,,ii #aacth ,,congress #ast ,session ,s4 #fbf ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,march #bj1 #bjac ,mr4 ,sanders introduced the following bill2 which was read twice and referred to the ,committee on ,health1 ,education1 ,labor1 and ,pensions ,a ,,bill ,to de-link research and development incentives from drug prices for new medicines to treat ,,hiv_/,,aids and to stimulate greater sharing of scientific knowledge4 #a4 ,short title ,this ,act may be cited as the ,prize ,fund for ,,hiv_/,,aids ,act4 #b4 ,findings ,congress makes the following findings3 7#a7 ,the ,centers for ,disease ,control and ,prevention estimates that more than #a1ajj1jjj people are living with ,,hiv in the ,united ,states1 and that #a in #e of those people living with ,,hiv is unaware of their infection4 7#b7 ,an estimated #di1jjj ,americans become infected with ,,hiv each year4 7#c7 ,more than #ae1jjj people with ,,aids still die each year in the ,united ,states4 7#d7 ,through #bjaj1 more than #fcf1jjj people with ,,aids in the ,united ,states have died since the epidemic began4 7#e7 ,globally1 ,,unaids estimates that more than #cd1jjj1jjj persons are living with ,,hiv4 7#f7 ,persons with ,,hiv_/,,aids require access to antiretroviral drugs4 7#g7 ,in the ,united ,states1 public and private sector expenditures on antiretroviral drugs currently exceed #i1jjj1jjj1jjj per year4 7#h7 ,the ,united ,states ,federal ,government is the largest funder of treatments for ,,hiv_/,,aids in the developing world4 7#i7 ,the development of new medicines and vaccines for ,,hiv_/,,aids is a national priority4 7#aj7 ,market exclusivity for new products is an expensive1 inefficient1 and unfair mechanism to reward investments in new products1 and has created hardships for persons with ,,hiv_/,,aids and businesses that employ persons with ,,hiv_/,,aids4 7#aa7 ,by de-linking research and development incentives from product prices1 and by eliminating legal monopolies to sell new medicines for the treatment of ,,hiv_/,,aids1 it is possible to induce investments that are medically more important1 procure products at low prices from competitive suppliers1 and introduce more efficient incentives for research and development4 #c4 ,purpose ,it is the purpose of this ,act to provide sustainable financing of incentives to encourage investments in research and development of new medicines for ,,hiv_/,,aids and to share knowledge1 data1 materials1 and technology1 through the establishment of a ,prize ,fund for ,,hiv_/,,aids1 while enhancing access to such medicines by eliminating legal monopolies on the manufacture1 distribution1 and sale of such medicines4 #d4 ,definitions ,in this ,act3 7#a7 ,biological product ,the term biological product has the meaning given such term in section #cea of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bfb74 7#b7 ,drug ,the term drug has the meaning given such term in section #bja of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cba74 7#c7 ,dual use product ,the term dual use product means a product that is a qualifying treatment for ,,hiv_/,,aids and that has a significant use for other diseases4 7#d7 ,fund ,the term ,fund means the ,prize ,fund for ,,hiv_/,,aids established under section #g4 7#e7 ,market clearance ,the term market clearance means the approval of an application under section #eje of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cee7 or the approval of a biologics license application under subsection 7a7 of section #cea of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bfb74 7#f7 ,qualifying treatment for ,,hiv_/,,aids ,the term qualifying treatment for ,,hiv_/,,aids means an antiretrovial drug1 biological product1 vaccine1 or other treatment primarily used for ,,hiv_/,,aids that has been certified as a qualifying product by the ,secretary of ,health and ,human ,services1 for purposes of the ,prize ,fund for ,,hiv_/,,aids4 #e4 ,elimination of exclusive rights to market drugs and biological products 7a7 ,in general ,notwithstanding title #ce1 ,united ,states ,code1 relevant provisions of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cja et seq47 7including amendments made by the ,drug ,price ,competition and ,patent ,term ,restoration ,act of #aihd 7,public ,law #ih-dag2 commonly referred to as the ,hatch-,waxman ,act771 the ,medicare ,prescription ,drug1 ,improvement1 and ,modernization ,act of #bjjc 7,public ,law #ajh-agc71 and any other provision of law providing any patent right or exclusive marketing period for any qualifying treatment for ,,hiv_/,,aids or manufacturing process for a qualifying treatment for ,,hiv_/,,aids 7such as pediatric extensions under section #eje;,a of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cee;a7 or orphan drug marketing exclusivity under subchapter ,b of chapter ,v of such ,act 7#ba ,u4,s4,c4 #cfj;aa et seq4771 no person shall have the right to exclusively manufacture1 distribute1 sell1 or use a qualifying treatment for ,,hiv_/,,aids or a manufacturing process for a qualifying treatment for ,,hiv_/,,aids in interstate commerce1 including the exclusive right to rely on health registration data or the #cj-month stay-of-effectiveness period for ,orange ,book patents under section #eje7;j7 of such ,act 7#ba ,u4,s4,c4 #cee7;j774 7b7 ,remuneration ,a person that is eligible for prize payments from the ,prize ,fund for ,,hiv_/,,aids shall receive such payments-- 7#a7 in lieu of any remuneration the person would have otherwise received for the exclusive marketing1 distribution1 sale1 or use of a qualifying treatment for ,,hiv_/,,aids or manufacturing process for a qualifying treatment for ,,hiv_/,,aids but for the application of subsection 7a72 and 7#b7 in addition to any other remuneration that such person receives by reason of the nonexclusive marketing1 distribution1 sale1 or use of the qualifying treatment for ,,hiv_/,,aids or manufacturing process for a qualifying treatment for ,,hiv_/,,aids4 7c7 ,application ,this section shall apply only with respect to the marketing1 distribution1 sale1 or use of a qualifying treatment for ,,hiv_/,,aids or a manufacturing process for a qualifying treatment for ,,hiv_/,,aids that occurs on or after ,october #a1 #bjad4 7d7 ,dual use products ,in the case of a dual use product1 the elimination of exclusive rights under subsection 7a7 shall apply only with respect to the manufacture1 distribution1 marketing1 sale1 or use of the product for the treatment of ,,hiv_/,,aids4 #f4 ,qualifying treatments for ,,hiv_/,,aids ,prize payments from the ,fund under section #h shall be limited to qualifying treatments for ,,hiv_/,,aids1 as defined in section #d4 #g4 ,prize fund for ,,hiv_/,,aids 7a7 ,establishment ,there is hereby established in the ,treasury of the ,united ,states a revolving fund to be known as the ,prize ,fund for ,,hiv_/,,aids1 which shall consist of amounts appropriated to the ,fund and amounts credited to the ,fund under subsection 7d74 7b7 ,prize fund administration ,the ,secretary of ,health and ,human ,services shall designate a ,prize ,fund ,director and other officials as needed to administer the ,fund4 7c7 ,advisory board ,the ,secretary of ,health and ,human ,services shall appoint an advisory board for the ,fund4 7d7 ,amounts credited to the ,fund ,the ,secretary of the ,treasury shall credit to the ,fund the interest on1 and the proceeds from sale or redemption of1 obligations held in the ,fund4 #h4 ,prize payments for medical innovation 7a7 ,award ,for fiscal year #bjae1 and each subsequent fiscal year1 the ,prize ,fund ,director shall award to persons described in subsection 7b7 prize payments for medical innovation relating to a qualifying treatment for ,,hiv_/,,aids1 or a new manufacturing process for such a qualifying treatment for ,,hiv_/,,aids4 7b7 ,eligibility ,to be eligible to receive a prize payment under subsection 7a7 a person shall be-- 7#a7 in the case of a qualifying treatment for ,,hiv_/,,aids that is a drug or biological product1 the first person to receive market clearance with respect to the drug or biological product2 7#b7 in the case of a manufacturing process for a qualifying treatment for ,,hiv_/,,aids1 the holder of the patent with respect to such process2 or 7#c7 in the case of open source contributions with respect to a qualifying treatment for ,,hiv_/,,aids1 the persons or communities that openly shared knowledge1 data1 materials1 and technology on a royalty-free and nondiscriminatory basis4 7c7 ,criteria ,the ,prize ,fund ,director shall1 by regulation1 establish criteria for the selection of recipients1 and for determining the amount1 of prize payments under this section4 ,such criteria shall include consideration of the following3 7#a7 ,the number of patients who benefit from the qualifying treatment for ,,hiv_/,,aids or manufacturing process involved4 7#b7 ,the incremental therapeutic benefit of the qualifying treatment for ,,hiv_/,,aids or manufacturing process involved as compared to existing drugs1 biological products1 and manufacturing processes available to treat the same disease or condition1 except that the ,prize ,fund ,director shall provide for cases where drugs1 biological products1 or manufacturing processes are developed at roughly the same time1 so that the comparison is to products that were not recently developed4 7#c7 ,improved efficiency of manufacturing processes for drugs or biological processes4 7#d7 ,the extent to which knowledge1 data1 materials1 and technology that are openly shared have contributed to the successful development of new products or improved processes for manufacturing products4 7d7 ,requirements ,in awarding prize payments under this section1 the ,prize ,fund ,director shall comply with the following3 7#a7 ,in cases where a new qualifying treatment for ,,hiv_/,,aids or manufacturing process for a qualifying treatment of ,,hiv_/,,aids offers an improvement over an existing qualifying treatment for ,,hiv_/,,aids or manufacturing process for a qualifying treatment and such new qualifying treatment or manufacturing process competes with or replaces the existing qualifying treatment or manufacturing process1 the ,prize ,fund ,director shall continue to make prize payments for the existing qualifying treatment or manufacturing process to the degree that the new qualifying treatment or manufacturing process was based on or benefitted from the development of the existing qualifying treatment or manufacturing process4 7#b7 ,the ,prize ,fund ,director may award prize payments for a qualifying treatment for ,,hiv_/,,aids or a manufacturing process for a qualifying treatment for ,,hiv_/,,aids for not more than #aj fiscal years1 regardless of the term of any related patents4 7#c7 ,for any fiscal year1 the ,prize ,fund ,director may not award a prize payment for any single qualifying treatment for ,,hiv_/,,aids or manufacturing process for a qualifying treatment in an amount that exceeds #ej percent of the total amount appropriated to the ,fund for that year4 7#d7 ,for every qualifying treatment for ,,hiv_/,,aids that receives market clearance1 the ,prize ,fund ,director shall determine whether and in what amount to award a prize payment for the qualifying treatment for ,,hiv_/,,aids not later than the end of the fourth full calendar-year quarter following the calendar-year quarter in which the qualifying treatment for ,,hiv_/,,aids receives market clearance4 #i4 ,open source dividend prizes 7a7 ,in general ,in order to induce greater access and the open sharing of knowledge1 data1 materials1 and technology1 at least #e percent of the prize payments from the ,fund shall be dedicated to ,open ,source ,dividend ,prizes4 7b7 ,procedures 7#a7 ,in general ,the ,prize ,fund ,director shall adopt procedures for the allocation of ,open ,source ,dividend ,prizes4 ,such procedures shall-- 7,a7 be fully transparent regarding the process for evaluating the value of open sharing of knowledge1 data1 materials1 and technology2 7,b7 reward the open1 nondiscriminatory1 and royalty-free sharing of knowledge1 data1 materials1 and technology that has contributed to the development of the new qualifying treatment for ,,hiv_/,,aids or manufacturing processes that are rewarded under section #g2 7,c7 in the case of rewards for contributing to the development of new qualifying treatment for ,,hiv_/,,aids or manufacturing processes rewarded under section #g1 provide for a time-limited period of nominations for persons or communities whose contributions were considered useful1 including the evidence to support such nominations to describe the significance of the contribution2 and 7,d7 provide for rules and procedures to protect against conflicts of interest4 7#b7 ,public availability of nominations ,the nominations described in paragraph 7#a77;,c71 and the evidence supporting such nominations1 shall be public4 ,the public shall be allowed to provide commentary and additional evidence on such nominations before awards are made4 #aj4 ,competitive intermediaries for funding interim technologies 7a7 ,in general ,the ,prize ,fund ,director may authorize multiple nonprofit intermediaries to manage ,fund payments to reward projects for interim research and development of new qualifying treatments for ,,hiv_/,,aids1 or for open source dividend prizes4 ,such intermediaries shall compete for funding from non-,federal entities that co-fund the ,fund4 7b7 ,availability ,prizes awarded by competitive intermediaries shall be available to persons or communities that provide open1 nondiscriminatory1 and royalty-free licenses to relevant intellectual property rights4 7c7 ,rules ,the ,prize ,fund ,director shall adopt rules to ensure the transparency and accountability of any entities authorized to act as competitive intermediaries under subsection 7a74 7d7 ,allocation ,the ,secretary of ,health and ,human ,services shall determine how much of the ,fund shall be managed by competitive intermediaries to reward projects for interim research and development of new qualifying treatments for ,,hiv_/,,aids or for open source dividend prizes4 #aa4 ,special transition rules 7a7 ,in general ,a qualifying treatment for ,,hiv_/,,aids that is on the market on ,october #a1 #bjad1 shall remain eligible for prize payments for not more than #aj fiscal years1 consistent with section #h7;d77#c74 7b7 ,determination of value ,in determining the amount of a prize payment for a qualifying treatment for ,,hiv_/,,aids described in subsection 7a71 the ,prize ,fund ,director shall calculate the incremental value of the qualifying treatment for ,,hiv_/,,aids as of the date on which the qualifying treatment for ,,hiv_/,,aids was first introduced in the market4 7c7 ,maximum amount ,with respect to qualifying treatment for ,,hiv_/,,aids described in subsection 7a71 the ,prize ,fund ,director may award-- 7#a7 of the amount appropriated to the ,fund for fiscal year #bjae1 not more than #ij percent of such amount2 and 7#b7 of the amount appropriated to the ,fund for each of the succeeding #i fiscal years1 not more than a percentage of such amount that is equal to #i percent less the percentage applicable to the preceding fiscal year under this subsection4 #ab4 ,arbitration ,in the case of a qualifying treatment for ,,hiv_/,,aids that is on the market on ,october #a1 #bjad1 and subject to patents owned by a party other than the person who first received market clearance for the qualifying treatment for ,,hiv_/,,aids1 the ,prize ,fund ,director shall establish an arbitration procedure to determine an equitable division of any prize payments under this ,act among the patent owners and the person who first received market clearance for the qualifying treatment for ,,hiv_/,,aids4 #ac4 ,funding 7a7 ,appropriations 7#a7 ,start-up costs ,for fiscal year #bjae1 there are authorized to be appropriated to the ,fund1 such sums as may be necessary to carry out this ,act4 7#b7 ,program implementation ,for fiscal year #bjae and each subsequent fiscal year1 there is authorized to be appropriated to the ,fund1 and there is appropriated1 out of any funds in the ,treasury not otherwise appropriated1 an amount equal to #j4jb percent of the gross domestic product of the ,united ,states for the preceding fiscal year 7as such amount is determined by the ,secretary of ,commerce74 7#c7 ,availability ,funds appropriated to the ,fund for a fiscal year shall remain available for expenditure in accordance with this ,act until the end of the #c-year period beginning on ,october #a of such fiscal year4 ,any such funds that are unexpended at the end of such period shall revert to the ,treasury4 7b7 ,imposition of annual fee on health insurance providers 7#a7 ,in general ,each covered entity engaged in the business of providing health insurance shall pay to the ,secretary1 not later than the annual payment date of each calendar year beginning after #bjad1 a fee in an amount determined under paragraph 7#c74 7#b7 ,annual payment date ,for purposes of this section1 the term annual payment date means1 with respect to any calendar year1 a date determined by the ,secretary1 which in no event1 may be later than ,september #cj of such calendar year4 7#c7 ,determination of fee amount 7,a7 ,in general ,the total of all fees paid by all covered entities for any given year shall be the amount described in subsection 7a77#b7 multiplied by the ratio of the number of persons receiving treatments for ,,hiv_/,,aids that are insured in the private sector to the number of persons receiving treatments for ,,hiv_/,,aids who received insurance or reimbursements or care from the public sector4 7,b7 ,individual contributions ,with respect to each covered entity1 the fee under this section for any calendar year shall be equal to the ratio of the covered entity's net premiums written with respect to health insurance for any ,united ,states health risk taken into account under subsection 7c7 during the preceding calendar year1 to the sum of such net premiums for all covered entities1 multiplied by the amount under subparagraph 7,a74 7c7 ,amounts taken into account ,for purposes of subsection 7b77#c71 the net premiums written with respect to health insurance for any ,united ,states health risk that are taken into account during any calendar year with respect to any covered entity shall be determined as follows3 7#a7 ,with respect to a covered entity's net premiums written during the calendar year that are not more than #be1jjj1jjj1 the percentage of net premiums written that are taken into account is #j percent4 7#b7 ,with respect to a covered entity's net premiums written during the calendar year that are more than #be1jjj1jjj but less than #ej1jjj1jjj1 the percentage of net premiums written that are taken into account is #ej percent4 7#c7 ,with respect to a covered entity's net premiums written during the calendar year that are #ej1jjj1jjj or more1 the percentage of net premiums written that are taken into account is #ajj percent4 7d7 ,covered entity 7#a7 ,in general ,for purposes of this section1 the term covered entity means any entity which provides health insurance for any ,united ,states health risk4 7#b7 ,exclusion ,such term does not include any governmental entity4 #ad4 ,donor ,innovation ,prize ,fund 7a7 ,in general ,in order to further separate product prices from research and development incentives and to facilitate the supply of low-cost generic drugs for the treatment of ,,hiv_/,,aids in developing countries1 there is established in the ,treasury of the ,united ,states a ,donor ,innovation ,prize ,fund4 7b7 ,amount in ,fund ,the amount in the ,donor ,innovation ,prize ,fund shall consist of-- 7#a7 an amount set aside by the ,secretary of ,health and ,human ,services that is equal to #aj percent of the amount of money estimated by such ,secretary as the cost of qualifying treatments for ,,hiv_/,,aids used by programs supported by the ,president's ,emergency ,plan for ,,aids ,relief 7commonly referred to as ,,pepfar7 or other federally supported programs to fund the treatment of ,,hiv_/,,aids in developing countries2 and 7#b7 other amounts donated to the ,fund as described in subsection 7d74 7c7 ,use of funds ,the ,secretary of ,health and ,human ,services 7referred to in this section as the ,secretary7 shall use the funds from the ,donor ,innovation ,prize ,fund to reward the owners and developers of products that permit open competition for products in developing countries1 either by not patenting products1 providing nondiscriminatory royalty-free open licenses to all patents and other intellectual property claims on at least a field of use for the treatment of ,,hiv_/,,aids in developing countries1 or through licenses to the ,medicine ,patent ,pool4 7d7 ,encouragement by ,secretary ,the ,secretary shall encourage other donors and developing country governments to contribute a similar fraction of drug purchase budgets to the ,donor ,innovation ,prize ,fund1 in order to facilitate greater competition for generic drugs1 while providing a sustainable source of rewards for innovation4 7e7 ,prizes ,the ,secretary shall establish and award prize payments from the ,donor ,innovation ,prize ,fund by applying similar eligibility rules1 selection criteria1 and requirements as are applied with respect to prize payments awarded from the ,prize ,fund for ,,hiv_/,,aids under section #h4 7f7 ,transparency ,the ,secretary shall adopt procedures to ensure that the operation of the ,donor ,innovation ,prize ,fund is transparent and supported by a description of the methods1 data sources1 assumptions1 outcomes1 and related information that will allow the public to understand how the ,secretary reaches its criteria-setting and award decisions4