,,ii #aaeth ,,congress #ast ,session ,s4 #bagb ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,november #bi1 #bjag,ms4 ,warren 7for herself1 ,mr4 ,brown1 ,mrs4 ,gillibrand1 ,mr4 ,franken1 ,ms4 ,baldwin1 ,mr4 ,sanders1 and ,ms4 ,harris7 introduced the following bill2 which was read twice and referred to the ,committee on ,health1 ,education1 ,labor1 and ,pensions ,a ,,bill ,to authorize the collection of supplemental payments to increase congressional investments in medical research1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,medical ,innovation ,act of #bjag4 #b4 ,authority to assess and use supplemental payments to increase congressional investments in medical research 7a7 ,in general ,section #cja of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bda7 is amended by adding at the end the following3 7i7 ,authority ,to assess and use supplemental payments ,to increase congressional investments in medical research 7#a7 ,definitions ,for purposes of this subsection3 7,a7 ,covered blockbuster drug 7i7 ,in general ,the term covered blockbuster drug means any product-- 7,i7 for which the covered manufacturer reported to the ,securities and ,exchange ,commission on a form1 including form #aj-,k or form #bj-;,f1 or is otherwise determined by the ,secretary to have received1 at least #a1jjj1jjj1jjj in net sales in the previous calendar year2 and 7,,ii7 that was developed1 in whole or in part1 through ,federal ,government investments in medical research1 as the ,secretary determines in accordance with clause 7ii74 7ii7 ,determination of ,federal ,government investment ,in determining under clause 7i77,,ii7 whether a product was developed1 in whole or in part1 through ,federal ,government investments in medical research1 the ,secretary shall consider whether information included in any patent that claims the covered blockbuster drug or that claims a method of using such covered blockbuster drug and with respect to which a claim of patent infringement could reasonably be asserted if a person not licensed by the owner engaged in the manufacture1 use1 or sale of the covered blockbuster drug1 or any element of the covered blockbuster drug-- 7,i7 relates to1 or is based upon1 prior science conducted1 in whole or in part1 by a person that is or was funded by the ,federal ,government2 7,,ii7 relates to1 acts upon1 or is based upon knowledge of a signaling pathway1 cellular receptor1 ion channel1 protein1 ,,dna or ,,rna sequence or mutation1 virus1 or any other scientific information discovered1 in whole or in part1 through research funded by the ,federal ,government2 or 7,,iii7 relates to1 or is based upon1 through the manufacturing process or testing process of the covered blockbuster drug1 technology derived1 in whole or in part1 through research funded by the ,federal ,government4 7,b7 ,covered manufacturer ,the term covered manufacturer means a person-- 7i7 that holds an application approved under section #eje of the ,federal ,food1 ,drug1 and ,cosmetic ,act or a license under section #cea of this ,act for a covered blockbuster drug2 or 7ii7 who is a co-licensed partner of the person described in clause 7i7 that obtains the covered blockbuster drug directly from a person described in this clause or clause 7i74 7,c7 ,covered settlement agreement 7i7 ,in general ,the term covered settlement agreement means a settlement agreement 7including a consent decree71 and except as provided under clause 7ii7-- 7,i7 that is between an agency and a covered manufacturer2 7,,ii7 that relates to-- 7aa7 an alleged violation of1 or a penalty under1 section #aabh;,a of the ,social ,security ,act or section #aabh;,b of the ,social ,security ,act2 7bb7 an alleged violation under subchapter ,,iii of chapter #cg of title #ca1 ,united ,states ,code 7commonly known as the ,false ,claims ,act72 7cc7 an alleged violation under the ,federal ,food1 ,drug1 and ,cosmetic ,act2 or 7dd7 an alleged violation of any other ,federal civil or criminal law2 and 7,,iii7 under the terms of which a covered manufacturer is obligated in an amount not less than a total of #a1jjj1jjj1 including civil or criminal penalties with respect to any parties1 including governmental and private entities4 7ii7 ,exception for settlements not affecting taxpayers or public health ,the term covered settlement agreement does not include any settlement agreement that the ,secretary determines-- 7,i7 does not involve an alleged criminal violation2 and 7,,ii7 does not to relate to-- 7aa7 allegations of fraud resulting1 or potentially resulting1 in a loss of taxpayer dollars2 or 7bb7 allegations of conduct having an adverse impact1 or a potentially adverse impact1 on the health of the public4 7,d7 ,person ,the term person has the meaning given such term in section #bja7;e7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act4 7,e7 ,product ,the term product means a drug approved under section #eje of the ,federal ,food1 ,drug1 and ,cosmetic ,act or licensed under section #cea1 and subject to section #ejc7;b77#a7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act4 7#b7 ,supplemental payments to increase congressional investments in medical research 7,a7 ,supplemental payment assessment and collection ,beginning with the first fiscal year that begins at least #fj days after the date of enactment of the ,medical ,innovation ,act of #bjag1 and each subsequent fiscal year1 the ,secretary shall1 in accordance with this paragraph1 assess and collect supplemental payments to increase congressional investments in medical research from each covered manufacturer described in subparagraph 7,b74 7,b7 ,criteria for assessing payments ,a covered manufacturer that meets both of the following criteria for a calendar year 7referred to in this subparagraph and subparagraph 7,d7 as the applicable calendar year7 shall be assessed a supplemental payment under subparagraph 7,a7 for the fiscal year beginning in the proceeding calendar year3 7i7 ,a covered manufacturer that1 during the #e-year period immediately preceding the date on which the payment is assessed1 but not before the date of enactment of the ,medical ,innovation ,act of #bjag1 entered into a covered settlement agreement4 7ii7 ,a covered manufacturer that reported net income of at least #a1jjj1jjj1jjj to the ,securities and ,exchange ,commission on a form1 including form #aj-,k or form #bj-;,f1 or that the ,secretary otherwise determines to have had net income of at least #a1jjj1jjj1jjj-- 7,i7 during the applicable calendar year2 or 7,,ii7 during the calendar year in which the covered manufacturer entered into a covered settlement agreement1 as described in clause 7i74 7,c7 ,payment amount 7i7 ,in general ,a covered manufacturer described in subparagraph 7,b7 shall be assessed a supplemental payment to increase congressional investments in medical research for a fiscal year equal to the applicable percentage of the net income of the covered manufacturer1 as reported or determined as described in subparagraph 7,b77ii71 for the previous calendar year1 multiplied by the number of covered blockbuster drugs of the covered manufacturer for that year4 7ii7 ,applicable percentage ,for purposes of determining the amount of a supplemental payment under clause 7i71 the applicable percentage of the net income of a covered manufacturer is-- 7,i7 #j4ge percent1 in the case of a covered settlement agreement under the terms of which the total obligation of a covered manufacturer is in an amount that is less than #ejj1jjj1jjj2 7,,ii7 #a percent1 in the case of a covered settlement agreement under the terms of which the total obligation of a covered manufacturer is in an amount that is at least #ejj1jjj1jjj but less than #a1jjj1jjj1jjj2 or 7,,iii7 #a4e percent1 in the case of a covered settlement agreement under the terms of which the total obligation of a covered manufacturer is in an amount that is at least #a1jjj1jjj1jjj4 7,d7 ,annual limitation ,in the case of a covered manufacturer that entered into more than #a covered settlement agreement during an applicable calendar year1 such covered manufacturer shall be assessed a supplemental payment under subparagraph 7,c7 only with respect to the covered settlement agreement under which the total amount obligated of the covered manufacturer1 as described in paragraph 7#a77;,c77i77,,iii71 is the highest4 7,e7 ,publication of payments ,beginning with the first fiscal year that begins at least #fj days after the date of enactment of the ,medical ,innovation ,act of #bjag1 and not later than #fj days before the start of each fiscal year1 the ,secretary shall publish in the ,federal ,register1 with respect to the next fiscal year-- 7i7 a list of covered manufacturers subject to the payment under this paragraph2 7ii7 a list of the covered blockbuster drugs of each such covered manufacturer2 7iii7 the total payment amount assessed to each such covered manufacturer2 and 7iv7 the manner in which payments assessed under this paragraph will be collected4 7,f7 ,crediting and availability of supplemental payments 7i7 ,in general ,subject to clause 7ii71 payments authorized under this paragraph shall be collected and available for obligation only to the extent and in the amount provided in advance in appropriations ,acts4 ,such payments are authorized to remain available until expended4 7ii7 ,collections and appropriations ,acts 7,i7 ,in general ,the payments authorized by this paragraph-- 7aa7 subject to subclause 7,,ii71 shall be collected and available in each fiscal year in an amount not to exceed the amount specified in appropriation ,acts1 or otherwise made available for obligation1 for such fiscal year2 and 7bb7 shall be available to the ,secretary to distribute1 as described in paragraph 7#c74 7,,ii7 ,provision for early payments ,payments authorized under clause 7iii7 for a fiscal year1 prior to the due date for such payments1 may be accepted by the ,secretary4 7iii7 ,authorization of appropriations ,for the first fiscal year that begins at least #fj days after the date of enactment of the ,medical ,innovation ,act of #bjag and for each subsequent fiscal year1 there is authorized to be appropriated for the purpose of making distributions under paragraph 7#c7 to meet the priorities described in paragraph 7#d71 an amount equal to the total amount of supplemental payments assessed for such fiscal year under this paragraph4 7,g7 ,remitting payments ,a covered manufacturer assessed a supplemental payment under subparagraph 7,a7 shall remit the payment no later than the first business day on or after ,october #a of each fiscal year1 or the first business day after the date of enactment of an appropriations ,act providing for the collection and obligation of supplemental payments for such fiscal year4 7,h7 ,collection of assessed payments that are not remitted ,in any case where the ,secretary does not receive a supplemental payment assessed under subparagraph 7,a7 within #cj days after it is due1 such supplemental payment shall be treated as a claim of the ,united ,states ,government subject to subchapter ,,ii of chapter #cg of title #ca1 ,united ,states ,code4 7,i7 ,supplement not supplant ,payments collected under this paragraph shall be used to supplement and not supplant other ,federal funds made available to carry out the priorities described in paragraph 7#d74 7#c7 ,distribution of payments to agencies to increase congressional investments in medical research 7,a7 ,distribution to agencies ,subject to subparagraph 7,c71 for the purposes described in paragraph 7#d71 the ,secretary shall distribute the amounts appropriated under paragraph 7#b77;,f77iii7 during a fiscal year to-- 7i7 the ,food and ,drug ,administration1 to be used in accordance with paragraph 7#d77;,a72 and 7ii7 the ,national ,institutes of ,health organized under title ,,iv1 to be used in accordance with paragraph 7#d77;,b74 7,b7 ,distribution ratio between agencies ,the amount that the ,secretary distributes to an agency under subparagraph 7,a7 during a fiscal year shall bear the same relation to the total amount appropriated under paragraph 7#b77;,f77iii7 for such fiscal year as the amount of discretionary funds appropriated to such agency for such fiscal year bears to the total amount of discretionary funding appropriated to both agencies listed in subparagraph 7,a7 for such fiscal year4 7,c7 ,ensuring stable congressional investments in medical research 7i7 ,in general ,supplemental payments collected in accordance with paragraph 7#b7 shall not be distributed under subparagraph 7,a7 for a fiscal year unless appropriations to both of the agencies listed in such subparagraph for the fiscal year are equal to or greater than appropriations to such agencies for the prior fiscal year4 7ii7 ,delayed distribution ,if1 in accordance with clause 7i71 the ,secretary does not distribute payments collected in accordance with paragraph 7#b7 during any portion of a fiscal year1 and1 at a later date in such fiscal year1 the appropriations to the agencies listed in subparagraph 7,a7 become equal to or greater than the amount of appropriations for the prior fiscal year1 the ,secretary may distribute such payment at any time in such fiscal year4 7,d7 ,considerations ,in determining amounts appropriated for purposes of subparagraphs 7,b7 and 7,c7-- 7i7 the ,secretary shall not consider any amounts appropriated in accordance with paragraph 7#b77;,f77iii72 and 7ii7 with respect to the ,food and ,drug ,administration1 the ,secretary shall not consider amounts appropriated in accordance with subchapter ,c of chapter ,,vii of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7relating to user fees collected by the ,secretary74 7#d7 ,prioritizing urgent needs in medical research ,the ,secretary shall ensure that the payments distributed under paragraph 7#c7 are used to meet urgent needs in medical research1 including priorities as follows3 7,a7 ,,fda ,with respect the ,food and ,drug ,administration1 the priority use of the distributions shall include carrying out the goals of the strategy and implementation plan for advancing regulatory science for medical products under section #aabd of the ,food and ,drug ,administration ,safety and ,innovation ,act 7#ba ,u4,s4,c4 #cic note71 and other such research activities in order to promote the public health and advance innovation in regulatory decisionmaking1 as determined by the ,secretary4 7,b7 ,,nih ,with respect to the ,national ,institutes of ,health1 the priority use of the distributions shall include supporting-- 7i7 research that fosters radical innovation1 including-- 7,i7 research on diseases or conditions for which treatments exist but are inadequate2 7,,ii7 research on diseases or conditions for which there are unmet medical needs2 7,,iii7 research on diseases for which treatments exist but the side effect profiles of such treatments limit the therapeutic potential of such treatments2 7,,iv7 research on new approaches to treatment or diagnosis of a disease using a drug1 device1 or therapy that1 at the time of distribution1 is not used or is underused2 or 7,v7 research to identify new biomarkers2 7ii7 research that advances fundamental knowledge and technology even if it does not provide immediate or near-term clinical or therapeutic benefits1 including research and technology that advances the understanding of biochemistry1 biology1 protein science1 immunology1 genetics1 virology1 microbiology1 or neurology2 7iii7 research related to diseases that disproportionally account for ,federal health care spending1 including spending under the ,medicare program under title ,,xviii of the ,social ,security ,act1 the ,medicaid program under title ,,xix of the ,social ,security ,act1 the ,state ,children's ,health ,insurance ,program under title ,,xxi of the ,social ,security ,act1 the ,,tricare program under chapter #ee of title #aj1 ,united ,states ,code1 and the hospital services and medical care provided through the ,veterans' ,administration under chapters #ag and #ah of title #ch1 ,united ,states ,code1 and tax credits made available through the amendments to the ,internal ,revenue ,code of #aihf made by the ,patient ,protection and ,affordable ,care ,act 7,public ,law #aaa-adh71 such as research relating to-- 7,i7 diseases that disproportionally impact older individuals2 7,,ii7 degenerative diseases1 and 7,,iii7 chronic conditions2 and 7iv7 early career scientists by-- 7,i7 awarding research project grants that support discrete1 specified1 circumscribed projects to be performed by the investigator in an area representing the specific interests and competencies of such investigator1 to investigators-- 7aa7 who are within #aj years of completing a terminal research degree2 or 7bb7 who are within #aj years of completing a medical residency2 7,,ii7 awarding grants that support career development experiences that lead to earlier research independence2 and 7,,iii7 awarding grants that support innovative training programs that1 in addition to scientific training1 provide additional training to enhance employment opportunities1 including training in management and business1 to-- 7aa7 graduate students2 7bb7 post-doctoral fellows2 7cc7 individuals within #aj years of completing a terminal research degree2 or 7dd7 individuals within #aj years of completing a medical residency4 7#e7 ,annual reports 7,a7 ,secretary of health and human services ,not later than #ahj calendar days before the end of a fiscal year in which the ,secretary has assessed supplemental payments under paragraph 7#b71 the ,secretary shall submit a report to the ,committee on ,health1 ,education1 ,labor1 and ,pensions of the ,senate and the ,committee on ,energy and ,commerce of the ,house of ,representatives1 which shall include a description of supplemental payments assessed1 collected1 and distributed under this subsection for such fiscal year1 and a list of the covered manufacturers that were assessed supplemental payments and the amount of such assessments4 7,b7 ,,fda and ,,nih ,for each fiscal year in which amounts are distributed under paragraph 7#c71 the ,food and ,drug ,administration and the ,national ,institutes of ,health shall report on the use and impact of such amounts in the annual budget submission of such entity4 4 7b7 ,effect of failure ,to remit payment ,section #ejb of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #ceb7 is amended by adding at the end the following3 7ee7 ,if it is a drug that is a covered blockbuster drug 7as defined in section #cja7;i77#a7 of the ,public ,health ,service ,act7 for which any payment assessed under section #cja7;i77#b7 of such ,act has not been paid in accordance with such section1 until such payment is made4 4