,i  #aad? ,,congress  #a/ ,session  ,h4 
,r4 #cgca  ,,9 ,,! ,,h\se ,,(           
,,repres5tatives  ,octob] #i1 #bjae ,mr4
 ,v>gas 7= himself & ,mr4 ,rooney (     
,florida7 introduc$ ! foll[+ bill2 :i* 0
 ref]r$ to ! ,committee on ,en]gy &     
,comm]ce  ,a ,,bill  ,to e/abli% a ,r>e 
,disease ,!rapeutics ,corporation to    
enc\rage ! developm5t ( high-risk1      
high-return !rapies = r>e diseases1 & = 
o!r purposes4  #a4 ,%ort title ,?is ,act
 may be cit$ z ! ,r>e ,disease ,fund    
,act or ! ,ra,d ,fund ,act 4  #b4 ,f9d+s
 ,! ,congress f9ds ! foll[+3  7#a7 ,t   
biom$ic9e is f> m advanc$ today ?an ev5 
a decade ago is indisputable1 b         
break?r\ghs require ye>s ( translational
 rese>* at a co/ ( hundr$s ( millions ( 
doll>s p] trial & h a sub/antial        
likelihood ( failure4  7#b7 ,! drug     
developm5t pipel9e is lad5 ) unfavorable
 probabilities4 ,on av]age1 = e         
#e1jjj-aj1jjj comp\nds t ent] ! drug    
discov]y pipel9e1 j #bej progress to    
precl9ical developm5t--& only "o w      

become an approv$ drug4  7#c7 ,biote* & 
life sci5ces traditional f9anc+ vehicles
 ( private & public equity are becom+   
less effective fund+ s\rces because !   
ne$s & expectations ( limit$ p>tn]s &   
%>ehold]s are n consi/5t ) ! increas+   
complexity1 risk1 & duration ( biom$ical
 innovation4  7#d7 ,indu/ry pr(essionals
 frequ5tly ref] to ! ,valley ( ,dea?--a 
/eadily wid5+ fund+ & res\rce gap t     
curr5tly exi/s betwe5 basic rese>* &    
cl9ical developm5t1 effectively limit+ !
 field ( pot5tial novel !rapies1        
te*nologies1 & treatm5ts = pati5ts4     
7#e7 ,! life sci5ces indu/ry ne$s novel 
approa*es to e>ly-/age drug developm5t t
 bett] manage risk1 l[] capital co/1    
improve rese>* effectiv5ess1 create     
div]se portfolios1 lev]age risk-tol]ant 
capital1 & access new capital s\rces4   
7#f7 ,"o solution is to implem5t a      
f9ancial /ructure 9 :i* a l>ge numb] (  
biom$ical programs are fund$ by a s+le  
entity to sub/antially div]sify !       
portfolio & !reby r$uce risk4 ,! entity 

c use securitization to f9ance its      
activities by issu+ debt1 :i* op5s up a 
mu* l>g] pool ( capital = inve/m5t4     
7#g7 ,?is approa* involves two          
compon5ts3 7,a7 ,creat+ l>ge div]sifi$  
portfolios1 call$ megafunds1 consi/+ (  
biom$ical products at all /ages (       
developm5t2 &  7,b7 ,/ructur+ ! f9anc+ =
 ^! portfolios z comb9ations ( equity & 
securitiz$ debt4  ,div]sification r$uces
 risk1 s t an entity c issue debt &     
equity1 r ?an ! equity-only inve/m5ts   
typically made by v5ture capital4  7#h7 
,a simulation conduct$ by rese>*]s at   
,,mit sugge/$ t a mode/ megafund model  
c\ld be successfully implem5t$ = r>e    
diseases 7e4g41 r>e g5etic disord]s1    
p$iatric canc]s1 & orphan diseases7 ) z 
few z t5 comp\nds & only #djj million 9 
capital4  7#i7 ,a r>e disease !rapeutics
 fund c\ld s]ve z a viable pilot        
project1 :ile m9imiz+ gov]nm5tal        
exposure4  7#aj7 ,9 addition to appeal+ 
to traditional biote* ,,vc inve/ors1    
megafund inve/m5ts may be attractive to 

p5sion funds1 insurance companies1 & o!r
 l>ge in/itutional inve/ors4  7#aa7 ,!  
,food & ,drug ,adm9i/ration 7,,fda7 may 
grant ! orphan designation = !rapies be+
 /udi$ = a r>e disease or condition     
affect+ few] ?an #bjj1jjj p 9 ! ,unit$  
,/ates1 :i* r$uces co/s & provides      
f9ancial inc5tives to enc\rage          
developm5t ( su* !rapies4  #c4 ,r>e     
,disease ,!rapeutics ,corporation  7a7  
,e/abli%m5t ,! ,director ( ! ,national  
,in/itutes ( ,heal? %all organize "u !  
laws ( a ,/ate a corporation to be "k z 
! ,r>e ,disease ,!rapeutics ,corporation
 7h]e9aft] 9 ?is ,act ref]r$ to z !     
,corporation74  7b7 ,purpose ,! purpose 
( ! ,corporation %all be to pur*ase     
rights to1 fund ! developm5t (1 &1 once 
develop$1 sell own]%ip int]e/s 9 r>e    
disease !rapeutics4  7c7 ,privatization 
( ! ,corporation  7#a7 ,9 g5]al ,z soon 
z practicable aft] ! e/abli%m5t ( !     
,corporation1 ! ,director %all sell     
equity /ock 9 ! ,corporation to         
inve/ors4  7#b7 ,gov]nm5t /ake  7,a7 ,9 

g5]al ,not)/&+ p>agraph 7#a71 ! bo>d (  
directors ( ! ,corporation & ! ,director
 may ent] into an agreem5t "u :i* !     
,national ,in/itutes ( ,heal? ma9ta9s an
 own]%ip int]e/ 9 ! ,corporation 9      
ex*ange = ! ,national ,in/itutes (      
,heal? provid+ ! ,corporation )         
intellectual prop]ty or o!r assi/ance1  
su* z m$ic9al *emi/ry1 toxicology1 &    
high ?r\ghput scre5+ s]vices4  7,b7     
,limit on ,gov]nm5t /ake ,! am\nt ( any 
own]%ip int]e/ ma9ta9$ by ! ,national   
,in/itutes ( ,heal? pursuant to         
subp>agraph 7,a7 may n exce$ #be p]c5t (
 ! equity /ock ( ! ,corporation4  7#c7  
,prohibition on divid5ds ,! ,corporation
 may n pay divid5ds on ! equity /ock ( !
 ,corporation4  7#d7 ,bo>d ( directors  
,at all times1 two ( ! memb]s ( ! bo>d (
 directors ( ! ,corporation %all be *os5
 z foll[s3  7,a7 ,"o memb] *os5 by !    
,director4  7,b7 ,"o memb] *os5 by !    
,secret>y ( ! ,treasury4  7d7 ,sale (   
own]%ip int]e/s  7#a7 ,9 g5]al ,!       
,corporation-- 7,a7 may sell a r>e      

disease !rapy own$ by ! ,corporation at 
any "t2 &  7,b7 %all sell any r>e       
disease !rapy own$ by ! ,corporation    
prior to ! comm5cem5t ( a phase #c /udy 
7z su* t]m is def9$ 9 section           
#cab4ba7;b7 ( title #ba1 ,code ( ,f$]al 
,regulations 7or any successor          
regulations774  7#b7 ,sale requirem5ts  
,9 any sale ( a r>e disease !rapy1 !    
,corporation %all make su* sale ?r\gh an
 op5 & transp>5t process & on           
comm]cially reasonable t]ms4  7e7 ,fund+
 ?r\gh bond issuances  7#a7 ,9 g5]al ,! 
,corporation %all issue "o or m classes 
( bonds1 ) a maturity ( no m ?an #ab    
ye>s & c>ry+ su* int]e/ z ! ,corporation
 det]m9es appropriate3  7,a7 ,gu>ante$  
bonds ,! ,corporation %all issue a class
 ( bonds t is gu>ante$ by ! ,unit$      
,/ates4  7,b7 ,ungu>ante$ bonds ,!      
,corporation may issue "o or m classes (
 bonds t are back$ by ! ,corporation1 b 
are n gu>ante$ by ! ,unit$ ,/ates4  7#b7
 ,debt-to-equity ratio ( gu>ante$ bonds 
,! ,corporation may n issue any gu>ante$

 bond pursuant to p>agraph 7#a77;,a7 if 
! issuance ( su* bond w\ld cause !      
,corporation to exce$ a debt-to-equity  
ratio ( #a to #a4  7#c7 ,gu>antee fee ,!
 ,corporation %all pay ! ,treasury a    
gu>antee fee1 :i* %all be set by !      
,secret>y ( ! ,treasury 9 an am\nt equal
 to ! anticipat$ co/ to ! ,treasury 9   
gu>antee+ bonds ( ! ,corporation "u     
p>agraph 7#a77;,a74  7f7 ,treatm5t "u ! 
securities laws ,= purposes only ( !    
securities laws-- 7#a7 securities ( !   
,corporation %all be deem$ to be        
securities t are n issu$ or gu>ante$ by 
! ,gov]nm5t2 &  7#b7 ! ,national        
,in/itutes ( ,heal? %all be deem$ to n  
be an in/rum5tality ( ! ,gov]nm5t4  7g7 
,corporation n gu>ante$ by ! ,unit$     
,/ates ,except z provid$ "u subsection  
7e77#a77;,a71 ! full fai? & cr$it ( !   
,unit$ ,/ates %all n be pl$g$ to !      
,corporation or any security ( !        
,corporation4  7h7 ,au?orization (      
appropriations ,!re are au?oriz$ to be  
appropriat$ to ! ,director su* sums z   

may be necess>y to e/abli% !            
,corporation & complete ! privatization 
( ! ,corporation4  7i7 ,sunset ,!       
,corporation %all t]m9ate aft] ! end ( !
 #ah-mon? p]iod foll[+ ! lat] (-- 7#a7 !
 date on :i* ! la/ bond issu$ "u        
subsection 7e7 matures2 &  7#b7 ! date  
on :i* ! ,corporation receives ! f9al   
paym5t = ! sale ( ! r>e disease         
!rapeutics own$ by ! ,corporation4  #d4 
,r>e ,disease ,!rapeutics ,corporation  
,sci5ce ,advisory ,c\ncil  7a7          
,e/abli%m5t ,!re is e/abli%$ )9 !       
,national ,in/itutes ( ,heal? an        
advisory c\ncil to be kn[n z ! ,r>e     
,disease ,!rapeutics ,corporation       
,sci5ce ,advisory ,c\ncil4  7b7 ,memb]s 
,! memb]s ( ! ,advisory ,c\ncil %all be 
select$ by ! ,director4  7c7 ,purpose ,!
 purpose ( ! ,advisory ,c\ncil %all be  
to advise ! ,corporation on ! pur*ase1  
sale1 & developm5t ( r>e disease        
!rapeutics4  7d7 ,disclosure ( c]ta9    
employm5t ,ea* memb] ( ! ,advisory      
,c\ncil %all disclose ea* company1      

p>tn]%ip1 or o!r entity ) respect to :i*
 ! memb] is an (fic] or director4  7e7  
,sunset ,! ,advisory ,c\ncil %all       
t]m9ate on ! date t ! ,corporation      
t]m9ates4  #e4 ,def9itions ,= purposes (
 ?is ,act3  7#a7 ,r>e disease !rapeutics
 ,! t]m r>e disease !rapeutics means a  
comp\nd1 biologic1 m$ical device1 or    
companion diagno/ic t has be5 designat$ 
z a !rapy = a r>e disease or condition  
pursuant to section #ebf ( ! ,f$]al     
,food1 ,drug1 & ,cosmetic ,act 7#ba     
,u4,s4,c4 #cfj;bb74  7#b7 ,advisory     
,c\ncil ,! t]m ,advisory ,c\ncil means !
 ,r>e ,disease ,!rapeutics ,corporation 
,advisory ,c\ncil e/abli%$ "u section   
#d7;a74  7#c7 ,corporation ,! t]m       
,corporation means ! ,r>e ,disease      
,!rapeutics ,corporation e/abli%$ "u    
section #c7;a74  7#d7 ,director ,! t]m  
,director means ! ,director ! ,national 
,in/itutes ( ,heal?4  7#e7 ,securities  
laws ,! t]m securities laws has ! mean+ 
giv5 t t]m "u section #c7;a7 ( !        
,securities ,ex*ange ,act ( #aicd 7#ae  

,u4,s4,c4 #gh;c7a774