage the 
development of treatments for rare diseases. To do this, the 
bill prohibits the Secretary of the Department of Health and 
Human Services (the Secretary) from granting orphan drug 
exclusivity to drugs seeking designation under the cost 
recovery pathway, unless the sponsor of the drug application 
demonstrates that there is no reasonable expectation at the 
time of approval or licensure that the cost of developing and 
making the drug available in the United States will be 
recovered from U.S. sales, taking into account all sales made 
or reasonably expected to be made within twelve years of first 
marketing the drug. Additionally, for drugs already approved or 
licensed, H.R. 4712 requires manufacturers to, no later than 60 
days after enactment, demonstrate that at the time of approval, 
it was not reasonable to expect that costs would be recovered. 
In the case that exclusive approval or licensure has already 
been granted, recognized, or applied at the time of enactment, 
H.R. 4712 would require the Secretary to revoke such 
exclusivity unless these demonstrations were made. In 
considering whether an orphan drug applicant has demonstrated 
the absence of any reasonable expectation at the time of 
approval that the costs incurred in developing the drug will be 
recovered, the Secretary would be required to consider the 
sales of all drugs that are developed or marketed by the same 
sponsor or manufacturer of the drug, and are covered by the 
same orphan drug designation. Furthermore, to prevent drugs 
from receiving unwarranted orphan drug exclusivity based on an 
earlier drug's orphan drug designation, H.R. 4712 prohibits a 
drug from receiving orphan drug exclusivity unless it meets the 
requirements for orphan drug designation on the day it was 
approved or licensed. A rule of construction in H.R. 4712 
applies these provisions to all drugs receiving an orphan drug 
designation under the cost recovery pathway regardless of: (1) 
the date on which it is designated or becomes the subject of a 
designation request under such section; (2) the date on which 
it is approved or licensed or the date on which the drug 
becomes the subject of an application for approval or 
licensure; and (3) the date on which the drug is granted 
exclusive approval or licensure, or becomes the subject of an 
application for approval or licensure.
    Although there are no drugs that currently have orphan drug 
exclusivity under the cost recovery pathway, H.R. 4712 is 
necessary to prevent unwarranted exclusivity from being granted 
in the future.

                        III. Committee Hearings

    For the purposes of section 103(i) of H. Res. 6 of the 
116th Congress, the following hearing was used to develop or 
consider H.R. 4712:
    The Subcommittee on Health held a legislative hearing on 
January 29, 2020, entitled, ``Improving Safety and Transparency 
in America's Food and Drugs.'' The hearing focused on H.R. 4712 
and related legislation. The Subcommittee received testimony 
from the following witnesses:

Panel I:

           Jeff Allen, Ph.D., President and CEO, 
        Friends of Cancer Research
           Richard Kaeser, Vice President, Global Brand 
        Protection, Johnson & Johnson
           Fernando Muzzio, Ph.D., Distinguished 
        Professor, Chemical and Biochemical Engineering, 
        Rutgers, the State University of New Jersey
           Kao-Ping Chua, M.D., Ph.D., Assistant 
        Professor, Department of Pediatrics, University of 
        Michigan Medical School

Panel II:

           Melanie Benesh, Legislative Attorney, 
        Environmental Working Group
           Tom Balmer, Executive Vice President, 
        National Milk Producers Federation
            J. David Carlin, Senior Vice President of 
        Legislative Affairs and Economic Policy, International 
        Dairy Foods Association
           Douglas Corey, D.V.M., Past President, 
        American Association of Equine Practitioners
           Talia Day, Patient Advocate
           Paul C. DeLeo, Ph.D., Principal, Integral 
        Consulting, Inc.
           Mardi Mountford, President, Infant Nutrition 
        Council of America
           Nancy Perry, Senior Vice President, 
        Government Relations, American Society for the 
        Prevention of Cruelty to Animals
           Sara Sorscher, Deputy Director of Regulatory 
        Affairs, Center for Science in the Public Interest

                      IV. Committee Consideration

    Representatives Dean, Carter (R-GA), Veasey, and McKinley 
introduced H.R. 4712 on September 26, 2019, and the bill was 
referred to the Committee on Energy and Commerce. Subsequently, 
H.R. 4712 was referred to the Subcommittee on Health on 
September 27, 2019. A legislative hearing was held on the bill 
on January 29, 2020.
    On March 11, 2020, the Subcommittee on Health met in open 
markup session, pursuant to notice, to consider H.R. 4712. 
During consideration of the bill, an amendment offered by Ms. 
Eshoo (D-CA) was agreed to by a voice vote. Subsequently, the 
Subcommittee on Health agreed to a motion offered by Ms. Eshoo, 
Chairwoman of the subcommittee, to forward favorably H.R. 4712, 
amended, to the full Committee on Energy and Commerce by a 
voice vote.
    On July 15, 2020, the full Committee met in virtual open 
markup session, pursuant to notice, to consider a committee 
print of the bill H.R. 4712, as amended by the Subcommittee on 
Health on March 11, 2020. During consideration of the bill, a 
manager's amendment offered by Mr. Veasey was agreed to by a 
voice vote. Upon conclusion of consideration of the bill, the 
full Committee agreed to a motion on final passage offered by 
Mr. Pallone, Chairman of the committee, to order H.R. 4712 
reported favorably to the House, amended, by a voice vote, a 
quorum being present.

                           V. Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list each record vote 
on the motion to report legislation and amendments thereto. The 
Committee advises that there were no record votes taken on H.R. 
4712, including the motion for final passage of the bill.

                         VI. Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII and clause 2(b)(1) 
of rule X of the Rules of the House of Representatives, the 
oversight findings and recommendations of the Committee are 
reflected in the descriptive portion of the report.

           VII. New Budget Authority, Entitlement Authority, 
                          and Tax Expenditures

    Pursuant to 3(c)(2) of rule XIII of the Rules of the House 
of Representatives, the Committee adopts as its own the 
estimate of new budget authority, entitlement authority, or tax 
expenditures or revenues contained in the cost estimate 
prepared by the Director of the Congressional Budget Office 
pursuant to section 402 of the Congressional Budget Act of 
1974.
    The Committee has requested but not received from the 
Director of the Congressional Budget Office a statement as to 
whether this bill contains any new budget authority, spending 
authority, credit authority, or an increase or decrease in 
revenues or tax expenditures.

                    VIII. Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

       IX. Statement of General Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XIII, the general 
performance goal or objective of this legislation is to amend 
the Federal Food, Drug, and Cosmetic Act with respect to 
limitations on exclusive approval or licensure of orphan drugs.

                   X. Duplication of Federal Programs

    Pursuant to clause 3(c)(5) of rule XIII, no provision of 
H.R. 4712 is known to be duplicative of another Federal 
program, including any program that was included in a report to 
Congress pursuant to section 21 of Public Law 111-139 or the 
most recent Catalog of Federal Domestic Assistance.

                      XI. Committee Cost Estimate

    Pursuant to clause 3(d)(1) of rule XIII, the Committee 
adopts as its own the cost estimate prepared by the Director of 
the Congressional Budget Office pursuant to section 402 of the 
Congressional Budget Act of 1974.

           XII. Earmarks, Limited Tax Benefits, and Limited 
                            Tariff Benefits

    Pursuant to clause 9(e), 9(f), and 9(g) of rule XXI, the 
Committee finds that H.R. 4712 contains no earmarks, limited 
tax benefits, or limited tariff benefits.

                   XIII. Advisory Committee Statement

    No advisory committee within the meaning of section 5(b) of 
the Federal Advisory Committee Act was created by this 
legislation.

                XIV. Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

           XV. Section-by-Section Analysis of the Legislation


Section 1. Short title

    Section 1 designates that the short title may be cited as 
the ``Fairness in Orphan Drug Exclusivity Act''.
    Sec. 2. Limitations on exclusive approval or licensure of 
orphan drugs
    Section 2(a) states that under section 527 of the FFDCA the 
Secretary may not grant, recognize, or apply orphan drug 
exclusivity unless the sponsor of the drug application 
demonstrates that there is no reasonable expectation at the 
time of approval that the manufacturer would recover costs 
incurred in developing or making the drug available in the 
United States through sales within the United States within the 
first twelve years of marketing the drug. In the case of a drug 
for which exclusivity has been granted, recognized, or applied 
prior to enactment, this section requires that the Secretary 
revoke such exclusivity unless the manufacturer can make the 
same demonstration within 60 days of enactment. When making 
determinations regarding the sales of drugs and the ability to 
recover costs, the Secretary would be required under section 2 
to consider all drugs that are developed by the same sponsor or 
manufacturer of the drug (or a licensor, predecessor in 
interest, or other related entity to the sponsor or 
manufacturer) that are covered under the same orphan drug 
designation under section 526 of the FFDCA.
    Section 2(a) also states that no drug receiving orphan drug 
designation under section 526(a)(2)(B) (the ``cost recovery'' 
pathway) of the FFDCA shall be eligible for orphan drug 
exclusivity unless it met the criteria of section 526(a)(2)(B) 
on the date it was approved or licensed.
    Finally, section 2(b) includes a rule of construction 
applying the provisions of section 2(a) to any drug that has 
been or will in the future be designated under section 
526(a)(2)(B) of the FFDCA, regardless of--(1) the date on which 
a drug is designated or becomes the subject of a designation 
request under section 526; (2) the date on which a drug is 
approved under section 505 of the FFDCA, licensed under section 
351 of the Public Health Service Act or becomes the subject of 
an application for such approval or licensure; and (3) the date 
on which a drug is granted exclusive approval or licensure 
under section 527 of the FFDCA or becomes the subject of a 
request for such exclusive approval or licensure.

       XVI. Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italics, and existing law in which no 
change is proposed is shown in roman):

                  FEDERAL FOOD, DRUG, AND COSMETIC ACT




           *       *       *       *       *       *       *
CHAPTER V--DRUGS AND DEVICES

           *       *       *       *       *       *       *



Subchapter B--Drugs for Rare Diseases or Conditions

           *       *       *       *       *       *       *



          protection for drugs for rare diseases or conditions

  Sec. 527. (a) [Except as provided in subsection (b)] Except 
as provided in subsection (b) or (f), if the Secretary--
          (1) approves an application filed pursuant to section 
        505, or
          (2) issues a license under section 351 of the Public 
        Health Service Act
for a drug designated under section 526 for a rare disease or 
condition, the Secretary may not approve another application 
under section 505 or issue another license under section 351 of 
the Public Health Service Act for the same drug for the same 
disease or condition for a person who is not the holder of such 
approved application or of such license until the expiration of 
seven years from the date of the approval of the approved 
application or the issuance of the license. Section 505(c)(2) 
does not apply to the refusal to approve an application under 
the preceding sentence.
  (b) During the 7-year period described in subsection (a) for 
an approved application under section 505 or license under 
section 351 of the Public Health Service Act, the Secretary may 
approve an application or issue a license for a drug that is 
otherwise the same, as determined by the Secretary, as the 
already approved drug for the same rare disease or condition 
if--
          (1) the Secretary finds, after providing the holder 
        of exclusive approval or licensure notice and 
        opportunity for the submission of views, that during 
        such period the holder of the exclusive approval or 
        licensure cannot ensure the availability of sufficient 
        quantities of the drug to meet the needs of persons 
        with the disease or condition for which the drug was 
        designated; or
          (2) the holder provides the Secretary in writing the 
        consent of such holder for the approval of other 
        applications or the issuance of other licenses before 
        the expiration of such seven-year period.
  (c) Condition of Clinical Superiority.--
          (1) In general.--If a sponsor of a drug that is 
        designated under section 526 and is otherwise the same, 
        as determined by the Secretary, as an already approved 
        or licensed drug is seeking exclusive approval or 
        exclusive licensure described in subsection (a) for the 
        same rare disease or condition as the already approved 
        drug, the Secretary shall require such sponsor, as a 
        condition of such exclusive approval or licensure, to 
        demonstrate that such drug is clinically superior to 
        any already approved or licensed drug that is the same 
        drug.
          (2) Definition.--For purposes of paragraph (1), the 
        term ``clinically superior'' with respect to a drug 
        means that the drug provides a significant therapeutic 
        advantage over and above an already approved or 
        licensed drug in terms of greater efficacy, greater 
        safety, or by providing a major contribution to patient 
        care.
  (d) Regulations.--The Secretary may promulgate regulations 
for the implementation of subsection (c). Beginning on the date 
of enactment of the FDA Reauthorization Act of 2017, until such 
time as the Secretary promulgates regulations in accordance 
with this subsection, the Secretary may apply any definitions 
set forth in regulations that were promulgated prior to such 
date of enactment, to the extent such definitions are not 
inconsistent with the terms of this section, as amended by such 
Act.
  (e) Demonstration of Clinical Superiority Standard.--To 
assist sponsors in demonstrating clinical superiority as 
described in subsection (c), the Secretary--
          (1) upon the designation of any drug under section 
        526, shall notify the sponsor of such drug in writing 
        of the basis for the designation, including, as 
        applicable, any plausible hypothesis offered by the 
        sponsor and relied upon by the Secretary that the drug 
        is clinically superior to a previously approved drug; 
        and
          (2) upon granting exclusive approval or licensure 
        under subsection (a) on the basis of a demonstration of 
        clinical superiority as described in subsection (c), 
        shall publish a summary of the clinical superiority 
        findings.
  (f) Limitations on Exclusive Approval, Certification, or 
License.--
          (1) In general.--For a drug designated under section 
        526 for a rare disease or condition pursuant to the 
        criteria set forth in subsection (a)(2)(B) of such 
        section, the Secretary shall not grant, recognize, or 
        apply exclusive approval or licensure under subsection 
        (a), and, if such exclusive approval or licensure has 
        been granted, recognized, or applied, shall revoke such 
        exclusive approval or licensure, unless the sponsor of 
        the application for such drug demonstrates--
                  (A) with respect to an application approved 
                or a license issued after the date of enactment 
                of this subsection, upon such approval or 
                issuance, that there is no reasonable 
                expectation at the time of such approval or 
                issuance that the cost of developing and making 
                available in the United States such drug for 
                such disease or condition will be recovered 
                from sales in the United States of such drug, 
                taking into account all sales made or 
                reasonably expected to be made within 12 years 
                of first marketing the drug; or
                  (B) with respect to an application approved 
                or a license issued on or prior to the date of 
                enactment of this subsection, not later than 60 
                days after such date of enactment, that there 
                was no reasonable expectation at the time of 
                such approval or issuance that the cost of 
                developing and making available in the United 
                States such drug for such disease or condition 
                would be recovered from sales in the United 
                States of such drug, taking into account all 
                sales made or reasonably expected to be made 
                within 12 years of first marketing the drug.
          (2) Considerations.--For purposes of subparagraphs 
        (A) and (B) of paragraph (1), the Secretary and the 
        sponsor of the application for the drug designated for 
        a rare disease or condition described in such paragraph 
        shall consider sales from all drugs that--
                  (A) are developed or marketed by the same 
                sponsor or manufacturer of the drug (or a 
                licensor, predecessor in interest, or other 
                related entity to the sponsor or manufacturer); 
                and
                  (B) are covered by the same designation under 
                section 526.
          (3) Criteria.--No drug designated under section 526 
        for a rare disease or condition pursuant to the 
        criteria set forth in subsection (a)(2)(B) of such 
        section shall be eligible for exclusive approval or 
        licensure under this section unless it met such 
        criteria under such subsection on the date on which the 
        drug was approved or licensed.

           *       *       *       *       *       *       *


                                  [all]